Document:

Exhibit
10.2

    
      

      Form
of  Class A Warrant

    

     

    THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THESE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED HEREUNDER AND UNDER THE SECURITIES ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

     

    CLASS
A WARRANT TO PURCHASE COMMON STOCK

    OF

    INFERX
CORPORATION

     

    
      
        
          
            
              	
                      Warrant
      No. A-___

                    	
                    	Issued
      on:  December __, 2009
	 
      	
                    	Void
      after: June  __,
2014

            

          

        

      

    

     

    This
certifies that ______________________________ or registered assigns (the “Holder”)
is entitled, subject to the terms and conditions of this Warrant, to purchase
from InferX Corporation (the “Company”)
at any time during the Exercise Period (defined below) and prior to June __,
2014 (the “Expiration
Date”) all, or any portion, of ______________ shares of Warrant Stock (as
defined below) as may be purchased at a price per share equal to the Exercise
Price (as defined below), upon surrender of this Warrant at the principal
offices of the Company, together with a duly executed exercise form in the form
attached hereto as Exhibit 1 (the “Notice of
Exercise Form”) and simultaneous payment of the full Exercise Price for
the shares of Warrant Stock so purchased in lawful money of the United
States.

     

    This
Warrant is one of a series of Class A Warrants issued by the Company, pursuant
to the terms of the Purchase Agreement pursuant to which (i) the Class A
Warrants shall have the right to acquire a total of 450,000 shares of Common
Stock in the aggregate at an initial exercise price of $.20 per share and (ii)
the Class B Warrants shall have the right to purchase 120,000 shares of Common
Stock in the aggregate at an initial exercise price of $.50 per
share.

     

    The
Exercise Price and the number and character of shares of Warrant Stock
purchasable under this Warrant are subject to adjustment as provided
herein.

     

    1.           DEFINITIONS.  The following
definitions shall apply for purposes of this Warrant.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Debenture and Warrant Purchase Agreement (the “Purchase Agreement”),
dated December __, 2009, among the Company and the purchasers signatory
thereto:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.1           “Exercise
Period” means that period that shall commence 181 days
from  the date hereof and end on the Expiration Date.

     

    1.2           “Exercise
Price” means $0.20 per share, subject to adjustment as provided
herein.

     

    1.3           “Holder”
means any person who shall at the time be the registered holder of this
Warrant.

     

    1.4           “Transfer
Agent” means _____________________, the current transfer agent of the
Company, with a mailing address of ___________________ and a facsimile number of
_______________, and any successor transfer agent of the Company.

     

    1.5           “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 Purchasers
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.

     

    1.6           “Warrant”
means this Warrant and any warrant(s) delivered in substitution or exchange
therefor, as provided herein.

     

    1.7           “Warrant
Stock” means shares of the Common Stock issuable upon exercise of this
Warrant.  The number and character of shares of Warrant Stock are
subject to adjustment as provided herein and the term “Warrant
Stock” shall include stock and other securities and property at any time
receivable or issuable upon exercise of this Warrant in accordance with its
terms.

     

    2.           EXERCISE.

     

    2.1           Method of
Exercise.  Subject to the terms and conditions of this Warrant,
the Holder may exercise this Warrant at any time or from time to time, in whole
or in part, on any Trading Day before the Expiration Date, for that number of
shares of Warrant Stock set forth herein with the Notice of Exercise Form duly
executed by the Holder (the “Notice of Exercise”),
and payment of an amount equal to the product obtained by multiplying (i) the
number of shares of Warrant Stock to be purchased by the Holder by (ii) the
Exercise Price as determined in accordance with the terms
hereof.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Stock available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within three (3) Trading Days of
the date the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Stock available hereunder shall have
the effect of lowering the outstanding number of Warrant Stock purchasable
hereunder in an amount equal to the applicable number of Warrant Stock
purchased.  The Holder and the Company shall maintain records showing
the number of Warrant Stock purchased and the date of such
purchases.  The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice.  In the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason of the
provisions of this paragraph, following the purchase of a portion of the Warrant
Stock hereunder, the number of Warrant Stock available for purchase hereunder at
any given time may be less than the amount stated on the face
hereof.

    
      
         

      

      
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    2.2           Form of
Payment.  Payment may be made by (i) a check payable to the
Company’s order, (ii) wire transfer of funds to the Company, or (iii) any
combination of the foregoing

     

    2.3           Cashless
Exercise.  If at any time after the six-month anniversary of
the date of the issuance of this Warrant, there is no effective registration
statement registering, or no current prospectus available for, the resale of the
Warrant Stock by the Holder, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Stock equal
to the quotient obtained by dividing [(A-B) (X)] by (A), where:

     

     (A)
= the VWAP on the Trading Day immediately preceding the date on which Holder
elects to exercise this Warrant by means of a “cashless exercise,” as set forth
in the applicable Notice of Exercise;

    

    (B) = the
Exercise Price of this Warrant, as adjusted hereunder; and

    

    (X) = the
number of Warrant Stock that would be issuable upon exercise of this Warrant in
accordance with the terms of this Warrant if such exercise were by means of a
cash exercise rather than a cashless exercise.

    

    Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2.3.

    

    2.4           No
Fractional Shares.  No fractional shares may be issued upon any
exercise of this Warrant, and any fractions shall be rounded down to the nearest
whole number of shares.  If upon any exercise of this Warrant a
fraction of a share results, the Company will pay the cash value of any such
fractional share, calculated on the basis of the Exercise
Price.

    
      
         

      

      
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    2.5           Restrictions
on Exercise.

     

    (a)           This
Warrant may not be exercised if the issuance of the Warrant Stock upon such
exercise would constitute a violation of any applicable federal or state
securities laws or other laws or regulations.  As a condition to the
exercise of this Warrant, the Holder shall execute the Notice of Exercise
Form.

     

    (b)           Notwithstanding
anything to the contrary contained herein, the number of shares of Warrant Stock
that may be acquired by any Warrant Holder upon any exercise of this Warrant
shall be limited to the extent necessary to insure that, following such
exercise, the total number of shares of Common Stock then beneficially owned by
such Warrant Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Warrant Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the
“5% Maximum
Percentage”) of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  Each delivery of an Exercise Notice by a Warrant
Holder will constitute a representation by such Warrant Holder that it has
evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of shares of Warrant Stock requested in such
Exercise Notice is permitted under this paragraph.  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.  By
written notice to the Company, any Warrant Holder may waive the provisions of
this Section or increase or decrease the 5% Maximum Percentage to any other
percentage specified in such notice, but (i) any such waiver or increase will
not be effective until the 61st day after such notice is delivered to the
Company, and (ii) any such waiver or increase or decrease will apply only to
such Warrant Holder and not to any other Warrant Holder.  For the
avoidance of doubt, this Section 2.5(b) (x) shall initially apply to all Warrant
Holders unless subsequently waived by a Warrant Holder, including Warrant
Holders that beneficially own in excess of 4.999% of the outstanding shares of
Common Stock; and (y) shall not be interpreted to require a shareholder to
convert, transfer or dispose of any shares of capital stock of the Company, or
otherwise reduce its beneficial ownership of shares of Common Stock,
irrespective of whether the beneficial ownership of shares of Common Stock by
such shareholder (together with its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Warrant
Holder’s for purposes of Section 13(d) of the Exchange Act) exceeds
4.999%.

     

    (c)           Notwithstanding
anything to the contrary contained herein, the number of shares of Warrant Stock
that may be acquired by any Warrant Holder upon any exercise of this Warrant
shall be limited to the extent necessary to insure that, following such
exercise, the total number of shares of Common Stock then beneficially owned by
such Warrant Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Warrant Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% (the
“10%
Maximum Percentage”) of the total number of issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  Each delivery of an Exercise Notice by a Warrant
Holder will constitute a representation by such Warrant Holder that it has
evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of shares of Warrant Stock requested in such
Exercise Notice is permitted under this paragraph.  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.  By
written notice to the Company, any Warrant Holder may waive the provisions of
this Section or increase or decrease the 10% Maximum Percentage to any other
percentage specified in such notice, but (i) any such waiver or increase will
not be effective until the 61st day after such notice is delivered to the
Company, and (ii) any such waiver or increase or decrease will apply only to
such Warrant Holder and not to any other Warrant Holder.  For the
avoidance of doubt, this Section 2.5(c) (x) shall initially apply to all Warrant
Holders unless subsequently waived by a Warrant Holder, including Warrant
Holders that beneficially own in excess of 9.999% of the outstanding shares of
Common Stock; and (y) shall not be interpreted to require a shareholder to
convert, transfer or dispose of any shares of capital stock of the Company, or
otherwise reduce its beneficial ownership of shares of Common Stock,
irrespective of whether the beneficial ownership of shares of Common Stock by
such shareholder (together with its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Warrant
Holder’s for purposes of Section 13(d) of the Exchange Act) exceeds
9.999%.

    
      
         

      

      
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    3.           ISSUANCE OF
STOCK.

     

    3.1           Delivery
of Certificates Upon Exercise. Certificates for shares purchased
hereunder shall be transmitted by the Transfer Agent to the Holder by crediting
the account of the Holder’s prime broker with the Depository Trust Company
through its Deposit Withdrawal Agent Commission (“DWAC”)
system if the Company is then a participant in such system and either (A) there
is an effective registration statement permitting the issuance of the Warrant
Stock to or resale of the Warrant Stock by the Holder or (B) the shares are
eligible for resale by the Holder without volume or manner-of-sale limitations
pursuant to Rule 144, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise by the date that is three (3)
Trading Days after the latest of (A) the delivery to the Company of the Notice
of Exercise Form, (B) surrender of this Warrant (if required), and (C) payment
of the aggregate Exercise Price as set forth above (including by cashless
exercise, if permitted) (such date, the “Warrant Stock
Delivery Date”).  This Warrant shall be deemed to have been
exercised on the first date on which all of the foregoing have been delivered to
the Company.  The Warrant Shares shall be deemed to have been issued,
and Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the
date the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 3.4 prior to the issuance of such
shares, having been paid. If the Company fails for any reason to deliver to the
Holder certificates evidencing the Warrant Stock by the Warrant Stock Delivery
Date, the Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of Warrant Stock subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of
Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth
Trading Day after such liquidated damages begin to accrue) for each Trading Day
after such Warrant Stock Delivery Date until such certificates are delivered or
Holder rescinds such exercise.

     

    3.2           Rescission
Rights.  If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Stock pursuant to Section 3.1 by the Warrant Stock Delivery Date, then,
the Holder will have the right to rescind such exercise.

    
      
         

      

      
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    3.3           Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise.  In addition to any other rights available to the
Holder, if the Company fails to deliver a certificate or the certificates
representing the Warrant Stock pursuant to an exercise on or before the Warrant
Stock Delivery Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Stock which the Holder
anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Stock that the Company was required to
deliver to the Holder in connection with the exercise at issue times (2) the
price at which the sell order giving rise to such purchase obligation was
executed, and (B) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Stock for which such exercise was
not honored (in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations
hereunder.  For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss.  Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

     

    3.4           Charges,
Taxes and Expenses.  Issuance of certificates for Warrant Stock
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the
event certificates for Warrant Stock are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

     

    4.           ADJUSTMENT
PROVISIONS.  The number and
character of shares of Warrant Stock issuable upon exercise of this Warrant (or
any shares of stock or other securities or property at the time receivable or
issuable upon exercise of this Warrant) and the Exercise Price therefor, are
subject to adjustment upon the occurrence of the following events between the
date this Warrant is issued and the date it is exercised:

     

    4.1           Adjustment
for Stock Splits and Stock Dividends.  The Exercise Price of
this Warrant and the number of shares of Warrant Stock issuable upon exercise of
this Warrant (or any shares of stock or other securities at the time issuable
upon exercise of this Warrant) shall each be proportionally adjusted to reflect
any stock dividend, stock split or reverse stock split, or other similar event
affecting the number of outstanding shares of Common Stock (or such other stock
or securities).  Each adjustment under this Section 4.1 shall become
effective on the close of business on the date such dividend, stock split or
reverse stock split, or other similar event becomes effective.

    
      
         

      

      
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    4.2           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization 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, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a
“Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Stock that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder (without regard to any
limitation in Section 2.5 on the 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 as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2.5 on the exercise of this Warrant).  For
purposes of any such exercise, the determination of the Exercise 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 Fundamental Transaction, and the Company shall apportion the
Exercise 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.  Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule
13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a
Fundamental Transaction involving a person or entity not traded on a national
securities exchange, the Company or any Successor Entity (as defined below)
shall, at the Holder’s option, exercisable at any time concurrently with, or
within 30 days after, the consummation of the Fundamental Transaction, purchase
this Warrant from the Holder by paying to the Holder an amount of cash equal to
the Black Scholes Value of the remaining unexercised portion of this Warrant on
the date of the consummation of such Fundamental Transaction.  “Black Scholes
Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction
and the Expiration Date, (B) an expected volatility equal to the greater of 100%
and the 100 day volatility obtained from the HVT function on Bloomberg as of the
Trading Day immediately following the public announcement of the applicable
Fundamental Transaction, (C) the underlying price per share used in such
calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in such
Fundamental Transaction and (D) a remaining option time equal to the time
between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date.  The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under
this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in form and
substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the holder of this Warrant, deliver to the Holder in exchange for
this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant which is
exercisable for a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental
Transaction, and with an exercise price which applies the exercise price
hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and
the value of such shares of capital stock, such number of shares of capital
stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the
Holder. Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant with the
same effect as if such Successor Entity had been named as the Company
herein.

    
      
         

      

      
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    4.3           Adjustment
for Reorganization, Consolidation, Merger.  In case of any
recapitalization or reorganization of the Company after the date of this
Warrant, or in case, after such date, the Company shall consolidate with, merge
into, or enter into a share exchange with, another corporation or entity (the
“Successor
Entity”) or other similar event, then, and in each such case, the Warrant
Holder shall be entitled to receive, at any time on or after the consummation of
such recapitalization, reorganization, consolidation, merger, share exchange or
other similar event, shall be entitled to receive, at the option of the Warrant
Holder, either (a) warrants or other securities exercisable or convertible into
common stock of the Successor Entity, or (b) in lieu of the securities
contemplated by clause (a) hereof, the cash, stock or other securities or
property to which the Warrant Holder would have been entitled upon the
consummation of such recapitalization, reorganization, consolidation, merger,
share exchange or other similar event, if the Warrant Holder had exercised this
Warrant immediately prior thereto at the Exercise Price.  The Company
covenants and agrees that any Successor Entity in such reorganization,
consolidation, merger, share exchange or other similar event (if other than the
Company) shall duly execute and deliver to the Warrant Holder a supplement
hereto acknowledging such corporation’s obligations under this Warrant; and in
each such case, the terms of this Warrant shall be applicable to the cash,
shares of stock or other securities or property receivable upon the exercise of
this Warrant after the consummation of such reorganization, consolidation,
merger, share exchange or other similar event.

    
      
         

      

      
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    4.4           Adjustment
for Dilutive Issuances.  If the Company, at any time after the
date of this Warrant, shall issue any shares of Common Stock or securities of
the Company convertible into shares of Common Stock at a price per share of
Common Stock less than the Exercise Price in effect immediately prior to such
issuance, in any case other than an Excluded Issuance (as hereinafter defined)
(a “Dilutive
Issuance”), then, and in each such case, the Exercise Price shall be
reduced to the effective per share price of the Common Stock in connection with
such additional issuance of securities.

     

    The
following shall be deemed “Excluded
Issuances” for the purpose of this Section 4.4:

     

    (a)           The
Company’s granting of stock options, and/or issuance of Common Stock upon
exercise thereof, to directors, officers, employees or consultants of the
Company pursuant to the Company’s 2007 Stock Incentive Plan;

     

    (b)           The
issuance or sale of shares of Common Stock (i) issuable upon the exercise of the
Class A Warrants and the Class B Warrants;

     

    (c)           The
issuance of shares of Common Stock or securities convertible into or
exchangeable or exercisable for shares of Common Stock (and the shares of Common
Stock issuable upon the conversion, exercise or exchange thereof) in connection
with any future acquisition, merger or other business combination, purchase of
assets or of all or a portion of a business or other strategic relationship
entered, by the Company or any of its subsidiaries.

     

    4.5           Number of
Shares of Warrant Stock.  Simultaneously with any adjustment to
the Exercise Price pursuant to Section 4.1 above, the number of shares of
Warrant Stock that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased number
of shares of Warrant Stock shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment; provided, however, any adjustment
of the Exercise Price and the number of shares of Warrant Stock available for
exercise, if applicable, made pursuant to
this  section  shall adjust back in the event none of
the  convertible  securities or options or
warrants  which  caused  such  adjustment  are
converted or exercised, as the case may be.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    4.6           Calculations.  All
calculations under this Section 4 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable.  The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Stock.

     

    4.7           Notice of
Adjustments.  The Company shall promptly give written notice of
each adjustment or readjustment of the Exercise Price or the number of shares of
Warrant Stock or other securities issuable upon exercise of this
Warrant.  The notice shall describe the adjustment or readjustment and
show in reasonable detail the facts on which the adjustment or readjustment is
based.

     

    4.8           No Change
Necessary.  The form of this Warrant need not be changed
because of any adjustment in the Exercise Price or in the number of shares of
Warrant Stock issuable upon its exercise.

     

    4.9           Reservation
of Stock.  If at any time the number of authorized but unissued
(or treasury shares) of Common Stock or other securities issuable upon exercise
of this Warrant shall not be sufficient to effect the exercise of this Warrant,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Warrant
Stock or other securities issuable upon exercise of this Warrant as shall be
sufficient for such purpose.

     

    5.           PIGGYBACK
REGISTRATION RIGHTS.  The Company shall notify all Holders in
writing at least thirty (30) days prior to filing any registration statement
under the Securities Act for purposes of effecting a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding
registration statements relating to any employee benefit plan or a corporate
reorganization or other transaction covered by Rule 145 promulgated under the
Securities Act, or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
Common Stock) and will afford each such Holder an opportunity to include in such
registration statement all or any part of the Warrant Stock then held by such
Holder.  Each Holder desiring to include in any such registration
statement all or any part of the Warrant Stock held by such Holder shall, within
twenty (20) days after receipt of the above-described notice from the Company,
so notify the Company in writing, and in such notice shall inform the Company of
the number of Warrant Stock such Holder wishes to include in such registration
statement.  If a Holder decides not to include all of its Warrant
Stock in any registration statement thereafter filed by the Company, such Holder
shall nevertheless continue to have the right to include any Warrant Stock in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.

     

    6.           NO RIGHTS
OR LIABILITIES AS SHAREHOLDER.  This Warrant does
not by itself entitle the Holder to any voting rights or other rights as a
shareholder of the Company.  In the absence of affirmative action by
the Holder to purchase Warrant Stock by exercise of this Warrant, no provisions
of this Warrant, and no enumeration herein of the rights or privileges of the
Holder, shall cause the Holder to be a shareholder of the Company for any
purpose.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    7.           NO
IMPAIRMENT.  The Company will
not, by amendment of its certificate of incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, willfully avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against wrongful impairment.  Without
limiting the generality of the foregoing, the Company will take all such action
as may be necessary or appropriate in order that the Company may duly and
validly issue fully paid and nonassessable shares of Warrant Stock upon the
exercise of this Warrant.

     

    8.           NOTICE
REQUIREMENT.  In case (i) the Company shall take a record of
the holders of its Common Stock (or other stock or securities at the time
deliverable upon the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other rights; or (ii) of any capital
reorganization of the Company, any reclassification of the capital stock of the
Company, any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
surviving entity), or any transfer of all or substantially all of the assets of
the Company; or (iii) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company, then, in each case, the Company will give notice
thereof to the Holder of this Warrant specifying in such notice , as the case
may be, (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, or (y) the effective date on which such
reorganization, reclassification, consolidation , merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for the security or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up.  Such notice shall be given by the Company
at least ten Trading Days prior to the record date or effective date for the
event specified in such notice.

     

    9.           ATTORNEYS’
FEES.  In the event any
party is required to engage the services of any attorneys for the purpose of
enforcing this Warrant, or any provision thereof, the prevailing party shall be
entitled to recover its reasonable expenses and costs in enforcing this Warrant,
including reasonable attorneys’ fees.

     

    10.         TRANSFER.    Subject
to compliance with any applicable securities laws, this Warrant and all rights
hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer.  Upon such
surrender and, if required, such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.  The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of
Warrant Stock without having a new Warrant issued.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    11.           TRANSFER
RESTRICTIONS.
If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be either
(i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or
(ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may
require, as a condition of allowing such transfer, that the Holder or transferee
of this Warrant, as the case may be, comply with the provisions of Section
11 of
the Purchase Agreement.

     

    12.           LOSS,
THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Stock, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock
certificate.

     

    13.           LIMITATION
OF LIABILITY.  No provision
hereof, in the absence of any affirmative action by Holder to exercise this
Warrant to purchase Warrant Stock, and no enumeration herein of the rights or
privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.

     

    14.           REMEDIES.  The Holder, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

     

    15.           GOVERNING
LAW.  All questions
concerning the construction, validity, enforcement and interpretation of this
Warrant shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflicts of law thereof.  Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding 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 Warrant 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.  If either party shall commence an action or proceeding to
enforce any provisions of this Warrant, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    16.           HEADINGS.  The headings and
captions used in this Warrant are used only for convenience and are not to be
considered in construing or interpreting this Warrant.  All references
in this Warrant to sections and exhibits shall, unless otherwise provided, refer
to sections hereof and exhibits attached hereto, all of which exhibits are
incorporated herein by this reference.

     

    17.           NOTICES.  Unless otherwise
provided, any notice required or permitted under this Agreement shall be given
in writing and shall be deemed effectively given (i) at the time of personal
delivery, if delivery is in person; (ii) one (1) Trading Day delivery by
facsimile transmission or after deposit with an express overnight courier for
United States deliveries, with proof of delivery from the courier requested
(provided that written or electronic confirmation of receipt is obtained), or
two (2) Trading Days after such deposit for deliveries outside of the United
States, with proof of delivery from the courier requested; or (iii) on the day
of proof of receipt, if mailed by registered or certified mail (return receipt
requested) for United States deliveries when addressed to the party to be
notified at the address indicated for such party pursuant to the Agreement or,
in the case of the Company, at 46950 Jennings Farm Drive, Suite 290, Sterling,
VA 20164-8679, (fax) 703 444-2119, or at such other address
as any party or the Company may designate by giving ten (10) days’ advance
written notice to all other parties.

     

    18.           AMENDMENT;
WAIVER.  This Warrant and
all other Class A Warrants issued under the Agreement may be amended and
provisions may be waived by the warrant holders holding, in the aggregate, Class
A Warrants exercisable for shares of Warrant Stock greater than 67% of all
shares of Warrant Stock available for exercise under the Class A Warrants, and
the Company as may be mutually agreed upon in writing.

     

    19.           SEVERABILITY.  If one or more
provisions of this Warrant are held to be unenforceable under applicable law,
such provision(s) shall be excluded from this Warrant and the balance of the
Warrant shall be interpreted as if such provision(s) were so excluded and shall
be enforceable in accordance with its terms.

     

    20.           TERMS
BINDING.     By
acceptance of this Warrant, the Holder accepts and agrees to be bound by all the
terms and conditions of this Warrant.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    21.           MISCELLANEOUS.  In any instance
where the word “days” is used herein, unless otherwise indicated, “days” shall
mean calendar days, including Saturday, Sunday and holidays.

     

    [The
balance of this page intentionally left blank]

    
      
         

      

      
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    IN WITNESS WHEREOF, the
parties hereto have executed this Warrant as of the date first above
written.

     

    
      
        
          
            
              
                
                  	
                          INFERX
      CORPORATION

                        
	 
      	 
      
	
                          By:

                        	 
      
	 	 
	
                          Name:

                        	 
      
	 	 
	
                          Title:

                        	 
      

                

              

            

          

        

      

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    EXHIBIT
1

     

    FORM OF
EXERCISE

    (To
be signed only upon exercise of Warrant)

     

    To:  InferX
Corporation

     

    The undersigned Holder hereby elects to
purchase ____________ shares of Common Stock of InferX Corporation (the “Warrant
Stock”), at a purchase price of $____ per share for a total purchase
price of $________________, pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price for such shares in
full.

     

    Please issue a certificate or
certificates representing such shares of Warrant Stock in the name specified
below:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      
	
                                  (Name)

                                
	 
	 
      
	
                                  (Address)

                                
	 
	 
      
	
                                  (City,
      State, Zip Code)

                                
	 
	 
      
	
                                  (Federal
      Tax Identification Number)

                                
	 
	 
      
	
                                  (Date)

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    In the
event that this exercise is for less than the total number of shares of Warrant
Stock available for exercise under this Warrant, please also issue a new Warrant
for the remaining number of shares of Warrant Stock.

    

    
      
        
          
            	 
      
	
                    Signature
      of Warrant
Holder

                  

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    FORM
OF ASSIGNMENT

    (ENTIRE)

    

    [To
be signed only upon transfer of entire Warrant]

    

    TO
BE EXECUTED BY THE REGISTERED HOLDER

    TO
TRANSFER THE WITHIN WARRANT

     

    FOR VALUE RECEIVED
___________________________ hereby sells, assigns and transfers unto
_______________________________ all rights of the undersigned under and pursuant
to the within Warrant, and the undersigned does hereby irrevocably constitute
and appoint _____________________ Attorney to transfer the said Warrant on the
books of InferX Corporation, with full power of substitution.

    

    
      
        
          
            
              
                	 
      
	
                        [Type
      Name of Holder]

                      
	 
      	 
      
	
                        By:

                      	 
      
	
                        Title:

                      	 
      
	 
      	 
      
	
                        Dated:

                      	 
      

              

            

          

        

      

    

    

    NOTICE

     

    The
signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    FORM
OF ASSIGNMENT

    (PARTIAL)

    

    [To
be signed only upon partial transfer of Warrant]

    

    TO
BE EXECUTED BY THE REGISTERED HOLDER

    TO
TRANSFER THE WITHIN WARRANT

     

    FOR VALUE
RECEIVED ___________________________ hereby sells, assigns and transfers unto
____________________________ (i) the rights of the undersigned to purchase
____________________ shares of Common Stock under and pursuant to the within
Warrant, and (ii) on a non-exclusive basis, all other rights of the
undersigned under and pursuant to the within Warrant, it being understood that
the undersigned shall retain, severally (and not jointly) with the transferee(s)
named herein, all rights assigned on such non-exclusive basis.  The
undersigned does hereby irrevocably constitute and appoint
__________________________ Attorney to transfer the said Warrant on the books of
InferX Corporation,  with full power of substitution.

    

    
      
        
          
            
              
                	 
      
	
                        [Type
      Name of Holder]

                      
	 
      	 
      
	
                        By:

                      	 
      
	
                        Title:

                      	 
      
	 
      	 
      
	
                        Dated:

                      	 
      

              

            

          

        

      

    

     

    NOTICE

     

    The
signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.Exhibit
10.3

       

      Form
of  Class B Warrant

    

     

    THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THESE SECURITIES
ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED HEREUNDER AND UNDER THE SECURITIES ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF
COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.

     

    CLASS
B WARRANT TO PURCHASE COMMON STOCK

    OF

    INFERX
CORPORATION

     

    
      	
              Warrant No. B-___

            	
              Issued on:  December __, 2009

            
	  	
              Void after: June __, 2014

            

    

     

    This
certifies that ______________________________ or registered assigns (the “Holder”)
is entitled, subject to the terms and conditions of this Warrant, to purchase
from InferX Corporation (the “Company”)
at any time during the Exercise Period (defined below) and prior to June __,
2014 (the “Expiration
Date”) all, or any portion, of ______________ shares of Warrant Stock (as
defined below) as may be purchased at a price per share equal to the Exercise
Price (as defined below), upon surrender of this Warrant at the principal
offices of the Company, together with a duly executed exercise form in the form
attached hereto as Exhibit 1 (the “Notice of
Exercise Form”) and simultaneous payment of the full Exercise Price for
the shares of Warrant Stock so purchased in lawful money of the United
States.

     

    This
Warrant is one of a series of Class B Warrants issued by the Company, pursuant
to the terms of Purchase Agreement pursuant to which (i) the Class B Warrants
shall have the right to acquire a total of 120,000 shares of Common Stock in the
aggregate at an initial exercise price of $0.50 per share; and
(ii)  the Class A Warrants shall have the right to purchase 450,000
shares of Common Stock in the aggregate at an initial exercise price of $0.20
per share.

     

    The
Exercise Price and the number and character of shares of Warrant Stock
purchasable under this Warrant are subject to adjustment as provided
herein.

     

    1.           DEFINITIONS.  The following
definitions shall apply for purposes of this Warrant.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Debenture and Warrant Purchase Agreement (the “Purchase Agreement”),
dated December __, 2009, among the Company and the purchasers signatory
thereto:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.1           “Exercise
Period” means that period that shall commence 181 days from the date
hereof and end on the Expiration Date.

     

    1.2           “Exercise
Price” means $0.50 per share, subject to adjustment as provided
herein.

     

    1.3           “Holder”
means any person who shall at the time be the registered holder of this
Warrant.

     

    1.4           “Transfer
Agent” means _____________________, the current transfer agent of the
Company, with a mailing address of ___________________ and a facsimile number of
_______________, and any successor transfer agent of the Company.

     

    1.5           “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 Purchasers
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.

     

    1.6           “Warrant”
means this Warrant and any warrant(s) delivered in substitution or exchange
therefor, as provided herein.

     

    1.7           
“Warrant
Stock” means shares of the Common Stock issuable upon exercise of this
Warrant.  The number and character of shares of Warrant Stock are
subject to adjustment as provided herein and the term “Warrant
Stock” shall include stock and other securities and property at any time
receivable or issuable upon exercise of this Warrant in accordance with its
terms.

     

    
      
         

      

      
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    2.           EXERCISE.

     

    2.1           Method of
Exercise.  Subject to the terms and conditions of this Warrant,
the Holder may exercise this Warrant at any time or from time to time, in whole
or in part, on any Trading Day before the Expiration Date, for that number of
shares of Warrant Stock set forth herein with the Notice of Exercise Form duly
executed by the Holder (the “Notice of
Exercise”), and payment of an amount equal to the product obtained by
multiplying (i) the number of shares of Warrant Stock to be purchased by the
Holder by (ii) the Exercise Price as determined in accordance with the terms
hereof. Notwithstanding anything herein to the contrary, the Holder shall not be
required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Stock available hereunder and the Warrant has
been exercised in full, in which case, the Holder shall surrender this Warrant
to the Company for cancellation within three (3) Trading Days of the date the
final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Stock available hereunder shall have the effect of lowering
the outstanding number of Warrant Stock purchasable hereunder in an amount equal
to the applicable number of Warrant Stock purchased.  The Holder and
the Company shall maintain records showing the number of Warrant Stock purchased
and the date of such purchases.  The Company shall deliver any
objection to any Notice of Exercise Form within 1 Business Day of receipt of
such notice.  In the event of any dispute or discrepancy, the records
of the Holder shall be controlling and determinative in the absence of manifest
error. The Holder and any
assignee, by acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a portion of the
Warrant Stock hereunder, the number of Warrant Stock available for purchase
hereunder at any given time may be less than the amount stated on the face
hereof.

     

    2.2           Form of
Payment.  Payment may be made by (i) a check payable to the
Company’s order, (ii) wire transfer of funds to the Company, or (iii) any
combination of the foregoing.

     

    2.3           Cashless
Exercise.  If at any time after the six month anniversary of
the date of the issuance of this Warrant, there is no effective registration
statement registering, or no current prospectus available for, the resale of the
Warrant Stock by the Holder, then this Warrant may also be exercised, in whole
or in part, at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a certificate for the number of Warrant Stock equal
to the quotient obtained by dividing [(A-B) (X)] by (A), where:

     

    (A) = the
VWAP on the Trading Day immediately preceding the date on which Holder elects to
exercise this Warrant by means of a “cashless exercise,” as set forth in the
applicable Notice of Exercise;

     

    (B) = the
Exercise Price of this Warrant, as adjusted hereunder; and

     

    (X) = the
number of Warrant Stock that would be issuable upon exercise of this Warrant in
accordance with the terms of this Warrant if such exercise were by means of a
cash exercise rather than a cashless exercise.

     

    Notwithstanding
anything herein to the contrary, on the Expiration Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2.3.

     

    2.4           No
Fractional Shares.  No fractional shares may be issued upon any
exercise of this Warrant, and any fractions shall be rounded down to the nearest
whole number of shares.  If upon any exercise of this Warrant a
fraction of a share results, the Company will pay the cash value of any such
fractional share, calculated on the basis of the Exercise Price.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    2.5           Restrictions
on Exercise.

     

    (a)           This
Warrant may not be exercised if the issuance of the Warrant Stock upon such
exercise would constitute a violation of any applicable federal or state
securities laws or other laws or regulations.  As a condition to the
exercise of this Warrant, the Holder shall execute the Notice of Exercise
Form.

     

    (b)           Notwithstanding
anything to the contrary contained herein, the number of shares of Warrant Stock
that may be acquired by any Warrant Holder upon any exercise of this Warrant
shall be limited to the extent necessary to insure that, following such
exercise, the total number of shares of Common Stock then beneficially owned by
such Warrant Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Warrant Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% (the
“5% Maximum
Percentage”) of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  Each delivery of an Exercise Notice by a Warrant
Holder will constitute a representation by such Warrant Holder that it has
evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of shares of Warrant Stock requested in such
Exercise Notice is permitted under this paragraph.  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.  By
written notice to the Company, any Warrant Holder may waive the provisions of
this Section or increase or decrease the 5% Maximum Percentage to any other
percentage specified in such notice, but (i) any such waiver or increase will
not be effective until the 61st day after such notice is delivered to the
Company, and (ii) any such waiver or increase or decrease will apply only to
such Warrant Holder and not to any other Warrant Holder.  For the
avoidance of doubt, this Section 2.5(b) (x) shall initially apply to all Warrant
Holders unless subsequently waived by a Warrant Holder, including Warrant
Holders that beneficially own in excess of 4.999% of the outstanding shares of
Common Stock; and (y) shall not be interpreted to require a shareholder to
convert, transfer or dispose of any shares of capital stock of the Company, or
otherwise reduce its beneficial ownership of shares of Common Stock,
irrespective of whether the beneficial ownership of shares of Common Stock by
such shareholder (together with its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Warrant
Holder’s for purposes of Section 13(d) of the Exchange Act) exceeds
4.999%.

     

    (c)           Notwithstanding
anything to the contrary contained herein, the number of shares of Warrant Stock
that may be acquired by any Warrant Holder upon any exercise of this Warrant
shall be limited to the extent necessary to insure that, following such
exercise, the total number of shares of Common Stock then beneficially owned by
such Warrant Holder and its Affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Warrant Holder’s for
purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% (the
“10%
Maximum Percentage”) of the total number of issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  Each delivery of an Exercise Notice by a Warrant
Holder will constitute a representation by such Warrant Holder that it has
evaluated the limitation set forth in this paragraph and determined that
issuance of the full number of shares of Warrant Stock requested in such
Exercise Notice is permitted under this paragraph.  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.  By
written notice to the Company, any Warrant Holder may waive the provisions of
this Section or increase or decrease the 10% Maximum Percentage to any other
percentage specified in such notice, but (i) any such waiver or increase will
not be effective until the 61st day after such notice is delivered to the
Company, and (ii) any such waiver or increase or decrease will apply only to
such Warrant Holder and not to any other Warrant Holder.  For the
avoidance of doubt, this Section 2.5(c) (x) shall initially apply to all Warrant
Holders unless subsequently waived by a Warrant Holder, including Warrant
Holders that beneficially own in excess of 9.999% of the outstanding shares of
Common Stock; and (y) shall not be interpreted to require a shareholder to
convert, transfer or dispose of any shares of capital stock of the Company, or
otherwise reduce its beneficial ownership of shares of Common Stock,
irrespective of whether the beneficial ownership of shares of Common Stock by
such shareholder (together with its Affiliates and any other Persons whose
beneficial ownership of Common Stock would be aggregated with the Warrant
Holder’s for purposes of Section 13(d) of the Exchange Act) exceeds
9.999%.

     

    
      
         

      

      
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    3.           ISSUANCE OF
STOCK.

     

    3.1           Delivery
of Certificates Upon Exercise.  Certificates for shares
purchased hereunder shall be transmitted by the Transfer Agent to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”)
system if the Company is then a participant in such system and either (A) there
is an effective registration statement permitting the issuance of the Warrant
Stock to or resale of the Warrant Stock by the Holder or (B) the shares are
eligible for resale by the Holder without volume or manner-of-sale limitations
pursuant to Rule 144, and otherwise by physical delivery to the address
specified by the Holder in the Notice of Exercise by the date that is three (3)
Trading Days after the latest of (A) the delivery to the Company of the Notice
of Exercise Form, (B) surrender of this Warrant (if required), and (C) payment
of the aggregate Exercise Price as set forth above (including by cashless
exercise, if permitted) (such date, the “Warrant Stock
Delivery Date”).  This Warrant shall be deemed to have been
exercised on the first date on which all of the foregoing have been delivered to
the Company.  The Warrant Shares shall be deemed to have been issued,
and Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the
date the Warrant has been exercised, with payment to the Company of the Exercise
Price (or by cashless exercise, if permitted) and all taxes required to be paid
by the Holder, if any, pursuant to Section 3.4 prior to the issuance of such
shares, having been paid. If the Company fails for any reason to deliver to the
Holder certificates evidencing the Warrant Stock by the Warrant Stock Delivery
Date, the Company shall pay to the Holder, in cash, as liquidated damages and
not as a penalty, for each $1,000 of Warrant Stock subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of
Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth
Trading Day after such liquidated damages begin to accrue) for each Trading Day
after such Warrant Stock Delivery Date until such certificates are delivered or
Holder rescinds such exercise.

     

    3.2           Rescission
Rights.  If the Company fails to cause the Transfer Agent to
transmit to the Holder a certificate or the certificates representing the
Warrant Stock pursuant to Section 3.1 by the Warrant Stock Delivery Date, then,
the Holder will have the right to rescind such exercise.

     

    
      
         

      

      
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    3.3           Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise.  In addition to any other rights available to the
Holder, if the Company fails to deliver a certificate or the certificates
representing the Warrant Stock pursuant to an exercise on or before the Warrant
Stock Delivery Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Stock which the Holder
anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (1) the number of Warrant Stock that the Company was required to
deliver to the Holder in connection with the exercise at issue times (2) the
price at which the sell order giving rise to such purchase obligation was
executed, and (B) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Stock for which such exercise was
not honored (in which case such exercise shall be deemed rescinded) or deliver
to the Holder the number of shares of Common Stock that would have been issued
had the Company timely complied with its exercise and delivery obligations
hereunder.  For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss.  Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

     

    3.4           Charges,
Taxes and Expenses.  Issuance of certificates for Warrant Stock
shall be made without charge to the Holder for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Company, and such certificates
shall be issued in the name of the Holder or in such name or names as may be
directed by the Holder; provided, however, that in the
event certificates for Warrant Stock are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

     

    4.           ADJUSTMENT
PROVISIONS.  The number and
character of shares of Warrant Stock issuable upon exercise of this Warrant (or
any shares of stock or other securities or property at the time receivable or
issuable upon exercise of this Warrant) and the Exercise Price therefor, are
subject to adjustment upon the occurrence of the following events between the
date this Warrant is issued and the date it is exercised:

     

    
      
         

      

      
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    4.1           Adjustment
for Stock Splits and Stock Dividends.  The Exercise Price of
this Warrant and the number of shares of Warrant Stock issuable upon exercise of
this Warrant (or any shares of stock or other securities at the time issuable
upon exercise of this Warrant) shall each be proportionally adjusted to reflect
any stock dividend, stock split or reverse stock split, or other similar event
affecting the number of outstanding shares of Common Stock (or such other stock
or securities).  Each adjustment under this Section 4.1 shall become
effective on the close of business on the date such dividend, stock split or
reverse stock split, or other similar event becomes effective.

     

    4.2           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the
Company, directly or indirectly, in one or more related transactions effects any
merger or consolidation of the Company with or into another Person, (ii) the
Company, directly or indirectly, effects any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or substantially all of its
assets in one or a series of related transactions, (iii) any, direct or
indirect, purchase offer, tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or
property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or recapitalization 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, (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person whereby such other Person
acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a
“Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Stock that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder (without regard to any
limitation in Section 2.5 on the 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 as a result of such Fundamental Transaction by
a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to
any limitation in Section 2.5 on the exercise of this Warrant).  For
purposes of any such exercise, the determination of the Exercise 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 Fundamental Transaction, and the Company shall apportion the
Exercise 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.  Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule
13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a
Fundamental Transaction involving a person or entity not traded on a national
securities exchange, the Company or any Successor Entity (as defined below)
shall, at the Holder’s option, exercisable at any time concurrently with, or
within 30 days after, the consummation of the Fundamental Transaction, purchase
this Warrant from the Holder by paying to the Holder an amount of cash equal to
the Black Scholes Value of the remaining unexercised portion of this Warrant on
the date of the consummation of such Fundamental Transaction.  “Black Scholes
Value” means the value of this Warrant based on the Black and Scholes
Option Pricing Model obtained from the “OV” function on Bloomberg, L.P. (“Bloomberg”)
determined as of the day of consummation of the applicable Fundamental
Transaction for pricing purposes and reflecting (A) a risk-free interest rate
corresponding to the U.S. Treasury rate for a period equal to the time between
the date of the public announcement of the applicable Fundamental Transaction
and the Expiration Date, (B) an expected volatility equal to the greater of 100%
and the 100 day volatility obtained from the HVT function on Bloomberg as of the
Trading Day immediately following the public announcement of the applicable
Fundamental Transaction, (C) the underlying price per share used in such
calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in such
Fundamental Transaction and (D) a remaining option time equal to the time
between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date.  The Company shall cause any
successor entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor
Entity”) to assume in writing all of the obligations of the Company under
this Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in form and
substance reasonably satisfactory to the Holder and approved by the Holder
(without unreasonable delay) prior to such Fundamental Transaction and shall, at
the option of the holder of this Warrant, deliver to the Holder in exchange for
this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant which is
exercisable for a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such Fundamental
Transaction, and with an exercise price which applies the exercise price
hereunder to such shares of capital stock (but taking into account the relative
value of the shares of Common Stock pursuant to such Fundamental Transaction and
the value of such shares of capital stock, such number of shares of capital
stock and such exercise price being for the purpose of protecting the economic
value of this Warrant immediately prior to the consummation of such Fundamental
Transaction), and which is reasonably satisfactory in form and substance to the
Holder. Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date
of such Fundamental Transaction, the provisions of this Warrant and the other
Transaction Documents referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of the Company and
shall assume all of the obligations of the Company under this Warrant with the
same effect as if such Successor Entity had been named as the Company
herein.

     

    
      
         

      

      
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    4.3           Adjustment
for Reorganization, Consolidation, Merger.  In case of any
recapitalization or reorganization of the Company after the date of this
Warrant, or in case, after such date, the Company shall consolidate with, merge
into, or enter into a share exchange with, another corporation or entity (the
“Successor
Entity”) or other similar event, then, and in each such case, the Warrant
Holder shall be entitled to receive, at any time on or after the consummation of
such recapitalization, reorganization, consolidation, merger, share exchange or
other similar event, shall be entitled to receive, at the option of the Warrant
Holder, either (a) warrants or other securities exercisable or convertible into
common stock of the Successor Entity, or (b) in lieu of the securities
contemplated by clause (a) hereof, the cash, stock or other securities or
property to which the Warrant Holder would have been entitled upon the
consummation of such recapitalization, reorganization, consolidation, merger,
share exchange or other similar event, if the Warrant Holder had exercised this
Warrant immediately prior thereto at the Exercise Price.  The Company
covenants and agrees that any Successor Entity in such reorganization,
consolidation, merger, share exchange or other similar event (if other than the
Company) shall duly execute and deliver to the Warrant Holder a supplement
hereto acknowledging such corporation’s obligations under this Warrant; and in
each such case, the terms of this Warrant shall be applicable to the cash,
shares of stock or other securities or property receivable upon the exercise of
this Warrant after the consummation of such reorganization, consolidation,
merger, share exchange or other similar event.

     

    
      
         

      

      
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    4.4           Adjustment
for Dilutive Issuances.  If the Company, at any time after the
date of this Warrant, shall issue any shares of Common Stock or securities of
the Company convertible into shares of Common Stock at a price per share of
Common Stock less than the Exercise Price in effect immediately prior to such
issuance, in any case other than an Excluded Issuance (as hereinafter defined)
(a “Dilutive
Issuance”), then, and in each such case, the Exercise Price shall be
reduced to the effective per share price of the Common Stock in connection with
such additional issuance of securities.

     

    The
following shall be deemed “Excluded
Issuances” for the purpose of this Section 4.4:

     

    (a)           The
Company’s granting of stock options, and/or issuance of Common Stock upon
exercise thereof, to directors, officers, employees or consultants of the
Company pursuant to the Company’s 2007 Stock Incentive Plan;

     

    (b)           The
issuance or sale of shares of Common Stock (i) issuable upon the exercise of the
Class A Warrants and the Class B Warrants;

     

    (c)           The
issuance of shares of Common Stock or securities convertible into or
exchangeable or exercisable for shares of Common Stock (and the shares of Common
Stock issuable upon the conversion, exercise or exchange thereof) in connection
with any future acquisition, merger or other business combination, purchase of
assets or of all or a portion of a business or other strategic relationship
entered, by the Company or any of its subsidiaries.

     

    4.5           Number of
Shares of Warrant Stock.  Simultaneously with any adjustment to
the Exercise Price pursuant to Section 4.1 above, the number of shares of
Warrant Stock that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased number
of shares of Warrant Stock shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment; provided, however, any adjustment
of the Exercise Price and the number of shares of Warrant Stock available for
exercise, if applicable, made pursuant to
this  section  shall adjust back in the event none of
the  convertible  securities or options or
warrants  which  caused  such  adjustment  are
converted or exercised, as the case may be.

     

    
      
         

      

      
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    4.6           Calculations.  All
calculations under this Section 4 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable.  The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Stock.

     

    4.7           Notice of
Adjustments.  The Company shall promptly give written notice of
each adjustment or readjustment of the Exercise Price or the number of shares of
Warrant Stock or other securities issuable upon exercise of this
Warrant.  The notice shall describe the adjustment or readjustment and
show in reasonable detail the facts on which the adjustment or readjustment is
based.

     

    4.8           No Change
Necessary.  The form of this Warrant need not be changed
because of any adjustment in the Exercise Price or in the number of shares of
Warrant Stock issuable upon its exercise.

     

    4.9           Reservation
of Stock.  If at any time the number of authorized but unissued
(or treasury shares) of Common Stock or other securities issuable upon exercise
of this Warrant shall not be sufficient to effect the exercise of this Warrant,
the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Warrant
Stock or other securities issuable upon exercise of this Warrant as shall be
sufficient for such purpose.

     

    5.           PIGGYBACK
REGISTRATION RIGHTS.  The Company shall notify all Holders in
writing at least thirty (30) days prior to filing any registration statement
under the Securities Act for purposes of effecting a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding
registration statements relating to any employee benefit plan or a corporate
reorganization or other transaction covered by Rule 145 promulgated under the
Securities Act, or a registration on any registration form which does not permit
secondary sales or does not include substantially the same information as would
be required to be included in a registration statement covering the sale of
Common Stock) and will afford each such Holder an opportunity to include in such
registration statement all or any part of the Warrant Stock then held by such
Holder.  Each Holder desiring to include in any such registration
statement all or any part of the Warrant Stock held by such Holder shall, within
twenty (20) days after receipt of the above-described notice from the Company,
so notify the Company in writing, and in such notice shall inform the Company of
the number of Warrant Stock such Holder wishes to include in such registration
statement.  If a Holder decides not to include all of its Warrant
Stock in any registration statement thereafter filed by the Company, such Holder
shall nevertheless continue to have the right to include any Warrant Stock in
any subsequent registration statement or registration statements as may be filed
by the Company with respect to offerings of its securities, all upon the terms
and conditions set forth herein.

     

    6.           NO RIGHTS
OR LIABILITIES AS SHAREHOLDER.  This Warrant does
not by itself entitle the Holder to any voting rights or other rights as a
shareholder of the Company.  In the absence of affirmative action by
the Holder to purchase Warrant Stock by exercise of this Warrant, no provisions
of this Warrant, and no enumeration herein of the rights or privileges of the
Holder, shall cause the Holder to be a shareholder of the Company for any
purpose.

     

    
      
         

      

      
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    7.           NO
IMPAIRMENT.  The Company will
not, by amendment of its certificate of incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities,
sale of assets or any other voluntary action, willfully avoid or seek to avoid
the observance or performance of any of the terms of this Warrant, but will at
all times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against wrongful impairment.  Without
limiting the generality of the foregoing, the Company will take all such action
as may be necessary or appropriate in order that the Company may duly and
validly issue fully paid and nonassessable shares of Warrant Stock upon the
exercise of this Warrant.

     

    8.           NOTICE
REQUIREMENT.  In case (i) the Company shall take a record of
the holders of its Common Stock (or other stock or securities at the time
deliverable upon the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other rights; or (ii) of any capital
reorganization of the Company, any reclassification of the capital stock of the
Company, any consolidation or merger of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
surviving entity), or any transfer of all or substantially all of the assets of
the Company; or (iii) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company, then, in each case, the Company will give notice
thereof to the Holder of this Warrant specifying in such notice , as the case
may be, (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, or (y) the effective date on which such
reorganization, reclassification, consolidation , merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for the security or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up.  Such notice shall be given by the Company
at least five Trading Days prior to the record date or effective date for the
event specified in such notice.

     

    9.           ATTORNEYS’
FEES.  In the event any
party is required to engage the services of any attorneys for the purpose of
enforcing this Warrant, or any provision thereof, the prevailing party shall be
entitled to recover its reasonable expenses and costs in enforcing this Warrant,
including reasonable attorneys’ fees.

     

    10.           TRANSFER.  Subject to
compliance with any applicable securities laws, this Warrant and all rights
hereunder (including, without limitation, any registration rights) are
transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer.  Upon such
surrender and, if required, such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees, as
applicable, and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.  The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the purchase of
Warrant Stock without having a new Warrant issued.

     

    
      
         

      

      
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    11.           TRANSFER
RESTRICTIONS.
If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be either
(i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or
(ii) eligible for resale without volume or manner-of-sale restrictions or
current public information requirements pursuant to Rule 144, the Company may
require, as a condition of allowing such transfer, that the Holder or transferee
of this Warrant, as the case may be, comply
with the provisions of Section 11 of the Purchase
Agreement.

     

    12.           LOSS,
THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants that
upon receipt by the Company of evidence reasonably satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Stock, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated, the Company
will make and deliver a new Warrant or stock certificate of like tenor and dated
as of such cancellation, in lieu of such Warrant or stock
certificate.

     

    13.           LIMITATION
OF LIABILITY.  No provision
hereof, in the absence of any affirmative action by Holder to exercise this
Warrant to purchase Warrant Stock, and no enumeration herein of the rights or
privileges of Holder, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.

     

    14.           REMEDIES.  The Holder, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

     

    
      
         

      

      
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    15.           GOVERNING
LAW.  All questions
concerning the construction, validity, enforcement and interpretation of this
Warrant shall be governed by and construed and enforced in accordance with the
internal laws of the State of New York, without regard to the principles of
conflicts of law thereof.  Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding 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 Warrant 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.  If either party shall commence an action or proceeding to
enforce any provisions of this Warrant, then the prevailing party in such action
or proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.

     

    16.           HEADINGS.  The headings and
captions used in this Warrant are used only for convenience and are not to be
considered in construing or interpreting this Warrant.  All references
in this Warrant to sections and exhibits shall, unless otherwise provided, refer
to sections hereof and exhibits attached hereto, all of which exhibits are
incorporated herein by this reference.

     

    17.           NOTICES.  Unless otherwise
provided, any notice required or permitted under this Agreement shall be given
in writing and shall be deemed effectively given (i) at the time of personal
delivery, if delivery is in person; (ii) one (1) Trading Day delivery by
facsimile transmission or after deposit with an express overnight courier for
United States deliveries, with proof of delivery from the courier requested
(provided that written or electronic confirmation of receipt is obtained), or
two (2) Trading Days after such deposit for deliveries outside of the United
States, with proof of delivery from the courier requested; or (iii) on the day
of proof of receipt, if mailed by registered or certified mail (return receipt
requested) for United States deliveries when addressed to the party to be
notified at the address indicated for such party pursuant to the Agreement or,
in the case of the Company, at 46950 Jennings Farm Drive, Suite 290, Sterling,
VA 20164-8679, (fax) 703 444-2119, or at such other address as any party or the
Company may designate by giving ten (10) days’ advance written notice to all
other parties.

     

    18.           AMENDMENT;
WAIVER.  This Warrant and
all other Class A Warrants issued under the Agreement may be amended and
provisions may be waived by the warrant holders holding, in the aggregate, Class
A Warrants exercisable for shares of Warrant Stock greater than 67% of all
shares of Warrant Stock available for exercise under the Class A Warrants, and
the Company as may be mutually agreed upon in writing.

     

    19.           SEVERABILITY.  If one or more
provisions of this Warrant are held to be unenforceable under applicable law,
such provision(s) shall be excluded from this Warrant and the balance of the
Warrant shall be interpreted as if such provision(s) were so excluded and shall
be enforceable in accordance with its terms.

     

    20.           TERMS
BINDING.  By acceptance of
this Warrant, the Holder accepts and agrees to be bound by all the terms and
conditions of this Warrant.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    21.           MISCELLANEOUS.   In any
instance where the word “days” is used herein, unless otherwise indicated,
“days” shall mean calendar days, including Saturday, Sunday and
holidays.

     

    [The
balance of this page intentionally left blank]

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Warrant as of the date first above
written.

     

    
      
        
          	
                  INFERX
      CORPORATION

                	 
      
	 
      	 
      
	
                  By:

                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                  Name:

                	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                  Title:

                	 
      	 
      

        

      

    

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    EXHIBIT
1

     

    FORM OF
EXERCISE

    (To
be signed only upon exercise of Warrant)

     

    To:  InferX
Corporation

     

    The undersigned Holder hereby elects to
purchase ____________ shares of Common Stock of InferX Corporation (the “Warrant
Stock”), at a purchase price of $____ per share for a total purchase
price of $________________, pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price for such shares in
full.

     

    Please issue a certificate or
certificates representing such shares of Warrant Stock in the name specified
below:

     

    
      
        	 
      
	
                (Name)

              
	 
      
	
                (Address)

              
	 
      
	
                (City,
      State, Zip Code)

              
	 
      
	
                (Federal
      Tax Identification Number)

              
	 
      
	
                (Date)

              

      

    

    

    In the
event that this exercise is for less than the total number of shares of Warrant
Stock available for exercise under this Warrant, please also issue a new Warrant
for the remaining number of shares of Warrant Stock.

    

    
      
        	 
      	 
      
	 
      	
                Signature
      of Warrant Holder

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    FORM
OF ASSIGNMENT

    (ENTIRE)

    

    [To
be signed only upon transfer of entire Warrant]

    

    TO
BE EXECUTED BY THE REGISTERED HOLDER

    TO
TRANSFER THE WITHIN WARRANT

     

    FOR VALUE RECEIVED
___________________________ hereby sells, assigns and transfers unto
_______________________________ all rights of the undersigned under and pursuant
to the within Warrant, and the undersigned does hereby irrevocably constitute
and appoint _____________________ Attorney to transfer the said Warrant on the
books of InferX Corporation, with full power of substitution.

    

    
      
        
          
            
              
                	 
      	 
      
	
                        [Type
      Name of Holder]

                      	 
      
	 
      	 
      
	
                        By:

                      	 
      	 
      
	
                        Title:

                      	 
      	 
      
	 
      	 
      	 
      
	
                        Dated:

                      	 
      	 
      

              

            

          

        

      

    

    

    NOTICE

     

    The
signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM
OF ASSIGNMENT

    (PARTIAL)

    

    [To
be signed only upon partial transfer of Warrant]

    

    TO
BE EXECUTED BY THE REGISTERED HOLDER

    TO
TRANSFER THE WITHIN WARRANT

     

    FOR VALUE
RECEIVED ___________________________ hereby sells, assigns and transfers unto
____________________________ (i) the rights of the undersigned to purchase
____________________ shares of Common Stock under and pursuant to the within
Warrant, and (ii) on a non-exclusive basis, all other rights of the
undersigned under and pursuant to the within Warrant, it being understood that
the undersigned shall retain, severally (and not jointly) with the transferee(s)
named herein, all rights assigned on such non-exclusive basis.  The
undersigned does hereby irrevocably constitute and appoint
__________________________ Attorney to transfer the said Warrant on the books of
InferX Corporation,  with full power of substitution.

    

    
      
        
          
            
              
                	 
      	 
      
	
                        [Type
      Name of Holder]

                      	 
      
	 
      	 
      
	
                        By:

                      	 
      	 
      
	
                        Title:

                      	 
      	 
      
	 
      	 
      
	
                        Dated:

                      	 
      	 
      

              

            

          

        

      

    

    

    NOTICE

     

    The
signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.

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