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Exhibit 10.5
SUBSIDIARY GUARANTY (this "Guaranty")
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New York, New York
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December 29, 2006
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FOR VALUE RECEIVED,
and in consideration of loans made or to be made or credit
otherwise extended or to be extended by LAURUS MASTER FUND, LTD.
("Laurus"), a Cayman Islands company, to or for the account of
NUMEREX CORP. ("Company"), a Pennsylvania corporation, from time to
time and at any time and for other good and valuable consideration
and to induce Laurus, in its discretion, to make such loans or
extensions of credit and to make or grant such renewals,
extensions, releases of collateral or relinquishments of legal
rights as Laurus may deem advisable, the undersigned (and each of
them if more than one, the liability under this Guaranty being
joint and several) (jointly and severally referred to as
"Guarantor" or "the undersigned") unconditionally guaranties to
Laurus, its successors, endorsees and assigns the prompt payment
when due (whether by acceleration or otherwise) of all present and
future obligations and liabilities of any and all kinds of Company
to Laurus arising under, out of, or in connection with
(i) that certain Securities Purchase Agreement dated as of the
date hereof by and between the Company and Laurus (the "Securities
Purchase Agreement") and (ii) each Related Agreement referred
to in the Securities Purchase Agreement (the Securities Purchase
Agreement and each Related Agreement, as each may be amended,
modified, restated and/or supplemented from time to time, are
collectively referred to herein as the "Documents") or any
documents, instruments or agreements relating to or executed in
connection with the Documents, whether now existing or hereafter
arising, direct or indirect, liquidated or unliquidated, absolute
or contingent, due or not due and whether under, pursuant to or
evidenced by a note, agreement, guaranty, instrument or otherwise
(all of which are herein collectively referred to as the
"Obligations"), and irrespective of the genuineness, validity,
regularity or enforceability of such Obligations, or of any
instrument evidencing any of the Obligations or of any security
interest in and to any collateral therefor or of the existence or
extent of such collateral, and irrespective of the allowability,
allowance or disallowance of any or all of the Obligations in any
case commenced by or against Company under Title 11, United States
Code, including, without limitation, obligations or indebtedness of
Company for post-petition interest, fees, costs and charges that
would have accrued or been added to the Obligations but for the
commencement of such case. Terms not otherwise defined herein shall
have the meaning assigned such terms in the Securities Purchase
Agreement. In furtherance of the foregoing, the undersigned hereby
agrees as follows:
1. No Impairment .
Laurus may at any time and from time to time, either before or
after the maturity thereof, without notice to or further consent of
the undersigned, extend the time of payment of, exchange or
surrender any collateral for, renew or extend any of the
Obligations or increase or decrease the interest rate thereon, and
may also make any agreement with Company or with any other party to
or person liable on any of the Obligations, or interested therein,
for the extension, renewal, payment, compromise, discharge or
release thereof, in whole or in part, or for any modification of
the terms thereof or of any agreement between Laurus and Company or
any such other party or person, or make any election of rights
Laurus may deem desirable under the United States Bankruptcy Code,
as amended, or any other federal or state bankruptcy,
reorganization, moratorium or insolvency law relating to or
affecting the enforcement of creditors’ rights generally (any
of the foregoing, an "Insolvency Law") without in any way impairing
or affecting this Guaranty. This Guaranty shall be effective
regardless of the subsequent incorporation, merger or consolidation
of Company, or any change in the composition, nature, personnel or
location of Company and shall extend to any successor entity to
Company, including a debtor in possession or the like under any
Insolvency Law.
2. Guaranty Absolute
. The undersigned guarantees that the Obligations will be paid
strictly in accordance with the terms of the Documents and/or any
other document, instrument or agreement creating or evidencing the
Obligations, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms
or the rights of Company with respect thereto. Guarantor hereby
knowingly accepts the full range of risk encompassed within a
contract of "continuing guaranty" which risk includes the
possibility that Company will contract additional indebtedness for
which Guarantor may be liable hereunder after Company’s
financial condition or ability to pay its lawful debts when they
fall due has deteriorated, whether or not Company has properly
authorized incurring such additional indebtedness. The undersigned
acknowledges that (i) no oral representations, including any
representations to extend credit or provide other financial
accommodations to Company, have been made by Laurus to induce the
undersigned to enter into this Guaranty and (ii) any extension
of credit to the Company shall be governed solely by the provisions
of the Documents, the other Documents and applicable law. The
liability of the undersigned under this Guaranty shall be absolute
and unconditional, in accordance with its terms, and shall remain
in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including, without
limitation: (a) any waiver, indulgence, renewal, extension,
amendment or modification of or addition, consent or supplement to
or deletion from or any other action or inaction under or in
respect of the Documents or any other instruments or agreements
relating to the Obligations or any assignment or transfer of any
thereof, (b) any lack of validity or enforceability of any
Document or other documents, instruments or agreements relating to
the Obligations or any assignment or transfer of any thereof to an
assignee of the Documents permitted pursuant to the terms of the
Documents, (c) any furnishing of any additional security to
Laurus or its assignees or any acceptance thereof or any release of
any security by Laurus or its assignees, (d) any limitation on
any party’s liability or obligation under the Documents or
any other documents, instruments or agreements relating to the
Obligations or any assignment or transfer of any thereof to an
assignee of the Documents permitted pursuant to the terms of the
Documents, or any invalidity or unenforceability, in whole or in
part, of any such document, instrument or agreement or any term
thereof, (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like
proceeding relating to Company, or any action taken with respect to
this Guaranty by any trustee or receiver, or by any court, in any
such proceeding, whether or not the undersigned shall have notice
or knowledge of any of the foregoing, (f) any exchange,
release or nonperfection of any collateral, or any release, or
amendment or waiver of or consent to departure from any guaranty or
security, for all or any of the Obligations or (g) any other
circumstance which might otherwise constitute a defense available
to, or a discharge of, the undersigned. Any amounts due from the
undersigned to Laurus shall bear interest until such amounts are
paid in full at the highest rate then applicable to the Obligations
(but without duplication of any interest accrued or payable under
the Documents). Obligations include post-petition interest whether
or not allowed or allowable.
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3. Waivers .
(a) This Guaranty is a guaranty of payment and not of
collection. Laurus shall be under no obligation to institute suit,
exercise rights or remedies or take any other action against
Company or any other person liable with respect to any of the
Obligations or resort to any collateral security held by it to
secure any of the Obligations as a condition precedent to the
undersigned being obligated to perform as agreed herein and
Guarantor hereby waives to the fullest extent permitted by
applicable law any and all rights which it may have by statute or
otherwise which would require Laurus to do any of the foregoing.
Guarantor further consents and agrees that Laurus shall be under no
obligation to marshal any assets in favor of Guarantor, or against
or in payment of any or all of the Obligations. The undersigned
hereby waives all suretyship defenses and any rights to interpose
any defense, counterclaim or offset of any nature and description
which the undersigned may have by virtue of its status as a
guarantor or surety of the Obligations.
(b) The
undersigned further waives (i) notice of the acceptance of
this Guaranty, of the making of any such loans or extensions of
credit, and of all notices and demands of any kind to which the
undersigned may be entitled, including, without limitation, notice
of adverse change in Company’s financial condition or of any
other fact which might materially increase the risk of the
undersigned and (ii) presentment to or demand of payment from
anyone whomsoever liable upon any of the Obligations, protest,
notices of presentment, non-payment or protest and notice of any
sale of collateral security or any default of any sort, other than
to the extent any such notice is required under the Documents or
applicable law.
(c) Notwithstanding
any payment or payments made by the undersigned hereunder, or any
setoff or application of funds of the undersigned by Laurus, the
undersigned shall not be entitled to be subrogated to any of the
rights of Laurus against Company or against any collateral or
guarantee or right of offset held by Laurus for the payment of the
Obligations, nor shall the undersigned seek or be entitled to seek
any contribution or reimbursement from Company in respect of
payments made by the undersigned hereunder, in each case until all
amounts owing to Laurus by Company on account of the Obligations
are paid in full and the Documents have been terminated. If,
notwithstanding the foregoing, any amount shall be paid to the
undersigned on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full and the
Documents shall not have been terminated, such amount shall be held
by the undersigned in trust for Laurus, segregated from other funds
of the undersigned, and shall forthwith upon, and in any event
within two (2) business days of, receipt by the undersigned, be
turned over to Laurus in the exact form received by the undersigned
(duly endorsed by the undersigned to Laurus, if required), to be
applied against the Obligations, whether matured or unmatured, in
such order as Laurus may determine, subject to the provisions of
the Documents. Any and all present and future debts and obligations
of Company to any of the und
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