Document:

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                                                                     EXHIBIT 4.2

THIS NOTE AND THE SHARES OF CLASS A COMMON STOCK ISSUABLE UPON CONVERSION OF
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE CLASS A COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
NOTE 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.

                              CONVERTIBLE TERM NOTE

         FOR VALUE RECEIVED, NUMEREX CORP., a Pennsylvania corporation (the
"BORROWER"), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o Ironshore
Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate House, South Church
Street, Grand Cayman, Cayman Islands, Fax: 345-949-9877 (the "HOLDER") or its
registered assigns or successors in interest, on order, the sum of FOUR MILLION
FIVE HUNDRED THOUSAND DOLLARS ($4,500,000), or such lesser principal amount as
may be from time to time owing to the Holder hereunder, together with any
accrued and unpaid interest hereon, on January 13, 2007 (the "MATURITY DATE") if
not sooner paid.

         Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in that certain Securities Purchase Agreement
dated as of the date hereof between the Borrower and the Holder (the "PURCHASE
AGREEMENT").

         The following terms shall apply to this Note:

                                   ARTICLE I
                             INTEREST & AMORTIZATION

         1.1.     Interest Rate and Payment. Subject to Article IV and Section
5.1 hereof, interest payable on this Note shall accrue at a rate per annum equal
to eight percent (8%) (the "CONTRACT RATE"). Interest shall be payable monthly
in arrears commencing on February 1, 2004, on the first day of each consecutive
calendar month thereafter (each, a "REPAYMENT DATE"), and on the Maturity Date,
whether by acceleration or otherwise.

         1.2.     Monthly Principal Payments. Amortizing payments of the
aggregate principal amount outstanding under this Note at any time (the
"PRINCIPAL AMOUNT") shall begin on July 1, 2004 and shall recur on the first
calendar day of each succeeding month thereafter (each, an "AMORTIZATION DATE")
until the Maturity Date. The Borrower shall make monthly payments to the Holder
as follows: beginning on the first Amortization Date and ending on the
Amortization Date of January 1, 2005, the Borrower shall pay to the Holder
$78,000 per month on each Repayment Date; beginning on the Amortization Date of
February 1, 2005 and ending on the Amortization Date of July 1, 2005, the
Borrower shall pay to the Holder $120,000 per month on each Repayment Date; and
beginning on the Amortization Date of August 1, 2005 and ending on the Maturity
Date, the Borrower shall pay to the Holder one eighteenth (1/18th) of the
remaining principal balance due under this Note in equal monthly installments on
each Repayment Date;

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each of the aforementioned monthly payments shall be made together with any
accrued and unpaid interest to date on such portion of the Principal Amount plus
any and all other amounts which are then owing under this Note but have not been
paid (collectively, the "MONTHLY AMOUNT").

                                   ARTICLE II
                            BORROWER PAYMENT OPTIONS

         2.1.     (a) Payment of Monthly Amount in Cash or Common Stock. Subject
to the terms hereof, the Borrower shall have the sole option to determine
whether to satisfy payment of the Monthly Amount on each Repayment Date either
in cash or in shares of its Class A common stock, no par value per share (the
"COMMON STOCK"), or a combination of both. Each month, ten (10) days prior to a
Repayment Date, the Borrower shall deliver to the Holder a written irrevocable
notice in the form of Exhibit B attached hereto electing to pay the Monthly
Amount payable on the next Repayment Date in either cash or Common Stock, or a
combination of both (each, a "REPAYMENT ELECTION NOTICE") (the date by which
such notice is required to be given being hereinafter referred to as the "NOTICE
DATE"). If a Repayment Election Notice is not delivered to the Holder by the
applicable Notice Date for such Repayment Date, then the Monthly Amount due on
such Repayment Date shall be paid in cash. Any portion of the Monthly Amount
paid in cash on a Repayment Date, shall be paid to the Holder an amount equal to
102% of the cash portion of the Monthly Amount then payable in satisfaction of
such obligation. If the Borrower repays all or a portion of the Monthly Amount
in shares of Common Stock, the number of such shares to be issued for such
Repayment Date shall be the number determined by dividing (x) the portion of the
Monthly Amount to be paid in shares of Common Stock, by (y) the Fixed Conversion
Price. For purposes hereof, the "FIXED CONVERSION PRICE" means $4.56; provided,
however, that 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.

         (b) Monthly Amount Common Stock Payment Guidelines. Subject to Sections
2.1 and 2.2 hereof, if the Borrower has elected to pay all or a portion of the
Monthly Amount due on such Repayment Date in shares of Common Stock and the
closing price of the Common Stock as reported by Bloomberg, L.P. on the
Principal Market (as defined in Section 4.7 hereof) for the seven (7) trading
days preceding a Repayment Date was less than 110% of the Fixed Conversion
Price, then the Borrower shall pay the Monthly Amount in cash instead. Any part
of the Monthly Amount due on such Repayment Date that the Borrower did not elect
to pay in shares of Common Stock shall be paid by the Borrower in cash on such
Repayment Date. Any part of the Monthly Amount due on such Repayment Date which
the Borrower elected to pay in shares of Common Stock but which must be paid in
cash (because the closing price of the Common Stock for the seven (7) trading
days preceding the applicable Repayment Date was less than 110% of the Fixed
Conversion Price) shall be paid within three (3) business days of the applicable
Repayment Date.

         2.2.     No Effective Registration. Notwithstanding anything to the
contrary herein, the Borrower shall not repay any part of its obligations to the
Holder hereunder in shares of

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Common Stock if (i) there fails to exist an effective current Registration
Statement (as defined in the Registration Rights Agreement) covering resale of
the shares of Common Stock to be issued in connection with such payment, or (ii)
an Event of Default hereunder exists and is continuing, unless such Event of
Default is cured within any applicable cure period or is otherwise waived in
writing by the Holder in whole or in part at the Holder's option.

         2.3.     Optional Prepayments in Common Stock. Subject to Section 2.2
hereof, if the average closing price of the Common Stock on the Principal Market
is greater than 110% of the Fixed Conversion Price for a period of at least five
(5) consecutive trading days, then the Borrower may, at its sole option, provide
the Holder written notice (a "PREPAYMENT CALL NOTICE") requiring the conversion
at the then applicable Fixed Conversion Price of all or a portion of the
outstanding principal, interest and fees outstanding under this Note (subject to
compliance with this Section 2.3 and Section 3.2, together with accrued interest
on the amount being prepaid, as of the date set forth in such Prepayment Call
Notice (the "PREPAYMENT CALL DATE"). The Prepayment Call Date shall be at least
ten (10) trading days following the date of the Prepayment Call Notice. On the
Prepayment Call Date, the Borrower shall deliver to the Holder certificates
evidencing the shares of Common Stock issued in satisfaction of the principal
and interest being prepaid. Notwithstanding the foregoing, the Borrower's right
to issue shares of Common Stock in satisfaction of its obligations under this
Note shall be subject to the limitation that the market price of the Common
Stock issued in connection with any Prepayment Call Notice shall exceed the
Fixed Conversion Price as of the Prepayment Call Date and for the seven (7)
trading days immediately preceding the Prepayment Call Date. If the price of the
Common Stock falls below 110% of the Fixed Conversion Price as of, or during the
seven (7) trading day period immediately preceding, the Prepayment Call Date,
then the Prepayment Call Notice shall be null and void and no conversion shall
be required hereunder.

         The Borrower shall not be permitted to give the Holder more than one
Prepayment Call Notice under this Note during any 22-day period.

         Any principal amount of this Note which is prepaid pursuant to this
Section 2.3 shall be deemed to constitute payments of outstanding principal
applying to Monthly Amounts for the remaining Repayment Dates in chronological
order.

         2.4.     Optional Redemption in Cash. (a) Subject to Section 2.4(b),
the Borrower will not have the option of redeeming or prepaying in cash any
Principal Amount during the twelve (12) months immediately following the date
hereof. Thereafter, the Borrower will have the option of redeeming or prepaying
any Principal Amount ("OPTIONAL REDEMPTION") by paying to the Holder a sum of
money equal to: (i) 110% of the Principal Amount if such redemption or
prepayment occurs after twelve (12) months from the date hereof and prior to the
end of the eighteenth (18th) month from the date hereof; (ii) 105% of the
Principal Amount if such redemption or prepayment occurs during the period
commencing on the first day following the eighteenth (18th) month anniversary of
the date hereof and prior to the end of the twenty-fourth (24th) month from the
date hereof; and (iii) 103% of the Principal Amount if such redemption or
prepayment occurs at any time thereafter but before the Maturity Date. Each such
redemption or prepayment made pursuant to this Section 2.4 shall include all
accrued but unpaid interest on that portion of the Principal Amount so prepaid
or redeemed and any and all other sums due, accrued or payable to the Holder
arising under this Note or the Purchase Agreement or any Related

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Document (as defined in the Purchase Agreement) (the "REDEMPTION AMOUNT")
outstanding on the day written notice of redemption (the "NOTICE OF REDEMPTION")
is given to the Holder, which Notice of Redemption shall specify the date for
such Optional Redemption (the "REDEMPTION PAYMENT DATE"). A Notice of Redemption
shall not be effective with respect to any portion of this Note for which the
Holder has a pending election to convert pursuant to Section 3.1 and the
Redemption Amount shall be determined as if such election to convert had been
completed immediately prior to the date of the Notice of Redemption. The
Redemption Payment Date shall be not earlier than the day after the date of the
Notice of Redemption and not later than seven (7) days after the date of the
Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must
be paid in good funds to the Holder. In the event the Borrower fails to pay the
Redemption Amount by the Redemption Payment Date, then such Redemption Notice
will be null and void.

         (b)      Notwithstanding anything contained herein to the contrary, if
during the period commencing on the date hereof and ending on January 13, 2005
the Borrower consummates any Permitted Non-Core Asset Sale (as hereinafter
defined), then the Borrower shall prepay the Principal Amount then due under
this Note in an amount equal to (i) fifty percent (50%) of the net proceeds of
each such Non-Core Asset Sale (i.e., gross proceeds less the reasonable costs of
such sales, which shall include, without limitation, reasonable fees, costs and
expenses of legal, financial, investment banking, accounting or other
professional advisors, broker commissions, closing costs, taxes, diligence fees
and other costs of readying the Permitted Non-Core Assets for sale) plus (ii)
the Premium, if any, with such prepayments to be made concurrently with the
consummation of each Permitted Non-Core Asset Sale. For purposes hereof, (1) the
term "PERMITTED NON-CORE ASSET SALE" shall mean a sale of any of the assets set
forth on Annex A hereto so long as (a) the Holder shall have been provided not
less than ten (10) business days prior written notice of each such sale, and (b)
no Event of Default shall have occurred and be continuing at the time of each
such sale; and (2) the term "PREMIUM" shall mean (a) zero percent (0%) in the
event the aggregate net cash proceeds arising from all Permitted Non-Core Asset
Sales equals an amount less than $1,500,000 and (b) ten percent (10%) of the
Principal Amount in excess of $1,500,000 required to be paid by the terms of
this Section 2.4(b) in the event the aggregate net cash proceeds arising from
all Permitted Non-Core Asset Sales equals or exceeds $1,500,000.

         (c)      If the Borrower consummates any Permitted Non-Core Asset Sale
after January 13, 2005, then the Borrower shall prepay an amount equal to (i)
fifty percent (50%) of the net proceeds of each such Non-Core Asset Sale (i.e.,
gross proceeds less the reasonable costs of such sales, which shall include,
without limitation, reasonable fees, costs and expenses of legal, financial,
investment banking, accounting or other professional advisors, broker
commissions, closing costs, taxes, diligence fees and other costs of readying
the Permitted Non-Core Assets for sale) plus (ii) the Adjusted Premium, with
such prepayments to be made concurrently with the consummation of each Permitted
Non-Core Asset Sale. For purposes hereof, the term "ADJUSTED PREMIUM" shall
mean: (a) 110% of the Principal Amount if such prepayment occurs after twelve
(12) months from the date hereof and prior to the end of the eighteenth (18th)
month from the date hereof; (b) 105% of the Principal Amount if such prepayment
occurs during the period commencing on the first day following the eighteenth
(18th) month anniversary of the date hereof and prior to the end of the
twenty-fourth (24th) month from the date hereof; and (c) 103%

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of the Principal Amount if such prepayment occurs at any time thereafter but
before the Maturity Date.

         2.5.     Mandatory Redemption Upon Failure to Cause an Effective
Registration Statement to be Filed. If on or prior to January 13, 2005, the
Borrower shall fail to file and cause to exist a current effective Registration
Statement (as defined in the Registration Rights Agreement) covering resale of
the shares of Common Stock underlying this Note and the Common Stock Purchase
Warrant, dated as of the date hereof, granted by the Borrower to the Holder,
then Holder shall have the right, upon six (6) month's prior written notice to
the Borrower, to demand repayment in full of all amounts outstanding under this
Note, including, but not limited to, any penalties set forth in this Article IV
and all accrued and unpaid interest and fees thereon.

                                  ARTICLE III
                                CONVERSION RIGHTS

         3.1.     Holder's Conversion Rights. (a) The Holder shall have the
right, but not the obligation, to convert all or any portion of the then
aggregate outstanding principal amount of this Note, together with interest and
fees due hereon, into shares of Common Stock subject to the terms and conditions
set forth in this Article III.

         (b)      Notwithstanding anything contained herein to the contrary,
during the six (6) month period following an effective current Registration
Statement (as defined in the Registration Rights Agreement), so long as no Event
of Default shall have occurred and be continuing, the Holder shall limit the
number of shares of Common Stock to which it voluntarily converts a portion of
this Note, on a monthly basis, to not greater than ten percent (10%) of the
total number of shares of the Borrower's Common Stock that traded during the
month immediately preceding such voluntary conversion by the Holder. In
addition, so long as no Event of Default shall have occurred and be continuing,
during the period commencing on the date hereof and ending on January 13, 2006,
the Holder shall not sell the Borrower's Common Stock at a price per share less
than the lower of (a) $3.80 per share or (b) the volume weighted average closing
price (the "VWAP") of the Borrower's Common Stock for the three (3) trading days
immediately preceding the date hereof (the "FLOOR PRICE"), unless, in each case,
the VWAP of the Borrower's Common Stock remains below the Floor Price for any
ninety (90) day period.

         3.2.     Conversion Limitation. Notwithstanding anything contained
herein to the contrary, pursuant to the terms of this Note, the Holder shall not
be entitled to convert on a Conversion Date (as defined in Section 3.3(b)) that
number of shares of Common Stock which would be in excess of the sum (i) the
number of shares of Common Stock actually owned by the Holder and its affiliates
on a Conversion Date and (ii) the number of shares of Common Stock issuable upon
the conversion of this Note and exercise of the warrants held by such Holder and
its affiliates with respect to which the determination of this proviso is being
made on a Conversion 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 Borrower on such date. For the purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The

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Holder may void the limitation described in this Section 3.2 upon 75 days prior
notice to the Borrower or without any notice requirement upon an Event of
Default.

         3.3.     Procedures for Conversion. (a) In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give written
notice of such election by delivering to the Borrower an executed and completed
notice of conversion (the "NOTICE OF CONVERSION"), such Notice of Conversion
shall provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and fees being converted. On each Conversion Date (as hereinafter
defined) and in accordance with the Notice of Conversion, the Holder shall make
the appropriate reduction to the Principal Amount, accrued interest and fees as
entered in its records and shall provide written notice thereof to the Borrower
within two (2) business days after the Conversion Date. Each date on which a
Notice of Conversion is delivered or telecopied to the Borrower in accordance
with the provisions hereof shall be deemed a Conversion Date (the "CONVERSION
DATE"). A form of Notice of Conversion to be employed by the Holder is annexed
hereto as Exhibit A.

         (b)      Pursuant to the terms of the Notice of Conversion the Borrower
will issue instructions to the transfer agent (together with such other
documents as the transfer agent may request), within one (1) business day of the
date of the delivery to Borrower of the Notice of Conversion. If the
Registration Statement (as defined in the Registration Rights Agreement) is
effective or the Conversion Shares are eligible for sale pursuant to Rule 144,
Borrower shall cause the transfer agent to transmit the certificates
representing the Conversion Shares to the Holder by crediting the account of the
Holder's designated broker with the Depository Trust Corporation ("DTC") through
its Deposit Withdrawal Agent Commission ("DWAC") system within three (3)
business days after receipt by the Borrower of the Notice of Conversion (the
"DELIVERY DATE"). Upon delivery to Holder of such certificates through DWAC in
accordance with this Section 3.3(b), Holder covenants to Borrower to (i) sell,
transfer or dispose of all Conversion Shares pursuant to the Registration
Statement in accordance with the plan of distribution described therein or the
provisions of Rule 144, as applicable, and (ii) fulfill applicable prospectus
delivery requirements imposed by applicable federal securities laws. In the case
of the exercise of the conversion rights set forth herein the conversion
privilege shall be deemed to have been exercised and the Conversion Shares
issuable upon such conversion shall be deemed to have been issued upon the date
of receipt by the Borrower of the Notice of Conversion. The Holder shall be
treated for all purposes as the record holder of such Common Stock, unless the
Holder provides the Borrower written instructions to the contrary.

         3.4.     Conversion Mechanics. (a) The number of shares of Common Stock
to be issued upon each conversion of this Note shall be determined by dividing
that portion of the principal and interest and fees to be converted, if any, by
the Fixed Conversion Price. In the event of any conversions of outstanding
principal amount under this Note in part pursuant to this Article III, such
conversions shall be deemed to constitute conversions of outstanding principal
amount applying to Monthly Amounts for the remaining Repayment Dates in
chronological order.

         (b)      No fractional shares of Common Stock shall be issued upon any
conversion of this Note. In lieu of any fractional share to which Holder would
otherwise be entitled, the Borrower shall pay Holder cash equal to the product
of such fraction multiplied by the fair

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market value as of the date of Conversion of a share of Common Stock, as
determined in good faith by the Borrower's Board of Directors (or an authorized
subcommittee thereof).

                                   ARTICLE IV
                                EVENTS OF DEFAULT

         If an Event of Default (as defined below) occurs and is continuing, the
Borrower's rights under Sections 2.1, 2.3 and 2.4 shall immediately cease and be
of no further effect until such time as the Event of Default has been cured, or
has been waived by the Holder. Upon the occurrence and continuance of an Event
of Default beyond any applicable grace period, the Holder, at its sole and
absolute discretion, may make all sums of principal, interest and other fees
then remaining unpaid hereon and all other amounts payable hereunder due and
payable within five (5) days after written notice from Holder to Borrower (each
occurrence being a "DEFAULT NOTICE PERIOD"), provided, however, that such
Default Notice Period shall not apply to Sections 4.3, 4.6 and 4.9 below. In the
event of such an acceleration, the amount due and owing to the Holder shall be
115% of the Principal Amount (plus accrued and unpaid interest and fees, if
any). If, with respect to any Event of Default other than a payment default
described in Section 4.1 below, within the Default Notice Period the Borrower
cures the Event of Default, the Event of Default will be deemed to no longer
exist and any rights and remedies of Holder pertaining to such Event of Default
will be of no further force or effect.

         The occurrence of any of the following events is an "EVENT OF DEFAULT":

         4.1.     Failure to Pay Principal, Interest or other Fees. The Borrower
fails to pay when due any installment of principal, interest or other fees
hereon in accordance herewith, or the Borrower fails to pay when due any amount
due under any other promissory note issued by Borrower.

         4.2.     Breach of Covenant. The Borrower breaches any material
covenant or other term or condition of this Note or the Purchase Agreement in
any material respect and such breach, if subject to cure, continues for a period
of thirty (30) days after the occurrence thereof.

         4.3.     Breach of Representations and Warranties. Any material
representation or warranty of the Borrower made herein, in the Purchase
Agreement, or in any Related Document shall have been materially false or
misleading when made and shall not be cured for a period of ten (10) days after
written notice thereof is received by the Borrower from the Holder.

         4.4.     Receiver or Trustee. The Borrower shall make an assignment for
the benefit of creditors, or apply for or consent to the appointment of a
receiver or trustee for it or for a substantial part of its property or
business; or such a receiver or trustee shall otherwise be appointed.

         4.5.     Judgments. Any money judgment, writ or similar final process
shall be entered or filed against the Borrower or any of its property or other
assets for more than $300,000, and shall remain unvacated, unbonded or unstayed
for a period of ninety (90) days.

         4.6.     Bankruptcy. Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall

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be instituted by or against the Borrower and, in the case of an involuntary case
or proceeding, such case or proceeding is not dismissed within sixty (60) days
following the commencement thereof.

         4.7.     Stop Trade. An SEC stop trade order or Principal Market
trading suspension of the Common Stock shall be in effect for five (5)
consecutive days or five (5) days during a period of ten (10) consecutive days,
excluding in all cases a suspension of all trading on a Principal Market,
provided that the Borrower shall not have been able to cure such trading
suspension within 30 days of the notice thereof or list the Common Stock on
another Principal Market within 60 days of such notice. The "PRINCIPAL MARKET"
for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ SmallCap
Market, NASDAQ National Market System, American Stock Exchange, or New York
Stock Exchange, whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock, or any securities exchange or other
securities market on which the Common Stock is then being listed or traded.

         4.8.     Default Under Security Agreement. An Event of Default shall
have occurred under and as defined in the Security Agreement, which shall not
have been cured during any applicable cure or grace period.

                                   ARTICLE V
                           DEFAULT RELATED PROVISIONS

         5.1.     Payment Grace Period. The Borrower shall have a three (3)
business day grace period to pay any monetary amounts due under this Note or the
Purchase Agreement or any Related Document, after which grace period a default
interest rate of five percent (5%) per annum above the then applicable interest
rate hereunder shall apply to the monetary amounts due.

         5.2.     Conversion Privileges. The conversion privileges set forth in
Article III shall remain in full force and effect immediately from the date
hereof and until this Note is paid in full or until all of the then outstanding
Principal Amount and interest and other fees payable hereunder shall have been
converted into shares of Common Stock.

                                   ARTICLE VI
                                  MISCELLANEOUS

         6.1.     Failure or Indulgence Not Waiver. No failure or delay on the
part of the Holder hereof in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

         6.2.     Notices. Any notice herein required or permitted to be given
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party notified, (ii) when sent by confirmed telex or facsimile
if sent during normal business hours of the recipient, if not, then on the next
business day, (iii) five days after having been sent by registered or certified

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mail, return receipt requested, postage prepaid, or (iv) one (1) business day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Borrower at the address provided in the Purchase Agreement executed
in connection herewith, and to the Holder at the address provided in the
Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825
Third Avenue , 14th Floor, New York, New York 10022, facsimile number (212)
541-4434, or at such other address as the Borrower or the Holder may designate
by ten days advance written notice to the other parties hereto. A Notice of
Conversion shall be deemed given when made to the Borrower pursuant to the
Purchase Agreement.

         6.3.     Amendment Provision. The term "Note" and all reference
thereto, as used throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument issued pursuant to Section 3.5
hereof, as it may be amended or supplemented.

         6.4.     Assignability. This Note shall be binding upon the Borrower
and its successors and assigns, and shall inure to the benefit of the Holder and
its successors and assigns, and may be assigned by the Holder only pursuant to
the requirements of the Purchase Agreement and applicable federal and state
securities laws.

         6.5.     Governing Law. (a) This Note 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 Note 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 Note 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 Borrower from asserting any defenses or
counterclaims in any such actions. Both the Borrower and the individual
executing this Note on behalf of the Borrower agree to submit to the
jurisdiction of such courts and waive trial by jury. The Borrower and the
individual executing this Note 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 Borrower and the
individual executing this Note 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 in any action brought in either such
court.

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

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         (c)      In the event that any provision of this Note 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 unenforceability of any other provision of this Note.

         6.6.     Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

         6.7.     Security Interest. The holder of this Note has been granted a
security interest in certain assets of the Borrower and of the guarantors of the
Note, as more fully described in the Security Agreement.

         6.8.     Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note 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 Note to favor any party
against the other.

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

                                       10
<PAGE>

         IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note
to be signed in its name effective as of this 13th day of January, 2004.

                                             NUMEREX CORP.

                                             By: /s/ STRATTON J. NICOLAIDES
                                                --------------------------------
                                             Name: STRATTON J. NICOLAIDES
                                                  ------------------------------
                                             Title:         CEO
                                                   -----------------------------
WITNESS:

   PAMELA S. LESTER
--------------------------

                                       11
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

(To be executed by the Holder in order to convert all or part of the Note into
Common Stock

[Name and Address of Holder]

The Undersigned hereby elects to convert $_________ of the principal due on
[specify applicable Repayment Date] under the Convertible Term Note issued by
NUMEREX CORP. dated January __, 2004 by delivery of Shares of Common Stock of
NUMEREX CORP. on and subject to the conditions set forth in Article III of such
Note.

1.       Date of Conversion      _______________________

2.       Shares To Be Delivered: _______________________

         The Undersigned represents and warrants that all offers and sales by
the Undersigned of the securities issuable upon conversion of the within Note
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.

Date: ____________

                                          By:_______________________________
                                          Name:_____________________________
                                          Title:____________________________

                                       12
<PAGE>

                                    EXHIBIT B

                            REPAYMENT ELECTION NOTICE

(To be executed by the Borrower in order to pay all or part of a Monthly Amount
with Common Stock)

[Name and Address of Holder]

NUMEREX CORP. hereby elects to pay $_________ of the Monthly Amount due on
[specify applicable Repayment Date] under the Convertible Term Note issued by it
dated January __, 2004 by delivery of Shares of its Common Stock of on and
subject to the conditions set forth in Article II of such Note.

1. Fixed Conversion Price: $_______________________

2. Amount to be paid:      $_______________________

3. Shares To Be Delivered (2 divided by 1): __________________

Date: ____________                           NUMEREX CORP.

                                             By:_______________________________
                                             Name:_____________________________
                                             Title:____________________________

                                       13
<PAGE>

                                     ANNEX A

                                 NON-CORE ASSETS

Any assets owned by any one or more of the following entities as of the
effective date of the Convertible Term Note to which this Annex A has been
attached:

1. Digilog Inc. (a Pennsylvania corporation);

2. DCX Systems Inc. (a Pennsylvania corporation);

3. BNI Solutions LLC (a Delaware limited liability company);

4. DCX Systems Australia PTY Limited (an Australian company); and

5. Broadband Networks, Inc. (a Delaware corporation).

                                       14<PAGE>

                                                                     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 300,000 Shares of
                                  Common Stock of Numerex Corp. (subject to
                                  adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. 36                                              Issue Date: January 13, 2004

                  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 13, 2011 (the "EXPIRATION DATE"), up to 300,000 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:

<PAGE>

                           (i)      150,000 shares at $4.75 per share;

                           (ii)     100,000 shares at $5.17 per share; and

                           (iii)    50,000 shares at $5.99 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,

                                       2

<PAGE>

assuming for the purposes of this clause (d) that all of the shares of Common
Stock then issuable upon exercise of the Warrant are outstanding at the
Determination Date.

                  1.3      Trustee for Warrant Holders. In the event that a bank
or trust company shall have been appointed as trustee for the Holder of the
Warrant pursuant to Subsection 3.2, such bank or trust company shall have all
the powers and duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such 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

                                       3
<PAGE>

thereupon be entitled to receive the number of duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock (or Other Securities)
determined as provided herein.

                           (b)      Notwithstanding any provisions herein to the
contrary, if the Fair Market Value of one share of Common Stock is greater than
the Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
exercised) by surrender of this Warrant at the principal office of the Company
together 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.

                                       4
<PAGE>

                  3.2      Continuation of Terms. Upon any reorganization,
consolidation, merger or transfer referred to in this Section 3, this Warrant
shall continue in full force and effect and the terms hereof shall be applicable
to the shares of stock and other securities and property receivable on the
exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or 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 13, 2004,
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 13, 2004, then on August 13, 2004, 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 15,000 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

                                       5
<PAGE>

evidence reasonably satisfactory to the Company demonstrating compliance with
applicable securities laws, which shall include, without limitation, a legal
opinion from the Transferor's counsel that such transfer is exempt from the
registration requirements of applicable securities laws, the Company at its
expense but with payment by the Transferor of any applicable transfer taxes)
will issue and deliver to or on the order of the Transferor thereof a new
Warrant of like tenor, in the name of the Transferor and/or the transferee(s)
specified in such Transferor Endorsement Form (each a "TRANSFEREE"), calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by the
Transferor. In no event shall a Transferee be a Competitor (as such term is
defined in the Purchase Agreement) of the Company.

         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.

                                       6
<PAGE>

         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.

         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

                                       7
<PAGE>

BASED UPON FORUM NON CONVENIENS FOR ANY ACTION FILED IN EITHER SUCH COURT.

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

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

                  (d)      The headings in this Warrant are for purposes of
reference only, and shall not limit or otherwise affect any of the terms hereof.
(e) The Company acknowledges that legal counsel participated in the preparation
of this Warrant and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Warrant to favor any party against the other
party.

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

                                       8
<PAGE>

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

                                             NUMEREX CORP.

                                             By: /s/ STRATTON J. NICOLAIDES
                                                --------------------------------
                                             Name: STRATTON J. NICOLAIDES
                                                  ------------------------------
                                             Title:         CEO
                                                   -----------------------------

WITNESS:

_______________________________

                                       9
<PAGE>

                                                                       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)

<PAGE>

                                                                       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.

<TABLE>
<CAPTION>
Transferees       Percentage Transferred                 Number Transferred
-----------       ----------------------                 ------------------
<S>               <C>                                    <C>

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

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

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

-----------       ----------------------                 ------------------
</TABLE>

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

Signed in the presence of:

-------------------------------                 --------------------------------
           (Name)                                            (address)

ACCEPTED AND AGREED:
   [TRANSFEREE]                                 --------------------------------
                                                             (address)

------------------------------
         (Name)

<PAGE>

                                                                       EXHIBIT C

                              PLAN OF DISTRIBUTION

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

                              Plan of Distribution

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

         -        ordinary brokerage transactions and transactions in which the
                  broker-dealer solicits purchasers;

         -        block trades in which the broker-dealer will attempt to sell
                  the shares as agent but may position and resell a portion of
                  the block as principal to facilitate the transaction;

         -        purchases by a broker-dealer as principal and resale by the
                  broker-dealer for its account;

         -        an exchange distribution in accordance with the rules of the
                  applicable exchange;

         -        privately negotiated transactions;

         -        broker-dealers may agree with the selling stockholder to sell
                  a specified number of such shares at a stipulated price per
                  share;

         -        a combination of any such methods of sale; and

         -        any other method permitted pursuant to applicable law.

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

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

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

                                       12

<PAGE>

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.

                                       13

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