AMENDMENT TO DEBENTURE AND WARRANTS
AMENDMENT
TO
DEBENTURE
AND WARRANTS
This
Amendment (the “Amendment”), dated as
of July 7, 2010, is made to the 8% Secured Convertible Debenture (the
“Debenture”), and the Class B Common Stock purchase warrants (the “Warrants”)
issued pursuant to the Securities Purchase Agreement dated as of December 29,
2009 (the “Purchase
Agreement”), between InferX Corporation, Inc., a Delaware corporation
(the “Company”)
and the purchasers identified on the signatures pages thereto (the “Purchasers”).
(a) “Commission” means the
United States Securities and Exchange Commission.
(b) “Legend Removal Date”
shall have the meaning ascribed to such term in Section 6(c).
(c) “Liens” means a lien,
charge pledge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.
(d) “Public Information
Failure” shall have the meaning ascribed to such term in Section
7.
(e) “Public Information Failure
Payments” shall have the meaning ascribed to such term in Section
7.
(f) “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
(g) “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC
Bulletin Board is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
Board, (c) if the Common Stock is not then listed or quoted for trading on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
“Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported, or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Signatory Holders of a majority in
interest of the Shares then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the
Company.
“The
entire principal amount of this Debenture, together with all accrued interest
and unpaid interest, shall be due and payable on August 31, 2010 (the “Maturity
Date”).”
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(a)
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Series B
Warrant. The Exercise Price of the Series B Warrant
shall be reduced to $0.20 per share from $0.50 per share. As
such, Section 1.2 of the Series B Warrant shall be amended and restated in
its entirety to read as follows:
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““Exercise Price” means $0.20
per share, subject to adjustment as provided herein.”
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(b)
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References to the
Exercise Prices in the Transaction Documents. Any and
all references to the Exercise Price of $0.50 for the Warrants in the
Transaction Documents shall be
disregarded.
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(a) The
Shares may only be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Shares other than pursuant
to an effective registration statement or Rule 144, to the Company or to an
Affiliate of a Signatory Holder or in connection with a pledge as contemplated
in Section 6(b), the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Amendment and shall have the rights and
obligations of a Signatory Holder under this Amendment.
(b) The
Signatory Holders agree to the imprinting, so long as is required by this
Section 6, of a legend on any of the Securities in the following
form:
THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN
WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
The
Company acknowledges and agrees that a Signatory Holder may from time to time
pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Shares to a financial
institution that is an “accredited investor” as defined in Rule 501(a) under the
Securities Act and who agrees to be bound by the provisions of this Amendment
and, if required under the terms of such arrangement, such Signatory Holder may
transfer pledged or secured Shares to the pledgees or secured
parties. Such a pledge or transfer would not be subject to approval
of the Company and no legal opinion of legal counsel of the pledgee, secured
party or pledgor shall be required in connection therewith. Further,
no notice shall be required of such pledge. At the appropriate
Signatory Holder’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Shares may reasonably request in
connection with a pledge or transfer of the Shares.
(c) Certificates
evidencing the Shares shall not contain any legend (including the legend set
forth in this Section 6), (i) while a registration statement covering the resale
of such security is effective under the Securities Act, (ii) following any sale
of such Shares pursuant to Rule 144, (iii) if such Shares are eligible for sale
under Rule 144 or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). The Company
shall cause its counsel to issue a legal opinion to the Transfer Agent promptly
after any event in (i)-(iv) herein if required by the Transfer Agent to effect
the removal of the legend hereunder. The Company agrees that following such time
as such legend is no longer required under this Section 6(c), it will, no later
than three Trading Days following the delivery by a Signatory Holder to the
Company or the Transfer Agent of a certificate representing Shares, as the case
may be, issued with a restrictive legend (such third Trading Day, the “Legend Removal
Date”), deliver or cause to be delivered to such Signatory Holder a
certificate representing such shares that is free from all restrictive and other
legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set
forth in this Section 6. Certificates for Shares subject to legend
removal hereunder shall be transmitted by the Transfer Agent to the Signatory
Holder by crediting the account of the Signatory Holder’s prime broker with the
Depository Trust Company System as directed by such Signatory
Holder.
(d) In
addition to such Signatory Holder’s other available remedies, the Company shall
pay to a Signatory Holder, in cash, as partial liquidated damages and not as a
penalty, for each $1,000 of Shares (based on the VWAP of the Common Stock on the
date such Shares are submitted to the Transfer Agent) delivered for removal of
the restrictive legend and subject to Section 6(c), $10 per Trading Day
(increasing to $20 per Trading Day five (5) Trading Days after such damages have
begun to accrue) for each Trading Day after the Legend Removal Date until such
certificate is delivered without a legend. Nothing herein shall limit such
Signatory Holder’s right to pursue actual damages for the Company’s failure to
deliver certificates representing any Shares as required by this Amendment, and
such Signatory Holder shall have the right to pursue all remedies available to
it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief.
(e) Each
Signatory Holder, severally and not jointly with the other Signatory Holders,
agrees with the Company that such Signatory Holder will sell any Shares pursuant
to either the registration requirements of the Securities Act, including any
applicable prospectus delivery requirements, or an exemption therefrom, and that
if Shares are sold pursuant to a registration statement, they will be sold in
compliance with the plan of distribution set forth therein, and acknowledges
that the removal of the restrictive legend from certificates representing Shares
as set forth in this Section 6 is predicated upon the Company’s reliance upon
this understanding.
[SIGNATURE
PAGE FOLLOWS]
INFERX
CORPORATION, INC.
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By:
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/s/
Xxxxx Xxxx
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Name:
Xxxxx
Xxxx,
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Title: President
and
CEO
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[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
[SIGNATURE
PAGE OF HOLDERS TO NRFX AMENDMENT]
Name of
Holder: __________________________
Signature of Authorized Signatory of
Holder: __________________________
Name of
Authorized Signatory: _________________________
Title of
Authorized Signatory: __________________________
[SIGNATURE
PAGES CONTINUE]