Exhibit 99.5
SECURITY AND PLEDGE AGREEMENT
This Security Agreement (this "Agreement"), dated as of March 28,
2003, is executed by Numerex Corp., a Pennsylvania corporation ("Numerex") and
Digilog, Inc., a Pennsylvania corporation ("Digilog" and together with Numerex,
the "Debtors") in favor of Alethea Limited Partnership, a Delaware limited
partnership (the "Secured Party").
WHEREAS, Digilog has entered into that certain Line of Credit Agreement
dated as of the date hereof with the Secured Party (the "Line of Credit
Agreement"), pursuant to which the Secured Party has agreed to make advances to
Digilog in accordance with the terms thereof; and
WHEREAS, Numerex has given the Secured Party that certain Guarantee
dated as of the date hereof, pursuant to which Numerex guarantees the prompt
payment and performance of all of Digilog's obligations under the Line of Credit
Agreement and the Term Promissory Note issued by Digilog in connection
therewith; and
WHEREAS, it is a condition to the obligations of the Secured Party
under the Line of Credit Agreement that Digilog and Numerex execute and deliver
this Security and Pledge Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Debtors hereby agree as
follows:
Section 1. Security Interest and Pledge.
A. Grant of Security Interest. Digilog hereby grants,
assigns, transfers, pledges and conveys to the Secured Party a first priority
continuing security interest in and to all of the assets of Digilog, in each
case whether now owned or hereafter acquired, together with all parts,
substitutions, replacements, profits, products and proceeds thereof, as follows:
(i) all right, title and interest in and to all of the
assets and properties of Digilog of every description whatsoever and
wherever located, tangible and intangible, including without limitation (a)
all inventory, equipment, machinery, moveable fixtures and goods held for
sale or being processed for sale of Digilog, maintained in the conduct of
business; (b) all accounts and funds on deposit of Digilog; (c) all
receivables of Digilog and all other rights for goods sold or leased or for
services rendered; (d) all chattel paper, instruments and documents of
Digilog; (e) all general intangibles of Digilog; (f) all personal property
of Digilog; and (g) all contract rights, leases and claims of Digilog,
including without limitation, all rights under any license, sales, supplier
or other agreements or contracts, and all cash and non-cash proceeds of all
of the foregoing, including without limitation, all insurance and
condemnation proceeds of every type or nature (collectively, the "Digilog
Assets").
B. Pledge of Stock. Numerex hereby grants, assigns,
transfers, pledges and conveys to the Secured Party a first priority continuing
security interest in and to all of the stock of Digilog, whether now owned or
hereafter acquired, together with all substitutions, replacements, profits and
proceeds thereof, as follows:
(i) all right, title and interest in and to all
shares of the capital stock of Digilog, now or hereafter owned by
Numerex and all proceeds (direct or indirect) of such shares, including
without limitation any and all payments, stock rights, stock splits,
subscription rights, dividends, distributions, profit allocations, new
certificates, new securities, additions, renewals, replacements,
amendments or other rights that are now or hereafter declared, issued,
paid or distributed or that are now or hereafter payable or
distributable with respect to such shares (the "Pledged Shares" and
together with the "Digilog Assets", the "Collateral").
Section 2. Secured Liabilities.
A. The security interest granted by Digilog hereunder
secures the payment and performance of all obligations of Digilog to the
Secured Party, whether now existing or hereafter arising however created,
evidenced or arising, whether individually or jointly with others, and
whether absolute or contingent, direct or indirect, as maker, endorser,
guarantor, surety or otherwise, liquidated or unliquidated, matured or
unmatured, whether or not secured by other collateral and including,
without limitation, all obligations of Digilog to perform or forbear from
performing any acts, and all costs of collection including attorneys' fees
and costs, whether such collection occurs prior to, during, or after any
bankruptcy proceedings are filed by or against Digilog, and further
specifically includes all of the obligations arising under the Line of
Credit Agreement, as such obligations are represented by the Note (all of
which are hereinafter collectively referred to as the "Liabilities").
B. The security interest granted by Numerex hereunder
secures (i) the payment and performance of all of the Liabilities, and (ii)
the payment and performance of all obligations of Numerex to the Secured
Party pursuant to the Guarantee, whether such obligations are now existing
or hereafter arising however created, evidenced or arising, whether
individually or jointly with others, and whether absolute or contingent,
direct or indirect, as maker, endorser, guarantor, surety or otherwise,
liquidated or unliquidated, matured or unmatured, whether or not secured by
other collateral and including, without limitation, all obligations of
Numerex to perform or forbear from performing any acts, and all costs of
collection including attorneys' fees and costs, whether such collection
occurs prior to, during, or after any bankruptcy proceedings are filed by
or against Numerex.
Section 3. Representations, Warranties and Covenants.
A. Representations, Warranties and Covenants of Digilog.
Digilog hereby represents, warrants and covenants as follows regarding itself
and the Digilog Assets:
(i) This Agreement has been duly authorized,
executed and delivered by Digilog and constitutes its valid and binding
obligation, enforceable against it in accordance with the terms hereof.
(ii) Digilog is, or to the extent that the
Digilog Assets will be acquired after the date hereof, will be, the
owner of all of the Digilog Assets, free from any adverse lien,
security interest or encumbrances, and Digilog, at its own expense,
will defend the Digilog Assets against all claims and demands of all
other persons at any time claiming any of the Digilog Assets or an
interest therein.
(iii) Digilog has not executed any other security
agreement or other agreement with respect to any of the Digilog Assets
and has not heretofore given or contracted to give, nor will it
hereafter give, authorize or permit to exist, any security interest of
any kind on any of the Digilog Assets to anyone except the Secured
Party.
(iv) There is no financing statement or other
notice of security interest now on file in any public office covering
any of the Digilog Assets, or which is intended to cover the Digilog
Assets, or in which Digilog is named or signs as a debtor, and so long
as any amount remains unpaid on any of the Liabilities, or any credit
from the Secured Party to Digilog under the Line of Credit Agreement is
in use by or available to it, Digilog will not execute or authorize the
filing of, and there will not be on file in any public office, any
financing statement or statements or other notice of security interest
except for the financing statement(s) to be filed in respect of and for
the security interest of the Secured Party granted or provided for
herein.
(v) Upon request of the Secured Party, Digilog
will stamp on its records concerning the Collateral, a notation of the
security interest of the Secured Party hereunder, which notation shall
be satisfactory to the Secured Party in both form and content.
(vi) Digilog will promptly notify the Secured
Party of any change in the location of the Digilog Assets.
(vii) Digilog will immediately give written notice
to the Secured Party of (a) any change in the principal place of
business, chief executive office or state of formation or incorporation
of Digilog, (b) any change in Digilog's name, or (c) any merger,
consolidation or other reorganization involving Digilog or the Digilog
Assets.
(viii) Any and all records concerning the Digilog
Assets will be kept at the Principal Address of Digilog as indicated in
Exhibit A hereto. The Secured Party or its designee may inspect or
audit such records, and make copies and abstracts thereof, at
any time, and upon request of the Secured Party, Digilog will deliver
to it all such records and furnish duly verified copies of summaries
thereof in form and content satisfactory to the Secured Party. Further,
upon request of the Secured Party, Digilog will furnish to the Secured
Party such information concerning itself and the Digilog Assets as the
Secured Party may from time to time request. Digilog will not remove
all or any part of such records from the locations indicated below, nor
will it keep any records concerning any Digilog Asset owned by it at
any other location, without the prior written consent of the Secured
Party.
(ix) Upon request of the Secured Party, Digilog
will promptly do all acts and things, and will execute and file all
instruments (including security agreement, financing statements,
amendments, statements of change, etc.) deemed necessary by the Secured
Party under applicable law to establish, maintain and continue the
Secured Party's perfected security interest in the Digilog Assets, and
will pay all costs and expenses of filing and recording or promptly
reimburse the Secured Party therefor if such costs and/or expenses are
incurred by the Secured Party, including the costs of any searches
deemed necessary by it to establish, determine or maintain the validity
and the priority of its security interest, and pay or otherwise satisfy
all other claims and charges which in the opinion of the Secured Party
might prejudice, imperil or otherwise affect any of the Digilog Assets
or the Secured Party's security interest therein.
(x) All records and other information with
respect to the Digilog Assets at any time heretofore or hereafter
furnished by Digilog to the Secured Party is and will be true and
correct as of the date furnished.
(xi) Digilog will pay promptly pay, or cause to
be promptly paid, when due, all taxes, assessments and other charges
levied or assessed upon any of the Digilog Assets.
(xii) After the occurrence and during the
continuance of an Event of Default and after notice from the Secured
Party, Digilog will forthwith, upon receipt, transmit and deliver to
the Secured Party, for its benefit, in the form received, all cash,
checks, drafts, items, chattel paper and other instruments to writing
for the payment of money (properly endorsed, where required, so that
such items may be collected by the Secured Party) which may be received
by Digilog at any time in full or partial payment or otherwise as
proceeds of any of the Digilog Assets. After such notice from the
Secured Party, Digilog will hold all such items it may receive in
express trust for the Secured Party until delivery is made to the
Secured Party.
(xiii) To the extent permitted by applicable law,
Digilog hereby waives the right to redeem any of the Digilog Assets and
to object to any proposal by the Secured Party to retain any of the
Digilog Assets in satisfaction of any of the Liabilities.
(xiv) To the extent permitted by applicable law,
Digilog hereby waives any right to obtain injunctive or other relief
relative to the Secured Party's sale or other disposition of the
Digilog Assets provided to it for any purpose by any person or entity.
Digilog further agrees to execute such documents and instruments and do
all other acts or things or cause such documents to be executed or
things to be done, as the Secured Party may reasonably request in order
to properly take and perfect the Secured Party's security interest or
lien in any additional property or assets resulting from such
disposition.
B. Representations, Warranties and Covenants of Numerex.
Numerex hereby represents, warrants and covenants as follows regarding itself
and the Pledged Shares:
(i) This Agreement has been duly authorized,
executed and delivered by Numerex and constitutes its valid and binding
obligation, enforceable against it in accordance with the terms hereof.
(ii) Numerex is, or to the extent that the
Pledged Shares will be acquired after the date hereof, will be, the
owner of the Pledged Shares, free from any adverse lien, security
interest or encumbrances, and Numerex, at its own expense, will defend
the Pledged Shares against all claims and demands of all other persons
at any time claiming the Pledged Shares or an interest therein.
(iii) Numerex has not executed any other security
agreement or other agreement with respect to the Pledged Shares and has
not heretofore given or contracted to give, nor will it hereafter give,
authorize or permit to exist, any security interest of any kind on the
Pledged Shares to anyone except the Secured Party.
(iv) Simultaneously with the execution and
delivery hereof, Numerex will deliver to the Secured Party all original
certificates evidencing the Pledged Shares, free and clear of all
liens, claims and encumbrances, duly endorsed for transfer or
accompanied by stock powers executed in blank or other instrument of
assignment and transfer, on the face of each of which shall appear a
restrictive legend indicating that such certificate is subject to the
terms and conditions hereof; and at all times after the date hereof,
immediately upon its receipt thereof, Numerex will deliver to the
Secured Party, all further certificates, documents and other
instruments evidencing any of the Pledged Shares (including Collateral
obtained in substitution, exchange or liquidation thereof).
(v) Numerex shall not vote any of the Pledged
Shares to approve the issuance of any additional shares of capital
stock of Digilog, or any options, warrants or rights therefor, or to
approve any other measure conflicting with the provisions of this
Agreement, the Guarantee, the Line of Credit Agreement or the Note.
(vi) Numerex shall not attempt to sell, transfer,
pledge, hypothecate, grant any security interest in or otherwise
dispose of the Pledged Shares to any other person or entity without the
prior written consent of the Secured Party, which consent will not be
unreasonably withheld or delayed.
(vii) Numerex shall furnish to the Secured Party a
copy of any notices or communications received by it from Digilog as
stockholder thereof.
(viii) In the event that, during the term hereof,
Digilog shall undertake a stock split, reverse stock split,
reorganization, recapitalization, merger, combination, share exchange
or any other transaction affecting the Pledged Shares, Numerex shall
cause the Secured Party to receive, upon surrender of the certificates
representing the original Pledged Shares, such securities, assets,
rights or other consideration as a holder of the Pledged Shares would
receive upon the consummation of such transaction pursuant to the terms
thereof, and the Secured Party shall hold same as Collateral hereunder.
(ix) Appropriate notation of the pledge of the
Pledged Shares has been recorded on the stock ledger of Digilog.
Numerex agrees that, unless and until an Event of Default shall occur
under the Line of Credit Agreement, Digilog is entitled to declare and
pay dividends or make distributions in respect of its shares, and
Numerex shall have the right to retain such dividends or distributions
and use the proceeds thereof as it shall deem appropriate, provided
that the Secured Party shall retain a security interest in such
dividends, distributions and proceeds.
(x) All records and other information with
respect to the Pledged Shares at any time heretofore or hereafter
furnished by Numerex to the Secured Party is and will be true and
correct as of the date furnished.
(xii) After the occurrence and during the
continuance of an Event of Default and after notice from the Secured
Party, Numerex will forthwith, upon receipt, transmit and deliver to
the Secured Party, for its benefit, in the form received, all cash,
checks, drafts, items, chattel paper and other instruments to writing
for the payment of money (properly endorsed, where required, so that
such items may be collected by the Secured Party) which may be received
by Numerex at any time in full or partial payment or otherwise as
proceeds of any of the Pledged Shares. After such notice from the
Secured Party, Numerex will hold all such items it may receive in
express trust for the Secured Party until delivery is made to the
Secured Party.
(xiii) To the extent permitted by applicable law,
Numerex hereby waives the right to redeem any of the Pledged Shares and
to object to any proposal by the Secured Party to retain any of the
Pledged Shares in satisfaction of any of the Liabilities.
(xiv) To the extent permitted by applicable law,
Numerex hereby waives any right to obtain injunctive or other relief
relative to the Secured Party's sale or other disposition of the
Pledged Shares. Numerex further agrees to execute such documents and
instruments and do all other acts or things or cause such documents to
be executed or things to be done, as the Secured Party may reasonably
request in order to properly take and perfect the Secured Party's
security interest or lien in any additional property or assets
resulting from such disposition.
Section 4. Covenants and Agreements Applicable to Insurance. If
requested by the Secured Party, Digilog will keep any of the Digilog Assets
insured against fire, damage, theft, business interruption and such other risks
as the Secured Party may require. Such insurance will be in such amounts, with
such companies, for such periods of time, and in such form as shall be
satisfactory to the Secured Party. Any and all such insurance policies are to be
made payable to the Secured Party in the event of loss, under a standard
non-contributory "mortgages", "Secured Party's", or "secured party" clause and
shall contain a breach of warranty provision acceptable to the Secured Party
which shall establish the Secured Party's right to be paid the insurance
proceeds irrespective of any action, inaction, breach of warranty or conditions,
or negligence of Digilog or any other person or entity with respect to such
policies. All such insurance policies shall contain such other provisions as the
Secured Party may require in order to protect its interests in the Digilog
Assets and to any payments to be made under such policies. All such policies
shall provide for a minimum of thirty (30) days' written notice to the Secured
Party prior to cancellation. Digilog hereby appoints the Secured Party as its
attorney-in-fact, to file claims under any such insurance policies, to receive,
receipt and give acquittance for any payments that may be payable to Digilog
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies, which power of attorney shall be deemed coupled with an interest and
irrevocable so long as the Secured Party shall have a security interest in any
of the Digilog Assets pursuant to this Agreement. If Digilog shall fail to
procure such insurance so requested or to pay any premium with respect thereto,
then the Secured Party may, at its discretion, procure such insurance or pay
such premium, and any costs so incurred by the Secured Party shall constitute a
part of the Liabilities secured hereby. The Secured Party may apply the proceeds
of any such insurance policy received by it to the payment of any Liabilities,
whether due or not due, in such order of application as the Secured Party shall
determine. Digilog shall promptly furnish the Secured Party with certificates or
other evidence satisfactory to it indicating compliance with the foregoing
insurance requirements.
Section 5. Power of Attorney. Digilog agrees that, in order to
protect the Secured Party's rights hereunder, Digilog hereby constitutes any
officer or employee of the Secured Party as its true and lawful attorney-in-fact
with full power of substitution:
A. to endorse or sign the name of Digilog upon any
invoice, freight or express bill or bill of lading relating to any Digilog
Assets covered hereby;
B. to endorse or sign the name of Digilog upon drafts
against account debtors assignments and verifications of accounts, and notices
to account debtors;
C. to endorse or sign the name of Digilog upon any and
every remittance or instrument of payment, including checks, drafts, and money
orders, and in whatever form received;
D. to notify the post office authorities to change the
address for delivery of Digilog's mail to an address designated by the Secured
Party;
E. to receive, open and dispose of all mail addressed to
Digilog; and
F. to do and perform all other acts and things
necessary, proper and requisite to carry out the intent of this Agreement. The
power herein granted shall be deemed to be
coupled with an interest and may not be revoked by Digilog until all of the
Liabilities have been paid in full, including all expenses payable.
Section 6. Use of Collateral. Until an Event of Default shall
have occurred, the Debtors may, unless otherwise provided in this Agreement, at
their own expense, sell, lease, furnish under contract of service, use, consume,
administer, manage and otherwise deal with any of the respective Collateral
owned by it in the ordinary course of business consistent with such Debtor's
business practices.
Section 7. Performance of the Debtors' Obligations. The Secured
Party may from time to time, at its sole discretion, perform any agreement of
either Debtor hereunder which such Debtor shall fail to perform and take any
other action that the Secured Party deems necessary for the maintenance or
preservation of any of the Collateral or its interest therein (including,
without limitation, the discharge of taxes or liens of any kind against the
Collateral), and each of the Debtors agrees to promptly reimburse the Secured
Party, on demand, for all expenses incurred in connection with the foregoing,
together with interest thereon at the rate 18% per annum, or at the highest rate
permitted by law, whichever is less, from the date incurred until the date of
reimbursement.
Section 8. Events of Default. An "Event of Default" shall occur
hereunder upon any breach of any provision of the Line of Credit Agreement, the
Note, the Guarantee, this Agreement or any breach of any other obligation of
either of the Debtors to the Secured Party.
Section 9. Remedies Upon Default. If an Event of Default shall
occur, then the Secured Party shall have the following rights and powers, any or
all of which it may undertake or exercise without any notice to the Debtors:
A. to enter the premises upon which any of the Digilog
Assets are located through any Secured Party's employees, agents or
representatives and, without legal process, take exclusive possession
thereof and the records relating thereto;
B. to require Digilog to assemble the Digilog Assets and
the records relating thereto, upon the Secured Party's demand, at
Digilog's expense, and make it available to the Secured Party at a
place designated by it which is reasonably convenient for it and
Digilog;
C. to sell the Collateral at public or private sale and
at any private sale as permitted by law. Such sale shall result in the
sale, conveyance and disposition of all right, title, and interest of
the applicable Debtor in all or any part of the Collateral which is the
subject of such a disposition. The Secured Party is authorized as
attorney-in-fact for each of the Debtors to sign and execute and bill
of sale, transfer, conveyance, stock powers or other instrument in
writing that may be necessary or desirable to effectuate any such
disposition of the respective Collateral owned by it;
D. to collect and retain, by legal proceedings or
otherwise all dividends, distributions, interest, principal payments and other
sums now or hereafter payable upon or on
account of the Pledged Shares, whether payable in cash or in kind;
E. to exercise all voting powers pertaining to any and
all of the Pledged Shares (and give proxies and written consents in lieu of
voting thereon) as the Secured Party, in its sole discretion, shall determine;
F. to enter into any renewal, modification, extension,
substitution, reorganization, deposit, merger or consolidation agreement or any
agreement in any way relating to or affecting the Collateral, and in connection
therewith may deposit or surrender control of the Collateral thereunder, accept
other property in exchange for such Collateral and do and perform such acts and
things as it may deem proper, and any money or property received in exchange for
such Collateral or otherwise may be either applied to indebtedness due under the
Note or held by the Secured Party as Collateral pursuant to the provisions
hereof in a non-interest bearing or cash collateral account;
G. to make any compromise, settlement or release the
Secured Party deems desirable or proper with reference to the Collateral;
H. to insure, process and preserve the Collateral;
I. to cause the Collateral to be transferred to its name
or to the name of its nominee;
J. to exercise as to such Collateral all of the rights,
powers and remedies of an owner;
K. to perform any obligation of either of the Debtors
hereunder;
L. to seek satisfaction from Numerex of any of the
outstanding Liabilities pursuant to the terms of the Guarantee; and
M. to exercise all other rights of a secured party under
the UCC (as defined below) and all other rights under law and at equity, all of
which shall be cumulative.
Section 10. Notice of Intended Disposition. If any notification
of intended disposition of any Collateral is required by law, reasonable
notification shall be deemed given if written notice is deposited in the U.S.
Mail, first class or certified postage prepaid, addressed to the applicable
Debtor and such other persons or entities as the Secured Party deems to be
appropriate, stating the time and place of any public sale or the time after
which any private sale or disposition is to be made, at least five (5) days
prior thereto.
Section 11. Proceeds of Disposition.
A. The proceeds of any disposition of the Collateral
shall be applied in the following order:
(i) first, to pay all costs and expenses
associated with the retaking, holding, preparation and disposition of the
Collateral on behalf of the Secured Party;
(ii) then, to pay attorneys' fees and any other
applicable costs or expenses owed by either of the Debtors to the Secured Party
under this Agreement, the Guarantee, the Line of Credit Agreement or under the
Note;
(iii) next, to pay all accrued but unpaid interest
accrued upon the Liabilities in such order as the Secured Party may determine at
its discretion; and
(iv) finally, to all unpaid principal outstanding
under the Liabilities, whether or not due and payable, in such order as the
Secured Party may determine at its sole discretion. Any remaining surplus shall
be paid to the applicable Debtor or otherwise in accordance with law. If the
proceeds of such disposition are insufficient to pay the Liabilities in full,
Digilog, Numerex and all other persons or entities liable thereon shall remain
fully obligated to the Secured Party for the unpaid balance thereof.
Section 12. Security Interest Absolute. This Agreement and the
lien, security interest and security title conveyed hereunder shall remain in
full force and effect without regard to, and shall not be released, suspended,
terminated, modified or otherwise affected by any circumstance or occurrence
whatsoever, including without limitation any of the following (whether or not
the Debtors consent thereto or have notice thereof):
A. any change in or waiver of the time, place or manner
of payment, or any other term, of the Line of Credit Agreement, the Note or the
Guarantee or any waiver of or any renewal, extension, increase, amendment or
modification of or addition or supplement to or deletion from, or any other
action or inaction under or in respect of, the Line of Credit Agreement, the
Note or the Guarantee or any other document, instrument or agreement referred to
therein or any assignment or transfer of the any rights or obligations under
Line of Credit Agreement, the Note or the Guarantee;
B. any bankruptcy, insolvency, liquidation or other like
proceeding or occurrence relating to the Secured Party or either Debtor;
C. any failure of the Secured Party to exercise any
right or remedy against any person or entity other than Debtors;
D. any other act or failure to act by the Secured Party
which may adversely affect either Debtor; or
E. any other circumstance which might otherwise
constitute a defense against, or a legal or equitable discharge of, the Debtors'
liability under this Agreement, the Line of Credit Agreement, the Note or the
Guarantee, or the Secured Party's lien, security interest or security title
hereunder.
Section 13. Miscellaneous.
A. The Secured Party shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in
its possession if it takes such action
for that purpose as either of the Debtors reasonably requests in writing,
but failure of the Secured Party to comply with any such request shall not
of itself be deemed a failure to exercise reasonable care, and no failure
of the Secured Party to preserve or protect any rights with respect to such
Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Debtors, shall be
deemed a failure to exercise reasonable care in the custody or preservation
of such Collateral.
B. No delay or failure on the part of the Secured Party
in exercising any right, power or privilege under this Agreement or other
instruments or agreements executed in connection with or pursuant to this
Agreement, or any of the Liabilities shall impair any such right, power or
privilege or be construed as a waiver of any default or any acquiescence
therein. No single or partial exercise of any such right, power or privilege
shall preclude the further exercise of such right, power or privilege, or the
exercise of any other right, power or privilege. No waiver shall be valid
against the Secured Party unless made in writing and signed by it, and then only
to the extent expressly specified therein. All remedies provided herein or
pursuant to this Agreement or any of the Liabilities and all remedies otherwise
afforded to the Secured Party by law or at equity shall be cumulative and shall
be available to the Secured Party, from time to time, until all the Liabilities
has been fully satisfied.
C. Each of the Debtors waives all notices of acceptance,
presentment, protest, acceleration and of dishonor or non-payment. Each of the
Debtors further waives any right that it may have, by statute or otherwise, to
require that the Secured Party seek recourse first against any other person or
entity prior to enforcing the Secured Party's lien, security interest and
security title under this Agreement. Each of the Debtors further consents and
agrees that, without notice to or consent by the Debtor and without affecting or
impairing this Agreement and the lien, security interest and security title
granted hereunder, the Secured Party may compromise or settle, or may waive,
amend or supplement in any manner the provisions of the Line of Credit
Agreement, the Note, the Guarantee or any other document, instrument or
agreement relating thereto (other than this Agreement). Each of the Debtors
expressly waives any and all rights of subrogation, reimbursement, indemnity or
contribution and any other claim which it may now or hereafter have against any
other person or entity arising from the existence, performance or enforcement of
this Agreement or by or against the Debtors or with respect to any of the
Collateral.
D. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one agreement.
E. This Agreement shall in all respects be construed in
accordance with and governed by the laws of the state of Florida, without regard
to the conflicts of laws principal thereof.
F. The captions of the sections of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof or used in construing the intent of the parties.
G. All words and terms used in this Agreement (and in
any financing statements or other documents filed of record evidence the
security interest granted hereby) other than those specifically defined herein
shall be deemed to have the meanings accorded to them in the Uniform Commercial
Code as then in effect in the State of Florida, as the same may be amended from
time to time (the "UCC").
H. If any part of any provision of this Agreement shall
be invalid or unenforceable under applicable law, said part shall be ineffective
to the extent of such invalidity only, without in any way effecting the
remaining parts of said provision or the remaining provisions.
I. This Agreement shall not be modified or amended
except in writing signed by the party to be bound.
J. All representations made by the Debtors in connection
herewith shall survive the execution and delivery of this Agreement, the Line of
Credit Agreement, the Note and the Guarantee and any and all other agreements,
documents and writings relating to or arising out of any of the foregoing or any
of the Liabilities.
K. This Agreement shall bind and inure to the benefit of
the parties, their successors, legal representatives, heirs and, where
permitted, assigns.
L. All notices or communications to be delivered
hereunder shall be given to the Debtors at the addresses set forth under the
caption "Principal Address" in Exhibit A hereto, and shall be given to the
Secured Party at its address set forth under the caption "Address of Secured
Party" in Exhibit A hereto.
M. Unless otherwise specifically provided herein to the
contrary, all written notices and communications shall be delivered by
facsimile, email, hand, overnight courier service, or mailed by first class
mail, postage prepaid, addressed to the parties hereto at the addresses referred
to above in subsection (K) or to such other addresses as any party may designate
to the other party by a written notice given in accordance with the provisions
hereof. Any written notice delivered by facsimile or email shall be deemed given
upon receipt of confirmation of transmission. Any notice delivered by hand or by
overnight courier service shall be deemed given or received upon receipt. Any
written notice delivered by U.S. Mail shall be deemed given or received on the
fifth (5th) Business Day after being deposited in the U.S. Mail.
N. Capitalized terms used but not defined herein
(including, without limitation, the descriptions of the Collateral in Section 1
hereof) shall have the meanings given to them in the UCC or the Line of Credit
Agreement, as the case may be.
O. CONSENT TO JURISDICTION. EACH OF THE DEBTORS
EXPRESSLY AND IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR PROCEEDING AGAINST
IT UNDER, ARISING OUT OF, OR IN ANY MANNER RELATING TO THIS NOTE SHALL BE
BROUGHT IN THE STATE OR DISTRICT COURTS OF THE STATE OF FLORIDA, AND THAT
SERVICE OF PROCESS MAY BE
MADE UPON IT IN ANY SUCH SUIT OR ACTION BY SERVICE OF PROCESS AS PROVIDED BY
FLORIDA LAW. EACH OF THE DEBTORS, BY ITS EXECUTION AND DELIVERY OF THIS
AGREEMENT, EXPRESSLY AND IRREVOCABLY CONSENTS AND SUBMITS TO THE PERSONAL
JURISDICTION OF ANY OF SUCH COURTS IN ANY SUCH ACTION OR PROCEEDING AND HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION, CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY
ALLEGED LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR
ANY SIMILAR BASIS. THE DEBTORS AND THE SECURED PARTY AGREE THAT FINAL JUDGMENT
IN ANY SUCH CIVIL SUIT OR ACTION SHALL BE CONCLUSIVE AND BINDING UPON IT AND
SHALL BE ENFORCEABLE AGAINST IT BY SUIT UPON SUCH JUDGMENT IN ANY COURT OF
COMPETENT JURISDICTION.
P. JURY WAIVER. EACH OF THE DEBTORS AND THE SECURED
PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT ANY OF THE PARTIES MAY
HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR
TORT, AT LAW OR IN EQUITY, BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE LINE OF CREDIT AGREEMENT, THE NOTE, THE
GUARANTEE, THE COLLATERAL, THE LIABILITIES SECURED HEREBY AND ANY OTHER DOCUMENT
OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE SECURED
PARTY ENTERING INTO THIS AGREEMENT. FURTHER, EACH OF THE DEBTORS HEREBY
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE SECURED PARTY, NOR ANY OF THE
SECURED PARTY'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE
SECURED PARTY WOULD NOT, IN THE EVEN OF SUCH LITIGATION, SEEK TO ENFORCE THIS
WAIVER OF RIGHT TO JURY TRIAL PROVISIONS. NO REPRESENTATIVE OR AGENT OF THE
SECURED PARTY NOR THE SECURED PARTY'S COUNSEL, HAS THE AUTHORITY TO WAIVE,
CONDITION, OR MODIFY THIS PROVISION.
[signatures on next page]
IN WITNESS WHEREOF, this Agreement has been signed and delivered by the
Debtors on this ___ day of March, 2003.
DEBTORS:
NUMEREX CORP.
By: /s/ Michael Marrett
_____________________________________
Name: Michael Marrett
Title: Executive Vice President
DIGILOG, INC.
By: /s/ Michael Marrett
_____________________________________
Name: Michael Marrett
Title: Executive Vice President
EXHIBIT A
Principal Address of Numerex:
1600 Parkway Circle
Suite 200
Atlanta, GA 30339
Principal Address of Digilog:
Digilog, Inc.
2360 Maryland Road
Willow Grove, PA 19090
Address of Secured Party:
Alethea Limited Partnership
4193 Las Palmas Way
Sarasota, FL 34238
Attention: Mr. Stratton Nicolaides