-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HBYElhVp5qB/Fna6vsqbANwT0CBqJnSH5twZHDZI/IKxbhU05G2hSWf5O2jaa2vh hVkI6dQSDY+Jq9BsPNrxOA== 0001144204-07-000986.txt : 20070108 0001144204-07-000986.hdr.sgml : 20070108 20070108172801 ACCESSION NUMBER: 0001144204-07-000986 CONFORMED SUBMISSION TYPE: SC 13G PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20070108 DATE AS OF CHANGE: 20070108 GROUP MEMBERS: DAVID GRIN GROUP MEMBERS: EUGENE GRIN GROUP MEMBERS: LAURUS CAPITAL MANAGEMENT, LLC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NUMEREX CORP /PA/ CENTRAL INDEX KEY: 0000870753 STANDARD INDUSTRIAL CLASSIFICATION: COMMUNICATIONS EQUIPMENT, NEC [3669] IRS NUMBER: 112948749 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13G SEC ACT: 1934 Act SEC FILE NUMBER: 005-46687 FILM NUMBER: 07518419 BUSINESS ADDRESS: STREET 1: 1600 PARKWOOD CIRCLE STREET 2: SUITE 200 CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 770-693-5950 MAIL ADDRESS: STREET 1: 1600 PARKWOOD CIRCLE STREET 2: SUITE 200 CITY: ATLANTA STATE: GA ZIP: 30339 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: LAURUS MASTER FUND LTD CENTRAL INDEX KEY: 0001189294 IRS NUMBER: 980337673 STATE OF INCORPORATION: E9 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13G BUSINESS ADDRESS: STREET 1: 152 W 57TH ST CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125415800 SC 13G 1 v062132_sc13g.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13G (Rule 13d - 102) Under the Securities Exchange Act of 1934 NUMEREX CORP. - -------------------------------------------------------------------------------- (Name of Issuer) Class A Common Stock, no par value per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 67053A102 - -------------------------------------------------------------------------------- (CUSIP Number) December 29, 2006 - -------------------------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) Check the appropriate box to designate the rule pursuant to which this Schedule 13G is filed: |_| Rule 13d-1(b) |X| Rule 13d-1(c) |_| Rule 13d-1(d) *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). - -------------------------------------------------------------------------------- CUSIP No. 47008R103 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Laurus Master Fund, Ltd. S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 98-0337673 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands - -------------------------------------------------------------------------------- 5 SOLE VOTING POWER 0 shares of Common Stock.* ----------------------------------------------------------------- NUMBER OF 6 SHARED VOTING POWER SHARES BENEFICIALLY 1,237,500 shares of Common Stock.* OWNED BY ----------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER REPORTING PERSON 0 shares of Common Stock.* WITH ----------------------------------------------------------------- 8 SHARED DISPOSITIVE POWER 1,237,500 shares of Common Stock.* - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,237,500 shares of Common Stock. - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 9.99%* - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON CO - -------------------------------------------------------------------------------- - ----------------------- * Based on 12,500,000 shares of the Class A common stock, no par value per share (the "Shares") of Numerex Corp., a Pennsylvania corporation (the "Company") outstanding, as represented by the Company to Laurus Master Fund, Ltd. (the "Fund") on December 29, 2006. As of December 29, 2006, the Fund held (i) a common stock purchase warrant (the "2004 Warrant #1") to acquire 300,000 Shares at the following exercise prices: (A) 150,000 Shares at an exercise price of $4.75, (B) 100,000 Shares at an exercise price of $5.17, and (C) 50,000 Shares at an exercise price of $5.99, all subject to certain adjustments, (ii) a common stock purchase warrant (the "2004 Warrant #2") to acquire 66,000 Shares at an exercise price of $5.99, subject to certain adjustments, (iii) a common stock purchase warrant (the "2005 Warrant #1") to acquire 100,000 Shares at the following exercise prices: (A) 50,000 at an exercise price of $5.51 and (B) 50,000 at an exercise price of $5.72, subject to certain adjustments, (iv) a common stock purchase warrant (the "2006 Warrant #1", and together with the 2004 Warrant #1, the 2004 Warrant #2 and the 2005 Warrant, the "Early Warrants") to acquire 241,379 Shares at an exercise price of $7.73, subject to certain adjustments, (v) a common stock purchase warrant (the "2006 Warrant #2") to acquire 158,562 Shares, at an exercise price of $10.13, subject to certain adjustments, (vi) a Convertible Term Note in the aggregate principal amount of $5,000,000 ("Note #1"), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments, (vii) a Convertible Term Note in the aggregate principal amount of $10,000,000 ("Note #2), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments and (viii) 529,267 Shares. The Early Warrants and Note #1 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 4.99% of the Shares then issued and outstanding (the "4.99% Issuance Limitation"). The 2006 Warrant #2 and Note #2 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 9.99% of the Shares then issued and outstanding (the "9.99% Issuance Limitation" and together with the 4.99% Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by the Fund upon 61 days or more prior notice to the Company and shall automatically become null and void following notice to the Issuer of the occurrence and/or continuance of an Event of Default (as defined in and pursuant to the terms of the applicable instrument). The Fund is managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Fund reported in this Schedule 13G, as amended. - -------------------------------------------------------------------------------- CUSIP No. 47008R103 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Laurus Capital Management, LLC S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 13-4150669 - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 5 SOLE VOTING POWER 0 shares of Common Stock.* ----------------------------------------------------------------- NUMBER OF 6 SHARED VOTING POWER SHARES BENEFICIALLY 1,237,500 shares of Common Stock.* OWNED BY ----------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER REPORTING PERSON 0 shares of Common Stock.* WITH ----------------------------------------------------------------- 8 SHARED DISPOSITIVE POWER 1,237,500 shares of Common Stock.* - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,237,500 shares of Common Stock. - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 9.99% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON OO - -------------------------------------------------------------------------------- - ----------------------- * Based on 12,500,000 shares of the Class A common stock, no par value per share (the "Shares") of Numerex Corp., a Pennsylvania corporation (the "Company") outstanding, as represented by the Company to Laurus Master Fund, Ltd. (the "Fund") on December 29, 2006. As of December 29, 2006, the Fund held (i) a common stock purchase warrant (the "2004 Warrant #1") to acquire 300,000 Shares at the following exercise prices: (A) 150,000 Shares at an exercise price of $4.75, (B) 100,000 Shares at an exercise price of $5.17, and (C) 50,000 Shares at an exercise price of $5.99, all subject to certain adjustments, (ii) a common stock purchase warrant (the "2004 Warrant #2") to acquire 66,000 Shares at an exercise price of $5.99, subject to certain adjustments, (iii) a common stock purchase warrant (the "2005 Warrant #1") to acquire 100,000 Shares at the following exercise prices: (A) 50,000 at an exercise price of $5.51 and (B) 50,000 at an exercise price of $5.72, subject to certain adjustments, (iv) a common stock purchase warrant (the "2006 Warrant #1", and together with the 2004 Warrant #1, the 2004 Warrant #2 and the 2005 Warrant, the "Early Warrants") to acquire 241,379 Shares at an exercise price of $7.73, subject to certain adjustments, (v) a common stock purchase warrant (the "2006 Warrant #2") to acquire 158,562 Shares, at an exercise price of $10.13, subject to certain adjustments, (vi) a Convertible Term Note in the aggregate principal amount of $5,000,000 ("Note #1"), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments, (vii) a Convertible Term Note in the aggregate principal amount of $10,000,000 ("Note #2), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments and (viii) 529,267 Shares. The Early Warrants and Note #1 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 4.99% of the Shares then issued and outstanding (the "4.99% Issuance Limitation"). The 2006 Warrant #2 and Note #2 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 9.99% of the Shares then issued and outstanding (the "9.99% Issuance Limitation" and together with the 4.99% Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by the Fund upon 61 days or more prior notice to the Company and shall automatically become null and void following notice to the Issuer of the occurrence and/or continuance of an Event of Default (as defined in and pursuant to the terms of the applicable instrument). The Fund is managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Fund reported in this Schedule 13G, as amended. - -------------------------------------------------------------------------------- CUSIP No. 47008R103 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: David Grin - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION Israel - -------------------------------------------------------------------------------- 5 SOLE VOTING POWER 0 shares of Common Stock.* ----------------------------------------------------------------- NUMBER OF 6 SHARED VOTING POWER SHARES BENEFICIALLY 1,237,500 shares of Common Stock.* OWNED BY ----------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER REPORTING PERSON 0 shares of Common Stock.* WITH ----------------------------------------------------------------- 8 SHARED DISPOSITIVE POWER 1,237,500 shares of Common Stock.* - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,237,500 shares of Common Stock. - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 9.99% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- - ----------------------- * Based on 12,500,000 shares of the Class A common stock, no par value per share (the "Shares") of Numerex Corp., a Pennsylvania corporation (the "Company") outstanding, as represented by the Company to Laurus Master Fund, Ltd. (the "Fund") on December 29, 2006. As of December 29, 2006, the Fund held (i) a common stock purchase warrant (the "2004 Warrant #1") to acquire 300,000 Shares at the following exercise prices: (A) 150,000 Shares at an exercise price of $4.75, (B) 100,000 Shares at an exercise price of $5.17, and (C) 50,000 Shares at an exercise price of $5.99, all subject to certain adjustments, (ii) a common stock purchase warrant (the "2004 Warrant #2") to acquire 66,000 Shares at an exercise price of $5.99, subject to certain adjustments, (iii) a common stock purchase warrant (the "2005 Warrant #1") to acquire 100,000 Shares at the following exercise prices: (A) 50,000 at an exercise price of $5.51 and (B) 50,000 at an exercise price of $5.72, subject to certain adjustments, (iv) a common stock purchase warrant (the "2006 Warrant #1", and together with the 2004 Warrant #1, the 2004 Warrant #2 and the 2005 Warrant, the "Early Warrants") to acquire 241,379 Shares at an exercise price of $7.73, subject to certain adjustments, (v) a common stock purchase warrant (the "2006 Warrant #2") to acquire 158,562 Shares, at an exercise price of $10.13, subject to certain adjustments, (vi) a Convertible Term Note in the aggregate principal amount of $5,000,000 ("Note #1"), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments, (vii) a Convertible Term Note in the aggregate principal amount of $10,000,000 ("Note #2), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments and (viii) 529,267 Shares. The Early Warrants and Note #1 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 4.99% of the Shares then issued and outstanding (the "4.99% Issuance Limitation"). The 2006 Warrant #2 and Note #2 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 9.99% of the Shares then issued and outstanding (the "9.99% Issuance Limitation" and together with the 4.99% Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by the Fund upon 61 days or more prior notice to the Company and shall automatically become null and void following notice to the Issuer of the occurrence and/or continuance of an Event of Default (as defined in and pursuant to the terms of the applicable instrument). The Fund is managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Fund reported in this Schedule 13G, as amended. - -------------------------------------------------------------------------------- CUSIP No. 47008R103 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON: Eugene Grin - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) |_| (b) |_| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 CITIZENSHIP OR PLACE OF ORGANIZATION United States - -------------------------------------------------------------------------------- 5 SOLE VOTING POWER 0 shares of Common Stock.* ----------------------------------------------------------------- NUMBER OF 6 SHARED VOTING POWER SHARES BENEFICIALLY 1,237,500 shares of Common Stock.* OWNED BY ----------------------------------------------------------------- EACH 7 SOLE DISPOSITIVE POWER REPORTING PERSON 0 shares of Common Stock.* WITH ----------------------------------------------------------------- 8 SHARED DISPOSITIVE POWER 1,237,500 shares of Common Stock.* - -------------------------------------------------------------------------------- 9 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,237,500 shares of Common Stock. - -------------------------------------------------------------------------------- 10 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES |X| - -------------------------------------------------------------------------------- 11 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9 9.99% - -------------------------------------------------------------------------------- 12 TYPE OF REPORTING PERSON IN - -------------------------------------------------------------------------------- - ----------------------- * Based on 12,500,000 shares of the Class A common stock, no par value per share (the "Shares") of Numerex Corp., a Pennsylvania corporation (the "Company") outstanding, as represented by the Company to Laurus Master Fund, Ltd. (the "Fund") on December 29, 2006. As of December 29, 2006, the Fund held (i) a common stock purchase warrant (the "2004 Warrant #1") to acquire 300,000 Shares at the following exercise prices: (A) 150,000 Shares at an exercise price of $4.75, (B) 100,000 Shares at an exercise price of $5.17, and (C) 50,000 Shares at an exercise price of $5.99, all subject to certain adjustments, (ii) a common stock purchase warrant (the "2004 Warrant #2") to acquire 66,000 Shares at an exercise price of $5.99, subject to certain adjustments, (iii) a common stock purchase warrant (the "2005 Warrant #1") to acquire 100,000 Shares at the following exercise prices: (A) 50,000 at an exercise price of $5.51 and (B) 50,000 at an exercise price of $5.72, subject to certain adjustments, (iv) a common stock purchase warrant (the "2006 Warrant #1", and together with the 2004 Warrant #1, the 2004 Warrant #2 and the 2005 Warrant, the "Early Warrants") to acquire 241,379 Shares at an exercise price of $7.73, subject to certain adjustments, (v) a common stock purchase warrant (the "2006 Warrant #2") to acquire 158,562 Shares, at an exercise price of $10.13, subject to certain adjustments, (vi) a Convertible Term Note in the aggregate principal amount of $5,000,000 ("Note #1"), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments, (vii) a Convertible Term Note in the aggregate principal amount of $10,000,000 ("Note #2), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments and (viii) 529,267 Shares. The Early Warrants and Note #1 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 4.99% of the Shares then issued and outstanding (the "4.99% Issuance Limitation"). The 2006 Warrant #2 and Note #2 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 9.99% of the Shares then issued and outstanding (the "9.99% Issuance Limitation" and together with the 4.99% Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by the Fund upon 61 days or more prior notice to the Company and shall automatically become null and void following notice to the Issuer of the occurrence and/or continuance of an Event of Default (as defined in and pursuant to the terms of the applicable instrument). The Fund is managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Fund reported in this Schedule 13G, as amended. Item 1(a). Name of Issuer: NUMEREX CORP. Item 1(b). Address of Issuer's Principal Executive Offices: 1600 Parkwood Circle SE, Suite 500 Atlanta, Georgia 30039 Item 2(a). Name of Person Filing: Laurus Master Fund, Ltd. This Schedule 13G, as amended, is also filed on behalf of Laurus Capital Management, LLC, a Delaware limited liability company, Eugene Grin and David Grin. Laurus Capital Management, LLC manages Laurus Master Fund, Ltd. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the shares owned by Laurus Master Fund, Ltd. Information related to each of Laurus Capital Management, LLC, Eugene Grin and David Grin is set forth on Appendix A hereto. Item 2(b). Address of Principal Business Office or if none, Residence: c/o Laurus Capital Management, LLC, 825 Third Avenue, 14th Floor, New York, NY 10022 Item 2(c). Citizenship: Cayman Islands Item 2(d). Title of Class of Securities: Class A Common Stock Item 2(e). CUSIP Number: 67053A102 Item 3. Not Applicable Item 4. Ownership: (a) Amount Beneficially Owned: 1,237,500 shares of Common Stock* (b) Percent of Class: 9.99%* (c) Number of shares as to which such person has: (i) sole power to vote or to direct the vote: 0 shares of Common Stock* (ii) shared power to vote or to direct the vote: 1,237,500 shares of Common Stock* (iii) sole power to dispose or to direct the disposition of: 0 shares of Common Stock* (iv) shared power to dispose or to direct the disposition of: 1,237,500 shares of Common Stock* Item 5. Ownership of Five Percent or Less of a Class: Not applicable Item 6. Ownership of More than Five Percent on Behalf of Another Person: Not applicable Item 7. Identification and Classification of Subsidiary Which Acquired the Securities: Not applicable Item 8. Identification and Classification of Members of the Group: Not applicable Item 9. Notice of Dissolution of Group: Not applicable Item 10. Certification: By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect. - ----------------------- * Based on 12,500,000 shares of the Class A common stock, no par value per share (the "Shares") of Numerex Corp., a Pennsylvania corporation (the "Company") outstanding, as represented by the Company to Laurus Master Fund, Ltd. (the "Fund") on December 29, 2006. As of December 29, 2006, the Fund held (i) a common stock purchase warrant (the "2004 Warrant #1") to acquire 300,000 Shares at the following exercise prices: (A) 150,000 Shares at an exercise price of $4.75, (B) 100,000 Shares at an exercise price of $5.17, and (C) 50,000 Shares at an exercise price of $5.99, all subject to certain adjustments, (ii) a common stock purchase warrant (the "2004 Warrant #2") to acquire 66,000 Shares at an exercise price of $5.99, subject to certain adjustments, (iii) a common stock purchase warrant (the "2005 Warrant #1") to acquire 100,000 Shares at the following exercise prices: (A) 50,000 at an exercise price of $5.51 and (B) 50,000 at an exercise price of $5.72, subject to certain adjustments, (iv) a common stock purchase warrant (the "2006 Warrant #1", and together with the 2004 Warrant #1, the 2004 Warrant #2 and the 2005 Warrant, the "Early Warrants") to acquire 241,379 Shares at an exercise price of $7.73, subject to certain adjustments, (v) a common stock purchase warrant (the "2006 Warrant #2") to acquire 158,562 Shares, at an exercise price of $10.13, subject to certain adjustments, (vi) a Convertible Term Note in the aggregate principal amount of $5,000,000 ("Note #1"), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments, (vii) a Convertible Term Note in the aggregate principal amount of $10,000,000 ("Note #2), a portion of which is convertible into Shares at a conversion rate of $10.37, subject to certain adjustments and (viii) 529,267 Shares. The Early Warrants and Note #1 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 4.99% of the Shares then issued and outstanding (the "4.99% Issuance Limitation"). The 2006 Warrant #2 and Note #2 contain an issuance limitation prohibiting the Fund from exercising those securities to the extent that such exercise would result in beneficial ownership by the Fund of more than 9.99% of the Shares then issued and outstanding (the "9.99% Issuance Limitation" and together with the 4.99% Issuance Limitation, the "Issuance Limitations"). The Issuance Limitations may be waived by the Fund upon 61 days or more prior notice to the Company and shall automatically become null and void following notice to the Issuer of the occurrence and/or continuance of an Event of Default (as defined in and pursuant to the terms of the applicable instrument). The Fund is managed by Laurus Capital Management, LLC. Eugene Grin and David Grin, through other entities, are the controlling principals of Laurus Capital Management, LLC and share sole voting and investment power over the securities owned by the Fund reported in this Schedule 13G, as amended. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. December 29, 2006 Date //s// Eugene Grin ------------------------------- Eugene Grin Director APPENDIX A A. Name: Laurus Capital Management, LLC, a Delaware limited liability company Business 825 Third Avenue, 14th Floor Address: New York, New York 10022 Place of Organization: Delaware B. Name: Eugene Grin Business 825 Third Avenue, 14th Floor Address: New York, New York 10022 Principal Director of Laurus Master Fund, Ltd. Occupation: Principal of Laurus Capital Management, LLC Citizenship: United States C. Name: David Grin Business 825 Third Avenue, 14th Floor Address: New York, New York 10022 Principal Director of Laurus Master Fund, Ltd. Occupation: Principal of Laurus Capital Management, LLC Citizenship: Israel Each of Laurus Capital Management, LLC, Eugene Grin and David Grin hereby agrees, by their execution below, that the Schedule 13G, as amended, to which this Appendix A is attached is filed on behalf of each of them, respectively. Laurus Capital Management, LLC //s// Eugene Grin - -------------------------------------- Eugene Grin Principal December 29, 2006 //s// David Grin - -------------------------------------- David Grin, on his individual behalf December 29, 2006 //s// Eugene Grin - -------------------------------------- Eugene Grin, on his individual behalf December 29, 2006 -----END PRIVACY-ENHANCED MESSAGE-----