8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

May 10, 2007

NAYNA NETWORKS, INC.

(Exact name of registrant as specified in its charter)

Nevada	000-13822	83-0210455
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4699 Old Ironsides Drive, Suite 420

SANTA CLARA, CALIFORNIA 95054

(Address of principal executive offices, including zip code)

(408) 956-8000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On May 10, 2007, the Company entered into Satisfaction and Release Agreements (the “Settlement Agreements”) with the six of the nine holders (the “Lenders”) of the Company’s callable secured convertible notes and warrants which the Company issued in November 2005 pursuant to securities purchase agreements. Under these Settlement Agreements, the Lenders and the Company have agreed that the Lenders shall accept the amounts set forth below as settlement in satisfaction of the amounts owed to the Lenders. 15% of the aggregate amount is payable within 30 days of the date of the Settlement Agreements, and the remaining amount is payable within 180 days of the date of the Settlement Agreements. In addition, the Company agreed to honor and the Lenders agreed to limit the exercise of their right of conversion to a number of shares which when combined with all shares obtained upon conversion of the Loan Documents by all of its affiliates (including any past conversions by each Lender or its affiliates) will not exceed, for each of the six Lenders, 4.99% of the total issued and outstanding shares of the Company as of December 31, 2006 for Harborview Master Fund and Whalehaven Fund and April 17, 2007 for the other entites listed below. In connection with these Settlement Agreements, the Company issued the full number of shares set forth below to the Lenders on May 18, 21 and 22, 2007. The Lenders also agreed to waive any past, existing and future defaults under the original loan documents for a period of 180 days from the date of the Settlement Agreements. The Lenders further agreed that upon receipt of the Pay-Off Payment by way of wire transfer in immediately available funds, (a) the Borrower will not be indebted to the Lenders for any reason under the Loan Documents, including without limitation indebtedness relating to principle, interest, fees, expenses or penalties, and the Lenders’ commitment to extend further credit to Borrower under the Loan Documents will terminate, (b) the Loan Documents and all of the Lenders’ security interests in, security titles to and other liens on all real and personal property of the Borrower will be automatically and without any further action by any party terminated and released, (c) all guarantors of the Indebtedness will be automatically and without any further action by any party released from their obligations to the Lenders, (d) the Lenders will deliver each promissory note or other instrument evidencing such Indebtedness to the Borrower for cancellation and (e) the Lenders will, and hereby do, authorize the Borrower to prepare and file, and to the extent the signature of each Lender is required, the Lenders will execute within three (3) business days of receipt of such document, any and all Uniform Commercial Code financing statement terminations, mortgage releases and other such lien release documents as the Borrower may request in order to evidence or otherwise give public notice of such lien terminations and releases (provided, however, that any and all such termination statements, mortgage releases and other such documents shall be prepared and recorded at Borrower’s expense).

The six lenders and the amounts of their settlements and stock issued is as follows:

Lender	Settlement Amount		Shares Issued
AJW Partners LLC	$	237,111.04		1,825,525
AJW Offshore Ltd.		1,076,999.62		1,303,454
AJW Qualified Partners LLC		649,555.33		533,034
New Millinnium Capital Partners II LLC		29,925.92		53,580
Harborview Master Fund		170,300.00		2,429,487
Whalehaven Fund		372,196.96		2,148,949
Total	$	2,535,088.87		8,294,029

Copies of the Settlement Agreements are attached hereto as Exhibits 10.1, 10.2, and 10.3.

The Company is continuing to negotiate Settlement Agreements with the remaining three holders Alpha Capital, NITE Capital and Bristol Investment Fund Ltd. of its callable secured convertible notes and warrants for the remaining principal amount of $507,841.00.

On May 10, 2007, the Company also entered into a Warrant Cancellation Agreement (the “Warrant Agreement”) with AJW Partners LLC, AJW Offshore Ltd., AJW Qualified Partners LLC, & New Millinnium Capital Partners II LLC (the “Investors”) under which the Company shall have the option to purchase from the Investors each of the 10,000,000 subject to warrants previously issued to the Investors. The Company shall have the option to purchase these warrants, in cash or same day funds, at any time from May 10, 2007 until the expiration of the warrants on January 10, 2014 for an aggregate purchase price of $500,000. Upon each Investor’s receipt of its portion of the aggregate purchase price, each Investor shall immediately return its warrant to the Company for cancellation.

A copy of the Warrant Agreement is attached hereto as Exhibit 10.4.

Item 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.

In connection with the Settlement Agreements, the Company issued an aggregate of 8,294,029 shares of its common stock to the Lenders on May 18, 21 and 22, 2007. The issuance of shares of the Company’s common stock to the Lenders was exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(2) thereof.

Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(c) Exhibits.

Exhibit No.	Description
10.1	Satisfaction and Release Agreement by and between Nayna Networks, Inc., and AJW Partners LLC, AJW Offshore Ltd., AJW Qualified Partners LLC, & New Millinnium Capital Partners II LLC dated May 10, 2007.
10.2	Satisfaction and Release Agreement by and between Nayna Networks, Inc., and Harborview Master Fund dated May 10, 2007.
10.3	Satisfaction and Release Agreement by and between Nayna Networks, Inc., and Whalehaven Fund dated May 10, 2007.
10.4	Warrant Cancellation Agreement by and among Nayna Networks, Inc., and AJW Partners LLC, AJW Offshore Ltd., AJW Qualified Partners LLC, & New Millinnium Capital Partners II LLC dated May 10, 2007.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	NAYNA NETWORKS, INC.
By:	/s/ Naveen S. Bisht
	Naveen S. Bisht Chief Executive Officer

Date: May 29, 2007

EXHIBIT INDEX

Exhibit No.	Description
10.1	Satisfaction and Release Agreement by and between Nayna Networks, Inc., and AJW Partners LLC, AJW Offshore Ltd., AJW Qualified Partners LLC, & New Millinnium Capital Partners II LLC dated May 10, 2007.
10.2	Satisfaction and Release Agreement by and between Nayna Networks, Inc., and Harborview Master Fund dated May 10, 2007.
10.3	Satisfaction and Release Agreement by and between Nayna Networks, Inc., and Whalehaven Fund dated May 10, 2007.
10.4	Warrant Cancellation Agreement by and among Nayna Networks, Inc., and AJW Partners LLC, AJW Offshore Ltd., AJW Qualified Partners LLC, & New Millinnium Capital Partners II LLC dated May 10, 2007.

EX-10.1

Exhibit 10.1

SATISFACTION AND RELEASE AGREEMENT

This Satisfaction and Release Agreement (this “Agreement”) is entered into as of May 10, 2007 by and between Nayna Networks, Inc., a Nevada corporation (the “Borrower”) and AJW Partners LLC, AJW Offshore Ltd, AJW Qualified Partners LLC, & New Millennium Capital Partners LLC (collectively, the “Lender”).

WHEREAS, the Borrower is indebted to the Lender pursuant to the loan agreements and debt instruments set forth on Schedule I hereto (together with all other loan or collateral agreements related thereto, the “Loan Documents;” and all indebtedness and liabilities, including without limitation all principle, interest, fees, expenses and penalties, under such Loan Documents being referred to herein as the “Indebtedness”);

WHEREAS, in connection with the issuance of the Indebtedness or otherwise the Lender has been issued certain warrants, as set forth on Schedule II hereto, which are exercisable or convertible into shares of the Borrower’s capital stock (the “Equity Instruments”).

WHEREAS, the Borrower intends to raise a new round of equity financing (the “Equity Financing”); and

WHEREAS, the Borrower has been advised that in order to raise necessary funds in the Equity Financing, Borrower must (i) obtain a satisfaction statement with respect to the Indebtedness, (ii) terminate the Equity Instruments, and (iii) obtain a full release of claims from Lender.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1.The Lender and the Borrower have agreed that the Lender shall accept $1,992,592.00 (the “Pay-Off Payment”), as settlement in satisfaction of the Indebtedness. In addition, the Borrower agrees to honor and the Lender agrees to limit the exercise of the Lender’s right of conversion under the Loan Documents to a number of shares which when combined with all shares obtained upon conversion of the Loan Documents by all of its affiliates (including any past conversions by Lender or its affiliates) will not exceed 4.99% of the total issued and outstanding shares of the Borrower as of April 17, 2007. The Lender further agrees that upon receipt of the Pay-Off Payment by way of wire transfer in immediately available funds, (a) the Borrower will not be indebted to the Lender for any reason under the Loan Documents, including without limitation indebtedness relating to principle, interest, fees, expenses or penalties, and the Lender’s commitment to extend further credit to Borrower under the Loan Documents will terminate, (b) the Loan Documents and all of the Lender’s security interests in, security titles to and other liens on all real and personal property of the Borrower will be automatically and without any further action by any party terminated and released, (c) all guarantors of the Indebtedness will be automatically and without any further action by any party released from their obligations to the Lender, (d) the Lender will deliver each promissory note or other instrument evidencing such Indebtedness to the Borrower for cancellation and (e) the Lender will, and hereby does, authorize the Borrower to prepare and file, and to the extent the Lender’s signature is required, the Lender will execute within three (3) business days of receipt of such document, any and all Uniform Commercial Code financing statement terminations, mortgage releases and other such lien release documents as the Borrower may request in order to evidence or otherwise give public notice of such lien terminations and releases (provided, however, that any and all such termination statements, mortgage releases and other such documents shall be prepared and recorded at Borrower’s expense). The Lender further acknowledges that it will rely on this letter and the acknowledgments, certifications, confirmations and agreements of the Lender contained herein in connection with raising the Equity Financing.

2.Upon the signing of this Agreement, the Lender hereby agrees to waive any past, existing and future defaults under the Loan Documents for a period of 180 days from the date of this Agreement. In addition, the Lender further agrees that for a period of 180 days from the date of this Agreement the Lender will not exercise its right of conversion under the Loan Documents except as per Section 1 above. The Borrower agrees to pay the Lender 15% of the $1,992,592.00 within 30 days of signing this Agreement. In addition, the Borrower shall issue the Lender the full number of shares described in the second sentence of Section 1 above and shall cause its legal counsel to provide a legal opinion covering the sale of a number of shares equal to 1% of the current number of shares outstanding under Rule 144.

3.The Lender hereby represents and warrants to the Borrower that (i) Schedule I sets forth all of the documents, instruments, promissory notes, contracts or other agreements (whether written or oral) pursuant to which the Borrower has any obligation or liability to Lender for or in respect of borrowed money (including, without limitation, any guarantee of the indebtedness or other obligation of any other party); (ii) all of the indebtedness of Borrower to Lender for borrowed money is set forth on Schedule I and Borrower has no obligation or liability to Lender except as set forth on Schedule I; (iii) all of the warrants, options, convertible securities or other contracts, instruments or other agreements exercisable for, exchangeable for or convertible into (x) any equity security issued or issuable by Borrower or (y) any document, instrument or agreement exercisable for, exchangeable for or convertible into any equity security issued or issuable by the Borrower are identified on Schedule II; (iv) Lender agrees that Schedule II shall be modified to include any additional issuance of such instruments as noted in subsection (iii) above after the date of this agreement to the date of the receipt of the Pay-Off Payment by the Lender; and (v) except as set forth on Schedule II, Lender does not have any right to acquire any equity security issued or issuable by Borrower to Lender.

4.The Lender hereby agrees and certifies to the Borrower that effective immediately the receipt of the Pay-Off Payment by the Lender that any and all Equity Instruments held by the Lender will without any further action by any party terminate and will be of no further force or effect, and the Lender will deliver each such Equity Instrument to the Borrower for cancellation and will thereafter execute any and all further documents as the Borrower may request in order to evidence such termination.

5.Lender hereby agrees not to transfer or assign any of the Loan Documents or related warrants unless such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 2 above.

6.Upon receipt of the Pay-Off Payment, each party (for itself and on behalf of its successors and assigns) hereby releases and forever discharges the other party (and all predecessors, successors and assigns of the other party, and the respective directors, officers, employees, owners, agents and representatives of the other party and its predecessors, successors and assigns) of and from any and all actions, causes of action, suits, claims, demands, agreements, debts, liabilities and obligations of any nature, fixed or contingent, known or unknown, whether at law or in equity, by reason of any event, occurrence, circumstances or matter of any nature arising out of the Loan Documents that occurred or existed at any time on or before the date of this Agreement.

7.The terms of this Agreement are contractual in nature and not mere recitals. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, and there are no representations, warranties, covenants or undertakings, oral or otherwise, that are not expressly set forth herein. No modification of this Agreement is valid and enforceable unless executed in writing with the same formality as this present Agreement and by the same parties. This Agreement shall be construed and governed in accordance with the laws of the State of New York. If any court shall subsequently deem any portion of this Agreement to be invalid, such designation shall not affect the remaining provisions of this Agreement, which will continue in full force and effect. This Agreement is binding upon the parties hereto, their respective agents, heirs, estates, legal representatives, attorneys, successors and assigns. Each party shall pay his or its fees and expenses in connection with the preparation and execution of this Agreement.

8.The parties to this Agreement hereby state that they have read the foregoing Agreement, that they have the requisite authority to enter into this Agreement, that they understand the contents hereof, that their execution of this Agreement is voluntary and that they have relied upon or have had the opportunity to seek the legal advice of the attorneys of their own choice prior to executing this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Satisfaction and Release Agreement as of the date first set forth above.

BORROWER:

Nayna Networks, Inc.

By: /s/ Naveen S. Bisht

Naveen S. Bisht

Chief Executive Officer

LENDER:

AJW PARTNERS, LLC

By: SMS Group, LLC

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

AJW OFFSHORE, LTD.

By: First Street Manager II, LLC

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

AJW QUALIFIED PARTNERS, LLC

By: AJW Manager, LLC

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

NEW MILLENNIUM CAPITAL PARTNERS II, LLC

By: First Street Manager II, LLP

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

Schedule I (NIR GROUP)

Loan Documents

(All Documents issued on November 17, 2005 and December 21, 2005 to following entities related to Convertible Debenture Financing)

NOTEHOLDER	ISSUED	PRINCIPAL AMOUNT
AJW Partners LLC AJW Offshore Ltd AJW Qualified Partnrs LLC New Millinnium Capital Partners II LLC Total (NIR Group)		$237,111.00 $1,076,000.00 $649,555.00 $29,926.00 $1,992,592.00

Lender Wire Instructions

Schedule II

Equity Instruments

HOLDERS OF SECURITIES	Warrants
AJW Partners LLC AJW Offshore Ltd AJW Qualified Partnrs LLC New Millinnium Capital Partners II LLC	119,000 540,000 326,000 15,000

HOLDERS OF SECURITIES	Warrants
AJW Partners LLC AJW Offshore Ltd AJW Qualified Partnrs LLC New Millinnium Capital Partners II LLC	1,220,000 5,960,000 2,700,000 120,000

EX-10.2

Exhibit 10.2

SATISFACTION AND RELEASE AGREEMENT

This Satisfaction and Release Agreement (this “Agreement”) is entered into as of May 10, 2007 by and between Nayna Networks, Inc., a Nevada corporation (the “Borrower”) and Harborview Master Fund (the “Lender”).

WHEREAS, the Borrower is indebted to the Lender pursuant to the loan agreements and debt instruments set forth on Schedule I hereto (together with all other loan or collateral agreements related thereto, the “Loan Documents;” and all indebtedness and liabilities, including without limitation all principle, interest, fees, expenses and penalties, under such Loan Documents being referred to herein as the “Indebtedness”);

WHEREAS, in connection with the issuance of the Indebtedness or otherwise the Lender has been issued certain warrants, as set forth on Schedule II hereto, which are exercisable or convertible into shares of the Borrower’s capital stock (the “Equity Instruments”).

WHEREAS, the Borrower intends to raise a new round of equity financing (the “Equity Financing”); and

WHEREAS, the Borrower has been advised that in order to raise necessary funds in the Equity Financing, Borrower must (i) obtain a satisfaction statement with respect to the Indebtedness, (ii) terminate the Equity Instruments, and (iii) obtain a full release of claims from Lender.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1.The Lender and the Borrower have agreed that the Lender shall accept $170,300.00 (the “Pay-Off Payment”), as settlement in satisfaction of the Indebtedness. In addition, the Borrower agrees to honor and the Lender agrees to limit the exercise of the Lender’s right of conversion under the Loan Documents to a number of shares which when combined with all shares obtained upon conversion of the Loan Documents by all of its affiliates (including any past conversions by Lender or its affiliates) will not exceed 4.99% of the total issued and outstanding shares of the Borrower as of December 31, 2006. The Lender further agrees that upon receipt of the Pay-Off Payment by way of wire transfer in immediately available funds, (a) the Borrower will not be indebted to the Lender for any reason under the Loan Documents, including without limitation indebtedness relating to principle, interest, fees, expenses or penalties, and the Lender’s commitment to extend further credit to Borrower under the Loan Documents will terminate, (b) the Loan Documents and all of the Lender’s security interests in, security titles to and other liens on all real and personal property of the Borrower will be automatically and without any further action by any party terminated and released, (c) all guarantors of the Indebtedness will be automatically and without any further action by any party released from their obligations to the Lender, (d) the Lender will deliver each promissory note or other instrument evidencing such Indebtedness to the Borrower for cancellation and (e) the Lender will, and hereby does, authorize the Borrower to prepare and file, and to the extent the Lender’s signature is required, the Lender will execute within three (3) business days of receipt of such document, any and all Uniform Commercial Code financing statement terminations, mortgage releases and other such lien release documents as the Borrower may request in order to evidence or otherwise give public notice of such lien terminations and releases (provided, however, that any and all such termination statements, mortgage releases and other such documents shall be prepared and recorded at Borrower’s expense). The Lender further acknowledges that it will rely on this letter and the acknowledgments, certifications, confirmations and agreements of the Lender contained herein in connection with raising the Equity Financing.

2.Upon the signing of this Agreement, the Lender hereby agrees to waive any past, existing and future defaults under the Loan Documents for a period of 180 days from the date of this Agreement. In addition, the Lender further agrees that for a period of 180 days from the date of this Agreement the Lender will not exercise its right of conversion under the Loan Documents except as per Section 1 above. The Borrower agrees to pay the Lender 15% of the $170,300.00 within 30 days of signing this Agreement. In addition, the Borrower shall issue the Lender the full number of shares described in the second sentence of Section 1 above and shall cause its legal counsel to provide a legal opinion covering the sale of a number of shares equal to 1% of the current number of shares outstanding under Rule 144.

3.The Lender hereby represents and warrants to the Borrower that (i) Schedule I sets forth all of the documents, instruments, promissory notes, contracts or other agreements (whether written or oral) pursuant to which the Borrower has any obligation or liability to Lender for or in respect of borrowed money (including, without limitation, any guarantee of the indebtedness or other obligation of any other party); (ii) all of the indebtedness of Borrower to Lender for borrowed money is set forth on Schedule I and Borrower has no obligation or liability to Lender except as set forth on Schedule I; (iii) all of the warrants, options, convertible securities or other contracts, instruments or other agreements exercisable for, exchangeable for or convertible into (x) any equity security issued or issuable by Borrower or (y) any document, instrument or agreement exercisable for, exchangeable for or convertible into any equity security issued or issuable by the Borrower are identified on Schedule II; (iv) Lender agrees that Schedule II shall be modified to include any additional issuance of such instruments as noted in subsection (iii) above after the date of this agreement to the date of the receipt of the Pay-Off Payment by the Lender; and (v) except as set forth on Schedule II, Lender does not have any right to acquire any equity security issued or issuable by Borrower to Lender.

4.The Lender hereby agrees and certifies to the Borrower that effective immediately the receipt of the Pay-Off Payment by the Lender that any and all Equity Instruments held by the Lender will without any further action by any party terminate and will be of no further force or effect, and the Lender will deliver each such Equity Instrument to the Borrower for cancellation and will thereafter execute any and all further documents as the Borrower may request in order to evidence such termination.

5.Lender hereby agrees not to transfer or assign any of the Loan Documents or related warrants unless such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 2 above.

6.Upon receipt of the Pay-Off Payment, each party (for itself and on behalf of its successors and assigns) hereby releases and forever discharges the other party (and all predecessors, successors and assigns of the other party, and the respective directors, officers, employees, owners, agents and representatives of the other party and its predecessors, successors and assigns) of and from any and all actions, causes of action, suits, claims, demands, agreements, debts, liabilities and obligations of any nature, fixed or contingent, known or unknown, whether at law or in equity, by reason of any event, occurrence, circumstances or matter of any nature arising out of the Loan Documents that occurred or existed at any time on or before the date of this Agreement.

7.The terms of this Agreement are contractual in nature and not mere recitals. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, and there are no representations, warranties, covenants or undertakings, oral or otherwise, that are not expressly set forth herein. No modification of this Agreement is valid and enforceable unless executed in writing with the same formality as this present Agreement and by the same parties. This Agreement shall be construed and governed in accordance with the laws of the State of New York. If any court shall subsequently deem any portion of this Agreement to be invalid, such designation shall not affect the remaining provisions of this Agreement, which will continue in full force and effect. This Agreement is binding upon the parties hereto, their respective agents, heirs, estates, legal representatives, attorneys, successors and assigns. Each party shall pay his or its fees and expenses in connection with the preparation and execution of this Agreement.

8.The parties to this Agreement hereby state that they have read the foregoing Agreement, that they have the requisite authority to enter into this Agreement, that they understand the contents hereof, that their execution of this Agreement is voluntary and that they have relied upon or have had the opportunity to seek the legal advice of the attorneys of their own choice prior to executing this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Satisfaction and Release Agreement as of the date first set forth above.

BORROWER:

Nayna Networks, Inc.

By: /s/ Naveen S. Bisht

Naveen S. Bisht

Chief Executive Officer

LENDER:

Harborview Master Fund LP

By: /s/ Dale J. Elliott

Dale J. Elliott

Navigator Management Ltd.

Authorized Signatory

Schedule I (Harborview Master Fund)

Loan Documents

(All Documents issued on November 17, 2005 and December 21, 2005 to following entities related to Convertible Debenture Financing)

NOTEHOLDER	ISSUED	PRINCIPAL AMOUNT
Harborview Master Fund		$170,300.00

Lender Wire Instructions

Schedule II

Equity Instruments

HOLDERS OF SECURITIES	Warrants
Harborview Master Fund	100,000

EX-10.3

Exhibit 10.3

SATISFACTION AND RELEASE AGREEMENT

This Satisfaction and Release Agreement (this “Agreement”) is entered into as of May 10, 2007 by and between Nayna Networks, Inc., a Nevada corporation (the “Borrower”) and Whalehaven Fund (the “Lender”).

WHEREAS, the Borrower is indebted to the Lender pursuant to the loan agreements and debt instruments set forth on Schedule I hereto (together with all other loan or collateral agreements related thereto, the “Loan Documents;” and all indebtedness and liabilities, including without limitation all principle, interest, fees, expenses and penalties, under such Loan Documents being referred to herein as the “Indebtedness”);

WHEREAS, in connection with the issuance of the Indebtedness or otherwise the Lender has been issued certain warrants, as set forth on Schedule II hereto, which are exercisable or convertible into shares of the Borrower’s capital stock (the “Equity Instruments”).

WHEREAS, the Borrower intends to raise a new round of equity financing (the “Equity Financing”); and

WHEREAS, the Borrower has been advised that in order to raise necessary funds in the Equity Financing, Borrower must (i) obtain a satisfaction statement with respect to the Indebtedness, (ii) terminate the Equity Instruments, and (iii) obtain a full release of claims from Lender.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements and covenants set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

1.The Lender and the Borrower have agreed that the Lender shall accept $374,786.00 (the “Pay-Off Payment”), as settlement in satisfaction of the Indebtedness. In addition, the Borrower agrees to honor and the Lender agrees to limit the exercise of the Lender’s right of conversion under the Loan Documents to a number of shares which when combined with all shares obtained upon conversion of the Loan Documents by all of its affiliates (including any past conversions by Lender or its affiliates) will not exceed 4.99% of the total issued and outstanding shares of the Borrower as of December 31, 2006. The Lender further agrees that upon receipt of the Pay-Off Payment by way of wire transfer in immediately available funds, (a) the Borrower will not be indebted to the Lender for any reason under the Loan Documents, including without limitation indebtedness relating to principle, interest, fees, expenses or penalties, and the Lender’s commitment to extend further credit to Borrower under the Loan Documents will terminate, (b) the Loan Documents and all of the Lender’s security interests in, security titles to and other liens on all real and personal property of the Borrower will be automatically and without any further action by any party terminated and released, (c) all guarantors of the Indebtedness will be automatically and without any further action by any party released from their obligations to the Lender, (d) the Lender will deliver each promissory note or other instrument evidencing such Indebtedness to the Borrower for cancellation and (e) the Lender will, and hereby does, authorize the Borrower to prepare and file, and to the extent the Lender’s signature is required, the Lender will execute within three (3) business days of receipt of such document, any and all Uniform Commercial Code financing statement terminations, mortgage releases and other such lien release documents as the Borrower may request in order to evidence or otherwise give public notice of such lien terminations and releases (provided, however, that any and all such termination statements, mortgage releases and other such documents shall be prepared and recorded at Borrower’s expense). The Lender further acknowledges that it will rely on this letter and the acknowledgments, certifications, confirmations and agreements of the Lender contained herein in connection with raising the Equity Financing.

2.Upon the signing of this Agreement, the Lender hereby agrees to waive any past, existing and future defaults under the Loan Documents for a period of 180 days from the date of this Agreement. In addition, the Lender further agrees that for a period of 180 days from the date of this Agreement the Lender will not exercise its right of conversion under the Loan Documents except as per Section 1 above. The Borrower agrees to pay the Lender 15% of the $374,786.00 within 30 days of signing this Agreement. In addition, the Borrower shall issue the Lender certificates for 391,225 and 1,557,647 shares of Common Stock at the conversion rates specified in the previously submitted conversion notices and shall cause its legal counsel to provide a legal opinion covering the sale of a number of shares equal to 1% of the current number of shares outstanding under Rule 144.

3.The Lender hereby represents and warrants to the Borrower that (i) Schedule I sets forth all of the documents, instruments, promissory notes, contracts or other agreements (whether written or oral) pursuant to which the Borrower has any obligation or liability to Lender for or in respect of borrowed money (including, without limitation, any guarantee of the indebtedness or other obligation of any other party); (ii) all of the indebtedness of Borrower to Lender for borrowed money is set forth on Schedule I and Borrower has no obligation or liability to Lender except as set forth on Schedule I; (iii) all of the warrants, options, convertible securities or other contracts, instruments or other agreements exercisable for, exchangeable for or convertible into (x) any equity security issued or issuable by Borrower or (y) any document, instrument or agreement exercisable for, exchangeable for or convertible into any equity security issued or issuable by the Borrower are identified on Schedule II; (iv) Lender agrees that Schedule II shall be modified to include any additional issuance of such instruments as noted in subsection (iii) above after the date of this agreement to the date of the receipt of the Pay-Off Payment by the Lender; and (v) except as set forth on Schedule II, Lender does not have any right to acquire any equity security issued or issuable by Borrower to Lender.

4.The Lender hereby agrees and certifies to the Borrower that effective immediately the receipt of the Pay-Off Payment by the Lender that any and all Equity Instruments held by the Lender will without any further action by any party terminate and will be of no further force or effect, and the Lender will deliver each such Equity Instrument to the Borrower for cancellation and will thereafter execute any and all further documents as the Borrower may request in order to evidence such termination. For the avoidance of doubt, Equity Instruments shall not include any shares held by the Lender as of the date of this Agreement or shares issued to the Lender pursuant to Section 2 above, all of which are not subject to cancellation.

5.Lender hereby agrees not to transfer or assign any of the Loan Documents or related warrants unless such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 2 above.

6.Upon receipt of the Pay-Off Payment, each party (for itself and on behalf of its successors and assigns) hereby releases and forever discharges the other party (and all predecessors, successors and assigns of the other party, and the respective directors, officers, employees, owners, agents and representatives of the other party and its predecessors, successors and assigns) of and from any and all actions, causes of action, suits, claims, demands, agreements, debts, liabilities and obligations of any nature, fixed or contingent, known or unknown, whether at law or in equity, by reason of any event, occurrence, circumstances or matter of any nature arising out of the Loan Documents that occurred or existed at any time on or before the date of this Agreement.

7.The terms of this Agreement are contractual in nature and not mere recitals. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, and there are no representations, warranties, covenants or undertakings, oral or otherwise, that are not expressly set forth herein. No modification of this Agreement is valid and enforceable unless executed in writing with the same formality as this present Agreement and by the same parties. This Agreement shall be construed and governed in accordance with the laws of the State of New York. If any court shall subsequently deem any portion of this Agreement to be invalid, such designation shall not affect the remaining provisions of this Agreement, which will continue in full force and effect. This Agreement is binding upon the parties hereto, their respective agents, heirs, estates, legal representatives, attorneys, successors and assigns. Each party shall pay his or its fees and expenses in connection with the preparation and execution of this Agreement.

8.The parties to this Agreement hereby state that they have read the foregoing Agreement, that they have the requisite authority to enter into this Agreement, that they understand the contents hereof, that their execution of this Agreement is voluntary and that they have relied upon or have had the opportunity to seek the legal advice of the attorneys of their own choice prior to executing this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Satisfaction and Release Agreement as of the date first set forth above.

BORROWER:

Nayna Networks, Inc.

By: /s/ Naveen S. Bisht

Naveen S. Bisht

Chief Executive Officer

LENDER:

WHALEHAVEN CAPITAL FUND LTD.

By: /s/ Arthur Jones

Arthur Jones

Director

Schedule I (Whalehaven Fund)

Loan Documents

(All Documents issued on November 17, 2005 and December 21, 2005 to following entities related to Convertible Debenture Financing)

NOTEHOLDER	ISSUED	PRINCIPAL AMOUNT
Whalehaven Fund		$374,786.00

Lender Wire Instructions

Schedule II

Equity Instruments

HOLDERS OF SECURITIES	Warrants
Whalehaven Fund	200,000

EX-10.4

Exhibit 10.4

WARRANT CANCELLATION AGREEMENT

This Warrant Cancellation Agreement (this “Agreement”) is entered into effective as of

May 10, 2007 (the “Effective Date”) by and among the investors set forth on the signature page (the “Investors”) and Nayna Networks, Inc., a Nevada corporation (“Nayna” and collectively with the Investors, the “Parties”).

WHEREAS, the Parties previously entered into that certain Waiver Agreement, dated as of January 18, 2007 (the “Waiver Agreement”); and

WHEREAS, pursuant to the terms set forth in the Waiver Agreement, Nayna issued to the Investors, warrants exercisable for the purchase of up to an aggregate of 10,000,000 shares of Nayna common stock (each, in the amount set forth opposite the name of each respective Investor on Schedule A hereto) with an exercise price of $0.06 per share (the “Warrants”).

NOW, THEREFORE,the Parties hereto, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, hereby agree as follows:

1.  Nayna shall have the option to purchase from the Investors, in cash or same day funds, each of the Warrants at any time from the Effective Date until the expiration of the Warrants, for an aggregate purchase price of $500,000 (such payment shall be allocated among the Investors in the manner set forth on Schedule A hereto) (the “Cash Amount”). Upon each Investor’s receipt of its portion of the Cash Amount, each Investor shall immediately return its Warrant to Nayna for cancellation.

2.  The terms of this Agreement are contractual in nature and not mere recitals. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, and there are no representations, warranties, covenants or undertakings, oral or otherwise, that are not expressly set forth herein. No modification of this Agreement is valid and enforceable unless executed in writing with the same formality as this present Agreement and by the same parties. This Agreement shall be construed and governed in accordance with the laws of the State of California. If any court shall subsequently deem any portion of this Agreement to be invalid, such designation shall not affect the remaining provisions of this Agreement, which will continue in full force and effect. This Agreement is binding upon the parties hereto, their respective agents, heirs, estates, legal representatives, attorneys, successors and assigns. Each party shall pay his or its fees and expenses in connection with the preparation and execution of this Agreement.

3. The parties to this Agreement hereby state that they have read the foregoing Agreement, that they have the requisite authority to enter into this Agreement, that they understand the contents hereof, that their execution of this Agreement is voluntary and that they have relied upon or have had the opportunity to seek the legal advice of the attorneys of their own choice prior to executing this Agreement.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the Parties have caused this Warrant Cancellation Agreement to be duly executed as of the date first above written.

NAYNA NETWORKS, INC.

a Nevada corporation

/s/ Naveen S. Bisht

Name: Naveen S. Bisht

Title: President & CEO

AJW PARTNERS, LLC

By: SMS Group, LLC

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

AJW OFFSHORE, LLC

By: First Street Manager II, LLC

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

AJW QUALIFIED PARTNERS, LLC

By: AJW Manager, LLC

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

NEW MILLENNIUM CAPITAL PARTNERS II, LLC

By: First Street Manager II, LLP

/s/ Corey S. Ribotsky

Corey S. Ribotsky

Manager

Schedule A

Investor	Warrant Shares	Allocation of Cash Amount
AJW PARTNERS, LLC	1,220,000	$61,000
AJW OFFSHORE, LLC	5,960,000	$298,000
AJW QUALIFIED PARTNERS, LLC	2,700,000	$135,000
NEW MILLENNIUM CAPITAL PARTNERS II, LLC	120,000	$6,000