EXHIBIT 4.7
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made
and entered into as of January 13, 2004, by and between Numerex Corp., a
Pennsylvania corporation (the "COMPANY"), and Laurus Master Fund, Ltd. (the
"PURCHASER").
This Agreement is made pursuant to the Securities Purchase
Agreement, dated as of the date hereof, by and between the Company and the
Purchaser (the "SECURITIES PURCHASE AGREEMENT"), and pursuant to the Note and
the Warrant referred to therein. The Company and the Purchaser hereby agree as
follows:
1. DEFINITIONS. Capitalized terms used and not otherwise defined herein
that are defined in the Securities Purchase Agreement shall have the meanings
given such terms in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of the Company's class A common
stock, no par value per share.
"Effectiveness Date" means August 13, 2004.
"Effectiveness Period" shall have the meaning set forth in
Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
"Filing Date" means, with respect to the Registration
Statement required to be filed hereunder, a date no later than one hundred and
twenty (120) days following the date upon which the principal amount of the Term
Loan to the Company in original principal amount of $4,500,000 has been funded
to the Company.
"Holder" or "Holders" means the Purchaser or any of its
affiliates or transferees to the extent any of them hold Registrable Securities.
"Indemnified Party" shall have the meaning set forth in
Section 5(c).
"Indemnifying Party" shall have the meaning set forth in
Section 5(c).
"Note" has the meaning set forth in the Securities Purchase
Agreement.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any
information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock
issued upon the conversion of the Note and issuable upon exercise of the Warrant
(including, without limitation, any additional shares of Common Stock received
by the holder under the Note or Warrant as a result of any interest payments or
any other payment or fee made thereunder by the Company in shares of Common
Stock).
"Registration Statement" means each registration statement
required to be filed hereunder, including the Prospectus, amendments and
supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended,
and any successor statute.
"Trading Day" means each day the Trading Market on which the
Common Stock is traded is open and available to trade securities.
"Trading Market" means any of the NASD OTC Bulletin Board,
NASDAQ SmallCap Market, the Nasdaq National Market, the American Stock Exchange
or the New York Stock Exchange.
"Warrant" means the Common Stock purchase warrant issued
pursuant to the Security Agreement.
2. REGISTRATION.
(a) On or prior to the Filing Date, the Company shall prepare
and file with the Commission a Registration Statement covering the Registrable
Securities for an offering to be
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made on a continuous basis pursuant to Rule 415. The Registration Statement
shall be on Form S-3 (except if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance herewith). The Company shall
cause the Registration Statement to become effective and remain effective as
provided herein. The Company shall use its reasonable commercial efforts to
cause the Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event no later
than the Effectiveness Date. The Company shall use its reasonable commercial
efforts to keep the Registration Statement continuously effective under the
Securities Act until the date which is the earlier date of when (i) all
Registrable Securities have been sold or (ii) all Registrable Securities may be
sold immediately without registration under the Securities Act and without
volume restrictions pursuant to Rule 144(k), as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company's transfer agent and the affected Holders (the
"EFFECTIVENESS PERIOD").
(b) In addition to the terms of Section 4 of the Warrant, if:
(i) after the Registration Statement is filed with and declared effective by the
Commission, the Registration Statement ceases to be effective (by suspension or
otherwise) as to all Registrable Securities to which it is required to relate at
any time prior to the expiration of the Effectiveness Period (without being
succeeded immediately by an additional registration statement filed and declared
effective) other than during an "ALLOWABLE SUSPENSION PERIOD" (as defined below)
for a period of time which shall exceed thirty (30) Trading Days in the
aggregate per year (defined as a period of 365 days commencing on the date the
Registration Statement is declared effective) or more than twenty (20)
consecutive calendar days; (ii) the Common Stock is not listed or quoted, or is
suspended from trading on any Trading Market for a period of three (3)
consecutive Trading Days (provided the Company shall not have been able to cure
such trading suspension within thirty (30) days of the notice thereof or within
such period list the Common Stock on another Trading Market); or (iii) an
Allowable Suspension Period shall have been exceeded; (any such failure or
breach being referred to as an "EVENT," and for purposes of clause (i) or (iii)
the date which such thirty (30) Trading Day or twenty (20) consecutive calendar
day period (as the case may be) is exceeded, or for purposes of clause (ii) the
date on which such three (3) Trading Day period is exceeded, being referred to
as "EVENT DATE")), then until the applicable Event is cured, the Company shall
pay to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to 1.0% for each thirty (30) day period (prorated for partial
periods) on a daily basis of the original principal amount of the Note. While
such Event continues, such liquidated damages shall be paid not less often than
each thirty (30) days. Any unpaid liquidated damages as of the date when an
Event has been cured by the Company shall be paid (prorated for partial periods)
within three (3) days following the date on which such Event has been cured by
the Company.
(c) Notwithstanding anything in this Agreement to the
contrary, the Company shall, by written notice to Purchaser, advise Purchaser
that sales under the Registration Statement after the Effectiveness Date might
be unlawful due to the fact that the Company is engaged in a material merger,
acquisition or sale, or other pending material financing, corporate
reorganization or other transaction or that an event shall have occurred as a
result of which it is reasonably expected that the Company's financial
statements will be restated or the Registration Statement contains or will
contain a misstatement of a material fact or omit to make a statement
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required to make the statements therein not misleading. Upon receipt of such
notice, Purchaser shall immediately discontinue any sales of Registrable
Securities pursuant to such Registration Statement until Purchaser has received
copies of a supplemented or amended Prospectus or until Purchaser is advised in
writing by the Company that the then-current Prospectus may be used and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Any period of not more
than twenty (20) consecutive calendar days or more than thirty (30) Trading Days
in any twelve month period commencing on the date the Registration Statement is
declared effective during which Purchaser shall not sell or where use of the
Registration Statement might be unlawful shall be referred to as an "ALLOWABLE
SUSPENSION PERIOD", provided that at least two (2) Trading Days shall elapse
between Allowable Suspension Periods.
3. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions hereof to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission the Registration
Statement with respect to such Registrable Securities, respond as promptly as
possible to any comments received from the Commission, and use its commercially
reasonable efforts to cause the Registration Statement to become and remain
effective for the Effectiveness Period with respect thereto, and promptly
provide to the Purchaser copies of all filings and Commission letters of comment
relating thereto;
(b) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by the
Registration Statement and to keep such Registration Statement effective until
the expiration of the Effectiveness Period;
(c) furnish to the Purchaser such number of copies of the
Registration Statement and the Prospectus included therein (including each
preliminary Prospectus) as the Purchaser reasonably may request to facilitate
the public sale or disposition of the Registrable Securities covered by the
Registration Statement;
(d) use its commercially reasonable efforts to register or
qualify the Purchaser's Registrable Securities covered by the Registration
Statement under the securities or "blue sky" laws of such jurisdictions within
the United States as the Purchaser may reasonably request, provided, however,
that the Company shall not for any such purpose be required to qualify generally
to transact business as a foreign corporation in any jurisdiction where it is
not so qualified or to consent to general service of process in any such
jurisdiction;
(e) list the Registrable Securities covered by the
Registration Statement with any national securities exchange or the National or
SmallCap Market of The Nasdaq Stock Market, Inc. or the NASD OTC Bulletin Board
or the National Quotation Bureau's Pink Sheets on which the Common Stock of the
Company is then listed;
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(f) immediately notify the Purchaser at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the happening of any event of which the Company has knowledge as a
result of which the Prospectus contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; and
(g) make available for inspection by the Purchaser and any
attorney, accountant or other agent retained by the Purchaser, all publicly
available, non-confidential financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
directors and employees to supply all publicly available, non-confidential
information reasonably requested by the attorney, accountant or agent of the
Purchaser.
4. REGISTRATION EXPENSES. All expenses relating to the Company's
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders, are called "REGISTRATION EXPENSES". All selling
commissions applicable to the sale of Registrable Securities, including any fees
and disbursements of any special counsel to the Holders beyond those included in
Registration Expenses, are called "SELLING EXPENSES." The Company shall only be
responsible for all Registration Expenses.
5. INDEMNIFICATION.
(a) In the event of a registration of any Registrable
Securities under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the Purchaser, and its officers, directors and each
other person, if any, who controls the Purchaser within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which the Purchaser, or such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this Agreement, any preliminary
Prospectus or final Prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Purchaser, and
each such person for any reasonable legal or other expenses incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability (i) arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by or on behalf of the Purchaser or any such person in
writing specifically for use in any such document or (ii) is pursuant to such
Purchaser's use of an outdated or defective prospectus after the Company has
provided written notice to Purchaser that the prospectus is outdated or
defective.
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(b) In the event of a registration of the Registrable
Securities under the Securities Act pursuant to this Agreement, the Purchaser
will indemnify and hold harmless the Company, and its officers, directors and
each other person, if any, who controls the Company within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact which was
furnished in writing by the Purchaser to the Company expressly for use in (and
such information is contained in) the Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to this
Agreement, any preliminary Prospectus or final Prospectus contained therein, or
any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, provided, however, that the
Purchaser will be liable in any such case if and only to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished in writing to the Company by or on behalf
of the Purchaser specifically for use in any such document. Notwithstanding the
provisions of this paragraph, the Purchaser shall not be required to indemnify
any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.
(c) Promptly after receipt by a party entitled to claim
indemnification hereunder (an "INDEMNIFIED PARTY") of notice of the commencement
of any action, such Indemnified Party shall, if a claim for indemnification in
respect thereof is to be made against a party hereto obligated to indemnify such
Indemnified Party (an "INDEMNIFYING PARTY"), notify the Indemnifying Party in
writing thereof, but the omission so to notify the Indemnifying Party shall not
relieve it from any liability which it may have to such Indemnified Party other
than under this Section 5(c) and shall only relieve it from any liability which
it may have to such Indemnified Party under this Section 5(c) if and to the
extent the Indemnifying Party is prejudiced by such omission. In case any such
action shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof, and, after notice from the Indemnifying Party to
such Indemnified Party of its election so to assume and undertake the defense
thereof, the Indemnifying Party shall not be liable to such Indemnified Party
under this Section 5(c) for any legal expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof; if the Indemnified
Party retains its own counsel, then the Indemnified Party shall pay all fees,
costs and expenses of such counsel, provided, however, that, if the defendants
in any such action include both the Indemnified Party and the Indemnifying Party
and the Indemnified Party shall have concluded upon the written opinion of its
counsel that there may be reasonable defenses available to it which are
different from or additional to those available to the Indemnifying Party or
that the interests of the Indemnified Party could reasonably be expected to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with
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the reasonable expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the Indemnifying Party as
incurred.
(d) In order to provide for just and equitable contribution in
the event of joint liability under the Securities Act in any case in which
either (i) the Purchaser, or any officer, director or controlling person of the
Purchaser, makes a claim for indemnification pursuant to this Section 5 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of the
Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion so that the
Purchaser is responsible only for the portion represented by the percentage that
the public offering price of its securities covered by the Registration
Statement bears to the public offering price of all securities covered by such
Registration Statement, provided, however, that, in any such case, (A) the
Purchaser will not be required to contribute any amount in excess of the public
offering price of all such securities offered by it pursuant to such
Registration Statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
6. REPRESENTATIONS AND WARRANTIES.
(a) The Common Stock of the Company is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act and, except with respect to certain
matters which the Company has disclosed to the Purchaser on Schedule 4.21 to the
Securities Purchase Agreement, the Company has filed all proxy statements,
reports, schedules, forms, statements and other documents required to be filed
by it under the Exchange Act. The Company has filed (i) its Annual Report on
Form 10-K for the fiscal year ended December 31, 2002 and (ii) its Quarterly
Report on Form 10-Q for the fiscal quarters ended March 31, 2003, June 30, 2003
and September 30, 2003 (collectively, the "SEC REPORTS"). Except as set forth on
Schedule 4.21 to the Securities Purchase Agreement, each SEC Report was, at the
time of its filing, in substantial compliance with the requirements of its
respective form and none of the SEC Reports, nor the financial statements (and
the notes thereto) included in the SEC Reports, as of their respective filing
dates, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed) and fairly present in all material
respects the financial
7
condition, the results of operations and the cash flows of the Company and its
subsidiaries, on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.
(b) The Common Stock is listed for trading on the Nasdaq
National Market System and satisfies the requirements for the continuation of
such listing in all material respects. The Company has not received any notice
from the NASD or Nasdaq that its Common Stock will be delisted from the Nasdaq
National Market System or that its Common Stock does not meet all requirements
for the continuation of such listing.
(c) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf, has directly or indirectly made any offers
or sales of any security or solicited any offers to buy any security under
circumstances that would cause the offering of the Registrable Securities
pursuant to the Securities Purchase Agreement to be integrated with prior
offerings by the Company for purposes of the Securities Act which would prevent
the Company from selling the Common Stock pursuant to Rule 506 under the
Securities Act, or any applicable exchange-related stockholder approval
provisions, nor will the Company or any of its affiliates or subsidiaries take
any action or steps that would cause the offering of the Registrable Securities
to be integrated with other offerings.
(d) The Warrant, the Note and the shares of Common Stock which
the Purchaser may acquire pursuant to the Warrant and the Note are all
restricted securities under the Securities Act as of the date of this Agreement.
The Company will not issue any stop transfer order or other order impeding the
sale and delivery of any of the Registrable Securities at such time as such
Registrable Securities are registered for public sale or an exemption from
registration is available, except as required by federal or state securities
laws.
(e) The Company understands the nature of the Registrable
Securities issuable upon the conversion of the Note and the exercise of the
Warrant and recognizes that the issuance of such Registrable Securities may have
a potential dilutive effect. The Company specifically acknowledges that its
obligation to issue the Registrable Securities is binding upon the Company and
enforceable regardless of the dilution such issuance may have on the ownership
interests of other shareholders of the Company.
(f) Except for agreements made in the ordinary course of
business, there is no agreement that has not been filed with the Commission as
an exhibit to a registration statement or to a form required to be filed by the
Company under the Exchange Act, the breach of which could reasonably be expected
to have a material and adverse effect on the Company and its subsidiaries, or
would prohibit or otherwise interfere with the ability of the Company to enter
into and perform any of its obligations under this Agreement in any material
respect.
(g) The Company will at all times have authorized and reserved
a sufficient number of shares of Common Stock for the full conversion of the
Note and exercise of the Warrant.
7. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a
Holder, of any of their respective obligations under this Agreement, each Holder
or the Company, as the case may
8
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(b) NO PIGGYBACK ON REGISTRATIONS. Except as and to the extent
specified in Schedule 7(e) hereto, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the
extent specified in Schedule 7(e) hereto, the Company has not previously entered
into any agreement granting any registration rights with respect to any of its
securities to any Person that have not been fully satisfied.
(c) COMPLIANCE. Each Holder covenants and agrees that it will
comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
the Registration Statement.
(d) DISCONTINUED DISPOSITION. Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of a Discontinuation Event (as hereinafter
defined), such Holder will forthwith discontinue disposition of such Registrable
Securities under the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement or until it is advised in writing (the "ADVICE") by the Company that
the use of the applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are incorporated
or deemed to be incorporated by reference in such Prospectus or Registration
Statement. The Company may provide appropriate stop orders to enforce the
provisions of this paragraph. For purposes of this Section 7(d), a
"DISCONTINUATION EVENT" shall mean (i) when the Commission notifies the Company
whether there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete copies thereof and all written responses thereto to
each of the Holders); (ii) any request by the Commission or any other Federal or
state governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and/or (v) the occurrence of any event or passage of time that makes
the financial statements included in such Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
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(e) PIGGY-BACK REGISTRATIONS. If at any time during the
Effectiveness Period there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare and
file with the Commission a registration statement relating to an offering for
its own account or the account of others under the Securities Act of any of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated under
the Securities Act) or their then equivalents relating to equity securities to
be issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen (15) days after receipt of such notice, any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered to the extent the Company may do so without
violating registration rights of others which exist as of the date of this
Agreement, subject to customary underwriter cutbacks applicable to all holders
of registration rights and subject to obtaining any required the consent of any
selling stockholder(s) to such inclusion under such registration statement.
(f) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of the then outstanding Registrable Securities. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of certain Holders
and that does not directly or indirectly affect the rights of other Holders may
be given by Holders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(g) NOTICES. Any notice or request hereunder may be given to
the Company or the Purchaser at the respective addresses set forth below or as
may hereafter be specified in a notice designated as a change of address under
this Section 7(g). Any notice or request hereunder shall be given by registered
or certified mail, return receipt requested, hand delivery, overnight mail or
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those by mail or overnight mail, deemed to
have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, and, in the case of a telecopy, when
confirmed. The address for such notices and communications shall be as follows:
If to the Company: Numerex Corp.
1600 Parkwood Circle, Suite 200
Atlanta, Georgia 30339-2119
Attention: Chief Financial Officer and
Legal Counsel
Facsimile: (770) 693-5951
With a copy to: Arnold & Porter
555 12th Street, N.W.
Washington, D.C. 20004
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Attention: Richard Baltz, Esq.
Facsimile: (202) 942-5999
If to a Purchaser: To the address set forth under
such Purchaser name on the
signature pages hereto.
If to any other Person who is then the registered Holder:
To the address of such Holder as it
appears in the stock transfer books
of the Company
or such other address as may be designated in writing hereafter in accordance
with this Section 7(g) by such Person.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Notes and the Security
Agreement with the prior written consent of the Company, which consent shall not
be unreasonably withheld.
(i) EXECUTION AND COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and, all of which taken together shall constitute one and the
same Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) GOVERNING LAW. This Agreement 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 Proceeding 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 Holder from bringing a Proceeding 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 Proceedings. Both parties and the individuals executing this Agreement
on behalf of such parties agree to submit to the jurisdiction of such courts and
waive trial by jury. Both parties and the individuals executing this Agreement
on behalf of such parties 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
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service provided a reasonable time for appearance is permitted, or in such other
manner as may be permissible under the rules of said courts. Both parties and
the individuals executing this Agreement on behalf of such parties 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 Proceeding filed in either such court. 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
Proceeding brought by one party hereto against the other party hereto, then each
of the parties shall bear its own costs in connection with such Proceeding,
unless otherwise directed by a court of competent jurisdiction.
(k) CUMULATIVE REMEDIES. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.
(l) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(m) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
NUMEREX CORP.
By: /s/ Stratton J. Nicolaides
-----------------------------------
Name: Stratton J. Nicolaides
---------------------------------
Title: CEO
--------------------------------
LAURUS MASTER FUND, LTD.
By: /s/ David Grin
-----------------------------------
Name: David Grin
---------------------------------
Title:
--------------------------------
Address for Notices:
825 Third Avenue, 14th Floor
New York, New York 10022
Attention: David Grin
Facsimile: 212-541-4434
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