WAIVER OF SDA AMERICA, INC.
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This WAIVER, dated as of July 29, 2005 (this "Waiver"), by and between
SECURED DIGITAL APPLICATIONS, INC., a Delaware corporation (the "Parent"), SDA
AMERICA, INC., a Delaware corporation (the "Company"), and LAURUS MASTER FUND,
LTD., a Cayman Islands company ("Laurus").
Reference is made to (i) the Certificate To Set Forth Designations, Voting
Powers, Preferences, Limitations, Restrictions, And Relative Rights Of Series A
Convertible Preferred Stock, $.01 Par Value Per Share (as amended, modified or
supplemented from time to time, the "Certificate of Designations"), of the
Company and (ii) that certain secured convertible term note dated May 28, 2004
made by the Company in favor Laurus in the original principal amount of Five
Hundred Thousand Dollars ($500,000) (the "Note"). Unless otherwise indicated,
capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Certificate of Designations and the Note, as
applicable.
NOW, THEREFORE, in consideration for the execution and delivery by the
Company of all documents requested by the holders of the Series A Preferred
Stock and the Note and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. The Company hereby waives its right to require the Holder to deliver
seventy five (75) days prior written notice of the Holder's conversion exercise
(in excess of the 4.99% conversion limitation described in Section 3.2 of the
Note), provided, however, the Holder and the Company confirm and agree that at
this waiver shall not serve as a waiver or recission of the requirements set
forth in Section 3.2 of the Note regarding the Holder's beneficial ownership
exceeding 19.99% of the Common Stock.
2. The Company hereby waives its right to require the Holder to deliver
seventy five (75) days prior written notice of the Holder's conversion exercise
(in excess of the 4.99% conversion limitation described in Section 5(b) of the
Certificate of Designations), provided, however, the Holder and the Company
confirm and agree that at this waiver shall not serve as a waiver or recission
of the requirements set forth in Section 5(b) of the Note regarding the Holder's
beneficial ownership exceeding 19.99% of the Common Stock.
3. This Waiver shall be effective as of the date hereof following the
execution of same by each of the Company, the Parent and the Laurus.
4. There are no other amendments to the Certificate of Designations or
the Note.
5. Each of the Parent and the Company hereby represents and warrants to
Laurus that as of the date hereof all representations, warranties and covenants
made by the Company in connection with the Note, the Certificate of Designations
and the Related Agreements (as defined in the Securities Purchase Agreement) are
true correct and complete and all of the Parent's and the Company's covenant
requirements have been met. As of the date hereof, no Event of Default under any
Related Agreement has occurred or is continuing.
6. This Waiver shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
and be enforceable by each of the parties hereto and its successors and
permitted assigns. This Amendment No. 1 may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
IN WITNESS WHEREOF, each of the Company, the Parent and Laurus have caused
this Waiver to the Certificate of Designations to be signed in its name this
29th day of July, 2005.
SECURED DIGITAL APPLICATIONS, INC.
By: /s/ ▇▇▇▇▇▇▇ Soon-▇▇▇▇ ▇▇▇
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Name: ▇▇▇▇▇▇▇ Soon-▇▇▇▇ ▇▇▇
Title: Chief Executive Officer
SDA AMERICA, INC.
By: /s/▇▇▇▇▇▇▇ Soon-▇▇▇▇ ▇▇▇
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Name: ▇▇▇▇▇▇▇ Soon-▇▇▇▇ ▇▇▇
Title: President
LAURUS MASTER FUND, LTD.
By: /s/▇▇▇▇▇ Grin
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Name: ▇▇▇▇▇ Grin