Document:

Exhibit
10.4

          

      Form of
Security Agreement

          

    

    SECURITY
AGREEMENT

    

    1.  THE
SECURITY.  The undersigned InferX Corporation, a
Delaware  corporation (the “Pledgor”) and all of
the direct and indirect subsidiaries of the Pledgor (the “Subsidiaries” and
together with the Pledgor, the “Debtors”), hereby
assign and grant to the holders of the Pledgor’s 8% Secured Convertible
Debentures due, subject to the terms therein, June __, 2010, in the original
aggregate principal amount of up to $300,000 (collectively, the “Debentures”),
signatory hereto, their endorsees, transferees and assigns (collectively, the
“Creditors”), a
security interest in all assets of the Debtors, now owned or hereafter acquired,
including the following described property now owned or hereafter acquired by
the Debtors (the “Collateral”):

     

    
      	
               
      

            	
              (a)  All
      accounts, contract rights, chattel paper, instruments, deposit accounts,
      letter of credit rights, payment intangibles and general intangibles,
      including all amounts due to each Debtor from a factor; and all returned
      or repossessed goods which, on sale or lease, resulted in an account or
      chattel paper.

            

    

    

    
      	
               
      

            	
              (b)  All
      inventory, including all materials, work in process and finished
      goods.

            

    

    

    
      	
               
      

            	
              (c)  All
      machinery, furniture, fixtures and other equipment of every type now owned
      or hereafter acquired by the
Pledgor.

            

    

    

    
      	
               
      

            	
              (d)  All
      instruments, notes, chattel paper, documents, certificates of deposit,
      securities and investment property of every type, including, without
      limitation, the capital stock of all of the Subsidiaries.  The
      Collateral shall include all liens, security agreements, leases and other
      contracts securing or otherwise relating to the
  foregoing.

            

    

    

    
      	
               
      

            	
              (e)  All
      general intangibles, including, but not limited to: (i) all patents, and
      all unpatented or unpatentable inventions, (ii) all trademarks, service
      marks, and trade names, (iii) all copyrights and literary rights, (iv) all
      computer software programs, (v) all mask works of semiconductor chip
      products, and (vi) all trade secrets, proprietary information, customer
      lists, manufacturing, engineering and production plans, drawings,
      specifications, processes and systems.  The Collateral shall
      include all good will connected with or symbolized by any of such general
      intangibles, all contract rights, documents, applications, licenses,
      materials and other matters related to such general intangibles; all
      tangible property embodying or incorporating any such general intangibles;
      and all chattel paper and instruments relating to such general
      intangibles.

            

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (f)  All
      negotiable and nonnegotiable documents of title covering any
      Collateral.

            

    

    

    
      	
               
      

            	
              (g)  All
      accessions, attachments and other additions to the Collateral, and all
      tools, parts and equipment used in connection with the
      Collateral.

            

    

    

    
      	
               
      

            	
              (h)  All
      substitutes or replacements for any Collateral, all cash or non-cash
      proceeds, product, rents and profits of any Collateral, all income,
      benefits and property receivable on account of the Collateral, all rights
      under warranties, indemnities and insurance contracts, letters of credit,
      guaranties or other supporting obligations covering the Collateral, and
      any causes of action relating to the
Collateral.

            

    

    

    
      	
               
      

            	
              (i)  All
      books and records pertaining to any Collateral, including but not limited
      to any computer-readable memory and any computer hardware or software
      necessary to process such memory (“Books and
      Records”).

            

    

    

    2.  THE
INDEBTEDNESS.  The Collateral secures and will secure all
Indebtedness.  “Indebtedness” means
all debts, obligations or liabilities now or hereafter existing, absolute or
contingent of the Debtors to the Creditors, whether voluntary or involuntary,
whether due or not due, or whether incurred directly or indirectly or acquired
by the Creditors by assignment or otherwise.

    

    3.      
 DEBTORS’ REPRESENTATIONS, WARRANTIES AND COVENANTS.  Each Debtor
represents, covenants and warrants that unless compliance is waived by each of
the Creditors in writing:

    

    
      	
               
      

            	
              (a)  Each
      Debtor will properly preserve the Collateral (except for any thereof that
      is sold in the ordinary course of business), defend the Collateral against
      any adverse claims and demands, and keep accurate Books and
      Records.

            

    

    

    
      	
               
      

            	
              (b)  Each
      Debtor’s chief executive office is located, in the state specified on the
      signature page hereof.  In addition, each Debtor is incorporated
      in or organized under the laws of the state specified on such signature
      page.  Each Debtor shall give the Creditors at least thirty (30)
      days notice before changing its chief executive office or state of
      incorporation or organization.  The Debtors will notify the
      Creditors in writing prior to any change in the location of any Collateral
      (except to the extent the change arises from the sale thereof in the
      ordinary course of business), including the Books and
    Records.

            

    

    

    
      	
               
      

            	
              (c)  Each
      Debtor will notify the Creditors, in writing, prior to any change in the
      Debtor’s name, identity or material change in its business
      structure.

            

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (d)  Except
      as otherwise specifically contemplated by this Agreement or unless
      otherwise agreed, each Debtor has not granted and will not grant any
      security interest in any of the Collateral except to the Creditors, and
      will keep the Collateral free of all liens, claims, security interests and
      encumbrances of any kind or nature.

            

    

    

    
      	
               
      

            	
              (e)  Each
      Debtor will promptly notify the Creditors, in writing, of any event which
      materially affects the value of the Collateral, the ability of the Debtors
      or the Creditors to dispose of the Collateral, or the rights and remedies
      of the Creditors in relation thereto, including, but not limited to, the
      levy of any legal process against any Collateral and the adoption of any
      marketing order, arrangement or procedure affecting the Collateral,
      whether governmental or otherwise.

            

    

    

    (f)  Each Debtor shall pay
all costs necessary to preserve, defend, enforce and collect the Collateral,
including but not limited to taxes, assessments, insurance premiums, repairs,
rent, storage costs and expenses of sales, and any costs to perfect the security
interest of the Creditors (collectively, the “Collateral
Costs”).  Without waiving such Debtor’s default for failure to
make any such payment, the Creditors, following any such failure, at its option
may pay any such Collateral Costs, and discharge encumbrances on the Collateral,
and such Collateral Costs payments shall be a part of the Indebtedness and bear
interest at the rate set out in the Indebtedness.  Each Debtor agrees
to reimburse the Creditors on demand for any Collateral Costs reasonably
incurred. Each Debtor shall promptly execute and deliver to the Creditors
such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such further action as the Agent may from time to time request and may in its
sole discretion deem necessary to perfect, protect or enforce the Creditors’
security interest in the Collateral including, without limitation, the delivery
of any stock certificates of the subsidiaries to the Creditors, together with
any necessary endorsements.

    

    
      	
               
      

            	
              (g)  Until
      the Creditors exercise their rights to make collection, the Debtors will
      diligently collect all Collateral.

            

    

    

    
      	
               
      

            	
              (h)  If
      any Collateral is or becomes the subject of any registration certificate,
      certificate of deposit or negotiable document of title, including any
      warehouse receipt or bill of lading, each Debtor shall immediately deliver
      such document to the Creditors, together with any necessary
      endorsements.

            

    

    

    
      	
               
      

            	
              (i)  The
      Debtors will not sell, lease, agree to sell or lease, or otherwise dispose
      of any Collateral except with the prior written consent of the Creditors;
      provided,
      however,
      that the Debtors may sell inventory in the ordinary course of
      business.

            

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (j)  Each
      Debtor will maintain and keep in force insurance covering the Collateral
      against fire and extended coverage, to the extent that any Collateral is
      of a type which can be so insured.  Such insurance shall require
      losses to be paid on a replacement cost basis, be issued by insurance
      companies acceptable to the Creditors and include a loss payable
      endorsement in favor of the Creditors in a form acceptable to the
      Creditors.  Upon the request of the Creditors, the Debtors shall
      deliver to the Creditors a copy of each insurance policy, or, if permitted
      by the Creditors, a certificate of insurance listing all insurance in
      force.

            

    

    

    
      	
               
      

            	
              (k)  The
      Debtors will not attach any Collateral to any real property or fixture in
      a manner which might cause such Collateral to become a part thereof unless
      the Debtor first obtains the written consent of any owner, holder of any
      lien on the real property or fixture, or other person having an interest
      in such property to the removal by the Creditors of the Collateral from
      such real property or fixture.  Such written consent shall be in
      form and substance acceptable to the Creditors and shall provide that the
      Creditors have no liability to such owner, holder of any lien, or any
      other person.

            

    

    

    
      	
               
      

            	
              (l)  Exhibit A to
      this Agreement is a complete list of all patents, trademark and service
      mark registrations, copyright registrations, mask work registrations, and
      all applications therefore, in which each Debtor has any right, title, or
      interest, throughout the world.  Each Debtor will promptly
      notify the Creditors of any acquisition (by adoption and use, purchase,
      license or otherwise) of any patent, trademark or service mark
      registration, copyright registration, mask work registration, and
      applications therefore, and unregistered trademarks and service marks and
      copyrights, throughout the world, which are granted or filed or acquired
      by any Debtor after the date hereof or which are not listed on such
      Exhibit.  Each Debtor authorizes the Creditors, without notice
      to any Debtor, to modify this Agreement by amending such Exhibit to
      include any such Collateral.

            

    

    

    
      	
               
      

            	
              (m)  Each
      Debtor will, at its expense, diligently prosecute all patent, trademark or
      service mark or copyright applications pending on or after the date
      hereof, will maintain in effect all issued patents and will renew all
      trademark and service mark registrations, including payment of any and all
      maintenance and renewal fees relating thereto, except for such patents,
      service marks and trademarks that are being sold, donated or abandoned by
      the Debtors pursuant to the terms of its intellectual property management
      program.  Each Debtor also will promptly make application on any
      patentable but unpatented inventions, registerable but unregistered
      trademarks and service marks, and copyrightable but uncopyrighted
      works.  Each Debtor will at its expense protect and defend all
      rights in the Collateral against any material claims and demands of all
      persons other than the Creditors and will, at its expense, enforce all
      rights in the Collateral against any and all infringers of the Collateral
      where such infringement would materially impair the value or use of the
      Collateral to the Debtors or the Creditors.  No Debtor will
      license or transfer any of the Collateral, except for such licenses as are
      customary in the ordinary course of the Debtors’ business, or except with
      the prior written consent of each of the Creditors, which consent shall
      not be unreasonably withheld.

            

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (n)           Based
on the consolidated financial condition of the Debtors, after giving effect to
the receipt by the Debtors of the proceeds from the sale of the Debentures: (i)
the fair saleable value of the Debtors’ assets exceeds the amount that will be
required to be paid on or in respect of the Debtors’ existing debts and other
liabilities (including known contingent liabilities) as they mature, (ii) the
Debtors’ assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its capital
needs taking into account the particular capital requirements of the business
conducted by the Debtors, and projected capital requirements and capital
availability thereof, and (iii) the current cash flow of the Debtors, together
with the proceeds the Debtors would receive, were they to liquidate all of their
respective assets, after taking into account all anticipated uses of the cash,
would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid.  The Debtors do not intend to
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its
debt).  The Debtors have no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year
from the date hereof.  No Debtor is in default with respect to any
indebtedness.

    

    
      (o)           At or
prior to the date hereof, the Debtors hereby agree to reimburse the Creditors
for all of their legal fees and expenses.

    

    

    4.  ADDITIONAL OPTIONAL
REQUIREMENTS.  Each Debtor agrees that the Creditors may, at their
option at any time, whether or not any Debtor is in default:

    

    
      	
               
      

            	
              (a)  Require
      the Debtors to deliver to the Creditors (i) copies of or extracts from the
      Books and Records, and (ii) information on any contracts or other matters
      affecting the Collateral.

            

    

    

    
      	
               
      

            	
              (b)  Examine
      the Collateral, including the Books and Records, and make copies of or
      extracts from the Books and Records, and for such purposes enter at any
      reasonable time, with or without prior notice, upon the property where any
      Collateral or any Books and Records are
located.

            

    

    

    
      	
               
      

            	
              (c)  Require
      each Debtor to deliver to the Creditors any instruments, chattel paper or
      letters of credit which are part of the Collateral, and to assign to the
      Creditors the proceeds of any such letters of
  credit.

            

    

    

    
      	
               
      

            	
              (d)  Notify
      any account debtors, any buyers of the Collateral, or any other persons of
      the Creditors’ interest in the
Collateral.

            

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    5.  DEFAULTS.  Any
one or more of the following shall be a default hereunder:

    

    
      	
               
      

            	
              (a)  Any
      Indebtedness is not paid when due, or any default occurs under any
      agreement relating to the Indebtedness, after giving effect to any
      applicable grace or cure periods.

            

    

    

    
      	
               
      

            	
              (b)  Any
      Debtor breaches any term, provision, warranty or representation under this
      Agreement or under any other obligation of the Debtor to the Purchaser,
      and such breach remains uncured after any applicable cure
      period.

            

    

    

    
      	
               
      

            	
              (c)  Any
      Creditor fails to have an enforceable lien on or security interest in the
      Collateral.

            

    

    

    
      	
               
      

            	
              (d)  Any
      custodian, receiver or trustee is appointed to take possession, custody or
      control of all or a material portion of the
  Collateral.

            

    

    

    
      	
               
      

            	
              (e)  Any
      involuntary lien of any kind or character attaches to any Collateral,
      except for liens for taxes not yet
due.

            

    

    

    6.  PURCHASER'S REMEDIES
AFTER DEFAULT.  In the event of any default, the Creditors may do any
one or more of the following:

    

    
      	
               
      

            	
              (a)  Declare
      any Indebtedness immediately due and payable, without notice or
      demand.

            

    

    

    
      	
               
      

            	
              (b)  Enforce the security interest
      given hereunder pursuant to the Uniform Commercial Code and any other
      applicable law.

            

    

    

    
      	
               
      

            	
              (c)  Require
      the Debtors to obtain the Creditors’ prior written consent to any sale,
      lease, agreement to sell or lease, or other disposition of any Collateral
      consisting of inventory.

            

    

    

    
      	
               
      

            	
              (d)  Require
      the Debtors to segregate all collections and proceeds of the Collateral so
      that they are capable of identification and deliver daily such collections
      and proceeds to the Creditors in
kind.

            

    

    

    
      	
               
      

            	
              (e)  Require
      the Debtors, to the extent not previously required, to direct all account
      debtors to forward all payments and proceeds of the Collateral to a post
      office box or account under the Creditors’ exclusive
    control.

            

    

    

    
      	
               
      

            	
              (f)  Require
      the Debtors to assemble the Collateral, including the Books and Records,
      and make them available to the Purchaser at a place designated by the
      Creditors.

            

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (g)  Enter
      upon the property where any Collateral, including any Books and Records,
      are located and take possession of such Collateral and such Books and
      Records, and use such property (including any buildings and facilities)
      and any of the Debtors’ equipment, if the Creditor deems such use
      necessary or advisable in order to take possession of, hold, preserve,
      process, assemble, prepare for sale or lease, market for sale or lease,
      sell or lease, or otherwise dispose of, any
  Collateral.

            

    

    

    
      	
               
      

            	
              (h)  Demand
      and collect any payments on and proceeds of the Collateral.  In
      connection therewith, each Debtor irrevocably authorizes the Creditors to
      endorse or sign the Debtor’s name on all checks, drafts, collections,
      receipts and other documents, and to take possession of and open the mail
      addressed to the Debtor and remove therefrom any payments and proceeds of
      the Collateral.

            

    

    

    
      	
               
      

            	
              (i)  Grant
      extensions and compromise or settle claims with respect to the Collateral
      for less than face value, all without prior notice to any
      Debtor.

            

    

    

    
      	
               
      

            	
              (j)  Use
      or transfer any of the Debtors’ rights and interests in any Intellectual
      Property now owned or hereafter acquired by any Debtor, if the Creditors
      deem such use or transfer necessary or advisable in order to take
      possession of, hold, preserve, process, assemble, prepare for sale or
      lease, market for sale or lease, sell or lease, or otherwise dispose of,
      any Collateral.  The Debtors agree that any such use or transfer
      shall be without any additional consideration to any Debtor.  As
      used in this paragraph, “Intellectual
      Property” includes, but is not limited to, all trade secrets,
      computer software, service marks, trademarks, trade names, trade styles,
      copyrights, patents, applications for any of the foregoing, customer
      lists, working drawings, instructional manuals, and rights in processes
      for technical manufacturing, packaging and labeling, in which any Debtor
      has any right or interest, whether by ownership, license, contract or
      otherwise.

            

    

    

    
      	
               
      

            	
              (k)  Have
      a receiver appointed by any court of competent jurisdiction to take
      possession of the Collateral.  Each Debtor hereby consents to
      the appointment of such a receiver and agrees not to oppose any such
      appointment.

            

    

    

    
      	
               
      

            	
              (l)  Take
      such measures as the Creditors may deem necessary or advisable to take
      possession of, hold, preserve, process, assemble, insure, prepare for sale
      or lease, market for sale or lease, sell or lease, or otherwise dispose
      of, any Collateral, and each Debtor hereby irrevocably constitutes and
      appoints the Creditors as the Debtors’ attorneys-in-fact to perform all
      acts and execute all documents in connection
  therewith.

            

    

    

    
      	
               
      

            	
              (m)  Exercise
      any other remedies available to the Creditors at law or in
      equity.

            

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    7.  ENVIRONMENTAL
MATTERS.

    

    (a)  Each Debtor represents
and warrants: (i) it is not in violation of any health, safety, or environmental
law or regulation regarding Hazardous Substances and (ii) it is not the subject
of any claim, proceeding, notice, or other communication regarding Hazardous
Substances.  “Hazardous Substances”
means any substance, material or waste that is or becomes designated or
regulated as “toxic,” “hazardous,” “pollutant,” or “contaminant” or a similar
designation or regulation under any current or future federal, state or local
law (whether under common law, statute, regulation or otherwise) or judicial or
administrative interpretation of such, including without limitation petroleum or
natural gas.

    

    (b)  Each Debtor shall
deliver to the Creditors, promptly upon receipt, copies of all notices, orders,
or other communications regarding (i) any enforcement action by any governmental
authority relating to health, safety, the environment, or any Hazardous
Substances with regard to the Debtors’ property, activities, or operations, or
(ii) any claim against the Debtors regarding Hazardous Substances.

    

    (c)  Each Creditor and its
respective agents and representatives will have the right at any reasonable
time, after giving reasonable notice to the Debtors, to enter and visit any
locations where the Collateral is located for the purposes of observing the
Collateral, taking and removing environmental samples, and conducting
tests.  The Debtors shall reimburse the Creditors on demand for the
costs of any such environmental investigation and testing.  The
Creditors will make reasonable efforts during any site visit, observation or
testing conducted pursuant to this paragraph to avoid interfering with the
Debtors’ use of the Collateral.  The Creditors are under no duty to
observe the Collateral or to conduct tests, and any such acts by the Creditors
will be solely for the purposes of protecting the Creditor’s security and
preserving the Creditor’s rights under this Agreement.  No site visit,
observation or testing or any report or findings made as a result thereof
(“Environmental
Report”) will (i) result in a waiver of any default of the Pledgor, (ii)
impose any liability on the Creditors, or (iii) be a representation or warranty
of any kind regarding the Collateral (including its condition or value or
compliance with any laws) or the Environmental Report (including its accuracy or
completeness).  In the event that any Creditor has a duty or
obligation under applicable laws, regulations or other requirements to disclose
an Environmental Report to the Debtors or any other party, the Debtors authorize
the Creditors to make such a disclosure.  The Creditors may also
disclose an Environmental Report to any regulatory authority, and to any other
parties as necessary or appropriate in the Creditors’ judgment.  Each
Debtor further understands and agrees that any Environmental Report or other
information regarding a site visit, observation or testing that is disclosed to
such Debtors by any Creditor or its agents and representatives is to be
evaluated (including any reporting or other disclosure obligations of the
Debtors) by the Debtors without advice or assistance from the
Creditors.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (d)  The Debtors will
indemnify and hold harmless the Creditors from any loss or liability any
Creditor incurs in connection with or as a result of this Agreement, which
directly or indirectly arises out of the use, generation, manufacture,
production, storage, release, threatened release, discharge, disposal or
presence of a hazardous substance.  These indemnities will apply
whether the hazardous substance is on, under or about the Debtors’ property or
operations or property leased to any Debtor.  The indemnities include
but are not limited to attorneys' fees (including the reasonable estimate of the
allocated cost of in-house counsel and staff).  The indemnities extend
to the Creditors, their parent, subsidiaries and all of their directors,
officers, employees, agents, successors, attorneys and assigns.

    

    8.  MISCELLANEOUS.

    

    
      	
               
      

            	
              (a)  Any
      waiver, express or implied, of any provision hereunder and any delay or
      failure by any Creditor to enforce any provision shall not preclude any
      Creditor from enforcing any such provision
  thereafter.

            

    

    

    
      	
               
      

            	
              (b)  The
      Debtors shall, at the request of any of the Creditors, execute such other
      agreements, documents, instruments, or financing statements in connection
      with this Agreement as the Creditors may reasonably deem
      necessary.

            

    

    

    
      	
               
      

            	
              (c)  This
      Agreement shall be governed by and construed according to the laws of the
      State of New York, to the jurisdiction of which the parties hereto
      submit.

            

    

    

    
      	
               
      

            	
              (d)  All
      rights and remedies herein provided are cumulative and not exclusive of
      any rights or remedies otherwise provided by law.  Any single or
      partial exercise of any right or remedy shall not preclude the further
      exercise thereof or the exercise of any other right or
    remedy.

            

    

    

    
      	
               
      

            	
              (e)  All
      terms not defined herein are used as set forth in the Uniform Commercial
      Code.

            

    

    

    
      	
               
      

            	
              (f)  In
      the event of any action by the Creditors to enforce this Agreement or to
      protect the security interest of the Creditors in the Collateral, or to
      take possession of, hold, preserve, process, assemble, insure, prepare for
      sale or lease, market for sale or lease, sell or lease, or otherwise
      dispose of, any Collateral, the Debtors agree to immediately pay the costs
      and expenses thereof, together with reasonable attorney's fees and
      allocated costs for in-house legal services to the extent permitted by
      law.

            

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (g)  In
      the event any of the Creditors seek to take possession of any or all of
      the Collateral by judicial process, the Debtors hereby irrevocably waive
      any bonds and any surety or security relating thereto that may be required
      by applicable law as an incident to such possession, and waives any demand
      for possession prior to the commencement of any such suit or
      action.

            

    

    

    (h)  This Agreement shall
constitute a continuing agreement, applying to all future as well as existing
transactions, whether or not of the character contemplated at the date of this
Agreement, and if all transactions between the Creditors and the Debtors shall
be closed at any time, shall be equally applicable to any new transactions
thereafter.

    

    (i)  The Creditors’ rights
hereunder shall inure to the benefit of its successors and
assigns.  In the event of any assignment or transfer by any Creditors
of any of the Indebtedness or the Collateral, such Creditors thereafter shall be
fully discharged from any responsibility with respect to the Collateral so
assigned or transferred, but such Creditors shall retain all rights and powers
hereby given with respect to any of the Indebtedness or the Collateral not so
assigned or transferred.  All representations, warranties and
agreements of the Debtors shall be binding upon the successors and assigns of
the Debtors.

    

    
      	
               
      

            	
              (j)  The
      Debtors agree that the Collateral may be sold as provided for in this
      Agreement and expressly waives any rights of notice of sale, advertisement
      procedures, or related provisions granted under applicable
      law.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    
      The
parties executed this Agreement as of  December __,
2009.

    

    

    INFERX
CORPORATION

    

    
      
        
          	 
      	 
      	 
      	
                  Address:
      _____________

                
	
                  By:  

                	 
      	 
      	 
      
	 
      	
                  Name:

                	 
      	 
      
	 
      	
                  Title:

                	 
      	 
      
	 
      	 
      	 
      	
                  State of Inc.: _________

                

        

      

    

    

    [INSERT
NAMES OF ANY OTHER DIRECT AND INDIRECT SUBS]

    

    
      
        	 
      	 
      	 
      	
                Address:
      _____________

              
	
                By:  

              	 
      	 
      	 
      
	 
      	
                Name:

              	 
      	 
      
	 
      	
                Title:

              	 
      	 
      
	 
      	 
      	 
      	
                State
      of Inc.: _________

              

      

    

    

    [SIGNATURE
PAGE OF CREDITORS FOLLOWS]

    
      
         

      

      
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    [SIGNATURE
PAGE OF CREDITORS TO NFRX SECURITY AGREEMENT]

    

    Name of
Investing Entity: __________________________

      

    Signature of Authorized Signatory of Investing
entity: _________________________

      

    Name of
Authorized Signatory: _________________________

      

    Title of
Authorized Signatory: __________________________

    
      
         

      

      
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    EXHIBIT
A

    Intellectual
Property

    
      
         

      

      
        13Unassociated Document

    Exhibit
10.5

    

    Form
of  Debenture and Warrant Purchase Agreement

    DEBENTURE
AND WARRANT PURCHASE AGREEMENT

     

    This
Debenture and Warrant Purchase Agreement (this “Agreement”), dated as
of December ___, 2009 is made by and between InferX Corporation, Inc., a
Delaware corporation (the “Company”), and the
Purchasers signatory hereto (collectively, the “Purchasers”).

     

    For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

     

    1.           Definitions.

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person, as such terms are
used in and construed under Rule 405 under the Securities Act.

     

    "Business Day" means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

     

    “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

     

    “Permitted
Indebtedness” shall mean up to $900,000 of indebtedness as described on
Schedule
4(k).

    

    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

    

    “Securities” means the
Debentures, Warrants and Underlying Shares.

    

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

    

    “Trading Day” means
(i) a day on which the principal Trading Market is open for trading or (ii) if
the Common Stock is not then listed on a Trading Market, a day on which New York
Stock Exchange is open for trading.

    

    “Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the NYSE AMEX, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange or the OTC Bulletin Board (or any successors to any of the
foregoing).

    
      
         

      

      
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    “Transaction
Documents” means this Agreement, the Debentures, the Warrants, the
Security Agreement, the Subsidiary Guarantee, the subordination agreements, all
exhibits and schedules thereto and hereto and any other documents or agreements
executed in connection with the transactions contemplated herein.

     

    "Underlying Shares"
means the shares of Common Stock issued and issuable upon conversion of the
Debentures and upon exercise of the Warrants.

     

    2.           Issuance of Debentures and
Warrants. The Company hereby agrees to issue to the Purchasers against
payment therefor as described herein, (a) an 8% secured
convertible  debenture of the Company, which debenture shall be in the
form of Exhibit
A attached hereto (a “Debenture”), (b) a
common stock purchase warrant to purchase an aggregate of up to 450,000 shares of the
Company’s common stock, par value $0.0001 (the “Common Stock”), with
an exercise price per share equal to $0.20, which warrant shall be
in the form of Exhibit
B attached hereto (the “Class A Warrant”) and
(c) a common stock purchase warrant to purchase an aggregate of up to 120,000 shares of Common
Stock, with an exercise price per share equal to $0.50, which warrant shall be
in the form of Exhibit
C attached hereto (the “Class B Warrant” and
collectively with the Class A Warrant, the “Warrants”).  The
total purchase price to be paid by the Purchasers for the purchase of the
Debentures and the Warrants is $300,000 (as to each
Purchaser, its “Subscription
Amount”).  Each Purchaser’s “Subscription Amount” shall be paid
in either United States dollars and in immediately available funds, or through
the cancellation of indebtedness as described in this Section.  Each
Debenture issued hereunder shall have a principal amount which shall equal such
Purchaser’s Subscription Amount.  The individual amounts of the
Debenture and Warrants issuable to each Purchaser hereunder shall be as set
forth on Schedule
A.

     

    3.           Closing.  Upon
the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties
hereto, the Company agrees to sell, and the Purchasers, severally and not
jointly, agree to purchase, the Debentures.  At the closing (the
“Closing”) each
Purchaser shall deliver to the Company via wire transfer of immediately
available funds equal to its cash Subscription Amount, and the Company shall
deliver to each Purchaser its respective Debentures and Warrants.

     

    4.           Representations and
Warranties of the Company.  The Company hereby makes to the
Purchasers the following representations and warranties:

     

    (a)           Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Schedule
4(a).  The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and clear of any
Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities.  If the Company has no subsidiaries, all other references
to the Subsidiaries or any of them in the Transaction Documents shall be
disregarded.

    
      
         

      

      
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    (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation nor
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

     

    (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and
thereunder.  The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, its board of
directors or its stockholders in connection therewith.  This Agreement
has been duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

     

    (d)           No
Conflicts.  The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby do not and will not: (i) conflict with or
violate any provision of the Company’s certificate or articles of incorporation,
bylaws or other organizational or charter documents; or (ii) conflict with, or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, result in the creation of any lien, charge,
security interest, encumbrance, right of first refusal, preemptive right or
other restriction (a “Lien”) (except as
contemplated herein) upon any of the properties or assets of the Company in
connection with, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other material instrument
(evidencing Company debt or otherwise) or other material understanding to which
such Company is a party or by which any property or asset of the Company is
bound or affected; or (iii) conflict with or result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company is subject (including
federal and state securities laws and regulations), or by which any property or
asset of the Company is bound or affected, except, in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.

    
      
         

      

      
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    (e)           Issuance of the Debentures
and Warrants.  The Debentures and Warrants are duly authorized
and, upon the execution of this Agreement by a Purchaser, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the
Debentures and Warrants.  The Underlying Shares, when issued in
accordance with the terms of the Debentures and Warrants, will be validly
issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company.  The Company has reserved from its duly authorized capital
stock a number of shares of Common Stock for issuance of the Underlying
Shares.

     

    (f)           Capitalization.  The
capitalization of the Company is as set forth on Schedule 4(f), which
Schedule 4(f)
shall also include the number of shares of Common Stock owned beneficially, and
of record, by Affiliates of the Company as of the date hereof. The Company has
not issued any capital stock since its most recently filed periodic report under
the Exchange Act, other than pursuant to the exercise of employee stock options
under the Company’s stock option plans, the issuance of shares of Common Stock
to employees pursuant to the Company’s employee stock purchase plans and
pursuant to the conversion and/or exercise of any Common Stock Equivalents
outstanding as of the date of the most recently filed periodic report under the
Exchange Act.  No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.  Except as a
result of the purchase and sale of the Securities, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents.  The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase
securities.  No further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the
Securities.  There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.

    
      
         

      

      
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    (g)           SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date hereof (or such shorter
period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension.  As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The Company has never been an issuer subject to Rule
144(i) under the Securities Act. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing.  Such financial
statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods
involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

     

    (h)           Material Changes;
Undisclosed Events, Liabilities or Developments.  Since the
date of the latest audited financial statements included within the SEC Reports,
except as specifically disclosed in a subsequent SEC Report filed prior to the
date hereof: (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans.  The Company does not have pending before the Commission
any request for confidential treatment of information.  Except for the
issuance of the Securities contemplated by this Agreement or as set forth on
Schedule 4(h),
no event, liability, fact, circumstance, occurrence or development has occurred
or exists, or is reasonably expected to occur or exist, with respect to the
Company or its Subsidiaries or their respective business, properties,
operations, assets or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at
least 1 Trading Day prior to the date that this representation is
made.

    
      
         

      

      
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    (i)           Private Placement.
Assuming the accuracy of the Purchasers’ representations and warranties set
forth in Section 5, no registration under the Securities Act is required for the
offer and sale of the Securities by the Company to the Purchasers as
contemplated hereby. The issuance and sale of the Securities hereunder does not
contravene the rules and regulations of the Trading Market.

     

    (j)           No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 5, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
(i) the Securities Act which would require the registration of any such
securities under the Securities Act, or (ii) any applicable shareholder approval
provisions of any Trading Market on which any of the securities of the Company
are listed or designated.

     

    (k)           Solvency.  Based
on the consolidated financial condition of the Company as of the Closing Date,
after giving effect to the receipt by the Company of the proceeds from the sale
of the Securities hereunder: (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, (ii) the Company’s assets do not constitute
unreasonably small capital to carry on its business as now conducted and as
proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and
projected capital requirements and capital availability thereof, and (iii) the
current cash flow of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be
paid.  The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of its debt).  The Company has no
knowledge of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date.  Schedule 4(k) sets
forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments.  Schedule 4(k) sets
forth as of the date hereof the Permitted Indebtedness.  For the
purposes of this Agreement, “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of
any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

    
      
         

      

      
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    (l)           Compliance.  Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment, decree or
order of any court, arbitrator or governmental body or (iii) is or has been in
violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a
Material Adverse Effect.

     

    (m)           No General
Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Securities by any form of
general solicitation or general advertising.  The Company has offered
the Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.

     

    (n)           Seniority.  No
Indebtedness or other claim against the Company is senior to the Debentures in
right of payment, whether with respect to interest or upon liquidation or
dissolution, or otherwise, other than indebtedness secured by purchase money
security interests (which is senior only as to underlying assets covered
thereby) and capital lease obligations (which is senior only as to the property
covered thereby).

     

    5.           Representations and
Warranties of the Purchaser.  Each Purchaser, severally, and
not jointly, hereby represents and warrants as of the date hereof to the Company
as follows:

     

    (a)           Authority.  The
execution, delivery and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate or similar action on the part of such Purchaser.  This
Agreement has been duly executed by such Purchaser and, when delivered by such
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

    
      
         

      

      
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    (b)           Own
Account.  Such Purchaser (i) understands that the Debentures
and Warrants are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law, (ii) is acquiring the
Debentures and Warrants as principal for its own account and not with a view to
or for distributing or reselling such Debentures or Warrants or any part thereof
in violation of the Securities Act or any applicable state securities law, (iii)
has no present intention of distributing any of such securities in violation of
the Securities Act or any applicable state securities law and (iv) has no
arrangement or understanding with any other persons regarding the distribution
of such Debentures and Warrants (this representation and warranty not limiting
such Purchaser’s right to sell the Underlying Shares pursuant to a registration
statement or otherwise in compliance with applicable federal and state
securities laws) in violation of the Securities Act or any applicable state
securities law.  Such Purchaser is acquiring the Debentures and
Warrants hereunder in the ordinary course of its business.

     

    (c)           Purchaser
Status.  At the time such Purchaser was offered the Debentures
and Warrants, it was, and as of the date hereof it is, and on each date on which
it exercises the Warrants or converts the Debentures it will be an “accredited
investor” as defined in Rule 501 under the Securities Act.  Such
Purchaser is not required to be registered as a broker-dealer under Section 15
of the Exchange Act.

     

    (d)           Experience of
Purchasers.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Debentures and Warrants, and has so evaluated
the merits and risks of such investment.  Such Purchasers is able to
bear the economic risk of an investment in the Debentures and Warrants and, at
the present time, is able to afford a complete loss of such
investment.

     

    (e)           General
Solicitation.  Such Purchaser is not purchasing the Debentures
and Warrants as a result of any advertisement, article, notice or other
communication regarding such securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

     

    6.           Furnishing of
Information.  If the Common Stock is not registered under
Section 12(b) or 12(g) of the Exchange Act on the date hereof, the Company
agrees to cause the Common Stock to be registered under Section 12(g) of the
Exchange Act on or before the 60th
calendar day following the date hereof. Until the earliest of the time that (i)
no Purchaser owns Securities or (ii) the Warrants have expired, the Company
covenants to maintain the registration of the Common Stock under Section 12(b)
or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to the Exchange Act even if
the Company is not then subject to the reporting requirements of the Exchange
Act.    As long as any Purchaser owns Securities, if the
Company is not required to file reports pursuant to the Exchange Act, it will
prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144(c) such information as is required for the Purchasers to sell the
Securities, including without limitation, under Rule 144.  The Company
further covenants that it will take such further action as any holder of
Securities may reasonably request, to the extent required from time to time to
enable such Person to sell such Securities without registration under the
Securities Act, including without limitation, within the requirements of the
exemption provided by Rule 144.

    
      
         

      

      
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    7.           Delivery of
Opinion.  Concurrently herewith, the Company shall deliver to
the Purchasers an opinion of outside counsel regarding this Agreement and the
issuance of the Debentures and Warrants, in form and substance reasonably
acceptable to the Purchasers.

     

    8.           Securities Laws Disclosure;
Publicity.  The Company shall, by 8:30 a.m. (New York City
time) on the Trading Day immediately following the date hereof, issue a Current
Report on Form 8-K and press release disclosing the material terms of the
transactions contemplated hereby, and including the Transaction Documents as
exhibits thereto.  From and after the issuance of such press release,
the Company shall have publicly disclosed all material, non-public information
delivered to any of the Purchasers by the Company or any of its subsidiaries, or
any of their respective officers, directors, employees or agents in connection
with the transactions contemplated by the Transaction Documents. The Company and
each Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company
nor any Purchaser shall issue any such press release nor otherwise make any such
public statement without the prior consent of the Company, with respect to any
press release of any Purchaser, or without the prior consent of each Purchaser,
with respect to any press release of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by
law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or
communication.  Notwithstanding the foregoing, the Company shall not
publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading
Market, without the prior written consent of such Purchaser, except: (a) as
required by federal securities law in connection with (i) any registration
statement contemplated by the Registration Rights Agreement and (ii) the filing
of final Transaction Documents (including signature pages thereto) with the
Commission and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure permitted under this clause (b).

     

    9.           Non-Public
Information.  Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the
Company covenants and agrees that neither it, nor any other Person acting on its
behalf, will provide any Purchaser or its agents or counsel with any information
that the Company believes constitutes material non-public information, unless
prior thereto such Purchaser shall have executed a written agreement with the
Company regarding the confidentiality and use of such
information.  The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in
securities of the Company.

    
      
         

      

      
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    10.           Equal Treatment of
Purchasers.  No consideration (including any modification of
any Transaction Document) shall be offered or paid to any Person to amend or
consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration is also offered to all of the parties to
the Transaction Documents. Further, the Company shall not make any payment of
principal or interest on the Debentures in amounts which are disproportionate to
the respective principal amounts outstanding on the Debentures at any applicable
time.  For clarification purposes, this provision constitutes a
separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended for the Company to treat the
Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or
voting of Securities or otherwise.

     

    11.           Expenses.  At
the Closing, the Company agrees to reimburse StreetCapital, LLC (“Street”) for its
legal fees and expenses, such fees not to exceed Seven Thousand Five Hundred
Dollars ($7,500).  Other than for such counsel fees, each party shall
bear its own costs, fees and expenses in connection with the transactions
contemplated hereby.

     

    12.           Amendments and
Waivers.  The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and Purchasers
holding 67% of more in interest of the Securities issued hereunder.

     

    13.           Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given.  The address for such notices and
communications shall be as set forth on the signature pages attached
hereto.

     

    14.           Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Purchaser. The Company may not assign (except
by merger) its rights or obligations hereunder without the prior written consent
of the Purchasers holding [67%]% in interest of the Securities issued hereunder
(except by merger).  The Purchasers may assign their rights hereunder
in the manner and to the persons as permitted under their respective Debentures
and Warrants.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    15.           Execution and
Counterparts.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any
signature is delivered by facsimile transmission or by e-mail delivery of a
“.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

     

    16.           Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the transaction documents 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 Agreement and any other transaction documents (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 (including with respect to the enforcement of any of the
transaction documents), 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
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner
permitted by law.   If either party shall commence an action or
proceeding to enforce any provisions of the transaction documents, 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.

     

    17.           Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

    
      
         

      

      
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    18.           Headings.  The
headings in this Agreement are for convenience only, do not constitute a part of
the Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    19.           Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise this Agreement and the transaction documents and,
therefore, the normal rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not be employed in the
interpretation of the transaction documents or any amendments hereto. In
addition, each and every reference to share prices and shares of Common Stock in
any transaction document shall be subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.

     

    20.           Secured
Obligation.  The parties acknowledge and agree that the
obligations of the Company under this Agreement and the Debentures, are subject
to the security interest granted by the Company and its Subsidiaries pursuant to
that certain Security Agreement and Subsidiary Guarantee, dated December __,
2009, by and among the Company, its Subsidiaries and the secured parties thereto
and that such obligations are “Obligations” under such Security Agreement and
are guaranteed by the Subsidiaries pursuant to any Subsidiary Guarantee entered
into in connection therewith.  The Company and the Subsidiaries shall
take any and all actions as may be necessary or appropriate in order to grant
the Purchasers a first priority security interest in the assets of the Company
and the Subsidiaries, including all UCC-1 filing receipts if
required.

     

    21.           Independent Nature of
Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the
Transaction Documents.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.  For reasons of
administrative convenience only, Purchasers and their respective counsel have
chosen to communicate with the Company through Weinstein Smith LP (“WS”).  WS
does not represent all of the Purchasers but only Street. The Company has
elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested
to do so by the Purchasers.

     

    

     

    

     [SIGNATURE
PAGE FOLLOWS]

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    Executed
as of the first date written above by the undersigned duly authorized
representatives of the Company and Purchasers:

     

    INFERX
CORPORATION, INC., a Delaware corporation

    

    

    By:
_______________________________

            Name:

            Title:

    

    Address
for Notice:

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    [PURCHASER
SIGNATURE PAGES TO NFRX PURCHASE AGREEMENT]

    

    IN
WITNESS WHEREOF, the undersigned have caused this Debenture and Warrant Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

     

    Name of
Purchaser: ________________________________________________________

     

    Signature of Authorized Signatory of
Purchaser: _________________________________

     

    Name of
Authorized Signatory: _______________________________________________

     

    Title of
Authorized Signatory: ________________________________________________

     

    Email
Address of Authorized Signatory: ________________________________________

     

    Facsimile
Number of Authorized Signatory:
______________________________________

     

    Address
for Notice of Purchaser:

    

    

    

    

    Address
for Delivery of Securities for Purchaser (if not same as address for
notice):

    

    

    Subscription
Amount: _____________

    

    Series A
Warrant Shares: _________________

    

    Series B
Warrant Shares: ___________

    

    

    

    

    EIN
Number:  [PROVIDE
THIS UNDER SEPARATE COVER]

    

    [SIGNATURE
PAGES CONTINUE]

    
      
         

      

      
        14

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