Exhibit 10.1


 





 


CONFIDENTIAL TREATMENT REQUESTED –
CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION. THE OMITTED PORTIONS
HAVE BEEN REPLACED WITH “****.


 







  


EXECUTION VERSION


 





 



 


NOTE PURCHASE AGREEMENT


 


by and among


 


NUMEREX
CORP.,


 


as Borrower,


 


various Guarantors from time to time party
hereto,


 


various Purchasers from time to time party
hereto,


 


and


 


HCP-FVF,
LLC,


 


as Collateral Agent


 


Dated as of June 7, 2017


 


 



 




    	 	 



     


    

 


	Article 1 DEFINITIONS	1
	 	 	 
	1.1	Definitions	1
	 	 	 
	1.2	Accounting Terms	21
	 	 	 
	Article 2 PURCHASE AND SALE OF THE NOTES	22
	 	 	 
	2.1	Purchase and Sale of the Notes	22
	 	 	 
	2.2	Fees Payable	22
	 	 	 
	2.3	Closing	23
	 	 	 
	Article 3 THE NOTES	23
	 	 	 
	3.1	Interest and Related Fees	23
	 	 	 
	3.2	Redemption of Notes	24
	 	 	 
	3.3	Manner of Payment	28
	 	 	 
	3.4	[Intentionally Omitted]	28
	 	 	 
	3.5	Taxes	28
	 	 	 
	3.6	Purchase Price Allocation	30
	 	 	 
	Article 4 CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS	31
	 	 	 
	4.1	Representations and Warranties	31
	 	 	 
	4.2	Compliance with this Agreement	31
	 	 	 
	4.3	Certificates	31
	 	 	 
	4.4	Solvency	32
	 	 	 
	4.5	Financial Information	32
	 	 	 
	4.6	Documents	32
	 	 	 
	4.7	Purchase of Notes Permitted by Applicable Laws	32
	 	 	 
	4.8	Opinion of Counsel	32
	 	 	 
	4.9	Consents and Approvals	32
	 	 	 
	4.10	No Material Judgment or Order	32
	 	 	 
	4.11	Good Standing Certificates	33
	 	 	 
	4.12	No Litigation	33
	 	 	 
	4.13	Insurance Certificates	33
	 	 	 
	4.14	Fees, Etc	33
	 	 	 
	4.15	Collateral	33
	 	 	 
	4.16	Lien Searches	33
	 	 	 
	4.17	No Material Adverse Effect	33
	 	 	 
	4.18	Structure	34


 




    	 	i	 



     


    

 


	4.19	Subordinated Note	34
	 	 	 
	4.20	Quality of Earnings Report	34
	 	 	 
	Article 5 CONDITIONS TO THE OBLIGATIONS OF THE BORROWER	34
	 	 	 
	5.1	Representations and Warranties	34
	 	 	 
	5.2	Compliance with this Agreement	34
	 	 	 
	Article 6 REPRESENTATIONS AND WARRANTIES OF THE BORROWER	34
	 	 	 
	6.1	Existence and Power	34
	 	 	 
	6.2	Authorization; No Contravention	35
	 	 	 
	6.3	Governmental Authorization; Third Party Consents	35
	 	 	 
	6.4	Binding Effect	35
	 	 	 
	6.5	No Legal Bar	35
	 	 	 
	6.6	Litigation	36
	 	 	 
	6.7	Compliance with Laws	36
	 	 	 
	6.8	No Default or Breach	36
	 	 	 
	6.9	Title to Properties	36
	 	 	 
	6.10	Real Property	36
	 	 	 
	6.11	Taxes	37
	 	 	 
	6.12	Financial Condition; SEC Filings	37
	 	 	 
	6.13	Absence of Certain Changes or Events	38
	 	 	 
	6.14	Environmental Matters	38
	 	 	 
	6.15	Investment Company/Government Regulations	39
	 	 	 
	6.16	Subsidiaries	39
	 	 	 
	6.17	Capitalization	40
	 	 	 
	6.18	Private Offering	40
	 	 	 
	6.19	Broker’s, Finder’s or Similar Fees	40
	 	 	 
	6.20	Labor Relations	40
	 	 	 
	6.21	Employee Benefit Plans	41
	 	 	 
	6.22	Patents, Trademarks, Etc	42
	 	 	 
	6.23	Potential Conflicts of Interest	43
	 	 	 
	6.24	Trade Relations	43
	 	 	 
	6.25	Indebtedness	43
	 	 	 
	6.26	Material Contracts	43
	 	 	 
	6.27	Insurance	44


 




    	 	ii	 



     


    

 


	6.28	Solvency	44
	 	 	 
	6.29	Licenses and Approvals	44
	 	 	 
	6.30	Change of Control and Similar Payments	44
	 	 	 
	6.31	OFAC; Anti-Terrorism; Patriot Act	45
	 	 	 
	6.32	Disclosure	45
	 	 	 
	6.33	Customers and Suppliers	45
	 	 	 
	6.34	Passive Foreign Investment Company	46
	 	 	 
	6.35	Absence of Certain Practices 	46
	 	 	 
	6.36	Internal Controls	46
	 	 	 
	6.37	Accounts and Notes Receivable; Accounts and Notes Payable	46
	 	 	 
	Article 7 REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS	47
	 	 	 
	7.1	Authorization; No Contravention	47
	 	 	 
	7.2	Binding Effect	47
	 	 	 
	7.3	No Legal Bar	47
	 	 	 
	7.4	Securities Laws	47
	 	 	 
	7.5	Governmental Authorization; Third Party Consent	49
	 	 	 
	7.6	Broker’s, Finder’s or Similar Fees	49
	 	 	 
	Article 8 AFFIRMATIVE COVENANTS	49
	 	 	 
	8.1	Delivery of Financial and Other Information	49
	 	 	 
	8.2	Use of Proceeds	52
	 	 	 
	8.3	Notice of Default or Material Adverse Effect	53
	 	 	 
	8.4	Conduct of Business	53
	 	 	 
	8.5	Taxes and Claims	53
	 	 	 
	8.6	Insurance	54
	 	 	 
	8.7	Compliance with Laws and Material Agreements	54
	 	 	 
	8.8	Maintenance of Properties	55
	 	 	 
	8.9	Audits and Inspection	55
	 	 	 
	8.10	Issue Taxes	55
	 	 	 
	8.11	Employee Benefit Plans	55
	 	 	 
	8.12	Environmental Covenants	56
	 	 	 
	8.13	Website Links	56
	 	 	 
	8.14	Further Assurances	56
	 	 	 
	8.15	Board Observation	56


 




    	 	iii	 



     


    

 


	8.16	Intellectual Property	57
	 	 	 
	8.17	Replacement of Notes	58
	 	 	 
	8.18	Landlord and Bailee Agreements	58
	 	 	 
	8.19	Foreign Pension Plans and Benefit Plans	58
	 	 	 
	8.20	Post-Closing Obligations	58
	 	 	 
	Article 9 NEGATIVE COVENANTS	59
	 	 	 
	9.1	Distributions	59
	 	 	 
	9.2	Indebtedness	59
	 	 	 
	9.3	Mergers	60
	 	 	 
	9.4	Sales of Assets	61
	 	 	 
	9.5	Investments and Acquisitions	61
	 	 	 
	9.6	Liens	62
	 	 	 
	9.7	Capital Expenditures; Operating Leases	64
	 	 	 
	9.8	Licenses	64
	 	 	 
	9.9	Affiliates	64
	 	 	 
	9.10	Permitted Hedging Arrangements	64
	 	 	 
	9.11	Sale and Leaseback Transactions and Other Off-Balance Sheet Liabilities	65
	 	 	 
	9.12	Contingent Obligations	65
	 	 	 
	9.13	Subsidiaries	65
	 	 	 
	9.14	Real Property	65
	 	 	 
	9.15	Modifications of Charter Documents	66
	 	 	 
	9.16	Fiscal Year	66
	 	 	 
	9.17	Payments on Subordinated Note	66
	 	 	 
	9.18	Restrictive Agreements	66
	 	 	 
	9.19	Use of Purchasers’ Names	66
	 	 	 
	9.20	Financial Covenants	66
	 	 	 
	9.21	Management Fees; Board Fees	68
	 	 	 
	9.22	Deposit Accounts	68
	 	 	 
	9.23	Modifications of Subordinated Note	68
	 	 	 
	9.24	No Negative Pledges	68
	 	 	 
	9.25	Accounts Payable	69
	 	 	 
	9.26	Passive Foreign Investment Company	69


 




    	 	iv	 



     


    

 


	Article 10 EVENTS OF DEFAULT	69
	 	 	 
	10.1	Events of Default	69
	 	 	 
	10.2	Acceleration	72
	 	 	 
	10.3	Set-Off	72
	 	 	 
	10.4	Suits for Enforcement	72
	 	 	 
	10.5	License	73
	 	 	 
	Article 11 INDEMNIFICATION	73
	 	 	 
	11.1	Indemnification	73
	 	 	 
	11.2	Procedure; Notification	74
	 	 	 
	Article 12 MISCELLANEOUS	74
	 	 	 
	12.1	Survival of Representations and Warranties	74
	 	 	 
	12.2	Notices	75
	 	 	 
	12.3	Successors and Assigns	76
	 	 	 
	12.4	Amendment and Waiver	77
	 	 	 
	12.5	Signatures; Counterparts	77
	 	 	 
	12.6	Headings	78
	 	 	 
	12.7	GOVERNING LAW	78
	 	 	 
	12.8	JURISDICTION, JURY TRIAL WAIVER, ETC.	78
	 	 	 
	12.9	Severability	79
	 	 	 
	12.10	Rules of Construction	79
	 	 	 
	12.11	Entire Agreement	79
	 	 	 
	12.12	Certain Expenses	79
	 	 	 
	12.13	Publicity	79
	 	 	 
	12.14	Further Assurances	80
	 	 	 
	12.15	No Strict Construction	80
	 	 	 
	12.16	Non-Public Information	80
	 	 	 
	12.17	Confidential Information	80
	 	 	 
	Article 13 COLLATERAL AGENT	81
	 	 	 
	13.1	Appointment of Agent; No Effect on Borrower’s Obligations	81
	 	 	 
	13.2	Powers and Duties	81
	 	 	 
	13.3	Collateral Matters	81
	 	 	 
	13.4	Actions with Respect to Defaults	83
	 	 	 
	13.5	Successor Collateral Agent	83


 




    	 	v	 



     


    

 


	SCHEDULES:	 
	 	 
	Schedule 1	Prohibited Transferees
	Schedule 2.1	Allocations
	Schedule 6.1	Jurisdictions of Organization and Qualification
	Schedule 6.3	Consents and Approvals
	Schedule 6.6	Litigation
	Schedule 6.7	Investigations, Etc.
	Schedule 6.9	Exceptions to Title, Etc.
	Schedule 6.10	Real Property Owned and Leased
	Schedule 6.11	Taxes
	Schedule 6.12	Financial Condition and Liabilities; SEC Documents
	Schedule 6.16	Subsidiaries
	Schedule 6.17	Capitalization, Etc.
	Schedule 6.19	Broker Fees, Etc.
	Schedule 6.20	Employment Agreements, Employment Matters
	Schedule 6.21	ERISA Plans
	Schedule 6.22	Licenses, Etc. Related to Intellectual Property
	Schedule 6.23	Conflicts of Interest
	Schedule 6.25	Existing Indebtedness & Liens
	Schedule 6.26	Material Contracts
	Schedule 6.27	Insurance
	Schedule 6.33	Customers & Suppliers
	Schedule 6.35	Absence of Certain Practices
	Schedule 6.36	Internal Controls
	Schedule 6.37(a)	Accounts and Notes Receivable
	Schedule 6.37(b)	Accounts and Notes Payable
	Schedule 8.6	Minimum Insurance
	Schedule 9.2	Existing Indebtedness
	Schedule 9.5	Investments
	Schedule 9.20(e)	Minimum Monthly Recurring Revenue
	Schedule 9.24	Negative Pledges
	Schedule 9.25	Accounts Payable and Receivable
	 	 
	EXHIBITS:	 
	 	 
	exhibit A	Form of Note
	Exhibit B	Form of Certificate Regarding Non-Bank Status
	Exhibit C	Form of Compliance Certificate


 




    	 	vi	 



     


    

  


NOTE PURCHASE
AGREEMENT


 


THIS NOTE PURCHASE AGREEMENT,
dated as of June 7, 2017 (as amended, restated, supplemented or otherwise modified from time to time in accordance with the terms
hereof, this “Agreement”), by and among NUMEREX CORP., a Pennsylvania corporation (the “Borrower”),
the Guarantors from time to time party hereto, the Purchasers from time to time party hereto, and HCP-FVF, LLC, a Delaware
limited liability company (“Hale Capital”), as collateral agent for itself and the Purchasers party hereto (in
such capacity and together with its successors and assigns, the “Collateral Agent”).


 


STATEMENT
OF PURPOSE:


 


WHEREAS, the Borrower
wishes to sell to the Purchasers, and the Purchasers wish to purchase on the terms and conditions set forth herein, senior secured
promissory notes issued by the Borrower on the Closing Date in an aggregate original principal amount of $13,500,000, each substantially
in the form of Exhibit A hereto (as amended, restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof, each a “Note” and collectively the “Notes”).


 


NOW, THEREFORE,
in consideration of the mutual covenants and agreements set forth herein and for other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto agree as follows:


 


Article
1


DEFINITIONS


 


1.1          Definitions.
As used in this Agreement, and unless the context requires a different meaning, the following terms have the meanings indicated:


 


“Account Debtor”
has the meaning given to that term in the UCC.


 


“Account or Accounts”
has the meaning given to that term in the UCC.


 


“Acquisition”
means any transaction or series of related transactions, consummated on or after the date of this Agreement, by which the Borrower
or any Subsidiary, directly or indirectly, (a) acquires any going concern business or all (or substantially all) of the assets
of any firm, corporation, limited liability company or other entity, or division thereof, whether through purchase of assets, merger
or otherwise or (b) acquires at least a majority (in number of votes) of the securities of an entity which have ordinary voting
power for the election of directors or managers or a majority (by percentage or voting power) of the outstanding Capital Stock
of any other Person.


 


“Affiliate”
of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities
(or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise;
provided that in no event shall any Purchaser or the Collateral Agent and the Borrower be deemed to be “Affiliates”
of one another.


 




    	 	1	 



     


    

 


“Agreement”
has the meaning given to that term in the introductory paragraph.


 


“Anti-Terrorism
Laws” has the meaning given to that term in Section 6.31(b).


 


“Anti-Terrorism
Order” has the meaning given to that term in Section 6.31(b).


 


“Applicable Insolvency
Laws” means all applicable laws governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation, 11 U.S.C. Sections
544, 547, 548 and 550 and other “avoidance” provisions of Title 11 of the Code, as amended or supplemented).


 


“Applicable Law”
shall mean all laws, rules and regulations applicable to the Person, conduct, transaction, covenant, document or contract in question,
including all applicable common law and equitable principles, all provisions of all applicable state, federal and foreign constitutions,
statutes, rules, regulations, treaties, directives and orders of any Governmental Authority, and all orders, judgments and decrees
of all courts and arbitrators.


 


“Applicable Rate”
means the Prime Rate plus seven percent (7%) per annum.


 


“Approved Distributors”
means Honeywell International acting through the ADI distribution business, Security Equipment Supply, Inc. and Tri-ED Distribution.


 


“Approved Fund”
means (i) any Person (other than a natural person) engaged in making, purchasing, holding, or investing in commercial loans and
similar extensions of credit and that is advised, administered, or managed by a Purchaser, an Affiliate of a Purchaser (or an entity
or an Affiliate of an entity that administers, advises or manages a Purchaser); (ii) with respect to any Purchaser that is an investment
fund, any other investment fund that invests in loans and that is advised, administered or managed by the same investment advisor
as such Purchaser or by an Affiliate of such investment advisor; and (iii) any third party which provides “warehouse financing”
to a Person described in the preceding clause (i) or (ii) (and any Person described in said clause (i) or (ii) shall also be deemed
an Approved Fund with respect to such third party providing such warehouse financing).


 


“Board”
has the meaning set forth in Section 8.15.


 


“Borrower”
has the meaning given to that term in the introductory paragraph.


 


“Business Combination”
has the meaning set forth in the definition of “Change of Control” below.


 


“Business Day”
means any day other than a Saturday, Sunday or other day on which commercial banks in New York are authorized or required by law
or executive order to close.


 




    	 	2	 



     


    

 


“Capital Expenditure”
means any expenditure (whether paid in cash or accrued as a liability) for any purchase or other acquisition of any asset which
would be classified as a fixed or capital asset on a balance sheet prepared in accordance with GAAP, including the cost of assets
acquired pursuant to Capital Leases and payments in respect of Capital Lease Obligations, but excluding (a) all Capitalized Software
Costs, (b) expenditures of insurance proceeds to rebuild or replace any capital or fixed asset after a casualty loss, (c) leasehold
improvement expenditures for which the Person is reimbursed promptly by the lessor, and (d) expenditures made in connection with
any Investment permitted pursuant to Section 9.5.


 


“Capital Lease”
of a Person means any lease of Property by such Person as lessee which would be classified as a capital lease on a balance sheet
of such Person prepared in accordance with GAAP.


 


“Capital Lease
Obligations” of any Person means all obligations (including sales tax obligations) of such Person under Capital Leases.


 


“Capitalized Software
Costs” means all costs for the development of software that are appropriately capitalized in accordance with GAAP.


 


“Capital Stock”
means (a) any capital stock, partnership, membership, limited liability company, joint venture or other ownership or equity interest
or other equivalent, participation or securities (whether voting or non-voting, whether preferred, common or otherwise, whether
certificated or uncertificated, and however designated), and (b) any option, warrant, security, appreciation right, profits interests
or other right (including Indebtedness securities or other evidence of Indebtedness) directly or indirectly convertible into or
exercisable or exchangeable for, or otherwise to acquire directly or indirectly, any capital stock, partnership, membership, limited
liability company, joint venture or other ownership or equity interest, participation or security described in clause (a)
above.


 


“Cash Equivalent
Investments” means (a) short-term obligations of, or fully guaranteed by, the United States, (b) commercial paper rated
A-1 or better by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (or any successor thereto)
or P-1 or better by Moody’s Investors Service, Inc. (or any successor thereto) with a duration of not more than nine (9)
months, (c) demand deposit accounts maintained in the ordinary course of business, and (d) certificates of deposit issued by, and
time deposits with, commercial banks (whether domestic or foreign) having capital and surplus in excess of $100,000,000; provided
in each case that the same provides for payment of both principal and interest (and not principal alone or interest alone)
and is not subject to any contingency regarding the payment of principal or interest.


 


“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended.


 


“CERCLIS”
means the Comprehensive Environmental Response Compensation Liability Information System List.


 


“Certificate Regarding
Non-Bank Status” means a certificate in the form attached hereto as Exhibit B.


 




    	 	3	 



     


    

 


“Certification”
has the meaning set forth in Section 6.12(b).


 


“Change in Law”
shall mean the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any
law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation,
implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline
or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, regulations,
guidelines, interpretations or directives thereunder or issued in connection therewith (whether or not having the force of Applicable
Law) and (y) all requests, rules, regulations, guidelines, interpretations or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign
regulatory authorities (whether or not having the force of law) , in each case pursuant to Basel III, shall in each case be deemed
to be a Change in Law regardless of the date enacted, adopted, issued, promulgated or implemented.


 


“Change of Control”
means the occurrence of any of the following:


 


(a)          The
acquisition by any Person or any group of Persons of record or beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 25% or more of (i) the Capital Stock of the Borrower (as determined on a fully-diluted basis) or (ii)
the combined voting power of the then-outstanding voting securities of the Borrower (the “Outstanding Company Voting Securities”);


 


(b)          Consummation
by the Borrower or any of its Subsidiaries of a merger, consolidation, combination, reorganization, or sale of Capital Stock, whether
in one or a series of related transactions (a “Business Combination”), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 80%
of the then outstanding shares of voting Capital Stock of the purchasing or surviving entity in such Business Combination, in substantially
the same proportions as its ownership immediately prior to such Business Combination, of the Outstanding Company Voting Securities
and (ii) at least a majority of the members of the board of directors (or equivalent governing body) of the purchasing or surviving
entity in such Business Combination were members of the Borrower’s or such Subsidiary’s board of directors (or equivalent
governing body) at the time of the execution of the initial agreement, or of the action of the Borrower’s or such Subsidiary’s
board of directors (or equivalent governing body), providing for such Business Combination;


 


(c)          A
sale, assignment, lease, conveyance, exchange, transfer, sale-leaseback or other Disposition of more than 50% of the assets of
the Borrower or any Guarantor, whether in one or a series of related transactions (excluding normal inventory sales and financing
arrangements associated with inventory or receivables);


 




    	 	4	 



     


    

 


(d)          The
Borrower ceases to own and control, directly or indirectly, free and clear of all Liens (other than in favor of the Purchasers)
100% of the Capital Stock of each Guarantor (other than directors’ qualifying shares, as may be required by law, and other
than as a result of a Disposition permitted by Section 9.4);


 


(e)          Approval
by the board of directors (or equivalent governing body) of the Borrower or any Guarantor of:


 


(i)          a
liquidation or dissolution of the Borrower or any Guarantor;


 


(ii)          an
exchange of the Capital Stock of the Borrower for the Capital Stock of any other Person or Persons;


 


(iii)          the
sale or Disposition of all or substantially all of the assets of the Borrower or any Guarantor; or


 


(iv)          the
merger of consolidation of the Borrower with or into another Person unless permitted by Section 9.3; or


 


(f)          During
any period of twelve (12) consecutive months, a majority of the members of the Board of the Borrower cease to be composed of individuals
(i) who were members of such Board on the first (1st) day of such period, (ii) whose election or nomination to such Board was approved
by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of such
Board or (iii) whose election or nomination to such Board was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a majority of such Board (excluding, in the case of both
clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of such Board occurs
as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors
by any Person or group other than a solicitation for the election of one or more directors by or on behalf of such Board).


 


“Charter Documents”
means the articles or certificate of incorporation or formation (as applicable), the bylaws or operating or limited liability company
agreement (as applicable), and other similar organizational and governing documents of any Person, as amended, restated, supplemented
or otherwise modified from time to time.


 


“Closing”
has the meaning given to that term in Section 2.3.


 


“Closing Date”
has the meaning given to that term in Section 2.3.


 


“Code”
means the Internal Revenue Code of 1986, as amended.


 


“Collateral Agent”
has the meaning given to it in the introductory paragraph of this Agreement.


 


“Collateral Access
Agreement” has the meaning assigned thereto in the Guaranty and Collateral Agreement.


 




    	 	5	 



     


    

 


“Collateral Documents”
means the Guaranty and Collateral Agreement, the Collateral Access Agreements, the Deposit Account Control Agreements, and each
other agreement or writing pursuant to which the Borrower or any Subsidiary purports to pledge or grant a security interest in
any property or assets securing the Obligations or any of such Borrower or Subsidiary purports to guarantee the payment and/or
performance of the Obligations, in each case, as amended, restated, supplemented or otherwise modified from time to time.


 


“Compliance Certificate”
means a Compliance Certificate in the form attached hereto as Exhibit C.


 


“Contingent Obligation”
of a Person means any contingent obligation calculated in conformity with GAAP, and in any event shall include any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment
of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain
the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other
Person against loss, including, without limitation, any comfort letter, operating agreement, take or pay contract or the obligations
of any such Person as general partner of a partnership with respect to the liabilities of the partnership.


 


“Contractual Obligations”
means as to any Person, any provision of any security issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument or arrangement (whether in writing or otherwise) to which such Person is a party or
by which it or any of such Person’s property is bound.


 


“CWA”
has the meaning set forth in the definition of “Environmental Laws.”


 


“Default”
means any event or condition which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.


 


“Default Rate”
has the meaning given to that term in Section 3.1(b).


 


“Deposit Account
Control Agreement” means each Deposit Account Control Agreement among any Loan Party, the Collateral Agent and the applicable
depository bank, as amended, restated, modified, or supplemented from time to time.


 


“Disposition”
has the meaning given to that term in Section 9.4.


 


“Distributions”
by a Person means (a) the declaration or payment of dividends or other distributions (whether in cash, securities or other property
or assets) on any now or hereafter outstanding Capital Stock of such Person; (b) any payment (whether in cash, securities or other
property or assets) on account of the redemption, repurchase, defeasance, sinking fund or other retirement or acquisition of such
Capital Stock or of warrants, rights or other options to purchase such Capital Stock made either directly or indirectly; (c) any
loans or advances (other than salaries or advances to, or reimbursement of, directors or employees for travel, entertainment, relocation
or other business expenses in the ordinary course of business), to any stockholder(s), partner(s) or member(s) of such Person;
(d) any payment or prepayment of principal or premium, if any, or interest, fees or other charges on or with respect to, and any
redemption, purchase, retirement, defeasance, sinking fund or similar payment and any claim for rescission with respect to any
Indebtedness that is subordinated to the Obligations; and (e) setting aside funds for any of the foregoing.


 




    	 	6	 



     


    

 


“Disqualified
Capital Stock” means any Capital Stock which, by its terms (or by the terms of any security or other equity interests
into which it is convertible or for which it is exchangeable or exercisable), or upon the happening of any event or condition (a)
matures or is mandatorily redeemable (other than solely for Capital Stock which are not otherwise Disqualified Capital Stock),
pursuant to a sinking fund obligation or otherwise, (b) is redeemable or subject to mandatory repurchase, in either case, at the
option of the holder thereof (other than solely for equity interests which are not otherwise Disqualified Capital Stock), in whole
or in part, (c) provides for scheduled payments, dividends or distributions in cash or (d) is or becomes convertible into or exchangeable
or exercisable for indebtedness or any other equity interests that would constitute Disqualified Capital Stock, in each case, prior
to the date that is ninety one (91) days after the Maturity Date.


 


“Domestic Subsidiary”
means any Subsidiary that is organized under the laws of any state of the United States or the District of Columbia.


 


“EBITDA”
means, for any period in question, the sum of (a) Net Income for such period plus (b) to the extent deducted in determining
such Net Income, the sum, without duplication, of (i) Interest Expense during such period, (ii) all federal, state, local and/or
foreign income taxes payable by the Borrower and its Subsidiaries during such period, (iii) depreciation expenses of the Borrower
and its Subsidiaries during such period, (iv) amortization expenses of the Borrower and its Subsidiaries during such period, (v)
non-recurring transaction fees and expenses arising from the Transactions on or prior to the Closing Date and paid within sixty
(60) days of the Closing Date in an amount not to exceed $575,000, (vi) prepayment fees in connection with the repayment of the
Borrower’s existing term loan facility in an amount not to exceed $340,000, (vii) cash severance paid during the second Fiscal
Quarter of 2017 in an amount not to exceed $100,000, (viii) the non-cash write-off of loss and commission during the second Fiscal
Quarter of 2017 relating to the sublease of the Borrower’s Dallas, Texas leased office space in an amount not to exceed $135,000;
(ix) non-cash equity-based compensation in an aggregate amount not to exceed $2,750,000; and (x) any extraordinary, non-recurring
and/or non-cash losses and expenses incurred during such period as may be agreed in writing by the Required Purchasers in their
sole discretion, minus (c) any extraordinary, non-recurring and/or non-cash gains or income during such period as may be
agreed in writing by the Required Purchasers in their sole discretion, all determined on a consolidated basis and in accordance
with GAAP.


 


“Eligible Account”
means those Accounts consisting of trade receivables created by each Loan Party in the ordinary course of its business, that arise
out of such Loan Party’s goods shipped or rendition of services, and that are not excluded as ineligible by virtue of one
or more of the excluding criteria set forth below. In determining the amount to be included, Eligible Accounts shall be calculated
net of customer deposits, credits and unapplied cash. Eligible Accounts shall not include the following:


 


(a)          Accounts
that the Account Debtor has failed to pay within 90 days of stated due date and Accounts specifically reserved for by the Loan
Parties;


 




    	 	7	 



     


    

 


(b)          Accounts
with payment terms greater than 90 days from original invoice date; provided that the Accounts of Approved Distributors may have
payment terms greater than 90 days from the original invoice date and such Accounts shall be considered to be Eligible Accounts
so long as they otherwise would be Eligible Accounts;


 


(c)          Accounts
owed by an Account Debtor (or its Affiliates) where any Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible
under clause (a) above (if past due amounts are greater than 10% of the Account Debtor’s Account balance) or clauses (h)
or (o) below;


 


(d)          Accounts
with respect to which the Account Debtor is an Affiliate of the Borrower or an employee of the Borrower;


 


(e)          Accounts
that are not payable in Dollars or Canadian Dollars (provided that such Accounts that are payable in Canadian Dollars shall not
constitute more than $500,000 of Eligible Accounts);


 


(f)          Accounts
with respect to which the Account Debtor (i) does not maintain its principal place of business in the United States or Canada,
(ii) is not organized in the United States or Canada or (iii) is the government of any foreign country or sovereign state, or of
any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or
other instrumentality thereof;


 


(g)          Accounts
with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United
States (exclusive, however, of Accounts with respect to which such Borrower has complied, to the reasonable satisfaction of the
Purchaser, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United States;


 


(h)          That
portion of Accounts with respect to which the Account Debtor is a creditor of such Borrower, has or has asserted a right of setoff,
forensic investigation, or has disputed its obligation to pay all or any portion of the Account;


 


(i)          That
portion of Accounts which reflect a reasonable reserve for warranty claims or returns or amounts which are owed to Account Debtors,
including those for rebates, allowances, prepayment discounts or other deductions;


 


(j)          Accounts
(i) owing by a single Account Debtor or group of Affiliated Account Debtors whose total obligations owing to Borrowers exceed twenty
five (25%) percent of the aggregate amount of all otherwise Eligible Accounts;


 


(k)          Accounts
with respect to which the Account Debtor, to the knowledge of any Loan Party or the Collateral Agent, is subject to an insolvency
or bankruptcy proceeding or any dissolution or liquidation proceeding, is not solvent, has gone out of business, or as to which
such Borrower has received notice of an imminent insolvency or bankruptcy proceeding or any dissolution or liquidation or a material
impairment of the financial condition of such Account Debtor;


 




    	 	8	 



     


    

 


(l)           Accounts
representing credit card sales or “C.O.D.” sales;


 


(m)         Accounts
that are not subject to a valid and perfected first priority Lien by the Collateral Agent or that are subject to any other Lien,
unless such other Lien is a Permitted Lien and the holder of such Permitted Lien has entered into an intercreditor agreement with
the Purchasers reasonably acceptable to the Purchasers;


 


(n)          Accounts
that consist of progress billings (such that the obligation of the Account Debtors with respect to such Accounts is conditioned
upon such Loan Party’s satisfactory completion of any further performance under the agreement giving rise thereto) or retainage
invoices;


 


(o)          that
portion of Accounts which represent finance charges, service charges, sales taxes or excise taxes;


 


(p)         
that portion of Accounts which has been restructured, extended, amended or otherwise modified;


 


(q)         Accounts which have
not been invoiced or not invoiced in accordance with the material terms of the relevant agreement;


 


(r)          Accounts
which do not have binding documentary evidence of an underlying transaction with an end user in the event that the transaction
giving rise to the Account involves a distributor, partner or other reseller;


 


(s)          Accounts
the balance of which is less than $500; and


 


(t)          Accounts
or that portion of Accounts otherwise deemed ineligible and not covered by clauses (a) through (s) above by the Collateral Agent
in its reasonable discretion exercising reasonable credit judgment.


 


Any Accounts which are
not Eligible Accounts shall nonetheless constitute Collateral.


 


“Eligible Accounts
Adjustment” means the total amount owed to Borrower with respect to the Accounts of Sentinel Offender Services, LLC (“Sentinel”)
solely to the extent that (i) Sentinel is current on its payment obligations under the Sentinel Settlement Agreement in an amount
not to exceed the lesser of $1,541,143 and the amount currently outstanding under the Sentinel Settlement Agreement and (ii) the
Sentinel Settlement Agreement has not been amended.


 


“Environmental
Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, plans, injunctions, Licenses, concessions, grants, franchises, agreements and other governmental
restrictions relating to (a) the protection of the environment, (b) the effect of the environment on human health, (c) emissions,
discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water, air or land,
or (d) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof, including, without limitation, the Clean Air Act,
42 U.S.C. § 7401 et seq., the Clean Water Act, 33 U.S.C. § 1251 et seq. (“CWA”), the Solid Waste Disposal
Act (as amended by the Resource Conservation and Recovery Act), 42 U.S.C. § 6901 et seq. (“RCRA”), and
CERCLA.


 




    	 	9	 



     


    

 


“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended and the rules and regulations promulgated thereunder.


 


“ERISA Affiliate”
means a corporation that is or was a member of a controlled group of corporations with the Borrower within the meaning of Section
4001(a) or (b) of ERISA or Section 414(b) of the Code, a trade or business (including a sole proprietorship, partnership, trust,
estate or corporation) that is under common control with the Borrower within the meaning of Section 414(m) of the Code, or a trade
or business which together with the Borrower is treated as a single employer under Section 414(o) of the Code.


 


“Event of Default”
has the meaning given to that term in Section 10.1.


 


“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.


 


“Excluded Account”
has the meaning assigned thereto in the Guaranty and Collateral Agreement.


 


“Excluded Taxes”
shall mean, with respect to any Purchaser, or any other recipient of any payment to be made by or on account of any Obligations,
(a) Taxes imposed on or measured by its Net Income (however denominated), and franchise Taxes imposed on it (in lieu of Net Income
taxes), (i) by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in
which its principal office or applicable lending office is located or (ii) that are Other Connection Taxes, (b) any branch profits
Taxes imposed by the United States or any similar Tax imposed by any other jurisdiction in which the applicable Purchaser is located,
(c) in the case of a Foreign Purchaser, any withholding Tax that is imposed on amounts payable to such Foreign Purchaser pursuant
to a law in effect at the time such Foreign Purchaser becomes a party hereto (or designates a new lending office), except to the
extent that such Foreign Purchaser (or its assignor or seller of a participation, if any) was entitled, at the time of designation
of a new lending office (or assignment or sale of a participation), to receive additional amounts from Borrower with respect to
such withholding Tax pursuant to Section 3.5(a), (d) Taxes resulting from the failure to comply with Section 3.5(e),
or (e) any U.S. federal withholding Taxes imposed under FATCA.


 


“FATCA”
shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with), any current or future regulations promulgated thereunder
or official interpretations thereof, any agreement entered into pursuant to Section 1471(b)(1) of the Code, and any applicable
intergovernmental agreements with respect thereto and any fiscal or regulatory legislation, rules, practices, or laws adopted pursuant
to such intergovernmental agreements.


 




    	 	10	 



     


    

 


“Fee Letter”
means that certain Fee Letter, dated as of June 7, 2017, between the Collateral Agent and the Borrower, as amended, restated, amended
and restated, supplemented or otherwise modified from time to time.


 


“Financial Statements”
has the meaning given to that term in Section 6.12.


 


“Fiscal Quarter”
means a fiscal quarter of the Borrower and its Subsidiaries, ending on March 31, June 30, September 30, and December 31 of each
year.


 


“Fiscal Year”
means a fiscal year of the Borrower and its Subsidiaries, ending on December 31 of each year.


 


“Foreign Benefit
Plan” means each material plan, fund, program or policy established under the law of a jurisdiction other than the United
States (or a state or local government thereof), whether formal or informal, funded or unfunded, insured or uninsured, providing
employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, pension, retirement
or savings benefits, under which one or more of the Loan Parties or their Subsidiaries have any liability with respect to any employee
or former employee, but excluding any Foreign Pension Plan.


 


“Foreign Pension
Plan” means a pension plan required to be registered under the law of a jurisdiction other than the United States (or
a state or local government thereof), that is maintained or contributed to by one or more of the Loan Parties or their Subsidiaries
for their employees or former employees.


 


“Foreign Purchaser”
shall mean any Purchaser that is organized under the laws of a jurisdiction other than that in which Borrower is resident for tax
purposes. For purposes of this definition, the United States, each State thereof, and the District of Columbia shall be deemed
to constitute a single jurisdiction.


 


“Foreign Subsidiary”
means any Subsidiary that is not a Domestic Subsidiary.


 


“GAAP”
means generally accepted accounting principles in effect within the United States from time to time, consistently applied. If there
are any changes to GAAP during the term of this Agreement, the parties shall continue to determine compliance with the financial
covenants, and make all other financial determinations hereunder, without giving effect to any such changes until such time that
the parties hereto can agree to amend the financial covenants and other provisions requiring financial determinations hereunder
to take into account the effect of such changes to GAAP in a mutually acceptable manner.


 


“Governmental
Authority” means the government of any nation, state, city, locality or other political subdivision of any thereof, any
entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, regulation
or compliance, including, without limitation, any federal, state or local public utility commission, and any corporation or other
entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing.


 




    	 	11	 



     


    

 


“Guarantor”
or “Guarantors” means each Person that guarantees all or any portion of the Obligations. Each of the Domestic
Subsidiaries of the Borrower on the Closing Date and each other Domestic Subsidiary of the Borrower required to guarantee all or
any portion of the Obligations after the Closing Date shall be a Guarantor.


 


“Guaranty and
Collateral Agreement” means that certain Guaranty and Collateral Agreement, dated as of the Closing Date, made by the
Loan Parties in favor of the Collateral Agent, as amended, restated, modified, or supplemented from time to time.


 


“Hazardous Materials”
means (a) any “hazardous substance”, as defined by CERCLA, (b) any “hazardous waste”, as defined by RCRA,
(c) any petroleum product, (d) any “pollutant,” as defined by the CWA, or (e) contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any other Environmental Law.


 


“Hazardous Materials
Activity” means any past, current, proposed or threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence, existence, location, Release, threatened Release, discharge,
placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposal, disposition
or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.


 


“Hedging Agreement”
means any rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest
or currency exchange rate or commodity price hedging agreement.


 


“Indebtedness”
means, with respect to any Person, without duplication, such Person’s (a) obligations for borrowed money, (b) obligations
representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of
such Person’s business payable on terms customary in the trade and not outstanding more than 90 days past the date of invoice),
(c) obligations, whether or not assumed, secured by Liens or payable out of the proceeds or production from Property now or hereafter
owned or acquired by such Person, (d) obligations which are evidenced by bonds, debentures, notes, acceptances, or other similar
instruments, (e) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale
of the same or substantially similar securities or Property, (f) Capital Lease Obligations and obligations created or arising
under any conditional sale or other title retention agreement, (g) Contingent Obligations, (h) net obligations under or relating
to Hedging Agreements, (i) Off-Balance Sheet Liabilities, (j) attributable indebtedness related to Sale and Leaseback Transactions,
(k) the aggregate undrawn face amount of all letters of credit issued for the account and/or upon the application of such Person
together with all unreimbursed drawings with respect thereto, (l) any obligation to repurchase or redeem Disqualified Capital Stock
of such Person other than at the sole option of such Person, (m) “earnouts” and similar payment obligations of such
Person to the extent such obligations become fixed or are considered liabilities under GAAP, (n) all Indebtedness of others guaranteed
by such Person, and (l) any other obligation for borrowed money or other financial accommodation which, in accordance with GAAP,
would be shown as a liability on the balance sheet of such Person. The amount of Indebtedness under any Hedging Agreement on any
date shall be deemed to be the swap termination value thereof as of such date.


 




    	 	12	 



     


    

 


“Indemnified Party”
has the meaning given to that term in Section 11.1.


 


“Indemnified Taxes” shall
mean (a) any Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation
of any Loan Party under any Note Document and (b) to the extent not otherwise described in (a), Other Taxes.


 


“Intellectual
Property” means all intellectual and similar property of a Person, including inventions, designs, patents, copyrights,
trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software
and databases.


 


“Intellectual
Property License” has the meaning assigned thereto in the Guaranty and Collateral Agreement.


 


“Intellectual
Property Security Agreement” means a collateral assignment or security agreement pursuant to which the Borrower or any
of its Subsidiaries assigns or grants a security interest in its interests in Intellectual Property to the Collateral Agent, as
security for the Obligations, as the same may be amended, restated, supplemented or otherwise modified from time to time.


 


“Interest Expense”
means, for any period, the net interest expense of the Borrower and its Subsidiaries for the period in question, determined on
a consolidated basis and in accordance with GAAP (including, without limitation, all commissions, discounts and/or related amortization
and other fees and charges owed by the Borrower and its Subsidiaries with respect to letters of credit or bankers’ acceptances,
the net costs associated with any Hedging Agreement of the Borrower and its Subsidiaries, capitalized interest expense, the interest
portion of Capital Lease Obligations and the interest portion of any deferred payment obligation).


 


“Interest Payment
Date” has the meaning given to that term in Section 3.1(c).


 


“Inventory”
means all of the “inventory” (as that term is defined in the UCC) of the Borrower and its Subsidiaries, whether now
existing or hereafter acquired or created.


 


“Investment”
means any direct or indirect purchase, acquisition or other investment (including, without limitation, any loan or advance or capital
contribution) in or to any Person, whether payment therefor is made in cash or Capital Stock or otherwise, and whether such investment
is by acquisition of Capital Stock or Indebtedness, or by loan, advance, transfer of property out of the ordinary course of business,
capital contribution, equity or profit sharing interest, extension of credit on terms other than those normal in the ordinary course
of business or otherwise. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions
thereto, without any adjustments for decreases in value, or write downs or write offs with respect to such Investment.


 


“IP Rights”
has the meaning given to that term in Section 6.22.


 


“IRS”
means the United States Internal Revenue Service.


 




    	 	13	 



     


    

 


“Knowledge of
the Borrower” or “Knowledge of a Loan Party”, or any similar phrases, means the actual knowledge of
any director or executive officer of the Borrower or such Loan Party, as applicable, or knowledge that such person would have reasonably
obtained in the performance of such person’s duties as a director or executive officer of the Borrower or such Loan Party,
as applicable.


 


“Liabilities”
has the meaning given to that term in Section 11.1.


 


“Licenses”
means all licenses, permits, authorizations, determinations, and registrations issued by any Governmental Authority to the Borrower
or any Subsidiary in connection with the conduct of its business.


 


“Lien”
means any lien (statutory or otherwise), security interest, mortgage, pledge, hypothecation, deed of trust, assignment, deposit
arrangement, encumbrance, or preference, priority or other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capital Lease, or other
title retention agreement (and any lease in the nature thereof)) and any agreement to give any of the foregoing.


 


“Loan Party”
means the Borrower and each Guarantor.


 


“Material Adverse
Effect” means individually or in the aggregate (a) a material adverse effect on the assets, business, properties, results
of operations, financial condition, or prospects of the Borrower and its Subsidiaries (taken as a whole), (b) a material adverse
effect upon (i) the legality, validity, binding effect or enforceability against the Borrower or any of its Subsidiaries of any
Note Document, (ii) a significant portion of the Collateral or the validity, perfection or priority of the Collateral Agent’s
Liens on a significant portion of the Collateral or (iii) the rights, remedies and benefits (taken as a whole) available to, or
conferred upon, the Collateral Agent or any Purchaser under any Note Document, or (c) a material adverse effect on the ability
of the Borrower or any of its Subsidiaries to perform its obligations under any Note Document.


 


“Material Contract”
means any contract, agreement, instrument, permit, lease or License of the Borrower or its Subsidiaries (other than this Agreement
and the Note Documents) (i) as to which the termination thereof could reasonably be expected to result in a Material Adverse Effect,
(ii) as to which the failure to comply with, or loss of such contract could reasonably be expected to decrease revenue of the Borrower
and its Subsidiaries for the most recently ended twelve (12) month period as of the date of determination by more than 10%, (iii)
involving a commitment to pay an amount, by any Loan Party or any of its Subsidiaries in excess of $1,000,000 in any twelve-month
period following the Closing Date (whether or not in the ordinary course of business) or where any Loan Party or any of its Subsidiaries
actually paid in excess of $1,000,000 during the twelve month period preceding the Closing Date; (iv) for a partnership or a joint
venture or for the acquisition, sale or lease of any assets or Capital Stock of any Loan Party, its Subsidiaries or any other Person
or involving a sharing of profits; (v) that is a mortgage, pledge, hypothecation, conditional sales contract, security agreement,
factoring agreement or other similar Contractual Obligation with respect to any tangible and/or intangible personal property of
any Loan Party or its Subsidiaries (other than in connection with trade payables incurred in the ordinary course of business);
(vi) that is a loan agreement, credit agreement, promissory note, guarantee, subordination agreement, letter of credit or any other
similar type of Contractual Obligation (other than this Agreement and the Note Documents or in connection with trade payables incurred
in the ordinary course of business); (vii) with any Governmental Authority other than in the ordinary course of business; (viii)
which contains any provision that may terminate such contract or require payments to be made by any Loan Party or any of its Subsidiaries
upon or following a “change of control”, if such termination or payment under such Contractual Obligation could individually
or in the aggregate have a Material Adverse Effect; (ix) with respect to Hazardous Materials Activity; or (x) that is a material
binding commitment or agreement to enter into any of the foregoing types of agreements.


 




    	 	14	 



     


    

 


“Maturity Date” has the meaning
given to that term in Section 3.2(a).


 


“Maximum Rate”
has the meaning given to that term in Section 3.1(d).


 


“Minimum Liquidity”
means unrestricted cash and Cash Equivalents recorded on the balance sheet of the Loan Parties (in each case, to the extent subject
to a first priority perfected security interest in favor of the Collateral Agent arising under a control agreement in favor of
the Collateral Agent, but excluding any cash or Cash Equivalents subject to Liens permitted by Section 9.6(m)).


 


“Minimum Total
Liquidity” means Minimum Liquidity plus Eligible Accounts plus the Eligible Accounts Adjustment; provided
that the Eligible Accounts Adjustment shall not be included in the calculation of Minimum Total Liquidity at any time after March
25, 2018.


 


“Monthly Recurring
Revenue” means, with respect to any month, the average amount of monthly revenue for the trailing three month period
derived from subscription and support revenues, as reflected on the Borrower’s and its Subsidiaries’ financial statements
(provided that revenue generated from professional services cannot be greater than 5% of Monthly Recurring Revenue for purposes
of compliance with Section 9.20(e)).


 


“Multiemployer
Plan” means a multiemployer plan within the meaning of Section 3(37) or 4001(a)(3) of ERISA or Section 414(f) of the
Code.


 


“Net Cash Proceeds”
means, with respect to:


 


(a)          any
voluntary or involuntary sale or Disposition (other than a casualty loss or a sale or Disposition permitted under Section 9.4),
the cash proceeds received (directly or indirectly) from time to time in respect thereof, including any cash received in respect
of any non-cash proceeds (including, without limitation, the monetization of notes receivables), but only as and when received;


 


(b)          a
casualty loss, insurance proceeds, proceeds of a condemnation award or other compensation payments, in each case net of all reasonable
fees and out-of-pocket expenses (including appraisals, and brokerage, legal, advisory, banking, title and recording tax expenses
and commissions) paid by any Loan Party to third parties (other than Affiliates) in connection with such event; or


 




    	 	15	 



     


    

 


(c)          the
issuance of any Capital Stock, the aggregate amount of cash received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration) in connection with such issuance, after deducting
therefrom only (i) reasonable fees, commissions, and expenses related thereto and required to be paid by the applicable Loan
Party in connection with such issuance and (ii) Taxes paid or payable to any taxing authorities by such Loan Party in connection
with such issuance, in each case to the extent, but only to the extent, that the amounts so deducted are actually paid or payable
to a Person that is not an Affiliate of such Loan Party, and are properly attributable to such transaction.


 


“Net Income”
means the net income (or loss) of the Borrower and its Subsidiaries for the period in question, determined on a consolidated basis
and in accordance with GAAP.


 


“Note Documents”
means this Agreement, the Notes, the Collateral Documents, the Fee Letter, the Warrant, and each other agreement, document, form
or certificate delivered pursuant to this Agreement or any other Note Document, in each case, as amended, restated, modified or
supplemented from time to time.


 


“Note”
or “Notes” has the meaning set forth in the Statement of Purpose and shall include any Note issued under this
Agreement, including, without limitation, any Note issued pursuant to Section 2.1.


 


“Obligations”
means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing
after the filing of any bankruptcy or similar petition) the Notes, and (b) the Prepayment Fee and all other fees and commissions
(including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants
and duties owing by Borrower and each of its Subsidiaries to the Purchasers or the Collateral Agent under any Note Document of
every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement
by or against the Borrower or any Subsidiary thereof of any proceeding under any federal bankruptcy laws (as now or hereafter in
effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding up or adjustment
of debts, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims
in such proceeding.


 


“Observer”
shall have the meaning set forth in Section 8.15.


 


“OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets Control.


 


“Off-Balance Sheet
Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any liability under any Sale and Leaseback Transaction which is not a Capital Lease, (c) any
liability under any so-called “synthetic lease” transaction entered into by such Person, or (d) any obligation arising
with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the balance sheets of such Person.


 




    	 	16	 



     


    

 


“Other Connection
Taxes” shall mean any Taxes imposed as a result of a former or present connection between the recipient of a payment
hereunder and the jurisdiction imposing such Taxes (other than a connection arising from executing, delivering, becoming a party
to, the performance of an obligation under, receiving payments under, perfecting a security interest under, or engaging in any
other transaction pursuant to, or enforcing, this Agreement or selling or assigning any interest in the Notes).


 


“Other Taxes”
shall mean all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes or any other excise
or property Taxes, charges or similar levies arising from any payment made hereunder or under any Note Document or from the execution,
delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise
with respect to, this Agreement or any Note Document, except any such Taxes that are Other Connection Taxes imposed with respect
to an assignment in accordance with the terms hereof.


 


“Outstanding Company
Voting Securities” has the meaning set forth in the definition of “Change of Control”.


 


“Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, P.L. 107-56, as amended.


 


“PBGC”
means the Pension Benefit Guaranty Corporation or any successor agency.


 


“Pension Plan”
has the meaning given to that term in Section 6.21(b).


 


“Permitted Liens”
has the meaning given to that term in Section 9.6.


 


“Person”
means any individual, firm, corporation, limited liability company, partnership, trust, incorporated or unincorporated association,
joint venture, joint stock company, Governmental Authority or other entity of any kind, and shall include any successor (by merger
or otherwise) of such entity.


 


“Plans”
has the meaning given to that term in Section 6.21(a).


 


“Prepayment Date”
has the meaning given to that term in Section 3.2(b).


 


“Prepayment Fee”
means an amount determined by multiplying the percentage set forth below corresponding to the date on which the prepayment is,
or is required to be, made by the amount of such prepayment (including any prepayment of deferred interest accruing on the Notes):


 


	Periods of Prepayment	Percentage
	 	 
	Closing Date to June 7, 2019	5%
	 	 
	June 8, 2019 to June 7, 2020	3%
	 	 
	June 8, 2020 to the Maturity Date	1%




  


“Prepayment Fee
Trigger Event” means


 




    	 	17	 



     


    

 


(a)          any
prepayment, redemption or repurchase by any Loan Party of all, or any part, of the principal balance of the Notes for any reason
whether in whole or in part, and whether before or after (i) the occurrence of an Event of Default, or (ii) the commencement of
any case or other proceeding by any Loan Party seeking liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar Applicable Law now or hereafter in effect or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or such Loan
Party shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or such Loan Party shall make a general assignment for the benefit of creditors, or formally
admits in writing its inability or shall fail generally to pay its debts as they become due, or such Loan Party shall take any
corporate action to authorize any of the foregoing (any of the forgoing items set forth in this clause (ii), an “Insolvency
Proceeding”), and notwithstanding any acceleration (for any reason) of the Obligations; provided that any payment required
to be made pursuant to Section 3.2(a) shall not constitute a Prepayment Fee Trigger Event;


 


(b)          the
acceleration of the Obligations for any reason, including, but not limited to, acceleration in accordance with Section 10.1(f)
or (g), including without limitation as a result of the commencement of an Insolvency Proceeding;


 


(c)          the
satisfaction, release, payment, restructuring, reorganization, replacement, reinstatement, defeasance or compromise of any of the
Obligations in any Insolvency Proceeding, foreclosure (whether by power of judicial proceeding or otherwise) or deed in lieu of
foreclosure or the making of a distribution of any kind in any Insolvency Proceeding to the Collateral Agent, for the account of
the Purchasers in full or partial satisfaction of the Obligations; or


 


(d)          the
termination of this Agreement for any reason.


 


For purposes of the definition
of the term Prepayment Fee, if a Prepayment Fee Trigger Event occurs under clauses (a)(ii), (b), (c) or (d) above, the entire outstanding
principal amount of the Term Loan shall be deemed to have been prepaid on the date on which such Prepayment Fee Trigger Event occurs.


 


“Prime Rate”
means, for any day, the greater of (i) the rate of interest in effect for such day equal to the prime rate in the United States
as reported from time to time in The Wall Street Journal (or other authoritative source selected by the Collateral Agent in its
sole discretion), or as Prime Rate is otherwise determined by the Collateral Agent in its sole and absolute discretion and (ii)
4.00%. The Collateral Agent’s determination of the Prime Rate shall be conclusive, absent manifest error. Any change in such
rate of interest shall take effect at the opening of business on the day of such change. In the event The Wall Street Journal (or
such other authoritative source) publishes a range of “prime rates”, the Prime Rate shall be the highest of the “prime
rates”.


 


“Prohibited Transferee”
shall mean any company that is a direct competitor of Borrower or any of its Subsidiaries, and any Person listed on Schedule
1 attached to this Agreement.


 




    	 	18	 



     


    

 


“Property”
of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased, or operated by such Person.


 


“Public Purchaser”
has the meaning given to that term in Section 8.1.


 


“Purchase Price”
has the meaning given to that term in Section 2.1.


 


“Purchaser”
and “Purchasers” means HCP-FVF, LLC, a Delaware limited liability company and shall include its successors and
assigns hereunder or under the Notes.


 


“RCRA”
has the meaning set forth in the definition of “Environmental Laws.”


 


“Release”
means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor environment (including the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous Materials), including the movement of any Hazardous Materials
through the air, soil, surface water or groundwater.


 


“Reportable Event”
means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that
it be notified within 30 days of the occurrence of such event; provided, however, that a failure to meet the minimum funding
standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.


 


“Required Purchasers”
means the Purchasers holding more than 50% of the aggregate outstanding principal balance of the Notes.


 


“Requirements
of Law” means as to any Person, provisions of the Charter Documents of such Person, or any law, treaty, code, rule, regulation,
right, privilege, qualification, License or franchise, or any determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to such Person or any of such Person’s property or to which such Person or any of such Person’s
property is subject or pertaining to any or all of the Transactions or other transactions contemplated or referred to in the Note
Documents.


 


“Sale and Leaseback
Transaction” means any sale or other transfer of Property by any Person with the intent to lease such Property as lessee.


 


“Sanctioned Entity”
means (a) an agency of the government of, (b) an organization directly or indirectly controlled by, or (c) a person resident in
a country that is subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs,
or as otherwise published from time to time as such program may be applicable to such agency, organization or person.


 




    	 	19	 



     


    

 


“Sanctioned Person”
means a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html,
or as otherwise published from time to time.


 


“SEC”
means the United States Securities and Exchange Commission or any other governmental authority then having jurisdiction to enforce
the Securities Act and/or the Exchange Act, as applicable.


 


“SEC Documents”
has the meaning set forth in Section 6.12(b).


 


“Securities Act”
means the Securities Act of 1933, as amended, or any similar federal statute, and the rules and regulations thereunder as the same
shall be in effect at the time.


 


“Sentinel Settlement
Agreement” means that certain Settlement and Release Agreement dated as of December 30, 2016, by and between the Borrower
and Sentinel Offender Services, LLC.


 


“Single Employer
Plan” means a Plan maintained by the Borrower, its Subsidiaries or any member of a controlled group of corporations with
the Borrower, within the meaning of Section 4001(a) or (b) of ERISA or Section 414(b) of the Code, for employees of the Borrower,
any of its Subsidiaries or any of its respective ERISA Affiliates.


 


“Solvent”
means, with respect to any Person that (a) the fair value of the assets and the property of such Person exceeds the fair value
of the aggregate liabilities (including contingent and unliquidated liabilities) of such Person, (b) after giving effect to the
transactions contemplated by this Agreement and the other Note Documents, such Person will not be left with unreasonably small
capital, and (c) after giving effect to the transactions contemplated by this Agreement and the other Note Documents, such Person
is able to both service and pay its liabilities as they mature. In computing the amount of contingent or unliquidated liabilities
at any time, such liabilities will be computed as the amount that, in light of all the facts and circumstances existing at such
time, represents the amount that is likely to become an actual or matured liability.


 


“Subordinated
Note” means that certain Amended and Restated Senior Subordinated Promissory Note dated as of the date hereof in the
stated principal amount of $5,000,000 among Kenneth Rainin Foundation, a California corporation, as Holder (as defined therein),
and the Borrower, as Borrower (as defined therein), as amended or otherwise modified from time to time in accordance with the terms
thereof.


 


“Subordinated
Note Obligations” means all of the indebtedness, obligations and liabilities evidenced by or related to or arising in
connection with the Subordinated Note.


 


“Subsidiary”
means, with respect to any Person, a corporation or other entity of which more than fifty percent (50%) of the voting power of
the voting equity securities or equity interest is owned, directly or indirectly, by such Person. Unless otherwise qualified, all
references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.


 




    	 	20	 



     


    

 


“Tax”
means any present or future United States federal, state, local or foreign income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental (including taxes under Code §59A), customs
duties, capital stock, franchise profits, withholding, social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on-minimum, estimated, or other taxes, levies, assessments,
fees or other charges imposed by any Governmental Authority, including any interest, penalty, or addition thereto, whether disputed
or not.


 


“Tax Return”
means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule
or attachment thereto, and including any amendment thereof.


 


“Transactions”
means the issuance of the Notes hereunder.


 


“UCC”
has the meaning set forth in the Guaranty and Collateral Agreement.


 


“Unfunded Liabilities”
means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Plans exceeds the fair
market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such
Plans using actuarial assumptions used in determining the Plans’ normal cost for purposes of Section 412(b)(2)(A) of the
Code. In each case, the foregoing determination shall be made as of the most recent date prior to the filing of said annual report
as of which such actuarial present value of accumulated Plan benefits is determined.


 


“Warrant”
means that certain Warrant, dated as of the date hereof, by the Borrower issued to HCP-FVF, LLC, as amended or modified from time
to time in accordance with the terms thereof.


 


“Wholly-owned”
means, with respect to a Subsidiary, that all of the Capital Stock of such Subsidiary is, directly or indirectly, owned or controlled
by the Borrower and/or one or more of its Wholly-owned Subsidiaries.


 




    	 	21	 



     


    

 


1.2          Accounting
Terms. All accounting terms used herein and not expressly defined in this Agreement shall have the respective meanings
given to them in conformance with GAAP. Where the character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this
Agreement, this shall be done in accordance with GAAP, consistently applied, to the extent applicable, except as otherwise expressly
provided in this Agreement. If any changes in accounting principles from those in effect on the date hereof are hereafter occasioned
by promulgation of rules, regulations, pronouncements or opinions by or are otherwise required by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors thereto or agencies with similar functions), and
any of such changes results in a change in the method of calculation of, or affects the results of such calculation of, any of
the financial covenants, standards or terms found herein, then the parties hereto agree upon the request of any Loan Party or Purchaser
to enter into and diligently pursue negotiations in order to amend such financial covenants, standards or terms so as to equitably
reflect such changes, with the desired result that the criteria for evaluating financial condition and results of operations of
the Borrower and its Subsidiaries shall be the same after such changes as if such changes had not been made; provided that
until any such amendments have been agreed upon by the Required Purchasers, the provisions in this Agreement shall be calculated
as if no such changes in accounting principles had occurred. Notwithstanding any other provision contained herein, all terms of
an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios shall be made, without
giving effect to any election under Accounting Standards Codification 825-10 (or any other Financial Accounting Standard having
a similar result or effect) to value any Indebtedness or other liabilities of any Loan Party at “fair value.” Notwithstanding
any accounting change after the Closing Date that would require lease obligations that would be treated as operating leases as
of the Closing Date to be classified and accounted for as capital leases or otherwise reflected on the Borrower’s and its
Subsidiaries’ consolidated balance sheet, for the purposes of determining compliance with any covenant contained herein,
such obligations shall be treated in the same manner as operating leases are treated as of the Closing Date.


 


Article
2


PURCHASE
AND SALE OF THE NOTES


 


2.1          Purchase
and Sale of the Notes. Subject to the terms and conditions herein set forth, on the Closing Date, the Borrower will issue
and sell to the Purchasers, and the Purchasers severally and not jointly will acquire from the Borrower, on the Closing Date, the
Notes in an aggregate principal amount (and for an aggregate purchase price) of $13,500,000 (the “Purchase Price”),
allocated among the Purchasers as set forth on Schedule 2.1.


 


2.2          Fees
Payable.


 


(a)          Fee
Letter. The Borrower shall pay to the Collateral Agent such fees as are specified as owing in the Fee Letter at the times and
in the manner and amounts as are set forth therein.


 


(b)          Reimbursement
of Expenses. At the Closing, the Borrower shall reimburse all of the Collateral Agent’s and the Purchasers’ reasonable
and documented out-of-pocket fees and expenses (including, without limitation, fees, charges and disbursements of outside counsel
and other out-of-pocket expenses such as consultant fees, travel expenses, background checks and other expenses) incurred in connection
with (i) the negotiation and execution and delivery of this Agreement and the Note Documents, (ii) the Purchasers’ due diligence
investigation, and (iii) the other transactions contemplated by this Agreement and the Note Documents (including filings or other
actions required to perfect the security interests granted under the Collateral Documents); provided that the Borrower shall not
be obligated to pay, without its prior written approval (such approval not to be unreasonably withheld or delayed), any out-of-pocket
fees, costs and expenses incurred in excess of (x) $10,000 for due diligence expenses, and (y) $215,000 for travel expense and
the fees, disbursements and other charges of legal counsel to the Purchasers incurred prior to the Closing in connection with clause
(i) above. The Borrower agrees to promptly pay all reasonable and documented out-of-pocket fees, costs and expenses (including
external attorneys’ fees and expenses) incurred by the Purchasers in connection with any action to enforce this Agreement
or the Note Documents or to collect any payments due from the Borrower or any of the Guarantors. All fees, costs, and expenses
for which the Borrower is responsible under this Section 2.2(b) shall be deemed part of the Obligations when incurred.


 




    	 	22	 



     


    

 


2.3          Closing.
The purchase and issuance of the Notes shall take place at the closing (the “Closing”) on the date hereof (the
“Closing Date”), subject to the satisfaction or waiver of the conditions to closing set forth in Article
4. At the Closing, the Borrower shall deliver the Notes to the Purchasers against delivery by the Purchasers of the Purchase
Price, which is payable by wire transfer of immediately available funds.


 


Article
3


THE
NOTES


 


3.1          Interest
and Related Fees.


 


(a)          Interest.
Except as provided in Section 3.1(b), interest shall accrue and shall be calculated daily on the basis of the actual number
of days elapsed and a 360-day year on the unpaid principal amount of the Notes outstanding from time to time and on all other Obligations
at the lesser of (i) the Applicable Rate and (ii) the Maximum Rate (as defined below).


 


(b)          Default
Rate of Interest. At the written election of the Required Purchasers after the occurrence of an Event of Default (or automatically
upon the occurrence of and during the continuance of any Event of Default pursuant to Section 10.1(a), 10.1(c) (solely
with respect to failure to comply with Section 9.20), 10.1(f) or Section 10.1(g)), and for so long as such
Event of Default continues, the unpaid principal amount of the Notes outstanding from time to time and the other Obligations shall
bear interest at a rate per annum of five percent (5%) (the “Default Rate”) in excess of the rates otherwise
payable under this Agreement or the Note Documents (but not in any event in excess of the Maximum Rate). The Default Rate shall
apply retroactively to the date of occurrence of such Event of Default. All Default Rate interest shall be paid in cash on demand
of the Collateral Agent. If, pursuant to the terms of this Agreement or the Note Documents such other Obligations do not bear interest,
after the occurrence of an Event of Default and for so long as it continues, such Obligations shall bear interest at the rate per
annum from time to time borne by the Notes.


 


(c)          Payment
of Interest and Related Fees. Subject to Section 3.1(e) below, the Borrower shall pay accrued interest in arrears on
the last day of each calendar month (each such date being an “Interest Payment Date”). In addition, accrued
and unpaid interest shall be payable on the maturity of the Notes, whether by acceleration or otherwise, and on the date of any
prepayment (with respect to the amount prepaid).


 




    	 	23	 



     


    

 


(d)          Excess
Interest. It is the intention of the parties to comply strictly with applicable usury laws. Accordingly, notwithstanding any
provision to the contrary in this Agreement or any other Note Document or any of the Obligations, in no event shall any Obligations
require the payment or permit the payment, taking, reserving, receiving, collection or charging of any sums constituting interest
under Applicable Law that exceed the maximum amount permitted by such laws, as the same may be amended or modified from time to
time (the “Maximum Rate”). If any such excess interest is called for, contracted for, charged, taken, reserved
or received in connection herewith or therewith, or in any communication by any Purchasers or any other Person to the Borrower
or any other Person, or in the event that all or part of the principal or interest hereof or thereof shall be prepaid or accelerated,
so that under any of such circumstances or under any other circumstance whatsoever the amount of interest contracted for, charged,
taken, reserved or received on the amount of principal actually outstanding from time to time under any Obligations shall exceed
the Maximum Rate, then in such event it is agreed that: (i) the provisions of this paragraph shall govern and control; (ii) neither
the Borrower nor any other Person or entity now or hereafter liable for the payment of any Obligations shall be obligated to pay
the amount of such interest to the extent it is in excess of the Maximum Rate; (iii) any such excess interest which is or has been
received by any Purchasers, notwithstanding this paragraph, shall be credited against the then unpaid principal balance of the
Obligations (or, if the principal amount of the Obligations shall have been paid in full, refunded by the Purchasers to the party
primarily liable on such Obligation); and (iv) the provisions of this Agreement and the Obligations, and any other communication
to the Borrower, shall immediately be deemed reformed and such excess interest reduced, without the necessity of executing any
other document, to the Maximum Rate. The right to accelerate the maturity of the Obligations does not include the right to accelerate,
collect, or charge unearned interest, but only such interest that has otherwise accrued as of the date of acceleration. Without
limiting the foregoing, all calculations of the rate of interest contracted for, charged, taken, reserved or received in connection
with any of the Obligations which are made for the purpose of determining whether such rate exceeds the Maximum Rate shall be made
to the extent permitted by Applicable Laws by amortizing, prorating, allocating and spreading during the period of the full term
of such Obligations, including all prior and subsequent renewals and extensions hereof or thereof, all interest at any time contracted
for, charged, taken, reserved or received by any Purchaser. The terms of this paragraph shall be deemed to be incorporated into
each of the other Note Documents.


 


(e)          PIK
Interest. Notwithstanding any other provision hereof, on any Interest Payment Date occurring on or prior to June 29, 2018 the
Borrower shall pay accrued interest in kind (rather than in cash). Any such interest shall be capitalized to the principal amount
of the Notes on such Interest Payment Date and shall be considered principal of the Notes for all purposes, including, without
limitation, for the calculation of interest on subsequent Interest Payment Dates and of any Prepayment Fee.


 


3.2          Redemption
of Notes.


 


(a)          Scheduled
Redemptions of Notes. (i) The Borrower shall redeem the Notes issued by it on March 31, 2021 (the “Maturity Date”)
by payment in cash in full of the entire outstanding principal balance thereof (including all interest that has been added to the
outstanding principal amount of such Notes pursuant to Section 3.1(e)), plus all unpaid interest accrued thereon
through the date of redemption, plus all outstanding and unpaid Obligations to the Purchasers of the Notes under the Note Documents
through the date of redemption and pay to the Collateral Agent all other outstanding Obligations payable to the Collateral Agent
under the Note Documents. (ii) The Borrower shall redeem the Notes issued by it in principal installments of $250,000 payable on
the last day of each month end beginning with the month ending June 30, 2018 and continuing through the Maturity Date (and on such
other date(s) and in such other amounts as may be required from time to time pursuant to this Agreement).


 




    	 	24	 



     


    

 


(b)          Optional
Redemption Initiated by the Borrower. The Borrower shall have the right, at its sole option and election, at any time or from
time to time prior to the Maturity Date, to redeem the Notes issued by the Borrower, in whole or in part on not less than five
(5) Business Days’ prior written notice of the date of redemption, which shall be a Business Day (any such date, a “Prepayment
Date”), by payment of an amount equal to the unpaid principal balance thereof to be redeemed, plus all unpaid
interest accrued thereon through the Prepayment Date, plus all outstanding and unpaid fees and expenses payable to the Purchasers
of each Note under the Note Documents through the Prepayment Date, plus the Prepayment Fee.


 




    	 	25	 



     


    

 


(c)          Mandatory
Redemptions.


 


(i)          Change
of Control. Upon the occurrence of a Change of Control, the Borrower shall purchase all Notes issued by it in full by payment
of an amount equal to (x) the unpaid principal balance thereof plus (y) all other outstanding Obligations payable to the
Purchasers of each Note under the Note Documents through the Prepayment Date and all other outstanding Obligations payable to the
Collateral Agent under the Note Documents plus (z) the Prepayment Fee. The provisions of this Section 3.2(c)(i) shall
not be deemed to be implied consent to any such Change of Control otherwise prohibited by the terms of this Agreement.


 


(ii)          Dispositions;
Casualty Losses. Promptly, and in any event within two (2) Business Days of receipt by the Borrower of the proceeds of any
voluntary or involuntary sale or Disposition by the Borrower or any Subsidiary of assets (including casualty losses or condemnations
but excluding sales or Dispositions which are permitted under Section 9.4), the Borrower shall be required to prepay the
Notes issued by it in an amount equal to 100% of the Net Cash Proceeds (including condemnation awards and payments in lieu thereof)
received by such Person in connection with such sales or Dispositions plus the Prepayment Fee; provided that, so
long as (A) no Default or Event of Default shall have occurred and is continuing or would result therefrom, (B) the Borrower shall
have given the Purchasers prior written notice of the Borrower’s intention to apply such monies to the costs of replacement
of the properties or assets that are the subject of such sale or Disposition or the cost of purchase or construction of other assets
useful in the business of the Borrower or its Subsidiaries, (C) the monies are held in a deposit account in which the Purchasers
have a perfected security interest (subject only to Permitted Liens) and (D) the Borrower or its Subsidiaries, as applicable, complete
such replacement, purchase, or construction within 180 days after the initial receipt of such monies, then the Borrower whose assets
were the subject of such Disposition shall have the option to apply such monies in an amount not to exceed $750,000 (with any Net
Cash Proceeds in excess of $750,000 to be applied to prepay the Notes) to the costs of replacement of the assets that are the subject
of such sale or Disposition or the costs of purchase or construction of other assets useful in the business of the Borrower unless
and to the extent that such applicable period shall have expired without such replacement, purchase, or construction being made
or completed, in which case, any amounts remaining in the deposit account referred to in clause (C) above shall be immediately
paid to the Purchasers and applied in prepayment of the Notes in accordance with Section 3.3. Nothing contained in this
Section 3.2(c) shall permit the Borrower or any Subsidiary to sell or otherwise dispose of any assets other than in accordance
with Section 9.4.


 


(iii)          Equity.
Promptly, and in any event within two (2) Business Days of the date of the receipt by the Borrower or any of its Subsidiaries of
the proceeds from the issuance and sale of any Capital Stock of the Borrower (other than proceeds of Capital Stock of the Borrower
used to repurchase or repay the Subordinated Note pursuant to Section 9.17 at any time in an aggregate amount not to exceed
$2,500,000), the Borrower shall be required to prepay the Notes in an amount equal to 100% of the Net Cash Proceeds received by
such Person in connection with such issuance plus the Prepayment Fee. The provisions of this Section 3.2(c)(iii)
shall not be deemed to be implied consent to any such issuance otherwise prohibited by the terms of this Agreement.


 




    	 	26	 



     


    

 


(iv)          Option
to Decline. Any mandatory prepayment required to be made pursuant to Section 3.2(c) may be declined in whole or
in part by any Purchaser without prejudice to such Purchaser’s rights hereunder to accept or decline any future payments
in respect of any mandatory prepayments, by providing notice to the Collateral Agent no later than 5:00 p.m. (New York City time)
one (1) Business Day (or such other date acceptable to the Collateral Agent) prior to the date of such prepayment; provided
that the Borrower shall give not less than two (2) Business Days’ prior written notice of the date of any mandatory prepayment.
If a Purchaser chooses not to accept payment in respect of a mandatory prepayment in whole or in part the other Purchasers that
accept such mandatory prepayment shall have the option to share such proceeds on a pro rata basis on or before the date otherwise
due hereunder; provided that, to the extent such mandatory prepayment is declined by all the Purchasers, such prepayment
may be retained by the Borrower.


 


(d)          Acceleration.
In addition, the Notes shall be subject to acceleration as set forth in Section 10.2 below.


 


(e)          Prepayment
Fee Trigger Event. Upon the occurrence of a Prepayment Fee Trigger Event, the Borrower shall pay to the Collateral Agent, for
the account of the Purchasers, the Prepayment Fee. THE BORROWER AND THE OTHER LOAN PARTIES EXPRESSLY WAIVE (TO THE EXTENT SUCH
WAIVER IS PERMISSIBLE UNDER APPLICABLE LAW) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT
THE COLLECTION OF THE FOREGOING PREPAYMENT FEE IN CONNECTION WITH ANY ACCELERATION OF THE OBLIGATIONS. The Borrower and the other
Loan Parties expressly agree that (A) the Prepayment Fee is reasonable and is the product of an arm’s length transaction
between sophisticated business people, ably represented by counsel, (B) the Prepayment Fee shall be payable notwithstanding the
then prevailing market rates at the time payment is made, (C) there has been a course of conduct between the Purchasers and the
Loan Parties giving specific consideration in this transaction for such agreement to pay the Prepayment Fee, (D) the Loan Parties
shall be estopped hereafter from claiming differently than as agreed to in this Section 3.2(e), (E) their agreement to pay
the Prepayment Fee is a material inducement to the Purchasers to purchase the Notes, and (F) the Prepayment Fee represents a good
faith, reasonable estimate and calculation of the lost profits or damages of the Purchasers and that it would be impractical and
extremely difficult to ascertain the actual amount of damages to the Purchasers or profits lost by the Purchasers as a result of
such Prepayment Fee Trigger Event.


 




    	 	27	 



     


    

 


3.3          Manner
of Payment. All fees, interest, Prepayment Fee, premium, principal and other amounts payable in respect of any Note Document
shall be paid by wire transfer of immediately available funds to an account at a bank designated in writing by the applicable Purchaser
or the Collateral Agent, as applicable. All payments made by the Borrower (excluding regular monthly interest payments made when
due under Section 3.1(a)) upon the Obligations relating to the Notes and all net proceeds from the enforcement of the Obligations
shall be applied (a) first, to that portion of the Obligations constituting fees, indemnities, and expenses and other amounts
(including attorneys’ fees), payable to the Collateral Agent and the Purchasers, (b) second, to the payment of that
portion of the Obligations constituting accrued and unpaid interest on the Notes, (c) third, to the payment of that portion
of the Obligations constituting unpaid principal of the Notes, and (d) last, the balance, if any, after all of the Obligations
have been indefeasibly paid in full, to the Borrower or as otherwise required by any Requirements of Law. All payments made by
the Borrower upon the Notes (including, without limitation, payments of principal if prepaid or upon earlier acceleration) shall
be paid proportionally among the Purchasers of the Notes based upon the outstanding principal amounts of such Notes held by each
Purchaser.


 


3.4          [Intentionally
Omitted].


 


3.5          Taxes.


 


(a)          Any
and all payments by or on account of any Obligations hereunder or under any Note Document shall be made free and clear of and without
deduction or withholding for any Indemnified Taxes; provided that if the Borrower shall be required by Applicable Law (as
determined in the good faith discretion of the Borrower) to deduct or withhold any Indemnified Taxes from such payments, then (i)
the sum payable shall be increased as necessary so that after making all such deductions or withholding (including such deductions
or withholding applicable to additional sums payable under this Section 3.5) a Purchaser receives an amount equal to the
sum it would have received had no such deductions or withholding been made, (ii) the Borrower shall make such deductions or withholding
and (iii) the Borrower shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance
with Applicable Law.


 


(b)          Without
limiting the provisions of Section 3.5(a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with Applicable Law.


 


(c)          The
Borrower shall indemnify each Purchaser for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Section 3.5) payable or paid by any Purchaser or required to be withheld
or deducted from a payment to such Purchaser and any reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate
setting forth in reasonable detail the basis for determining the amount of such payment or liability delivered to Borrower by any
Purchaser shall be conclusive absent manifest error. Such payment shall be due within ten (10) days of Borrower’s receipt
of such certificate.


 


(d)          As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority pursuant
to this Section 3.5, Borrower shall deliver to the applicable Purchasers the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to such Purchasers.


 




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(e)          Status
of Purchasers.


 


(i)          Any
Purchaser that is entitled to an exemption from or reduction of withholding Tax with respect to payments made hereunder or under
any Note Document shall deliver to the Borrower at the time or times reasonably requested by the Borrower such properly completed
and executed documentation as reasonably requested by the Borrower as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Purchaser, if requested by the Borrower, shall deliver such other documentation
prescribed by Applicable Law or reasonably requested by the Borrower as will enable the Borrower to determine whether or not such
Purchaser is subject to backup withholding or information reporting requirements.


 


(ii)          Without
limiting the generality of Section 3.5(e)(i), each Purchaser that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for U.S. federal income tax purposes (a “Non-US Purchaser”) shall deliver promptly
to the Borrower, on or prior to the Closing Date (in the case of each Purchaser listed on the signature pages hereof on the Closing
Date or, if later, on or prior to the date on which such Purchaser becomes a party to this Agreement), and at such other times
as the Borrower reasonably requests, (i) two original copies of IRS Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP and/or W-8IMY (or, in
each case, any successor forms), properly completed and duly executed by such Purchaser, and such other documentation prescribed
by the Code or reasonably requested by the Borrower to establish, if applicable, that such Purchaser is not subject to (or is subject
to a reduced rate of) deduction or withholding of United States federal tax with respect to any payments to such Purchaser of principal,
interest, fees or other amounts payable under any of the Note Documents, or (ii) if such Purchaser is not a “bank”
or other Person described in Section 881(c)(3) of the Code, a Certificate Regarding Non-Bank Status that is substantially in the
form of Exhibit B together with two original copies of IRS Form W-8BEN or W-8BEN-E or W-8IMY (or any successor form), properly
completed and duly executed by such Purchaser, and such other documentation prescribed by the Code or reasonably requested by the
Borrower to establish, if applicable, that such Purchaser is not subject to (or is subject to a reduced rate of) deduction or withholding
of United States federal tax with respect to any payments to such Purchaser of interest payable under any of the Note Documents.
Without limiting the generality of Section 3.5(e)(i), each Purchaser that is a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for United States federal income tax purposes (a “U.S. Purchaser”) shall deliver
to the Borrower on or prior to the Closing Date (or, if later, on or prior to the date on which such Purchaser becomes a party
to this Agreement) and at such other times as the Borrower reasonably requests two original copies of IRS Form W-9 (or any successor
form), properly completed and duly executed by such Purchaser, certifying that such U.S. Purchaser is entitled to an exemption
from United States backup withholding tax, or otherwise prove that it is entitled to such an exemption. Each Purchaser required
to deliver any forms, certificates or other evidence with respect to United States federal tax withholding matters pursuant to
this Section 3.5(e) hereby agrees, from time to time after the initial delivery by such Purchaser of such forms, certificates
or other evidence, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence obsolete
or inaccurate in any material respect, that such Purchaser shall promptly deliver to the Borrower two new original copies of IRS
Form W-8BEN, W-8BEN-E, W-8ECI, W-8EXP, W-8IMY and/or W-9 (or, in each case, any successor form), or a Certificate Regarding Non-Bank
Status and two original copies of IRS Form W-8BEN, W-8BEN-E or W-8IMY (or, in each case, any successor form), as the case may be,
properly completed and duly executed by such Purchaser, and such other documentation prescribed by the Code or reasonably requested
by the Borrower, if applicable, to confirm or establish that such Purchaser is not subject to deduction or withholding of United
States federal tax with respect to payments to such Purchaser under the Note Documents, or promptly notify the Borrower of its
legal inability to deliver any such forms, certificates or other evidence.


 




    	 	29	 



     


    

 


(iii)          If
a payment made to a Purchaser under any Note Document would be subject to U.S. federal withholding Tax imposed by FATCA if such
Purchaser were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b)
or 1472(b) of the Code, as applicable), such Purchaser shall deliver to the Borrower at the time or times prescribed by law and
at such time or times reasonably requested by the Borrower such documentation prescribed by applicable law (including as prescribed
by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower as may be necessary
for the Borrower to comply with its obligations under FATCA and to determine that such Purchaser has complied with such Purchaser’s
obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause
(iii), “FATCA” shall include any amendments made to FATCA after the date hereof.


 


(f)          If
any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it
has been indemnified pursuant to this Section 3.5 (including additional amounts pursuant to this Section 3.5), it
shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this
Section 3.5 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to
such refund). Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount
paid over pursuant to this Section 3.5(f) (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this Section 3.5(f), in no event will the indemnified party be required to pay any amount to
an indemnifying party pursuant to this Section 3.5(f) the payment of which would place the indemnified party in a less favorable
net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such
refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect
to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax
returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.


 


(g)          Without
prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower and
any Purchaser under this Section 3.5 shall survive the termination of the Note Documents and the payment in full of the
Notes or the assignment of rights by a Purchaser.


 


3.6          Purchase
Price Allocation. On the Closing Date, in consideration of the Purchasers purchasing the Notes, the Issuer will issue to the
Purchasers for no additional consideration, the Warrant. The Purchasers and the Borrower agree that the Notes and the Warrants
constitute an “investment unit” for purposes of Section 1273(c)(2) of the Code. The Purchasers and the Borrower mutually
agree that for purpose of the allocation of the issue price of such investment unit among the Notes and the Warrants in accordance
with Section 1273(c)(2) of the Code and U.S. Treasury Regulation Section 1.1273-2(h) $1,760,869.57 shall be allocated to the Warrants,
and neither the Purchasers nor the Company shall take any position inconsistent with such allocation in any Tax Return unless otherwise
required by a tax authority or court.


 




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Article
4


CONDITIONS
TO THE OBLIGATIONS OF THE PURCHASERS


 


The obligation of the Purchasers
to purchase the Notes, to pay the Purchase Price at the Closing and to perform any obligations hereunder shall be subject to the
satisfaction as determined by, or waived by, the Purchasers of the following conditions on or before the Closing Date; provided
that any waiver of a condition shall not be deemed a waiver of any breach of any representation, warranty, agreement, term
or covenant, as specifically set forth elsewhere in this Agreement, or of any misrepresentation by the Borrower.


 


4.1          Representations
and Warranties. The representations and warranties contained in Article 6 hereof shall be true and correct in all
material respects (except to the extent any such representation or warranty is by its terms qualified by reference to materiality,
in which case such representation or warranty shall be true and correct in all respects) at and as of the Closing Date (except
to the extent such representations and warranties specifically relate to an earlier date, in which case they shall be true and
correct as of such earlier date) after giving effect to the Transactions, and the Purchasers shall have received at the Closing
a certificate to the foregoing effect, dated the Closing Date, and executed by the chief executive officer or chief financial officer
of the Borrower on behalf of the Borrower.


 


4.2          Compliance
with this Agreement. The Borrower and the Guarantors shall have performed and complied in all material respects with all
of its agreements and conditions set forth or contemplated herein that are required to be performed or complied with by such Loan
Party on or before the Closing Date and the Purchasers shall have received at the Closing a certificate to the foregoing effect,
dated the Closing Date, and executed by the chief executive officer or chief financial officer on behalf of the Borrower.


 


4.3          Certificates.
The Purchasers shall have received certificates from the Borrower and each Guarantor, dated the Closing Date and signed by a manager
or an officer of such Loan Party, certifying (i) that the attached copies of the Charter Documents of such Loan Party, and resolutions
of the board of directors or similar governing body of such Loan Party approving the Note Documents to which it is a party and
the Transactions are all true, complete and correct and remain unamended and in full force and effect, (ii) to the incumbency and
specimen signature of each manager or officer of such Loan Party executing any Note Document to which it is a party or any other
document delivered in connection herewith and therewith on behalf of such Loan Party, (iii) that the attached list of executive
officers and directors or managers, as applicable, of such Loan Party are true, complete, and correct, (iv) that, to the Knowledge
of such Loan Party, none of the executive officers and directors or managers, as applicable, included in such attached list have
been charged with, indicted for, been part of a proceeding for, been investigated for, arrested for, or convicted of a felony,
nor are they engaged in criminal activity, nor have any of them been an officer of a bankrupt company other than as set forth on
a schedule attached to such certificate, and (v) that, to the Knowledge of such Loan Party, there are no written or oral side agreements
with any individual or business whereby such Loan Party or its management has agreed to incur any obligations other than those
contained in formal written contracts or agreements executed by or on behalf of such Loan Party.


 




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4.4          Solvency.
The Purchasers shall have received a certificate, signed by the chief financial officer of the Borrower, certifying that the Borrower
and its Subsidiaries, on a consolidated basis, are Solvent both immediately before and immediately after giving effect to the Transactions.


 


4.5          Financial
Information. The Purchasers shall have received (i) a set of projections of the Borrower for each Fiscal Year through the
Maturity Date, including projected financial statements and Capital Expenditures, and (ii) a pro forma balance sheet of the Borrower,
prepared giving effect to the consummation of the transactions contemplated hereby, in each case in form and substance (including
as to scope and underlying assumptions) reasonably satisfactory to the Purchasers.


 


4.6          Documents.
The Purchasers shall have received true, complete and correct copies of the Note Documents, and such other agreements, schedules,
exhibits, certificates, documents, financial information and filings as the Purchasers may request in connection with or relating
to the Transactions all in form and substance reasonably satisfactory to the Purchasers, including, without limitation, each of
the Note Documents executed by the Borrower and its Subsidiaries as and where applicable.


 


4.7          Purchase
of Notes Permitted by Applicable Laws. The acquisition of and payment for the Notes to be acquired by the Purchasers hereunder
and the consummation of the transactions contemplated hereby and by the Note Documents (i) shall not be prohibited by any Requirements
of Law, and (ii) shall not subject the Purchasers to any penalty or other onerous condition under or pursuant to any Requirements
of Law.


 


4.8          Opinion
of Counsel. The Purchasers shall have received opinions of outside counsel to the Borrower and its Subsidiaries, dated
as of the Closing Date, relating to the Transactions, in form and substance reasonably acceptable to the Purchasers.


 


4.9          Consents
and Approvals. All consents, exemptions, authorizations, or other actions by, or notices to, or filings with, Governmental
Authorities and other Persons in respect of all Requirements of Law and with respect to those Contractual Obligations of the Borrower
and each other Loan Party necessary in connection with the execution, delivery or performance by the Borrower or such other Loan
Party, or enforcement against the Borrower, of the Note Documents to which it is a party shall have been made or obtained and be
in full force and effect, and the Purchasers shall have been furnished with appropriate evidence thereof.


 


4.10        No
Material Judgment or Order. There shall not be on the Closing Date any judgment, injunction or order of a court of competent
jurisdiction or any ruling of any Governmental Authority which, in the judgment of the Purchasers, would prohibit the purchase
of the Notes hereunder or subject the Purchasers to any penalty or other onerous condition under or pursuant to any Requirement
of Law if the Notes were to be purchased hereunder.


 




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4.11        Good
Standing Certificates. The Borrower shall have delivered to the Purchasers as of a date not more than fifteen (15) Business
Days before the Closing Date good standing certificates for the Borrower and each Guarantor for its jurisdiction of incorporation
or formation and certificates of foreign qualification for all other jurisdictions where its ownership, lease or operation of property
or the conduct of its business requires such foreign qualification, except where the failure to be so qualified could not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse Effect.


 


4.12        No
Litigation. No arbitration, action, claim, suit, litigation or proceeding before any court or any Governmental Authority
shall have been commenced or threatened against the Borrower or any Subsidiary (including its directors or officers), and no investigation
by any Governmental Authority shall have been commenced and no action, suit or proceeding by any Governmental Authority shall have
been threatened against any Purchaser, or the Borrower (i) seeking to restrain, prevent or change the transactions contemplated
hereby or questioning the validity or legality of any of such Transactions, (ii) in which the amount of damages claimed is $500,000
or more or (iii) which could reasonably be expected to have a Material Adverse Effect, except as set forth on Schedule 6.6.


 


4.13        Insurance
Certificates. The Collateral Agent shall have received (i) evidence of insurance complying with the requirements of Section
8.6 and (ii) separate certificates or policy language naming the Collateral Agent as an additional insured on all liability
policies and lenders’ loss payee on all property policies for the business and properties of each Loan Party.


 


4.14        Fees,
Etc. On the Closing Date, the Borrower shall have paid (i) to the Collateral Agent, all fees due and payable pursuant to
the Fee Letter and (ii) to the Collateral Agent and the Purchasers all out-of-pocket costs, fees and expenses (including, without
limitation, legal fees and expenses) then due and payable to the Collateral Agent and the Purchasers, as applicable, hereunder.


 


4.15        Collateral.
The Collateral Agent shall have received correct, complete fully executed copies of each of the Collateral Documents in a form
acceptable to the Collateral Agent, together with such UCC financing statements, original stock certificates, if any, and stock
powers, original promissory notes, notices of security interest to be filed in the United States Patent and Trademark Office, and
other instruments and documents required to be delivered under the Collateral Documents or as the Collateral Agent may otherwise
determine to be necessary or appropriate to perfect the Liens granted thereunder, all in form and substance acceptable to the Collateral
Agent.


 


4.16        Lien
Searches. The Collateral Agent shall have received (i) searches of the Uniform Commercial Code, judgment, bankruptcy and
tax lien filings which may be filed with respect to the Collateral covered by the Collateral Documents and (ii) Lien searches of
intellectual property, in each case confirming that all such Property given as collateral is subject to no Liens except Permitted
Liens.


 


4.17        No
Material Adverse Effect. There shall exist no (a) event, development, or circumstance occurring on or after December 31,
2016, that has had or could be expected to have, individually or in the aggregate, a Material Adverse Effect, or (b) material disruption
or material adverse change in the financial, banking or capital markets generally affecting credit facilities similar to the facility
herein.


 




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4.18        Structure.
The legal and corporate structure of the Borrower and its Subsidiaries, along with the form and terms of the Charter Documents
of the Borrower and its Subsidiaries, shall be satisfactory to the Collateral Agent.


 


4.19        Subordinated
Note. The Collateral Agent shall have received a duly executed copy of the Subordinated Note. The Subordinated Note Obligations
outstanding under the Subordinated Note on the Closing Date shall not exceed $5,000,000.


 


4.20        Quality
of Earnings Report. The Purchasers shall have received the Borrower’s quality of earnings report for the Borrower
and its Subsidiaries, the results of which shall be satisfactory to the Purchasers in their sole discretion.


 


Article
5


CONDITIONS
TO THE OBLIGATIONS OF THE BORROWER


 


The obligations of the
Borrower to issue, or cause to be issued, the Notes and to perform its other obligations hereunder shall be subject to the satisfaction
as determined by, or waived by, the Borrower of the following conditions on or before the Closing Date:


 


5.1          Representations
and Warranties. The representations and warranties of the Purchasers contained in Article 7 hereof shall be true
and correct in all material respects at and as of the Closing Date as if made at and as of such date (except to the extent such
representations and warranties specifically relate to an earlier date, in which case they shall be true and correct in all material
respects as of such earlier date).


 


5.2          Compliance
with this Agreement. The Purchasers shall have performed and complied in all material respects with all of the agreements
and conditions set forth or contemplated herein that are required to be performed or complied with by them on or before the Closing
Date.


 


Article
6


REPRESENTATIONS
AND WARRANTIES OF THE BORROWER


 


The Borrower hereby represents
and warrants to the Purchasers as follows:


 


6.1          Existence
and Power. The Borrower and each of its Subsidiaries: (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation, (b) has all requisite corporate or limited liability company power
and authority to own and operate its property, to lease the property it operates as lessee and to conduct the business in which
it is currently, or is currently proposed to be, engaged; (c) is duly qualified as a foreign entity, licensed and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires
such qualification, except where the failure to be so qualified could not reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect, and (d) has the corporate or limited liability company power and authority to execute,
deliver and perform its obligations under each Note Document to which it is or will be a party and to borrow hereunder. The jurisdictions
in which the Borrower and each of its Subsidiaries are organized and qualified to do business as of the Closing Date are listed
on Schedule 6.1.


 




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6.2          Authorization;
No Contravention. The execution, delivery and performance by the Borrower and each Subsidiary of each Note Document to
which it is or will be a party and the consummation of the Transactions: (a) have been duly authorized by all necessary corporate
or limited liability company action; (b) do not and will not contravene or violate the terms of the Charter Documents of the Borrower
or any of its Subsidiaries or any amendment thereto or any material Requirement of Law applicable to the Borrower or such Subsidiary
or the Borrower’s or such Subsidiary’s assets, business or properties; (c) do not and will not (i) conflict with, contravene,
result in any violation or breach of or default under any material Contractual Obligation of the Borrower or such Subsidiary (with
or without the giving of notice or the lapse of time or both) other than any right to consent, which consents have been obtained,
(ii) create in any other Person a right or claim of termination or amendment of any material Contractual Obligation of the Borrower
or such Subsidiary, or (iii) require modification, acceleration or cancellation of any material Contractual Obligation of the Borrower
or such Subsidiary; and (d) do not and will not result in the creation of any Lien (or obligation to create a Lien) against any
property, asset or business of the Borrower or such Subsidiary (other than those securing the Notes).


 


6.3          Governmental
Authorization; Third Party Consents. Except as set forth on Schedule 6.3, no approval, consent, compliance, exemption,
authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person in respect of any
Requirement of Law or Material Contract, and no lapse of a waiting period under a Requirement of Law or Material Contract, is necessary
or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of the Note Documents
to which it is a party or the consummation of the Transactions, other than filings to perfect Liens granted under the Collateral
Documents.


 


6.4          Binding
Effect. The Borrower and its Subsidiaries have duly executed and delivered the Note Documents to which it is a party and
such Note Documents constitute the legal, valid and binding obligations of the Borrower and such Subsidiary enforceable against
the Borrower and such Subsidiary in accordance with its respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’
rights and by general principles of equity.


 


6.5          No
Legal Bar. Neither the Borrower nor any Subsidiary has previously entered into any agreement which is currently in effect
or to which the Borrower or any of its Subsidiaries is currently bound granting any rights to any Person which conflict with the
rights to be granted by the Borrower in the Note Documents, other than the right to consent, which consents have been obtained.


 




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6.6          Litigation.
Except as set forth on Schedule 6.6, (a) there are no legal actions, suits, proceedings, claims or disputes pending or,
to the Knowledge of the Borrower, threatened, at law, in equity, in arbitration or before any Governmental Authority against or
affecting the Borrower or its Subsidiaries that could reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect; (b) there is no injunction, writ, temporary restraining order, decree or any order or determination of any nature
by any arbitrator, court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance
of the Note Documents or which relates to the assets or the business of the Borrower or its Subsidiaries; and (c) there is no litigation,
claim, audit, dispute, review, proceeding or investigation currently pending or threatened against the Borrower or its Subsidiaries
for any violation or alleged violation of any Requirements of Law, and neither the Borrower nor any Subsidiary has received written
notice of any threat of any suit, action, claim, dispute, investigation, review or other proceeding pursuant to or involving any
Requirements of Law.


 


6.7          Compliance
with Laws.


 


(a)          The
Borrower and its Subsidiaries are in compliance with all Requirements of Law, except for such noncompliance that could not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect. Except as set forth on Schedule 6.7 as
of the Closing Date, there are no actual or, to the Knowledge of the Borrower, pending appeals, adjustments, audits, inquiries,
investigations, proceedings, recoupments or notices of intent to audit or investigate by any Governmental Authority against the
Borrower or its Subsidiaries.


 


6.8          No
Default or Breach. No event has occurred and is continuing or would result from the incurring of Obligations by the Borrower
under the Note Documents which constitutes or, with the giving of notice or lapse of time or both would constitute an Event of
Default. To the Knowledge of the Borrower, except as could not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect, neither the Borrower nor any Subsidiary is in default with respect to any Contractual Obligation in
any Material Contract.


 


6.9          Title
to Properties. Except as set forth on Schedule 6.9, the Borrower and its Subsidiaries has good title to, or a valid
leasehold interest in, all Property used by it in its business and none of such Property is subject to any Lien, except for Permitted
Liens.


 


6.10        Real
Property. Schedule 6.10 sets forth a correct and complete list of all real property owned or leased by the Borrower
or its Subsidiaries as of the Closing Date. Each lease relating to such leased real property is in full force and effect and the
Borrower and its Subsidiaries enjoy peaceful and undisturbed possession thereunder. There is no material default on the part of
the Borrower or its Subsidiaries or any event or condition which (with notice or lapse of time, or both) would constitute a default
on the part of the Borrower or its Subsidiaries under any such lease. The Borrower and its Subsidiaries have good and marketable
title in fee simple to the real property identified on Schedule 6.10 as owned by the Borrower or its Subsidiaries, free
and clear of any Liens other than Permitted Liens. There are no actions, suits or proceedings pending or, to the Knowledge of the
Borrower, threatened against the owned real property or the leased real property used in connection with the business of the Borrower
or its Subsidiaries, at law or in equity, in arbitration or before any Governmental Authority which would in any way affect title
to or the right to use such owned real property or leased real property.


 




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6.11        Taxes.


 


(a)          The
Borrower and each of its Subsidiaries has timely filed all United States federal and material state income and other material Tax
Returns that it was required to file, in each case with due regard for any extension of time within which to file such Tax Return.
All such Tax Returns were correct and complete in all material respects. All Taxes shown on such Tax Returns to be due and payable
by the Borrower or its Subsidiaries have been paid, in each case with due regard for any extension of time within which to file
such Tax Return, other than any Taxes the amount or validity of which is being actively contested by Borrower or its Subsidiaries
in good faith and by appropriate proceedings and with respect to which adequate reserves or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made or provided therefor. Except as set forth on Schedule 6.11, as
of the Closing Date, there are no Liens, other than Permitted Liens, on any of the assets of the Borrower or its Subsidiaries that
arose in connection with any failure (or alleged failure) to pay any Tax. No claim has been made by a Governmental Authority in
a jurisdiction where the Borrower and its Subsidiaries do not file Tax Returns that the Borrower or any of its Subsidiaries is
or may be subject to taxation by that jurisdiction.


 


(b)          Except
as set forth on Schedule 6.11, as of the Closing Date, there is no action, suit, proceeding, investigation, examination,
audit, or claim now pending or threatened in writing by any Governmental Authority regarding any Taxes relating to the Borrower
or its Subsidiaries. Neither the Borrower nor any Subsidiary has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the payment or collection of Taxes of such Person
and there are no circumstances that would cause the taxable years of the Borrower or its Subsidiaries not to be subject to the
normally applicable statute of limitations.


 


6.12        Financial
Condition; SEC Filings.


 


(a)          The
Borrower has furnished the Purchasers with true, correct and complete copies of (collectively, the “Financial Statements”):
(i) the audited consolidated balance sheets of the Borrower and its Subsidiaries as of December 31, 2016, 2015 and 2014, and the
related audited consolidated statements of operations and comprehensive (loss) income, shareholders’ equity and cash flows
for each of the Fiscal Years in the three-year period ended December 31, 2016, together with the notes thereto and the reports
thereon as of December 31, 2016, certified by the Borrower’s independent certified public accountants, and (ii) the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries for the Fiscal Quarter ended as of March 31, 2017 and the related
unaudited consolidated statements of operations and comprehensive (loss) income, changes in shareholders’ equity and cash
flows for such period. The Financial Statements fairly present, in all material respects, the financial position of the Borrower,
as of the respective dates thereof, and the results of operations and cash flows thereof, as of the respective dates or for the
respective periods set forth therein, and are in conformity with the past historical practices of the Borrower, with GAAP consistently
applied during the periods involved. Except as set forth on Schedule 6.12, as of the dates of the Financial Statements,
neither the Borrower nor any Subsidiary had any known obligation, Indebtedness or liability (whether accrued, absolute, contingent
or otherwise, and whether due or to become due), which was not reflected or reserved against in the balance sheets which are part
of the Financial Statements, except for those incurred in the ordinary course of business and which are fully reflected on the
books of account of the Borrower or its Subsidiaries, as applicable.


 




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(b)          Except
as set forth on Schedule 6.12, all statements, reports, schedules, forms and other documents (the “SEC Documents”)
required to have been filed or furnished by any Loan Party with or to the SEC from January 1, 2016 through the Closing Date have
been so filed or furnished on a timely basis (other than any immaterial Form 3, 4, 5 or 8-K filings or any filings relating solely
to benefit plans). No Subsidiary of any Loan Party is required to file or furnish any documents with or to the SEC. As of the time
it was filed with or furnished to the SEC: (i) each of the SEC Documents complied as to form in all material respects with the
applicable requirements of the Securities Act or the Exchange Act (as the case may be); and (ii) none of the SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading, except to the extent
corrected by the filing or furnishing of the applicable amending or superseding SEC Document. Each of the certifications and statements
relating to SEC Documents required by: (1) Rule 13a-14 or 15d-14 under the Exchange Act; or (2) 18 U.S.C. §1350 (Section 906
of the Sarbanes-Oxley Act) (collectively, the “Certifications”) is accurate and complete, and complied as to
form and content with all Applicable Laws in effect at the time such Certification was filed with or furnished to the SEC.


 


6.13        Absence
of Certain Changes or Events. Since December 31, 2016, there has been no development, event, circumstance, or change which
could be expected to have, either individually or in the aggregate, a Material Adverse Effect.


 


6.14        Environmental
Matters.


 


(a)          The
Borrower and its Subsidiaries are and have been in compliance in all material respects with all applicable Environmental Laws relating
to their Property, assets and operations; to the Knowledge of the Borrower, there are no Hazardous Materials stored or otherwise
located in, on or under any of the Property or assets of the Borrower or its Subsidiaries, including, without limitation, the groundwater,
except in material compliance with applicable Environmental Laws; and, to the Knowledge of the Borrower, there have been no releases
or, threatened releases of Hazardous Materials in, on or under any property adjoining any of the Property or assets of (or used
by) the Borrower or its Subsidiaries which have not been remediated to the satisfaction of the appropriate Governmental Authorities
and in material compliance with Environmental Laws.


 


(b)          To
the Knowledge of the Borrower, none of the Property, assets or operations of (or used by) the Borrower and its Subsidiaries is
the subject of any federal, state or local investigation evaluating whether (i) any remedial action is needed to respond to a release
or threatened release of any Hazardous Materials into the environment or (ii) any release or threatened release of any Hazardous
Materials into the environment is in contravention of any Environmental Law.


 




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(c)          Neither
the Borrower nor any Subsidiary has received any written notice or claim, nor, to the Knowledge of the Borrower, are there any
pending, threatened, or anticipated lawsuits or proceedings against them, with respect to violations of an Environmental Law or
in connection with the presence of or exposure to any Hazardous Materials in the environment or any release or threatened release
of any Hazardous Materials into the environment, and, to the Knowledge of the Borrower, neither the Borrower nor any Subsidiary
is or has been the owner or operator of any property which (i) pursuant to any Environmental Law has been placed on any list of
Hazardous Materials disposal sites, including, without limitation, the “National Priorities List” or “CERCLIS
List,” (ii) has, or had, any subsurface storage tanks located thereon, or (iii) has ever been used as or for a waste disposal
facility, a mine, a gasoline service station or a petroleum products storage facility.


 


(d)          To
the Knowledge of the Borrower, neither the Borrower nor any Subsidiary has present or contingent liability in connection with the
presence either on or off the Property or assets of, or used by, the Borrower or any Subsidiary of any Hazardous Materials in the
environment or any release or threatened release of any Hazardous Materials into the environment.


 


6.15        Investment
Company/Government Regulations. Neither the Borrower nor any Subsidiary is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. Neither the Borrower nor any Subsidiary is subject to regulation under
the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, the Interstate Commerce Act, or any federal
or state statute or regulation limiting its ability to incur Indebtedness.


 


6.16        Subsidiaries.
Except as set forth in Schedule 6.16, the Borrower does not (a) have any Subsidiaries or (b) own of record or beneficially,
directly or indirectly, any (i) Capital Stock issued by any other Person or (ii) equity, voting or participating interest in any
joint venture or other enterprise.


 




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6.17        Capitalization.
As of the Closing Date, after giving effect to the transactions contemplated hereby and in the other Note Documents, the capitalization
of the Borrower and its Subsidiaries (including the maximum amount of diluted shares) is as set forth on Schedule 6.17.
All of the issued and outstanding Capital Stock of the Borrower has been, and Capital Stock of the Borrower issuable upon the exercise
of outstanding securities when issued will be, duly authorized and validly issued and are fully paid and nonassessable. All outstanding
Capital Stock of the Borrower’s Subsidiaries are 100% owned by the Borrower or one of its Subsidiaries free and clear of
all Liens other than Permitted Liens. Except as set forth in the Charter Documents (as in effect on the Closing Date), the issuance
of the foregoing Capital Stock is not and has not been subject to preemptive rights in favor of any Person other than such rights
that have been waived and will not result in the issuance of any additional Capital Stock of the Borrower or the triggering of
any anti-dilution or similar rights contained in any options warrants, debentures or other securities or agreements of the Borrower
or any of its Subsidiaries. On the Closing Date, except as set forth on Schedule 6.17, there are no outstanding securities
convertible into or exchangeable for Capital Stock of the Borrower or any of its Subsidiaries or options, warrants or other rights
to purchase or subscribe for Capital Stock of the Borrower or any of its Subsidiaries, or contracts, commitments, agreements, understandings
or arrangements of any kind to which the Borrower or any of its Subsidiaries is a party relating to the issuance of any Capital
Stock of the Borrower or any of its Subsidiaries, or any such convertible or exchangeable securities or any such options, warrants
or rights. On the Closing Date, except as set forth on Schedule 6.17, neither the Borrower nor any of its Subsidiaries has
any obligation, whether mandatory or at the option of any other Person, at any time to redeem or repurchase any Capital Stock of
the Borrower or any of its Subsidiaries, pursuant to the terms of their respective Charter Documents or otherwise. On the Closing
Date, except as set forth on Schedule 6.20 and Schedule 6.21, neither the Borrower nor any of its Subsidiaries maintains
nor has any obligations under any stock option plan or other equity compensation related plans or agreements. No issued and outstanding
shares of the Borrower’s Capital Stock are subject to a right of first refusal or condition of forfeiture in favor of the
Borrower, and no shares of the Capital Stock of the Borrower are subject to vesting restrictions. Since January 1, 2017, the Borrower
has not declared or paid, or become responsible to declare or pay, and the Borrower is not responsible for or have any obligation
to declare or pay, a dividend or other distribution on its securities or otherwise combined, split, recapitalized or taken similar
actions with respect to its outstanding Capital Stock. There are no voting trusts, proxies or other contracts or understandings
to which the Borrower is a party or is bound with respect to the voting of any shares of the Borrower’s Capital Stock, the
acquisition (including rights of co-sale, first refusal, antidilution or pre-emptive rights), disposition, registration of securities
of the Borrower, or other rights of securityholders, or obligations of the Borrower, with respect to the securities of the Borrower,
other than registration rights under warrants set forth on Schedule 6.17. All securities of the Borrower and its Subsidiaries
(including all shares of the Borrower’s common stock, securities, options and warrants to purchase shares of the Borrower’s
common stock (both outstanding as well as those that are no longer outstanding)), have been and were issued and granted pursuant
to an exception from the Securities Act and otherwise in compliance, in all material respects, with all securities and other Applicable
Laws, in compliance with the fiduciary obligations of the board of directors of the Borrower, and in compliance with all requirements
of applicable contracts affecting, applicable to or relating to, such issuances.


 


6.18        Private
Offering. No form of general solicitation or general advertising was used by the Borrower or its Subsidiaries or their
respective representatives in connection with the offer or sale of the Notes to the Purchasers pursuant to this Agreement.


 


6.19        Broker’s,
Finder’s or Similar Fees. Except as set forth on Schedule 6.19, there are no brokerage commissions, finder’s
fees or similar fees or commissions payable by the Borrower or its Subsidiaries in connection with the Transactions based on any
agreement, arrangement or understanding with the Borrower or its Subsidiaries or any action taken by the Borrower or its Subsidiaries.


 


6.20        Labor
Relations. Neither the Borrower nor any Subsidiary has committed or is engaged in any unfair labor practice (as defined
in the National Labor Relations Act of 1947 and the regulations thereunder, in each case, as amended). There is (a) no unfair labor
practice complaint pending or, to the Knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries before
the National Labor Relations Board and no grievance or arbitration proceeding arising out of or under collective bargaining agreements
is so pending or, to the Knowledge of the Borrower, threatened, (b) no strike, labor dispute, slowdown or stoppage pending or,
to the Knowledge of the Borrower, threatened against the Borrower or any Subsidiary, (c) no union representation question existing
with respect to the employees of the Borrower or any Subsidiary, and to the Knowledge of the Borrower, no union organizing activities
are taking place, and (d) as of the Closing Date, no employment contract with any employee of the Borrower or any of its Subsidiaries
except as set forth on Schedule 6.20 and the employment of all employees of the Borrower and its Subsidiaries are terminable
at will without penalty or severance of any kind, except as set forth on Schedule 6.20. Except as set forth on Schedule 6.20,
the Borrower and each Subsidiary is in compliance in all material respects with all federal, state or other Applicable Laws respecting
employment and employment practices, terms and conditions of employment and wages and hours. Neither the Borrower nor any Subsidiary
is a party to any collective bargaining agreement.


 




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6.21        Employee
Benefit Plans.


 


(a)          Employee
Benefit Plans and Liabilities. Within the six-consecutive-year period immediately preceding the first day of the year in which
the Closing Date occurs neither the Borrower nor any ERISA Affiliate thereof has contributed to, or has any actual or contingent,
direct or indirect, liability in respect of, any employee benefit plan (as defined in Section 3(3) of ERISA) or other employee
benefit arrangement (collectively, the “Plans”), other than liabilities with respect to such Plans specifically
listed on Schedule 6.21. Schedule 6.21 sets forth all Plans. The Borrower has delivered to the Purchasers materially
accurate and complete copies of all of such Plans in effect as of the date hereof. At no time during such six year period has the
Borrower or any ERISA Affiliate thereof participated in or contributed to any Multiemployer Plan, nor during such period has the
Borrower or any ERISA Affiliate thereof had an obligation to participate in or contribute to any such Multiemployer Plan. No agreement
subject to Section 4204 of ERISA has been entered into in connection with Transactions. There are no outstanding liabilities of
the Borrower or any ERISA Affiliate thereof to any employee benefit plans previously maintained by the Borrower or any ERISA Affiliate
thereof, and, the Borrower has no Knowledge of any potential liabilities in connection therewith. There are no actions, suits or
claims, other than for benefits in the ordinary course, pending or, to the Knowledge of the Borrower, threatened against the Borrower,
any ERISA Affiliate thereof or the Plans which might subject the Borrower or any ERISA Affiliate thereof to any material liability.


 


(b)          Plan
Compliance. The Borrower and its Subsidiaries, individually and collectively, are in compliance in all material respects with
all reporting, disclosure and registration requirements applicable to it under the Code, ERISA and all federal and state securities
laws, and Department of Labor, IRS and SEC rules and regulations promulgated thereunder, with respect to all of the Plans, and
are not subject to any material liability, whether asserted or not, for any penalties to any Governmental Authority for late filing
of any return, report or other governmental filing. No civil or criminal action brought pursuant to the provisions of Title I,
Subtitle B, Part 5 of ERISA or any other federal or state law is pending or, to the Knowledge of the Borrower, threatened against
any fiduciary of the Plans with respect to the Plans. Except as set forth on Schedule 6.7, no Plan, or, to the Knowledge
of the Borrower, any fiduciary thereof, has been, or is currently, the direct or indirect subject of an audit, investigation, or
examination by any Governmental Authority with respect to the Plans. All of the Plans comply currently, and have complied at all
times (and all former Plans have complied at all times in the past), both as to form and operation, in all material respects, with
its terms and with all Requirements of Law applicable thereto. Each of the Plans maintained by the Borrower or any ERISA Affiliate
thereof that is an “employee benefit pension plan” (within the meaning of Section 3(2)(a) of ERISA) (each a “Pension
Plan”) either (i) has obtained a favorable determination (covering all changes or amendments applicable under Requirements
of Law) from the IRS as to its qualification under Sections 401(a) and 501(a) of the Code or, if the Pension Plan is maintained
pursuant to a prototype or standardized plan, is entitled to rely on an opinion letter from the IRS, or (ii) is within the remedial
amendment period (as provided in Section 401(b) of the Code) for making any required changes or amendments, and nothing has occurred
before or after the date of each such determination letter as would reasonably be expected to adversely affect such qualification.
All amounts that are currently owing to Plan participants (including, without limitation, former Plan participants), or contributions
required to be made to the Plans have been timely paid in all material respects, contributed or accrued in accordance with past
historical practices with respect to all periods prior to the Closing Date.


 




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(c)          Prohibited
Transactions. No Plan, nor any related trust, nor the Borrower or Subsidiary, nor any trustee, administrator or other “party
in interest” or “disqualified person” (within the meaning of Section 3(14) of ERISA or Section 4975(e)(2) of
the Code, respectively) with respect to the Plans, has engaged in any nonexempt “prohibited transaction” (within the
meaning of Section 406 of ERISA or Section 4975(c) of the Code, respectively) with respect to the participation of the Borrower
or any Subsidiary therein, which could subject any of the Plans or related trusts, or any trustee, administrator or other fiduciary
of any such Plan, or the Borrower or Subsidiary or any Purchaser, or any other party dealing with the Plans, to the penalties or
excise tax imposed on prohibited transactions by Section 502 of ERISA or Section 4975 of the Code.


 


(d)          Miscellaneous.
Neither the Borrower nor any Subsidiary nor any Plan provides for or promises retiree, medical, disability, or life insurance benefits
to any current or former employee, officer, or director of the Borrower or any Subsidiary other than continuation coverage required
by Section 4980B of the Code. Neither the Borrower nor any Subsidiary is a party to, or obligated, under any agreement, plan, contract
or other arrangements that will result, separately or in the aggregate, in the payment of any “excess parachute payment”
within the meaning of Section 280G of the Code as a result of the consummation of the Transactions.


 


6.22        Patents,
Trademarks, Etc.


 


(a)          The
Borrower and each Subsidiary owns and/or has the right to use all Intellectual Property material to the conduct of its business
(collectively, “IP Rights”) without any conflict with or infringement of the IP Rights of others. Schedule
6.22 sets forth a complete list of Licenses or other Contractual Obligations relating to the Borrower’s and its Subsidiaries’
IP Rights (other than off the shelf computer software and programs and Licenses and Contractual Obligations entered in the ordinary
course of business) and of registrations of patents, trademarks, service marks and copyrights including any applications therefor
constituting such IP Rights as of the Closing Date. Neither the Borrower nor any Subsidiary has any obligation to pay any royalty
with respect to the IP Rights.


 


(b)          Except
as set forth in Schedule 6.22, as of the Closing Date no claims have been asserted by any Person with respect to the use
by the Borrower or any Subsidiary of any such IP Rights or challenging or questioning the validity or effectiveness of any License
or agreement held by the Borrower or its Subsidiaries or to which it is a party relating to any such IP Rights which claims could
reasonably be expected to have a Material Adverse Effect. To the Knowledge of the Borrower, the conduct of the business of the
Borrower and its Subsidiaries as conducted and as proposed to be conducted does not and will not, in any material respect, conflict
with or infringe upon the IP Rights of others, and neither the Borrower nor any Subsidiary has received any communication alleging
any such violation. To the Knowledge of the Borrower, no third party is infringing or violating any of the IP Rights of the Borrower
or its Subsidiaries. To the Knowledge of the Borrower, no person employed by or affiliated with the Borrower or its Subsidiaries
has violated any confidential relationship that such person may have had with any third party, in connection with the development
or sale of any product or service or proposed product or service of the Borrower or its Subsidiaries.


 




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6.23        Potential
Conflicts of Interest. Except as set forth on Schedule 6.23, no executive officer, director or manager (or equivalent
Person) or member of the Borrower or any Subsidiary: (a) is an officer, director, manager, employee or consultant of, any Person
that is, or is engaged in business as, a competitor, lessor, lessee, supplier, distributor, sales agent or customer of, or lender
to or borrower from, the Borrower or its Subsidiaries; (b) has been a party to any material transaction with the Borrower or any
Subsidiary; (c) owns, directly or indirectly, in whole or in part, any material tangible or intangible property that the Borrower
or its Subsidiaries use or contemplate using in the conduct of business; or (d) has any material cause of action or other material
claim whatsoever against, or owes or has advanced any amount to the Borrower or any Subsidiary, except for advances in the ordinary
course of business such as for accrued vacation pay, accrued benefits under employee benefit plans, customary expense reimbursements
existing on the date hereof, and similar matters and agreements.


 


6.24        Trade
Relations. To the Knowledge of the Borrower, there exists no present condition or state of facts or circumstances that
could reasonably be expected to have a Material Adverse Effect or prevent the Borrower or any of its Subsidiaries from conducting
its business after the consummation of the Transactions, in substantially the same manner in which such business has heretofore
been conducted.


 


6.25        Indebtedness.
Schedule 6.25 lists (a) the amount of all Indebtedness of the Borrower and its Subsidiaries (other than Indebtedness under
this Agreement) that will remain outstanding after the Closing Date, (b) the Liens that relate to such Indebtedness and that encumber
the assets of the Borrower and its Subsidiaries, (c) the name of each lender thereof, and (d) the amount of any unfunded commitments,
if any, available to the Borrower and its Subsidiaries in connection with any such Indebtedness facilities.


 


6.26        Material
Contracts. Schedule 6.26 lists all Material Contracts as of the Closing Date. Each of the Material Contracts is
in full force and effect. The Borrower and its Subsidiaries has satisfied in full or provided for all of its liabilities and obligations
under each Material Contract requiring performance prior to the date hereof in all material respects, and is not in default under
any of such Material Contracts, nor does, to the Knowledge of the Borrower, any condition exist that with notice or lapse of time
or both would constitute such a default. To the Knowledge of the Borrower, no other party to any Material Contract is in default
thereunder, nor, to the Knowledge of the Borrower, does any condition exist that with notice or lapse of time or both would constitute
such a default. No approval or consent of any Person is needed for the Material Contracts to continue to be in full force and effect
after giving effect to the Transactions.


 




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6.27        Insurance.
Schedule 6.27 accurately summarizes all of the insurance policies or programs of the Borrower and its Subsidiaries as of
the date hereof. All such policies are in full force and effect, are underwritten by reputable insurers, are sufficient for all
applicable Requirements of Law and otherwise are in compliance with the criteria set forth in Section 8.6 hereof. All such
policies will remain in full force and effect and will not terminate or lapse by reason of any of the Transactions.


 


6.28        Solvency.
Borrower and its Subsidiaries, on a consolidated basis, are Solvent, both before and after taking into account the Transactions.


 


6.29        Licenses
and Approvals. The Borrower and each of its Subsidiaries holds all material Licenses that are required by any Governmental
Authority to permit it to conduct and operate the Borrower’s or its Subsidiaries’ business as now conducted, and all
such Licenses are valid and in full force and effect and will remain in full force and effect upon consummation of the transactions
contemplated by this Agreement and the other Note Documents. The Borrower and its Subsidiaries are in compliance in all material
respects with all Licenses. Neither the Borrower nor any Subsidiary is a party to and, to the Knowledge of the Borrower, there
is not, any investigation, notice of apparent liability, violation, forfeiture or other order or complaint issued by or before
any Governmental Authority or any other proceedings which could in any manner threaten or adversely affect the validity or continued
effectiveness of such material Licenses of the Borrower or its Subsidiaries, or give rise to any order of forfeiture. There is
no pending threat of cancellation, loss, termination, modification, or nonrenewal of any such Licenses of the Borrower or its Subsidiaries,
nor any basis for such cancellation, loss, termination, modification, or nonrenewal. The Borrower has no reason to believe that
such Licenses will not be renewed in the ordinary course. The Borrower and its Subsidiaries have filed in a timely manner all material
reports, applications, documents, instruments, and information required to be filed pursuant to applicable rules and regulations
or requests of every regulatory body having jurisdiction over any of its Licenses.


 


6.30        Change
of Control and Similar Payments. Neither the execution, delivery and performance by the Borrower and the Guarantors of
this Agreement, nor the execution, delivery and performance by the Borrower and the Guarantors of any of the other Note Documents,
nor the consummation of the transactions contemplated hereby shall require any payment by the Borrower or any Subsidiary, in cash
or kind, under any other agreement, plan, policy, commitment or other arrangement, other than pursuant to the terms of the Indebtedness
that is being repaid on the Closing Date in accordance with Section 8.2(a). There are no agreements, plans, policies, commitments
or other arrangements with respect to any compensation, benefits or consideration which will be materially increased, or the vesting
of benefits of which will be materially accelerated, as a result of this Agreement or the other Note Documents or the occurrence
of any of the transactions contemplated hereby or thereby. There are no payments or other benefits payable by the Borrower or its
Subsidiaries, the value of which will be calculated on the basis of any of the transactions contemplated by this Agreement or the
other Note Documents.


 




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6.31        OFAC;
Anti-Terrorism; Patriot Act.


 


(a)          Neither
the Borrower nor any Subsidiary nor, to the knowledge of the Borrower, any Affiliate of the foregoing: (a) is a Sanctioned Person,
(b) has any assets in Sanctioned Entities, or (c) derives any operating income from Investments in, or transactions with Sanctioned
Persons or Sanctioned Entities. The proceeds of the Notes will not be used and have not been used to fund any operations in, finance
any Investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity.


 


(b)          The
Borrower and its Subsidiaries are in compliance, in all material respects, with any United States Requirements of Law relating
to terrorism, sanctions or money laundering (the “Anti-Terrorism Laws”), including the United States Executive
Order No. 13224 on Terrorist Financing (the “Anti-Terrorism Order”) and the Patriot Act. No part of the
proceeds of any Note will be used, directly or indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices
Act of 1977, as amended, or any other Anti-Terrorism Law.


 


(c)          No
Loan Party and no Subsidiary of any Loan Party (and, to the knowledge of each Loan Party, no joint venture or Affiliate thereof)
(i) is listed in the annex to, or is otherwise subject to the provisions of, the Anti-Terrorism Order, (ii) is owned
or controlled by, or acting for or on behalf of, any person listed in the annex to, or is otherwise subject to the provisions of,
the Anti-Terrorism Order or (iii) commits, threatens or conspires to commit or supports “terrorism” as defined
in the Anti-Terrorism Order.


 


6.32        Disclosure.


 


(a)          Agreement
and Other Documents. This Agreement, together with all exhibits and schedules hereto, the Note Documents, and the agreements,
certificates and other documents furnished to the Purchasers by the Borrower at the Closing, do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements contained herein or therein, in the
light of the circumstances under which they were made, not misleading provided that to the extent any such exhibit, schedule,
agreement, certificate or other document was based solely upon or constitutes a forecast or projection, the Borrower represents
only that it acted in good faith and utilized reasonable assumptions in the preparation of such exhibit, schedule, agreement, certificate
or other document, it being understood that actual results may vary from such forecasts and that such variations may be material.


 


(b)          Material
Adverse Effect. To the Knowledge of the Borrower, there is no fact which the Borrower has not disclosed to the Purchasers in
writing which could reasonably be expected to have a Material Adverse Effect.


 


6.33        Customers
and Suppliers. Schedule 6.33 sets forth a complete and accurate list of (a) the 10 largest customers of the Loan Parties
(measured by aggregate billing) during (i) the Fiscal Year ended December 31, 2016 and (ii) the Fiscal Quarter ended March 31,
2017, noting the relevant Loan Party, and (b) the 10 largest suppliers of materials, products or services to the Loan Parties (measured
by the aggregate amount purchased by the Loan Parties during (i) the Fiscal Year ended December 31, 2016 and (ii) the Fiscal Quarter
ended March 31, 2017, noting the relevant Loan Party.


 




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6.34        Passive
Foreign Investment Company. To the Knowledge of the Borrower or any Loan Party (but without consultation with any of the
Borrower’s independent accountants), no Loan Party is, or has been, a “passive foreign investment company,” as
defined in Section 1297 of the Code, during any tax year beginning after May 31, 2012.


 


6.35        Absence
of Certain Practices. Except as set forth on Schedule 6.35, no Loan Party or any of its Subsidiaries, or, to the
Knowledge of the Borrower or any Loan Party, any director, officer, agent, employee or other Person acting on their behalf, has
given or agreed to give any gift or similar benefit of more than nominal value to any customer, supplier, governmental employee
or official or any other Person who is or may be in a position to help or hinder any Loan Party or its Subsidiaries or assist any
Loan Party or its Subsidiaries in connection with any proposed transaction involving such Loan Party or its Subsidiaries, which
gift or similar benefit, induced any party to do business with such Loan Party. No Loan Party or any of its Subsidiaries, or, to
the Knowledge of the Borrower or any Loan Party, any director, officer, agent, employee or other Person acting on their behalf
has (i) used any corporate or other funds for unlawful contributions, payments, gifts, or entertainment, or made any unlawful expenditures
relating to political activity to, or on behalf of, government officials or others; or (ii) accepted or received any unlawful contributions,
payments, gifts or expenditures.


 


6.36        Internal
Controls. Each Loan Party and its Subsidiaries maintain a system of internal control over financial reporting. Such internal
controls over financial reporting (a) provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP and (b) as to Borrower are designed to ensure that all material
information concerning Borrower and its Subsidiaries required to be disclosed by Borrower in the reports that it is required to
file, submit or furnish under the Exchange Act is recorded, processed, summarized and reported on a timely basis to the individuals
responsible for the preparation of such reports. There are no significant deficiencies or material weaknesses in the design or
operation of any Loan Party’s or its Subsidiaries’ ability to record, process, summarize and report financial data
other than set forth on Schedule 6.36. There is and has been no fraud, whether or not material, that involves management
or other employees who have a significant role in any Loan Party’s and/or its Subsidiaries’ internal controls.


 


6.37        Accounts
and Notes Receivable; Accounts and Notes Payable.


 


(a)          All
the accounts receivable and notes receivable owing to any Loan Party or any of its Subsidiaries as of the date hereof constitute
valid and enforceable (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors’ rights and by general principles of equity)
claims (without any previously exercised rights of set off or compromise) arising from bona fide transactions in the ordinary course
of business, consistent with past practice, and, to the Knowledge of the Borrower or any Loan Party, there are no known or, to
the Knowledge of the Borrower or any Loan Party, asserted claims, refusals to pay or other rights of set-off against any thereof.
Except as provided on Schedule 6.37(a), (i) as of April 30, 2017, no account debtor or note debtor is delinquent by more
than thirty (30) days in any payment due that exceeds $5,000; (ii) as of the Closing Date, no account debtor or note debtor has
refused (or, to the Knowledge of the Borrower or any Loan Party, threatened to refuse) to pay its obligations for any reasons;
(iii) to the Knowledge of the Borrower or any Loan Party, as of the Closing Date no account debtor or note debtor is insolvent
or bankrupt and (iv) no account receivable or note receivable is hypothecated or pledged to any person (except in connection with
the Notes) by any Loan Party or any of its Subsidiaries.


 




    	 	46	 



     


    

 


(b)          All
accounts payable and notes payable by any Loan Party or any of its Subsidiaries to third parties as of the date hereof arise from
bona fide transactions in the ordinary course of business, consistent with past practice and, except as set forth on Schedule
6.37(b), as of April 30, 2017, there is no such account payable or note payable more than thirty (30) days delinquent in its
payment, except those contested in good faith.


 


Article
7


REPRESENTATIONS
AND WARRANTIES OF THE PURCHASERS


 


Each Purchaser hereby severally
and not jointly represents and warrants as follows:


 


7.1          Authorization;
No Contravention. The execution, delivery and performance by such Purchaser of this Agreement: (a) is within its power
and authority and has been duly authorized by all necessary action; (b) does not contravene the terms of its Charter Documents
or any amendment thereof, and (c) will not, in any material respect, violate, conflict with or result in any breach or contravention
of any of its Contractual Obligations, or any order or decree directly relating to it.


 


7.2          Binding
Effect. This Agreement has been duly executed and delivered by such Purchaser and this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles
relating to enforceability.


 


7.3          No
Legal Bar. The execution, delivery, and performance of this Agreement by such Purchaser will not violate in any material
respect any Requirement of Law applicable to it, assuming the accuracy and correctness of the representations and warranties made
by the Borrower to the Purchasers in the Note Documents.


 


7.4          Securities
Laws.


 


(a)          The
Notes are being or will be acquired by such Purchaser hereunder for its own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution thereof in any transaction which would be in violation of state or
federal securities laws.


 


(b)          Such
Purchaser is a sophisticated purchaser with respect to the purchase of the Notes and is an “accredited investor” as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.


 




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(c)          Such
Purchaser understands that (i) the Notes constitute “restricted securities” under the Securities Act, (ii) the offer
and sale of the Notes hereunder is not registered under the Securities Act or under any “blue sky” laws in reliance
upon certain exemptions from such registration and that the Borrower is relying on the representations made herein by such Purchaser
in its determination of whether such specific exemptions are available, and (iii) the Notes may not be transferred except pursuant
to an effective registration statement under the Securities Act, or under an exemption from such registration available under the
Securities Act and under applicable “blue sky” laws or in a transaction exempt from such registration. Such Purchaser
acknowledges that: (1) it has no right to require registration thereof under the Securities Act or any “blue sky” laws,
and (2) there is not now and is not contemplated to be any public market therefor. As a result, such Purchaser is prepared and
is able to bear the economic risk of an investment in the Notes for an indefinite period of time. Such Purchaser understands that
any certificate representing the Notes that are issued to the Purchaser may bear, in the Borrower’s discretion, the following
restrictive legend and will be restricted from transfer in accordance with such legend:


 


“This
Note has not been and will not be registered under the United States Securities Act 1933 (the “Securities Act”) or
with any securities regulatory authority of any state or other jurisdiction of the United States. The holder hereof, by purchasing
or otherwise acquiring this security, acknowledges that this security has not been registered under the Securities Act. The holder
agrees that this security may be offered, resold, pledged or otherwise transferred only in compliance with the Securities Act and
any applicable state securities laws and only (1) pursuant to Rule 144 under the Securities Act or (2) pursuant to an exemption
from registration under the Securities Act, and in each case in accordance with any applicable securities laws of the states of
the United States and other jurisdictions. The holder acknowledges that the purpose of the foregoing limitation is, in part, to
ensure that Company is not required to register under the Securities Act.”


 


(d)          Such
Purchaser (i) has been furnished with or has had access to all material books and records of the Borrower and each Subsidiary and
all of their respective material contracts, agreements and documents and (ii) has had an opportunity to ask questions of, and receive
answers from, management and representatives of the Borrower and its Subsidiaries and which representatives have made available
to them such information regarding the Borrower and its Subsidiaries and their current respective businesses, operations, assets,
finances, financial results, financial condition and prospects in order to make a fully informed decision to purchase and acquire
the Notes. Such Purchaser has generally such knowledge and experience in business and financial matters, and with respect to investments
in securities of privately held companies, as to enable it to understand and evaluate the risks of an investment in the Notes and
form an investment decision with respect thereto. Such Purchaser acknowledges that none of the Borrower or its Subsidiaries has
given such Purchaser any investment advice, credit information or opinion as to whether the purchase of the Notes is prudent.


 


(e)          The
foregoing, however, does not limit or modify the representations and warranties set forth in Article 6 of this Agreement
or in any other Note Document or the right of such Purchaser to rely thereon.


 




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7.5          Governmental
Authorization; Third Party Consent. No approval, consent, compliance, exemption or authorization of any Governmental Authority
or any other Person in respect of any Requirement of Law, and no lapse of a waiting period under a Requirement of Law, is necessary
or required in connection with the execution, delivery or performance by it or enforcement against such Purchaser of this Agreement
or the transactions contemplated hereby.


 


7.6          Broker’s,
Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions
payable in connection with the transactions contemplated by the Note Documents based on any agreement, arrangement or understanding
with such Purchaser or any action taken by it.


 


Article
8


AFFIRMATIVE
COVENANTS


 


Until the indefeasible
payment in full in cash of all Obligations under the Notes (other than contingent indemnification or expense reimbursement obligations
for which no claim has been made) or such later date as set forth below, the Borrower hereby covenants and agrees with the Purchasers
as follows:


 


8.1          Delivery
of Financial and Other Information. The Borrower will, and will cause each other Loan Party to, maintain a system of accounting
established and administered in accordance with GAAP (including reflecting in its financial statements adequate accruals and appropriations
to reserves). In addition, the Borrower shall deliver or cause to be delivered to the Purchasers the following:


 


(a)          Within
ninety (90) days after the close of each Fiscal Year, an unqualified audit report certified by BDO USA, LLP or such other independent
certified public accountants selected by the Borrower and reasonably acceptable to Collateral Agent, prepared in accordance with
GAAP, including consolidated balance sheets of the Borrower and its Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, changes in shareholders’ equity and cash flows for such Fiscal Year, all such financial
statements to be prepared in accordance with GAAP and accompanied by (i) any management letter prepared by said accountants and
(ii) a management summary, discussion, and analysis prepared by an authorized officer of the Borrower setting forth in narrative
form all significant operational and financial events and activities affecting the Borrower and its Subsidiaries during such Fiscal
Year.


 


(b)          Within
forty-five (45) days after the close of each Fiscal Quarter beginning with June 30, 2017, an unaudited consolidated balance sheet
of the Borrower and its Subsidiaries and as of the end of such Fiscal Quarter and the related consolidated statements of operations,
changes in shareholders’ equity and cash flows for such Fiscal Quarter and for the portion of the Fiscal Year ended at the
end of such Fiscal Quarter, prepared in accordance with GAAP and setting forth in each case in comparative form, the figures for
(i) the corresponding Fiscal Quarter and the corresponding portion of the previous Fiscal Year (as applicable), (ii) the immediately
preceding Fiscal Quarter and (iii) the annual budget described in Section 8.1(g) for the corresponding Fiscal Quarter and
the corresponding portion of the previous Fiscal Year, all of which shall be prepared in an actual-to-budget comparative format
in relation to the applicable annual budget described in Section 8.1(g) hereof and shall be certified by an authorized officer
of the Borrower as fairly presenting, in all material respects, the financial position of the Borrower and its Subsidiaries, as
of the respective dates thereof, and the results of operations and cash flows thereof, as of the respective dates or for the respective
periods set forth therein and accompanied by a management summary, discussion, and analysis prepared by an authorized officer of
the Borrower setting forth in narrative form all significant operational and financial events and activities affecting the Borrower
and its Subsidiaries during such Fiscal Quarter.


 




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(c)          Within
thirty (30) days after the close of each calendar month beginning with June 30, 2017, (i) an unaudited consolidated balance sheet
of the Borrower and its Subsidiaries and the related consolidated statements of operations, changes in shareholders’ equity
and cash flows for such month and for the portion of the Fiscal Year ended at the end of such month, prepared in accordance with
GAAP and setting forth in each case in comparative form, the figures for (A) the corresponding month and the corresponding portion
of the previous Fiscal Year (as applicable) (B) the immediately preceding month, and (C) the annual budget described in Section
8.1(g) for the corresponding month and the corresponding portion of the previous fiscal year, all of which shall be prepared in
an actual-to-budget comparative format in relation to the applicable annual budget described in Section 8.1(g) hereof and
shall be certified by an authorized officer of the Borrower as fairly presenting, in all material respects, the financial position
of the Borrower and its Subsidiaries, as of the respective dates thereof, and the results of operations and cash flows thereof,
as of the respective dates or for the respective periods set forth therein, (ii) an accounts payable aging report and an accounts
receivable aging report, each in form and substance reasonably satisfactory to the Required Purchasers, (iii) a revenue report
in form and substance reasonably satisfactory to the Required Purchasers and with no less detail than such report contained in
the Borrower’s financial model delivered to the Purchasers prior to the Closing Date, which report shall include by business
segment: (s) revenue, (t) number of subscribers, (u) number of new subscribers added, (v) number of subscribers dropped, (w) churn
(net and gross), (x) number of new customers, (y) number of customers dropped and (z) the average selling price of hardware and
software, and (iv) a product line profit and loss report.


 


(d)          Together
with the financial statements required under Sections 8.1(a), Section 8.1(b), and Section 8.1(c), a Compliance Certificate
signed by an authorized officer of the Borrower (i) evidencing the Loan Parties’ compliance with the financial covenants
contained in Section 9.20 hereof and (ii) stating whether there exists on the date of such certificate any Default
or Event of Default and, if any Default or Event of Default then exists, setting forth the details thereof and the action which
the Borrower is taking or proposes to take with respect thereto.


 


(e)          Promptly
upon receipt thereof, any reports (including, without limitation, any management letters and/or reports) submitted to the Borrower
or any Subsidiary (other than reports previously delivered pursuant to Sections 8.1(a), 8.1(b) and 8.1(c)
above) by independent accountants in connection with any annual, interim or special audit made by them of the books of the Borrower
or any Subsidiary.


 


(f)          Promptly
upon receipt or transmission thereof, and in any event no later than two (2) Business Days after the date of such receipt or transmission,
provided that the delivery thereof is not prohibited by any Requirement of Law, copies of all communications to and from
Governmental Authorities regarding notice of material enforcement proceedings, complaints, inspections, and related matters addressed
to the Borrower or any Subsidiary.


 




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(g)          As
soon as available, but in any event no later than thirty (30) days after the end of the Fiscal Year, consolidated capital and operating
expense budgets, projections of sources and applications of funds, balance sheets and profit and loss projections, all for each
month of the applicable Fiscal Year, all itemized in detail (including itemization of provisions for officers’ compensation),
together with any material revisions thereto.


 


(h)          Upon
the request of any Purchaser, copies of the annual federal and state income Tax Returns of the Borrower and each Subsidiary for
the immediately preceding year, any filings with the SEC and, if requested by any Purchaser, copies of all reports filed with any
federal, state or local Governmental Authority.


 


(i)          Promptly
upon receipt by the Borrower or any Subsidiary, written notice of any material default which has not been waived or cured, given
to any such Loan Party by the holder of the Subordinated Note or any other creditor or lessor to whom the Borrower or any Subsidiary
has material debt or other obligations.


 


(j)          Promptly
upon obtaining knowledge thereof, written notice of any litigation claiming in excess of $200,000 from the Borrower or any Subsidiary,
or which could be expected to otherwise have a Material Adverse Effect and copies of any pleadings associated therewith.


 


(k)          As
soon as available, copies of all statements, reports, press releases, and other documents relating to the financial condition of
the Borrower, each Subsidiary and their respective business operations as required to be furnished to any lender of the Borrower
or any Subsidiary.


 


(l)          Promptly,
and in any event within five (5) Business Days after receipt thereof by the Borrower or any Subsidiary, provided that the
delivery thereof is not prohibited by any Requirement of Law, copies of each notice or other correspondence received from the SEC
(or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other
inquiry by such agency regarding financial or other operational results of the Borrower or any Subsidiary.


 


(m)          Together
with the financial statements required under Section 8.1(c), copies of any (i) board materials provided to the Board of
the Borrower or any Subsidiary and (ii) a copy of the internal management FP&A package; provided that the Purchasers
may be denied access to any such materials, if and to the extent the Borrower reasonably and in good faith determines (x) such
denial is reasonably necessary based on the reasonable advice of counsel to preserve attorney-client privilege, (y) there exists
an actual or potential conflict of interest between the Purchasers, and the Borrower or its Subsidiaries, as applicable, or (z)
based on the reasonable advice of counsel, such denial is required by Applicable Laws;


 




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(n)          Promptly
upon the filing or sending thereof, and in any event within three (3) Business Days after filing thereof, copies of all regular,
periodic or special reports of any Loan Party filed with the SEC; copies of all registration statements of any Loan Party filed
with the SEC (other than on Form S-8); and copies of all proxy statements or other communications made to security holders generally;
provided that filing or furnishing of such report, registration statement, proxy statement or other communication with the
SEC via the EDGAR system shall be deemed to be furnishing of the same to Purchasers; or


 


(o)          Such
other information (including non-financial information) as any Purchaser may from time to time reasonably request.


 


Documents required to be
delivered pursuant to Section 8.1(a),(b) or (g) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i)
on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website
address; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any,
to which each Purchaser has access; provided that: (i) the Borrower shall deliver paper copies of such documents to any
Purchaser upon its request to the Borrower to deliver such paper copies until a written request to cease delivering paper copies
is given by such Purchaser and (ii) the Borrower shall notify each Purchaser (by telecopier or electronic mail) of the posting
of any such documents and provide electronic mail electronic versions (i.e., soft copies) of such documents.


 


The Borrower hereby acknowledges
that certain of the Purchasers (each, a “Public Purchaser”) may have personnel who do not wish to receive material
non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and
who may be engaged in investment and other market-related activities with respect to such Persons’ securities. The Borrower
hereby agrees that so long as the Borrower is the issuer of any outstanding debt or equity securities that are registered or issued
pursuant to a private offering or is actively contemplating issuing any such securities it will use commercially reasonable efforts
to identify that portion of the materials and/or information provided by or on behalf of the Borrower hereunder (collectively,
“Borrower Materials”) that may be distributed to the Public Purchasers and that (w) all such Borrower Materials
shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC”
shall appear prominently on the first page thereof; by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed
to have authorized the Purchasers to treat such Borrower Materials as not containing any material non-public information (although
it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States federal and state
securities laws.


 


8.2          Use
of Proceeds.


 


(a)          The
Borrower shall use the proceeds of the sale of the Notes hereunder only as follows: (i) to repay that certain Term Loan Agreement,
dated as of March 9, 2016, between the Numerex Corp., as lead borrower, the other borrowers party thereto from time to time, Crystal
Financial LLC, as term agent, and the term lenders party thereto from time to time, (ii) for general corporate purposes and working
capital requirements of the Borrower and its Subsidiaries, and (iii) to pay the closing fee and all other fees and expenses in
connection with this Agreement.


 




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(b)          The
Borrower shall not use any proceeds of the sale of the Notes hereunder to, directly or indirectly, purchase or carry any “margin
stock” (as defined in Regulation U) or to extend credit to others for the purpose of purchasing or carrying any “margin
stock” in violation of the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.


 


8.3          Notice
of Default or Material Adverse Effect. The Borrower will give prompt notice in writing to the Purchasers upon becoming
aware of the following: (a) the occurrence of any Default or Event of Default under this Agreement (such notice to specify the
nature and period of existence thereof and what action the Borrower is taking (and proposes to take) with respect thereto), (b)
the occurrence of any event which constitutes or which with the passage of time or giving of notice or both would constitute an
event of default under any Material Contract, (c) the occurrence of any event which constitutes or which with the passage of time
or giving of notice or both would constitute a default under any other Contractual Obligation which could reasonably be expected
to have a Material Adverse Effect and (d) any development or other information outside the ordinary course of business of the Borrower
or any Subsidiary which could reasonably be expected to have a Material Adverse Effect.


 


8.4          Conduct
of Business. The Borrower will, and will cause each other Loan Party to, carry on and conduct its business in substantially
the same manner and in substantially the same fields of enterprise as it is presently conducted or those reasonably related or
ancillary thereto and do all things necessary to remain duly incorporated or organized, validly existing and in good standing as
a domestic corporation or limited liability company in its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted except to the
extent the failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.


 


8.5          Taxes
and Claims. The Borrower will, and will cause each of its Subsidiaries to:


 


(a)          Timely
file complete and correct United States federal and material state income and applicable foreign and material state and local Tax
Returns required by law, in each case with due regard for any extension of time within which to file such Tax Return, and pay when
due all material Taxes, except those which are being contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with GAAP, which deferment of payment is permissible so long as no Lien, other
than a Permitted Lien has been entered and the Borrower’s and its Subsidiaries’ title to, and its/their right to use,
its/their Properties are not materially adversely affected thereby; and


 


(b)          Pay
and perform (i) all Obligations under this Agreement and the other Note Documents and (ii) except where failure to do so could
not reasonably be expected to have a Material Adverse Effect, all other Indebtedness, obligations and liabilities in accordance
with customary trade practices; provided that the Borrower or such Subsidiary may contest any item described in clause
(ii) above in good faith so long as adequate reserves are maintained with respect thereto in accordance with GAAP.


 




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8.6          Insurance.


 


(a)          The
Borrower will, and will cause each of its Subsidiaries to, maintain with reputable insurance companies insurance in such amounts
and covering such risks as set forth on Schedule 8.6 and is otherwise consistent with sound business practice, including,
without limitation, property and casualty insurance on all of its Property, general liability insurance, workers compensation insurance,
business interruption insurance, and directors and officers liability insurance and maintain such insurance as is required by the
terms of any Collateral Document. All such insurance policies shall contain the provision that the Purchasers be given 30 days
written notice of intent to terminate by either the Borrower or any of its Subsidiaries or insuring company, and shall name Collateral
Agent as lenders loss payee or additional insured, as applicable, thereunder. The Borrower will, and will cause each of its Subsidiaries
to, furnish to the Purchasers upon request full information as to the insurance carried by it.


 


(b)          The
Borrower will, and will cause each of its Subsidiaries to, at all times keep its Property which is subject to the Lien of any Collateral
Document insured in favor of the Purchasers, and all policies or certificates (or certified copies thereof) with respect to such
insurance. At or prior to the Closing Date, the Borrower shall furnish certificates of insurance issued on applicable ACORD Forms
with respect to property and liability insurance for the Borrower. The Borrower will, and will cause each of its Subsidiaries to,
notify the Purchasers, promptly, upon receipt of a notice of termination, cancellation, or non-renewal from its insurance company
of any such policy.


 


(c)          If
the Borrower shall fail to maintain all insurance in accordance with this Section 8.6 or to timely pay or cause to be paid
the premium(s) on any such insurance, or if the Borrower shall fail to deliver all certificates with respect thereto, the Purchasers
shall have the right (but shall be under no obligation) to procure such insurance or pay such premiums, and the Borrower agrees
to reimburse the Purchasers, on demand, for all costs and expenses relating thereto.


 


8.7          Compliance
with Laws and Material Agreements.


 


(a)          The
Borrower will, and will cause each of its Subsidiaries to, comply with any and all Requirements of Law to which it may be subject
including, without limitation, all Environmental Laws, and obtain any and all Licenses necessary to the ownership of its Property
or to the conduct of its businesses, except, in each case, where failure to do so could not reasonably be expected to have a Material
Adverse Effect. The Borrower will, and will cause each of its Subsidiaries to, timely satisfy all material assessments, fines,
costs and penalties imposed by any Governmental Authority against such Person or any Property of such Person except to the extent
such assessments, fines, costs, or penalties are being contested in good faith by appropriate proceedings and for which the Borrower
or such Subsidiary has set aside on its books adequate reserves in accordance with GAAP. The Borrower will, and will cause each
of its Subsidiaries to, comply with any and all agreements or instruments evidencing Indebtedness and any other material agreement
to which it is a party or by which it is bound, where such default would result in a Material Adverse Effect.


 




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(b)          The
Borrower will file or furnish, on a timely basis in accordance with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be) or in the timeframe set forth in any extension granted by the SEC, all statements, reports, schedules,
forms and other documents (other than any immaterial Form 3, 4, 5 or 8-K filings or any filings relating solely to benefit plans),
required to be filed or furnished with or to the SEC.


 


8.8          Maintenance
of Properties. The Borrower will, and will cause each of its Subsidiaries to, do all things necessary to maintain, preserve,
protect and keep its Property (other than Property that is obsolete, surplus, or no longer used or useful in the ordinary conduct
of its business) in good repair, working order and condition (ordinary wear and tear and casualty and condemnation excepted), make
all necessary and proper repairs, renewals and replacements such that its business can be carried on in connection therewith and
be properly conducted at all times and pay and discharge when due the cost of repairs and maintenance to its Property, and pay
all rentals when due for all real estate leased by such Person.


 


8.9          Audits
and Inspection. The Borrower will, and will cause each of its Subsidiaries to, permit the Collateral Agent, and any of
its representatives or designees, to visit and inspect any of its Property, books of account, records and reports to examine, audit
and make copies thereof, and to discuss its affairs, finances and accounts with, and to be advised as to the same by, its officers,
managers, employees and independent certified public accountants at such times and intervals as the Collateral Agent may designate
upon advance notice to the Borrower (except following the occurrence and during the continuance of an Event of Default in which
case no advance notice shall be required). The reasonable and documented out-of-pocket costs and expenses associated with such
activities shall be paid by the Borrower.


 


8.10        Issue
Taxes. The Borrower shall pay all Taxes, if any, in connection with the issuance of the Notes. The obligations of the Borrower
hereunder shall survive the payment of the Obligations and the termination of the Note Documents.


 


8.11        Employee
Benefit Plans. The Borrower will, and will cause each of its Subsidiaries to, (a) keep in full force and effect any and
all Plans which are presently in existence or may, from time to time, come into existence under ERISA and not withdraw from any
such Plans, unless such withdrawal can be effected or such Plans can be terminated without material liability to the Borrower or
its Subsidiaries, (b) make contributions to all such Plans in a timely manner and in a sufficient amount to comply in all material
respects with the standards of ERISA, including, without limitation, the minimum funding standards of ERISA, (c) comply in all
material respects with all requirements of ERISA, (d) notify the Purchasers promptly upon receipt by the Borrower or any Subsidiary
of any notice concerning the imposition of any withdrawal liability or of the institution of any proceeding or other action which
may result in the termination of any such Plans by the PBGC or the appointment of a trustee to administer such Plans, (e) promptly
advise the Purchasers of the occurrence of any Reportable Event or non-exempt prohibited transaction (as defined in ERISA) with
respect to any such Plans of which Borrower becomes aware, and (f) amend any Plan that is intended to be qualified within the meaning
of Section 401 of the Code to the extent necessary to keep the Plan qualified and to cause the Plan to be administered and operated
in a manner that does not cause the Plan to lose its qualified status.


 






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8.12        Environmental
Covenants. The Borrower will, and will cause each of its Subsidiaries to:





 


(a)          use
and operate all of its facilities and Properties in material compliance with all Environmental Laws, keep all necessary Licenses
in effect and remain in material compliance therewith, and handle all Hazardous Materials in material compliance with all applicable
Environmental Laws;


 


(b)          promptly
notify the Purchasers and provide copies upon receipt of all written claims or complaints relating to compliance of the Properties
with Environmental Laws, and shall promptly seek to cure and diligently pursue and have dismissed with prejudice any such actions
and proceedings to the satisfaction of the Purchasers; and


 


(c)          provide
such information and certifications which any Purchaser may reasonably request from time to time to ensure compliance with this
Section 8.12.


 


8.13        Website
Links. The Borrower will, and will cause each of its Subsidiaries to, permit each Purchaser to place on its website a link
to the Borrower’s and each of its Subsidiaries’ websites.


 


8.14        Further
Assurances. The Borrower will, and will cause each of its Subsidiaries to, take any action reasonably requested by any
Purchaser in order to effectuate the purposes and terms contained in this Agreement or any of the Note Documents.


 


8.15        Board
Observation. For so long as the Obligations are outstanding, the Purchasers shall have the right to appoint Martin Hale
Jr. (or another Hale Capital representative acceptable to the Purchasers), by written notice to the Borrower from time to time,
as an observer (the “Observer”) to the board of directors or similar governing body of the Borrower and each
of its Subsidiaries (the “Board”). The Observer shall have the right to attend (which attendance may occur telephonically
at the election of the Observer) and participate in all meetings of the Board and any committees thereof. The Observer shall have
no right to vote on any matter presented to the Board or any committee thereof. The Borrower shall give the Observer written notice
of each meeting thereof at the same time and in the same manner as the other members of the Board or such committee receive notice
of such meetings. The Borrower shall permit the Observer to attend and participate in all meetings thereof. The Observer shall
be entitled to receive all written materials and other information given to other members of the Board and such committees in connection
with such meeting or otherwise, at the same time such materials and information are given to the other members of the Board and
such committees, and the Observer shall keep such materials and information confidential, and shall abide by the Borrower’s
insider trading policy. If the Borrower or any Subsidiary proposes to take any action by written consent in lieu of a meeting of
the Board, then the Borrower shall give written notice thereof to the Observer describing the nature and substance of such action
and including the text of such written consents. The Borrower shall pay and reimburse the reasonable and documented out-of-pocket
costs and expenses of the Observer incurred in connection with traveling to and attending such meetings of the Board and committees.
Notwithstanding anything contained in this Section 8.15 to the contrary, the Observer designated hereunder may be excluded
from any meeting (or portion thereof), or denied access to any materials, if and to the extent the Board reasonably and in good
faith determines (i) such recusal is reasonably necessary based on the advice of counsel to preserve attorney-client privilege,
(ii) there exists, with respect to any deliberation or board or committee materials, an actual or potential conflict of interest
between the Observer, and the Borrower or its Subsidiaries, as applicable, or (iii) based on the advice of counsel, such recusal
is required by Applicable Laws.


 




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8.16        Intellectual
Property.


 


(a)          At
the request of the Collateral Agent, in order to facilitate filings with the United States Patent and Trademark Office and the
United States Copyright Office, the Borrower will, and will cause each Guarantor to, execute and deliver to the Collateral Agent
one or more Intellectual Property Security Agreements to further evidence the Purchasers’ Lien on such Person’s Intellectual
Property. The Borrower will, and will cause each Guarantor to, take the steps described in this Section 8.16 with respect
to all new or acquired Intellectual Property to which the Borrower or any Guarantor is now or later becomes entitled that is necessary
in the conduct of such Person’s business. The Borrower acknowledges and agrees that the Purchasers shall have no duties with
respect to any Intellectual Property or Licenses of the Borrower or its Subsidiaries.


 


(b)          The
Borrower and the Guarantors shall have the duty, with respect to Intellectual Property that is necessary in the conduct of such
Person’s business (i) to prosecute diligently any trademark application or service mark application that is part of the trademarks
pending as of the date hereof or hereafter, (ii) to prosecute diligently any patent application that is part of the patents pending
as of the date hereof or hereafter, and (iii) to take all reasonable and necessary action to preserve and maintain all of the Borrower’s
and the Guarantors’ trademarks, patents, copyrights, Licenses, and its rights therein, including paying all maintenance fees
and filing of applications for renewal, affidavits of use, and affidavits of noncontestability, except in cases of (i) and (ii),
where Borrower, in its reasonable opinion, determines that the costs for engaging in such prosecution activities exceeds the likely
benefit of continued prosecution and except in case (iii) where Borrower, in its reasonable opinion, determines that the costs
of preserving and maintaining exceeds the value Borrower obtains from such preservation and maintenance. Borrower and each Guarantor
shall require all employees, consultants, and contractors of the Borrower and the Guarantors who were involved in the creation
or development of such Intellectual Property to sign agreements containing assignment to the Borrower or such Guarantor of Intellectual
Property rights created or developed and obligations of confidentiality. Neither the Borrower nor any Guarantor shall abandon any
Intellectual Property or License that is necessary in the conduct of the Borrower’s or such Guarantor’s business.


 


(c)          The
Borrower will, and will cause each of the Guarantors to, promptly file an application with the United States Copyright Office for
any copyright that has not been registered with the United States Copyright Office if such copyright registration is necessary
in connection with the conduct of such Person’s business. Any expenses incurred in connection with the foregoing shall be
borne by the Borrower or the Guarantors.


 


(d)          Neither
the Borrower nor any Guarantor shall enter into any Intellectual Property License to receive any license or rights in any Intellectual
Property of any other Person unless the Borrower or Guarantors have used commercially reasonable efforts to permit the assignment
of or grant of a Lien in such Intellectual Property License (and all rights of the Borrower or Guarantors thereunder) to the Purchasers.


 




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8.17        Replacement
of Notes. Upon receipt of evidence reasonably satisfactory to the Borrower of the loss, theft, destruction or mutilation
of any Note, and, in the case of any such loss, theft or destruction, upon delivery of a bond of indemnity reasonably satisfactory
to the Borrower (provided that an institutional Purchaser of a Note may instead deliver to the Borrower an indemnity agreement
in form and substance reasonably satisfactory to the Borrower), or, in the case of any such mutilation, upon surrender and cancellation
of the Note, as the case may be, the Borrower will issue a new Note of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Note.


 


8.18        Landlord
and Bailee Agreements. Each Loan Party shall (i) obtain a landlord agreement or bailee or mortgagee waivers, as applicable,
from the lessor of each property leased from an Affiliate of a Loan Party and (ii) use commercially reasonable efforts to obtain
a landlord agreement or bailee or mortgagee waivers, as applicable, from the lessor (other than Affiliates) of each leased property,
bailee in possession of any Collateral or mortgagee of any owned property, in each case, with respect to the Borrower’s headquarters
and each other location where any Collateral having a value in excess of $250,000 is stored or located, which agreement shall be
reasonably satisfactory in form and substance to the Collateral Agent.


 


8.19        Foreign
Pension Plans and Benefit Plans. None of the Loan Parties or any of their Subsidiaries maintain or contribute to, or are
required to maintain or contribute to, or have any liability or contingent liability with respect to, any Foreign Benefit Plans
and Foreign Pension Plans.


 


8.20        Post-Closing
Obligations.


 


(a)          Collateral
Access Agreements. The Loan Parties shall use commercially reasonable efforts to obtain and deliver to Collateral Agent, within
thirty (30) days after the Closing Date (or any longer period Collateral Agent agrees to in its sole discretion), an executed Collateral
Access Agreement (in form and substance reasonably satisfactory to Collateral Agent) with respect to each location that the Loan
Parties are required to obtain Collateral Access Agreements for pursuant to Section 8.18 of this Agreement; provided that such
thirty (30) day period shall be extended for an additional thirty (30) days if the Loan Parties are diligently pursuing such agreements
but have not obtained them within the initial thirty (30) day period provided above.


 


(b)          Control
Agreements.  The Loan Parties shall deliver to Collateral Agent, within thirty (30) days after the Closing Date (or any
longer period Collateral Agent agrees to in its sole discretion), executed Deposit Account Control Agreements (in form and substance
reasonably satisfactory to Collateral Agent)  with respect to each of the Loan Parties’ deposit accounts (other than
Excluded Accounts) existing on the Closing Date.


 


(c)          Insurance. 
The Loan Parties shall deliver to Collateral Agent, within thirty (30) days after the Closing Date (or any longer period Collateral
Agent agrees to in its sole discretion), insurance endorsements (in form and substance reasonably satisfactory to Collateral Agent)
naming Collateral Agent as lenders loss payee or additional insured, as applicable, and containing the provision that the Purchasers
be given thirty (30) days written notice of intent to terminate such insurance policy by the Borrower, any of its Subsidiaries,
or the insuring company.


 




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(d)          Lien
Release. The Loan Parties shall deliver to Collateral Agent, within sixty (60) days after the Closing Date (or any longer period
Collateral Agent agrees to in its sole discretion), evidence that each of the state tax liens listed below have been released:


 


		(i)	State Tax Lien (GA) (File No. 3576 / 671)



		(ii)	State Tax Lien (GA) (File No. 3596 / 373)



		(iii)	State Tax Lien (GA) (File No. 3685 / 467)



		(iv)	State Tax Lien (GA) (File No. 3726 / 681)



		(v)	State Tax Lien (GA) (File No. 3769 / 558)



		(vi)	State Tax Lien (GA) (File No. 3909 / 652)



 


(e)          Numerex
Solutions, LLC. The Loan Parties shall deliver to Collateral Agent, within five (5) Business Days of the Closing Date (or such
longer period Collateral Agent agrees to in its sole discretion), (i) evidence of filing of an amended and restated or amended
certificate of formation for Numerex Solutions, LLC (in form and substance reasonably satisfactory to Collateral Agent) and (ii)
executed resolutions of Numerex Solutions, LLC (in form and substance reasonably satisfactory to Collateral Agent) related to such
certificate of formation and organizational documents of Numerex Solutions, LLC.


 


Article
9


NEGATIVE
COVENANTS


 


Until the indefeasible
payment in full in cash of all Obligations under the Notes (other than contingent indemnification or expense reimbursement obligations
for which no claim has been made) or such later date as set forth below, the Borrower hereby covenants and agrees with the Purchasers
as follows:


 


9.1          Distributions.
The Borrower will not, and will not cause or permit any of its Subsidiaries to, make or declare or incur any liability to make
any Distributions in respect of the Capital Stock of the Borrower, except that (i) a Subsidiary of the Borrower may declare and
pay dividends on its outstanding Capital Stock to the Borrower or to a Wholly-owned Subsidiary of the Borrower that is a Loan Party;
and (ii) the Borrower may declare and pay dividends with respect to its Capital Stock payable solely in additional shares of its
Capital Stock.


 


9.2          Indebtedness.
The Borrower will not, and will not cause or permit any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness
(directly or indirectly), except:


 


(a)          the
Obligations;


 


(b)          Indebtedness
existing on the date hereof and described in Schedule 9.2;


 


(c)          Capital
Lease Obligations and purchase money Indebtedness in an aggregate amount not to exceed $2,500,000 at any time outstanding;


 




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(d)          endorsement
of items for deposit or collection of commercial paper received in the ordinary course of business;


 


(e)          Indebtedness
with respect to surety and appeal bonds, performance bonds, bid bonds, completion guarantees and similar obligations incurred in
the ordinary course of business;


 


(f)          Indebtedness
owed to any Person providing property, casualty, liability, or other insurance to the Borrower or any of its Subsidiaries, so long
as the amount of such Indebtedness is not in excess of the amount of the unpaid cost of, and shall be incurred only to defer the
cost of, such insurance for the year in which such Indebtedness is incurred and such Indebtedness is outstanding only during such
year, and which, in all cases, does not exceed $550,000 outstanding at any time;


 


(g)          accrual
of interest, accretion or amortization of original issue discount, in each case, on Indebtedness permitted hereunder;


 


(h)          Indebtedness
in respect of bid, performance or surety bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances
issued for the account of the Borrower or any Subsidiary in the ordinary course of business, including guarantees or obligations
of the Borrower or any Subsidiary with respect to letters of credit supporting such bid, performance or surety bonds, workers’
compensation claims, self-insurance obligations and bankers acceptances (in each case other than for an obligation for money borrowed);
provided that neither the Borrower nor any Domestic Subsidiary shall incur such Indebtedness for the account of, for the
benefit of, or in support of any Foreign Subsidiary;


 


(i)          Indebtedness
in respect of netting services, overdraft protections and otherwise in connection with deposit accounts that are promptly repaid
incurred in the ordinary course of business;


 


(j)          unsecured
Indebtedness in the ordinary course of business in respect of the following bank products or services extended to any Loan Party
in an aggregate amount not to exceed $300,000 at any time: (i) cash management services and (ii) commercial credit card and merchant
card services; and


 


(k)          the
Subordinated Note Obligations in an aggregate principal amount not to exceed $5,000,000 (which aggregate principal amount permitted
under this Section 9.2(k) shall be reduced by the amount of any payments of principal made pursuant to Section 9.17).


 


9.3          Mergers.
The Borrower will not merge or consolidate with or into any other Person other than with another Loan Party in a transaction in
which the Borrower is the surviving entity. The Borrower will not cause or permit any of its Subsidiaries to, merge or consolidate
with or into any other Person that is not a Loan Party, and no Domestic Subsidiary will merge or consolidate with any Foreign Subsidiary
unless the surviving entity is a Loan Party that is a Domestic Subsidiary.


 




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9.4          Sales
of Assets. The Borrower will not, and will not cause or permit any of its Subsidiaries to, sell, assign, License, lease,
convey, exchange, transfer or otherwise dispose of its Property (each, a “Disposition”) (including, without
limitation, any Capital Stock of any Subsidiary owned by the Borrower or another Subsidiary) to any other Person, except:


 


(a)          Dispositions
of Inventory in the ordinary course of business;


 


(b)          Dispositions
of obsolete, worn-out or surplus assets no longer used or usable in the business of the Borrower or any of its Subsidiaries in
the ordinary course of business;


 


(c)          leases,
licenses or sublicenses of real or personal property in the ordinary course of business, in each case subject to the Liens granted
under the Note Documents;


 


(d)          Investments
in compliance with Section 9.5(b);


 


(e)          Dispositions,
settlements and writeoffs of accounts receivable in connection with the collection or compromise thereof in the ordinary course
of business and in an aggregate amount not to exceed $450,000 in any fiscal year;


 


(f)          Dispositions
of Property to the extent that (i) such Property is exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property and,
in each case, so long as Collateral Agent has a Lien with respect to such replacement property with the same priority as the Lien
of Collateral Agent with respect to the Property disposed of;


 


(g)          subject
to Section 3.2(c)(ii), Dispositions which constitute, or which are subject to, a casualty event;


 


(h)          Dispositions
by any Loan Party to any other Loan Party; and


 


(i)          (i)
any lapse of Intellectual Property by any Loan Party that is not economically desirable in the conduct of the Loan Parties’
business or (ii) any abandonment of Intellectual Property rights in the ordinary course of business so long as (in each case under
clauses (i) and (ii)), such lapse is not materially adverse to the interests of the Purchasers and such Intellectual Property is
not then being used by the Loan Parties in the ordinary course of business.


 


9.5          Investments
and Acquisitions. The Borrower will not, and will not cause or permit any of its Subsidiaries to, make or suffer to exist
any Investments (including without limitation, loans and advances to, and other Investments in, Subsidiaries), or commitments therefor,
or to become or remain a partner in any partnership or joint venture, or to make any Acquisition of any Person, except for:


 


(a)          Cash
Equivalent Investments, subject to Deposit Account Control Agreements in favor of the Collateral Agent on behalf of the Purchasers
or otherwise subject to a perfected security interest in favor of the Collateral Agent on behalf of the Purchasers, and purchases
of assets in the ordinary course of business;


 




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(b)          Investments
(including intercompany loans) in Wholly-owned Domestic Subsidiaries that are Loan Parties so long as the Collateral Agent has
a first priority, perfected Lien in any intercompany loans and has received an intercompany note evidencing such intercompany loans,
together with transfer powers executed in blank in connection therewith;


 


(c)          Investments
comprised of (i) accounts receivables or notes payable owing to the Borrower or Subsidiary if created or acquired in the ordinary
course of business, (ii) endorsements of negotiable instruments held for collection in the ordinary course of business or (iii)
lease, utility and other similar deposits made in the ordinary course of business;


 


(d)          Investments
in securities of trade creditors, customers, suppliers or account debtors received in satisfaction or partial satisfaction of obligations
owing to it or upon foreclosure or pursuant to any plan of reorganization or liquidation or similar arrangement upon the bankruptcy
or insolvency of such trade creditors, customers, suppliers or account debtors;


 


(e)          deposits
of cash made in the ordinary course of business to secure performance of operating leases permitted hereunder;


 


(f)          Investments
existing on the Closing Date and set forth on Schedule 9.5; and


 


(g)          extensions
of payment terms made to customers in the ordinary course of business.


 


9.6          Liens.
The Borrower will not, and will not cause or permit any of its Subsidiaries to, create, incur or suffer to exist, any Lien in,
of or on its or their Property (whether now owned or hereafter acquired, or upon any income, profits or proceeds therefrom), except
the following (“Permitted Liens”):


 


(a)          Subject
to Section 8.5 hereof, Liens for taxes, assessments or governmental charges or levies on its Property if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or are being contested in good faith and by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books, so long as the Borrower’s
or Subsidiary’s title to, and its right to use, its Properties are not materially adversely affected thereby;


 


(b)          Subject
to Section 8.5 hereof, Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ liens and
other similar Liens arising in the ordinary course of business which secure payment of obligations not more than 60 days past due
or which are being contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books, so long as the Borrower’s or Subsidiary’s title to, and its right to use, its Properties
are not materially adversely affected thereby;


 


(c)          Liens
arising out of pledges or deposits under worker’s compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation;


 




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(d)          (i)
Utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character, as arise in the ordinary course of business and that do not secure
any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary course
of business of the Borrower or any Subsidiary and (ii) minor defects in title, in each case, which do not materially interfere
with the conduct of the Borrower’s and its Subsidiaries’ business or the utilization thereof in the business of the
Borrower or its Subsidiaries;


 


(e)          Liens
existing on the date hereof and described in Schedule 9.6;


 


(f)          Liens
securing the Obligations;


 


(g)          Liens
securing Indebtedness permitted under Section 9.2(c); provided that (i) such Liens shall be created substantially
simultaneously with the acquisition or lease of the related asset, (ii) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not increased and (iv) the
principal amount of Indebtedness secured by any such Lien shall at no time exceed one hundred percent (100%) of the original purchase
price of such property at the time it was acquired;


 


(h)          Liens
arising out of judgments, attachments or awards not resulting in an Event of Default under Section 10.1(i) or securing appeal
or other surety bonds relating to such judgments;


 


(i)          Liens
(i) incurred in the ordinary course of business to secure the performance of tenders, statutory obligations (other than excise
taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance
and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or (ii) arising
by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers;


 


(j)          leases,
licenses or sublicenses of the properties of the Borrower or its Subsidiaries, in each case as otherwise permitted under Section
9.4 hereof and entered into in the ordinary course of the Borrower’s or its Subsidiaries’ business so long as such
leases, licenses or sublicenses do not, individually or in the aggregate, (i) interfere in any material respect with the ordinary
conduct of the business of the Borrower or its Subsidiaries, or (ii) materially impair the use (for its intended purposes) or the
value of the property subject thereto;


 


(k)          (i)
bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalent Investments
on deposit in one or more accounts maintained by the Borrower or its Subsidiaries, in each case granted in the ordinary course
of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect
to cash management and operating account arrangements and (ii) Liens of a collection bank arising under Section 4-210 of the UCC
on items in the course of collection;


 




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(l)          the
filing of UCC financing statements solely as a precautionary measure in connection with operating leases otherwise permitted hereunder;


 


(m)          Liens
on cash and Cash Equivalent Investments held in an Excluded Account securing reimbursement obligations in respect of letters of
credit and related Indebtedness permitted to be incurred hereunder, and in any event, not securing more than $300,000 of Indebtedness
in the aggregate at any time;


 


(n)          statutory
Liens of landlords and lessors in respect of rent not in default;


 


(o)          the
title and interest of a lessor or sublessor in and to personal property leased or subleased, in each case extending only to such
personal property; and


 


(p)          non-exclusive
licenses of Intellectual Property rights in the ordinary course of business.


 


9.7          Capital
Expenditures; Operating Leases.


 


(a)          The
Borrower will not, and will not cause or permit any of its Subsidiaries to, make any Capital Expenditure if the sum of the aggregate
amount of all Capital Expenditures of the Borrower and its Subsidiaries on a pro forma basis (calculated as if the Capital Expenditure
in question was on made on the last day of the most recently ended month) in the trailing twelve month period most recently ended
on a combined basis would exceed $1,300,000.


 


(b)          The
Borrower will not, and will not cause or permit any of its Subsidiaries to, enter into any operating lease if the sum of the aggregate
amount of all expenditures under operating leases (excluding the operating lease with respect to the property located at 3330 Cumberland
Boulevard, Atlanta, GA 30339) made or required to be made by the Loan Parties on a combined basis during such Fiscal Year would
exceed $1,000,000.


 


9.8          Licenses.
The Borrower will not, and will not cause or permit any of its Subsidiaries to, grant any rights or Licenses to any IP Rights of
the Borrower or its Subsidiaries other than non-exclusive rights or Licenses granted in the ordinary course of business.


 


9.9          Affiliates.
Except as otherwise permitted by Section 9.21 and the Subordinated Note, the Borrower will not, and will not cause or permit any
of its Subsidiaries to, enter into any transaction or arrangement (including, without limitation, the purchase or sale of any Property
or service) with, or make any payment or transfer to, any Affiliate, except for transactions permitted by this Agreement and transactions
in the ordinary course of business and pursuant to the reasonable requirements of the Borrower’s or such Subsidiary’s
operating business and upon fair and reasonable terms that are fully disclosed to the Purchasers and that are no less favorable
to the Borrower or such Subsidiary than would be obtained in a comparable arm’s-length transaction with a Person not an Affiliate.


 


9.10        Permitted
Hedging Arrangements. The Borrower will not, and will not cause or permit any of its Subsidiaries to, enter into Hedging
Agreements or become liable for liabilities arising from Hedging Agreements.


 




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9.11        Sale
and Leaseback Transactions and Other Off-Balance Sheet Liabilities. The Borrower will not, and will not cause or permit
any of its Subsidiaries to, enter into or suffer to exist any (a) Sale and Leaseback Transaction which is not a Capital Lease or
(b) any other transaction pursuant to which the Borrower or any Subsidiary incurs or has incurred Off-Balance Sheet Liabilities.


 


9.12        Contingent
Obligations. The Borrower will not, and will not cause or permit any of its Subsidiaries to, make or suffer to exist any
Contingent Obligation (other than indemnities to officers and directors to the extent permitted by applicable law), except Contingent
Obligations arising from the Collateral Documents, or existing on the Closing Date as permitted Indebtedness or permitted by Section
9.2.


 


9.13        Subsidiaries.


 


(a)          If
the Borrower or any Subsidiary creates, forms or acquires any Domestic Subsidiary on or after the date of this Agreement, the Borrower
will, and will cause such Subsidiaries to, contemporaneously with the creation, formation or acquisition of such new Domestic Subsidiary
(or at such later time as the Collateral Agent may agree in writing), (i) grant to Collateral Agent a perfected security interest
in and Lien on all of the issued and outstanding Capital Stock of such Domestic Subsidiary, in order to secure the Obligations
and (ii) cause such Domestic Subsidiary to join the Guaranty and Collateral Agreement and secure said Obligations as a “Grantor”
under the Guaranty and Collateral Agreement with a perfected security interest in and Lien on all of the accounts, Inventory, documents,
instruments, chattel paper, general intangibles, goods, machinery, equipment, investment property, other tangible and intangible
personal property, real property and other assets and the books and records of such Subsidiary and the thereof (except that, with
respect to property of such Domestic Subsidiary that constitutes Capital Stock in a Foreign Subsidiary, any such pledge, security
interest or Lien shall be limited to sixty-five percent (65%) of the voting Capital Stock of such Foreign Subsidiary), all pursuant
to the Guaranty and Collateral Agreement.


 


(b)          Neither
the Borrower nor any Subsidiary shall create, form, or acquire any Foreign Subsidiary without the express written consent of the
Collateral Agent.


 


(c)          No
Subsidiary shall at any time acquire any material assets or operations unless such Subsidiary shall have complied with the requirements
of this Section 9.13 applicable to newly created, formed or acquired Subsidiaries.


 


9.14        Real
Property. As soon as practicable after any permitted acquisition of real property or lease (as lessee), the Borrower will,
and will cause each of its Subsidiaries to, deliver a perfected mortgage Lien in favor of the Collateral Agent on any acquired
real property of the Borrower or Subsidiary, collateral assignment of lease and Collateral Access Agreement on any real property
leased by the Borrower or Subsidiary, and such insurance policies, opinions of counsel and related documents as the Collateral
Agent may reasonably request (all in form and substance acceptable to the Collateral Agent).


 




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9.15        Modifications
of Charter Documents. The Borrower will not permit, and will cause each of its Subsidiaries not to permit, such Person’s
Charter Documents to be amended or modified in any way that could reasonably be expected to materially or adversely affect the
interests of the Purchasers.


 


9.16        Fiscal
Year. The Borrower will not, and will not cause or permit any of its Subsidiaries to, change its Fiscal Year so that it
ends on other than the last day of December.


 


9.17        Payments
on Subordinated Note. The Borrower will not, and will not cause or permit any of its Subsidiaries to, make any payment
or repurchase or declare or set aside any amount for payment or repurchase of principal, interest or other amount on or with respect
to the Subordinated Note except as permitted by the subordination terms thereof; provided that from the Closing Date until
July 1, 2018 the Borrower (or any of its Subsidiaries) may make payments or repurchases of the Subordinated Note in accordance
with the terms thereof in an aggregate amount not to exceed $5,000,000 so long as no Default or Event of Default shall have occurred
and be continuing at the time of such repurchase or prepayment or would result therefrom.


 


9.18        Restrictive
Agreements. The Borrower will not, and will not cause or permit any of its Subsidiaries to, become or be a party to any
contract or agreement which materially impairs such Person’s ability to perform under this Agreement, or under any other
Note Document.


 


9.19        Use
of Purchasers’ Names. Neither the Borrower nor any Subsidiary shall use any Purchaser’s name in connection
with any of its business operations. Nothing herein contained is intended to permit or authorize the Borrower or its Subsidiaries
to make any contract on behalf of any Purchaser.


 


9.20        Financial
Covenants. The Borrower and its Subsidiaries, on a consolidated basis, shall not:


 


(a)          Minimum
EBITDA. As of the last day of any Fiscal Quarter on or after June 30, 2017, permit (i) EBITDA less (ii) consolidated
Capitalized Software Costs of the Borrower and its Subsidiaries, in each case, for each Fiscal Quarter period then ended to be
less than the amount set forth across from such Fiscal Quarter in the table below:


 





	Fiscal Quarter Ending	Minimum Amount
	June 30, 2017	$580,000
	September 30, 2017	$1,000,000
	December 31, 2017	$1,500,000
	March 31, 2018 and each Fiscal Quarter thereafter	$1,750,000




  




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(b)          [Reserved].


 


(c)          Minimum
Total Liquidity. As of the last day of any calendar month ending on or after the Closing Date, permit Minimum Total Liquidity
to be less than the amount set forth across from such fiscal month in the table below:


 



	Month Ending	Minimum Amount
	Each calendar month end ending after the Closing Date through and including the calendar month ending September 30, 2017	$10,500,000
	Each calendar month end ending after September 30, 2017 through and including the calendar month ending June 30, 2018	$11,000,000
	Each calendar month end ending after June 30, 2018through and including the calendar month ending December 31, 2018	$12,500,000
	Each calendar month end ending after December 31, 2018 and each calendar month end thereafter	$14,000,000





 


(d)          Minimum
Liquidity. (i) At any time after the Closing Date through and including July 1, 2018, permit Minimum Liquidity to be less than
$5,000,000 and (ii) at any time after July 1, 2018 through and including the Maturity Date, permit Minimum Liquidity to be less
than $6,000,000.


 


(e)          Minimum
Monthly Recurring Revenue.


 


(i)          As
of the last day of any calendar month ending on or after the Closing Date, permit the actual minimum Monthly Recurring Revenue,
averaged on a trailing three (3) month basis, to be less than the projected total minimum Monthly Recurring Revenue as set forth
in Schedule 9.20(e) and calculated in the manner described in Schedule 9.20(e).


 


(ii)          As
of the last day of any calendar month ending on or after the Closing Date, permit the sum of the trailing 6 month actual Monthly
Recurring Revenue for the Uplink line of business (which shall be consistent with the breakout for such line of business provided
in that certain model dated as of June 1, 2017 and delivered to the Purchasers prior to the Closing Date), to be less than $8,000,000.
For purposes of testing the trailing Monthly Recurring Revenue, the six-month actual results will be calculated as the sum of the
test month plus the five previous months’ actual results for the Uplink line of business.


 




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9.21        Management
Fees; Board Fees. The Borrower will not, and will not cause or permit any of its Subsidiaries to, pay any management, advisory
or other similar fee to any Person, except with respect to (a) payment of reasonable compensation to officers, employees, and Affiliates
for actual services rendered to the Loan Parties and their Subsidiaries and reimbursement of actual out-of-pocket expenses, in
all cases, in the ordinary course of business, (b) payment of reasonable directors’ fees in an aggregate amount of cash compensation
not to exceed $60,000 per director, per calendar year, and reimbursement of actual out-of-pocket expenses incurred in connection
with attending board of director and committee meetings and (c) payment of non-cash equity-based compensation to directors.


 


9.22        Deposit
Accounts. Unless consented to in advance in writing by the Purchasers, the Borrower and its Subsidiaries shall not: (i)
establish or maintain any deposit account or securities account that is not subject to an account control agreement in favor of
the Collateral Agent, (ii) deposit any payment items or the proceeds of any Note into a deposit account or securities account that
is not subject to an account control agreement in favor of Collateral Agent or (iii) close or modify the terms governing any existing
deposit account in a manner adverse to the Purchasers; provided, however, that the foregoing shall not apply to any Excluded
Account.


 


9.23         Modifications
of Subordinated Note. The Borrower shall not directly or indirectly amend, terminate or otherwise modify (or permit any
amendment, termination or modification of), including waivers of material rights or remedies thereunder, the Subordinated Note
which in any case (i) is contrary to the terms of this Agreement or any other Note Document, (ii) is in contravention of the amendment
restrictions set forth in the Subordinated Note as in effect on the Closing Date or (iii) could reasonably be expected to be materially
adverse to the rights, interests or privileges of the Collateral Agent or the Purchasers or their ability to enforce the same.


 


9.24        No
Negative Pledges. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly,
(a) create or otherwise cause or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the
ability of any Loan Party or Subsidiary to pay dividends or make any other distribution on any of such Loan Party’s or Subsidiary’s
Capital Stock or to pay fees, including management fees, or make other payments and distributions to the Borrower or any other
Loan Party, or to make loans or advances to the Borrower, or to transfer any of the properties or assets of such Subsidiary to
the Borrower, or (b) enter into, assume or become subject to any Contractual Obligation prohibiting or otherwise restricting the
existence of any Lien upon any of its assets in favor of the Collateral Agent, whether now owned or hereafter acquired; provided
that the foregoing in this Section 9.24 shall not apply to restrictions and conditions (i) imposed by Requirements of Law,
(ii) imposed by the Note Documents, (iii) existing on the date hereof and identified on Schedule 9.24 (but shall apply to
any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iv)
to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted by the terms of this
Agreement, (v) clause (b) shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness
(including Capital Lease Obligations) permitted by this Agreement if such restrictions or conditions apply only to the property
or assets securing such Indebtedness and (vi) clause (b) of the foregoing shall not apply to customary provisions in leases restricting
the assignment thereof.


 




    	 	68	 



     


    

 


9.25        Accounts
Payable. No Loan Party shall, and no Loan Party shall permit any of its Subsidiaries to, directly or indirectly, allow
the accounts or notes payable to (i) the suppliers set forth on Schedule 9.25, (ii) any successors of such suppliers set
forth on Schedule 9.25 and (iii) any network provider that is providing network services for 20% or more of the Loan Parties’
subscribers to be overdue for more than thirty (30) days past the invoice date for such accounts payable.


 


9.26        Passive
Foreign Investment Company. No Loan Party shall become “passive foreign investment company,” as defined in
Section 1297 of the Code.


 


Article
10


EVENTS
OF DEFAULT


 


10.1        Events
of Default. An “Event of Default” shall occur hereunder upon:


 


(a)          Failure
of the Borrower to pay the principal of any Note (or any installment thereof) as and when due (whether at scheduled maturity, upon
acceleration or otherwise), or failure of the Borrower to pay within one (1) Business Day after the same shall become due (i) any
interest upon any Note, (ii) any fees or any other Indebtedness or Obligations to the Purchasers or (iii) any other obligations
under any of the Note Documents.


 


(b)          Any
representation or warranty made or deemed made by or on behalf of the Borrower or any of its Subsidiaries to any Purchaser under
or in connection with this Agreement, the Notes or any other Note Document or any certificate or information delivered in connection
with any of the foregoing shall be materially false when made.


 


(c)          Failure
of the Borrower or any of its Subsidiaries to comply with any term, covenant, or provision contained in Sections 8.1(a),
8.1(b), 8.1(c), 8.1(d), 8.1(g), 8.2, 8.3 (other than (d)), 8.6, 8.15,
8.20 or Article 9 of this Agreement.


 


(d)          Failure
of the Borrower or any of its Subsidiaries to perform or observe any other term, covenant or provision contained in this Agreement
(other than those specified elsewhere in this Section 10.1) or any other Note Document and any such failure shall remain
unremedied for thirty (30) days after occurrence.


 


(e)          (i)
Failure of the Borrower or any of its Subsidiaries to pay when due or within any applicable grace period therefor any payments
under any Indebtedness (other than the Obligations) in excess of $150,000 (which, for purposes of clarity, shall include the Subordinated
Note) or (ii) the default by the Borrower or any of its Subsidiaries in the performance (beyond the applicable grace period with
respect thereto, if any) of any other term, provision or condition contained in any agreement, contract or instrument under which
any such Indebtedness was created or is governed, the effect of which default is to cause, or to permit the holder or holders of
such other Indebtedness to cause, such Indebtedness to become due prior to its stated maturity, or (iii) any other event shall
occur or condition exist, the effect of which event or condition is to cause, or to permit the holder or holders of such other
Indebtedness to cause, such Indebtedness to become due prior to its stated maturity; or (iv) any such Indebtedness of the Borrower
or any of its Subsidiaries shall be declared to be due and payable or required to be prepaid or repurchased (other than by a regularly
scheduled payment) prior to the stated maturity thereof; or (v) the Borrower or any of its Subsidiaries shall admit in writing
its inability to pay its debts generally as they become due.


 




    	 	69	 



     


    

 


(f)          The
Borrower or any Subsidiary shall (i) file or consent to the entry of an order for relief with respect to it under any federal,
state or foreign bankruptcy, insolvency, receivership, liquidation or similar law as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of its Property, (iv) institute any proceeding seeking
an order for relief under any federal, state or foreign bankruptcy, insolvency, receivership, liquidation or similar law as now
or hereafter in effect seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts under any such law relating to bankruptcy, insolvency or reorganization
or relief of debtors, fail to file an answer or other pleading denying the material allegations of any such proceeding filed against
it or file an answer admitting the material allegations of a petition filed against itself in any such proceeding, (v) dissolve,
wind up or liquidate, (vi) take any corporate, organizational or similar action to authorize or effect any of the foregoing actions
set forth in this Section 10.1(f), or (vii) fail to contest in good faith any appointment or proceeding described in Section
10.1(g).


 


(g)         Without
the application, approval or consent of the Borrower or any Subsidiary, as applicable, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for such Loan Party or any substantial part of its Property, or a proceeding described in
Section 10.1(f) shall be instituted against such Loan Party and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 45 consecutive days.


 


(h)         Any
court, government, or Governmental Authority shall condemn, seize or otherwise appropriate, or take custody or control of, all
or any material portion of the Property of the Borrower or any Subsidiary.


 


(i)          The
Borrower or any Subsidiary shall fail within 30 days to pay, bond or otherwise discharge one or more (i) judgments or orders for
the payment of money aggregating in excess of $250,000 (or the equivalent thereof in currencies other than U.S. Dollars) in the
aggregate, or (ii) nonmonetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect, which judgment(s), in any such case, is/are not stayed on appeal or otherwise being appropriately contested
in good faith.


 


(j)          The
occurrence of a Reportable Event with respect to any Plan; the filing of a notice of intent to terminate a Plan by the Borrower,
any ERISA Affiliate or any Subsidiary, the institution of proceedings to terminate a Plan by the PBGC or any other Person; the
withdrawal in a “complete withdrawal” or a “partial withdrawal” as defined in Sections 4203 and 4205, respectively,
of ERISA by the Borrower, any ERISA Affiliate or any Subsidiary of the Borrower from any Multiemployer Plan; the incurrence of
any material increase in the contingent liability of the Borrower or any of its Subsidiaries with respect to any “employee
welfare benefit plan” as defined in Section 3(1) of ERISA which covers retired employees and its beneficiaries; or the Unfunded
Liabilities of all Single Employer Plans shall exceed (in the aggregate) $250,000, in each such case which, either individually
or in the aggregate, would be reasonably expected to result in liability to any Loan Party in excess of $250,000.


 




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(k)          The
institution by the Borrower, any ERISA Affiliate or any Subsidiary of steps to terminate any Plan if, in order to effectuate such
termination, the Borrower, such ERISA Affiliate or such Subsidiary, as the case may be, would be required to make a contribution
to such Plan, or would incur a liability or obligation to such Plan, in excess of $250,000, or the institution by the PBGC of steps
to terminate any Plan, which would reasonably be expected to result in material liability to any Loan Party.


 


(l)           The
Borrower or any Subsidiary shall (i) be the subject of any proceeding pertaining to the release by the Borrower, any such Subsidiary
or any other Person of any Hazardous Material into the environment, or (ii) violate any Environmental Law, which, in either case
could reasonably be expected to have a Material Adverse Effect.


 


(m)         Any
breach by the Borrower or the holders of the Subordinated Note of the subordination provisions set forth therein.


 


(n)         Any
Collateral Document shall for any reason fail to create a valid and perfected first priority (subject to any Permitted Liens) security
interest in any collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document, or any
Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document.


 


(o)          The
occurrence of a Change of Control.


 


(p)          The
occurrence of a Material Adverse Effect.


 


(q)          The
subordination provisions set forth in Section 5 of the Subordinated Note or any subordination or intercreditor agreement relating
to any other Indebtedness of any Loan Party subordinated to the Obligations, or any subordination provisions of any note or other
document running to the benefit of the Collateral Agent or Purchasers in respect of such Indebtedness, shall cease for any reason
to be in full force and effect or any Loan Party or any of their Subsidiaries shall so assert in writing.


 


(r)          Borrower’s
SEC reporting obligations under the Securities Exchange Act of 1934, as amended, are terminated or Borrower’s Capital Stock
are delisted from The Nasdaq Stock Market and not listed on any other national stock exchange (for the avoidance of doubt a “national
stock exchange” shall not include OTC Bulletin Board or any other similar over the counter exchange).


 


(s)          Any
Loan Party or any material Subsidiary shall be enjoined, restrained, or in any way prevented by court order from continuing to
conduct all or any material part of its business.


 


(t)          Any
Loan Party or any of its Subsidiaries shall be convicted under any criminal law that could lead to a forfeiture of any property
of such Person where either (i) the property subject to forfeiture has a fair market value of $500,000 or more, or (ii) the forfeiture
of such property could reasonably be expected to have a Material Adverse Effect.


 




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10.2        Acceleration.
If an Event of Default occurs and is continuing under Section 10.1(f), or (g) or clause (v)(B) of Section
10.1(e), then the outstanding principal of and interest on the Notes shall automatically become immediately due and payable
along with the Prepayment Fee, without presentment, demand, protest or notice of any kind, all of which are expressly waived. If
any other Event of Default occurs and is continuing, the Required Purchasers, by written notice to the Borrower, may declare the
principal of and interest on the Notes to be due and payable immediately along with the Prepayment Fee. Upon any such declaration
of acceleration, such principal and interest shall become immediately due and payable, without presentment, demand, protest or
notice of any kind, all of which are expressly waived, and the Collateral Agent (acting at the direction of the Required Purchasers)
shall be entitled to exercise all of its rights and remedies hereunder and under such Note or any other Note Document whether at
law or in equity.


 


10.3        Set-Off.
Upon the occurrence and during the continuation of an Event of Default, in addition to all other rights and remedies that may then
be available to any Purchaser of any Note, each Purchaser of any Note and the Collateral Agent is hereby authorized at any time
and from time to time, without notice to the Borrower (any such notice being expressly waived by the Borrower) to set off and apply
any and all Indebtedness at any time owing by such Purchaser or the Collateral Agent to or for the credit or the account of the
Borrower or any of its Subsidiaries against all amounts which may be owed to such Purchaser or the Collateral Agent by the Borrower
or any of its Subsidiaries in connection with this Agreement or any other Note Document. If any Purchaser of the Notes shall obtain
from the Borrower payment of any principal of or interest on any Note held by it or payment of any other amount under this Agreement
or such Note held by it or any other Note Document through the exercise of any right of set-off, and, as a result of such payment,
such Purchaser shall have received a greater percentage of the principal, interest or other amounts then due to such Purchaser
under the Note Documents than the percentage received by any other Purchaser, it shall promptly make such adjustments (including
without limitation purchasing risk participations) with such other Purchaser from time to time as shall be equitable, to the end
that all the Purchasers of the Notes shall share the benefit of such excess payment (net of any expenses which may be incurred
by such Purchaser in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal and/or interest
on the Notes or other amounts (as the case may be) owing to each of the Purchasers of the Notes. To such end, all Purchasers of
the Notes shall make appropriate adjustments among themselves if such payment is rescinded or must otherwise be restored. Any Purchaser
of the Notes taking action under this Section 10.3 shall promptly provide notice to the Borrower of any such action taken;
provided that the failure of such Purchaser to provide such notice shall not prejudice its rights hereunder.


 


10.4        Suits
for Enforcement. In case any one or more Events of Default described in Section 10.1 shall have occurred and be
continuing, unless such Events of Default shall have been waived, the Purchaser of each Note with respect to which any such Event
of Default has occurred may proceed to protect and enforce its rights under this Article 10 by suit in equity or action
at law. It is agreed that in the event of any such action, or any action between the Purchasers of the Notes and the Borrower (including
its officers and agents) in connection with a breach or enforcement of this Agreement, the Purchasers of the Notes shall be entitled
to receive all reasonable and documented out-of-pocket fees, costs and expenses incurred, including without limitation such fees
and expenses of outside counsel (whether or not litigation is commenced) and fees, costs and expenses of appeals.


 




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10.5        License.
The Borrower and its Subsidiaries hereby grant to the Collateral Agent a non-exclusive, worldwide and royalty-free license to use
or otherwise exploit all Intellectual Property rights of the Borrower or Subsidiary for the purpose of: (a) completing the manufacture
of any in-process materials following any Event of Default so that such materials become saleable inventory, all in accordance
with the same quality standards previously adopted by the Borrower or Subsidiary for its own manufacturing; and (b) selling, leasing
or otherwise disposing of any or all collateral following any Event of Default.


 


Article
11


INDEMNIFICATION


 


11.1        Indemnification.
In addition to all other sums due hereunder or provided for in this Agreement, the Borrower shall indemnify and hold harmless each
Purchaser, the Collateral Agent, its respective Affiliates and each of its respective managers, officers, directors, agents, employees,
Subsidiaries, partners, members, attorneys, accountants and controlling persons (each, an “Indemnified Party”)
to the fullest extent permitted by law from and against any and all reasonable and documented out-of-pocket losses, claims, damages,
expenses (including, without limitation, fees, disbursements and other charges of outside counsel and costs of investigation incurred
by an Indemnified Party in any action or proceeding between the Borrower (or any of its Subsidiaries) and such Indemnified Party
(or Indemnified Parties) or between an Indemnified Party (or Indemnified Parties) and any third party or otherwise) or other liabilities
or losses (collectively, “Liabilities”), in each case resulting from or arising out of any breach of any representation
or warranty, covenant or agreement of the Borrower or any of its Subsidiaries in this Agreement or any other Note Document, including
without limitation, the failure to make payment when due of amounts owing pursuant to this Agreement or any other Note Document,
on the due date thereof (whether at the scheduled maturity, by acceleration or otherwise) or any legal, administrative or other
actions (including, without limitation, actions brought by any holders of equity or Indebtedness of the Borrower or any of its
Subsidiaries or derivative actions brought by any Person claiming through or in the Borrower’s or any such Subsidiary’s
name), proceedings or investigations (whether formal or informal), or written threats thereof, based upon, relating to or arising
out of the Note Documents, the transactions contemplated thereby, or any Indemnified Party’s role therein or in the transactions
contemplated thereby, or the gross negligence or willful misconduct of the Borrower or any of its Affiliates and its respective
directors, officers, and employees; provided, however, that the Borrower shall not be liable under this Section 11.1
to an Indemnified Party to the extent that it is finally judicially determined that such Liabilities resulted primarily from the
willful misconduct or gross negligence of an Indemnified Party; provided, further, that if and to the extent that such indemnification
is unenforceable for any reason, the Borrower shall make the maximum contribution to the payment and satisfaction of such Liabilities
which shall be permissible under Applicable Laws. In connection with the obligation of the Borrower to indemnify for expenses as
set forth above, the Borrower further agrees, upon presentation of appropriate invoices, to reimburse each Indemnified Party for
all such reasonable and documented out-of-pocket expenses (including, without limitation, fees, disbursements and other charges
of outside counsel and costs of investigation incurred by an Indemnified Party in connection with any Liabilities) as they are
incurred by such Indemnified Party. The obligations of the Borrower under this Section 11.1 shall survive the payment
in full of the other Obligations and the termination of this Agreement.


 




    	 	73	 



     


    

 


11.2        Procedure;
Notification. Each Indemnified Party under this Article 11 will, promptly after the receipt of notice of the commencement
of any action, investigation, claim or other proceeding against such Indemnified Party in respect of which indemnity may be sought
from the Borrower under this Article 11, notify the Borrower in writing of the commencement thereof. The omission of any
Indemnified Party to so notify the Borrower of any such action shall not relieve the Borrower from any liability which it may have
to such Indemnified Party, except to the extent that such omission impairs the Borrower’s ability to defend the action, claim
or other proceeding. In case any such action, claim or other proceeding shall be brought against any Indemnified Party and it shall
notify the Borrower of the commencement thereof, the Borrower shall be entitled to assume the defense thereof at its own expense,
with counsel satisfactory to such Indemnified Party in its judgment; provided that any Indemnified Party may, at its own
expense, retain separate counsel to participate in such defense. Notwithstanding the foregoing, in any action, claim or proceeding
in which the Borrower, on the one hand, and an Indemnified Party, on the other hand, is, or may become, a party, such Indemnified
Party shall have the right to employ separate counsel at the Borrower’s expense and to control its own defense of such action,
claim or proceeding if, in the opinion of counsel to such Indemnified Party, a conflict or potential conflict exists between the
Borrower, on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable.
The Borrower agrees that it will not, without the prior written consent of the Required Purchasers, settle, compromise or consent
to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated hereby
(if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of the Purchaser and each other Indemnified Party from all liability arising
or that may arise out of such claim, action or proceeding. The rights accorded to Indemnified Parties hereunder shall be in addition
to any rights that any Indemnified Party may have at common law, by separate agreement or otherwise.


 


Article
12


MISCELLANEOUS


 


12.1        Survival
of Representations and Warranties. All of the representations and warranties made herein shall survive the execution and
delivery of this Agreement, any investigation by or on behalf of any Purchaser, acceptance of the Notes and payment therefor, or
termination of this Agreement. Except as otherwise expressly provided by its terms, this Agreement and each other Note Document
shall terminate and be of no further force and effect on the earlier of (a) the date on which the Obligations (other than contingent
indemnification obligations for which no claim has been made) have been satisfied in full in cash, as set forth in writing by the
Purchasers, and (b) such time as the parties hereto mutually agree to the termination thereof.


 




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12.2        Notices.
All notices, demands and other communications provided for or permitted hereunder shall be made in writing and shall be by registered
or certified first-class mail, return receipt requested, facsimile, or email (with receipt confirmed), courier service or personal
delivery:


 


(a)          if
to Collateral Agent:


 


HCP-FVF, LLC


c/o Hale Capital Partners, LP


17 State Street, Suite 3230


New York, NY 10004


Email: martin@halefunds.com


Telephone:(212) 751-8807


Fax: (212) 751-1201


Attention: Martin M. Hale, Jr.


 


With a copy (which shall not constitute notice) to:


 


Proskauer Rose LLP


One International Place


Boston, MA 02110


Email: SBoyko@proskauer.com


Telephone: (617) 526-9770


Fax: (617) 526-9899


Attention: Stephen A. Boyko


 


(b)          if
to the Purchasers:


 


HCP-FVF, LLC


c/o Hale Capital Partners, LP


17 State Street, Suite 3230


New York, NY 10004


Email: martin@halefunds.com


Telephone:(212) 751-8807


Fax: (212) 751-1201


Attention: Martin M. Hale, Jr.


 


With a copy (which shall not constitute notice) to:


 


Proskauer Rose LLP


One International Place


Boston, MA 02110


Email: SBoyko@proskauer.com


Telephone: (617) 526-9770


Fax: (617) 526-9899


Attention: Stephen A. Boyko




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(c)          if
to the Borrower or any Subsidiary:


 


Numerex Corp.


400 Interstate North Parkway, 13th Floor


Atlanta, GA 30339


Email: kgayron@numerex.com


ehyun@numerex.com


Telephone:   (770) 615-1410


(770) 615-1431


Attention:Kenneth Gayron


 Eugene Hyun


 


With a copy (which shall not constitute notice) to:


 


Andrew J. Ryan


The Ryan Law Group LLP


14 E. 4th St., Suite 406


New York, NY 10012


Email: ar@trlg-llp.com


Telephone: 212-944-7300


 


All such notices and communications
shall be deemed to have been duly given: if personally delivered, when delivered by hand; if mailed, five (5) Business Days after
being deposited in the mail, postage prepaid; if delivered by courier, one (1) Business Day after being deposited with a reputable
overnight courier, with charges prepaid; if faxed, upon confirmation as successfully sent by the sender's fax machine; or if emailed,
when receipt is acknowledged.


 


12.3        Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the
parties hereto. Subject to applicable securities laws, each Purchaser may, with the consent of the Collateral Agent and upon notice
to, but without the consent of the Borrower, transfer the Notes held by it in whole or in part and may assign its rights under
the Note Documents to one or more assignees; provided that any such transfer or assignment by a Purchaser to one or more
of its Affiliates or Approved Funds may be made at any time without requiring the consent of the Required Purchasers or any other
Person; provided further that, so long as no Event of Default has occurred and is continuing, any such assignee is not a
Prohibited Transferee. In addition, each Purchaser may at any time, without the consent of, or notice to, the Borrower sell participations
to any Person in all or a portion of such Purchaser’s rights and/or obligations under this Agreement and the other Note Documents;
provided that such Purchaser’s obligations under this Agreement and the other Note Documents shall remain unchanged,
and the Borrower shall continue to deal solely and directly with such Purchaser, as the case may be, in connection with the provisions
of this Agreement and the other Note Documents. Notwithstanding anything herein to the contrary, no assignments may be made to,
and no participations may be sold to, a Loan Party or any of its Affiliates, except pursuant to the purchase option set forth in
the Subordinated Note. Notwithstanding anything herein to the contrary, any Purchaser may, at any time, create a security interest
in, pledge or assign, all or any portion of its rights under and interest in the Note Documents and the Notes in favor of any secured
creditor of such Purchaser, and such secured creditor may enforce such pledge or security interest in any manner permitted under
Applicable Law. Neither the Borrower nor any Subsidiary may assign any of its rights, or delegate any of its obligations, under
this Agreement, the Notes without the prior written consent of the Required Purchasers, and any such purported assignment by the
Borrower or any such Subsidiary without the written consent of the Required Purchasers shall be void and of no effect. Except as
provided in Article 11, no Person other than the parties hereto and its successors and permitted assigns is intended to
be a beneficiary of any of the Note Documents.


 




    	 	76	 



     


    

 


12.4        Amendment
and Waiver.


 


(a)          No
failure or delay on the part of any of the parties hereto in exercising any right, power, or remedy hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise
thereof or the exercise of any other right, power, or remedy. The remedies provided for in this Agreement are cumulative and are
not exclusive of any remedies that may be available to the parties hereto at law, in equity or otherwise.


 


(b)          Any
amendment, waiver, supplement or modification of or to any provision of this Agreement or the Notes and any consent to any departure
by any party from the terms of any provision of this Agreement or the Notes, shall be effective (i) only if it is made or given
in writing and signed by the Borrower and the Required Purchasers and (ii) only in the specific instance and for the specific purpose
for which made or given; provided that, notwithstanding the foregoing, without the prior written consent of the Purchaser
affected thereby, an amendment, waiver, supplement or modification of this Agreement, the Notes or any consent to departure from
a term or provision hereof or thereof may not: (A) reduce the rate of or extend the time for payment of principal or interest on
the Notes; (B) reduce the principal amount of the Notes; (C) make the Notes payable in money other than that stated in the Notes;
(D) reduce the amount or extend the time of payment of fees or other compensation payable to the Purchasers hereunder; or (E) change
any provision of this Section 12.4(b) or the definition of “Required Purchasers” or any other provision specifying
the number or percentage of Purchasers required to amend, waive or otherwise modify any rights hereunder or make any determination
or grant any consent hereunder.


 


(c)          Except
where notice is specifically required by this Agreement, no notice to or demand on the Borrower or any of its Subsidiaries in any
case shall entitle the Borrower or any of its Subsidiaries to any other or further notice or demand in similar or other circumstances.


 


12.5        Signatures;
Counterparts. Facsimile and electronic transmissions of any executed original document and/or retransmission of any executed
facsimile or electronic transmission shall be deemed to be the same as the delivery of an executed original. At the request of
any party hereto, the other parties hereto shall confirm facsimile transmissions by executing duplicate original documents and
delivering the same to the requesting party or parties. This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.


 




    	 	77	 



     


    

 


12.6        Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.


 


12.7        GOVERNING
LAW. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION.


 


12.8       JURISDICTION,
JURY TRIAL WAIVER, ETC.


 


(a)          EACH
PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE NOTES OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN THE SUPREME COURT OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTY OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, OR ANY APPELLATE
COURT FROM ANY THEREOF, AND HEREBY EXPRESSLY SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF
AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT ANY SUCH COURT IS AN INCONVENIENT FORUM. EACH PARTY HEREBY
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION 12.2, SUCH
SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.


 


(b)          TO
THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER NOTE DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EACH OF THE LOAN PARTIES (i) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY HOLDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE PURCHASERS WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii) ACKNOWLEDGES THAT THE PURCHASERS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, AND THE OTHER NOTE DOCUMENTS TO WHICH IT IS PARTY BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.


 




    	 	78	 



     


    

 


12.9        Severability.
If any one or more of the provisions contained in this Agreement, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal
or unenforceable shall substantially impair the benefits of the remaining provisions of this Agreement. The parties hereto further
agree to replace such invalid, illegal, or unenforceable provision of this Agreement with a valid, legal, and enforceable provision
that will achieve, to the extent possible, the economic, business and other purposes of such invalid, illegal, or unenforceable
provision.


 


12.10     Rules
of Construction. Unless the context otherwise requires, “or” is not exclusive, and references to sections or
subsections refer to sections or subsections of this Agreement.


 


12.11      Entire
Agreement. This Agreement, together with the exhibits and schedules hereto and the other Note Documents, is intended by
the parties as a final expression of its agreement and intended to be a complete and exclusive statement of the agreement and understanding
of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein or therein. This Agreement, together with the exhibits and schedules
hereto, and the other Note Documents supersede all prior agreements and understandings between the parties with respect to such
subject matter.


 


12.12     Certain
Expenses. The Borrower will pay all expenses of the Purchasers and the Collateral Agent (including, without limitation,
fees, charges and disbursements of outside counsel and travel expenses) in connection with (a) any administration, enforcement,
amendment, supplement, modification or waiver of or to any provision of this Agreement or any of the other Note Documents or any
documents relating thereto (including, without limitation, a response to a request by the Borrower or any of its Subsidiaries for
the consent of such Purchaser or Collateral Agent to any action otherwise prohibited hereunder or thereunder), (b) consent to any
departure from the terms of any provision of this Agreement or such other documents and (c) any redemption of the Notes. The obligations
of the Borrower under this Section 12.12 shall survive the payment in full of the other Obligations and the termination
of this Agreement.


 


12.13      Publicity.
Except as may be required by Applicable Law or otherwise expressly provided herein, none of the parties hereto shall issue a publicity
release or announcement or otherwise make any public disclosure concerning this Agreement or the transactions contemplated hereby,
without prior approval by the other parties hereto, provided, however, that the Purchasers may, without the approval of
the Borrower, issue a press release and may publish and distribute one or more tombstone or other announcements of the closing
of the transactions contemplated hereby using the Borrower’s name, product photographs, logo or trademark. In addition to
the foregoing, each Purchaser is hereby authorized to deliver a copy of any financial statement or other information made available
by the Borrower or its Subsidiaries in connection herewith to any regulatory authority having jurisdiction over such Purchaser,
pursuant to any request therefore and may further divulge to any assignee or purchaser of any portion of the Notes (or any participation
therein) or any prospective assignee or purchaser of any portion of the Notes (or any participation therein), all information,
and furnish to such Person copies of any reports, financial statements, certificates, and documents obtained under any provision
of this Agreement, or related agreements and documents.


 




    	 	79	 



     


    

 


12.14      Further
Assurances. Each of the parties shall execute such documents and perform such further acts
(including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices
to, or making any filings with, any Governmental Authority or any other Person) as may be required or desirable to carry out or
to perform the provisions of this Agreement, including without limitation, any post-closing assignment(s) by any Purchaser of a
portion of the Notes to a Person not currently a party hereto, subject to the limitations set forth herein.


 


12.15      No
Strict Construction. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement and the other Note Documents. In the event an ambiguity or question of intent or interpretation arises
under any provision of this Agreement or any Note Document, this Agreement or such other Note Document shall be construed as if
drafted jointly by the parties thereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement or any other Note Document. No knowledge of, or investigation,
including without limitation, due diligence investigation, conducted by, or on behalf of, the Purchaser or any other Purchaser
shall limit, modify or affect the representations set forth in Article 6 of this Agreement or the right of any Purchaser
to rely thereon.


 


12.16     Non-Public
Information. Each Purchaser acknowledges and agrees that it may receive material non-public
information (“MNPI”) hereunder concerning the Loan Parties and their Affiliates and agrees to use such information
in compliance with all relevant policies, procedures and applicable Requirements of Laws.


 


12.17      Confidential
Information. Each Purchaser agrees to use commercially reasonable efforts to maintain,
in accordance with its customary practices, the confidentiality of information obtained by it pursuant to any Note Document, except
that such information may be disclosed (i) with the Borrower’s consent, (ii) to any investment committee of such Purchaser
that is advised of the confidential nature of such information and is instructed to keep such information confidential in accordance
with the terms hereof, (iii) to Persons employed or engaged by Collateral Agent or such Purchaser or such Purchaser’s Affiliates
or Approved Funds in evaluating, approving, structuring or administering the Notes, (iv) to the extent such information presently
is or hereafter becomes (A) publicly available other than as a result of a breach of this Section 12.17 or (B) available
to such Purchaser from a source (other than any Loan Party) not known by such Purchaser to be subject to disclosure restrictions,
(v) to the extent disclosure is required by applicable Requirements of Law or other legal process or requested or demanded by any
Governmental Authority, (vi) to any other party hereto, (vii) to any assignee or participant or potential assignee or participant
that has agreed to comply with the covenant contained in this Section 12.17 (and any such assignee or participant or
potential assignee or participant may disclose such information to Persons employed or engaged by them as described in clause (iii) above),
(viii) in connection with the exercise or enforcement of any right or remedy under any Note Document or in connection with any
litigation or other proceeding to which Purchaser is a party or bound, (ix) to any nationally recognized rating agency that requires
access to information about a Purchaser’s investment portfolio in connection with ratings issued with respect to such Purchaser,
(x) to any Purchaser’s independent auditors and other professional advisors as to which such information has been identified
as confidential. In the event of any conflict between the terms of this Section 12.17 and those of any other Contractual
Obligation entered into with any Loan Party (whether or not a Note Document), the terms of this Section 12.17 shall
govern.


 




    	 	80	 



     


    

 


Article
13


COLLATERAL
AGENT


 


13.1        Appointment
of Agent; No Effect on Borrower’s Obligations. Hale Capital is hereby appointed by each Purchaser and its successors
and assigns as Collateral Agent hereunder and under the other Note Documents and each Purchaser hereby authorizes Hale Capital
to act as Collateral Agent in accordance with the terms hereof and the other Note Documents. Collateral Agent hereby agrees to
act in its capacity as such upon the express conditions contained herein and the other Note Documents, as applicable. The provisions
of this Article 13 are solely for the benefit of Collateral Agent and each Purchaser, and no Loan Party shall have any rights
as a third party beneficiary of any of the provisions thereof. Each Purchaser shall ratably, in accordance with the aggregate outstanding
principal amount of the Notes held by it, indemnify the Collateral Agent (to the extent not reimbursed by the Loan Parties) against
any cost, expense (including outside counsel fees and disbursements), claim, demand, action, loss or liability (except such as
result from the Collateral Agent’s gross negligence or willful misconduct) that the Collateral Agent may suffer or incur
in connection with the Note Documents or any action taken or omitted by the Collateral Agent hereunder or thereunder. The obligations
of the Purchasers under this Section 13.1 shall survive the payment in full of the Obligations and the termination of this
Agreement. This Article 13 sets forth the rights and obligations solely as between the Collateral Agent and the Purchasers,
and nothing in this Article 13 creates any rights for any Loan Party or releases the Borrower from its obligations
under this Agreement, including without limitation the obligation of any Loan Party to reimburse any Purchaser for any payment
made by such Purchaser to Collateral Agent under this Section 13.1 on any Loan Party’s behalf.


 


13.2        Powers
and Duties. Each Purchaser irrevocably authorizes Collateral Agent to take such action on such Purchaser’s behalf
and to exercise such powers, rights, and remedies hereunder and under the other Note Documents as are specifically delegated or
granted to Collateral Agent by the terms hereof and thereof, together with such powers, rights, and remedies as are incidental
thereto. Each Purchaser hereby further irrevocably authorizes Collateral Agent to act as the secured party under each of the Collateral
Documents. Collateral Agent may exercise such powers, rights and remedies and perform such duties by or through its agents or employees
and may consult with legal counsel, independent public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or expert.
Collateral Agent may accept payments of principal, interest, fees and expenses due under the Note Documents from the deposits from
any Loan Party on the account or benefit for any Purchaser.


 


13.3        Collateral
Matters.


 


(a)          Each
Purchaser authorizes and directs the Collateral Agent to enter into the Collateral Documents for the benefit of the Purchasers.
Each Purchaser hereby agrees, and each holder of any Note by the acceptance thereof will be deemed to agree, that, except as otherwise
set forth herein, any action taken by the Required Purchasers or all of the Purchasers or the Collateral Agent at the discretion
of the Required Purchasers or all of the Purchasers, as applicable, in accordance with the provisions of this Agreement or the
other Note Documents, and the exercise by the Required Purchasers, all of the Purchasers, or the Collateral Agent, as applicable,
of the powers set forth herein or therein, together with such other powers as are incidental thereto, shall be authorized and binding
upon all of the Purchasers. The Collateral Agent is hereby authorized on behalf of all of the Purchasers, without the necessity
of any notice to or further consent from any Purchaser, from time to time, to take any action with respect to any Collateral or
Note Document which may be necessary or appropriate to perfect and maintain perfected the Liens granted pursuant to the Collateral
Documents.


 




    	 	81	 



     


    

 


(b)          The
Purchasers hereby authorize the Collateral Agent, at the election and on the instruction of the Required Purchasers (i) to, in
accordance with the terms of (and at the times specified in) the Collateral Documents, release (x) any Lien granted to or held
by the Collateral Agent upon any collateral in accordance with the terms of the Collateral Documents, and (y) any Guarantor from
its obligations under the Guaranty and Collateral Agreement; and (ii) to subordinate or release any Lien on any collateral
granted to or held by the Collateral Agent under any Collateral Document to the holder of any Permitted Lien described in Sections
9.6(g). Upon request by the Collateral Agent at any time, the Purchasers will confirm in writing the Collateral Agent’s
authority to release or subordinate its interest in particular types or items of collateral, or to release any Guarantor from any
guaranty, in each case, as permitted pursuant to this Section 13.3(b).


 


(c)          The
Collateral Agent shall have no obligation whatsoever to the Purchasers or to any other Person to assure that any collateral exists
or is owned by the Borrower or any Subsidiary thereof or is cared for, protected or insured or that the Liens granted to the Collateral
Agent herein or pursuant to the Note Documents have been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under
any duty of care, disclosure or fidelity any of the rights, authorities and powers granted or available to the Collateral Agent
in this Section 13.3 or in any of the Note Documents, it being understood and agreed that in respect of the Collateral,
or any act, omission or event related thereto, the Collateral Agent may act in any manner it may deem appropriate, in its sole
discretion, given the Collateral Agent’s own interest in any collateral as one of the Purchasers and that the Collateral
Agent shall have no duty or liability whatsoever to the Purchasers, except for its gross negligence or willful misconduct. Neither
the Collateral Agent nor any of its directors, officers, partners, managers, agents or employees shall be responsible for or have
any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with any Note Document
or any borrowing hereunder; (ii) the performance or observance of any of the covenants or agreements specified in any Note Document;
(iii) the satisfaction of any condition specified in any Note Document, except receipt of items required to be delivered to the
Collateral Agent; (iv) the validity, effectiveness, sufficiency or genuineness of any Note Document or any other instrument or
writing furnished in connection therewith; (v) the existence or non-existence of any Default or Event of Default; or (vi) the financial
condition of any Loan Party. Each Purchaser acknowledges that it has, independently and without reliance upon the Collateral Agent
or any other Purchaser, and based on such documents and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. Each Purchaser also acknowledges that it will, independently and without reliance upon
the Collateral Agent or any other Purchaser, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking any action under the Note Documents.


 




    	 	82	 



     


    

 


13.4        Actions
with Respect to Defaults. The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default except with respect to Defaults in the payment of principal, interest and fees required to be paid
to the Collateral Agent for the account of Purchasers, unless the Collateral Agent shall have received written notice from a Purchaser
or a Loan Party referring to this Agreement, describing such Default or Event of Default and stating that such notice is a “notice
of default”. The Collateral Agent will notify each Purchaser of its receipt of any such notice. In addition to the Collateral
Agent’s right to take actions on its own accord as permitted under this Agreement, the Collateral Agent shall take such action
with respect to a Default or Event of Default as shall be directed by the Required Purchasers or all of the Purchasers, as the
case may be, provided that the Collateral Agent shall not be required to take any action which in the Collateral Agent’s
opinion would expose the Collateral Agent or its Affiliates to liability, and provided, further, that until the Collateral
Agent shall have received such directions, the Collateral Agent may (but shall not be obligated to) take such ministerial action,
or refrain from taking such ministerial action, with respect to such Default or Event of Default as it shall deem advisable and
in the best interests of the Purchasers. The Collateral Agent may at any time request instructions from the Purchasers with respect
to any actions or approvals which by the terms of this Agreement or of any of the Note Documents the Collateral Agent is permitted
or desires to take or to grant, and if such instructions are promptly requested, the Collateral Agent shall be absolutely entitled
to refrain from taking any action or to withhold any approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Note Documents until it shall have received such instructions
from the Required Purchasers. Without limiting the foregoing, no Purchaser shall have any right of action whatsoever against the
Collateral Agent solely as a result of the Collateral Agent acting or refraining from acting under this Agreement, except with
respect to its gross negligence or willful misconduct.


 


13.5        Successor
Collateral Agent. The Collateral Agent may at any time give notice of its resignation to the Purchasers and the Borrower.
Upon receipt of any such notice of resignation, the Required Purchasers shall have the right to appoint a successor Collateral
Agent. If no such successor shall have been so appointed by the Required Purchasers and shall have accepted such appointment within
thirty (30) days after the retiring Collateral Agent gives notice of its resignation, then (a) the resignation of the Collateral
Agent shall become effective on such 30th day, (b) the Required Purchasers shall perform the duties of the Collateral Agent under
the Note Documents until the Required Purchasers appoint a successor Collateral Agent, (c) the retiring Collateral Agent shall
be discharged from its duties and obligations hereunder and under the other Note Documents and (d) all payments, communications
and determinations provided to be made by, to or through the Collateral Agent shall instead be made by or to each Purchaser directly,
until such time as the Required Purchasers appoint a successor the Collateral Agent as provided for in this Section 13.5.
Upon the acceptance of a successor’s appointment as the Collateral Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring (or retired) Collateral Agent, and the retiring Collateral
Agent shall be discharged from all of its duties and obligations hereunder and under the other Note Documents (if not already discharged
therefrom as provided herein). After the retiring Collateral Agent’s resignation hereunder and under the other Note Documents,
the provisions of this Article 13 shall continue in effect for the benefit of such retiring Collateral Agent and its sub-agents
in respect of any actions taken or omitted to be taken by any of them while the retiring Collateral Agent was acting or was continuing
to act as the Collateral Agent.


 


[Signature Page Follows]


 




    	 	83	 



     


    

 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed and delivered by its respective officers hereunto duly authorized as of
the date first written.


 


	 	BORROWER:
	 	 
	 	NUMEREX CORP.
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	GUARANTORS:
	 	 
	 	CELLEMETRY LLC
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	CELLEMETRY SERVICES, LLC
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	NUMEREX GOVERNMENT SERVICES LLC
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:


 


[Signature Page to Note Purchase Agreement]


 




    	 	 	 



     


    

 


	 	NUMEREX SOLUTIONS, LLC
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	ORBIT ONE COMMUNICATIONS, LLC
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	UBLIP, INC.
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	UPLINK SECURITY, LLC
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	OMNILINK SYSTEMS, INC.
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:


 


[Signature Page to Note Purchase Agreement]


 




    	 	 	 



     


    

 


	 	NEXTALARM, LLC
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:
	 	 	 
	 	TELEMETRY SERVICES CORPORATION
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:
	 	 	Its:


 


[Signature Page to Note Purchase Agreement]


 




    	 	 	 



     


    

 


	 	HCP-FVF, LLC, in its capacity as Collateral Agent and as a Purchaser
	 	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	Name: Martin Hale Jr.
	 	Title: Authorized Signatory


 


[Signature Page to Note Purchase Agreement]


 




    	 	 	 



     


    
  





SCHEDULE
1


 


PROHIBITED
TRANSFEREES


 


		1.	Cerberus
                                         Capital Management






		2.	Black
                                         Diamond Capital Management



 




     


     


    

SCHEDULE
2.1


 


ALLOCATION


 


	Purchaser	Allocation
	HCP-FVF,
    LLC	$13,500,000



 



     


     


    

 


SCHEDULE
6.1


 


EXISTENCE
AND POWER


 


	Name
    of Company	Type
    of Organization	Jurisdiction
    of 

Organization	Foreign
    

Jurisdictions
	Numerex
    Corp.	for-profit
    corporation	PA	GA,
    UT, OK
	Cellemetry
    LLC	limited
    liability company	DE	GA
	CELLEMETRY
    SERVICES, LLC	limited
    liability company	GA	N/A
	NextAlarm,
    LLC	limited
    liability company	GA	N/A
	Numerex
    Government Services LLC	limited
    liability company	GA	N/A
	NUMEREX
    SOLUTIONS, LLC	limited
    liability company	DE	TX,
    GA
	Orbit
    One Communications, LLC	limited
    liability company	GA	N/A
	uBlip,
    Inc.	for-profit
    corporation	GA	N/A
	Uplink
    Security, LLC	limited
    liability company	GA	N/A
	Omnilink
    Systems Inc.	for-profit
    corporation	DE	GA,
    CA, VA, NC
	Telemetry
    Services Corporation	for-profit
    corporation	DE	GA
	Omnilink
    Systems India Private Limited	Indian
    private limited company entity 	India	N/A
	DCX
    Systems Australia PTY LTD	Australian
    proprietary limited company	Australia	N/A



 






     


     


    

 


SCHEDULE
6.3


 


GOVERNMENT
AUTHORIZATION; THIRD PARTY CONSENTS


 


None.


 




     


     


    

 


SCHEDULE
6.6


 


LITIGATION


 


(a):


 


In re Easterling v. Aretz,
et al., 16 CV 1617 (Montgomery Ct., TN)


 


Date Filed: August 8, 2016





Status: Discovery on Omnilink’s
motion to dismiss 


Insurance Coverage: Agreed to
defend


 


Products liability claim against
Omnilink Systems Inc. based on the death of Liperial Easterling by an individual assigned to wear an ankle monitoring bracelet
supplied by Omnilink Systems Inc.


 


Cen-Com, Inc. v. Numerex Corp.,
et al., 16-2-311077-0 (King Ct., Wash) (the “Cen-Com Matter”)





 


Date Filed: December 30, 2016 


Status: Answer and Counterclaim
filed





Insurance Coverage: No


 


Misappropriation of customer
information and breach of contract claims against Numerex Corp. and NextAlarm, LLC by Cen-Com, Inc.


 


Marc Zionts


 


Date Filed: Not Applicable 


Status: Under negotiation 


Insurance Coverage: No


 


Possible disparagement, breach
of employment contract, and wrongful termination claims based on the termination of Marc Zionts as Chief Executive Officer of
Numerex.


 




     


     


    

 


SCHEDULE
6.7


 


INVESTIGATIONS,
ETC.


 


SEC Investigation. On
April 27, 2016, Borrower received a document preservation notice from the Atlanta regional Office of the Securities & Exchange
Commission in connection with an investigation by the staff. The SEC inquired about the departure of executive officers of Borrower,
Grant Thorton’s decision not to stand for reappointment after completion of audit services for fiscal year 2015, and the
material weakness reported in Borrower’s annual report for the year ended December 31, 2015. The chair of Borrower’s
audit committee responded to questions from the SEC staff and since that time, there have been no additional contact or requests
for more information.


 


OFCCP. On May 10, 2016,
Numerex entered into a Conciliation Agreement with the U.S. Department of Labor Office of Federal Contract Compliance Program
in connection with its investigation of Numerex’s Affirmative Action Program.


 




     


     


    

 


SCHEDULE
6.9


 


TITLE
TO PROPERTY


 


None.



 






     


     


    

 


SCHEDULE
6.10


 


REAL PROPERTY


 


The following properties are
leased by Borrower or its Subsidiaries:


 


	1210
    Roosevelt St. Suite 200

    Edmund, OK 73034

    Lessee: Numerex Corp.	400
    Interstate North Parkway SE

    Suite 1350

    Atlanta, GA 30339

    Lessee: Numerex Corp.
	8144
    Walnut Hill Lane

    Suite 310

    Dallas, TX 75231

    Lessee: Numerex Corp.	1095
    Windward Ridge

    Building 300, Ste. 160

    Alpharetta, GA 30005

    Lessee: Numerex Corp.
	5900
    Windward Parkway #200

    Alpharetta, GA 30005

    Lessee: Omnilink Systems Inc.	275
    S. Main Street, Suite 2CC

    Doylestown, PA 18902

    Lessee: Numerex Corp.
	3330
    Cumberland Boulevard, Suite 700

    Atlanta, GA 30339

    Lessee: Numerex Corp.	12720
    Hillcrest Road

    Dallas, TX 75230

    Lessee: Numerex Solutions, LLC


 


The following properties are
owned by Borrower or its Subsidiaries:


 


None.


 




     


     


    

 


SCHEDULE
6.11


 


TAXES


 


		1.	State
                                         Tax Lien, Fulton County GA (File No. 3576 / 671) $1,221.00, entered against Omnilink
                                         Systems Inc.



 


		2.	State
                                         Tax Lien, Fulton County GA (File No. 3596 / 373) $1,221.00, entered against Omnilink
                                         Systems Inc.



 


		3.	State
                                         Tax Lien, Fulton County GA (File No. 3685 / 467) $1,221.00, entered against Omnilink
                                         Systems Inc.



 


		4.	State
                                         Tax Lien, Fulton County GA (File No. 3726 / 681) $2,596.65, entered against Omnilink
                                         Systems Inc.



 


		5.	State
                                         Tax Lien, Fulton County GA (File No. 3769 / 558) $2,596.65, entered against Omnilink
                                         Systems Inc.



 


		6.	State
                                         Tax Lien, Fulton County GA (File No. 3909 / 652) $2,596.65, entered against Omnilink
                                         Systems Inc.



 




     


     


    

 


SCHEDULE
6.12


 


FINANCIAL
CONDITION


 


		(a)	None.



 


		(b)	On
                                         January 20, 2017, the Company filed with the SEC a Current Report on Form 8-K for which
                                         the deadline was January 20, 2017. However, due to an error by the employee making the
                                         filing, the report was inadvertently not filed until after 5:30 pm on January 20,
                                         2017, resulting in a filing date of January 23, 2017.



 




     


     


    

 


SCHEDULE
6.16


 


SUBSIDIARIES


 


The following are wholly owned
subsidiaries of Numerex Corp.:


 


Cellemetry LLC


 


CELLEMETRY SERVICES, LLC


 


NextAlarm, LLC


 


Numerex Government Services LLC


 


NUMEREX SOLUTIONS, LLC


 


Orbit One Communications, LLC


 


uBlip, Inc.


 


Omnilink Systems Inc.


 


DCX Systems Australia PTY LTD


 


The following are wholly owned
subsidiaries of Omnilink Systems Inc.:


 


Telemetry Services Corporation


 


Omnilink Systems India Private
Limited


 


The following is a wholly
owned subsidiary of Cellemetry LLC:


 


Uplink Security, LLC


 




     


     


    

 


SCHEDULE
6.17


 


CAPITALIZATION


 


	Issuer	#
    of Shares Owned	Total
    Shares Outstanding	Owner	Certificate
    No. 

    (if uncertificated, 

please indicate so)	Par
    Value 

(if any)
	Numerex
    Corp.	N/A	19,578,470
    million shares of Class A Common Stock outstanding 	Publicly
    Traded	N/A	No
    par value
	uBlip,
    Inc.	1,000	1,000	Numerex
    Corp.	1	None
	Omnilink
    Systems Inc.	10	10	Numerex
    Corp.	1	$0.01
	Telemetry
    Services Corporation	100,000	100,000	Omnilink
    Systems Inc.	1	$0.0001
	Cellemetry
    LLC	100%	N/A	Numerex
    Corp.	Uncertificated	N/A
	CELLEMETRY
    SERVICES, LLC	100%	N/A	Numerex
    Corp.	Uncertificated	N/A
	Numerex
    Government Services LLC	100%	N/A	Numerex
    Corp.	Uncertificated	N/A
	NUMEREX
    SOLUTIONS, LLC	100%	N/A	Numerex
    Corp.	Uncertificated	N/A
	Orbit
    One Communications, LLC	100%	N/A	Numerex
    Corp.	Uncertificated	N/A
	Uplink
    Security, LLC	100%	N/A	Cellemetry
    LLC	Uncertificated	N/A
	NextAlarm,
    LLC	100%	N/A	Numerex
    Corp.	Uncertificated	N/A


 


Numerex Corp. also owns 100%
of DCX Systems Australia PTY LTD, an Australian proprietary limited company. Numerex Corp.’s ownership interest in this
subsidiary is uncertificated. Omnilink Systems Inc. also owns 100% of Omnilink Systems India Private Limited, an Indian private
limited company. Omnilink Systems Inc.’s ownership interest in this subsidiary is uncertificated.


 






     


     


    

 


Options Granted to Employees
and Directors


 


	Issuer	Grant
    Number	Grant
    Date	Expiry
    Date	Exercise
    Price	Outstanding	Vested	NonVested
	Numerex
    Corp.	2006
    20070305 ISO	03/05/2007	03/04/2017	$9.3400
    	250.00
    	250.00
    	0.00
    
	Numerex
    Corp.	2006
    20071026 ISO	10/26/2007	10/25/2017	$7.8400
    	5,250.00
    	5,250.00
    	0.00
    
	Numerex
    Corp.	2006
    20071026 NQ	10/26/2007	10/25/2017	$7.8400
    	3,000.00
    	3,000.00
    	0.00
    
	Numerex
    Corp.	1999
    20061026 ISO MK	10/26/2006	10/25/2016	$9.4600
    	50,000.00
    	50,000.00
    	0.00
    
	Numerex
    Corp.	2006
    20061026 ISO EE	10/26/2006	10/25/2016	$9.4600
    	2,000.00
    	2,000.00
    	0.00
    
	Numerex
    Corp.	2006
    20061026 ISO EE A	10/26/2006	10/25/2016	$9.4600
    	6,500.00
    	6,500.00
    	0.00
    
	Numerex
    Corp.	2006
    20100521 SAR	05/21/2010	05/21/2020	$4.5100
    	55,932.00
    	55,932.00
    	0.00
    
	Numerex
    Corp.	2006
    20100730 SAR	07/30/2010	07/30/2020	$5.1700
    	7,500.00
    	7,500.00
    	0.00
    
	Numerex
    Corp.	2006
    20101028 SAR	10/28/2010	10/28/2020	$7.2500
    	2,000.00
    	2,000.00
    	0.00
    
	Numerex
    Corp.	2006
    20110114 SAR	01/14/2011	01/14/2021	$10.2500
    	11,125.00
    	11,125.00
    	0.00
    
	Numerex
    Corp.	2006
    20110519 SAR	05/19/2011	05/19/2021	$9.9300
    	11,500.00
    	11,500.00
    	0.00
    
	Numerex
    Corp.	2006
    20110916 SAR	09/16/2011	09/16/2021	$6.0300
    	10,875.00
    	10,875.00
    	0.00
    
	Numerex
    Corp.	2006
    20130611 NQ/SAR MK	06/11/2013	06/11/2023	$10.9700
    	50,000.00
    	50,000.00
    	0.00
    
	Numerex
    Corp.	2006
    20130628 NQ/SAR	06/28/2013	06/28/2023	$11.1600
    	20,000.00
    	20,000.00
    	0.00
    
	Numerex
    Corp.	2006
    20131024 NQ	10/24/2013	10/24/2023	$12.0100
    	10,000.00
    	7,500.00
    	2,500.00
    
	Numerex
    Corp.	2006
    20140220 NQ/SAR	02/20/2014	02/20/2024	$14.5700
    	21,500.00
    	16,125.00
    	5,375.00
    
	Numerex
    Corp.	2006
    20140424 NQ/SAR	04/24/2014	04/24/2024	$10.6700
    	10,000.00
    	7,500.00
    	2,500.00
    
	Numerex
    Corp.	2014
    20140516 NQ EE	05/16/2014	05/16/2024	$10.9500
    	39,500.00
    	29,625.00
    	9,875.00
    
	Numerex
    Corp.	2014
    20140516 NQ SVP	05/16/2014	05/16/2024	$10.9500
    	56,550.00
    	44,350.00
    	12,200.00
    
	Numerex
    Corp.	2014
    20141023 NQ	10/23/2014	10/23/2024	$11.6500
    	4,500.00
    	2,250.00
    	2,250.00
    
	Numerex
    Corp.	2014
    20150520 NQ RB	05/20/2015	05/21/2025	$8.5900
    	15,000.00
    	11,250.00
    	3,750.00
    
	Numerex
    Corp.	2014
    20150729 NQ SVP	07/29/2015	07/29/2025	$8.2800
    	44,400.00
    	11,100.00
    	33,300.00
    
	Numerex
    Corp.	2014
    20150729 NQ EE	07/29/2015	07/29/2025	$8.2800
    	60,200.00
    	15,050.00
    	45,150.00
    
	Numerex
    Corp.	2014
    20150911 NQ	09/11/2015	09/11/2025	$8.9600
    	5,800.00
    	1,450.00
    	4,350.00
    
	Numerex
    Corp.	2014
    20151028NQ EE	10/28/2015	10/28/2025	$8.1300
    	10,000.00
    	2,500.00
    	7,500.00
    
	Numerex
    Corp.	2014
    20151028NQ SVP	10/28/2015	10/28/2025	$8.1300
    	51,000.00
    	12,750.00
    	38,250.00
    
	Numerex
    Corp.	2006
    20061026 ISO LF	11/13/2015	07/29/2016	$9.4600
    	15,000.00
    	15,000.00
    	0.00
    
	Numerex
    Corp.	2006
    20070305 ISO LF	11/13/2015	07/29/2016	$9.3400
    	15,000.00
    	15,000.00
    	0.00
    
	Numerex
    Corp.	2006
    20090730 NQ LF	11/13/2015	07/29/2016	$5.5000
    	4,375.00
    	4,375.00
    	0.00
    
	Numerex
    Corp.	2006
    20110916 SAR LF	11/13/2015	07/29/2016	$6.0300
    	7,500.00
    	7,500.00
    	0.00
    
	Numerex
    Corp.	2006
    20130628 NQSAR LF	11/13/2015	07/29/2016	$11.1600
    	10,000.00
    	10,000.00
    	0.00
    
	Numerex
    Corp.	2014
    20140516 NQ LF	11/13/2015	07/29/2016	$10.9500
    	3,225.00
    	3,225.00
    	0.00
    
	Numerex
    Corp.	2014
    20160302 NQ	03/02/2016	03/02/2026	$5.8800
    	10,000.00
    	2,500.00
    	7,500.00
    
	Numerex
    Corp.	2014
    20160126 NQ	01/26/2016	01/26/2026	$6.1700
    	68,000.00
    	17,000.00
    	51,000.00
    
	Numerex
    Corp.	2014
    20160126 NQ SVP	01/26/2016	01/26/2026	$6.1700
    	63,500.00
    	15,875.00
    	47,625.00
    
	Numerex
    Corp.	2014
    20160519 NQ Exec	05/19/2016	05/19/2026	$7.2600
    	139,510.00
    	34,877.00
    	104,633.00
    
	Numerex
    Corp.	2014
    20160519 NQ	05/19/2016	05/19/2026	$7.2600
    	226,460.00
    	56,606.00
    	169,854.00
    
	Numerex
    Corp.	2014
    20160531 NQ EE	05/31/2016	05/31/2026	$7.5000
    	13,000.00
    	3,250.00
    	9,750.00
    
	Numerex
    Corp.	2014
    20160908 RM	09/08/2016	09/08/2026	$7.6100
    	5,609.00
    	0.00
    	5,609.00
    
	Numerex
    Corp.	2014
    20160523 OPT AV	05/23/2016	05/23/2026	$7.5600
    	10,000.00
    	2,500.00
    	7,500.00
    
	Numerex
    Corp.	2014
    20160531 OPT CS	05/31/2016	05/31/2026	$7.5000
    	10,000.00
    	2,500.00
    	7,500.00
    
	Numerex
    Corp.	2014
    20160613 OPT JM	06/13/2016	06/13/2026	$7.4900
    	5,000.00
    	0.00
    	5,000.00
    
	Numerex
    Corp.	2014
    20160613 OPT MS	06/13/2016	06/13/2026	$7.4900
    	15,000.00
    	0.00
    	15,000.00
    
	Numerex
    Corp.	2014
    20160615 OPT MB	06/15/2016	06/15/2026	$7.5500
    	5,000.00
    	0.00
    	5,000.00
    
	Numerex
    Corp.	2014
    20160627 OPT JS	06/27/2016	06/27/2026	$7.1200
    	10,000.00
    	0.00
    	10,000.00
    
	Numerex
    Corp.	2014
    20160712 OPT KB	07/12/2016	07/12/2026	$7.9400
    	12,000.00
    	0.00
    	12,000.00
    
	Numerex
    Corp.	2014
    20160718 OPT DG	07/18/2016	07/18/2026	$7.7900
    	22,000.00
    	0.00
    	22,000.00
    
	Numerex
    Corp.	2014
    20161031 NQ EE New Hire	10/31/2016	10/31/2026	$7.1100
    	126,500.00
    	0.00
    	126,500.00
    
	Numerex
    Corp.	2014
    20170111 Exec OPT	01/11/2017	01/11/2027	$7.1800
    	50,000.00
    	0.00
    	50,000.00
    
	Numerex
    Corp.	2014
    20170221 New Hire Option	02/21/2017	02/21/2027	$5.3300
    	26,500.00
    	0.00
    	26,500.00
    
	 	 	 	 	 	1,437,561.00
    	587,590.00
    	849,971.00
    
	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 


 






     


     


    

Unvested Restricted Stock
Units Granted to Employees and Directors


 


	Issuer	Grant
    Number	Grant
    Date	Issued	Forfeited	Remaining
	Numerex
    Corp.	2014
    20140516 RSU EE	05/16/2014	104,950.00
    	44,650.00
    	11,238.00
    
	Numerex
    Corp.	2014
    20140516 RSU SVP	05/16/2014	221,700.00
    	130,925.00
    	10,150.00
    
	Numerex
    Corp.	2014
    20141023 RSU	10/23/2014	7,900.00
    	3,000.00
    	1,700.00
    
	Numerex
    Corp.	2014
    20150729 RSU EE	07/29/2015	34,500.00
    	15,150.00
    	13,575.00
    
	Numerex
    Corp.	2014
    20150729 RSU SVP	07/29/2015	50,100.00
    	27,900.00
    	16,650.00
    
	Numerex
    Corp.	2014
    20151028 RSU SVP	10/28/2015	44,000.00
    	17,250.00
    	15,750.00
    
	Numerex
    Corp.	2014
    20160101 RSU	01/01/2016	39,789.00
    	17,811.00
    	8,352.00
    
	Numerex
    Corp.	2014
    20160101 RSU SVP	01/01/2016	43,479.00
    	17,996.00
    	7,228.00
    
	Numerex
    Corp.	2014
    20160519 RSU Exec	05/19/2016	101,540.00
    	45,250.00
    	42,218.00
    
	Numerex
    Corp.	2014
    20160519 RSU EE	05/19/2016	80,240.00
    	19,920.00
    	45,249.00
    
	Numerex
    Corp.	2014
    20160101 RSU LG  TERM	01/01/2016	1,726.00
    	0.00
    	863.00
    
	Numerex
    Corp.	2014
    20160908 RW RSU	09/08/2016	2,300.00
    	0.00
    	2,300.00
    
	Numerex
    Corp.	2014
    20160727 RSU BOD	07/27/2016	96,000.00
    	0.00
    	96,000.00
    
	Numerex
    Corp.	2014
    20160727 YR	07/27/2016	10,000.00
    	0.00
    	10,000.00
    
	Numerex
    Corp.	2014
    20170111 RSU Exec	01/11/2017	50,000.00
    	0.00
    	50,000.00
    
	 	 	 	888,224.00
    	339,852.00
    	331,273.00
    


 






     


     


    

 


Shares of Common Stock Reserved
for Issuance Pursuant to Options and RSUs


 


1,156,398


 


Warrants


 


On March 31, 2017, the Borrower
issued to Kenneth Rainin Foundation a warrant to purchase 125,000 shares of the Borrower’s common stock at a warrant price
of  $0.01 per share.


 


In connection with the Transaction,
the Borrower will issue to HCP-FVF, LLC a warrant to purchase 895,944 shares of the Borrower’s common stock at an exercise
price of $4.14 per share.


 


Total Capitalization 


 


	Total
    Numer of Shares Outstanding	19,578,470
	Total
    Number of Outstanding Options	1,437,561
	Total
    Number of Unvested RSUs	331,273
	Total
    Number of Warrants	1,020,944
	Fully
    diluted share count as of June 7, 2017	22,368,248












     


     


    




 


SCHEDULE
6.19


 


BROKER’S,
FINDER’S OR SIMILAR FEES


 


None.


 




     


     


    

 


SCHEDULE
6.20


 


LABOR
RELATIONS


 


Change in Control Severance Agreement
with Stratton Nicolaides dated July 31, 2014


 


Change in Control Severance Agreement
with Eugene Hyun dated October 5, 2016


 


Change in Control Severance Agreement
with Wayne Stargardt dated July 31, 2014


 


Change in Control Severance Agreement
with Anubha Jayaswal dated October 5, 2016


 


Severance and Change-In-Control
Agreement with Shu Gan dated March 2, 2016


 


Severance and Change-In-Control
Agreement with Ken Gayron dated March 7, 2016


 


Employment Agreement with Yoganand
Rajala dated May 5, 2014


 


Employment Agreement with Stratton
Nicolaides dated November 4, 2015


 


Severance Agreement with Rizwan
Munir dated September 8, 2016


 


Severance and Change-In-Control
Agreement with Kelly Gay dated March 6, 2017


 




     


     


    

 


SCHEDULE
6.21


 


EMPLOYEE
BENEFITS PLANS


 


The Numerex Corp. Savings and
Profit Sharing Plan


 


Medical Plan


 


Dental Plan


 


Vision Plan


 


Life insurance,


 


Long term disability


 


Short term disability


 


Flexible spending account


 


Health Care Flexible Spending
Account


 


Dependent Care Flexible Spending
Account


 


Health savings account


 


LegalShield Legal Plan


 


Employee Assistance Plan


 


Team Member Share Purchase Incentive
Plan


 


Numerex Corporation 2006 Long
Term Incentive Plan


 


Numerex Corporation 2014 Incentive
Plan


 




     


     


    

 


SCHEDULE
6.22


 


PATENTS,
TRADEMARKS, ETC.


 


		(a)	Licenses
                                         and Intellectual Property



 


Licenses


 


Settlement Agreement
between Satellite Tracking of People, LLC and Michelle Enterprises on the one hand, and Omnilink Systems Inc. on the other, dated
July 16, 2010.


 


Supplemental Settlement
Agreement between Satellite Tracking of People, LLC and Omnilink Systems Inc., effective May 19, 2014.


 


GPS and Limited Data
Bus Patent License Agreement between Omega Patents LLC and Numerex Corp., dated February 1, 2011.


 


Software License Agreement
between Verizon Corporate Services Group Inc. and Omnilink Systems Inc., effective September 2, 2015.


 


Software License Agreement
between Jazz Wireless Data, Inc. and Numerex Corp., effective September 30, 2010.


 


Wireless Network Patent
Portfolio License between MPEG LA, LLC and Numerex Corp., effective November 11, 2006.


 


Patents


 


	Country	Serial
    No	Filing
    

Date	Patent
    No	Issue
    Date	Title	Status	Assignee
	US	09/666,042	9/20/2000	6,718,177	4/6/2004	System
    for Communicating Messages Via a Forward Overhead Control Channel for a Programmable Logic Control Device	Issued	Numerex
    Corp.
	US	10/038,089	1/2/2002	6,882,843	4/19/2005	Multiple
    Wireless Data Transport Transceiver System	Issued	Numerex
    Corp.
	US	09/083,079	5/21/1998	6,311,060	10/30/2001	Method
    and System for Registering the Location of a Mobile Cellular Communications Device	Issued	Numerex
    Corp.
	US	10/008,100	11/13/2001	7,225,459	5/29/2007	Methods
    and Systems for Dynamically Adjusting Video Bit Rates	Issued	Numerex
    Corp.
	US	08/769,142	12/18/1996	5,873,043	2/16/1999	System
    for Communicating Messages Via a Forward Overhead Control Channel	Expired	Numerex
    Corp.



 






     


     


    

 


	US	09/699,312	10/27/2000	6,856,808	2/15/2005	Interconnect
    System and Method for Multiple Protocol Short Message Services	Issued	Numerex
    Corp.
	US	10/262,372	9/30/2002	6,718,237	4/6/2004	Communications
    Device for Conveying Geographic Location Information Over Capacity Constrained Wireless Systems	Issued	Numerex
    Corp.
	US	09/549,761	4/14/2000	6,738,647	5/18/2004	Method
    and System for Expanding the Data Payload of Data Messages Transported Via a Cellular Network Control Channel	Issued	Numerex
    Corp.
	US	09/082,694	5/21/1998	6,311,056	10/30/2001	Method
    and System for Expanding the Data Capacity of a Cellular Network Control Channel	Issued	Numerex
    Corp.
	US	10/773,692	2/6/2004	7,272,494	9/18/2007	Communication
    Device for Conveying Geographic Location Information Over Capacity Constrained Wireless Systems	Issued	Numerex
    Corp.
	US	10/770,326	2/2/2004	7,151,943	12/19/2006	System
    for Communicating Messages Via a Forward Overhead Control Channel for a Programmable Logic Control Device	Issued	Numerex
    Corp.
	US	10/885,445	7/6/2004	7,245,928	7/17/2007	Method
    and System for Improved Short Message Services	Issued	Numerex
    Corp.
	US	10/952,710	9/29/2004	7,233,802	6/19/2007	Interconnect
    System and Method for Multiple Protocol Short Message Services	Issued	Numerex
    Corp.
	US	11/811,855	6/12/2007	7,680,505	3/16/2010	Telemetry
    Gateway	Issued	Numerex
    Corp.
	US	12/704,290	2/11/2010	8,060,067	11/15/2011	Method
    and System for Efficiently Routing Messages	Issued	Numerex
    Corp.
	US	13/247,316	9/28/2011	8,543,146	9/24/2013	Method
    and System for Efficiently Routing Messages	Issued	Numerex
    Corp.
	US	13/848,804	3/22/2013	8,903,437	12/2/2014	Method
    and System for Efficiently Routing Messages	Issued	Numerex
    Corp.
	US	10/959,809	10/6/2004	7,783,508	8/24/2010	Method
    and System for Refining Vending Operations Based on Wireless Data	Issued	Numerex
    Corp.
	US	10/877,354	6/25/2004	7,650,285	1/19/2010	Method
    and System for Adjusting Digital Audio Playback Sampling Rate	Issued	Numerex
    Corp.
	US	12/012,848	2/6/2008	8,265,605	9/11/2012	Service
    escrowed transportable wireless event reporting system	Issued	Numerex
    Corp.
	US	13/568,559	8/7/2012	8,543,097	9/24/2013	Service
    escrowed transportable wireless event reporting system	Issued	Numerex
    Corp.
	US	13/971,935	8/21/2013	8,855,716	10/7/2014	Service
    escrowed transportable wireless event reporting system	Issued	Numerex
    Corp.
	US	12/002,215	12/14/2007	7,880,599	2/1/2011	Method
    and System for Remotely Monitoring the Operations of a Vehicle	Issued	Numerex
    Corp.
	US	12/002,091	12/14/2007	7,936,256	5/3/2011	Method
    and System for Interacting with a Vehicle over a Mobile Radiotelephone Network	Issued	Numerex
    Corp.
	US	12/290,048	10/27/2008	8,738,046	5/27/2014	Intelligent
    Short Message Delivery System and Method	Issued	Numerex
    Corp.



 






     


     


    

 


	US	12/713,916	2/26/2010	8,041,383	10/18/2011	Digital
    Upgrade System and Method	Issued	Numerex
    Corp.
	US	13/234,712	9/16/2011	8,483,748	7/9/2013	Digital
    Upgrade System and Method	Issued	Numerex
    Corp.
	US	13/911,554	6/6/2013	8,868,059	10/21/2014	Digital
    Upgrade System and Method	Issued	Numerex
    Corp.
	US	12/640,688	12/17/2009	8,112,285	2/7/2012	Method
    and System for Improving Real-Time Data Communications	Issued	Numerex
    Corp.
	US	12/985,989	1/6/2011	8,126,764	2/28/2012	Communication
    of Managing Vending Operations Based on Wireless Data	Issued	Numerex
    Corp.
	US	12/860,231	8/20/2010	8,214,247	7/3/2012	Method
    and System for Refining Vending Operations Based on Wireless Data	Issued	Numerex
    Corp.
	US	13/491,079	6/7/2012	8,484,070	7/9/2013	Method
    and System for Managing Vending Operations Based on Wireless Data	Issued	Numerex
    Corp.
	US	12/985,975	1/6/2011	8,269,618	9/18/2012	Method
    and System for Remotely Monitoring the Location of a Vehicle	Issued	Numerex
    Corp.
	US	13/040,563	3/4/2011	8,253,549	8/28/2012	Method
    and System for Interacting with a Vehicle over a Mobile Radiotelephone Network	Issued	Numerex
    Corp.
	US	13/561,313	7/30/2012	8,547,212	10/1/2013	Method
    and System for Interacting with a Vehicle over a Mobile Radiotelephone Network	Issued	Numerex
    Corp.
	US	14/043,363	10/1/2013	9,084,197	7/14/2015	Method
    and System for Interacting with a Vehicle over a Mobile Radiotelephone Network	Issued	Numerex
    Corp.
	US	13/345,018	1/6/2012	8,412,186	4/2/2013	Method
    and system for managing subscriber identity modules on wireless networks for machine to-machine applications	Issued	Numerex
    Corp.
	US	13/681,460	11/20/2012	8,611,891	12/17/2013	Method
    and system for managing subscriber identity modules on wireless networks for machine to-machine applications	Issued	Numerex
    Corp.
	US	14/079,936	11/14/2013	9,414,240	8/9/2016	Method
    and system for managing subscriber identity modules on wireless networks for machine to-machine applications	Issued	Numerex
    Corp.
	US	13/456,662	4/26/2012	8,705,716	4/22/2014	Interactive
    Control of Alarm Systems by Telephone Interface Using an Intermediate Gateway	Issued	Numerex
    Corp.
	US	13/413,333	3/6/2012	8,705,704	4/22/2014	Delivery
    of Alarm System Event Data and Audio Over Hybrid Network	Issued	Numerex
    Corp.
	US	13/438,941	4/4/2012	8,798,260	8/5/2014	Delivery
    of Alarm System Event Data and Audio	Issued	Numerex
    Corp.
	US	14/450,787	8/4/2014	9,462,135	10/4/2016	Delivery
    of Alarm System Event Data and Audio	Issued	Numerex
    Corp.
	US	14/013,637	8/29/2013	9,153,124	10/6/2015	Alarm
    Sensor Supporting Long-Range Wireless Communication	Issued	Numerex
    Corp.



 






     


     


    

 


	US	14/039,573	9/27/2013	9,177,464	11/3/2015	Method
    and system for untethered two-way voice communication for an alarm system	Issued	Numerex
    Corp.
	US	10/462,708	6/17/2003	7,245,703	7/17/2007	Alarm
    Signal Interceptor, Middleware Processor, and Re-Transmitter Using Caller ID	Issued	Numerex
    Corp.
	US	10/861,790	6/7/2004	7,440,554	10/21/2008	Alarm
    Signal Interceptor, Middleware Processor, and Re-Transmitter	Issued	Numerex
    Corp.
	US	11/226,857	9/14/2005	7,593,512	9/22/2009	Private
    VOIP network for Security System Monitoring	Issued	Numerex
    Corp.
	US	11/348,291	2/6/2006	7,734,020	6/8/2010	Two-way
    Voice and Voice over IP receivers for Alarm Systems	Issued	Numerex
    Corp.
	US	11/517,025	9/7/2006	7,613,278	11/3/2009	Alarm
    System Activation Platform	Issued	Numerex
    Corp.
	US	12/018,724	1/23/2008	8,369,487	2/5/2013	Enhanced
    911 notification for Internet Enabled Alarm Systems	Issued	Numerex
    Corp.
	US	12/504,709	7/17/2009	9,131,040	9/8/2015	Alarm
    System for use over Satellite Broadband	Issued	Numerex
    Corp.
	US	13/004,917	1/12/2011	8,509,391	8/13/2013	Wireless
    VoIP Network for Security System Monitoring	Issued	Numerex
    Corp.
	US	13/939,460	7/11/2013	9,094,410	7/28/2015	Wireless
    VoIP Network for Security System Monitoring	Issued	Numerex
    Corp.
	US	13/194,912	7/30/2011	9,054,893	6/9/2015	Alarm
    System IP Network with PSTN Output	Issued	Numerex
    Corp.
	US	14/598,737	1/16/2015	9,356,798	5/31/2016	Alarm
    System IP Network with PSTN Output	Issued	Numerex
    Corp.
	US	14/075,467	11/8/2013	9,235,855	1/12/2016	Delivery
    of Security Solutions Based on Demand	Issued	Numerex
    Corp.
	US	14/272,709	5/8/2014	9,510,180	11/29/2016	Mobile
    Management Message Distribution and Active On-Network Determination	Issued	Numerex
    Corp.
	US	14/862,701	9/23/2015	 	 	Mobile
    Management Message Distribution and Active On-Network Determination	Pending	Numerex
    Corp
	US	14/185,209	2/20/2014	9,350,871	5/24/2016	Delivery
    of Alarm System Event Data and Audio Over Hybrid Network	Issued	Numerex
    Corp
	US	14/332,794	7/16/2014	9,183,730	11/10/2015	Method
    and System for Mitigating Invasion Risk Associated with Stranger Interactions in a Security System Environment	Issued	Numerex
    Corp
	US	14/559,190	12/3/2014	 	 	Method
    and System for Managing a Location Detector	Pending	Numerex
    Corp
	US	14/525,808	10/28/2014	 	 	Method
    and System for Generating Geofences for Managing Offender Movement	Pending	Numerex
    Corp
	US	14/534,746	11/6/2014	 9,582,982	 2/28/2017	Method
    and System for Energy Managed of an Offender Monitor	Issued	Numerex
    Corp
	US	14/524,232	10/27/2014	 	 	Offender
    Monitor with Managed Rate of Location Reading	Pending	Numerex
    Corp



 






     


     


    

 


	US	14/525,786	10/28/2014	9,401,082	7/26/2016	Offender
    Monitor with Orientation Based Monitoring	Issued	Numerex
    Corp
	US	14/522,965	10/24/2014	9,449,497	9/20/2016	Method
    and System for Detecting Alarm System Tampering	Issued	Numerex
    Corp
	US	11/040,636	1/21/2005	7,323,970	1/29/2008	Method
    and System for Remote Interaction with a Vehicle via Wireless Communication	Issued	Numerex
    Corp
	US	14/789,085	7/1/2015	 	 	Method
    and System for Locating a Wireless Tracking Device	Pending	Numerex
    Corp
	US	14/789,089	7/1/2015	9,503,848	11/22/2016	Method
    and System for Locating a Wireless Tracking Device Associated with a Network of Alarm Panels	Issued	Numerex
    Corp
	US	13/081,954	4/7/2011	9,119,013	8/25/2015	Satellite
    Based Tracking and Data Device with Multi-Function Radio Frequency Interface	Issued	Numerex
    Corp
	US	13/092,652	4/22/2011	 	 	Analytical
    Scoring Engine for Remote Device Data	Pending	Numerex
    Corp
	US	13/209,536	8/15/2011	8,769,111	7/1/2014	IP
    Network Service Redirector Device and Method	Issued	Numerex
    Corp
	US	13/435,231	3/30/2012	8,990,915	3/24/2015	Local
    Data Appliance for Collecting and Storing Remote Sensor Data	Issued	Numerex
    Corp
	US	13/484,973	5/31/2012	9,214,082	12/15/2015	System
    and Method for Alarm System Tamper Detection and Reporting	Issued	Numerex
    Corp
	US	13/485,030	5/31/2012	9,325,814	8/9/2016	Wireless
    SNMP Agent Gateway	Issued	Numerex
    Corp
	US	13/607,955	9/10/2012	8,761,795	6/24/2014	Dynamic
    Reverse Geofencing	Issued	Numerex
    Corp
	US	14/312,037	6/23/2014	 	 	Dynamic
    Reverse Geofencing	Pending	Numerex
    Corp
	US	13/644,001	10/3/2012	8,970,364	3/3/2015	Method
    and System for Remote Coupling Security System Control	Issued	Numerex
    Corp
	US	13/734,352	1/4/2013	9,207,331	12/8/2015	Using
    Statistical Analysis to Infer an Accurate GPS Location for Use in Tracking Devices	Issued	Numerex
    Corp
	US	13/865,601	4/18/2013	9,041,527	5/26/2015	System
    and Method for Using Alarm System Zones for Remote or Mobile Objects	Issued	Numerex
    Corp
	US	14/721,472	5/26/2015	 	 	System
    and Method for Using Alarm System Zones for Remote or Mobile Objects	Pending	Numerex
    Corp
	US	14/538,569	11/11/2014	 	 	System
    and Method for Employing Base Stations to Track Mobile Devices	Pending	Numerex
    Corp
	US	14/552,768	11/25/2014	 	 	System
    and Method for Interfacing 2G Applications with a 3G/4G Cellular Radio Network	Pending	Numerex
    Corp
	US	14/794,586	7/8/2015	 	 	Depletion
    Mode MOSFET Power Supply	Pending	Numerex
    Corp
	US	14/794,602	7/8/2015	 	 	System
    and Method for Camera Registration	Pending	Numerex
    Corp
	US	14/830,574	8/19/2015	 	 	Motor
    Fault Detection System and Method	Pending	Numerex
    Corp



 






     


     


    

 


	US	14/872,780	10/1/2015	 	 	Coordination
    of Gas Pump with Tank Level Sensors for Fraud Detection	Pending	Numerex
    Corp
	US	14/872,997	10/1/2015	 	 	Closed
    Tank Fill Level Sensor	Pending	Numerex
    Corp
	US	11/804,199	5/17/2007	7,680,471	3/16/2010	System
    and method for prolonging wireless data product’s life	Issued	Numerex
    Corp
	US	13/750,205	1/25/2013	9,215,578	12/15/2015	Monitoring
    Systems and Methods	Issued	Omnilink
    Systems Inc.
	US	12/112,695	4/30/2008	8,115,621	2/14/2012	Device
    for Tracking the Movement of Individuals or Objects	Issued	Omnilink
    Systems Inc.
	US	11/935,858	11/6/2007	8,547,222	10/1/2013	System
    and Method of Tracking the Movement of Individuals and Assets	Issued	Omnilink
    Systems Inc.
	US	11/935,833	11/6/2007	7,518,500	4/14/2009	System
    and Method for Monitoring Alarms and Responding to the Movement of Individuals and Assets	Issued	Omnilink
    Systems Inc.
	US	12/350,678	1/8/2009	7,864,047	1/4/2011	System
    and Method for Monitoring Alarms and Responding to the Movement of Individuals and Assets	Issued	Omnilink
    Systems Inc.
	US	13/937,941	7/9/2013	9,373,241	6/21/2016	System
    and Method of Tracking the Movement of Individuals and Assets	Issued	Omnilink
    Systems Inc.
	US	12/794,500	6/4/2010	8,489,113	7/16/2013	Method
    and System for Tracking, Monitoring and/or Changing Tracking Devices including Wireless Energy Transfer Features	Issued	Omnilink
    Systems Inc.
	US	12/639,524	12/16/2009	8,831,627	9/9/2014	System
    and Method for Tracking Monitoring, Collecting, Reporting and Communicating with the Movement of Individuals	Issued	Omnilink
    Systems Inc.
	US	29/279,448	5/1/2007	D578,918	10/21/2008	Offender
    Monitor	Issued	Omnilink
    Systems Inc.
	US	08/969,146	11/12/1997	6,154,648	11/28/2000	METHODS
    AND APPARATUS FOR COMMUNICATING DATA VIA A CELLULAR MOBILE RADIOTELEPHONE SYSTEM	Issued	Numerex
    Corp.
	US	09/160,512	9/24/1998	6,108,537	8/22/2000	METHOD
    AND SYSTEM FOR PERFORMING A PREDETERMINED OPERATION RELATED TO A PREDETERMINED CLASS OF CELLULAR SOURCES	Issued	Numerex
    Corp.
	US	15/222,164	7/28/2016	 	 	Offender
    Monitor Messaging System	Pending	Numerex
    Corp.
	US	15/158,088	5/18/2016	 	 	System
    and Method of Using Pick-up, Drop-off Geofence for Mobile Devices	Pending	Numerex
    Corp.
	US	14/991,031	1/8/2016	9,536,417 	 1/2/2017	Method
    and System for Hierarchical Management of Personal Emergency Response System (PERS) Devices	Issued	Numerex
    Corp.
	US	14/991,028	1/8/2016	 	 	Method
    and System for Locating a Personal Emergency Response System (PERS) Device Based on Real Estate Lockbox Interaction	Pending	Numerex
    Corp.
	US	15/331,364	10/21/2016	 	 	Method
    and System for Locating a Wireless Tracking Device Associated with a Network of Alarm Panels	Pending	Numerex
    Corp.


 


 






     


     


    

 


Trademarks


 


	MARK	SERIAL
    NO.	REG.
    NO.	FILING
    DATE	REG.
    DATE	Registrant	Country

	

         
	77894440	3906542	12/16/2009	1/18/2011	Numerex
    Corp.	US
	AVIDWIRELESS	85721098	4378893	9/5/2012	8/6/2013	Numerex
    Corp.	US
	FASTRACK	78047504	2858718	2/9/2001	6/29/2004	Numerex
    Corp.	US
	FOCALPOINT	78873454	3545293	5/1/2006	12/9/2008	Omnilink
    Systems Inc.	US
	MYSHIELD	86740980	5087883	8/28/2015	 11/22/2016	Numerex
    Corp.	US
	NEXTALARM	86187648	4784209	2/7/2014	8/4/2015	Numerex
    Corp.	US
	NEXTALARM.COM	78885124	3249281	5/16/2006	6/5/2007	Numerex
    Corp.	US
	NEXTALARM.COM
    THE BROADBAND ALARM COMPANY	78929909	3244717	7/14/2006	5/22/2007	Numerex
    Corp.	US
	NUMEREX	77710898	3736251	4/9/2009	1/12/2010	Numerex
    Corp.	US
	NUMEREX
    SATELLITE FLEX	85385958	4488845	8/1/2011	2/25/2014	Numerex
    Corp.	US
	OMNILINK	78626004	3156898	5/9/2005	10/17/2006	Omnilink
    Systems Inc.	US



 






     


     


    

 


	SMART
    DATA DELIVERED	86112013	4680617	11/6/2013	2/3/2015	Numerex
    Corp.	US
	THE
    BROADBAND ALARM COMPANY	78785181	3175728	1/4/2006	11/21/2006	Numerex
    Corp.	US
	UPLINK	78691601	3279435	8/12/2005	8/14/2007	Uplink
    Security, LLC	US
	UPLINK	78106931	4013326	2/5/2002	8/16/2011	Uplink
    Security, LLC	US
	UPLINK	86190829	4683816	2/11/2014	2/10/2015	Uplink
    Security, LLC	US
	ACCELAVIEW	85040167	3932829	5/17/2010	3/15/2011	Numerex
    Corp.	US
	MACHINES
    TRUST US	77592395	3675590	10/14/2008	9/1/009	Numerex
    Corp.	US
	NUMEREX
    FAST	77920341	3906634	1/26/2010	1/18/2011	Numerex
    Corp.	US
	NUMEREX
    DNA DEVICE NETWORK APPLICATION	77917829	3840747	1/22/2010	8/31/2010	Numerex
    Corp.	US
	V-NOTIFY	77084419	3333730	1/17/2007	11/13/2007	Numerex
    Corp.	US
	E-NOTIFY	77084414	3403769	1/17/2007	3/25/2008	Numerex
    Corp.	US
	ORBITRAX	77004275	3264104	9/21/2006	7/17/2007	Numerex
    Corp.	US
	CELLEMETRY	74493789	2004693	2/23/1994	10/1/1996	Numerex
    Corp.	US
	DCX	74437904	1941980	9/20/1993	12/19/1995	Numerex
    Corp.	US
	DERIVED
    CHANNEL MULTIPLEX	74437859	1937727	9/20/1993	11/28/1995	Numerex
    Corp.	US
	UPLINK
    REMOTE	86187670	4677682	2/7/2014	1/27/2015	Uplink
    Security, LLC	US
	UPLINK
    GPS	85818059	4546091	1/8/2013	6/10/2014	Uplink
    Security, LLC	US


 


Registered Copyrights


 


None.


 




     


     


    

 


Domain Name


 


	 	 	 
	GoDaddy	alzcomfortzone.com	10/18/2017
	GoDaddy	comfortzonecheckin.com	10/18/2017
	GoDaddy	lbsdeveloper.com	10/18/2017
	GoDaddy	lbsdevelopment.com	10/18/2017
	GoDaddy	lbsgateway.com	10/18/2017
	GoDaddy	nmrxalerts.com	2/8/2026
	GoDaddy	4GSUNRISE.COM	9/12/2017
	GoDaddy	accelaview.info	5/12/2018
	GoDaddy	accelaview.net	5/12/2018
	GoDaddy	accelaview.us	5/11/2018
	GoDaddy	accelaviewblog.com	5/12/2018
	GoDaddy	accelaviewdriver.com	5/12/2018
	GoDaddy	accelaviewdriver.info	5/12/2018
	GoDaddy	accelaviewdriver.net	5/12/2018
	GoDaddy	accelaviewdriver.us	5/11/2018
	GoDaddy	accelaviewfleet.com	5/12/2018
	GoDaddy	accelaviewfleet.info	5/12/2018
	GoDaddy	accelaviewfleet.net	5/12/2018
	GoDaddy	accelaviewfleet.us	5/11/2018
	GoDaddy	accelaviewonline.com	5/12/2018
	GoDaddy	accelaviewshop.com	5/12/2018
	GoDaddy	accelaviewstore.com	5/12/2018
	GoDaddy	ACCUTAV.BIZ	5/16/2018
	GoDaddy	ACCUTAV.COM	5/17/2018
	GoDaddy	ACCUTAV.INFO	5/17/2018
	GoDaddy	ACCUTAV.MOBI	5/17/2018
	GoDaddy	ACCUTAV.NET	5/17/2018
	GoDaddy	ACCUTAV.ORG	5/17/2018
	GoDaddy	ACCUTAV.US	5/16/2018
	GoDaddy	ACTIVATEUPLINK.COM	7/28/2017
	GoDaddy	AIRDESK.NET	5/1/2018
	GoDaddy	AIRDESKWIRELESS.COM	5/1/2018
	GoDaddy	ALARMLOGIN.COM	6/26/2017
	GoDaddy	ALARMLOGIN.NET	6/26/2017
	GoDaddy	ALARMLOGIN.US	5/16/2017
	GoDaddy	ASKUPLINK.COM	7/28/2017
	GoDaddy	CELLEMETRY.COM	5/1/2018



 






     


     


    

 


	GoDaddy	CELLEMETRY.NET	5/1/2018
	GoDaddy	CELLEMETRY.ORG	5/3/2018
	GoDaddy	CELLEMETRYAPPS.COM	5/1/2018
	GoDaddy	comcastconnectionprotection.com	9/30/2018
	GoDaddy	comcastwirelessbackup.com	8/25/2026
	GoDaddy	CPNFORUM.COM	5/1/2018
	GoDaddy	DCXSYS.COM	5/1/2018
	GoDaddy	DIGILOG.COM	5/1/2018
	GoDaddy	FAST-SCO.COM	10/15/2018
	GoDaddy	FAST-UPLINK.COM	7/28/2017
	GoDaddy	FASTRACKFLEET.COM	7/12/2017
	GoDaddy	FASTRACKMOBILE.COM	7/12/2017
	GoDaddy	FASTRACKXPRESS.COM	7/12/2017
	GoDaddy	FTFLEET.COM	8/1/2017
	GoDaddy	GOUPLINK.NET	7/28/2017
	GoDaddy	GPRSXPRESS.COM	5/1/2018
	GoDaddy	M2MEXCHANGE.NET	5/29/2018
	GoDaddy	M2MEXCHANGE.ORG	5/29/2018
	GoDaddy	M2MXCHANGE.COM	5/29/2018
	GoDaddy	M2MXCHANGE.NET	5/29/2018
	GoDaddy	M2MXCHANGE.ORG	5/29/2018
	GoDaddy	MBLGPS.COM	12/31/2017
	GoDaddy	myaccelaview.com	5/12/2018
	GoDaddy	MYALARM.INFO	7/10/2017
	GoDaddy	MYMOBILEFASTRACK.COM	7/12/2017
	GoDaddy	MYMOBILEGUARDIAN.COM	5/1/2018
	GoDaddy	MYMOBILEGUARDIAN.NET	5/1/2018
	GoDaddy	MYUPLINKCONNECT.COM	7/20/2017
	GoDaddy	MYUPLINKGPS.COM	7/20/2017
	GoDaddy	MYUPLINKINTERACTIVE.COM	7/20/2017
	GoDaddy	MYUPLINKMOBILE.COM	7/20/2017
	GoDaddy	MYUPLINKREMOTE.COM	7/20/2017
	GoDaddy	MYUPLINKSECURITY.COM	7/20/2017
	GoDaddy	MYWIRELESSCONNECTIONS.COM	5/1/2018
	GoDaddy	MYWIRELESSCONNECTIONS.NET	5/1/2018
	GoDaddy	NEXTALARM.COM	4/23/2021
	GoDaddy	NEXTALARM.INFO	6/12/2017
	GoDaddy	NEXTALARM.NET	6/12/2017
	GoDaddy	NEXTALARM.ORG	6/12/2017



 






     


     


    

 


	GoDaddy	NEXTALARM.US	6/11/2017
	GoDaddy	NEXTVIEWCAM.COM	1/23/2018
	GoDaddy	NMRX.COM	5/1/2018
	GoDaddy	NMRX.NET	5/1/2018
	GoDaddy	NMRX.ORG	3/24/2017
	GoDaddy	NUMEREX-IOT.COM	6/11/2025
	GoDaddy	NUMEREX.COM	11/4/2021
	GoDaddy	NUMEREX.NET	8/10/2018
	GoDaddy	NUMEREX.ORG	8/10/2018
	GoDaddy	numerexbilling.com	6/16/2026
	GoDaddy	NUMEREXCELLPASS.COM	8/1/2017
	GoDaddy	NUMEREXCLOUDPASS.COM	8/1/2017
	GoDaddy	NUMEREXCOMMPASS.COM	8/2/2017
	GoDaddy	NUMEREXCOMPASS.COM	8/1/2017
	GoDaddy	NUMEREXCONNECTPASS.COM	8/1/2017
	GoDaddy	NUMEREXCORP.COM	5/1/2018
	GoDaddy	NUMEREXCORP.NET	5/1/2018
	GoDaddy	NUMEREXDATAPASS.COM	8/1/2017
	GoDaddy	NUMEREXFASTPASS.COM	8/1/2017
	GoDaddy	NUMEREXFASTRACK.COM	7/12/2017
	GoDaddy	NUMEREXFLEX.COM	7/12/2017
	GoDaddy	NUMEREXM2MSOLUTIONS.COM	5/11/2020
	GoDaddy	NUMEREXMEXICO.COM	5/1/2018
	GoDaddy	NUMEREXMOBILE.COM	7/12/2017
	GoDaddy	NUMEREXPASSPORT.COM	8/1/2017
	GoDaddy	NUMEREXPRESS.COM	8/27/2018
	GoDaddy	NUMEREXSOLUTIONS.COM	5/1/2018
	GoDaddy	NUMEREXSOLUTIONS.NET	5/1/2018
	GoDaddy	NUMEREXVENDING.COM	5/1/2018
	GoDaddy	NUMEREXVENDING.NET	5/1/2018
	GoDaddy	NUMEREXWORLDPASS.COM	7/12/2017
	GoDaddy	ONEHOURSECURITY.COM	12/19/2017
	GoDaddy	ORBIT-ONE.COM	4/6/2020
	GoDaddy	PORTABLEM2M.COM	5/29/2018
	GoDaddy	PORTABLEM2M.NET	5/29/2018
	GoDaddy	PORTABLEM2M.ORG	5/29/2018
	GoDaddy	POWEREDBYNUMEREX.COM	5/11/2020
	GoDaddy	REMOTEARM.ME	12/22/2017
	GoDaddy	SATELLITEFLEX.COM	7/12/2017



 






     


     


    

 


	GoDaddy	SATELLITEHERO.COM	7/12/2017
	GoDaddy	SMARTDATADELIVERED.BIZ	3/8/2017
	GoDaddy	SMARTDATADELIVERED.COM	3/9/2017
	GoDaddy	SMARTDATADELIVERED.INFO	3/9/2017
	GoDaddy	SMARTDATADELIVERED.MOBI	3/9/2017
	GoDaddy	SMARTDATADELIVERED.NET	3/9/2017
	GoDaddy	SMARTDATADELIVERED.ORG	3/9/2017
	GoDaddy	SMARTDATADELIVERED.US	3/8/2017
	GoDaddy	U-TARQCARGO.NET	6/3/2018
	GoDaddy	U-TRAQ.COM	6/3/2018
	GoDaddy	U-TRAQ.NET	6/3/2018
	GoDaddy	U-TRAQASSETS.COM	6/18/2018
	GoDaddy	U-TRAQASSETS.NET	6/18/2018
	GoDaddy	U-TRAQAUTO.COM	6/3/2018
	GoDaddy	U-TRAQAUTO.NET	6/3/2018
	GoDaddy	U-TRAQAUTOPRO.COM	6/18/2018
	GoDaddy	U-TRAQAUTOPRO.NET	6/18/2018
	GoDaddy	U-TRAQCARGO.COM	6/3/2018
	GoDaddy	U-TRAQFLEET.COM	6/3/2018
	GoDaddy	U-TRAQFLEET.NET	6/3/2018
	GoDaddy	U-TRAQMINI.COM	6/18/2018
	GoDaddy	U-TRAQMINI.NET	6/18/2018
	GoDaddy	U-TRAQMINIC.COM	6/18/2018
	GoDaddy	U-TRAQMINIC.NET	6/18/2018
	GoDaddy	U-TRAQPETS.COM	6/3/2018
	GoDaddy	U-TRAQPETS.NET	6/3/2018
	GoDaddy	UPLINK.COM	5/1/2018
	GoDaddy	UPLINK2GIG.COM	7/28/2017
	GoDaddy	UPLINKBILLING.COM	5/1/2018
	GoDaddy	UPLINKCONNECT.COM	7/20/2017
	GoDaddy	UPLINKGPS.COM	7/20/2017
	GoDaddy	UPLINKINTERACTIVE.COM	7/20/2017
	GoDaddy	UPLINKREMOTE.COM	7/20/2017
	GoDaddy	UPLINKSECURITY.COM	5/1/2018
	GoDaddy	UPLINKTRACKER.COM	4/23/2018
	GoDaddy	UPLINKTRACKER.NET	4/23/2018
	GoDaddy	UPLINKTRACKING.COM	4/23/2018
	GoDaddy	UPLINKTRACKING.NET	4/23/2018
	GoDaddy	UTRAQAUTO.COM	6/3/2018



 






     


     


    

 


	GoDaddy	UTRAQAUTO.NET	6/3/2018
	GoDaddy	UTRAQCARGO.COM	6/3/2018
	GoDaddy	UTRAQCARGO.NET	6/3/2018
	GoDaddy	UTRAQFLEET.COM	6/3/2018
	GoDaddy	UTRAQFLEET.NET	6/3/2018
	GoDaddy	UTRAQNOW.COM	6/3/2018
	GoDaddy	UTRAQNOW.NET	6/3/2018
	GoDaddy	UTRAQPETS.COM	6/3/2018
	GoDaddy	UTRAQPETS.NET	6/3/2018
	GoDaddy	VENDMONITOR.COM	5/1/2018
	GoDaddy	VENDMONITOR.NET	5/1/2018
	GoDaddy	VENDVIEW.COM	12/31/2017
	GoDaddy	VENDVIEW.NET	12/31/2017
	GoDaddy	VOIP-ALARM.CO	7/19/2017
	GoDaddy	VOIPALARM.CO	7/19/2017
	GoDaddy	VOIPALARM.COM	12/10/2018
	GoDaddy	ALZCOMFORTZONE.COM	10/18/2017
	GoDaddy	COMFORTZONECHECKIN.COM	10/18/2017
	GoDaddy	LBSDEVELOPER.COM	10/18/2017
	GoDaddy	LBSDEVELOPMENT.COM	10/18/2017
	GoDaddy	LBSGATEWAY.COM	10/18/2017
	GoDaddy	LBSPLATFORM.COM	10/18/2017
	GoDaddy	LBSPROFESSIONALSERVICES.COM	10/18/2017
	GoDaddy	LBSPROSERVE.COM	10/18/2017
	GoDaddy	M2MWIRELESSDEVICES.COM	10/18/2017
	GoDaddy	OMNILINK.COM	10/18/2017
	GoDaddy	OMNILINKALERT.COM	10/18/2017
	GoDaddy	OMNILINKALERTS.COM	10/18/2017
	GoDaddy	OMNILINKFOCALPOINT.COM	10/18/2017
	GoDaddy	OMNILINKFOCALPT.COM	10/18/2017
	GoDaddy	OMNILINKFPT.COM	10/18/2017
	GoDaddy	OMNILINKJS.COM	10/18/2017
	GoDaddy	OMNILINKJUDICIAL.COM	10/18/2017
	GoDaddy	OMNILINKSAFERETURN.COM	10/18/2017
	GoDaddy	OMNILINKSAFERETURNS.COM	10/18/2017
	GoDaddy	OMNILINKSOFTWARE.COM	10/18/2017
	GoDaddy	OMNILINKSYS.COM	10/18/2017
	GoDaddy	OMNILINKSYSTEMS.COM	10/18/2017
	GoDaddy	OMNILINKVE.COM	10/18/2017



 






     


     


    

 


	GoDaddy	OMNILINKVIRTUALEARTH.COM	10/18/2017
	GoDaddy	TSCGATEWAY.COM	10/18/2017
	GoDaddy	TSCGATEWAY.NET	10/18/2017
	GoDaddy	UNIVERSALTRACKER.COM	10/18/2017
	GoDaddy	VIRTUALEARTHCONSULTING.COM	10/18/2017
	GoDaddy	VIRTUALEARTHDEVELOPMENT.COM	10/18/2017
	GoDaddy	VIRTUALEARTHPS.COM	10/18/2017
	GoDaddy	numerexdna.com	12/30/2018
	GoDaddy	ublip.com	5/25/2017
	GoDaddy	numerexfast.com	4/20/2018
	GoDaddy	i3gcorp.com	12/19/2017
	GoDaddy	ACCUTRAX.COM	4/16/2018
	GoDaddy	ACCUTRAX.INFO	3/2/2019
	GoDaddy	ACCUTRAX.MOBI	3/2/2019
	GoDaddy	ACCUTRAX.US	3/1/2019
	GoDaddy	ACCUTRAXLIVE.COM	3/1/2019
	GoDaddy	ACCUTRAXLIVE.NET	3/1/2019
	GoDaddy	ACCUTRAXONLINE.NET	3/1/2019
	GoDaddy	ACCUTRAXWEB.COM	3/1/2019
	GoDaddy	ACCUTRAXWEB.NET	3/1/2019
	GoDaddy	FELIX-DATA.COM	1/26/2018
	GoDaddy	FELIXADMIN.COM	1/26/2018
	GoDaddy	FELIXCONTROL.COM	1/26/2018
	GoDaddy	FELIXLITE.COM	1/26/2018
	GoDaddy	FELIXLITE.NET	1/26/2018
	GoDaddy	FELIXLIVE.COM	1/26/2018
	GoDaddy	FELIXLIVE.NET	1/26/2018
	GoDaddy	FELIXLOGISTICS.COM	1/26/2018
	GoDaddy	FELIXMANAGER.COM	1/26/2018
	GoDaddy	FELIXMAPPING.COM	1/26/2018
	GoDaddy	FELIXMOBILE.COM	1/26/2018
	GoDaddy	FELIXMOBILE.NET	1/26/2018
	GoDaddy	FELIXTAV.COM	1/26/2018
	GoDaddy	FELIXTPM.COM	4/4/2018
	GoDaddy	FELIXTRACKING.COM	1/26/2018
	GoDaddy	FELIXVIEW.COM	1/26/2018
	GoDaddy	G-RFID.COM	1/23/2018
	GoDaddy	G-RFID.INFO	1/24/2018
	GoDaddy	G-RFID.NET	1/23/2018



 






     


     


    

 


	GoDaddy	G-RFID.ORG	1/24/2018
	GoDaddy	G-RFID.US	1/23/2018
	GoDaddy	I-FELIX.COM	1/26/2018
	GoDaddy	MYACCUTRAX.COM	3/1/2019
	GoDaddy	MYACCUTRAX.NET	3/1/2019
	GoDaddy	comcastconnectionpro.com	1/13/2022
	GoDaddy	comcastwirelessbackup.com	1/25/2026
	GoDaddy	comcastconnectionprotection.com	9/30/2018


 


		(b)	Claims
                                         Asserted



 


The Cen-Com Matter.
See Schedule 6.6 for more information.



 






     


     


    

 


SCHEDULE
6.23


 


POTENTIAL
CONFLICTS OF INTEREST


 


(a) and (b):


 


Andrew Ryan, a board member of
Numerex Corp., provides legal services to Numerex Corp. through his firm, The Ryan Law Group. In the fiscal year ending December
31, 2016, The Ryan Law Group billed Numerex approximately $140,000 in legal fees and costs.


 


Brian Igoe is the Chief Investment
Officer of the Rainin Group, Inc., a family office responsible for the investments of the Kenneth Rainin Foundation. As noted
in Schedules 6.17 and 6.25, the Kenneth Rainin Foundation is the holder of the Subordinated Note and holds a warrant to purchase
125,000 shares of the Company’s common stock at a warrant price of  $0.01 per share.


 


(d):


 


As noted in Schedule 6.25, the
Kenneth Rainin Foundation is the holder of the Subordinated Note.



 






     


     


    

 


SCHEDULE
6.25


 


EXISTING
INDEBTEDNESS & LIENS


 


		(a)	Indebtedness
                                         of the Borrower and its Subsidiaries



 


		1.	Indebtedness
                                         in the amount of approximately $981,000 pursuant to the Master Lease and Financing Agreement
                                         No. 12568, dated as of March 23, 2016, between Cisco Systems Capital Corporation and
                                         Numerex Corp. (the “Cisco Lease”), under which the obligations of
                                         the Company are secured by a lien on the equipment purchased under the Cisco Lease.



 


		2.	Standby
                                         Letter of Credit SVBSF006532 issued by Silicon Valley Bank in the amount of $200,000.00
                                         in favor of Sprint Spectrum L.P. with Omnilink Systems Inc. as the beneficiary thereunder
                                         (the “Sprint LOC”), which is secured by a lien on the money market
                                         accounts with Silicon Valley Bank with account numbers ending in -8509 and -8513.



 


		3.	Indebtedness
                                         in the amount of $5,000,000 outstanding under the Subordinated Note, which is unsecured.



 


		(b)	Liens
                                         related to the Indebtedness of the Borrower and its Subsidiaries



 


See response
to (a) above.


 


		(c)	Lenders



 


See response
to (a) above.


 


		(d)	Unfunded
                                         Commitments



 


None.


 




     


     


    

 


SCHEDULE
6.26


 


MATERIAL
CONTRACTS


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


****


 


The Subordinated Note


 




     


     


    

 


SCHEDULE
6.27


 


INSURANCE


 


	Coverage
    Description	Carrier

    Policy Number

    Effective Dates	Deductible/Retention	Limits	 
	 
	 
	Property	 Berkley
    Tech

    TCP7009453

    10/31/2016-10/31/2017 	AOP
    Deductible - $5,000

    BI Waiting Period - 24 Hours

    Earthquake - $50,000/72 Hours

    Flood - $50,000/ 72 Hours	Blanket
    Business Personal Property - $12,725,412

    BI & Extra Expense - $25,250,000

    Earthquake - $5,000,000

    Flood - $5,000,000

    

    Havana, FL Scheduled BPP - $250,000

    Havana, FL Scheduled BI - $732,236	 
	General
    Liability	General
    Liability - $0

    Employee Benefits Each Employee - $1,000	Each
    Occurrence - $1,000,000

    Personal & Advertising Injury - $1,000,000

    Medical Expense (Any one person) - $10,000

    Damage to Premises Rented to You - $1,000,000

    Products/Completed Ops - $3,000,000

    General Aggregate - $3,000,000

    

    Employee Benefits Liability

    Each Employee - $1,000,000

    All Claims Aggregate - $3,000,000	 
	International
    Contingent Auto/Employers Liability	Hired
    Car PD Deductible - $1,000	Contingent
    Auto Liability - $1,000,000

    Hired Car PD - $50,000

    

    Contingent Employers Liability 

    Bodily Injury by Accident - $1,000,000

    Bodily Injury by Disease (Policy Limit) - $1,000,000

    Bodily Injury by Disease (each employee) - $1,000,000	 
	Umbrella	Retention
    - $0	Each
    Occurrence/Aggregate - $15,000,000	 



 






     


     


    

 


	Auto	 Berkley
    Tech

    TCA7009454

    10/31/2016-10/31/2017 	Comprehensive/Collision
    Deductible - $1,000	Liability
    - $1,000,000 CSL - Symbols 8,9

    Physical Damage- Actual Cash Value - Symbol 8	 
	Workers
    Comp/ Employers Liability	 Berkley
    Tech

    TWC7009455

    10/31/2016-10/31/2017 	$0
    	WC
    Limits Statutory by State

    Employers Liability Limits

    Bodily Injury by Accident - $1,000,000

    Bodily Injury by Disease (Policy Limit) - $1,000,000

    Bodily Injury by Disease (each employee) - $1,000,000	 
	1st
    XS Liability	 CNA

    6043546133

    10/31/16-17 	N/A	Each
    Occurrence/Aggregate - $25M xs $15M	 
	Cargo
    Policy	 Zurich

    OC 5844395

    10/31/16-17 	Per
    Occurrence - $1,000	Any
    One Vessel - $1,000,000

    Any One Vessel (On Deck) - $100,000

    Any One Aircraft - $1,000,000

    Any One Package Shipped by Registered Mail/Parcel - $5,000

    

    Domestic Transit - Any One Conveyance or at Any One Place/Time  $1,5000,000	 
	E&O/Cyber	 CNA

    596738041

    10/31/16-17 	Retention
    $100,000

    BI Waiting Period - 10 Hours	Liability
    Coverages

    Tech E&O Liability - $10,000,000

    Media  Liability - $10,000,000

    Network Security Liability - $10,000,000

    Privacy Liability - $10,000,000

    Privacy Regulation Proceeding - $10,000,000

    Privacy Regulation Fines - $10,000,000

    

    

    Reimbursement Coverages

    Privacy Event Expense - $10,000,000

    Extortion Demand - $10,000,000

    Privacy Regulation Investigation - $10,000,000

    1st Party BI & Extra Expense - $10,000,000	 
	Primary
    D&O	AIG

    02-199-31-95

    10/30/16-10/30/17	Securities
    Retention - $500,000

    Employment Practices Retention - $150,000

    All Other Loss - $250,000	Limit
    of Liability - $10,000,000	 



 






     


     


    

 


	1st
    XS D&O	Travelers

    105518089

    10/30/16-10/30/17	N/A	D&O
    - $10MM xs $10MM	 
	2nd
    XS D&O Side A	AIG

    02-245-84-16

    10/30/16-10/30/17	N/A	D&O-Side
    A  $5MM xs 20MM	 
	Employment
    Practices Liability	AIG

    02-250-50-64

    10/30/16-10/30/17	Class
    Action Retention - $50,000

    3rd Party Retention - $50,000

    All Other Loss - $50,000	Limit
    of Liability - $3,000,000	 
	Fiduciary
    Liability	AIG

    02-250-50-62

    10/30/16-10/30/17	$0
    	Limit
    of Liability - $1,000,000	 
	Crime	Travelers

    106619918

    10/30/16-10/30/17	Employee
    Theft - $25,000

    ERISA Fidelity - $0

    Employee Theft of Client Property - $25,000

    Forgery or Alteration - $25,000

    On Premises - $25,000

    In Transit - $25,000

    Money Orders or Counterfeit Money - $5,000

    Computer Fraud - $25,000

    Computer Program & Data Restoration Expense - $25,000

    Funds Transfer Fraud - $25,000

    Personal Accounts Forgery or Alteration - $25,000

    Identity Fraud Expense - $0

    Claim Expense - $0	Employee
    Theft - $5,000,000

    ERISA Fidelity - $5,000,000

    Employee Theft of Client Property - $5,000,000

    Forgery or Alteration - $5,000,000

    On Premises - $5,000,000

    In Transit - $5,000,000

    Money Orders or Counterfeit Money - $5,000,000

    Computer Fraud - $5,000,000

    Computer Program & Data Restoration Expense - $1,000,000

    Funds Transfer Fraud - $5,000,000

    Personal Accounts Forgery or Alteration - $1,000,000

    Identity Fraud Expense - $25,000

    Claim Expense - $15,000	 



 






     


     


    

 


SCHEDULE
6.33


 


CUSTOMERS
AND SUPPLIERS


 


(a)        10
largest customers


 


		(i)	During
                                         the Fiscal Year ended December 31, 2016



 


	Customer	2016
    Sales	Entity
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****


 


		(ii)	During
                                         the Fiscal Quarter ended March 31, 2017



 


	Customer	Q1
    2017 Sales	Entity
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****
	****	****	****


 






     


     


    

 


(b)        10
largest suppliers


 


		(i)	During
                                         the Fiscal Year ended December 31, 2016



 


	Supplier	 Purchases
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****


 


		(ii)	During
                                         the Fiscal Quarter ended March 31, 2017



 


	Supplier	Purchases
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****




     


     


    

 


SCHEDULE
6.35


 


ABSENCE
OF CERTAIN PRACTICES


 


None.


 




     


     


    

 


SCHEDULE
6.36


 


INTERNAL
CONTROLS


 


Significant Deficiencies as set
forth in March 31, 2017 Audit Committee Report:


 


(a)       IT
General Controls


 


(b)       Internal
Controls over Income Tax Accounting


 


(c)       Review
of Significant Balance Sheet Reconciliation



 






     


     


    

 


SCHEDULE
6.37(a)


 


ACCOUNTS
AND NOTES RECEIVABLE


 


(i) As of April 30, 2017


 


	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****



 



     


     


    

 


SCHEDULE
6.37(b)


 


ACCOUNTS
AND NOTES PAYABLE


 


As of April 30, 2017


 


	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****


 






     


     


    

 


	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****
	****	****


 


     


     


    

 


SCHEDULE
8.6


 


MINIMUM
INSURANCE


 


	Coverage

    Description	Limits	 
	 
	 
	Property	Blanket
    Business Personal Property - $12,725,412

    BI & Extra Expense - $25,250,000

    Earthquake - $5,000,000

    Flood - $5,000,000

    

    Havana, FL Scheduled BPP - $250,000

    Havana, FL Scheduled BI - $732,236	 
	General
    Liability	Each
                                         Occurrence - $1,000,000
 Personal & Advertising Injury - $1,000,000
 Medical
                                         Expense (Any one person) - $10,000
 Damage to Premises Rented to You - $1,000,000

                                         Products/Completed Ops - $3,000,000
 General Aggregate - $3,000,000
 
 Employee
                                         Benefits Liability
 Each Employee - $1,000,000
 All Claims Aggregate - $3,000,000

                                                                                 
	 
	International
    Contingent Auto/Employers Liability	Contingent
    Auto Liability - $1,000,000

    Hired Car PD - $50,000

    

    Contingent Employers Liability 

    Bodily Injury by Accident - $1,000,000

    Bodily Injury by Disease (Policy Limit) - $1,000,000

    Bodily Injury by Disease (each employee) - $1,000,000	 
	Umbrella	Each
                                         Occurrence/Aggregate - $15,000,000

                                                                                 
	 



 






     


     


    

 


	Auto	Liability
    - $1,000,000 CSL - Symbols 8,9

    Physical Damage- Actual Cash Value - Symbol 8	 
	Workers
    Comp/ Employers Liability	WC
    Limits Statutory by State

    Employers Liability Limits

    Bodily Injury by Accident - $1,000,000

    Bodily Injury by Disease (Policy Limit) - $1,000,000

    Bodily Injury by Disease (each employee) - $1,000,000	 
	1st
    XS Liability	Each
    Occurrence/Aggregate - $25M xs $15M	 
	Cargo
    Policy	Any
    One Vessel - $1,000,000

    Any One Vessel (On Deck) - $100,000

    Any One Aircraft - $1,000,000

    Any One Package Shipped by Registered Mail/Parcel - $5,000

    

    Domestic Transit - Any One Conveyance or at Any One Place/Time  $1,5000,000	 
	E&O/Cyber	Liability
    Coverages

    Tech E&O Liability - $10,000,000

    Media  Liability - $10,000,000

    Network Security Liability - $10,000,000

    Privacy Liability - $10,000,000

    Privacy Regulation Proceeding - $10,000,000

    Privacy Regulation Fines - $10,000,000

    

    

    Reimbursement Coverages

    Privacy Event Expense - $10,000,000

    Extortion Demand - $10,000,000

    Privacy Regulation Investigation - $10,000,000

    1st Party BI & Extra Expense - $10,000,000	 
	Primary
    D&O	Limit
    of Liability - $10,000,000	 
	1st
    XS D&O	D&O
    - $10MM xs $10MM	 



 






     


     


    

 


	2nd
    XS D&O Side A	D&O-Side
    A  $5MM xs 20MM	 
	Employment
    Practices Liability	Limit
    of Liability - $3,000,000	 
	Fiduciary
    Liability	Limit
    of Liability - $1,000,000	 
	Crime	Employee
    Theft - $5,000,000

    ERISA Fidelity - $5,000,000

    Employee Theft of Client Property - $5,000,000

    Forgery or Alteration - $5,000,000

    On Premises - $5,000,000

    In Transit - $5,000,000

    Money Orders or Counterfeit Money - $5,000,000

    Computer Fraud - $5,000,000

    Computer Program & Data Restoration Expense - $1,000,000

    Funds Transfer Fraud - $5,000,000

    Personal Accounts Forgery or Alteration - $1,000,000

    Identity Fraud Expense - $25,000

    Claim Expense - $15,000	 


 


     


     


    

 


SCHEDULE
9.2


 


EXISTING
INDEBTEDNESS


 


The Cisco Lease


 


The Subordinated Note


 


The Sprint LOC


 




     


     


    

 


SCHEDULE
9.5


 


EXISTING
INVESTMENTS


 


The investments in the direct
and indirect Subsidiaries of the Company described on Schedule 6.17.


 




     


     


    

 


SCHEDULE
9.6


 


EXISTING
LIENS


 


Under the terms of the Cisco
Lease, Cisco Systems Capital Corporation has a first priority security interest in certain equipment purchased under the Cisco
Lease.


 


Liens on the money market accounts
with Silicon Valley Bank with account numbers ending in -8509 and -8513 which have been pledged as cash collateral to Silicon
Valley Bank to secure the Sprint LOC.


 


The liens listed on Schedule
6.11, of which the Company is diligently pursuing the release by the applicable taxing authorities.


 




     


     


    

 


 


Schedule 9.20(e)


 


MINIMUM MONTHLY RECURRING REVENUE


 


For the purposes of testing the trailing three-month
Monthly Recurring Revenue, the three-month actual results will be calculated as the average of the test month plus the two previous
months’ actual results. For example, for the test period ending June 30, 2017, actual Monthly Recurring Revenue shall be
calculated as the average of the actual results of the months ending June 30, 2017, May 31, 2017 and April 30, 2017. To be in compliance
with the minimum Monthly Recurring Revenue covenant set forth in Section 9.20(e)(i), the three-month trailing actual Monthly Recurring
Revenue shall be greater than the amount set forth in the table below.


 


	Month Ending	Monthly Recurring 

Revenue, 3 month 

trailing average no 

less than
	June 30, 2017	$3,660,000  
	July 31, 2017	$3,666,000  
	August 31, 2017	$3,687,000  
	September 30, 2017	$3,760,000  
	October 31, 2017	$3,793,000  
	November 30, 2017	$3,820,000  
	December 31, 2017	$3,785,000  
	January 31, 2018	$3,808,000  
	February 28, 2018	$3,830,000  
	March 31, 2018	$3,814,000  
	April 30, 2018	$3,832,000  
	May 31, 2018	$3,849,000  
	June 30, 2018	$3,867,000  
	July 31, 2018	$3,884,000  
	August 31, 2018	$3,901,000  
	September 30, 2018	$3,919,000  
	October 31, 2018	$3,936,000  
	November 30, 2018	$3,954,000  
	December 31, 2018	$3,971,000  
	January 31, 2019	$3,988,000  
	February 28, 2019	$4,003,000  
	March 31, 2019	$4,016,000  
	April 30, 2019	$4,029,000  
	May 31, 2019	$4,042,000  
	June 30, 2019	$4,055,000  
	July 31, 2019	$4,068,000  
	August 31, 2019	$4,081,000  
	September 30, 2019	$4,094,000  
	October 31, 2019	$4,106,000  
	November 30, 2019	$4,119,000  
	December 31, 2019	$4,132,000  
	January 31, 2020	$4,117,000  
	February 29, 2020	$4,104,000  
	March 31, 2020	$4,079,000  
	April 30, 2020	$4,098,000  
	May 31, 2020	$4,116,000  
	June 30, 2020	$4,135,000  
	July 31, 2020	$4,153,000  
	August 31, 2020	$4,171,000  
	September 30, 2020	$4,189,000  
	October 31, 2020	$4,207,000  
	November 30, 2020	$4,225,000  
	December 31, 2020	$4,243,000  
	January 31, 2021	$4,261,000  
	February 28, 2021	$4,278,000  
	March 31, 2021	$4,296,000  




 




    	 	 	 



     


    



 


SCHEDULE
9.24


 


NEGATIVE
PLEDGES


 


See Schedule 9.6



 






     


     


    

 


SCHEDULE
9.25


 


ACCOUNTS
PAYABLE


 


****


 


****


 


****


 


****









     


     


    


 


EXHIBIT A


 


FORM OF NOTE


 


THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT
TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.


 


[THIS NOTE HAS BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT (AS DEFINED IN § 1273(a) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND U.S. TREASURY REGULATION
§ 1.1273-1 PROMULGATED THEREUNDER). THE HOLDER HEREOF CAN OBTAIN THE INFORMATION DESCRIBED IN U.S. TREASURY REGULATION §
1.1275-3 BY WRITING TO: NUMEREX CORP., ATTENTION: CHIEF EXECUTIVE OFFICER.]


 


NUMEREX CORP.


 


SENIOR SECURED NOTE


 


DUE March 31, 2021


 


	$[____________]	June [__], 2017


 


FOR VALUE RECEIVED, the undersigned,
NUMEREX CORP., a Pennsylvania corporation (the “Borrower”), hereby promises to pay to [_____________], a [______________]
(together with its registered assigns, the “Holder”), the principal sum of [___________] AND NO/100 DOLLARS
($[__________]) on the Maturity Date, except as otherwise set forth herein or in the Note Purchase Agreement (as defined below),
and with interest thereon from time to time as provided herein.


 


1.          Note
Purchase Agreement. This Note (this “Note”) is issued by the Borrower, on the date hereof, pursuant to the
Note Purchase Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time,
the “Note Purchase Agreement”), by and among the Borrower, the Holder, the Collateral Agent, and the other Purchasers
now and from time to time party thereto, and is subject to the terms thereof. The Holder is entitled to the benefits of this Note
and the Note Purchase Agreement, as the Note Purchase Agreement relates to this Note, and may enforce the agreements of the Borrower
contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect hereto
and thereto. This Note is secured by, among other things, one or more Collateral Documents described in the Note Purchase Agreement.
Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Note Purchase Agreement.


 




    	 	 	 



     


    

 


2.          Interest.
The Borrower promises to pay interest on the sum of the principal amount of this Note (including any default interest added thereto
pursuant to Section 3.1(b) of the Note Purchase Agreement) at the aggregate rate and in the manner and times set forth in
the Note Purchase Agreement.


 


3.          Repayment;
Prepayment. The Borrower shall repay the outstanding principal amount of this Note as set forth in the Note Purchase Agreement.


 


4.          Amendment.
Amendments and modifications of this Note may be made only in the manner provided in the Note Purchase Agreement.


 


5.          Enforcement.
The Borrower shall pay all costs of enforcement of this Note to the extent and in the manner set forth in the Note Purchase Agreement.


 


6.          Remedies
Cumulative. No remedy conferred upon the Holder herein or in the Note Purchase Agreement or any other Note Document is intended
to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other
remedy given hereunder, under the Note Purchase Agreement or under any other Note Document or now or hereafter existing at law
or in equity or by statute or otherwise.


 


7.          Transfer.
This Note may be transferred or assigned, in whole or in part, by the Holder at any time subject to the limitations set forth in
the Note Purchase Agreement and herein. The term “Holder” as used herein shall also include any permitted transferee
of this Note. Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and may
be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from
the registration requirements of the Securities Act.


 


8.          Covenants
Bind Successors and Assigns. All the covenants, stipulations, promises, and agreements in this Note by or on behalf of the
Borrower shall bind its successors and assigns, whether so expressed or not.


 


9.          Notices.
All notices, demands and other communications provided for or permitted hereunder shall be made in writing and in the manner set
forth in Section 12.2 of the Note Purchase Agreement.


 


10.        GOVERNING
LAW. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH,
AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE THAT
WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.


 




    	 	2	 



     


    

 


11.        Severability.
In case any provision in or obligation under this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdictions,
shall not in any way be affected or impaired thereby.


 


12.        Waivers.
All Persons bound by this obligation, whether primarily or secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive the benefits of all provisions of law for stay or delay or execution or sale of property or other satisfaction
of judgment against any of them on account of liability hereon until judgment is obtained, executed and issued against any of them
and in turn satisfied, and its right, if any, to require the Holder to hold as security for this Note any collateral deposited
by any of said persons as security. Demand, presentment, protest, notice of protest, and notice of dishonor are hereby waived by
all parties bound hereon.


 


13.        Headings.
The headings in this Note are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.


 


[Signature Pages Follow]


 




    	 	3	 



     


    

 


IN WITNESS WHEREOF, the
Borrower has caused this Note to be executed as of the date first written above.


 


	 	NUMEREX CORP.
	 	 	 
	 	By:	 
	 	 	Name:  
	 	 	Its:  


 


Signature Page to Senior Secured Note –
[_______]


 




    	 	 	 



     


    

 


Exhibit
C


 


Form
of Compliance Certificate


 


See attached.


 




    	 	 	 



     


    


 


NOTE


 


THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT
TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.


 


NUMEREX CORP.


 


SENIOR SECURED NOTE


 


DUE March 31, 2021


 


	$13,500,000.00	June 7, 2017


 


FOR VALUE RECEIVED, the undersigned,
NUMEREX CORP., a Pennsylvania corporation (the “Borrower”), hereby promises to pay to HCP-FVF, LLC, a Delaware
limited liability company (together with its registered assigns, the “Holder”), the principal sum of thirteen
million five hundred thousand AND NO/100 DOLLARS ($13,500,000.00) on the Maturity Date, except as otherwise set forth herein
or in the Note Purchase Agreement (as defined below), and with interest thereon from time to time as provided herein.


 


1.          Note
Purchase Agreement. This Note (this “Note”) is issued by the Borrower, on the date hereof, pursuant to the
Note Purchase Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time,
the “Note Purchase Agreement”), by and among the Borrower, the Holder, the Collateral Agent, and the other Purchasers
now and from time to time party thereto, and is subject to the terms thereof. The Holder is entitled to the benefits of this Note
and the Note Purchase Agreement, as the Note Purchase Agreement relates to this Note, and may enforce the agreements of the Borrower
contained herein and therein and exercise the remedies provided for hereby and thereby or otherwise available in respect hereto
and thereto. This Note is secured by, among other things, one or more Collateral Documents described in the Note Purchase Agreement.
Capitalized terms used herein and not defined herein have the meanings ascribed to such terms in the Note Purchase Agreement.


 


2.          Interest.
The Borrower promises to pay interest on the sum of the principal amount of this Note (including any default interest added thereto
pursuant to Section 3.1(b) of the Note Purchase Agreement) at the aggregate rate and in the manner and times set forth in
the Note Purchase Agreement.


 


3.          Repayment;
Prepayment. The Borrower shall repay the outstanding principal amount of this Note as set forth in the Note Purchase Agreement.


 



     

     


     


4.          Amendment.
Amendments and modifications of this Note may be made only in the manner provided in the Note Purchase Agreement.


 


5.          Enforcement.
The Borrower shall pay all costs of enforcement of this Note to the extent and in the manner set forth in the Note Purchase Agreement.


 


6.          Remedies
Cumulative. No remedy conferred upon the Holder herein or in the Note Purchase Agreement or any other Note Document is intended
to be exclusive of any other remedy and each and every such remedy shall be cumulative and shall be in addition to every other
remedy given hereunder, under the Note Purchase Agreement or under any other Note Document or now or hereafter existing at law
or in equity or by statute or otherwise.


 


7.          Transfer.
This Note may be transferred or assigned, in whole or in part, by the Holder at any time subject to the limitations set forth in
the Note Purchase Agreement and herein. The term “Holder” as used herein shall also include any permitted transferee
of this Note. Each transferee of this Note acknowledges that this Note has not been registered under the Securities Act, and may
be transferred only pursuant to an effective registration under the Securities Act or pursuant to an applicable exemption from
the registration requirements of the Securities Act.


 


8.          Covenants
Bind Successors and Assigns. All the covenants, stipulations, promises, and agreements in this Note by or on behalf of the
Borrower shall bind its successors and assigns, whether so expressed or not.


 


9.          Notices.
All notices, demands and other communications provided for or permitted hereunder shall be made in writing and in the manner set
forth in Section 12.2 of the Note Purchase Agreement.


 


10.        GOVERNING
LAW. THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH,
AND ENFORCED UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE THAT
WOULD REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.


 


11.        Severability.
In case any provision in or obligation under this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdictions,
shall not in any way be affected or impaired thereby.


 


12.        Waivers.
All Persons bound by this obligation, whether primarily or secondarily liable as principals, sureties, guarantors, endorsers or
otherwise, hereby waive the benefits of all provisions of law for stay or delay or execution or sale of property or other satisfaction
of judgment against any of them on account of liability hereon until judgment is obtained, executed and issued against any of them
and in turn satisfied, and its right, if any, to require the Holder to hold as security for this Note any collateral deposited
by any of said persons as security. Demand, presentment, protest, notice of protest, and notice of dishonor are hereby waived by
all parties bound hereon.


 



    	 	2	 



     


     


13.        Headings.
The headings in this Note are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.


 


[Signature Pages Follow]


 



    	 	3	 



     


     


IN WITNESS WHEREOF, the
Borrower has caused this Note to be executed as of the date first written above.


 


	 	NUMEREX CORP.
	 	 
	 	By:	/s/ Kenneth L. Gayron
	 	 	Name:  Kenneth Gayron
	 	 	Its:  Interim Chief Executive Officer and Chief Financial Officer


 


[Signature Page to Note]