Exhibit 4.22


 


WARRANT


 


THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON
STOCK ISSUABLE HEREUNDER, HAVE BEEN AND WILL BE ISSUED WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND
MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT UNLESS EITHER (i) THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE COMPANY, TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION
WITH SUCH DISPOSITION OR (ii) THE SALE OF SUCH SECURITIES IS MADE PURSUANT
TO SECURITIES AND EXCHANGE COMMISSION RULE 144.


 


WARRANT TO PURCHASE COMMON STOCK OF SPESCOM
SOFTWARE INC.


 


NO. C
- 01


 


THIS CERTIFIES THAT, for value
received, Liolios Group, Inc. or the permitted registered assigns thereof (the “Holder”)
is entitled, subject to the terms and conditions of this Warrant, at any time
or from time to time after the date this Warrant is issued (the “Effective
Date”), and before 5:00 p.m. Pacific Time on the third anniversary of
the Effective Date (the “Expiration Date”), to purchase from Spescom
Software Inc., a California corporation (the “Company”), Three Hundred
Thousand (300,000) shares of common stock, no par value (“Common Stock”)
of the Company at a price per share of $0.10 (the “Purchase Price”). Both
the number of shares of Common Stock purchasable upon exercise of this Warrant
and the Purchase Price are subject to adjustment and change as provided herein.


 


1.             CERTAIN
DEFINITIONS. As used in this Warrant, the following terms
shall have the following respective meanings:


 


“Effective Date” shall mean March 31, 2006.


 


“Market Price” of a security, as of a
particular date, means the average, on the five trading days prior to such
date, of (i) the closing prices of such security’s sales on all securities
exchanges on which such security may at the time be listed or (ii) if there has
been no sales on any such exchanges on any day, the average of the highest bid
and the lowest asked prices on all such exchanges at the end of such day or
(iii) if on a day such security is not listed on any exchange, the average of
the representative bid and asked prices quoted in the NASDAQ System as of 4:00
pm Eastern Time or (iv) if on a day such security is not listed on any exchange
or quoted in the NASDAQ System, but is traded over the counter, the closing bid
price or (v) if on a day any security is not listed on any exchange, quoted on
the NASDAQ System, or traded over the counter, the value as determined in good
faith by the Company’s Board of Directors.


 


“HSR Act” shall mean the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended from time to time.


 

















 


“Registered Holder” shall mean any Holder in
whose name this Warrant is registered upon the books and records maintained by
the Company.


 


“Warrant” as used herein, shall include this
Warrant and any warrant delivered in substitution or exchange therefor as
provided herein.


 


2.             EXERCISE
OF WARRANT


 


2.1.          Payment.
Subject to compliance with the terms and conditions of this Warrant and
applicable securities laws, this Warrant may be exercised in whole or in part
at any time or from time to time, on or before the Expiration Date by the
delivery (including, without limitation, delivery by facsimile) of the form of
Notice of Exercise attached hereto as Exhibit 1
(the “Notice of Exercise”), duly executed by the Holder, at the
principal office of the Company, and as soon as practicable after such date,
surrendering:


 


(a) this Warrant at the principal office of the
Company; and


 


(b) payment in cash, certified or official bank check
in same-day funds, or by wire transfer of an amount equal to the product
obtained by multiplying the number of shares of Common Stock being purchased
upon such exercise by the then effective Purchase Price (the “Exercise
Amount”), except that if Holder is subject to HSR Act Restrictions (as
defined in Section 2.4 below), the Exercise Amount shall be paid to the Company
within five (5) business days of the termination of all HSR Act Restrictions.


 


2.2           Net
Exercise. In lieu of the payment methods set forth in Section 2.1
above, the Holder may elect to exchange all or some of the Warrant for shares
of Common Stock equal to the value of the amount of the Warrant being exchanged
on the date of exchange. If Holder elects to exchange this Warrant as provided
in this Section 2.2, Holder shall tender to the Company the Warrant for
the amount being exchanged, along with written notice of Holder’s election to
exchange some or all of the Warrant, and the Company shall issue to Holder the
number of shares of the Common Stock computed using the following formula:


 


X = Y (A-B)


A


 


Where X = the number of shares of Common
Stock to be issued to Holder.


 


Y = the number of shares of Common Stock
purchasable under the amount of the Warrant being exchanged (as adjusted to the
date of such calculation).


 


A = the Market Price of one share of the
Company’s Common Stock as of the date of exercise of the Warrant.


 


B = exercise price hereunder (as adjusted to
the date of such calculation).


 


2.3.          Stock
Certificates; Fractional Shares. As soon as practicable on or after such
date, the Company shall issue and deliver to the person or persons entitled to
receive the same a certificate or certificates for the number of whole shares
of Common Stock issuable upon such exercise, together with cash in lieu of any
fraction of a share equal to such fraction of the current


 


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Market Price of one whole share
of Common Stock as of the date of exercise of this Warrant. No fractional
shares or scrip representing fractional shares shall be issued upon an exercise
of this Warrant.


 


2.4.          HSR Act. The Company hereby
acknowledges that exercise of this Warrant by Holder may subject the Company
and/or the Holder to the filing requirements of the HSR Act and that Holder may
be prevented from exercising this Warrant until the expiration or early
termination of all waiting periods imposed by the HSR Act (“HSR Act Restrictions”).
If on or before the Expiration Date, Holder has sent the Notice of Exercise to
Company and Holder has not been able to complete the exercise of this Warrant
prior to the Expiration Date because of HSR Act Restrictions, the Holder shall
be entitled to complete the process of exercising this Warrant in accordance
with the procedures contained herein notwithstanding the fact that completion
of the exercise of this Warrant would take place after the Expiration Date.


 


2.5.          Partial
Exercise; Effective Date of Exercise. In case of any partial exercise of
this Warrant, the Company shall cancel this Warrant upon surrender hereof and
shall execute and deliver a new Warrant of like tenor and date for the balance
of the shares of Common Stock purchasable hereunder. This Warrant shall be
deemed to have been exercised immediately prior to the close of business on the
date of its surrender for exercise as provided above. However, if Holder is
subject to HSR Act filing requirements this Warrant shall be deemed to have
been exercised on the date immediately following the date of the expiration of
all HSR Act Restrictions. The person entitled to receive the shares of Common
Stock issuable upon exercise of this Warrant shall be treated for all purposes
as the holder of record of such shares as of the close of business on the date
the Holder is deemed to have exercised this Warrant.


 


3.             VALID
ISSUANCE; TAXES. All shares of Common Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and non-assessable,
and the Company shall pay all taxes and other governmental charges that may be
imposed in respect of the issue or delivery thereof. The Company shall not be
required to pay any tax or other charge imposed in connection with any transfer
involved in the issuance of any certificate for shares of Common Stock in any
name other than that of the Registered Holder of this Warrant, and in such case
the Company shall not be required to issue or deliver any stock certificate or
security until such tax or other charge has been paid, or it has been
established to the Company’s reasonable satisfaction that no tax or other
charge is due.


 


4.             ADJUSTMENT
OF PURCHASE PRICE AND NUMBER OF SHARES. The number of shares
of Common Stock issuable upon exercise of this Warrant (or any shares of stock
or other securities or property receivable or issuable upon exercise of this
Warrant) and the Purchase Price are subject to adjustment upon occurrence of
the following events:


 


4.1.          Adjustment
for Stock Splits, Stock Subdivisions or Combinations of Shares. The
Purchase Price of this Warrant shall be proportionally decreased and the number
of shares of Common Stock issuable upon exercise of this Warrant (or any shares
of stock or other securities at the time issuable upon exercise of this
Warrant) shall be proportionally increased to reflect any stock split or
subdivision of the Company’s Common Stock. The Purchase Price of this Warrant
shall be proportionally increased and the number of shares of Common Stock
issuable upon exercise of this Warrant (or any shares of stock or other
securities at the time issuable upon exercise of this Warrant) shall be
proportionally decreased to reflect any combination of the Company’s Common
Stock.


 


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4.2.          Adjustment
for Dividends or Distributions of Stock or Other Securities or Property. In
case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other
distribution with respect to the Common Stock (or any shares of stock or other
securities at the time issuable upon exercise of the Warrant) payable in shares
of any class or series of capital stock of the Company, then, in each such
case, the Holder of this Warrant on exercise hereof at any time after the
consummation, effective date or record date of such dividend or other
distribution, shall receive, in addition to the shares of Common Stock (or such
other stock or securities) issuable on such exercise prior to such date, and
without the payment of additional consideration therefor, the shares of the
Company to which such Holder would have been entitled upon such date if such
Holder had exercised this Warrant on the date hereof and had thereafter, during
the period from the date hereof to and including the date of such exercise,
retained such shares and/or all other additional stock available by it as
aforesaid during such period giving effect to all adjustments called for by
this Section 4.


 


4.3.          Reclassification.
If the Company, by reclassification of securities or otherwise, shall change
any of the securities as to which purchase rights under this Warrant exist into
the same or a different number of securities of any other class or classes,
this Warrant shall thereafter represent the right to acquire such number and
kind of securities as would have been issuable as the result of such change
with respect to the securities that were subject to the purchase rights under
this Warrant immediately prior to such reclassification or other change and the
Purchase Price therefore shall be appropriately adjusted, all subject to
further adjustment as provided in this Section 4. No adjustment shall be made
pursuant to this Section 4.3 upon any conversion or redemption of the Common
Stock which is the subject of Section 4.5.


 


4.4.          Adjustment
for Capital Reorganization, Merger or Consolidation. In case of any capital
reorganization of the capital stock of the Company (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or any merger or consolidation of the Company with or into another
corporation, then, and in each such case, as a part of such reorganization,
merger or consolidation, lawful provision shall be made so that the Holder of
this Warrant shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the Purchase
Price then in effect, the number of shares of stock or other securities or
property of the successor corporation resulting from such reorganization,
merger or consolidation that a holder of the shares deliverable upon exercise
of this Warrant would have been entitled to receive in such reorganization,
consolidation or merger if this Warrant had been exercised immediately before
such reorganization, merger or consolidation, all subject to further adjustment
as provided in this Section 4. The foregoing provisions of this Section 4.4
shall similarly apply to successive reorganizations, consolidations or mergers
and to the stock or securities of any other corporation that are at the time
receivable upon the exercise of this Warrant. If the per-share consideration
payable to the Holder hereof for shares in connection with any such transaction
is in a form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company’s Board of
Directors. In all events, appropriate adjustment (as determined in good faith
by the Company’s Board of Directors) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of the
Holder after the


 


4

















 


transaction, to the end that
the provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable
after that event upon exercise of this Warrant.


 


4.5.          Conversion
of Common Stock. In case all or any portion of the authorized and
outstanding shares of Common Stock of the Company are redeemed or converted or
reclassified into other securities pursuant to the Company’s Articles of
Incorporation or otherwise, or the Common Stock otherwise ceases to exist,
then, in such case, the Holder of this Warrant, upon exercise hereof at any
time after the date on which the Common Stock is so redeemed or converted,
reclassified or ceases to exist (the “Termination Date”), shall receive,
in lieu of the number of shares of Common Stock that would have been issuable
upon such exercise immediately prior to the Termination Date, the securities
that would have been received if this Warrant had been exercised in full and
the Common Stock received thereupon had been simultaneously converted
immediately prior to the Termination Date, all subject to further adjustment as
provided in this Warrant. Additionally, the Purchase Price shall be immediately
adjusted to equal the quotient obtained by dividing (x) the aggregate
Purchase Price of the maximum number of shares of Common Stock for which this
Warrant was exercisable immediately prior to the Termination Date by
(y) the number of shares of Common Stock or the number of shares or other
units of securities of the Company for which this Warrant is exercisable
immediately after the Termination Date, all subject to further adjustment as
provided herein.


 


5.             CERTIFICATE
AS TO ADJUSTMENTS. In each case of any adjustment in the
Purchase Price, or number or type of shares or securities issuable upon
exercise of this Warrant, the Chief Financial Officer or Controller of the
Company shall compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment and showing in
detail the facts upon which such adjustment is based, including a statement of
the adjusted Purchase Price. The Company shall promptly send (by facsimile and
by either first class mail, postage prepaid or overnight delivery) a copy of
each such certificate to the Holder.


 


6.             LOSS
OR MUTILATION. Upon receipt of evidence reasonably
satisfactory to the Company of the ownership of and the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to it, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver in lieu
thereof a new Warrant of like tenor as the lost, stolen, destroyed or mutilated
Warrant.


 


7.             RESERVATION
OF COMMON STOCK. The Company hereby covenants that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of shares of Common Stock or other shares of capital stock
of the Company as are from time to time issuable upon exercise of this Warrant
and, from time to time, will take all steps necessary to amend its Articles of
Incorporation to provide sufficient reserves of shares of Common Stock issuable
upon exercise of this Warrant (and shares of its Common Stock for issuance on
conversion of such Common Stock). All such shares shall be duly authorized, and
when issued upon such exercise, shall be validly issued, fully paid and
non-assessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions arising under federal or state
securities laws. Issuance of this Warrant shall constitute full authority to
the Company’s officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock and Common Stock upon the exercise of this Warrant.


 


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8.             TRANSFER
AND EXCHANGE. Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, and upon the prior
written consent of the Company, which consent shall not be unreasonably
withheld, this Warrant and all rights hereunder may be transferred to the
parent, subsidiary or affiliate of any Registered Holder, in whole or in part,
on the books of the Company maintained for such purpose at the principal office
of the Company referred to above, by the Registered Holder hereof in person, or
by duly authorized attorney, upon surrender of this Warrant properly endorsed
and upon payment of any necessary transfer tax or other governmental charge
imposed upon such transfer. Any attempted or purported transfer of this Warrant
or any of the rights hereunder that does not comply with the provisions of this
Section 8 shall be null and void and of no force or effect. Upon any permitted
partial transfer, the Company will issue and deliver to the Registered Holder a
new Warrant or Warrants with respect to the shares of Common Stock not so
transferred. Each taker and holder of this Warrant, by taking or holding the
same, consents and agrees that when this Warrant shall have been so endorsed,
the person in possession of this Warrant may be treated by the Company, and all
other persons dealing with this Warrant, as the absolute owner hereof for any
purpose and as the person entitled to exercise the rights represented hereby,
any notice to the contrary notwithstanding; provided, however,
that until a transfer of this Warrant is duly registered on the books of the
Company, the Company may treat the Registered Holder hereof as the owner for
all purposes.


 


9.             RESTRICTIONS
ON TRANSFER. The Holder, by acceptance hereof, agrees that,
absent an effective registration statement filed with the Securities and
Exchange Commission (the “SEC”) under the Securities Act, covering the
disposition or sale of this Warrant or the Common Stock issued or issuable upon
exercise hereof, as the case may be, and registration or qualification under
applicable state securities laws, such Holder will not sell, transfer, pledge
or hypothecate any or all such Warrants or Common Stock, as the case may be,
unless either (i) the Company has received an opinion of counsel, in form
and substance reasonably satisfactory to the Company, to the effect that such
registration is not required in connection with such disposition or
(ii) the sale of such securities is made pursuant to Rule 144 under the
Securities Act.


 


10.          REGISTRATION
RIGHTS.


 


10.1         If
the Company shall determine to register any Common Stock under the Securities
Act for sale in connection with a public offering of Common Stock (other than
pursuant to an employee benefit plan or a merger, acquisition or similar
transaction), the Company will give written notice thereof to Holder and will
include in such registration any of the Registrable Shares (as defined below)
which Holder may request be included (“Included Shares”) by a writing delivered to the Company within
15 days after the notice given by the Company to Holder; provided, however,
that if the offering is to be firmly underwritten, and the representative of
the underwriters of the offering refuses in writing to include in the offering
all of the shares of Common Stock requested by the Company and others, the
shares to be included shall be allocated first to the Company and any
shareholder who initiated such registration and then among the others based on
the respective number of shares of Common Stock held by such


 


6

















 


persons. If the Company decides
not to, and does not, file a registration statement with respect to such
registration, or after filing determines to withdraw the same before the
effective date thereof, the Company will promptly so inform Holder, and the
Company will not be obligated to complete the registration of the Included Shares
included therein. The Company will pay all costs and expenses of such
registration other than underwriting discounts or brokerage fees or commissions
in connection with the sale of the Included Shares and fees and costs of
accountants, attorneys or others retained by Holder. For purposes of this
Warrant, “Registrable Shares”
shall mean the shares of Common Stock (or such stock or securities as at the
time are receivable upon the exercise of this Warrant) issuable upon exercise
of the Warrant and any shares issued as a result of stock split, stock dividend
or reclassification of such shares; provided, however, that any share shall
cease to be a Registrable Share if and when (a) it has been effectively
registered under the Securities Act and disposed of pursuant thereto, or
(b) the holder may sell such share (or in the case of a share not yet
issued under this Warrant, the holder may exercise this Warrant and sell such
share issued upon such exercise) in the market on which the Company common
stock is then traded without registration under the Securities Act.


 


10.2         In
connection with any registration under this Section 10, the Company will:


 


10.2.1      furnish
to Holder a copy of the registration statement and each amendment to the
registration statement and such number of copies of the final prospectus
included in the registration statement as Holder may reasonably request in
order to facilitate the distribution of the Included Shares owned by Holders;
and


 


10.2.2      notify
Holder of the issuance of any stop order by the Securities and Exchange
Commission in connection with the registration statement.


 


10.3         As a
condition to including Registrable Shares in the registration statement, Holder
must provide to the Company such information regarding itself, the Registrable
Shares held by it and the intended method of distribution of such Shares as
shall be required to effect the registration of the Registrable Shares and, if
the offering is being underwritten, Holder must provide such powers of
attorney, indemnities and other documents as may be reasonably requested by the
managing underwriter.


 


10.4         Following
the effectiveness of the registration statement, upon receipt from the Company
of a notice that the registration statement contains an untrue statement of
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, Holder will immediately discontinue
disposition of Included Shares pursuant to the registration statement until the
Company notifies Holder that it may resume sales of Included Shares and, if
necessary, provides to Holder copies of the supplemental or amended prospectus.
In such event, Holder will deliver to the Company all copies, other than
permanent file copies then in Holder’s possession, of the most recent
prospectus covering the Included Shares.


 


10.5         The
Company agrees to indemnify and hold harmless Holder, and its officers,
directors and agents, and each person, if any, who controls Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the
Securities  Exchange Act of 1934, as
amended (the “Exchange Act”)
from and against any and all losses, claims, damages and liabilities caused by
(i) any violation or alleged violation by the Company of the Securities Act,
Exchange Act, any


 


7

















 


state securities laws or any
rule or regulation promulgated under the Securities Act, Exchange Act or any
state securities laws, (ii) any untrue statement or alleged untrue statement of
a material fact contained in any registration statement or prospectus relating
to the Included Shares (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or any preliminary prospectus,
or (iii) caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by Holder or on Holder’s behalf
expressly for use therein.


 


10.6         Holder
agrees to indemnify and hold harmless the Company, its officers, directors and
agents and each person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to Holder, but only
with respect to information furnished in writing by Holder or on Holder’s
behalf expressly for use in any registration statement or prospectus relating
to the Registrable Shares, or any amendment or supplement thereto, or any
preliminary prospectus.


 


10.7         In
case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to this Section 10, such person (an “Indemnified Party”) shall promptly notify the person against
whom such indemnity may be sought (the “Indemnifying Party”) in writing and the Indemnifying Party
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Indemnified Party, and shall assume the payment
of all fees and expenses; provided that the failure of any Indemnified Party so
to notify the Indemnifying Party shall not relieve the Indemnifying Party of
its obligations hereunder except to the extent (and only to the extent that)
that the Indemnifying Party is materially prejudiced by such failure to notify.
In any such proceeding, any Indemnified Party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party unless (i) the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel
or (ii) in the reasonable judgment of such Indemnified Party representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Party shall not, in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (in addition to any local counsel) at
any time for all such Indemnified Parties (including in the case of Holder, all
of its officers, directors and controlling persons) and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, the Indemnified Parties shall
designate such firm in writing to the Indemnifying Party. The Indemnifying
Party shall not be liable for any settlement of any proceeding effected without
its written consent (which consent shall not be unreasonably withheld or
delayed), but if settled with such consent, or if there be a final judgment for
the plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent
stated above) by reason of such settlement or judgment. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability arising out
of such proceeding.


 


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11.          COMPLIANCE
WITH SECURITIES LAWS. By acceptance of this Warrant, the
Holder hereby represents, warrants and covenants that any shares of stock
purchased upon exercise of this Warrant or acquired upon conversion thereof
shall be acquired for investment only and not with a view to, or for sale in
connection with, any distribution thereof; that the Holder has had such
opportunity as such Holder has deemed adequate to obtain from representatives
of the Company such information as is necessary to permit the Holder to
evaluate the merits and risks of its investment in the company; that the Holder
is able to bear the economic risk of holding such shares as may be acquired
pursuant to the exercise of this Warrant for an indefinite period; that the
Holder understands that the shares of stock acquired pursuant to the exercise of
this Warrant or acquired upon conversion thereof will not be registered under
the Securities Act (unless otherwise required pursuant to exercise by the
Holder of the registration rights, if any, previously granted to the registered
Holder) and will be “restricted securities” within the meaning of Rule 144
under the Securities Act and that the exemption from registration under Rule
144 will not be available for at least one year from the date of exercise of
this Warrant, and even then will not be available unless a public market then
exists for the stock, adequate information concerning the Company is then
available to the public, and other terms and conditions of Rule 144 are
complied with; and that all stock certificates representing shares of stock
issued to the Holder upon exercise of this Warrant or upon conversion of such
shares may have affixed thereto a legend substantially in the following form:


 


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


 


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


 


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13.          NOTICES.
Any notice required or permitted by this Warrant must be in
writing and must be sent by facsimile, by nationally recognized commercial
overnight courier, or mailed by United States registered or certified mail,
addressed to the other party at the address below or to such other address for
notice (or facsimile number, in the case of a notice by facsimile) as a party
gives the other party written notice of in accordance with this Section 13.
Any such notice will be effective as of the date of receipt:


 


Notices should be addressed as follows:


 


(i)                                     If
to Holder, to:


 


Liolios Group, Inc.

2431 West Coast Hwy, #205

Newport Beach, CA  92663

Attention: J. Scott Liolios

Facsimile:  (949) 574-3870


 


 (ii)                               If to the Company, to:


 


Spescom Software Inc.

10052 Mesa Ridge Court, Suite 100

San Diego, CA  92121

Attention:  Chief Executive Officer

Facsimile:  (858) 625-3010


 


14.          HEADINGS.
The headings in this Warrant are for purposes of convenience
in reference only, and shall not be deemed to constitute a part hereof.


 


15.          LAW
GOVERNING. This Warrant shall be construed and enforced in
accordance with, and governed by, the laws of the State of California.


 


16.          NO
IMPAIRMENT. The Company will not, by amendment of its
Articles of Incorporation or Bylaws, or through reorganization, consolidation,
merger, dissolution, issue or sale of securities, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Registered
Holder of this Warrant against impairment. Without limiting the generality of
the foregoing, the Company (a) will not increase the par value of any shares of
stock issuable upon the exercise of this Warrant above the amount payable
therefor upon such exercise and (b) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally
issue fully paid and non-assessable shares of Common Stock upon exercise of
this Warrant.


 


17.          NOTICES
OF RECORD DATE. In case:


 


17.1.        the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant), for
the purpose of entitling them to receive any dividend or other distribution, or
any right to subscribe for or purchase any shares of stock of any class or any
other securities or to receive any other right; or


 


10

















 


17.2.        of
any consolidation or merger of the Company with or into another corporation,
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, or any conveyance of all or substantially all of the
assets of the Company to another corporation in which holders of the Company’s
stock are to receive stock, securities or property of another corporation; or


 


17.3.        of
any voluntary dissolution, liquidation or winding-up of the Company; or


 


17.4.        of
any redemption or conversion of all outstanding Common Stock;


 


then,
and in each such case, the Company will mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such
dividend, distribution or right or (ii) the date on which such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation, winding-up, redemption or conversion is to take
place, and the time, if any is to be fixed, as of which the holders of record
of Common Stock or (such stock or securities as at the time are receivable upon
the exercise of this Warrant), shall be entitled to exchange their shares of
Common Stock (or such other stock or securities), for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation or winding-up. Such notice shall be
delivered at least ten (10) days prior to the date therein specified.


 


18.          SEVERABILITY.
If any term, provision, covenant or restriction of this
Warrant is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.


 


19.          ENTIRE AGREEMENT. This
Warrant contains the entire understanding of the parties, supersedes all prior
agreements and understandings relating to the subject matter hereof.


 


20.          COUNTERPARTS.
For the convenience of the parties, any number of
counterparts of this Warrant may be executed by the parties hereto and each
such executed counterpart shall be, and shall be deemed to be, an original
instrument.


 


21.          SATURDAYS,
SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. Pacific Time on the next day that is not a Saturday,
Sunday or legal holiday.


 


11

















 


IN WITNESS WHEREOF, the parties
hereto have executed this Warrant as of the Effective Date.


 


	
  LIOLIOS
  GROUP, INC.

  	
  SPESCOM SOFTWARE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ J. Scott Liolios

  	
   

  	
  By: 

  	
  /s/ John W. Low

  
	
   

  	
   

  
	
   

  	
   

  
	
  J. Scott Liolios

  	
   

  	
  John W. Low

  
	
  Printed Name

  	
   

  	
  Printed Name

  
	
   

  	
   

  	
   

  
	
  President

  	
   

  	
  Chief Financial Officer

  
	
  Title

  	
   

  	
  Title

  



 


 


SIGNATURE PAGE TO WARRANT TO PURCHASE COMMON
STOCK


 


12

















 


EXHIBIT 1


 


NOTICE OF EXERCISE


 


(To be executed upon exercise of Warrant)


	
  SPESCOM
  SOFTWARE INC.

  	
   

  	
  WARRANT NO.      

  



 


The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant Certificate for, and to purchase thereunder,
the securities of Spescom Software Inc., as provided for therein, and tenders
herewith payment of the exercise price in full in the form of cash or a
certified or official bank check in same-day funds in the amount of $                     
for                  
such securities.


 


Please
issue a certificate or certificates for such securities in the name of, and pay
any cash for any fractional share to (please print name, address and social
security number):


 


	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  



 


Note:  The above signature should correspond exactly
with the name on the first page of this Warrant Certificate or with the name of
the assignee appearing in the assignment form below.


 


If
said number of shares shall not be all the shares purchasable under the within
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the shares purchasable thereunder
rounded up to the next higher whole number of shares.


 

















 


EXHIBIT 2


 


ASSIGNMENT


 


	
  (To be executed only upon assignment of Warrant Certificate)

  	
   

  	
  WARRANT NO.     

  



 


For value received, hereby sells, assigns and transfers unto                                                  
the within Warrant Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint                                                  
attorney, to transfer said Warrant Certificate on the books of the within-named
Company with respect to the number of Warrants set forth below, with full power
of substitution in the premises:


 


	
  Name(s) of Assignee(s)

  	
   

  	
  Address

  	
   

  	
  # of Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


And if said number of Warrants shall not be all the Warrants
represented by the Warrant Certificate, a new Warrant Certificate is to be
issued in the name of said undersigned for the balance remaining of the
Warrants registered by said Warrant Certificate.


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  



 


Notice:  The signature to the foregoing Assignment
must correspond to the name as written upon the face of this security in every
particular, without alteration or any change whatsoever; signature(s) must be
guaranteed by an eligible guarantor institution (banks, stock brokers, savings
and loan associations and credit unions with membership in an approved
signature guarantee medallion program) pursuant to Securities and Exchange
Commission Rule 17Ad-15.


 


Pursuant to the terms of Section 8 of the
Warrant to which this Assignment pertains, this Assignment shall be null and
void and of no force or effect unless a duly authorized officer of the Company
indicates the Company’s consent to this Assignment by signing below:


 


Spescom Software Inc. hereby consents to the sale, assignment and
transfer unto                                                  
the within Warrant Certificate, together with all right, title and interest
therein.


 


	
   

  	
  SPESCOM SOFTWARE INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: