Exhibit 10.29

FOLLOW ON FUNDING
WAIVER OF RIGHTS AGREEMENT

This Waiver of Rights Agreement (the “Agreement”) is made and entered into as of
___, 2007 (the “Effective Date”), by and between XA, Inc., a Nevada corporation
(“XA”) and Sands Brothers Venture Capital LLC, Sands Brothers Venture Capital II
LLC, Sands Brothers Venture Capital III LLC, Sands Brothers Venture Capital IV
LLC, Katie & Adam Bridge Partners, L.P., G. Chris Andersen, Paul M. Higbee and
Vision Opportunity Master Fund, Ltd. (each a “Purchaser” and collectively the
“Purchasers”), and Mastodon Ventures, Inc., Gusrae Kaplan Bruno & Nusbaum, PLLC
and David M. Loev (the “Interested Parties” and collectively with the
Purchasers, the “Warrant Holders”) each individually a “Party” and collectively
the “Parties.”

W I T N E S S E T H:

WHEREAS, pursuant to Securities Purchase Agreements entered into with the
Purchasers on August 8, 2006, September 26, 2006, and October 23, 2006 (the
“Prior Purchase Agreements”), XA sold the Purchasers an aggregate of $2,700,000
in 11% Senior Secured Convertible Promissory Notes (the “Prior Notes”) and
granted the Warrant Holders various warrants to purchase shares of XA’s common
stock as described in greater detail on Exhibit A, attached hereto (the
“Prior Warrants”);

WHEREAS, the Purchasers entered into Registration Rights Agreements in
connection with the Prior Purchase Agreements, which provided among other
things, that XA would register all of the shares of common stock issuable in
connection with the conversion of the Notes and the exercise of the Warrants
(each a “Prior Rights Agreement” and collectively the “Prior Rights Agreements”)
pursuant to a Registration Statement (the “Registration Statement”) which was to
be declared effective by the SEC by May 24, 2007, which deadline was not met
(the “Effectiveness Date”);

WHEREAS, XA has been prevented from registering all of the Registrable
Securities due to limitations put on the total number of shares of common stock
which XA can register pursuant to Rule 415(a)(1);

WHEREAS, XA plans to sell additional Notes on substantially similar terms to the
Purchasers (the “Follow On Notes” and collectively with the Prior Notes, the
“Notes”) and issue additional Warrants to the Purchasers in connection with the
Follow On Notes on similar terms as the Warrants (the “Follow On Warrants” and
collectively with the Prior Warrants, the “Warrants”), in connection with and
pursuant to Securities Purchase Agreements, which shares issuable in connection
with the conversion of the Follow On Notes and issuable in connection with the
exercise of the Follow On Warrants XA has agreed to register pursuant to
Registration Rights Agreements (each a “Follow On Rights Agreement” and
collectively the “Follow On Rights Agreements”; the transactions pursuant to
which the Follow On Notes and the Follow On Warrants are to be issued, the
“Follow On Funding”); and

WHEREAS, due to the sale of the Follow On Warrants and the Follow On Notes, and
the other related transactions as described therein, XA is required to withdraw
its currently pending Registration Statement.

 
Follow On Funding Waiver of Rights Agreement
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NOW, THEREFORE, in consideration for the promises and pledges contained below
and other good and valuable consideration, which consideration the Parties
acknowledge receipt of, and the premises and the mutual covenants, agreements,
and considerations herein contained, the Parties hereto agree as follows:

1. Waiver of Default; Replacement of Prior Rights Agreement.

 
(a)
The Purchasers agree (and any of the Interested Parties holding the power to do
so) to waive the default caused by XA’s inability to meet the required
Effectiveness Date and waive any default which may occur due to XA’s need to
withdraw the Registration Statement.

 
(b)
The Purchasers, the Interested Parties and XA further agree that each Prior
Rights Agreement and the terms and conditions set forth therein shall be
replaced and superseded in its entirety, with the terms and conditions of the
Follow On Rights Agreement entered into between XA and such party, as the case
may be..

2.  Re-Pricing of the Prior Notes.

The Purchasers and XA agree that in connection with the issuance of the Follow
On Notes, the Prior Notes shall be re-priced, i.e., the Conversion Price of such
Prior Notes shall be equal to the Conversion Price of the Follow On Notes, as
such term is defined in the Follow On Notes.

3. Waiver of Anti-Dilution Rights.

The Warrant Holders and XA agree that the Purchase Price (as defined in the
Warrants) of the $1.10 exercise price Prior Warrants shall be adjusted to the
Purchase Price of the Follow On Warrants.

4. No XA Defaults.

The Purchasers agree that after this Agreement is executed by each party hereto,
that XA shall not be in default of any of the agreements entered into in
connection with the Prior Purchase Agreements and/or Follow On Purchase
Agreements.

5. Re-Pricing of June 30, 2004 Warrants.

The Parties agree and acknowledge that the Follow On Funding will cause the
previously granted 250,000 Class A Warrants to purchase shares of XA’s common
stock at $9.60 per share (prior to the re-pricing) to re-price and/or adjust to
$0.30 per share, based on the current exercise price of the Follow On Warrants
(the “Re-Pricing”) in connection with the anti-dilution rights contained
therein. The Purchasers agree to waive any default and/or dilution rights which
may exist in connection with the Notes and/or Warrants in connection such
Re-Pricing.

 
Follow On Funding Waiver of Rights Agreement
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6.  Miscellaneous.

 
(a)
Assignment. All of the terms, provisions and conditions of this Agreement shall
be binding upon and shall inure to the benefit of and be enforceable by the
Parties hereto and their respective successors and permitted assigns.

 
(b)
Applicable Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Nevada, California, Illinois, New Jersey
and New York, excluding any provision of this Agreement which would require the
application of the laws of any other jurisdiction.

 
(c)
Amendments and Waivers. No variations, modifications, changes or extensions of
this Agreement or any other terms hereof shall be binding upon any Party hereto
unless set forth in a document duly executed by such Party or an authorized
agent or such Party.

 
(d)
Waiver. No failure on the part of any Party to enforce any provisions of this
Agreement will act as a waiver of the right to enforce that provision.

 
(e)
Section Headings. Section headings are for convenience only and shall not define
or limit the provisions of this Agreement.

 
(f)
Counterparts; Effect of Facsimile and Photocopied Signatures. This Agreement may
be executed in several counterparts, each of which is an original. It shall not
be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts. A copy of this Agreement
signed by one Party and faxed to another Party shall be deemed to have been
executed and delivered by the signing Party as though an original. A photocopy
of this Agreement shall be effective as an original for all purposes.

[Remainder of page left intentionally blank. Signature page follows.]

 
Follow On Funding Waiver of Rights Agreement
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  This Agreement has been executed by the Parties on the date first written
above, with an Effective Date as provided above.

XA, Inc.

/s/ Joseph Wagner
Joseph Wagner
Chief Executive Officer

Purchasers:

   
Sands Brothers Venture Capital LLC
 Sands Brothers Venture Capital II LLC
   
By:/s/ Scott Baily                          
 
By:/s/ Scott Baily                          
Its: COO                                          
 
Its:COO                                           
 
Printed Name:
 
Scott Baily                                      
Printed Name:
 
Scott Baily                                      
 
 
 
 
   
Sands Brothers Venture Capital III LLC
Sands Brothers Venture Capital IV LLC
   
By:/s/ Scott Baily                          
By:/s/ Scott Baily                          
 
Its:COO                                          
Its:COO                                           
 
Printed Name:
 
Scott Baily                                      
Printed Name:
 
Scott Baily                                      
 
 
       
 
Katie & Adam Bridge Partners, L.P.
Vision Opportunity Master Fund, Ltd. 
   
By:/s/ Scott Baily                          
By:/s/ Adam Benowitz                  
 
Its:COO                                          
 
Its:Porfolio Manager                     
 
Printed Name:
 
Scott Baily                                      
Printed Name:
 
Adam Benowitz                                 
 
 
   
/s/ G. Chris Andersen                       
/s/ Paul M. Higbee                              
G. Chris Andersen
Paul M. Higbee

 
Interested Parties:

Mastodon Ventures, Inc.
 
Gusrae Kaplan Bruno & Nusbaum, PLLC
 
By:/s/ Robert Hersch                   
 
By:______________________
 
Its:President                                  
 
Its:_______________________
 
Printed Name:
 
Robert Hersch                                 
Printed Name:
 
________________________
 
 
   
/s/ David M. Loev                          
 
David M. Loev
 

 
 
Follow On Funding Waiver of Rights Agreement
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Exhibit A

XA, Inc. Prior Warrants
                     
As Granted
Currently Held (1)
   
Grant Date
Vesting Date
         Exercisable
  until
Exercise Price
Warrants
 
Warrants
Warrants
               
$0.30
$0.30
               
 
 
 
Vision Opportunity Master Fund, Ltd.
10/23/06
10/23/06
10/23/11
$1.10
187,500
 
 
 
   
10/23/06
10/23/06
10/23/11
$0.30
100,000
 
100,000
333,333
(1)
             
 
 
 
Paul M. Higbee
9/26/06
9/26/06
10/26/11
$1.10
15,000
 
0
0
 
G. Chris Andersen
9/26/06
9/26/06
10/26/11
$1.10
15,000
 
0
0
               
 
 
 
Sands Brothers Venture Capital LLC
8/8/06
8/8/06
08/08/11
$1.10
3,500
 
 
 
   
8/8/06
8/8/06
08/08/11
$0.30
6,667
 
6,667
4,000
               
 
 
 
Sands Brothers Venture Capital II LLC
8/8/06
8/8/06
08/08/11
$1.10
14,000
 
 
 
   
8/8/06
8/8/06
08/08/11
$0.30
26,667
 
26,667
16,000
               
 
 
 
Sands Brothers Venture Capital III LLC
8/8/06
8/8/06
08/08/11
$1.10
108,500
 
 
 
   
8/8/06
8/8/06
08/08/11
$0.30
206,666
 
206,666
124,000
               
 
 
 
Sands Brothers Venture Capital IV LLC
8/8/06
8/8/06
08/08/11
$1.10
35,000
 
 
 
   
8/8/06
8/8/06
08/08/11
$0.30
66,666
 
66,666
39,999
               
 
 
 
Katie & Adam Bridge Partners, L.P.
8/8/06
8/8/06
08/08/11
$1.10
14,000
 
 
 
   
8/8/06
8/8/06
08/08/11
$0.30
26,667
 
26,667
16,001
               
 
 
 
Mastodon Ventures, Inc.
8/8/06
8/8/06
08/08/11
$0.30
666,667
 
666,667
429,334
(1)
             
 
 
 
David M. Loev
8/8/2006
8/8/2006
08/08/11
$0.30
25,000
 
 
 
   
11/2/2006
11/2/2006
11/02/11
$0.30
75,000
                           
(1) Note: The Sands Brothers entities transferred 133,333 $0.30 warrants to
Vision, and Mastodon transferred 100,000 $0.30 warrants to Vision in connection
with the Vision closing. Additionally, Mastodon transferred 54,933 $0.30
warrants to David Loev and 82,400 $0.30 warrants to Gusrae Kaplan Bruno &
Nusbaum as disclosed in the Company's filings.
 

 
 
Follow On Funding Waiver of Rights Agreement
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