Exhibit 10.1

BLACK NICKEL ACQUISITION CORP. I

 
May 17, 2006
 
B.K. Gogia
President
InferX Corp.
1600 International Drive
Suite 100
McLean, Virginia 22102

Re: Letter of Intent for Share Exchange
 
Dear B.K.:
 
Further to our recent discussions, this Letter of Intent summarizes the terms
upon which Black Nickel Acquisition Corp. I or an affiliate (“Buyer”) intends
combine with InferX Corp. (“Seller”) by an exchange of its shares of common
stock for all of the issued and outstanding shares of capital stock of Seller
(the “Reverse Merger”). The parties have agreed that Seller plans to issue a
$350,000 Promissory Note for bridge financing and an Agreement and Plan of
Merger and such other agreements as are necessary (the "Definitive Agreements")
with respect to the Reverse Merger in accordance with the following terms.
 
Bridge Financing
 

 
1.
Amount of Loan: Minimum $350,000 (the “Loan”).

 

 
2.
Promissory Note. A 6-month promissory note from Seller in the amount of at least
$350,000 principal with interest at 8% per annum payable upon the earlier of the
maturity date, the closing of a Reverse Merger by Seller with Buyer or an event
of default (the “Bridge Note”).

 

1.
3. Securities Issued: This Note includes an undertaking of the Company to issue
that number of shares of the Company’s common stock, par value $.01 per share,
(the “Bridge Shares”) to allow the Lender to receive [250,000] shares of common
stock of the operating entity following the Reverse Merger upon the issuance
hereof. All Bridge Shares issued pursuant to the Bridge Note shall have anti
dilution protection prior to the time of an effective registration statement
covering such Bridge Shares, i.e., in the event that Seller obtains additional
financing prior to such an effective registration statement, the Bridge Shares
shall be increased in the event that the financing is at a per share price less
than $.50 per share, subject to adjustment.

 

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Reverse Merger/Share Exchange
 

2.  
Surviving Public Company: Buyer (with Seller as subsidiary thereafter)

 

3.  
Merger Consideration. At the closing of the transaction (the “Closing”), Buyer
will exchange 5,600,000 shares of Black Nickel Acquisition Corp. I common stock
(“Common Stock”) for all the issued and outstanding shares of Seller’s capital
stock (including the Bridge Shares issued pursuant to the Bridge Note).
Separately, Buyer will have cash on hand at closing of at least $850,000, of
which $350,000 will be used to repay the Loan and the remaining $500,000 will be
available for Seller to use as working capital. Seller shall not use any
proceeds of financings, including the private placement below, to repay the SBA
Loan (as hereinafter defined).

 

4.  
Private Placement. At the closing of the Reverse Merger, Buyer will complete a
private placement with gross proceeds of $850,000 by offering 1,700,000 units at
a price of $.50 per unit consisting of 1,700,000 shares of Common Stock of Black
Nickel Acquisition Corp. I, 1,700,000 Class A warrants and 1,700,000 Class B
warrants. All shares of Common Stock or shares of Common Stock issued upon
exercise of the warrants (“Warrant Shares”) shall have anti dilution protection
prior to the time of an effective registration statement covering such shares,
i.e., in the event that Seller obtains additional financing prior to such an
effective registration statement, the shares of Common Stock shall be increased
in the event that the financing is at a per share price less than $.50 per
share, subject to adjustment, and the exercise prices for the Class A and Class
B Warrants shall be reduced to the price of the shares in such future financing.
Investors in the private placement will have customary pre-emptive rights to
invest in future financings.

 

5.  
Class A Warrant Terms. Exercisable at any time for shares of Common Stock at an
exercise price of $.50 per share with a term of five (5) years, subject to anti
dilution protection, so that any part of the 1,700,000 of the warrants shall be
callable by Buyer if the underlying Warrant Shares are registered and the Common
Stock trades in the open market for thirty (30) consecutive days at a closing
price above $1.50 per share. 1,000,000 warrants shall be callable by Buyer if
Buyer or Seller is awarded a contract with a guaranteed minimum revenue to Buyer
or Seller of at least $1,000,000 with a department of the U.S. Government (not
including the Missile Defense Agency)(“Customer”) to deploy its existing
technology for threat detection or other application. If such contract requires
payments over more than one year and the Customer has the option to renew for
successive periods, revenues projected to be received in option or renewal
periods will not be included for such purpose.

 

6.  
Class B Warrant Terms. Exercisable at any time for shares of Common Stock at an
exercise price of $.62 per share with a term of five (5) years, subject to anti
dilution protection, so that any part of the 1,700,000 warrants are callable by
Seller if the underlying warrant shares are registered and the Common Stock
trades in the open market for thirty (30) consecutive days at a closing price
above $1.86 per share.

 

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7.  
Shell Company. 1,200,000 shares of Common Stock of Black Nickel Acquisition
Corp. I (“Shell Shares”) will remain outstanding, not including any securities
issued pursuant to the private placement referred to in Section 4 above. All
such Shell Shares shall have anti dilution protection prior to the time of an
effective registration statement covering such shares, i.e., in the event that
Seller obtains additional financing prior to such an effective registration
statement, the shares of Common Stock shall be increased in the event that the
financing is at a per share price less than $.50 per share, subject to
adjustment.

 

8.  
Shares Issued to Seller’s Shareholders: 5,600,000 shares of Common Stock

 

9.  
Shares Reserved Under Seller’s Stock Option Plan: For a period of two (2) years
from the date of the closing of the Reverse Merger, no more than 2,200,000
shares of Common Stock may be reserved under a stock option plan and any options
granted under that stock option plan will be subject to an exercise price of not
less than $.50 per share.

 

10.  
Registration Statements. There will be two registration statements filed:

 
a. First Registration Statement. Buyer shall register 4,050,000 shares of Common
Stock or 47.6% of the initial outstanding shares. The Registration Statement
shall be filed within 45 days of closing of the Reverse Merger and shall become
effective no more than 120 days (150 days if the SEC elects to review the
registration statement) after closing of the Reverse Merger. The shares to be
registered shall be as follows: 
 
1,700,000 shares for the $850,000 private placement
1,000,000 shares underlying the Class A warrants
750,000 shares of the Shell Shares
250,000 shares of the Bridge Shares
350,000 shares for Buyer shareholders that will be registered for resale at a
fixed price of not less than $.55 per share
 
b. Second Registration Statement. The holders of Class A Warrants and Class B
Warrants and all remaining unregistered shares of the Shell Shares shall have a
demand registration right, exercisable at any time 30 days after the
effectiveness of the first Registration Statement, to cause Buyer to register a
minimum of 2,400,000 shares of Common Stock underlying the Class A Warrants and
Class B Warrants and all remaining unregistered shares of the Shell Shares. The
second registration statement shall be filed no less than 30 days after and no
more than 45 days after the exercise of such demand.
 
c. Penalty Provision. A penalty to be determined in the Definitive Documents
will be imposed on Seller if the registration statements are not filed within
the timeframes above and the first registration statements is not effective
within 120 days (150 days if the SEC elects to review the registration
statement) after the closing of the Reverse Merger and the second registration
statement is not effective within 120 days (150 days if the SEC elects to review
the registration statement) after the closing of the Reverse Merger and the
second registration is not effective within 150 days from the date of demand by
the holders of the Class A Warrants and Class B Warrants.
 

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11.  
NASD Form 211. Seller shall within ten (10) days of the filing of the first
registration statement have a market maker for the Common Stock file Form 211 to
have the Common Stock traded on the OTCBB upon effectiveness of the first
registration statement.

 

12.  
Key Hire. Jesus Mena will be employed by Seller as an employee on or before the
closing of the Reverse Merger with Mr. Mena starting to perform services within
forty-five (45) days following the closing of the Reverse Merger. Mr. Mena shall
execute an employment agreement in form and substance reasonably acceptable to
all parties prior to closing the Reverse Merger.

 

13.  
Conditions to Effectiveness. The effectiveness of the Definitive Agreements will
be subject to the satisfaction of the following conditions:

 
a. Third Party Consents and Approvals. Buyer and Seller shall have received all
necessary consents, if any, of third parties or governmental entities.

b. Definitive Agreements. Definitive Agreements containing customary
representations, warranties, covenants and indemnities by Buyer and the Seller
shall have been executed and delivered, including the Bridge Note and an
Agreement and Plan of Merger.
 
c. Approval. The board of directors of Buyer and the board of directors and the
shareholders of Seller shall have approved the Definitive Agreements and the
transactions contemplated therein.
 
d. Closing. The parties acknowledge that the Closing of the transactions
contemplated herein will occur as soon as practicable after the negotiation and
execution of the Definitive Agreements, and the parties desire the transactions
be consummated no later than August 17, 2006.
 
e.  Liabilities and Accounts Payable. At the time of closing the Reverse Merger,
the Seller will have accounts payable of less than $125,000 and its other
outstanding liabilities shall be a $404,000 loan from the U.S. Small Business
Administration (“SBA Loan”) and an outstanding note on a BMW automobile of
approximately $20,000. All outstanding liabilities to officers, directors and
shareholders (and their affiliates) will be converted to equity and extinguished
prior to closing in a manner acceptable to Buyer.
 
f.  Compensation Packages. For a period of two years following the closing of
the Reverse Merger, the following executives will have the following
compensation arrangements:
 

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a) BK Gogia - $180,000 annually, target bonus of 50% of compensation, no bonus
to be paid unless the company is profitable, and he will receive a company car.
Subject to a 10% increase in year two.
 
b) Scott Parliament - $150,000 annually, target bonus of 50% of compensation, no
bonus to be paid unless the company is profitable. Subject to a 10% increase in
year two.
 
c) Jerzy Bala - $140,000 annually, target bonus of 50% of compensation, no bonus
to be paid unless the company is profitable. Subject to a 10% increase in year
two.
 

 
13.
Miscellaneous.

 
a. No-Shop. In consideration of the expense and effort that will be expended by
Buyer in due diligence and the negotiation of the Definitive Agreements, neither
Seller nor its affiliates will, directly, indirectly or otherwise, solicit or
entertain offers from, negotiate with or in any manner encourage, discuss,
accept or consider any proposal of any other person or entity relating to a
transaction of the type set forth herein or any other potential merger,
acquisition, sale or financing transaction until the earlier to occur of the
Closing, the date on which Buyer and Seller mutually agree in writing to
discontinue negotiations regarding such a transaction on the terms set forth
herein, or August 17, 2006.
 
b. Definitive Agreements; Consents. Buyer and Seller shall negotiate in good
faith to arrive at a mutually acceptable Definitive Agreements for approval,
execution and delivery on the earliest practicable date. Buyer and Seller shall
cooperate with each other and proceed, as promptly as is reasonably practicable,
to seek to obtain all necessary consents and approvals, if any, from third
parties or governmental entities, and to endeavor to comply with all other legal
or contractual requirements for, or preconditions to, the execution and
consummation of the Definitive Agreements
 
c. Confidentiality. Each of Buyer and Seller covenants and agrees that, except
as consented to by the parties, neither they nor any of their respective
officers, directors, employees, agents or representatives will disclose any
confidential information of the other to any third party, except (i) as required
by law or regulation (including applicable securities regulations), or (ii) to a
party’s accountants, lawyers, employees, advisors, and representatives in
connection with evaluating whether to proceed with negotiating and closing the
transactions contemplated herein, or (iii) in connection with obtaining consents
required by the Definitive Agreements.
 
d. Costs. Buyer and Seller shall be responsible for and bear all of their own
costs and expenses incurred in connection with the proposed transaction, with
the exception that Seller shall pay all legal costs of Buyer in connection with
pursuing or consummating the proposed transaction, regardless of whether or not
the transaction is consummated.
 

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e. No Material Changes in Business. From and after the date of this Letter of
Intent until the earlier to occur of the termination of this Letter of Intent,
August 17, 2006 or the date of the execution of the Agreement and Plan of
Merger, Seller will use commercially reasonable efforts to maintain the Business
in accordance with its customary practices and otherwise to conduct its business
in the ordinary course in the manner in which it has heretofore been conducted
and to preserve its business relationships with customers, suppliers, and
content providers. During such time, Seller shall take no action outside the
ordinary course of business or make any commitment involving more than $20,000
without the prior written consent of Buyer, which shall not be unreasonably
withheld.
 
f. Binding Nature of Letter.
 
(1). Sections 1-12 of this Letter of Intent (collectively, the "Nonbinding
Provisions") reflect our mutual understanding of the matters described in them,
but each party acknowledges that the Nonbinding Provisions are not intended to
create or constitute any legally binding obligation between Buyer and Seller,
and neither Buyer nor Seller shall have any obligation to refrain from
competition with the other or with respect to the Nonbinding Provisions until
fully integrated, Definitive Agreements and other related documents are
prepared, authorized, executed and delivered by the parties. Until such time as
the foregoing documents are prepared, authorized, executed and delivered by and
between all parties, Buyer shall have the right to conduct its business and
Seller shall have the right to conduct its business in the manner currently
conducted and Buyer and Seller shall be under no obligation to the other except
with respect to the Binding Provisions (as hereinafter defined) of this letter.
If the Definitive Agreements are not prepared, authorized, executed or delivered
for any reason, no party to this Letter of Intent shall have any liability to
any other party to this Letter of Intent based upon, arising from, or relating
to the Nonbinding Provisions.

(2). Upon execution by Buyer and Seller of this Letter of Intent or counterparts
thereof, Section 13 of this Letter of Intent (the "Binding Provisions") shall
constitute the legally binding and enforceable agreement of Buyer and Seller (in
recognition of the significant costs to be borne by Buyer and Seller in pursuing
the transaction set forth herein and further as to their mutual undertakings as
to the matters described herein). The Binding Provisions (along with the rest of
this Letter of Intent) may be terminated (A) by mutual written consent of Buyer
and Seller; or (B) upon written notice by either Buyer or Seller to the other
parties if the Definitive Agreements have not been executed by [August] 17,
2006, provided, however that the termination of the Binding Provisions shall not
affect the liability for breach of any of the Binding Provisions prior to the
termination.

     (3.) Counterparts, etc. This Letter of Intent may be executed in separate
counterparts, none of which need contain the signatures of all parties, each of
which shall be deemed to be an original, and all of which taken together
constitute one and the same instrument. The Binding Provisions may only be
amended in writing signed by both parties. The Binding Provisions reflect the
entire agreement among the parties with respect to the subject matter thereof.
This Letter of Intent may not be assigned. Telecopied or email (via PDF)
signatures shall be deemed to have the same effect as an original. If you are in
agreement with the foregoing as a basis for negotiating Definitive Agreements
between Buyer and Seller with respect to the matters set forth herein, please
execute the enclosed duplicate copy of this letter and return it to me.
 

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        Sincerely,      
BLACK NICKEL ACQUISITION CORP. I
 
   
   
    By:   /s/ Paul T. Mannion, Jr.  

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Name: Paul T. Mannion, Jr.
Title: President and CEO
Date: May 17, 2006
   

 

        Accepted and Agreed:
 
InferX Corp.
 
   
   
    By:   /s/ B.K. Gogia  

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Name: B.K. Gogia
Title: President
Date: May 17, 2006