EXHIBIT 10.6
WAIVER AND AMENDMENT
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This WAIVER AND AMENDMENT ("Amendment") is made as of this 18th day of
December, 2008, by and between CDEX Inc., a Nevada corporation ("Company"), and
GEMINI MASTER FUND, LTD., a Cayman Islands company ("Holder").
W I T N E S S E T H:
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WHEREAS, pursuant to that certain Securities Purchase Agreement
("Purchase Agreement") dated as of June 25, 2008 by and between the Company and
the Holder, on or about such date the Company sold and issued to the Holder (i)
a 12% Senior Convertible Note ("Note"), which Note is convertible into shares of
common stock of the Company, $0.005 par value per share ("Common Stock"), and
(ii) a Common Stock Purchase Warrant to purchase up to 2,717,391 shares of
Common Stock ("Warrant"); capitalized terms used herein but not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement, the
Note or the Warrant, as the case may be; and
WHEREAS, the Company wishes (a) to issue shares of Common Stock in one or
more financings between the date hereof and April 1, 2009 ("Waiver Period")
without the anti-dilution adjustments applying as set forth in the Transaction
Documents in certain circumstances, (b) to delay payments of the Monthly
Redemption Amount due on January 1, 2009 under the Note until February 1, 2009,
and (c) to allow for prepayment of the Note under certain conditions, and the
Holder desires to consent to such requests, on the terms and conditions set
forth herein;
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth in this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Subsequent Issuance Waivers
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(a) -Common Stock Issuances. Notwithstanding anything contained in the
Transaction Documents, to the extent the Company sells and issues shares of
Common Stock or warrants in one or more Common Stock Financings (as defined
below) during the Waiver Period for gross proceeds which do not exceed
$500,000 in the aggregate, such issuances shall constitute "Exempt
Issuances" under the Transaction Documents. For purposes hereof, "Common
Stock Financing" means the sale and issuance of shares of Common Stock by
the Company in a capital raising financing, provided that (a) the effective
sale price per share of Common Stock shall equal at least $0.10, (b) the
transaction shall not be a Variable Rate Transaction or MFN Transaction,
and (c) the Company may issue to the purchasers thereof, in connection with
any such financing, warrants to purchase a number of shares of Common Stock
equal to 50% of the number of shares of Common Stock sold to such
purchasers in such financing, provided that the effective exercise price
per share of Common Stock under such warrants shall equal at least $0.20.
For clarification, a Common Stock Financing may result from the sale and
issuance of shares of Common Stock pursuant to the exercise of currently
outstanding warrants following a reduction of the exercise price
thereunder, provided that the provisions of the preceding sentence are
satisfied. Notes issued subsequent to the Effective Date of the Transaction
Documents to the CEO or entities controlled by the CEO or his family up to
a combined gross principal amount of $135,000 on terms no more favorable
than those contained in the Transaction Documents shall not count as a part
of the $500,000.
2. January Monthly Redemption. The Holder hereby agrees that the Company,
at its option, may delay payment of the Monthly Redemption Amount due on January
1, 2009 until February 1, 2009 (in which case on February 1, 2009 the Company
shall pay the Monthly Redemption Amount originally due for January 1, 2009 and
February 1, 2009, i.e., $169,555.29, consisting of $45,289.86 principal
repayment for each of January 1st and February 1st and $78,975.58 of interest).
3. Prepayment. Notwithstanding anything contained in the Note, the Company
shall have the right to prepay the Note in cash, in whole or in part, at any
time during the Waiver Period for consideration equal to the principal amount
being prepaid plus all accrued and unpaid interest thereon, provided that (a)
the Company furnishes to the Holder written notice thereof at least ten (10)
Business Days prior to the date of any such prepayment, and (b) during such
notice period the Holder may convert such principal amount elected to be
prepaid. Such prepayment amount shall be payable in full on the date selected by
the Company (which must be during the Extended Wavier Period).
4. Rule 144. The Company acknowledges and agrees that, for purposes of Rule
144 promulgated under the Securities Act of 1933, as amended ("Securities Act"),
the holding period for the shares of Common Stock issuable upon conversion or
cashless exercise of, or otherwise pursuant to, the Note and/or Warrant, shall
have commenced on June 25, 2008 (the date of original issuance of the Note and
the Warrant), notwithstanding this Amendment. 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 and/or Warrant). In
connection with any registration of shares of Common Stock pursuant to this
Section, the Company and the Holder shall enter into a registration rights
agreement containing customary and reasonable provisions regarding the
registration of securities under the Securities Act.
5. Disclosure. To the extent the transactions contemplated by this
Amendment constitute material non-public information concerning the Company or
are otherwise required to be publicly disclosed under the Securities Exchange
Act of 1934, as amended, and the rules promulgated thereunder, the Company
shall, within three (3) business days following the date hereof, issue a press
release and/or Current Report on Form 8-K disclosing the material terms of the
transactions contemplated hereby. The Company and the Holder shall consult with
each other in issuing any other press releases with respect to the transactions
contemplated hereby.
6. Miscellaneous.
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(a) Full Force and Effect. Except as otherwise expressly provided
herein, each of the Purchase Agreement, the Note, the Warrant and the other
agreements and transactions contemplated thereby ("Transaction Documents")
shall remain in full force and effect. Except for the waiver and
modifications contained herein, this Amendment shall not in any way waive
or prejudice any of the rights or obligations of the Holder or the Company
under the Transaction Documents, under any law, in equity or otherwise, and
such modifications shall not constitute a waiver or modification of any
other provision of the Transaction Documents nor a waiver or modification
of any subsequent default or breach of any obligation of the Company or of
any subsequent right of the Holder.
(b) Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws of the State of New York.
(c) Counterparts. This Amendment may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Amendment may be
executed by facsimile or by email of a digital image format or portable
document format of the signature page hereto.
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be duly executed effective the date first written above.
CDEX INC.
By:
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: CEO
GEMINI MASTER FUND, LTD.
By: GEMINI STRATEGIES, LLC,
as investment manager
By: _______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
