Exhibit 10.2

FORM OF

INVESTOR RIGHTS AGREEMENT

This Investor Rights Agreement, dated as of July 15, 2015 (this “Agreement”), by
and among Cicero, Inc., a Delaware corporation (the “Company”), Privet Fund LP,
a Delaware limited partnership (“Privet”), and John L. Steffens, an individual
and a resident of New York (“Steffens”, and together with Privet, the
“Investors” and each individually, an “Investor”).

This Agreement is made in connection with the Stock and Warrant Purchase
Agreement, dated as of the date hereof, between the Company and each Investor
(the “Purchase Agreement”).

The Company and each Investor hereby agree as follows:

1.           Definitions.

Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

“Advice” shall have the meaning set forth in Section 7(d).

“Effectiveness Date” means, with respect to any Registration Statement required
to be filed hereunder, the fifth Trading Day following the date on which the
Company is notified by the SEC that such Registration Statement will not be
reviewed or is no longer subject to further review and comments.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Filing Date” means the earlier of: (i) 30 days after receipt of a Filing Notice
by the Company and (ii) the earliest practical date on which the Company is
permitted by SEC Guidance to file an additional Registration Statement related
to the Registrable Securities.

“Filing Notice” means the written request by Privet for the Company to file a
Registration Statement.

“Indemnified Party” shall have the meaning set forth in Section 6(c).

“Indemnifying Party” shall have the meaning set forth in Section 6(c).

“Losses” shall have the meaning set forth in Section 6(a).

“Plan of Distribution” shall have the meaning set forth in Section 2(a).
 
 
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“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated by the SEC pursuant to the
Securities Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

“Registrable Securities” means, as of any date of determination, (a) all shares
of Common Stock beneficially owned by the Investors pursuant to the Purchase
Agreement, including any exercised Warrants, and (b) any securities issued or
then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided,
however, that any such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the effectiveness
of any, or file another, Registration Statement hereunder with respect thereto)
for so long as (a) a Registration Statement with respect to the sale of such
Registrable Securities is declared effective by the SEC under the Securities Act
and such Registrable Securities have been disposed of by the Investor in
accordance with such effective Registration Statement, (b) such Registrable
Securities have been previously sold in accordance with Rule 144, or (c) such
securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144, as
reasonably determined by the Company, upon the advice of counsel to the Company.

“Registration Deadline” means, with respect to any Registration Statement
required hereunder, the 120th calendar day following the Filing Date.

“Registration Statement” means any registration statement required to be filed
hereunder pursuant to Section 2(a), which may be on Form S-3 or any successor
forms thereto as the SEC may adopt, including the Prospectus, amendments and
supplements to any such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in any such registration
statement.

“Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the SEC pursuant to the Securities Act,
as such Rule may be amended or interpreted from time to time, or any similar
rule or regulation hereafter adopted by the SEC having substantially the same
purpose and effect as such Rule.
 
 
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“Selling Stockholder Questionnaire” shall have the meaning set forth in Section
3(a).

“SEC Guidance” means (i) any publicly-available written or oral guidance of the
SEC staff, or any comments, requirements or requests of the SEC staff and (ii)
the Securities Act.

“Trading Day” means a day on which the principal Trading Market 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
MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global
Select Market, the New York Stock Exchange, the OTCQB or the OTC Bulletin Board
(or any successors to any of the foregoing).
 
2.           Demand Registration.

(a) At any time when the Company is eligible to register the Registrable
Securities for resale by the investors on an appropriate Registration Statement
with the SEC, Investors holding at least 35% of the then issued Registrable
Securities may request that the Company register some or all of the Registrable
Securities pursuant a Registration Statement by submitting a Filing Notice with
the Company (each a “Demand Registration”). After receipt of each Filing Notice,
the Company shall prepare and file with the SEC, on or before the Filing Date, a
Registration Statement covering the resale of all Registrable Securities
requested to be included in such Demand Registration or such maximum portion of
such Registrable Securities as permitted by SEC Guidance (provided that, the
Company shall use its reasonable commercial efforts to obtain the registration
of all such Registrable Securities in accordance with the SEC Guidance,
including without limitation, Compliance and Disclosure Interpretation 612.09)
that are not then registered on an effective Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415.  Each
Registration Statement filed hereunder shall be on the appropriate form under
the Securities Act and shall contain (unless otherwise directed by at least a
majority in interest of the Investors) substantially the “Plan of Distribution”
attached hereto as Annex A.  Subject to the terms of this Agreement, the Company
shall use its reasonable commercial efforts to cause a Registration Statement
filed hereunder to be declared effective under the Securities Act as promptly as
reasonably practicable after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its reasonable commercial efforts
to keep such Registration Statement current and continuously effective under the
Securities Act until such date as all Registrable Securities covered by such
Registration Statement (i) have been sold, thereunder or pursuant to Rule 144,
or (ii) in the opinion of counsel to the Investors, (A) may be sold without
volume or manner-of-sale restrictions pursuant to Rule 144 and (B) (I) may be
sold without the requirement for the Company to be in compliance with the
current public information requirement under Rule 144 or (II) the Company is in
compliance with the current public information requirement under Rule 144 (the
“Effectiveness Period”).  Such Registration Statement (including any amendments
or supplements thereto and prospectuses contained therein), except for
information provided by an Investor or any transferee of an Investor, shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.  The
Company shall telephonically request effectiveness of a Registration Statement
as of 5:00 p.m. New York City time on a Trading Day.   The Company shall
immediately notify the Investors via facsimile or by e-mail of the effectiveness
of a Registration Statement on the same Trading Day that the Company
telephonically confirms effectiveness with the SEC, which shall be the date
requested for effectiveness of such Registration Statement.  The Company shall,
by 9:30 a.m. New York City time on the Trading Day after the effective date of
such Registration Statement, file a final Prospectus with the SEC as required by
Rule 424.  Notwithstanding any other provision of this Agreement, if any SEC
Guidance sets forth a limitation on the number of Registrable Securities
permitted to be registered on a particular Registration Statement (and
notwithstanding that the Company used its reasonable commercial efforts to
obtain the registration of all or a greater portion of Registrable Securities),
unless otherwise directed in writing by a Holder as to its Registrable
Securities, the number of Registrable Securities to be registered on such
Registration Statement will first be reduced by Registrable Securities
represented by Warrant Shares (applied, in the case that some Warrant Shares may
be registered, to the Holders on a pro rata basis based on the total number of
unregistered Warrant Shares held by such Holders).  In the event of a cutback
hereunder, the Company shall give the Investor at least five (5) Trading Days
prior written notice along with the calculations as to such Investor’s
allotment.
 
 
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(b) The Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to Section 2(a) (i) during the period that is
ninety (90) days before the Company’s good faith estimate of the date of filing
of, and ending on a date that is one-hundred eighty (180) days after the
effective date of, a Company-initiated registration, provided that the Company
is actively employing its good faith and commercially reasonable efforts to
cause such registration statement to become effective; or (ii) after the Company
has effected four registrations pursuant to Section 2(a).  A registration shall
not be counted as “effected” for purposes of this Section 2(b) until such time
as the applicable Registration Statement has been declared effective by the SEC.

3.
Registration Procedures.

In connection with the Company’s registration obligations hereunder, the Company
shall:

(a) Not less than five (5) Trading Days prior to the filing of each Registration
Statement and not less than one (1) Trading Day prior to the filing of any
related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference, but not including (i) any Exchange Act filing (including any
post-effective amendment filed solely to update the Registration Statement for
an Exchange Act filing) or (ii) any supplement or post-effective amendment to a
registration statement that is not related to such Investor’s Registrable
Securities), the Company shall (i) furnish to each Investor copies of all such
documents proposed to be filed and any comments made by the staff of the SEC
with respect to such Registration Statement and the Company’s responses thereto,
which documents (other than those incorporated or deemed to be incorporated by
reference) will be subject to the review of such Investors, and (ii) cause its
officers and directors, counsel and independent registered public accountants to
respond to such inquiries as shall be necessary, in the reasonable opinion of
respective counsel to each Investor, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file a
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Investors of a majority of the Registrable Securities shall
reasonably object in good faith, provided that, the Company is notified of such
objection in writing no later than five (5) Trading Days after the Investors
have been so furnished copies of a Registration Statement or one (1) Trading Day
after the Investors have been so furnished copies of any related Prospectus or
amendments or supplements thereto. In the event that the Company is prevented
from making such filing on account of the objections described in the previous
sentence (provided that the Company uses reasonable commercial efforts to
address the objections described in the previous sentence and to promptly file
thereafter), the failure of the Company to make such filing shall not be deemed
a breach or default hereunder or otherwise with respect to the Securities.  Each
Investor agrees to furnish to the Company a completed questionnaire in the form
attached to this Agreement as Annex B (a “Selling Stockholder Questionnaire”) on
a date that is not less than two (2) Trading Days prior to the Filing Date or by
the end of the fourth (4th) Trading Day following the date on which such
Investor receives draft materials in accordance with this Section.
 
 
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(b) (i) Prepare and file with the SEC such amendments, including post-effective
amendments, and supplements to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
current and continuously effective (subject to any requirement that a
post-effective amendment be declared effective by the SEC) as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with
the SEC such additional Registration Statements in order to register for resale
under the Securities Act all of the Registrable Securities subject to any SEC
Guidance that sets forth a limitation on the number of Registrable Securities
permitted to be registered on a particular Registration Statement, (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so supplemented or
amended, to be filed pursuant to Rule 424, (iii) respond as promptly as
reasonably possible to any comments received from the SEC with respect to a
Registration Statement or any amendment thereto, and (iv) comply in all material
respects with the applicable provisions of the Securities Act and the Exchange
Act with respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of disposition by the
Investors thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.

(c) If during the Effectiveness Period, the number of Registrable Securities at
any time exceeds 100% of the number of shares of Common Stock then registered in
a Registration Statement, then the Company shall file as soon as reasonably
practicable, but in any case prior to the applicable Filing Date, an additional
Registration Statement covering the resale by the Investors of not less than the
number of such Registrable Securities.  The Company shall use its commercial
efforts to cause such new Registration Statement to become effective as soon as
practicable following the filing thereof.  For all purposes of this Agreement,
such additional Registration Statement shall be deemed to be the Registration
Statement required to be filed by the Company pursuant to Section 2(a), and the
Company and the Investors shall have the same rights and obligations with
respect to such additional Registration Statement as they shall have with
respect to the initial Registration Statement required to be filed by the
Company pursuant to Section 2(a).
 
 
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(d) Notify the Investors of Registrable Securities to be sold (which notice
shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made) as promptly as reasonably possible (and, in the case of (i)(A)
below, not less than one (1) Trading Day prior to such filing) and (if requested
by any such Person) confirm such notice in writing no later than one (1) Trading
Day following the day: (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed
(but not including (1) any Exchange Act filing (including any post-effective
amendment filed solely to update the Registration Statement for an Exchange Act
filing) or (2) any supplement or post-effective amendment to a registration
statement that is not related to such Investor’s Registrable Securities), (B)
when the SEC notifies the Company whether there will be a “review” of such
Registration Statement and whenever the SEC comments in writing on such
Registration Statement, and (C) with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the SEC or any other federal or
state governmental authority of any stop order suspending the effectiveness of a
Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose, (v) of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to a
Registration Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and
(vi) of the occurrence or existence of any pending corporate development with
respect to the Company that the Company believes may be material and that, in
the determination of the Company, makes it not in the best interest of the
Company to allow continued availability of a Registration Statement or
Prospectus, provided that, any and all of such information shall remain
confidential to each Investor until such information otherwise becomes public,
unless disclosure by an Investor is required by law.

(e) Use its reasonable commercial efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.

(f) Furnish to each Investor, upon request, without charge, at least one
conformed copy of each such Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference to the extent requested by such
Person, and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of
such documents with the SEC; provided, that any such item which is available on
the EDGAR system (or successor thereto) need not be furnished in physical form.
 
 
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(g) Subject to the terms of this Agreement, the Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by each of the
selling Investors in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(d).

(h)  The Company shall cooperate with any broker-dealer through which an
Investor proposes to resell its Registrable Securities in effecting a filing
with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as
requested by any such Investor.

(i) Prior to any resale of Registrable Securities by an Investor, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Investors in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Investor under the state securities laws of such
jurisdictions within the United States  (“Blue Sky”) as any Investor reasonably
requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all other
acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration
Statement; provided, that, the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified,
subject the Company to any material tax in any such jurisdiction where it is not
then so subject or file a general consent to service of process in any such
jurisdiction.

(j) If requested by an Investor, cooperate with such Investor to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any such Investor
may request.

(k) Upon the occurrence of any event contemplated by Section 3(d), as promptly
as reasonably possible under the circumstances taking into account the Company’s
good faith assessment of any adverse consequences to the Company and its
stockholders of the premature disclosure of such event, prepare a supplement or
amendment, including a post-effective amendment, to a Registration Statement or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  If the Company notifies the Investors in accordance with
clauses (iii) through (vi) of Section 3(d) above to suspend the use of any
Prospectus until the requisite changes to such Prospectus have been made, then
the Investors shall suspend use of such Prospectus.  The Company will use its
reasonable commercial efforts to ensure that the use of the Prospectus may be
resumed as promptly as is practicable.  The Company shall be entitled to
exercise its right under this Section 3(k) to suspend the availability of a
Registration Statement and Prospectus for a period not to exceed 60 calendar
days (which need not be consecutive days) in any 12-month period.
 
 
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(l) Comply with all applicable rules and regulations of the SEC in connection
with obtaining and maintaining the effectiveness of any Registration Statement
required to be filed and maintained with the SEC hereunder.

(m) To the extent reasonably required, request that each selling Investor shall
furnish to the Company a certified statement as to the number of shares of
Common Stock beneficially owned by such Investor, the natural persons thereof
that have voting and dispositive control over such shares and any affiliations
with members or registered persons with FINRA or similar organizations. If the
requested information is not provide within fifteen (15) Trading Days after the
request is made, then the Company may discontinue the registration of the
Registrable Securities of the Investor, and proceed to register the Registrable
Securities of any other Investor or person on the Registration Statement without
any penalty.

(n) At the reasonable request of an Investor and at such Investor’s expense,
prepare and file with the SEC such amendments (including post-effective
amendments) and supplements to a Registration Statement and any Prospectus used
in connection with the registration statement as may be necessary in order to
change the plan of distribution or name of any selling shareholder and the
information thereof set forth in such Registration Statement.

(o) Hold in confidence and not make any disclosure of information concerning an
Investor provided to the Company (excluding any information provided on the
Selling Stockholder Questionnaire) unless (i) disclosure of such information is
necessary to comply with federal or state securities laws or the rules of any
securities exchange or trading market on which the Company’s securities are then
listed or traded, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement. The Company agrees that
it shall, upon learning that disclosure of such information concerning an
Investor is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to such Investor prior
to making such disclosure, and allow such Investor, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information

4.           Piggyback Registration.  Whenever the Company proposes to register
the offer and sale of any shares of its Common Stock under the Securities Act,
whether for its own account or for the account of one or more stockholders of
the Company, and the form of Registration Statement (a "Piggyback Registration
Statement") to be used by the Company may be used for registration of
Registrable Securities (a "Piggyback Registration"), the Company shall give
prompt written notice (in any event no later than 30 days prior to the filing of
such Registration Statement) to the Investors of its intention to effect such a
registration and shall include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
from the Investors within 10 days after the Company's notice has been given to
each Investor. A Piggyback Registration shall not be considered a Demand
Registration for purposes of Section 2. If any Piggyback Registration Statement
pursuant to which Investors have registered the offer and sale of Registrable
Securities is a Registration Statement on Form S-3 or the then appropriate form
for an offering to be made on a delayed or continuous basis pursuant to Rule 415
under the Securities Act or any successor rule thereto (a "Piggyback Shelf
Registration Statement"), the Investors shall have the right, but not the
obligation, to be notified of and to participate in any offering under such
Piggyback Shelf Registration Statement.
 
 
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5.           Registration Expenses. All fees and expenses incident to the
performance of or compliance with, this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses of the Company’s counsel and
independent registered public accountants) (A) with respect to filings made with
the SEC, (B) with respect to filings required to be made with any Trading Market
on which the Common Stock is then listed for trading and (C) in compliance with
applicable state securities or Blue Sky laws reasonably agreed to by the Company
in writing (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities), (ii) printing expenses (including, without limitation,
expenses of printing certificates for Registrable Securities), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, (vi) fees and disbursements of one counsel for the Investors for each
Registration Statement, not to exceed $25,000 for each Registration Statement,
and (vii) fees and expenses of all other Persons retained by the Company in
connection with the consummation of the transactions contemplated by this
Agreement.  In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.  In no event shall the Company be
responsible for any broker or dealer or other selling commissions of any
Investor in connection with the Registrable Securities or, except as set forth
under (vi) above and to the extent provided for in the Purchase Agreement, any
legal fees or other costs of the Investors or their brokers/dealers.

6.           Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify, hold harmless and defend each
Investor, the officers, directors, members, managers, partners and employees
(and any other persons with a functionally equivalent role of a person holding
such titles, notwithstanding a lack of such title or any other title) of each of
them, each person who controls any such Investor (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, stockholders, partners, and employees (and any other persons
with a functionally equivalent role of a person holding such titles,
notwithstanding a lack of such title or any other title) of each such
controlling person, to the fullest extent permitted by applicable law, from and
against any and all losses, claims, damages, liabilities, costs (including,
without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged
untrue statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any other law, including any state
securities law, or any rule or regulation promulgated thereunder, in connection
with the performance of its obligations under this Agreement, except to the
extent, but only to the extent, that (i) such untrue statements or omissions are
based solely upon information regarding such Investor furnished in writing to
the Company by such Investor expressly for use therein, or to the extent that
such information relates to such Investor or such Investor’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Investor expressly for use in a Registration Statement, such
Prospectus or in any amendment or supplement thereto (it being understood that
the Investor has approved Annex A hereto for this purpose) or (ii) in the case
of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi),
the use by such Investor of an outdated, defective or otherwise unavailable
Prospectus after the Company has notified such Investor in writing that the
Prospectus is outdated, defective or otherwise unavailable for use by such
Investor and prior to the receipt by such Investor of the Advice contemplated in
Section 7(d).  The Company shall notify the Investors promptly of the
institution, threat or assertion of any Proceeding arising from or in connection
with the transactions contemplated by this Agreement of which the Company is
aware.
 
 
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(b) Indemnification by Investors. Each Investor shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon (x) such Investor’s
failure to comply with the prospectus delivery requirements of the Securities
Act or (y) any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be stated therein
(in the case of any Prospectus or supplement thereto, in light of the
circumstances under which they were made) or necessary to make the statements
therein not misleading (i) to the extent, but only to the extent, that such
untrue statement or omission is contained in any information so furnished in
writing by such Investor to the Company in such Investor’s capacity as a selling
Investor specifically and expressly for inclusion in such Registration Statement
or such Prospectus or (ii) to the extent that such information relates to such
Investor’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Investor expressly for use in
a Registration Statement (it being understood that the Investor has approved
Annex A hereto for this purpose), such Prospectus or in any amendment or
supplement thereto or (ii) in the case of an occurrence of an event of the type
specified in Section 3(d)(iii)-(vi), the use by such Investor of an outdated,
defective or otherwise unavailable Prospectus after the Company has notified
such Investor in writing that the Prospectus is outdated, defective or otherwise
unavailable for use by such Investor and prior to the receipt by such Investor
of the Advice contemplated in Section 7(d).  In no event shall the liability of
any selling Investor under this Section 6(b) be greater in amount than the
dollar amount of the net proceeds received by such Investor upon the sale of the
Registrable Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses reasonably incurred in connection with defense
thereof; provided that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure materially prejudiced
the Indemnifying Party’s ability to defend such action.

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless:  (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding, or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party).  The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed.  No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
 
 
10

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Subject to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that, the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined not to be entitled to indemnification hereunder.

(d) Contribution. If the indemnification under Section 6(a) or 6(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.  The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other fees or expenses incurred by such party in connection with any Proceeding
to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section was available to such party
in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 6(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 6(d), no Investor
shall be required to contribute pursuant to this Section 6(d), in the aggregate,
any amount in excess of the amount by which the net proceeds actually received
by such Investor from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Investor has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties, provided that no amount shall be reimbursed twice in any
event.

7.           Board Matters.
 
(a) Agreement to Vote.  The Company’s board of directors (the “Board”) shall
take all actions necessary such that the Board shall consist of such number of
members, and shall be composed, as follows:

 
 
11

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(i) upon execution of this Agreement to remove four members of the Board
designated by the Chairman of the Board, to amend the Bylaws to reduce the size
of the Board from nine members to seven members and to vote to elect two persons
designated in writing by Privet, which shall be Ryan Levenson and Thomas Avery,
to fill the vacancies and serve on the Board;

(ii) upon exercise in full of the first tranche of Warrants by Privet to remove
one member of the Board designated by the Chairman of the Board, to vote to
elect an addition candidate designated in writing by Privet to serve on the
Board.  For the avoidance of doubt, the composition of the seven member Board
would include three Privet designees; and

(iii) upon full exercise of all tranches of Warrants by Privet to remove two
members of the board of directors designated by the Chairman of the Board, to
reduce the size of the Board from seven members to five members with the three
Privet designees remaining on the board.

The directors designated by Privet pursuant to clauses (i) – (iii) above, shall
be collectively referred to as the “Privet Designees.”

(b) Nominations of Privet Designees.  For so long as Privet has the right to
designate directors pursuant to clauses (i) – (iii) above, any Privet Designee
designated by Privet shall be nominated by the Board (or a committee thereof)
for election at the annual meeting of stockholders.  At least ninety (90) days
prior to the first anniversary of the preceding year’s annual meeting; provided
that if the date of the annual meeting is advanced by more than 30 days or
delayed by more than 70 days from such anniversary date of the preceding year’s
annual meeting, then not earlier than 120 days prior to such annual meeting and
not later than the close of business on the later of the 90th day prior to such
annual meeting or the 10th day following the day on which public announcement of
the date of such meeting is first made, Privet shall notify the Company in
writing of the Privet Designees to be nominated for election as a director.  The
Company shall disclose in its proxy statement the nominated Privet
Directors.  In the absences of any such notification, it shall be presumed that
Privet’s then incumbent directors have been designated.

(c) Stockholder Proposals.  Within sixty (60) days of the date hereof, the Board
shall take all necessary action, including but not limited to holding a special
meeting of stockholders, to present (i) to the Company’s stockholders for a vote
a proposal to amend the Company’s certificate of incorporation, the form of
which is attached hereto as Exhibit A; (ii) to the Company’s Series A-1 holders
of Preferred Stock for a vote a proposal to amend the Certificate of
Designations of Series A-1 Convertible Preferred Stock to cause the automatic
conversion of Series A-1 Preferred Stock into Common upon the consummation of an
equity financing for at least $1,000,000 at any time after the first issuance of
Series A-1 Preferred Stock; and (iii) to the Company’s Series B holders of
Preferred Stock for a vote a proposal to amend the Certificate of Designations
of Series B Convertible Preferred Stock to cause the automatic conversion of
Series B Preferred Stock into Common upon the consummation of an equity
financing for at least $1,000,000 at any time after the first issuance of Series
B Preferred Stock.  During such sixty (60) day period, the Company shall not
authorize or approve any other amendments to the Company’s certificate of
incorporation including the certificates of designations incorporated therein
except as contemplated by this Agreement.
 
 
12

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(d) Indemnification Agreements.  The Company shall enter into an indemnification
agreement in the form attached hereto as Annex C, with each of the Privet
Designees prior to the commencement of his or her service on the Board.

(e) Committees of the Board.  For so long as Privet has the right to designate
the Privet Designees and provided that such individuals meet the requirements
imposed by the SEC and any exchange upon which the Common Stock may be traded
for membership on such committees, the Board shall appoint at least one Privet
Designee to each of the audit committee, the compensation committee and the
nominating and corporate governance committee.

(f) Successor Privet Designees.  If a Privet Designee shall cease to serve as a
director for any reason, then Privet shall notify the Company in writing of the
individual to replace such Privet Designee, and the Board shall appoint and
elect such replacement director to serve out the remaining term of such
director.

(g) Board Meetings.  Unless otherwise determined by the vote of a majority of
the directors then in office, the Board of Directors shall meet at least
quarterly in accordance with an agreed-upon schedule.  The Company shall
reimburse the nonemployee directors for all reasonable out-of-pocket travel
expenses incurred (consistent with the Company’s travel policy) in connection
with attending meetings of the Board of Directors.

8.           Miscellaneous.

(a) Remedies.  In the event of a breach by the Company or by an Investor of any
of their respective obligations under this Agreement, each Investor or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
shall be entitled to specific performance of its rights under this
Agreement.  Each of the Company and each Investor agrees that monetary damages
would not provide adequate compensation for any losses incurred by reason of a
breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect of
such breach, it shall not assert or shall waive the defense that a remedy at law
would be adequate.

(b) No Piggyback on Registrations. Neither the Company nor any of its security
holders (other than the Investors in such capacity pursuant hereto) may include
securities of the Company in any Registration Statements filed as a result of a
Demand Registration.

(c) Compliance. Each Investor covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.
 
 
13

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(d) Discontinued Disposition.  By its acquisition of Registrable Securities,
each Investor agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d)(iii) through (vi),
such Investor will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus (as it may
have been supplemented or amended) may be resumed.  The Company will use its
reasonable commercial efforts to ensure that the use of the Prospectus may be
resumed as promptly as is practicable.

(e) 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 the Investors
of a majority of the then outstanding Registrable Securities (including, for
this purpose any Registrable Securities issuable upon exercise or conversion of
any Security) originally issued to the Investors.  If a Registration Statement
does not register all of the Registrable Securities pursuant to a waiver or
amendment done in compliance with the previous sentence, then the number of
Registrable Securities to be registered for each Investor shall be reduced pro
rata among all Investors and each Investor shall have the right to designate
which of its Registrable Securities shall be omitted from such Registration
Statement. Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of an Investor or some Investors and that does not directly or indirectly
affect the rights of other Investors may be given by such Investor or Investors
of all of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the first
sentence of this Section 7(e).

(f) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the
Purchase Agreement.

(g) 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 Investor. The Company may not assign (except
by merger) its rights or obligations hereunder without the prior written consent
of all of the Investors of the then outstanding Registrable Securities.  Each
Investor may assign their respective rights hereunder in the manner and as
permitted under Sections 4 and 5 of the Purchase Agreement.

(h) No Inconsistent Agreements; Prior Agreements Terminated. Neither the Company
nor any of its subsidiaries has entered, as of the date hereof, nor shall the
Company or any of its subsidiaries, on or after the date of this Agreement,
enter into any agreement with respect to its securities, that would have the
effect of impairing the rights granted to the Investors in this Agreement or
otherwise conflicts with the provisions hereof.  Neither the Company nor any of
its subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any person or
entity that have not been satisfied in full or waived with respect to any
Registration Statement filed under this Agreement. This Agreement shall
supersede and replace the following agreements, which are terminated as of the
date hereof:
 
 
14

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(i) Registration Rights Agreement, dated as of March 20, 2013, by and among the
Company and the Purchasers named thereto; and
 
(ii) Registration Rights Agreement, dated as of January 15, 2010, by and among
the Company and the Purchasers named thereto.

(i) 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.

(j) Governing Law; Jurisdiction.  ALL QUESTIONS CONCERNING THE CONSTRUCTION,
VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH OF THE
COMPANY AND EACH OF THE HOLDERS 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. EACH OF THE COMPANY AND EACH OF THE HOLDERS
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 THE
STOCK AND WARRANT PURCHASE 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 MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND EACH OF THE HOLDER
HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY. 

(k) Waiver of Jury Trial.  EACH OF THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY,
AND INTENTIONALLY WAIVES ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER DOCUMENTS ENTERED INTO IN CONNECTION HEREWITH, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OF ANY PARTY.
 
 
15

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(l) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any other remedies provided by law.

(m) 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.

(n) 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.

(o) Independent Nature of Investors’ Obligations and Rights. The obligations of
each Investor hereunder are several and not joint with the obligations of any
other Investor hereunder, and no Investor shall be responsible in any way for
the performance of the obligations of any other Investor hereunder. Nothing
contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Investor pursuant hereto or thereto, shall be deemed
to constitute the Investors as a partnership, an association, a joint venture or
any other kind of entity, or create a presumption that the Investors are in any
way acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Investor shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Investor to be joined as
an additional party in any proceeding for such purpose.

********************
(Signature Pages Follow)
 
 
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IN WITNESS WHEREOF, the parties have executed this Investor Rights Agreement as
of the date first written above.
 

 
CICERO, INC.
         
 
By:
/s/      Name:       Title:                       PRIVET FUND LP     By: Privet
Fund Management LLC, its Managing Partner            
By:
/s/     Name:       Title:                    

 
[SIGNATURE PAGE TO INVESTOR RIGHTS AGREEMENT]
 
 
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John L. Steffens
                 

 
 
 
 
18

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Annex A

Plan of Distribution

Each Selling Stockholder (the “Selling Stockholders”) of the shares of common
stock and any of their pledgees, assignees and successors-in-interest may, from
time to time, sell any or all of their shares of common stock covered hereby on
the [OTCBB] or any other stock exchange, market or trading facility on which the
shares are traded or in private transactions.  These sales may be at fixed or
negotiated prices.  A Selling Stockholder may use any one or more of the
following methods when selling shares:
 
●  
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 
●  
block trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to facilitate
the transaction;

 
●  
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 
●  
an exchange distribution in accordance with the rules of the applicable
exchange;

 
●  
privately negotiated transactions;

 
●  
settlement of short sales entered into after the effective date of the
registration statement of which this prospectus is a part;

 
●  
in transactions through broker-dealers that agree with the Selling Stockholders
to sell a specified number of such shares at a stipulated price per share;

 
●  
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 
●  
a combination of any such methods of sale; or

 
●  
any other method permitted pursuant to applicable law.

 
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
 
Broker-dealers engaged by the Selling Stockholders may arrange for other
broker-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with FINRA Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with FINRA IM-2440.
 
 
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In connection with the sale of shares of Common Stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of shares
of common stock in the course of hedging the positions they assume.  The Selling
Stockholders may also sell shares of common stock short and deliver these
securities to close out their short positions, or loan or pledge the shares of
common stock to broker-dealers that in turn may sell these securities.  The
Selling Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or more derivative
securities which require the delivery to such broker-dealer or other financial
institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
 
The Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales.  In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.  Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the shares of common
stock. In no event shall any broker-dealer receive fees, commissions and markups
which, in the aggregate, would exceed eight percent (8%).
 
The Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares.  The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
 
Because Selling Stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act including Rule 172 thereunder.  The Selling
Stockholders have advised us that there is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders.
 
We agreed to keep this prospectus effective until the earlier of (i) the date on
which the shares may be resold by the Selling Stockholders without registration
and without regard to any volume or manner-of-sale limitations by reason of Rule
144, without the requirement for the Company to be in compliance with the
current public information under Rule 144 under the Securities Act or any other
rule of similar effect or (ii) all of the shares have been sold pursuant to this
prospectus or Rule 144 under the Securities Act or any other rule of similar
effect.  The resale shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale of shares of common stock covered hereby
may not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
 
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to the Common Stock for the applicable
restricted period, as defined in Regulation M, prior to the commencement of the
distribution.  In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of common stock by the Selling Stockholders or any other
person.  We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).
 
 
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Annex B
 
CICERO, INC.
 
Selling Stockholder Notice and Questionnaire
 
The undersigned beneficial owner of shares of common stock (the “Registrable
Securities”) of Cicero Inc., a company organized under the laws of the State of
Delaware (the “Company”), understands that the Company has filed or intends to
file with the Securities and Exchange Commission (the “Commission”) a
registration statement (the “Registration Statement”) for the registration and
resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities
Act”), of the Registrable Securities, in accordance with the terms of the
Investor Rights Agreement (the “Investor Rights Agreement”) to which this
document is annexed.  A copy of the Registration Rights Agreement is available
from the Company upon request at the address set forth below.  All capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Registration Rights Agreement.
 
Certain legal consequences arise from being named as a selling stockholder in
the Registration Statement and the related prospectus.  Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling stockholder in the Registration Statement and the related
prospectus.
 
NOTICE
 
The undersigned beneficial owner (the “Selling Stockholder”) of Registrable
Securities hereby elects to include the Registrable Securities owned by it in
the Registration Statement.
 
 
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The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
 
QUESTIONNAIRE
 
 
1.
Name.

 
 
(a)
Full Legal Name of Selling Stockholder

 

   

 
(b)
Full Legal Name of Registered Investor (if not the same as (a) above) through
which Registrable Securities are held:

 

   

 
(c)
Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by this Questionnaire):

 

   

 
2.
Address for Notices to Selling Stockholder:

 

      Telephone:   Fax:   email:   Contact Person:  

 
 
3.
Broker-Dealer Status:

 
 
(a)
Are you a broker-dealer?

 
Yes o                        No o  
 
 
(b)
If “yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?

 
Yes o                        No o  
 
 
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Note:
If “no” to Section 3(b), the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

 
 
(c)
Are you an affiliate of a broker-dealer?

 
Yes o                        No o  
 
 
(d)
If you are an affiliate of a broker-dealer, do you certify that you purchased
the Registrable Securities in the ordinary course of business, and at the time
of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

 
Yes o                        No o  
 
 
Note:
If “no” to Section 3(d), the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

 
 
4.
Beneficial Ownership of Securities of the Company Owned by the Selling
Stockholder.

 

Except as set forth below in this Item 4, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the securities
issuable pursuant to the Purchase Agreement.
 
 
(a)
Type and Amount of other securities beneficially owned by the Selling
Stockholder:

 

     

 
 
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5.
5. Relationships with the Company:

 
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
 
 
State any exceptions here:

 

     

 
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof at any time while the Registration Statement remains effective.
 
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto.  The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus and any amendments or supplements thereto.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
 
Date:                                                     Beneficial
Owner:                                                                         

By:                                                                         
Name:
Title:

PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE
AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

[NOTE – insert Company address]

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