Waiver of Rights Agreement Dated On Or Around June 22, 2007 with the Purchasers

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

        Page
          1
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          5

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


    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

            	 


    

     

    
      
        
           

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            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.

            	 


    

     

     

    
      
        
        

      

      
        
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            Funding Waiver of Rights Agreement

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