AMENDMENT NO. 2 TO CERTIFICATE OF DESIGNATIONS OF SDA AMERICA, INC.
This AMENDMENT NO. 2 TO CERTIFICATE OF DESIGNATIONS, dated as of April 22, 2005
(this "Amendment No. 2"), 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) the Securities Purchase Agreement, dated as of May 28, 2004,
among the Parent, the Company and Laurus (as amended, modified or supplemented
from time to time, the "Securities Purchase Agreement"). Unless otherwise
indicated, capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Certificate of Designations.
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 for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Section 5(c) of the Certificate of Designations is hereby amended
to provide as follows:
(c) The number of shares of the Parent's Common Stock issuable upon
conversion of each share of Series A Preferred Stock shall equal (i)
the sum of (A) the State Value per share, as amended pursuant to
Section 5 hereof, and (B) at the Holder's election, accrued and unpaid
dividends on such share, (ii) divided by the Conversion Price (as
defined below).
The Conversion Price shall be set as follows: (a) for the first
$2,000,000 in Stated Value or accrued and unpaid dividends or fees
converted by Holder, the Conversion Price shall be 85 percent of the
average of the five lowest closing prices during the 22 trading days
prior to the conversion, but in no event less than $0.07 per share;
(b) for the next $1,000,000 in Stated Value or accrued and unpaid
dividends or fees converted by Holder, the Conversion Price shall be
$0.25; and (c) for each succeeding amount converted, whether in Stated
Value or accrued and unpaid dividends or fees, the Conversion Price
shall $0.35 per share.
2. This Amendment No. 2 shall be effective as of the date hereof
following the execution of same by each of the Company, the Parent and the
Laurus.
3. There are no other amendments to the Certificate of Designations.
4. 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 Securities Purchase
Agreement, 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.
5. This Amendment No. 2 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 Xxxxxx have
caused this Amendment No. 2 to the Certificate of Designations to be signed in
its name this 22nd day of April, 2005.
SECURED DIGITAL APPLICATIONS, INC.
By:/S/Xxxxxxx Soon-Xxxx Xxx
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Name:Xxxxxxx Soon-Xxxx Xxx
Title:Chairman
SDA AMERICA, INC.
By:/S/ Xxxxxxx Soon-Xxxx Xxx
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Name: Xxxxxxx Soon-Xxxx Xxx
Title: Chairman
LAURUS MASTER FUND, LTD.
By:/S/Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Partner
