REGISTRATION RIGHTS AGREEMENT
Exhibit 10.6
This Registration Rights Agreement (this “Agreement”) is made and entered into as of December
29, 2006, by and between Numerex Corp., a Pennsylvania corporation (the “Company”), and Laurus
Master Fund, Ltd. (the “Purchaser”).
This Agreement is made pursuant to the Purchase Agreement referred to below, 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, dated as of the date hereof, by and among the Purchaser, and the
Company (as amended, modified or supplemented from time to time, the “Purchase Agreement”), and
pursuant to the Note and Warrant referred to therein. 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.
“Convertible Note” shall mean the Note as such term is defined in the Purchase Agreement.
“Effectiveness Date” means, (i) with respect to the Registration Statement required to be
filed in connection with the shares of Common Stock issuable upon conversion of the Convertible
Note and exercise of the Warrants issued on the date hereof, a date no later than one hundred
eighty (180) days following such date and (ii) with respect to each additional Registration
Statement required to be filed hereunder (if any), a date no later than one hundred eighty (180)
days following the applicable Filing Date.
“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 (1) the Registration Statement required to be filed in
connection with the shares of Common Stock issuable to the Purchaser upon conversion of the
Convertible Note and upon exercise of a Warrant, the date which is sixty (60) days after the
issuance of such Convertible Note and Warrants, and (2) the Registration Statement required to be
filed in connection with the shares of Common Stock issuable to the Holder as a result of
adjustments to the Fixed Conversion Price under the Convertible Note or to the Exercise Price under
the Warrant or otherwise, thirty (30) days after the occurrence of such event or the date of such
adjustment.
“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).
“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
Convertible Note and issuable upon exercise of the Warrant (including, without limitation, any
additional shares of Common Stock received by the holder under the Convertible 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.
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“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 Purchase 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 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) 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 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.
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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;
(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.
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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.
(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
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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 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. Notwithstanding the foregoing, the Company shall not be liable for the reasonable fees
and expenses of more than one separate firm of attorneys for the Indemnified Parties.
(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
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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 during the last 12 months, 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,
2005 and (ii) its Quarterly Report on Form 10-Q for the fiscal quarters ended March 31, 2006, June
30, 2006 and September 30, 2006 (collectively, the “SEC Reports”). Each SEC Report was, at the
time of its filing, in compliance in all material respects 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 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.
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(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 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 Convertible Note and the shares of Common Stock which the Purchaser may
acquire pursuant to the Warrant and the Convertible 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 Convertible 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 Convertible Note and exercise of the Warrant.
(h) The Company shall provide written notice to each Holder of (i) the occurrence of each
Discontinuation Event (as defined below) and (i) the declaration of effectiveness by the SEC of
each Registration Statement required to be filed hereunder within one (1) business day of the date
of each such occurrence and/or declaration, as the case may be.
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 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.
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(b) No Piggyback on Registrations. Except as and to the extent specified in Schedule
7(b) 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 (other than Hayden Communications, Inc.). 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
(other than Hayden Communications, Inc.) 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.
(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
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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. | |||||
| 0000 Xxxxxxxx Xxxxxx, Xxxxx 000 | ||||||
| Xxxxxxx, Xxxxxxx 00000-0000 | ||||||
| Attention: | Chief Financial Officer and Legal Counsel | |||||
| Facsimile: (000) 000-0000 | ||||||
| With a copy to: Xxxxxx & Xxxxxx LLP | ||||||
| 000 00xx Xxxxxx, X.X. | ||||||
| Xxxxxxxxxx, X.X. 00000 | ||||||
| Attention: | Xxxxxxx Xxxxx, Esq. | |||||
| Facsimile: | (000) 000-0000 | |||||
| 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.
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(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 Purchase 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 giving effect to any choice or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of New York. 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 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
11
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/ Xxxxxxxx X. Xxxxxxxxxx | |||||
| Name: Xxxxxxxx X. Xxxxxxxxxx | ||||||
| Title: Chairman and CEO | ||||||
| LAURUS MASTER FUND, LTD. | ||||||
| By: | /s/ Xxxxx Grin | |||||
| Name: | Xxxxx Grin | |||||
| Title: | Director | |||||
| Address for Notices: | ||||||
| 000 Xxxxx Xxxxxx, 00xx
Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx Grin Facsimile: 000-000-0000 |
||||||
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Schedule 7(b)
1. Gwynedd Resources, Ltd. has piggy-back registration rights.
2. Hayden Communications, Inc. has piggy-back registration rights.
14
