EXHIBIT 99.2
PROMISSORY NOTE AND STOCK PLEDGE AGREEMENT
$2,062,500 June 19, 2007
FOR VALUE RECEIVED, the undersigned, RYE 68, LLC, a Delaware limited liability
company ("Maker"), promises to pay to the order of XXXXXXX XXXXXX, ("Payee") the
principal sum of Two Million Sixty Two Thousand and Five Hundred Dollars
($2,062,500) plus interest at an annual rate of eight percent (8%) per annum
through the date final payment is made by Maker.
Maker agrees to pay the entire principal amount hereunder, together with any
then accrued but unpaid interest thereon, on the third anniversary date of this
Promissory Note and Stock Pledge Agreement ("Note"). Interest on this Note shall
be paid in cash semi-annually on January 19 and June 19 of each year to the
holder of this Note until this Note has been paid in full.
The entire unpaid balance of the principal amount, together with interest
accrued thereon, immediately shall become due and payable in full, without
notice or demand, upon the occurrence of any of the following events: (i) the
filing of a petition in bankruptcy or reorganization (A) by Maker under any law
of the United States or any state for the relief of debtors, or (B) against
Maker by any creditor of Maker which is not dismissed within ninety (90) days,
(ii) the application for, or appointment of, a receiver for the property of, or
the offering of a composition or extension to creditors by, or the making or
attempted making of an assignment for the benefit of creditors by, Maker, or
(iii) the failure of Maker to make any principal or interest payment required
hereunder within ten (10) calendar days after written notice that such payment
is due.
Maker's payment obligations hereunder shall be secured by a pledge of two
hundred and fifty thousand (250,000) shares of the common stock of Numerex Corp.
(the "Shares"). Maker hereby grants a first priority security interest in, and
pledges, all of its right, title and interest in and to the following, whether
now owned or hereafter acquired (the "Pledged Collateral"):
(a) the Shares, and the certificates representing the Shares;
(b) all dividends, cash, instruments, capital stock ("Additional
Shares"), and other property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Shares; and
(c) to the extent not otherwise included in any of the foregoing, all
cash and noncash proceeds of any and all of the foregoing.
This pledge shall be governed by all applicable provisions of, and
Payee shall have all rights and remedies with respect to the Pledged Collateral
of a secured party under, the Uniform Commercial Code as in effect in the State
of New York.
Maker, concurrently with the execution of this Note, shall deliver one or more
certificates representing the Shares to an escrow agent ("Escrow Agent") for
Payee pursuant to an Escrow Agreement between Maker, Payee and Escrow Agent (the
"Escrow Agreement"). Concurrently with the delivery of this Promissory Note and
Stock Pledge Agreement to Payee, Maker has delivered to Payee a stock power
therefore duly executed by Maker in blank. Forthwith upon Maker's acquisition of
any Additional Shares, Maker shall (i) deliver to the Escrow Agent for Payee the
certificates representing such Additional Shares and (ii) deliver to Payee a
stock power therefore duly executed by Maker in blank.
Maker agrees to deliver to Payee such other documents of transfer as Payee may
from time to time request to enable Payee to transfer the pledged Shares into
its name or the name of its nominee and to perfect Payee's security interest in
the Pledged Collateral under applicable laws. Maker agrees that it will not (i)
sell or otherwise dispose of, or grant any option with respect to, any of the
Pledged Collateral without the prior written consent of Payee or (ii) create or
permit to exist any lien upon or with respect to any of the Pledged Collateral,
except for the security interest granted hereby. Notwithstanding the foregoing,
Maker shall be entitled to arrange with Payee for a sale by Maker of pledged
Shares, free of the security interest granted hereby, provided that (A) such
sale is permitted pursuant to the Rule 144 restrictions and/or applicable
registration requirements and (B) Maker directs that the proceeds of such sale
first be used to satisfy Maker's obligations pursuant to the first paragraph of
this Promissory Note and Stock Pledge Agreement.
In the event that, during the term of this Promissory Note and Stock Pledge
Agreement, any stock dividend, reclassification, readjustment or other change is
declared or made in the capital structure of Numerex Corp., then Payee shall
have a security interest in all securities (whether shares of Common Stock or
other securities) issued to or acquired by Maker by reason of such event related
to the Pledged Collateral, and such securities shall become part of the Pledged
Collateral.
During the term of this Promissory Note and Stock Pledge Agreement and so long
as the Pledged Collateral remains in Escrow Agent's possession, Maker shall have
the right to vote the pledged Shares and exercise any voting rights pertaining
to such Pledged Collateral, and to give consents, ratifications and waivers with
respect thereto, for all purposes.
All or any portion of the principal amount evidenced by this Promissory Note and
Stock Pledge Agreement may be prepaid at any time without premium or penalty.
Maker hereby waives presentment, notice of dishonor and protest in respect
hereof.
In the event of default under this Promissory Note and Stock Pledge Agreement,
Payee shall have all rights and remedies provided at law and in equity provided.
All costs and expenses of collection, including reasonable attorneys' fees,
shall be added to and become part of the principal amount of this Promissory
Note and Stock Pledge Agreement and shall be collectible as part of such
principal amount.
No interest or other amount shall be payable in excess of the maximum
permissible rate under applicable law, and any interest or other amount which is
paid in excess of such maximum rate shall be deemed to be a payment of principal
hereunder.
No amendment of any provision of this Promissory Note and Stock Pledge Agreement
shall be valid unless the same shall be in writing and signed by Maker and
Payee. Any term or provision of this Promissory Note and Stock Pledge Agreement
may be waived at any time by the party entitled to the benefit thereof by a
written instrument duly executed by such party. No waiver by any party hereto of
any default, misrepresentation, or breach hereunder, whether intentional or not,
shall be deemed to extend to any prior or subsequent default, misrepresentation,
or breach hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.
This Promissory Note and Stock Pledge Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the principles of conflict of laws thereof. If any term or provision
of the Promissory Note and Stock Pledge Agreement shall be held invalid, illegal
or unenforceable, the validity of all other terms and provisions hereof shall in
no way be affected thereby and shall remain in full force and effect.
This Promissory Note and Stock Pledge Agreement shall be binding upon the
successors and assigns of Maker and shall inure to the benefit of Payee and its
successors and assigns. Maker may not assign or otherwise transfer any of its
rights, interests or obligations under this Note, by operation of law or
otherwise, in whole or in part, without the prior written consent of the Payee.
Maker:
RYE 68, LLC
By: Xxxxxx X. Xxxx
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