Document:

exv4w3

 

Exhibit 4.3

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

	 	 	 
	

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

COMMON STOCK PURCHASE WARRANT

	 	 	 
	No. 36

	 	Issue Date: January 28, 2005

          NUMEREX CORP., a corporation organized under the laws of the State of Pennsylvania, hereby
certifies that, for value received, LAURUS MASTER FUND, LTD., or its assigns (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company from and after the
Issue Date of this Warrant and at any time or from time to time before 5:00 p.m., New York time, on
January 28, 2012 (the “Expiration Date”), up to 100,000 fully paid and nonassessable shares of
Common Stock (as hereinafter defined), no par value per share, of the Company, at the Exercise
Price (as hereinafter defined). The number and character of such shares of Common Stock are subject
to adjustment as provided herein.

          As used herein the following terms, unless the context otherwise requires, have the following
respective meanings:

          (a) The term “Company” shall include Numerex Corp. and any corporation which shall succeed or
assume the obligations of Numerex Corp. hereunder.

          (b) The term “Common Stock” includes (a) the Company’s Class A Common Stock, no par value per
share, and (b) any other securities into which or for which any of the securities described in (a)
may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale
of assets or otherwise.

          (c) The term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the
Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 4 or otherwise.

          (d) The term “Exercise Price” shall be as follows:

 

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

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

          (e) The term “Registration Rights Agreement” means the Registration Rights Agreement, dated as
of the date hereof, between the Company and the Holder as the same may be amended, modified and
supplemented from time to time.

          (f) The term “Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture or an unincorporated
organization.

     1. Exercise of Warrant.

          1.1 Number of Shares Issuable upon Exercise. From and after the date hereof through
and including the Expiration Date, the Holder shall be entitled to receive, upon exercise of this
Warrant in whole or in part, by delivery of an original or fax copy of the exercise notice attached
hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.

          1.2 Fair Market Value. Fair Market Value of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean:

               (a) If the Company’s Common Stock is traded on the American Stock Exchange or another national
securities exchange or is quoted on the National or SmallCap Market of The Nasdaq Stock Market,
Inc. (“Nasdaq”), then the closing or last sale price, respectively, reported for the last business
day immediately preceding the Determination Date.

               (b) If the Company’s Common Stock is not traded on the American Stock Exchange or another
national stock exchange or on the Nasdaq but is traded on the NASD OTC Bulletin Board or the
National Quotation Bureau’s Pink Sheets, then the mean of the average of the closing bid and asked
prices reported for the last business day immediately preceding the Determination Date.

               (c) Except as provided in clause (d) below, if the Company’s Common Stock is not publicly
traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in
accordance with the rules then in effect of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and training to pass on the
matter to be decided.

               (d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any
event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then
all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the
event of such liquidation, dissolution or winding up, plus all other amounts to be payable per
share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of
this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant
are outstanding at the Determination Date.

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          1.3 Trustee for Warrant Holders. In the event that a bank or trust company shall have
been appointed as trustee for the Holder of the Warrant pursuant to Subsection 3.2, such bank or
trust company shall have all the powers and duties of a warrant agent (as hereinafter described)
and shall accept, in its own name for the account of the Company or such successor Person as may be
entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may
be, on exercise of this Warrant pursuant to this Section 1.

     2. Procedure for Exercise.

          2.1 Delivery of Stock Certificates, etc. on Exercise. The Company agrees that the
shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the
Holder as the record owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any event within three
(3) business days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as
such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for the number of duly and validly
issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such
Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such
holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market
Value of one full share, together with any other stock or other securities and property (including
cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1
or otherwise. The certificates for the number of shares of Common Stock (or Other Securities)
shall bear a legend required or advisable under federal and state securities laws. The Holder
agrees that if the Registration Statement (as defined in the Registration Rights Agreement) is then
currently effective or if the shares of Common Stock are eligible for sale pursuant to Rule 144
under the Securities Act of 1933, as amended, the Holder shall (i) sell, transfer or dispose of the
shares of Common Stock it receives as a result of the exercise of this Warrant pursuant to the
Registration Statement in accordance with the plan of distribution described therein (such plan of
distribution shall be substantially in the form attached hereto as Exhibit C) or the
provisions of Rule 144, as applicable, and (ii) fulfill applicable prospectus delivery requirements
imposed by applicable federal securities laws.

          2.2 Exercise.

               (a) Payment may be made either in (i) cash or by certified or official bank check payable to
the order of the Company equal to the applicable aggregate Exercise Price, (ii) by delivery of the
Warrant, Common Stock and/or Common Stock receivable upon exercise of the Warrant in accordance
with Section (b) below, or (iii) by a combination of any of the foregoing methods, for the number
of shares of Common Stock specified in such form (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to the holder per the
terms of this Warrant) and the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein.

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               (b) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one
share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth
below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being exercised) by
surrender of this Warrant at the principal office of the Company together with the properly
endorsed Exercise Notice in which event the Company shall issue to the Holder a number of shares of
Common Stock computed using the following formula:

	 	 	 	 	 
	

	 	X=Y (A-B)	 	 
	

	 	         A	 	 
	 

	 		 	 
	 	 	Where X = the number of shares of Common Stock to be issued to the
Holder
	 
	 	 	 	 
	

	 	Y=
	 	the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised (at the date of such calculation)
	 
	 	 	 	 
	

	 	A=
	 	the Fair Market Value of one share of the Company’s Common
Stock (at the date of such calculation)
	 
	 	 	 	 
	

	 	B=
	 	Exercise Price (as adjusted to the date of such calculation)

     3. Effect of Reorganization, etc.; Continuation of Terms.

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

          3.2 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer
referred to in this Section 3, this Warrant shall continue in full force and effect and the terms
hereof shall be applicable to the shares of stock and other securities and property

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receivable on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any such stock or other securities, including,
in the case of any such transfer, the person acquiring all or substantially all of the properties
or assets of the Company, whether or not such person shall have expressly assumed the terms of this
Warrant as provided in Section 4.

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

     5. Certificate as to Adjustments. In each case of any adjustment or readjustment in the
shares of Common Stock (or Other Securities) issuable on the exercise of the Warrant or following
the exercise in part of this Warrant, the Company at its expense will promptly cause its Chief
Financial Officer or other appropriate designee to compute such adjustment or readjustment in
accordance with the terms of the Warrant and prepare a certificate setting forth such adjustment or
readjustment. The Company will forthwith mail a copy of each such certificate to the holder of the
Warrant and any Warrant agent of the Company (appointed pursuant to Section 11 hereof);
provided, however, that the failure of the Company to mail a copy of such
certificate to the Holder of the Warrant and any Warrant Agent shall not affect the Delayed
Registration Penalty and/or the number of shares of Common Stock (or Other Securities) represented
hereby.

     6. Reservation of Stock, etc. Issuable on Exercise of Warrant. The Company will at all times
reserve and keep available, solely for issuance and delivery on the exercise of the Warrant, or
following the exercise in part of this Warrant, shares of Common Stock (or Other Securities) from
time to time issuable on the exercise of the Warrant.

     7. Assignment; Exchange of Warrant. Subject to compliance with applicable federal and state
securities laws and the Securities Purchase Agreement, dated of even date herewith, by and between
the Company and the Holder (the “Purchase Agreement”), this Warrant, and the rights evidenced
hereby, may be transferred by any registered holder hereof (a “Transferor”) with respect to any or
all of the shares of Common Stock available for exercise hereunder. On the surrender for exchange
of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto
(the “Transferor Endorsement Form”) and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall include, without
limitation, a legal opinion from the Transferor’s counsel that such transfer is exempt from the
registration requirements of applicable securities

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laws, the Company at its expense but with payment by the Transferor of any applicable transfer
taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor
Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for
the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered
by the Transferor. In no event shall a Transferee be a Competitor (as such term is defined in the
Purchase Agreement) of the Company.

     8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft
or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu
thereof, a new Warrant of like tenor.

     9. Registration Rights. The Holder of this Warrant has been granted certain registration
rights by the Company. These registration rights are set forth in a Registration Rights Agreement
entered into by the Company and the purchaser of the Company’s Convertible Note (the “Note”) at or
prior to the issue date of this Warrant.

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

     11. Warrant Agent. The Company may, by written notice to the each holder of the Warrant,
appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of
this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing
this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance,
exchange or replacement, as the case may be, shall be made at such office by such agent.

     12. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.

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     13. Notices, etc. All notices and other communications from the Company to the Holder of this
Warrant shall be mailed by first class registered or certified mail, postage prepaid, at such
address as may have been furnished to the Company in writing by such holder or, until any such
Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.

     14. No Shorting. Neither the Purchaser nor any of its affiliates or investment partners shall
or shall cause any Person, directly or indirectly, to engage in “short sales” of the Company’s
Common Stock or any other hedging strategies involving the Company’s publicly traded securities.

     15. Miscellaneous.

          (a) THIS WARRANT CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAWS. EXCEPT AS PROVIDED IN SECTION 1.2(C) HEREOF, ANY ACTION BROUGHT BY EITHER PARTY
AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALL BE BROUGHT ONLY IN
ANY STATE OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, CITY OF NEW YORK; PROVIDED THAT
NOTHING CONTAINED IN THIS WARRANT SHALL BE DEEMED TO PRECLUDE HOLDER FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER COURT OF COMPETENT JURISDICTION AND NOTHING SHALL BE DEEMED TO
PRECLUDE THE COMPANY FROM ASSERTING ANY DEFENSES OR COUNTERCLAIMS IN ANY SUCH ACTIONS. BOTH THE
COMPANY AND THE INDIVIDUAL EXECUTING THIS WARRANT ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE
JURISDICTION OF SUCH COURTS AND WAIVE TRIAL BY JURY. THE COMPANY AND THE INDIVIDUAL EXECUTING THIS
WARRANT FURTHER CONSENT THAT ANY SUMMONS, SUBPOENA OR OTHER PROCESS OR PAPERS (INCLUDING, WITHOUT
LIMITATION, ANY NOTICE OR MOTION OR OTHER APPLICATION TO EITHER OF THE AFOREMENTIONED COURTS OR A
JUDGE THEREOF) OR ANY NOTICE IN CONNECTION WITH ANY PROCEEDINGS HEREUNDER, MAY BE SERVED BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY PERSONAL SERVICE PROVIDED A
REASONABLE TIME FOR APPEARANCE IS PERMITTED, OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER
THE RULES OF SAID COURTS. THE COMPANY AND THE INDIVIDUAL EXECUTING THIS WARRANT WAIVE ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED HEREON IN THE SUPREME COURT FOR THE
STATE OF NEW YORK, COUNTY OF NEW YORK, OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND SHALL NOT ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE OR
BASED UPON FORUM NON CONVENIENS FOR ANY ACTION FILED IN EITHER SUCH COURT.

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          (b) The prevailing party shall be entitled to recover from the other party its reasonable
attorney’s fees and costs; provided, however, that if the parties hereto agree to settle any claim,
action, proceeding or lawsuit brought by one party hereto against the other party hereto, then each
of the parties shall bear its own costs in connection with such claim, action, proceeding or
lawsuit, unless otherwise directed by a court of competent jurisdiction.

          (c) In the event that any provision of this Warrant is invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision of this Warrant.

          (d) The headings in this Warrant are for purposes of reference only, and shall not limit or
otherwise affect any of the terms hereof.

          (e) The Company acknowledges that legal counsel participated in the preparation of this
Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be
resolved against the drafting party shall not be applied in the interpretation of this Warrant to
favor any party against the other party.

[Balance of page intentionally left blank; signature page follows.]

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

	 	 	 	 	 
	 	 	NUMEREX CORP.
	 
	 	 	 	 
	

	 	By:	 	/s/ Alan B. Catherall
	

	 	 	 	

	

	 	Name:	 	Alan B. Catherall
	

	 	 	 	

	

	 	Title:	 	Chief Financial Officer
	

	 	 	 	

	 
	 	 	 	 
	WITNESS:
	 	 	 	 
	 
	 	 	 	 
	Pamela S. Lester

	 	 	 	 

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Exhibit A

FORM OF SUBSCRIPTION

(To be signed only on exercise of Warrant)

TO: NUMEREX CORP.

The undersigned, pursuant to the provisions set forth in the attached Warrant (No.___), hereby
irrevocably elects to purchase (check applicable box):

                                                                shares of the Common Stock covered by such Warrant; or

                     the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless
exercise procedure set forth in Section 2.

     The undersigned herewith makes payment of the full Exercise Price for such shares at the price per
share provided for in such Warrant, which is $___. Such payment takes the form of (check
applicable box or boxes):

                       $                                         in lawful money of the United States; and/or

                     the cancellation of such portion of the attached Warrant as is exercisable for a total of                                  
       shares of Common Stock (using a Fair Market Value of $                     per share for purposes of this calculation); and/or

                     the cancellation of such number of shares of Common Stock as is necessary, in accordance with
the formula set forth in Section 2, to exercise this Warrant with respect to the maximum number of
shares of Common Stock purchaseable pursuant to the cashless exercise procedure set forth in
Section 2.

The undersigned requests that the certificates for such shares be issued in the name of, and
delivered to                                                              whose address is                                                                                                                         

                                        .

The undersigned represents and warrants that all offers and sales by the undersigned of the
securities issuable upon exercise of the within Warrant shall be made pursuant to registration of
the Common Stock and prospectus delivery requirements under the Securities Act of 1933, as amended
(the “Securities Act”) or pursuant to an exemption from registration under the Securities Act.

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	

	
	 	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	(Signature must conform to name of holder as
	

	 	 	 	 	 	specified on the face of the Warrant)
	 
	 	 	 	 	 	 
	

	 	 	 	 	 	

	

	 	 	 	 	 	(Address)

 

 

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To be signed only on transfer of Warrant)

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

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	Transferees	 	 	Percentage Transferred	 	 	 	Number Transferred	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 
	

	

	 	

	

	 	 	 	 	 	(Signature must conform to name of holder as
	

	 	 	 	 	 	specified on the face of the Warrant)
	 
	 	 	 	 	 	 
	Signed in the presence of:	 	 	 	 
	 
	 	 	 	 	 	 
	
	 	 	 	

	(Name)

	 	 	 	 (address)
	 
	 	 	 	 	 	 
	ACCEPTED AND AGREED:	 	 	 	 
	[TRANSFEREE]	 	 	 	 
	 
	 	 	 	 	 	 
	
	 	 	 	

	(Name)
	 	 	 	(address)

 

 

Exhibit C

PLAN OF DISTRIBUTION

The Company shall include a “Plan of Distribution” section in the Registration Statement (as
defined in the Registration Rights Agreement), which shall substantially state as follows:

Plan of Distribution

     The shares of our common stock covered hereby may be offered and sold from time to time by the
selling stockholder. The selling stockholder will act independently of us in making decisions with
respect to the timing, manner and size of each sale of shares of common stock currently held by
selling stockholder. Following conversion of the secured convertible note or exercise of warrants
by the selling stockholder holding a secured promissory note or warrants, the selling stockholder
will act independently of us in making decisions with respect to the timing, manner, and sale of
shares of our common stock held by the selling stockholder who converts or exercises. The selling
stockholder may use any one or more of the following methods when selling shares:

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

     The selling stockholder may also sell shares under Rule 144 under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus.

     Broker-dealers engaged by the selling stockholder may arrange for other broker-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from the selling
stockholder (or, if any broker-dealer acts as agent for the purchaser of shares, from the
purchaser) in amounts to be negotiated. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by the selling stockholder. The
selling stockholder does not expect these commissions and discounts to exceed what is customary in
the types of transactions involved.

     The selling stockholder may from time to time pledge or grant a security interest in some or
all of the shares of common stock owned by it and, if it defaults in the performance of its secured
obligations, the pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus, or under an amendment to this prospectus under

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Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of
selling stockholders to include the pledgee, transferee or other successors in interest as selling
stockholder under this prospectus.

     The selling stockholder also may transfer the shares of common stock in other circumstances,
in which case the transferees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus and may sell the shares of common stock from time
to time under this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus.

     The selling stockholder and any broker-dealers or agents that are involved in selling the
shares may be deemed to be “underwriters” within the meaning of the Securities Act in connection
with such sales. In such event, any commissions received by such broker-dealers or agents and any
profit on the resale of the shares purchased by them may be deemed to be underwriting commissions
or discounts under the Securities Act. The selling stockholder have informed the Company that it
does not have any agreement or understanding, directly or indirectly, with any person to distribute
the Common Stock.

     The Company is required to pay certain fees and expenses incurred by the Company incident to
the registration of the shares. The Company has agreed to indemnify the selling stockholder
against certain losses, claims, damages and liabilities, including liabilities under the Securities
Act.

     The anti-manipulation rules of Regulation M under the Securities Exchange Act of 1934, as
amended, may apply to sales of our common stock and activities of the selling stockholder.

13exv4w4

 

Exhibit
4.4

SECURITY AGREEMENT

	 	 	 
	To:

	 	Laurus Master Fund, Ltd.
	

	 	c/o Onshore Corporate Services, Ltd.
	

	 	P.O. Box 1234 G.T
	

	 	Queensgate House
	

	 	South Church Street
	

	 	Grand Cayman, Cayman Islands

Gentlemen:

     1. To secure the payment of all Obligations (as hereafter defined), we hereby grant to you a
continuing security interest in all of the following property now owned or at any time hereafter
acquired by us, or in which we now have or at any time in the future may acquire any right, title
or interest (the “Collateral”): all accounts, inventory, equipment, goods, documents, instruments
(including, without limitation, promissory notes), contract rights, general intangibles (including,
without limitation, payment intangibles), chattel paper, supporting obligations, investment
property, letter-of-credit rights, trademarks and tradestyles in which we now have or hereafter may
acquire any right, title or interest, all proceeds and products thereof (including, without
limitation, proceeds of insurance) and all additions, accessions and substitutions thereto or
therefor.

     2. The term “Obligations” as used herein shall mean and include all debts, liabilities and
obligations owing by each of us to you under that certain Guaranty, dated as of the date hereof, as
amended, modified and supplemented from time to time (as so amended, modified and supplemented, the
“Guaranty”) and all obligations owing by Numerex Corp. (“Company”) to you under the Convertible
Term Note dated as of the date hereof in the original principal amount of $1,500,000, as amended,
modified and supplemented from time to time or otherwise (as so amended, modified and supplemented
from time to time, the “Note “).

     3. We hereby represent, warrant and covenant to you that: (a) each of us is a legal entity
validly existing, in good standing and formed under the laws of the jurisdictions set forth below
our names on the signature pages hereto with an organization identification number set forth below
our names on the signature pages hereto and we will provide you thirty (30) days’ prior written
notice of any change in our state of formation; (b) our legal names are as set forth on the
signature pages hereto and are identical to that which is set forth in our certificates or articles
of incorporation or other constitutive documents, as amended through the date hereof; (c) we are
the lawful owner of the Collateral and have the sole right to grant a security interest therein and
will defend the Collateral against all claims and demands of all persons and entities; (d) we will
keep the Collateral free and clear of all attachments, levies, taxes, liens, security interests and
encumbrances of every kind and nature (“Encumbrances”), except (i) to the extent said Encumbrance
does not secure indebtedness in excess of $150,000 on a combined basis for each of us at any one
time and such Encumbrance is removed or otherwise released within 10 business days of the creation
thereof or (ii) for those Encumbrances arising from the Convertible

 

Term Note given by us, as Borrower, to you, as Holder, dated as of January 13, 2004; (e) we
will at our own cost and expense use commercially reasonable efforts to keep the Collateral in good
state of repair (ordinary wear and tear excepted) and will use commercially reasonable efforts not
to waste or destroy the same or any part thereof other than ordinary course discarding of items no
longer used or useful in our business; (f) we will not without your prior written consent, sell,
exchange, lease or otherwise dispose of the Collateral or any of our rights therein, whether by
sale, lease or otherwise, except for (I) Permitted Non-Core Asset Sales (as defined in the Note),
(II) the sale of inventory in the ordinary course of business and (III) the disposition or transfer
in the ordinary course of business during any fiscal year of obsolete and worn-out equipment having
an aggregate fair market value of not more than $37,500 and only to the extent that (i) the
proceeds of any such equipment disposition are used to acquire replacement equipment which is
subject to your first priority security interest or are used to repay Obligations or to pay general
corporate expenses, or (ii) following the occurrence of an Event of Default which continues to
exist the proceeds of which are remitted to you to be held as cash collateral for the Obligations;
(g) we will name you as an additional insured and lender’s loss payee under all of our policies of
insurance which shall insure, without limitation, the Collateral against such losses, damages and
hazards as you shall reasonably require and in amounts and under policies issued by insurers
reasonably acceptable to you. If we fail to do so, you may procure such insurance and the cost
thereof shall constitute Obligations; (h) we will at all reasonable times and upon reasonable
advance notice (except that such notice shall not be required in the event you reasonably believe
such access is necessary to preserve or protect the Collateral and/or during the continuance of an
Event of Default) allow you or your representatives free access to and the right of inspection of
the Collateral provided that you do not unreasonably interfere with our normal business operations;
(i) we hereby indemnify and save you harmless from all loss, costs, damage, liability and/or
expense, including reasonable attorneys’ fees, that you may sustain or incur to enforce payment,
performance or fulfillment of any of the Obligations and/or in the enforcement of this Agreement or
in the prosecution or defense of any action or proceeding either against you or us concerning any
matter growing out of or in connection with this Agreement, and/or any of the Obligations and/or
any of the Collateral, except to the extent caused by your own gross negligence or willful
misconduct; (j) with respect to all accounts arising out of contracts between us and the United
States of America, or any state, or any department, agency or instrumentality of any of them (each,
a “Government Contract”), we will, upon your request, comply with any governmental notice or
approval requirements, including, without limitation, compliance with the Federal Assignment of
Claims Act, and (k) each account shall conform to the following criteria: (i) shipment of the
merchandise or rendition of services has been completed, (ii) merchandise or services shall not
have been rejected or disputed by the account debtor and there shall not have been asserted any
offset, defense or counterclaim (other than any such rejections, disputes, offsets, defenses or
counterclaims which are asserted in the ordinary course of business), and (iii) each such account
shall be a good and valid account representing an undisputed bona fide indebtedness (other than in
connection with any such dispute arising in the ordinary course of business) incurred by the
account debtor liable therefor, for a fixed sum
 as set forth in the invoice relating thereto with
respect to an unconditional sale and delivery upon the stated terms of goods sold by us, or work,
labor and/or services rendered by us, as applicable. You acknowledge that concurrent with each such
sale, and your receipt in immediately available funds of all proceeds of such required to be paid
to you pursuant to the Note, you shall promptly

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take all action reasonably requested by us to release your security interest in those assets
sold pursuant to a Permitted Non-Core Asset Sale.

     4. Following the occurrence and during the continuance of an Event of Default, you shall have
the right to instruct all of our account debtors to remit payments on all accounts in accordance
with your express written instructions. If, despite such instructions, we shall receive any
payments with respect to accounts, we shall receive such payments in trust for your benefit, shall
segregate such payments from our other funds and shall deliver or cause to be delivered to you, in
the same form as so received with all necessary endorsements, all such payments as soon as
practicable, but in no event later than five (5) business days after our receipt thereof.
Following the occurrence and during the continuation of an Event of Default, you shall have full
power and authority to collect each account, through legal action or otherwise, and may settle,
compromise, or assign (in whole or in part) the claim for any account, or otherwise exercise any
other right now existing or hereafter arising with respect to any account if such action is
commercially reasonable and will expedite collection.

     5. We shall be in default under this Agreement upon the happening of any of the following
events or conditions, each such event or condition being an “Event of Default” (a) the occurrence
of any Event of Default under and as defined in the Note and/or Guaranty which is not cured within
any applicable notice, cure, grace or similar period; (b) any warranty, representation or statement
made or furnished to you by any of us or on our behalf was false in any material respect when made
or furnished; (c) any of us shall breach in any material respect any provision of this Agreement,
as the same may be amended, modified and supplemented from time to time, and such breach shall not
have been cured during any applicable notice, cure, grace or similar period; (d) except to the
extent otherwise expressly permitted hereunder, the loss, theft, damage, destruction, sale or
encumbrance to or of any of the Collateral or the making of any levy, seizure or attachment thereof
or thereon except to the extent (i) said levy, seizure or attachment does not secure indebtedness
in excess of $100,000 and such levy, seizure or attachment has not been removed or otherwise
released within 10 business days of the creation or the assertion thereof or (ii) (I) with respect
to any loss, theft, destruction or damage to or of any of the Collateral (collectively, a “Loss”)
in an aggregate amount equal to $1,000,000 or more on a combined basis for all Collateral, you
shall have received within ninety (90) days of the occurrence of such Loss insurance proceeds in an
amount not less than ninety percent (90%) of the fair market value of the Collateral subject to
such Loss and (II) with respect to any Loss in an aggregate amount less than $1,000,000 on a
combined basis for all Collateral, you shall have repaired, replaced or otherwise restored the
Collateral subject to such Loss within ninety (90) days of the occurrence of such Loss; (e) other
than in connection with a Permitted Transaction, any of us shall become insolvent, cease
operations, dissolve, terminate our business existence, make an assignment for the benefit of
creditors, or suffer the appointment of a receiver, trustee, liquidator or custodian of all or any
part of our property; (f) any proceedings under any bankruptcy or insolvency law shall be commenced
by or against any of us and if commenced against us shall not be dismissed within 45 days; (g) any
of us shall repudiate or purport to revoke any of our obligations under the Note or any guaranty
agreement made by any of us in favor of you after expiration of applicable cure, notice, grace or
similar period; or (h) if any Core Company shall at any time transfer in any manner whatsoever,
including by way of merger,

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consolidation or otherwise, any of its assets to a Non-Core Company. For purposes of
subsection (e) above, the term “Permitted Transaction” shall mean a Permitted Non-Core Asset Sale
or any winding-up, dissolution, merger or liquidation of any subsidiary of the Company following
the sale of all or substantially all of its assets as a result of a Permitted Non-Core Asset Sale.
For purposes of subsection (h) above, the following terms shall have the following meanings: (1)
“Core Company” shall mean any one or more of the following companies: Numerex Corp. (a Pennsylvania
corporation), Numerex Solutions, LLC (a Delaware limited liability company), Cellemetry LLC (a
Delaware limited liability company), Numerex Investment Corp. (a Delaware corporation),
Mobileguardian LLC (a Delaware limited liability company) and Uplink Security, Inc. (a Georgia
corporation); and (2) “Non-Core Company” shall mean any one or more of the following companies:
Digilog Inc. (a Pennsylvania corporation), DCX Systems Inc. (a Pennsylvania corporation), DCX
Systems Australia PTY Limited (an Australian company), Broadband Networks Inc. (a Delaware
corporation) and BNI Solutions LLC (a Delaware limited liability company). You hereby acknowledge
that you will not unreasonably withhold your consent to any non-bankruptcy internal corporate
reorganization or restructuring of the Company and/or any of its subsidiaries.

     6. Upon the occurrence of any Event of Default and for so long as such Event of Default is
continuing, you may declare all Obligations immediately due and payable and you shall have the
remedies of a secured party provided in the Uniform Commercial Code as in effect in the State of
New York, this Agreement and other applicable law. Upon the occurrence of any Event of Default and
for so long as such Event of Default is continuing, you will have the right to take possession of
the Collateral and to maintain such possession on our premises or to remove the Collateral or any
part thereof to such other premises as you may desire. Upon your request (following the occurrence
of an Event of Default for so long as such Event of Default is continuing), we shall assemble the
Collateral and make it available to you at a place designated by you. If any notification of
intended disposition of any Collateral is required by law, such notification, if mailed, shall be
deemed properly and reasonably given if mailed at least ten (10) days before such disposition,
postage prepaid, addressed to us either at our address shown herein or at any other address for
such notice as we may provide you from time to time in writing pursuant to Section 11 hereof. Any
proceeds of any disposition of any of the Collateral shall be applied by you in the following order
to the extent of any such proceeds: first, to the payment of all reasonable expenses in connection
with the sale of the Collateral, including reasonable attorneys’ fees and other legal expenses and
disbursements and the reasonable expense of retaking, holding, preparing for sale, selling, and the
like, second, toward the payment of the Obligations in such order of application as you may elect
subject to the terms of the Note, and third, to us or as otherwise required by the Uniform
Commercial Code or as a court of competent jurisdiction may direct.

     7. If we default in the performance or fulfillment of any of the terms, conditions, promises,
covenants, provisions or warranties on our part to be performed or fulfilled under or pursuant to
this Agreement, you may, at your option without waiving your right to enforce this Agreement
according to its terms, at any time after five (5) days’ written notice to Numerex Corp., as our
agent (provided that no such notice shall be required in the event prompt action is necessary to
preserve or protect the Collateral), perform or fulfill the same or cause the

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performance or fulfillment of the same for our account and at our sole cost and expense, and
the reasonable out-of-pocket cost and expense thereof (including reasonable attorneys’ fees) shall
be added to the Obligations and shall be payable on demand with interest thereon at the highest
interest rate under the Note.

     8. We appoint you, any of your officers, employees or any other person or entity whom you may
designate as our attorney, with power to execute such documents in our behalf and to supply any
omitted information and correct patent errors in any documents executed by us or on our behalf; to
file financing statements against us covering the Collateral; to sign our name on public records
only if and to the extent necessary to evidence, perfect and/or preserve the security interest
created pursuant to this Agreement; and to take all such other reasonable actions that are
necessary to carry out this Agreement. We hereby ratify and approve all acts of the attorney and
neither you nor the attorney will be liable for any acts of commission or omission, nor for any
error of judgment or mistake of fact or law other than gross negligence or willful misconduct.
This power being coupled with an interest, is irrevocable so long as any Obligations remains
unpaid.

     9. No delay or failure on your part in exercising any right, privilege or option hereunder
shall operate as a waiver of such or of any other right, privilege, remedy or option, and no waiver
whatever shall be valid unless in writing, signed by you and then only to the extent therein set
forth, and no waiver by you of any default shall operate as a waiver of any other default or of the
same default on a future occasion. You shall have the right to enforce any one or more of the
remedies available to you, successively, alternately or concurrently. We agree to join with you in
executing financing statements or other instruments to the extent required by the Uniform
Commercial Code in form satisfactory to you and in executing such other documents or instruments as
may be reasonably required or deemed necessary by you for purposes of effecting or continuing your
security interest in the Collateral.

     10. This Agreement cannot be changed or terminated orally, and shall be governed by and
construed in accordance with the laws of the State of New York, without regard to principles of
conflicts of laws. Any action brought by either party against the other concerning the
transactions contemplated by this Agreement shall be brought only in any state or federal court
sitting in the Borough of Manhattan, City of New York; provided that nothing contained in this
Agreement shall be deemed to preclude you from bringing suit or taking other legal action in any
other court of competent jurisdiction and nothing shall be deemed to preclude us from asserting any
defenses or counterclaims in any such actions. You, we and the individuals executing this Agreement
agree to submit to the jurisdiction of such courts and waive trial by jury. You, we and the
individuals executing this Agreement further consent that any summons, subpoena or other process or
papers (including, without limitation, any notice or motion or other application to either of the
aforementioned courts or a judge thereof) or any notice in connection with any proceedings
hereunder, may be served by registered or certified mail, return receipt requested, or by personal
service provided a reasonable time for appearance is permitted, or in such other manner as may be
permissible under the rules of said courts. You, we and the individuals executing this Agreement
waive any objection to jurisdiction and venue of any action instituted hereon in the Supreme Court
for the State of New York, County of New York or the United

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States District Court for the Southern District of New York and shall not assert any defense
based on lack of jurisdiction or venue or based upon forum non conveniens
in any action brought in either such court.

     11. All notices from you to us shall be sufficiently given if mailed or delivered to us at our
address set forth below unless you shall have received from us in writing another address for
notices. Copies of all notices to us shall also be sent to: Legal Counsel, Numerex Corp., 1600
Parkwood Circle SE, Suite 200, Atlanta, Georgia 30339, facsimile: (770) 693-5951, and Richard
Baltz, Esq., Arnold & Porter LLP, 555 12th Street, N.W., Washington, D.C. 20004,
facsimile: (202) 942-5999.

[SIGNATURE LINES ON FOLLOWING PAGE]

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[SIGNATURE PAGE NO. 1 TO SECURITY AGREEMENT]

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	NUMEREX CORP.
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES
	

	 	

	

	 	Its:	 	President and CEO
	

	 	

	

	 	Address:
	 	1600 Parkwood Circle SE, Suite 200
	

	 	 	 	Atlanta, GA 30339
	 
	 	 	 	 
	 	 	State of Formation: Pennsylvania
	 	 	Org. ID#: PA2569500
	 
	 	 	 	 
	 	 	NUMEREX SOLUTIONS LLC
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES
	

	 	

	

	 	Its:	 	CEO and Treasurer
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	1600 Parkwood Circle SE, Suite 200
	

	 	 	 	Atlanta, GA 30339
	 
	 	 	 	 
	 	 	State of Formation: Delaware
	 	 	Org. ID#: DE3361359
	 
	 	 	 	 
	 	 	CELLEMETRY LLC
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES
	

	 	

	

	 	Its:	 	President
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	1600 Parkwood Circle SE, Suite 200
	

	 	 	 	Atlanta, GA 30339
	 
	 	 	 	 
	 	 	State of Formation: Delaware
	 	 	Org. ID#: DE2896495

[SIGNATURE LINES CONTINUED ON FOLLOWING PAGE]

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[SIGNATURE PAGE NO. 2 TO SECURITY AGREEMENT]

	 	 	 	 	 
	 	 	NUMEREX INVESTMENT CORP.
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	CEO and Treasurer 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	1600 Parkwood Circle SE, Suite 200
	

	 	 	 	Atlanta, GA 30339
	 
	 	 	 	 
	 	 	State of Formation: Delaware
	 	 	Org. ID#: DE2429448
	 
	 	 	 	 
	 	 	BROADBAND NETWORKS INC.
	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	Chairman and Treasurer 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	2820 E. College Ave. Suite B
	

	 	 	 	State College, PA 16801-7548
	 
	 	 	 	 
	 	 	State of Formation: Delaware
	 	 	Org. ID#: DE2280048
	 
	 	 	 	 
	 	 	BNI SOLUTIONS LLC
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	Treasurer 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	2820 E. College Ave. Suite B
	

	 	 	 	State College, PA 16801-7548
	 
	 	 	 	 
	 	 	State of Formation: Delaware
	 	 	Org. ID#: DE3410681

[SIGNATURE LINES CONTINUED ON FOLLOWING PAGE]

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[SIGNATURE PAGE NO. 3 TO SECURITY AGREEMENT]

	 	 	 	 	 
	 	 	DIGILOG INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	CEO and Treasurer 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	2360 Maryland Road
	

	 	 	 	Willow Grove, PA 19090
	 
	 	 	 	 
	 	 	State of Formation: Pennsylvania
	 	 	Org. ID#: PA2587972
	 
	 	 	 	 
	 	 	DCX SYSTEMS INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	Chairman and Treasurer 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	2360 Maryland Road
	

	 	 	 	Willow Grove, PA 19090
	 
	 	 	 	 
	 	 	State of Formation: Pennsylvania
	 	 	Org. ID#: PA2608798
	 
	 	 	 	 
	 	 	DCX SYSTEMS AUSTRALIA PTY LIMITED
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	President 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	Lindfield Executive Centre
	

	 	 	 	12 Tryon Rd.
	

	 	 	 	P.O. Box 42
	

	 	 	 	Lindfield, NSW 2072, Australia
	 
	 	 	 	 
	 	 	State of Formation: Australia
	 	 	Org. ID#: 078013573

[SIGNATURE LINES CONTINUED ON FOLLOWING PAGE]

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[SIGNATURE PAGE NO. 4 TO SECURITY AGREEMENT]

	 	 	 	 	 
	 	 	MOBILEGUARDIAN LLC
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	CEO and Treasurer 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	1600 Parkwood Circle SE, Suite 200
	

	 	 	 	Atlanta, GA 30339
	 
	 	 	 	 
	 	 	State of Formation: Delaware
	 	 	Org. ID#: DE3597074
	 
	 	 	 	 
	 	 	UPLINK SECURITY, INC.
	 
	 	 	 	 
	

	 	By:	 	/s/ STRATTON J. NICOLAIDES 
	

	 	

	

	 	Its:	 	CEO and Treasurer 
	

	 	

	 
	 	 	 	 
	

	 	Address:
	 	1600 Parkwood Circle SE, Suite 200
	

	 	 	 	Atlanta, GA 30339
	 
	 	 	 	 
	 	 	State of Formation: Georgia
	 	 	Org. ID#: GAK823623
	 
	 	 	 	 
	 	 	Dated as of: January 28, 2005

ACKNOWLEDGED:

	 	 	 
	LAURUS MASTER FUND, LTD.
	 
	 	 
	By:
	 	/s/ DAVID GRIN 
	

	 	

	Its:
	 	 
	

	 	

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