EXHIBIT 10.6
Modification Letter
SECURITIES PURCHASE AGREEMENT
AMENDMENT DATED AS OF MAY 7, 2004
THE PROJECT GROUP, INC.
May 7, 2004
To The Holders Identified on Schedule A
Re: Preferred Stock Conversion Price and Common Stock Purchase
Warrant Exercise Price Modification
Dear Holders:
Reference is made to the Securities Purchase Agreement dated as of March
9, 2004 between The Project Group, Inc. (the "Company") and the undersigned
Holder related to the purchase by the Holder of Series B 4% Redeemable
Preferred Stock ("Preferred Stock") and Common Stock Purchase Warrants (the
"Warrants") Pursuant to the Certificate of Designation, Preferences and Rights
and Number of Shares of Series B 4% Redeemable Preferred Stock
("Certificate of Designation"), each of the Holders of Preferred Stock was
granted the right to convert such Preferred Stock into Common Stock of the
Company. Pursuant to the Warrants, each of the Holders was granted the
right, subject to terms and conditions of the Warrant, to purchase shares of
Common Stock of the Company.
WHEREAS, the Company and the undersigned Holder have determined that it is
necessary and desirable to to modify certain terms of the Preferred Stock and
Warrants and the Securities Purchase Agreement.
It is now therefore agreed by the Company and the Holder for good and
valuable consideration, receipt of which is acknowledged, that:
1. The initial Conversion Rate, as defined in the Certificate of
Designation, shall be amended and changed to reflect that each share of
Preferred Stock shall be convertible into12,500 shares of Common Stock. The
Company undertakes to make all filings with the State of Nevada which are
necessary to effectuate this modification and to provide an amendment to the
Certificate of Designation of the Preferred Stock to the Holder.
2. The Exercise Price, as defined in the Warrants, is reduced to
$0.135, subject to further adjustment as described in the Warrants.
3. The Holder hereby acknowledges that as a result of the changes to
the Preferred Stock and Warrants, the Company shall be required to withdraw its
pending registration statement which was filed by the Company to comply with
section 10 of the Securities Purchase Agreement, and to file a new registration
statement reflecting the new terms of the preferred Stock and Warrants. The
undersigned Holder hereby waives any default which may be deemed to have
occurred under Section 10 of the Securities Purchase Agreement as a result of
the withdrawal; provided, however, such waiver of default shall be deemed
effective only in the even that the Company files a new registration statement
with the Securities and Exchange Commission within 5 business days of the date
hereof.
4. All terms employed in this letter, unless otherwise defined herein,
shall have the same meanings attributed to them in the Certificate of
Designation, Preferred Stock and Warrants.
5. Except as modified herein, the Certificate of Designation, Preferred
Stock, Warrants and documents delivered in connection therewith remain in full
force and affect.
6. This letter constitutes the binding obligation of the Company
and the Holder. This Agreement may be executed in counterpart and all so
executed shall constitute one Agreement, binding on all the parties hereto even
though all the parties are not signatories to the original or the same
counterpart .
7. In lieu of the Company reissuing Preferred Stock certificates and
Warrant certificates reflecting the reduced Conversion Rate and Exercise Price,
a copy of this letter appended to the Preferred Stock certificate and Warrant
shall be deemed sufficient to evidence the reduction of the Conversion Rate and
Exercise Price.
8. The Holder further acknowledges that the warrants issuable to the
Selling Agent shall be amended to reflect an exercise price of $.135 per share
THE PROJECT GROUP, INC.
/s/ Xxxxx Xxxxxxxx
By:________________________________
Xxxxx Xxxxxxxx, Pesident
HOLDER:
Alpha Capital AG
Ateres Mechoel, Inc
Xxxx Xxxxxx Xxxxx
Genesis Microcap, Inc
Xxxx Xxxxxxxx
X.X. Investors
Bella Xxxxxx
Xxxxx Mycb Xxxxx
Xxxxxxxxxx Charitable
Foundation
Platinum Partners Value
Arbitrage Fund
Platinum Partners Global
Macro Fund
Zenny Trading Ltd
