Document:

f8k022210ex10iii_neonode.htm

     

    
      EXHIBIT
10.3

      

      NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

       

      
        	 
      	
                Right
      to Purchase ________ shares of Common
      Stock of Neonode Inc. (subject to adjustment as provided
      herein)

              

      

       

      
 

      COMMON
STOCK PURCHASE WARRANT

       

      
      

       

      
        	No. 2010-[insert warrant designation
      code]   	Issue Date: _______
      __, 2010

      

       

       

      NEONODE
INC., a corporation organized under the laws of the State of Delaware (the
“Company”), hereby certifies that, for value received, [fill-in
name of investor], or its assigns (the “Holder”), is entitled, subject to
th e terms
set forth below, to purchase from the Company at any time commencing six (6)
months after the Issue Date until 5:00 p.m., E.S.T on ________ __, 2013, the
third (3rd)
anniversary of the Issue Date (the “Expiration Date”), up to [fill-in
amount of Common Stock that can be issued] fully paid and nonassessable
shares of Common Stock at a per share purchase price of $0.04.  The
purchase price per share, as adjusted from time to time as herein provided, is
referred to herein as the "Purchase Price."  The number and character
of such shares of Common Stock and the Purchase Price are subject to adjustment
as provided herein.  Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Convertible Note
Agreement (the “Convertible Note Agreement”), dated as of _________ __, 2010,
entered into by the Company and certain of the Holders.

      

      As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

       

      (a)           The
term “Company” shall include Neonode Inc. and any corporation which shall
succeed or assume the obligations of Neonode Inc. hereunder.

       

      (b)           The
term “Common Stock” includes (a) the Company's Common Stock, $0.001 par
value per share, as authorized on the date of the Convertible Note Agreement,
and (b) any other securities into which or for which any of the securities
described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.

       

      (c)           The
term “Other Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 3 or otherwise.

       

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

       

      (d)           The
term “Warrant Shares” shall mean the Common Stock issuable upon exercise of this
Warrant.

       

      1.           Exercise of
Warrant.

       

      1.1.           Number of Shares Issuable
upon Exercise.  From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, shares of Common Stock of the Company, subject to
adjustment pursuant to Section 3.

       

      1.2.           Full
Exercise.  This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form”) duly executed by
such Holder and delivery within two days thereafter of payment, in cash, wire
transfer or by certified or official bank check payable to the order of the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Purchase Price then in
effect.  The original Warrant is not required to be surrendered to the
Company until it has been fully exercised.

       

      1.3.           Partial
Exercise.  This Warrant may be exercised in part (but not for a
fractional share) by delivery of a Subscription Form in the manner and at the
place provided in subsection 1.2 except that the amount payable by the
Holder on such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares of Common Stock designated by the Holder in
the Subscription Form by (b) the Purchase Price then in
effect.  On any such partial exercise provided the Holder has
surrendered the original Warrant, the Company, at its expense, will forthwith
issue and deliver to or upon the order of the Holder hereof a new Warrant of
like tenor, in the name of the Holder hereof or as such Holder (upon payment by
such Holder of any applicable transfer taxes) may request, the whole number of
shares of Common Stock for which such Warrant may still be exercised for the
balance of.

       

      1.4.           Fair Market Value.
Fair Market Value of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:

       

      (a)           If
the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
Global Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the New
York Stock Exchange or the American Stock Exchange, LLC, then the average of the
closing or last sale prices, respectively, reported for the ten trading days
immediately preceding the Determination Date;

       

      (b)           If
the Company's Common Stock is not traded on an exchange or on the NASDAQ Global
Market, Nasdaq Global Select Market, the NASDAQ Capital Market, the New York
Stock Exchange or the American Stock Exchange, LLC, but is traded in the
over-the-counter market, then the average of the closing bid price reported for
the ten trading days immediately preceding the Determination Date;

       

      (c)           Except
as provided in clause (d) below and Section 2.1, if the Company's Common
Stock is not publicly traded, then as the Holder and the Company agree, or in
the absence of such an agreement, by arbitration in accordance with the rules
then standing of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and
training to pass on the matter to be decided; or

       

      (d)           If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.

       

       

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      1.5.           Company
Acknowledgment. The Company will, at the time of the exercise of the
Warrant, upon the request of the Holder hereof acknowledge in writing its
continuing obligation to afford to such Holder any rights to which such Holder
shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

       

      1.6.           Trustee for Warrant
Holders. In the event that a bank or trust company shall have been
appointed as trustee for the Holder of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the powers and
duties of a warrant agent (as hereinafter described) and shall accept, in its
own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.

       

                 1.7           Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that the shares of
Common Stock purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder hereof as the record owner of such shares as of the close
of business on the date on which delivery of a Subscription Form shall have
occurred and payment made for such shares as aforesaid. As soon as practicable
after the exercise of this Warrant in full or in part, and in any event within
three (3) business days thereafter (“Warrant Share Delivery Date”), the Company
at its expense (including the payment by it of any applicable issue taxes) will
cause to be issued in the name of and delivered to the Holder hereof, or as such
Holder (upon payment by such Holder of any applicable transfer taxes) may direct
in compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and non-assessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or
otherwise.

       

      2.           Cashless
Exercise.

       

      (a)           Commencing
six months after the Issue Date, payment upon exercise may be made at the option
of the Holder either in (i) cash, wire transfer or by certified or official
bank check payable to the order of the Company equal to the applicable aggregate
Purchase Price, (ii) by delivery of Common Stock issuable upon exercise of the
Warrants in accordance with Section (b) below or (iii) by a
combination of any of the foregoing methods, for the number of Common Stock
specified in such form (as such exercise number shall be adjusted to reflect any
adjustment in the total number of shares of Common Stock issuable to the holder
per the terms of this Warrant) and the holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully-paid and
non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.

       

      (b)           Subject
to the provisions herein to the contrary, if the Fair Market Value of one share
of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Subscription
Form in which event the Company shall issue to the holder a number of shares of
Common Stock computed using the following formula:

       

      X=Y (A-B)

                A

       

       

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

       

      
        

        
          	
                   
      Where

                	
                  X=

                	
                  the
      number of shares of Common Stock to be issued to the
  holder

                

        

         

      

      
        	
                 
      

              	
                Y=

              	
                the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

              

      

       

      
        	
                 
      

              	
                A=

              	
                the
      average of the closing sale prices of the Common Stock for the five (5)
      Trading Days immediately prior to (but not including) the Exercise Date,
      or Fair Market Value, whichever is
less

              

      

       

      
        	
                 
      

              	
                B=

              	
                Purchase
      Price (as adjusted to the date of such
  calculation)

              

      

       

      For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction shall be deemed to have been acquired by the Holder, and the holding
period for the Warrant Shares shall be deemed to have commenced, on the date
this Warrant was originally issued pursuant to the Convertible Note
Agreement.

       

      3.           Adjustment for
Reorganization, Consolidation, Merger, etc.

       

      3.1.
Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
entity, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another entity) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, (D) the Company consummates a
stock purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with one or more persons or entities whereby such other persons or
entities acquire more than the 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by such other persons or entities
making or party to, or associated or affiliated with the other persons or
entities making or party to, such stock purchase agreement or other business
combination), (E) any "person" or "group" (as these terms are used for purposes
of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial
owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
50% of the aggregate Common Stock of the Company, or (F) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a "Fundamental Transaction"),
then, upon any subsequent exercise of this Warrant, the Holder shall have the
right to receive, for each Warrant Share that would have been issuable upon such
exercise immediately prior to the occurrence of such Fundamental Transaction, at
the option of the Holder, (a) upon exercise of this Warrant, the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration
(the "Alternate Consideration") receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a Holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event or (b) if the Company is acquired in
(1) a transaction where the consideration paid to the holders of the Common
Stock consists solely of cash, (2) a “Rule 13e-3 transaction” as defined in Rule
13e-3 under the 1934 Act, or (3) a transaction involving a person or entity not
traded on a national securities exchange, the Nasdaq Global Select Market, the
Nasdaq Global Market or the Nasdaq Capital Market, cash equal to the
Black-Scholes Value. For purposes of any such exercise, the determination of the
Purchase Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such 

       

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

       

      Fundamental
Transaction, and the Company shall apportion the Purchase Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to the Company or surviving entity in
such Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder's right to exercise such
warrant into Alternate Consideration. The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section
2.1 and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. “Black-Scholes Value” shall be determined in accordance with the
Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
L.P. using (i) a price per share of Common Stock equal to the VWAP of the Common
Stock for the Trading Day immediately preceding the date of consummation of the
applicable Fundamental Transaction, (ii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the remaining term of this
Warrant as of the date of such request and (iii) an expected volatility equal to
the 100 day volatility obtained from the HVT function on Bloomberg L.P.
determined as of the Trading Day immediately following the public announcement
of the applicable Fundamental Transaction.

       

      3.2.           Dissolution.  In
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and
other securities and property (including cash, where applicable) receivable by
the Holder of the Warrants after the effective date of such dissolution pursuant
to this Section 2 to a bank or trust company (a "Trustee") having its
principal office in New York, NY, as trustee for the Holder of the
Warrants.  Such property shall be delivered only upon payment of the
Warrant exercise price.

       

      3.3.           Continuation of
Terms.  Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this
Section 2, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any Other
Securities, including, in the case of any such transfer, the person acquiring
all or substantially all of the properties or assets of the Company, whether or
not such person shall have expressly assumed the terms of this Warrant as
provided in Section 4.  In the event this Warrant does not
continue in full force and effect after the consummation of the transaction
described in this Section 2, then only in such event will the Company's
securities and property (including cash, where applicable) receivable by the
Holder of the Warrants be delivered to the Trustee as contemplated by
Section 2.2.

       

      4.           Extraordinary Events
Regarding Common Stock.  In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this
Section 4. The number of shares of Common Stock that the Holder of this
Warrant shall thereafter, on the exercise hereof, be entitled to receive shall
be adjusted to a number determined by multiplying the number of shares of Common
Stock that would otherwise be issuable on such exercise by a fraction of which
(a) the numerator is the Purchase Price that would otherwise be in effect, and
(b) the denominator is the Purchase Price in effect on the date of such
exercise.

       

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      5.           Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of the Warrant and any Warrant Agent
of the Company (appointed pursuant to Section 10 hereof).

       

      6.           Reservation of Stock, etc.
Issuable on Exercise of Warrant; Financial
Statements.   The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrants, all shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant.  This Warrant entitles the
Holder hereof to receive copies of all financial and other information
distributed or required to be distributed to the holders of the Company's Common
Stock.

       

      7.           Assignment; Exchange of
Warrant.  Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any
registered holder hereof (a "Transferor"). On the surrender for exchange of this
Warrant, with the Transferor's endorsement in the form of Exhibit B
attached hereto (the “Transferor Endorsement Form") and together with an opinion
of counsel reasonably satisfactory to the Company that the transfer of this
Warrant will be in compliance with applicable securities laws, the Company will
issue and deliver to or on the order of the Transferor thereof a new Warrant or
Warrants of like tenor, in the name of the Transferor and/or the transferee(s)
specified in such Transferor Endorsement Form (each a "Transferee"), calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by the
Transferor.

       

      8.           Replacement of
Warrant.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

       

      9.           Maximum
Exercise.  The Holder shall not be entitled to exercise this
Warrant on an exercise date in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the
exercise of this Warrant with respect to which the determination of this
limitation is being made on an exercise date, which would result in beneficial
ownership by the Holder and its affiliates of more than 4.99% of the outstanding
shares of Common Stock on such date; provided that the restrictions on exercise
set forth in this Section 9 shall not apply in event of completion of a
Fundamental Transaction.  For the purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities 1934 Act, and Rule 13d-3
thereunder.  Subject to the foregoing, the Holder shall not be limited
to aggregate exercises which would result in the issuance of more than
4.99%.  The restriction described in this paragraph may be
waived, in whole or in part, upon sixty-one (61) days prior notice from the
Holder to the Company to increase such percentage to up to 9.99%, but not in
excess of 9.99%.  The Holder may decide whether to convert a
Investment Amount or exercise this Warrant to achieve an actual 4.99% or up to
9.99% ownership position as described above, but not in excess of
9.99%.

       

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      10.           Warrant
Agent.  The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to
Section 1, exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or any of the foregoing, and
thereafter any such issuance, exchange or replacement, as the case may be, shall
be made at such office by such Warrant Agent.

       

      11.           Transfer on the Company's
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

       

      12.           Notices.   All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:  if to the Company, to:
Neonode Inc., 651 Byrdee Way, Lafayette, California, 94549, Attn: Chief
Financial Officer, with a copy by telecopier only to: Steve Kronengold, SRK Law
Offices, Hamada 12, Rehovot, Israel, Fax: +972-8-936-6000, and (ii) if to the
Holder, to the address and telecopier number listed in the records of the
Company, or such other address as such party may designate by notice
hereunder.

       

      13.           Law Governing This
Warrant.  This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.  Any action brought by either party against the
other concerning the transactions contemplated by this Warrant shall be brought
only in the state courts of New York or in the federal courts located in the
state and county of New York.  The parties to this Warrant hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The Company and Holder waive trial by
jury.  The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs.  In the event
that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby
irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.

       

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

       

       

      IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

       

      
        	 
      	
                NEONODE
      INC.

                 

                 

                 

                By:                                                   
           

                                 
      Name:

                 

                 

                 

                 

              

      

      

       

       

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

       

       

      Exhibit
A

      

      FORM OF
SUBSCRIPTION

      (to be
signed only on exercise of Warrant)

      TO:  NEONODE
INC.

      The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

      

      __           ________
shares of the Common Stock covered by such Warrant.

      

      __           ________
the maximum number of shares of Common Stock covered by such Warrant pursuant to
the cashless exercise procedure set forth in Section 2.

      

      The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is
$______.  Such payment takes the form of (check applicable box or
boxes)

      

      ___           $__________
in lawful money of the United States and/or

      

      ___           the
cancellation of such portion of the attached Warrant as is exercisable for a
total of ____ shares of Common Stock (using a Fair Market Value of $__ per share
for purposes of this calculation); and/ or

      

      ___           the
cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2, to exercise this
Warrant with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in
Section 2.

      

      

      The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered to ____________________________________ whose address is
______________________________________________________________________________________ .

      

      The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities Act"), or pursuant to an exemption from registration
under the Securities Act.

      

      
        	
                Dated:___________________

              	
                                                                                            

                (Signature
      must conform to name of holder 

                as
      specified on the face of the Warrant)

                 

                                                                             

                                                                           

                (Address)

              

      

       

       

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       

      Exhibit B

      

      

      FORM OF
TRANSFEROR ENDORSEMENT

      (To be
signed only on transfer of Warrant)

       

      For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of NEONODE INC. to which the within Warrant relates specified under the
headings "Percentage Transferred" and "Number Transferred," respectively,
opposite the name(s) of such person(s) and appoints each such person Attorney to
transfer its respective right on the books of NEONODE INC. with full power of
substitution in the premises.

       

      

      
        	
                Transferees

              	
                Percentage Transferred

              	
                Number Transferred

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

      

      

      
        	
                Dated:  ______________,
      ___________

                 

                 

                 

                Signed
      in the presence of:

                 

                                                                                    
           

                (Name)

                 

                 

                ACCEPTED
      AND AGREED:

                [TRANSFEREE]

                 

                 

                                                                                         

                (Name)

                 

              	
                                                                                                     

                (Signature
      must conform to name of holder

                as
      specified on
      the face of the warrant)

                 

                 

                 

                                                                                            
              

                                                                                    
                     

                (address)

                 

                 

                      
                   

                                                                                              
              

                                                                                      
                     

                  (address)ex10_1.htm

    EXHIBIT
10.1

    SECURITIES PURCHASE
AGREEMENT

    

    This
Securities Purchase Agreement (“Agreement”) is entered into as
of February 15, 2010 by and between CDEX Inc., a corporation organized under the
laws of the State of Nevada (the “Company”), on the one hand,
and each Person set forth on the signature page hereto as a “Purchaser”
hereunder (each a “Purchaser” and collectively
the “Purchasers”), on
the other hand.

    

    WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to each Purchaser, and each Purchaser, severally and
not jointly, desires to purchase from the Company, Notes of the Company in a
PIPE Transaction as set forth herein;

     

    WHEREAS,
Gemini Master Fund, Ltd. (“Gemini”) holds that certain
12% Senior Convertible Note of the Company issued to it on or about June 25,
2008 in the original principal amount $1,086,956.52 (as amended to date, the
“Gemini Note”), which
Gemini Note currently has an outstanding principal balance, together with all
accrued and unpaid interest thereon, equal to $1,151,100.33 as of the date
hereof;

    

    WHEREAS,
an entity controlled by Malcolm H. Philips, Jr., Chief Executive Officer of the
Company (“Philips”),
holds those certain promissory notes of the Company, issued to him at various
times for various principal amounts (as amended to date, the “Philips Notes”), which Philips
Notes currently have an aggregate outstanding principal balance, together with
all accrued and unpaid interest thereon, equal to $247,114.82 as of the date
hereof;

    

    WHEREAS,
certain other Persons (“Creditors”) hold either
promissory notes of the Company, issued to them at various times for various
principal amounts (as amended to date, the “Other Notes”), or trade claims
against the Company for amounts past due to such Person from the Company (“Creditor
Claims”);

    

    WHEREAS,
Gemini wishes to exchange its Gemini Note, Philips wishes to exchange his
Philips Notes, and certain Creditors wish to exchange their Other Notes or
Creditor Claims, for the new Notes being issued hereunder; and

    

    WHEREAS,
the remaining Purchasers hereunder (and Philips in addition to the
above-referenced exchange) wish to purchase Notes in exchange for cash
hereunder;

    

    NOW THEREFORE, in consideration of the
foregoing premise and the covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each Purchaser agree as follows:

    

    1.       
    Incorporation by Reference; Definitions.

    

    
      	
              (a)

            	
              Incorporation.  This
      Agreement incorporates by reference, as if set forth herein in its
      entirety and including without limitation all terms, conditions and
      provisions set forth therein, the PipeFund Services Organization Standard
      Transaction Document labeled GTC 1-10 (General Terms and Conditions)
      available and accessible at www.pipefund.com
      (“PST Document
      GTC”); provided,
      however, that (1) all terms and conditions are to be read and
      interpreted in light of this Agreement including all schedules, enclosures
      and attachments hereto, and (2)  to the extent any of the terms,
      conditions or provisions of this Agreement (without such incorporation)
      contradict or conflict with the terms, conditions or provisions of PST
      Document GTC, this Agreement shall
control.

            

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              Defined
      Terms.  Each initially capitalized term used but not
      defined in this Agreement (including PST Document GTC as incorporated
      herein pursuant to the preceding Section), and each initially capitalized
      term used but not defined in any other Transaction Document, shall have
      the meaning ascribed thereto in the PipeFund Services Organization
      Standard Transaction Document labeled 1-10 DEF (Definitions) available and
      accessible at www.pipefund.com.

            

    

    

    
      	
              (c)

            	
              PipeFund Transaction
      Code.  This Securities Purchase Agreement shall be known
      as “Securities Purchase Agreement
#CEXI-10-A”.

            

    

    

    2.            Securities.  The
Company agrees to issue and sell, and each Purchaser agrees to purchase,
severally and not jointly, in consideration for payment by such Purchaser of its
Subscription Amount indicated on such Purchaser’s signature page hereto, upon
the terms and conditions contained in this Securities Purchase Agreement, 10%
Senior Convertible Notes of the Company, in the form attached hereto as Exhibit A (“Notes”), with an aggregate
original principal amount equal to such Purchaser’s Subscription Amount, which
Notes shall (i) bear interest at 10% per annum, (ii) be convertible into shares
of Common Stock as set forth in the Notes, and (iii) have a maturity date of
February 15, 2012, subject to acceleration of such date as set forth
therein.  On or prior to the Offering Termination Date, the Company
may issue to any Creditor Notes with an original principal amount equal to the
amount of indebtedness under Creditor Claims which is being cancelled in
exchange for such Notes.

    

    3.            Closing.  Notwithstanding
anything to the contrary contained in Section 2.3(b) of PST Document
GTC:

    

    
      	
              (a)

            	
              Gemini
      Exchange.  Gemini shall pay for the Note being purchased
      hereunder at Closing solely by exchanging and surrendering to the Company
      its Gemini Note for a new Note with an original principal amount equal to
      the outstanding balance (including principal and accrued interest thereon)
      of the Gemini Note as of the Closing Date, and no other value or
      consideration shall be paid or payable by Gemini for the purchase of such
      new Note.

            

    

     

    
      	
              (b)

            	
              Philips
      Exchange.  Philips shall pay for the Note being purchased
      hereunder at Closing solely by exchanging and surrendering to the Company
      all of the Philips Notes for a new Note with an original principal amount
      equal to the aggregate outstanding balance (including principal and
      accrued interest thereon) of the Philips Notes as of the Closing Date, and
      no other value or consideration shall be paid or payable by Philips for
      the purchase of such new Note.

            

    

    

    
      	
              (c)

            	
              Purchasers.  Each
      of Gemini and Philips and each other Creditor purchasing Notes hereunder
      shall constitute a “Purchaser” under the Transaction Documents
      notwithstanding the foregoing payment for Notes by exchange of
      securities.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    4.            Specific
Terms.

    

    
      	
              (a)

            	
              The
      Minimum Aggregate Investment Amount shall be $400,000 of new cash
      investments into the Company, $200,000 of which shall be from Philips or
      an Affiliate of Philips.  The Maximum Aggregate Investment
      Amount (and for clarification the maximum principal amount of Notes which
      may be issued to Purchasers and Creditors) shall be
      $4,000,000.

            

    

    

    
      	
              (b)

            	
              The
      Bulletin Board shall be an Eligible
Market.

            

    

    

    
      	
              (c)

            	
              Requisite
      Purchasers means 67%-in-Interest of the
  Purchasers.

            

    

    

    
      	
              (d)

            	
              The
      Offering Termination Date shall be April 1,
  2010.

            

    

    

    5.            Escrow.  Stephen
McCommon (“Escrow
Agent”) shall act as funds escrow agent for the Closing of the
Transactions pursuant to those certain Funds Disbursements Agreements entered or
to be entered into by the Escrow Agent with the Company to serve in such
capacity for the Closing.  There shall be no Documents Escrow Agent
for the Closing.  The Company represents that the Escrow Agent is
holding $450,000 in cash in escrow pending Closing of the
Transactions.

    

    6.            Expenses.  At the
Closing or promptly thereafter, the Company shall pay or reimburse to Gemini’s
counsel (“Expense
Payee”) a non-refundable, non-accountable sum equal to $20,000 for
documentation of the Transactions, which amount shall be deducted and paid from
Closing proceeds.

    

    7.            Company
Address for Notices:

    

    
      	
              Company:

               

              CDEX
      Inc.

              4555
      South Palo Verde Road

              Suite
      123

              Tucson,
      AZ 85714

              Facsimile:
      520-514-6394

              Email:
      smccommon@cdex-inc.com

              Contact
      person: Stephen McCommon, CFO

               

            	
               

              With
      a copy to:

               

              Mary
      Payton O'Hara

              Madama
      Griffitts O'Hara LLP

              450
      Park Avenue  South, Eighth Floor

              New
      York, NY 10016

              Facsimile:
      (212) 209-5460

              Email:
      mohara@madama-law.com

               

            

    

    8.            Modifications
and Additional Terms.

    

    
      	
              (a)

            	
              Additional
      Documents.  In addition to the those items set forth in
      Section 2.3(a)(viii) of PST Document GTC, on the Closing Date the Company
      shall deliver or cause to be delivered to each Purchaser the
      following:

            

    

    

    
      	
               
      

            	
               
      (i)

            	
              a
      Security Agreement, in substantially the form of Exhibit B
      attached hereto, duly executed by the Company (for clarification, no
      security interest is created thereunder unless and until the Company has
      failed to satisfy either Milestone 1 or Milestone 2 under the Notes (as
      such terms are defined in the Notes));
and

            

    

    

    
      	
               
      

            	
               
      (ii)

            	
              irrevocable
      Lock-Up Agreement, in substantially the form of Exhibit C
      attached hereto, duly executed and delivered by Malcolm Philips for so
      long as he is subject to the reporting requirements of Section 16 of the
      Securities Act.

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              (b)

            	
              Modifications to PST Document
      GTC.

            

    

     

    
      
        	
                 
      

              	
                 
      (i)

              	
                
                  No Registration
      Rights.  Sections 6.1 through 6.3 of PST Document GTC are
      hereby deleted such that the Purchasers shall not have any registration
      rights except for the piggyback registration rights set forth in Section
      6.4 thereof.

                

              

      

       

    

    
      	
               
      

            	
               
      (ii)

            	
              Use of
      Proceeds. Notwithstanding
      anything to the contrary contained in Section 4.9 of PST Document GTC, the
      proceeds from the transaction will be used only for general corporate
      purposes with at least $50,000 being used for investor relations to
      achieve greater exposure of the Company to investors in such manner and
      with such service providers as are reasonable acceptable to Gemini, at
      least $25,000 of which shall be spent by June 1, 2010.  Of the
      first $400,000 in cash proceeds received from the sale of the Notes
      (determined on a first-in, first out basis), no payments will be made to
      Philips (except for no more than $35,000 in outstanding bona fide expense
      reports for Company expenditures).  So long as the Gemini Note
      is outstanding, no payments shall be made on account of indebtedness
      (including without limitation account payables, deferred compensation or
      otherwise), provided that the Company may pay (A) any trade payables
      incurred after the date hereof for services rendered or goods provided to
      the Company in the ordinary course of business, and (B) from proceeds
      received up to $450,000, up to $286,000 in the aggregate for any trade
      payables (which for clarification does not include any deferred
      compensation, promissory notes, indebtedness for borrowed money, or
      reimbursement of Company expenses in excess of the $35,000 referenced
      above) outstanding on the date hereof and Transaction
      expenses.  To the extent any proceeds are received in excess of
      $450,000 from any financing up to $4 million, 50% of such proceeds shall
      be used for payment of principal and interest outstanding on the Notes and
      50% can be used for any general corporate purposes.  Any amounts
      payable to the Noteholders under the preceding sentence shall be shared
      ratably among the Noteholders, and the portion payable to any Noteholder
      which is declined in writing by such holder shall be paid to the other
      Noteholders electing to be repaid pro
rata.

            

    

    

    
      	
              (c)

            	
              Additional Representations and
      Warranties.

            

    

    

    
      	
               
      

            	
               
      (i)

            	
              Philips Note
      Balance.  Each of Philips and the Company represents and
      warrants to the Purchasers that the aggregate
      outstanding principal balance, together with all accrued and unpaid
      interest thereon, of the Philips Notes as of the date hereof is equal to
      the amount set forth in the recitals hereto and shall provide evidence
      thereof upon the request of any
Purchaser.

            

    

    

    
      	
               
      

            	
               
      (ii)

            	
              Employees.  The
      Company represents and warrants to the Purchasers that Schedule 8(c)(ii)
      attached hereto sets forth those agreements affecting employees which
      entitle such employees to employment with the Company for a specified
      term, which Schedule sets forth the end date of each such term and the
      estimated severance expense to the Company in the event such employment is
      terminated by the Company without cause prior to such end
      date.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              (d)

            	
              Additional
      Covenants.

            

    

    

    
      	
               
      

            	
               
      (i)

            	
              Stockholder
      Approval.

            

    

    

    
      	
               
      

            	
               
      (A)

            	
              Stockholder
      Meeting.  On or prior to September 30, 2010, the Company
      shall effect an increase in the number of authorized unissued shares of
      Common Stock by at least 100 million shares (or effect such other action
      that has the effect of effectively increasing the number of authorized,
      unissued and unreserved shares of Common Stock by at least such amount
      from the number of authorized, unissued and unreserved shares of Common
      Stock available on the date hereof), and prior to such date the Company
      shall obtain Stockholder Approval for such increase to the extent required
      by applicable state or federal laws or regulations or the regulations of
      any market or self-regulatory agency or organization.  On or
      prior to June 30, 2010, the Company shall file with the Commission and
      deliver to its stockholders a notice of meeting and proxy statement or
      information circular, as required by the Commission, with respect to a
      Stockholder Meeting which contains a proposal seeking such Stockholder
      Approval.  Such Stockholder Meeting shall occur within sixty
      (60) days following the filing of such proxy statement or information
      circular (75 days if the Commission gives a full review of such proxy and
      the Company responds to any comments within 5 days).  The Board
      of Directors of the Company shall recommend to the Company’s stockholders
      that such proposal be approved, which recommendation shall be contained in
      such proxy statement or information circular, and the Company shall
      solicit proxies from its stockholders in connection therewith in the same
      manner as all other management proposals in such proxy statement (or as
      typically solicited by management for management proposals), and all
      management-appointed proxy holders shall vote their proxies in favor of
      such Stockholder Approval.  The Purchasers and their counsel
      shall be entitled to review such proxy statement or information circular
      prior to filing with the Commission, and such proxy statement or
      information circular shall not contain any untrue statement of a material
      fact or omit to state any material fact required to be stated therein or
      necessary in order to make the statements therein, in light of the
      circumstances under which they were made, not misleading.  If
      the Company does not obtain such Stockholder Approval at the first such
      Stockholder Meeting, the Company shall call a Stockholder Meeting every
      four months thereafter to seek Stockholder Approval until the date on
      which Stockholder Approval is
obtained.

            

    

    

    
      	
               
      

            	
               
      (B)

            	
              Failure to Call and
      Hold Stockholder Meeting.  If the Company fails to (1)
      file the proxy statement or information circular referred to above or (2)
      hold the Stockholder Meeting referred to above, in each case prior to the
      date by which such filing or meeting is required above, then each
      Purchaser shall have the right to compel the Company to redeem the Notes
      held by the Purchaser which cannot be converted or exercised due to the
      maximum issuance amount set forth in Section 3 above, as may be elected by
      such Purchaser.  The redemption price under the Notes shall be
      the Mandatory Default Amount (as defined in the Notes).  Such
      redemption price shall be paid within ten (10) days after the exercise of
      such redemption right.  If the Company fails to make any cash
      payments or redemption payments under this subsection in a timely manner,
      such payments shall bear interest at 24% per annum until paid in full.
      Without limiting the foregoing, failure to timely obtain Stockholder
      Approval shall constitute an Event of Default under the
    Notes.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
               
      (C)

            	
              Reservation of
      Underlying Shares.  Section 5.5 of PST Document GTC shall
      not be effective until September 30, 2010, provided that the number of
      shares of Common Stock currently reserved for issuance to Gemini upon
      conversion of the Gemini Note and the warrant issued to Gemini on or about
      June 25, 2008 for 2,717,391 shares of Common Stock (“Gemini Warrant”) shall
      remain reserved for issuance to Gemini upon conversion of the new Note
      purchased by Gemini hereunder and the New Warrant (as defined
      below).  The Company represents and warrants that such number of
      shares currently reserved and to be so continued to be reserved equals at
      least 10,014,313 shares, and Gemini may use shares reserved for exercise
      of the New Warrant for conversion of its new Note instead or vice-versa or
      as it may otherwise determine, in each case in the sole discretion of
      Gemini.

            

    

    

    
      	
               
      

            	
               
      (ii)

            	
              Rule
      144.  The Company acknowledges and agrees that, for
      purposes of Rule 144, the holding period for the shares of Common Stock
      issuable upon conversion or otherwise pursuant to the Note issued to
      Gemini shall have commenced on June 25, 2008 (the date of original
      issuance of the Gemini Note), notwithstanding this Agreement and the
      Transactions.  Without limiting the foregoing, if at any time it
      is determined that such holding period does not relate back to such date,
      the Company will promptly cause the registration of all such underlying
      shares under the Securities Act (without regard to any beneficial
      ownership or issuance limitations contained in the Note) in accordance
      with Article VI of PST Document GTC.  In connection with any
      registration of shares of Common Stock pursuant to this Section, the
      Company and Gemini shall enter into a registration rights agreement
      containing customary and reasonable provisions regarding the registration
      of securities under the Securities Act, consistent with Article VI of PST
      Document GTC.  Any and all shares of Common Stock issued upon
      conversion of the Note issued to Gemini hereunder shall be issued free and
      clear of any and all legends and restrictions thereon.  The new
      Note being issued to Gemini hereunder is in substitution for and not in
      satisfaction of the Gemini Note.  Such new Note shall not
      constitute a novation or satisfaction and accord of the Gemini
      Note.  The Company hereby acknowledges and agrees that such new
      Note shall amend, restate, modify, extend, renew and continue the terms
      and provisions contained in the Note and shall not extinguish or release
      the Company or any of its Subsidiaries under any Transaction Document or
      otherwise constitute a novation of its obligations
      thereunder.  The Company acknowledges that, for any Creditors
      (which do not currently have Other Notes) which exchange their Creditor
      Claims for Notes, the Rule 144 holding period for such Notes will commence
      on the date of issuance of such
Notes.

            

    

    

    
      	
               
      

            	
               
      (iii)

            	
              Board
      Seats.  Within 60 days following the first Closing
      hereunder and for so long as any Notes are outstanding, the Company’s
      Board of Directors shall consist of up to seven members, which shall
      include (1) Greg Firmbach, (2) Carmen Conicelli, (3) Don Strickland, (4)
      the new CEO to be appointed as described in subsection (iv) below, or in
      each case for clauses (1) through (4) individuals appointed or elected to
      replace such individuals upon their resignation, (5) one individual
      designated by the majority of Note Holders (excluding Gemini) as
      designated by David Lax (one of the Purchasers for cash hereunder) (so
      long as at least $100,000 in principal amount of Notes are outstanding
      excluding Gemini’s Notes) (“Noteholder Seat”), and
      (6) one individual designated by Gemini (so long as Gemini holds at least
      $100,000 in principal amount of
Notes).

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
               
      (iv)

            	
              Management
      Changes.  Immediately following the first Closing, the
      Company’s Board of Directors shall begin the process of seeking and
      retaining a new Chief Executive Officer of the Company (“CEO”) with experience as
      an executive of a medical company and of a public company.  The
      Company shall use every effort to conclude such search and hire a new CEO
      prior to the date which is 60 days following the Closing Date, provided
      that if it fails to do so by such date then the Company shall appoint an
      interim CEO and use every effort to conclude such search and hiring as
      soon as practicable.  Any material information referenced herein
      shall be publicly disclosed as soon as possible following the Closing
      Date.

            

    

    

    
      	
               
      

            	
               
      (v)

            	
              Lock-Up
      Agreement.  The Company shall enforce the provisions of
      the Lock-Up Agreement to the extent it becomes aware of any violation
      thereof.  The Company agrees not to take any action inconsistent
      with the Lock-Up Agreement nor amend or terminate any Lock-Up Agreement
      without the consent of the
Purchasers.

            

    

    

    
      	
               
      

            	
               
      (vi)

            	
              Subsequent Equity
      Sales.

            

    

    

    
      	
               
      

            	
               
      (A)

            	
              From
      the date hereof until such time as no Purchaser holds any of the Notes,
      the Company shall be prohibited from effecting or entering into an
      agreement to issue shares of Common Stock, Convertible Securities or
      Options involving a Variable Rate Transaction or MFN
      Transaction.

            

    

    

    
      	
               
      

            	
               
      (B)

            	
              Without
      limiting the foregoing, with respect to each Purchaser, from the date
      hereof until such time as such Purchaser no longer holds any of Notes, in
      the event the Company issues or sells any shares of Common Stock,
      Convertible Securities or Options or amends the transaction documents
      relating to any sale or issuance of Common Stock, Convertible Securities
      or Options, other than Exempt Issuances, if such Purchaser reasonably
      believes that the terms and conditions thereunder are more favorable to
      such investors than the terms and conditions granted under the Transaction
      Documents, upon notice to the Company by such Purchaser the Company shall
      amend the terms of this Transaction and the Transaction Documents so as to
      give such Purchaser the benefit of such more favorable terms or conditions
      with respect to such portion of Notes still held by such
      Purchaser.

            

    

    

    
      	
               
      

            	
               
      (vii)

            	
              Insurance.  For at
      least six (6) years following the final Closing, the Company shall
      continue and maintain in full force and effect directors and officers
      insurance in such amounts and with such coverage as is currently
      maintained by the Company with a reputable, financially
      sound insurance carrier, which insurance shall cover, without limitation,
      claims arising with respect to actions and omissions of the Company’s
      officers and directors occurring prior to the final
      Closing.  The Company shall promptly furnish or cause to be
      furnished evidence of such insurance to each Purchaser and Board member
      (including without limitation prior Board members) so requesting same, in
      form and substance reasonably satisfactory to such Purchaser or Board
      member.

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
               
      (viii)

            	
              Bank
      Statements.  Until one of the Milestones are satisfied,
      upon the written request (which may be by email) of Gemini at any time and
      from time to time, the Company shall furnish to Gemini a copy of any of
      the Company’s monthly bank statements requested by Gemini within five (5)
      days following such request (provided that the Company shall not furnish
      such statements unless so specifically requested by Gemini). The following
      are approximately the debts of the company as of February 1, 2010 in a
      form complaint with reporting on CDEX’s financial statements: Accounts
      Payable and Accrued Expenses $384,822, Notes Payable and Accrued Interest
      $1,678,227, accrued legal fees $569,911.15 (of which, $438,159 is to one
      law firm), deferred compensation $589,259 and accrued payable to a
      distributor $272,038.

            

    

     

    
      	
               
      

            	
               
      (ix)

            	
              Gemini
      Warrant.  The Company and Gemini shall exchange the
      Gemini Warrant for a new warrant (“New Warrant”) which is
      identical to the Gemini Warrant in all respects except that the New
      Warrant shall be exercisable for 5 million shares at an exercise price of
      $0.08 per share (each subject to adjustment as set forth therein) and
      shall expire on June 25, 2015.

            

    

     

    
      	
               
      

            	
               
      (x)

            	
              No Assets Disposition;
      Defeasement.  Prior to Milestone 2 (as defined in the
      Notes) being satisfied, other than inventory sold in the ordinary course
      of business, the Company shall not sell, transfer, license, grant a
      security interest in or otherwise dispose of any assets of the Company
      (including without limitation any intellectual property) without the prior
      written consent of each holder of Notes who holds Note(s) with an
      outstanding balance in excess of $175,000 (each a “Large Noteholder”),
      which consent may be withheld in his/her/its sole discretion, provided however, that
      such consent shall not be required with respect to each Large Noteholder
      for whom the Company (i) places an amount of cash in escrow equal to the
      outstanding balance (including principal and accrued interest) of such
      Large Noteholder’s Note(s) minus $175,000 as collateral against such
      Note(s), and (ii) executes and delivers such escrow agreements, control
      account agreements and other documents in such form and with such parties
      as is acceptable to such Large Noteholder in his/her/its sole discretion
      in order for such Large Noteholder to possess a perfected first priority
      security interest in such cash escrow account for his/her/its sole benefit
      to secure the Company’s obligations under such
  Note(s).

            

    

     

    
      	
              (e)

            	
              Other Terms and
      Provisions.

            

    

    

    
      	
               
      

            	
               
      (i)

            	
              Full Force and
      Effect.  Except as otherwise expressly provided herein,
      each of the transaction documents pursuant to which the Gemini Note was
      issued and the other agreements and transactions contemplated thereby
      (“Gemini
      Documents”) shall remain in full force and effect, and this
      Agreement and the transactions contemplated hereby shall not in any way
      waive or prejudice any of the rights or obligations of Gemini or the
      Company under the Gemini Documents, under any law, in equity or otherwise,
      and shall not constitute a waiver or modification of any provision of the
      Gemini Documents.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
               
      (ii)

            	
              Attorneys.  For
      reasons of administrative convenience only, the Purchasers are all
      utilizing the same Transaction Documents at the Company’s
      request.  Peter J. Weisman, P.C. does not represent any of the
      Purchasers except Gemini.

            

    

     

    [Signature Page
Follows]

      

     

     

     

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, as of the date first written above, the Parties hereto have
duly executed, or caused their authorized officers to duly execute, this
Securities Purchase Agreement #CEXI-10-A with file name SPA -- CDEX (Feb 10)
v.6.

    

    COMPANY:

    

    CDEX
INC.

    

    

    By:                                                                              

    Name:  Stephen
McCommon

    Title:    CFO

    

    

    PURCHASER:

    

    
      	
              1.  Signature:

            
	 	 
	
              PARTNERSHIP,
      CORPORATION, LIMITED 

              LIABILITY
      COMPANY OR TRUST:

               

               

              
                                                                                               
           

              

              (Print
      Name of Purchaser Entity)

               

              By:                                                                              
      

                    
      (Print name of authorized, executing entity, if any; if none, leave
      blank)

               

            	
               

              INDIVIDUAL:

               

               

              

                                                                                                    
      

              

              (Print
      Name(s))

               

              

                                                                                                    
      

              

              (Signature)

            
	
               

              By:                                                                                    

                    
      (Signature of Authorized Person)

               

              

                                                                                                    
      

              

              (Print Name
      and Title of Authorized Person)

               

            	
               

                           
                                                                           
      

              (Joint-Owner
      Signature, if any)

            
	
               

               

              2.  Subscription Amount:  $                             
      

               

               

              3.  Maximum
      Ownership Percentage:

               

              The
      Maximum Ownership Percentage shall be 9.9% if no box is checked
      below.

               

            
	
              □ 4.9%

            	
              □ 9.9%

            	
              □
      Other:              
      %

            	
              □
  None

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    PURCHASER:                                                                                     

    (Print
Name)

    

    
      	
              4.  Address for
      Notices:

            	
              With
      a copy to, if any:

            
	
               

                                                                                             
           

              (Name
      or c/o Name)

               

              

                                                                                                    
      

              

              (Address)

               

              

                                                                                                    
      

              

               

              

                                                                                                    
      

              

              (Contact
      Name)

               

              

                                                                                                    
      

              

              (Facsimile)

               

              

                                                                                                    
      

              

              (Telephone)

               

              

                                                                                                    
      

              

              (Email
      Address)

               

            	
               

              

                                                                                                    
      

              

              (Name)

               

              

                                                                                                    
      

              

              (Address)

               

              

                                                                                                    
      

              

               

              

                                                                                                    
      

              

              (Contact
      Name)

               

              

                                                                                                    
      

              

              (Facsimile)

               

              

                                                                                                    
      

              

              (Telephone)

               

              

                                                                                                    
      

              

              (Email
      Address)

               

            
	
               

              5.  Residence/Organization
      and TIN:

            
	 	 
	
              

                                                                                                    
      

              

              (State/Jurisdiction
      of Primary Residence (for individuals) 

              or
      Organization (for entities))

            	
              

                                                                                                    
      

              

              (Social
      Security or Employer/Tax Identification Number, 

              if
      applicable)

            
	
               

              6.  Special Instructions Where Securities to Be
      Delivered:

            
	 	 
	
              For
      Common Stock:

               

            	
              For
      Other Securities:

               

            

    

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      Exhibit
A

      

      FORM OF 10% SENIOR
CONVERTIBLE NOTE

      

      

      

      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Exhibit
B

      

      FORM OF SECURITY
AGREEMENT

      

      

      

      

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      Exhibit
C

      

      FORM OF LOCK-UP
AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00168-of-00352.parquet"}]]