EXHIBIT 10.10
SUN NETWORK GROUP, INC.
0000 XXXXXXXX XXXX., XXXXX 0000
XXX XXXXXXX, XXXXXXXXXX 00000
October 15, 2003
AJW Partners, LLC
New Millennium Capital Partners II, LLC
AJW Offshore, Ltd. (f/k/a AJW/New Millennium Offshore, Ltd.)
AJW Qualified Partners, LLC (f/k/a/ Pegasus Capital Partners, LLC)
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxx, Xxx Xxxx 00000
RE: SUN NETWORK GROUP, INC. (THE "COMPANY") - AMENDMENT OF
SECURITIES PURCHASE AGREEMENT
Ladies and Gentlemen:
This letter sets forth the agreement of the parties hereto to provide
for the amendment of that certain Securities Purchase Agreement, dated as of
June 27, 2002, by and among the Company and each of the investors set forth on
the signature pages hereto (the "Purchase Agreement").
By execution hereof, for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree that
Section 4(h) of the Purchase Agreement is hereby amended and restated in its
entirety to provide as follows:
"h. AUTHORIZATION AND RESERVATION OF SHARES. The Company shall at all
times have authorized, and reserved for the purpose of issuance, a sufficient
number of shares of Common Stock to provide for the full conversion or exercise
of the outstanding Debentures and Warrants and issuance of the Conversion Shares
and Warrant Shares in connection therewith (based on the Conversion Price of the
Debentures or Exercise Price of the Warrants in effect from time to time) and as
otherwise required by the Debentures. The Company shall not reduce the number of
shares of Common Stock reserved for issuance upon conversion of Debentures and
exercise of the Warrants without the consent of each Buyer. The Company shall at
all times maintain the number of shares of Common Stock so reserved for issuance
at an amount ("RESERVED AMOUNT") equal to no less than two (2) times the number
that is then actually issuable upon full conversion of the Debentures and
Additional Debentures and upon exercise of the Warrants and the Additional
Warrants (based on the Conversion Price of the Debentures or the Exercise Price
of the Warrants in effect from time to time). If at any time the number of
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shares of Common Stock authorized and reserved for issuance ("AUTHORIZED AND
RESERVED SHARES") is below the Reserved Amount, the Company will promptly take
all corporate action necessary to authorize and reserve a sufficient number of
shares, including, without limitation, calling a special meeting of stockholders
to authorize additional shares to meet the Company's obligations under this
Section 4(h), in the case of an insufficient number of authorized shares, obtain
stockholder approval of an increase in such authorized number of shares, and
voting the management shares of the Company in favor of an increase in the
authorized shares of the Company to ensure that the number of authorized shares
is sufficient to meet the Reserved Amount. If the Company fails to obtain such
stockholder approval within thirty (30) days following the date on which the
Reserved Amount exceeds the number of Authorized and Reserved Shares, the
Company shall pay to the Borrower the Standard Liquidated Damages Amount, in
cash or in shares of Common Stock at the option of the Buyer. If the Buyer
elects to be paid the Standard Liquidated Damages Amount in shares of Common
Stock, such shares shall be issued at the Conversion Price at the time of
payment. In order to ensure that the Company has authorized a sufficient amount
of shares to meet the Reserved Amount at all times, the Company must deliver to
the Buyer at the end of every month a list detailing (1) the current amount of
shares authorized by the Company and reserved for the Buyer; and (2) amount of
shares issuable upon conversion of the Debentures and upon exercise of the
Warrants and as payment of interest accrued on the Debentures for one year. If
the Company fails to provide such list within five (5) business days of the end
of each month, the Company shall pay the Standard Liquidated Damages Amount, in
cash or in shares of Common Stock at the option of the Buyer, until the list is
delivered. If the Buyer elects to be paid the Standard Liquidated Damages Amount
in shares of Common Stock, such shares shall be issued at the Conversion Price
at the time of payment."
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Please signify your agreement with the foregoing by signing a copy of
this letter where indicated and returning it to the undersigned.
Sincerely,
SUN NETWORK GROUP, INC.
/s/ T. Xxxxxx Xxxxxxx
______________________________
T. Xxxxxx Xxxxxxx
President and Executive Officer
ACCEPTED AND AGREED:
AJW PARTNERS, LLC
By: SMS GROUP, LLC
/s/ Xxxxx X. Xxxxxxxx
___________________________________
Xxxxx X. Xxxxxxxx, Manager
NEW MILLENNIUM CAPITAL PARTNERS II, LLC
By: FIRST STREET MANAGER II, LLC
/s/ Xxxxx X. Xxxxxxxx
____________________________________
Xxxxx X. Xxxxxxxx, Manager
AJW OFFSHORE, LTD.
By: FIRST STREET MANAGER II, LLC
/s/ Xxxxx X. Xxxxxxxx
____________________________________
Xxxxx X. Xxxxxxxx, Manager
AJW QUALIFIED PARTNERS, LLC
By: AJW MANAGER, LLC
/s/ Xxxxx X. Xxxxxxxx
____________________________________
Xxxxx X. Xxxxxxxx, Manager
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