cicn_ex43.htm


    Exhibit 4.3

      


      


      THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.

       

      April
16, 2009

       

      
        	250,000
      Shares      	 	Warrant No.
      2009APN-01


      

       

      CICERO,
INC.

      STOCK
PURCHASE WARRANT

      


      THIS IS
TO CERTIFY THAT JOHN L. STEFFENS (the “Holder”), or its
registered assigns, is entitled, at any time prior to the Expiration Date (as
hereinafter defined), to purchase from CICERO, INC., a Delaware corporation (the
“Company”) (the
Company and the Holder are hereinafter referred to collectively as the “Parties” and
individually as a “Party”), 250,000 shares of Common Stock
(as hereinafter defined and subject to adjustment as provided herein), in whole
or in part, at a purchase price of $0.20 per share (subject to adjustment as
provided herein), on the terms and conditions and pursuant to the provisions
hereinafter set forth.

       

      1.  
DEFINITIONS

       

      As used
in this Warrant, the following terms have the respective meanings set forth
below:

       

      “Additional Shares of Common
Stock” shall mean all shares of Common Stock issued by the Company after
the Closing, other than Warrant Stock.

       

      “Business Day” shall
mean any day that is not a Saturday or Sunday or a day on which banks are
required or permitted to be closed in the State of New York.

       

      “Closing Date” shall
have the meaning set forth in the Purchase Agreement.

       

      “Commission” shall
mean the Securities and Exchange Commission or any other Federal agency then
administering the Securities Act and other Federal securities laws.

       

      
        
           


        

        
          1

          
            

          

        

        
           


        

      

      Exhibit
4.3


      “Common Stock” shall
mean (except where the context otherwise indicates) the common stock, $.001 par
value, of the Company as constituted on the Closing Date, and any capital stock
into which such Common Stock may thereafter be changed, and shall also include
(i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of Common Stock upon any
reclassification thereof which is also not preferred as to dividends or assets
over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation (as defined in Section 4.4) received by or distributed to the
holders of Common Stock of the Company in the circumstances contemplated by
Section 4.4.

       

      “Convertible
Securities” shall mean evidences of indebtedness, shares of stock or
other securities which are convertible into or exchangeable, with or without
payment of additional consideration in cash or property, for Additional Shares
of Common Stock, either immediately or upon the occurrence of a specified date
or a specified event.

       

      “Current Market Price”
shall mean, in respect of any share of Common Stock on any date herein specified
(i) the closing sales price on such day on the NASDAQ National Market System
(“NASDAQ”) or the principal stock exchange on which such Common Stock is listed
or admitted to trading, (ii) if no sale takes place on such day on NASDAQ or any
such exchange, the average of the last reported closing bid and asked prices on
such day as officially quoted on NASDAQ or any such exchange, (iii) if the
Common Stock is not then listed or admitted to trading on NASDAQ or any stock
exchange, the average of the last reported closing bid and asked prices on such
day in the over-the-counter market, as furnished by the National Association of
Securities Dealers Automatic Quotation System or the National Quotation Bureau,
Inc., (iv) if neither such corporation at the time is engaged in the business of
reporting such prices, as furnished by any similar firm then engaged in such
business, or (v) if there is no such firm, as furnished by any member of the
NASD selected mutually by the Holder and the Company or, if they cannot agree
upon such selection, as selected by two such members of the NASD, one of which
shall be selected by the Holder and one of which shall be selected by the
Company.

       

      “Current Warrant
Price” shall mean, in respect of a share of Common Stock at any date
herein specified, $0.20 per share of Common Stock as of the date hereof, subject
to adjustment as provided herein.

       

      "Date of Exercise"
shall have the meaning set forth in Section 2.1(b).

       

      “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, or any similar Federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect from time to time.

       

      “Exercise Period”
shall mean the period during which this Warrant is exercisable pursuant to
Section 2.1.

       

      “Expiration Date”
shall mean April 16, 2014.

       

      “Holder” shall mean
the Person in whose name the Warrant set forth herein is registered on the books
of the Company maintained for such purpose.

       

      
        
           


        

        
          2

          
            

          

        

        
           


        

      

      Exhibit
4.3


       

      “NASD” shall mean the
National Association of Securities Dealers, Inc., or any successor corporation
thereto.

       

      “Other Property” shall
have the meaning set forth in Section 4.4.

       

      “Outstanding” shall
mean, when used with reference to Common Stock, at any date as of which the
number of shares thereof is to be determined, all issued shares of Common Stock,
except shares then owned or held by or for the account of the Company or any
subsidiary thereof, and shall include all shares issuable in respect of
outstanding scrip or any certificates representing fractional interests in
shares of Common Stock.

       

      “Person” shall mean
any individual, sole proprietorship, partnership, limited liability company,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether Federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

       

      "Proceeding" shall
have the meaning set forth in Section 14.8.

       

      “Restricted Common
Stock” shall mean shares of Common Stock which are, or which upon their
issuance on the exercise of this Warrant would be, evidenced by a certificate
bearing the restrictive legend set forth in the Purchase Agreement.

       

      “Securities Act” shall
mean the Securities Act of 1933, as amended, or any similar Federal statute, and
the rules and regulations of the Commission thereunder, all as the same shall be
in effect at the time.

       

      "Trading Day(s)" shall
mean any day on which the primary market on which such shares of Common Stock
are listed is open for trading.

       

      “Warrants” shall mean
this Warrant and all warrants issued upon transfer, division or combination of,
or in substitution for, any thereof.  All Warrants shall at all times
be identical as to terms and conditions and date, except as to the number of
shares of Common Stock for which they may be exercised.

       

      “Warrant Price” shall
mean an amount equal to (i) the number of shares of Common Stock being purchased
upon exercise of this Warrant pursuant to Section 2.1, multiplied by (ii) the
Current Warrant Price as of the date of such exercise.

       

      “Warrant Stock” shall
mean the shares of Common Stock purchased by the holders of the Warrants upon
the exercise thereof.

       

      2.  
EXERCISE OF WARRANT

       

      2.1.          
Manner of
Exercise.  (a) From and after the Closing Date and until 6:30
P.M., New York time, on the Expiration Date, the Holder may exercise this
Warrant, for all or any part of the number of shares of Common Stock purchasable
hereunder.

       

      
        
           


        

        
          3

          
            

          

        

        
           


        

      

      Exhibit
4.3


       

      (b)  In
order to exercise this Warrant, in whole or in part, the Holder shall deliver to
the Company at its office at 8000 Regency Parkway, Suite 542, Cary, North
Carolina 27518 or at the office or agency designated by the Company pursuant to
Section 13, (i) a written notice of the Holder’s election to exercise this
Warrant, which notice shall specify the number of shares of Common Stock to be
purchased, (ii) payment of the Warrant Price and (iii) this
Warrant.  Such notice shall be substantially in the form of the
subscription form appearing at the end of this Warrant as Exhibit A, duly
executed by the Holder or its agent or attorney.  Upon receipt
thereof, the Company shall, as promptly as practicable, and in any event within
three (3) Business Days thereafter, issue or cause to be issued and deliver or
cause to be delivered to the Holder a certificate or certificates representing
the aggregate number of full shares of Common Stock issuable upon such exercise,
together with cash in lieu of any fraction of a share, as hereinafter
provided.  The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as such Holder
shall request in the notice and shall be registered in the name of the Holder
or, subject to Section 8, such other name as shall be designated in the
notice.  This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the Holder
or any other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares for all purposes, as of the date the
notice, together with the cash or check or checks and this Warrant, is received
by the Company as described above and all taxes required to be paid by the
Holder, if any, pursuant to Section 2.2 prior to the issuance of such shares
have been paid (such date, the "Date of
Exercise").  If this Warrant shall have been exercised in part,
the Company shall, at the time of delivery of the certificate or certificates
representing Warrant Stock, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the unpurchased shares of Common Stock called
for by this Warrant, which new Warrant shall in all other respects be identical
with this Warrant, or, at the request of the Holder, appropriate notation may be
made on this Warrant and the same returned to the
Holder.  Notwithstanding any provision herein to the contrary, the
Company shall not be required to register shares in the name of any Person who
acquired this Warrant (or part hereof) or any Warrant Stock otherwise than in
accordance with this Warrant. If the Company fails to deliver to the Holder the
required Warrant Stock in accordance with and pursuant to this Section by the
third Trading Day after the Date of Exercise, then the Holder will have the
right to rescind such exercise.

       

      (c)  The
Company's obligations to issue and deliver Warrant Stock in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Stock.

       

      (d)  Payment
of the Warrant Price shall be made at the option of the Holder by (i) wire
transfer to an account designated by the Company, (ii) certified or official
bank check, and/or (iii) by the Holder’s surrender to the Company of that number
of shares of Warrant Stock (or the right to receive such number of shares) or
shares of Common Stock having an aggregate Current Market Price equal to or
greater than the Current Warrant Price for all shares then being purchased
(including those being surrendered), or (iv) any combination thereof, duly
endorsed by or accompanied by appropriate instruments of transfer duly executed
by the Holder or by the Holder’s attorney duly authorized in
writing.

       

      
        
           


        

        
          4

          
            

          

        

        
           


        

      

      Exhibit
4.3


       

      2.2.           Payment of
Taxes.  All shares of Common Stock issuable upon the exercise
of this Warrant pursuant to the terms hereof shall be validly issued, fully paid
and nonassessable and without any preemptive rights.  The Company
shall pay all expenses in connection with, and all taxes and other governmental
charges that may be imposed with respect to, the issue or delivery thereof,
unless such tax or charge is imposed by law upon the Holder, in which case such
taxes or charges shall be paid by the Holder.  The Holder or its
transferee shall pay any transfer tax due and payable in respect of a transfer
of this Warrant or the Warrant Stock to a party other than the
Holder.

       

      2.3.           Fractional
Shares.  The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant.  As to
any fraction of a share which the Holder of one or more Warrants, the rights
under which are exercised in the same transaction, would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the same fraction of (x)
the Current Market Price per share of Common Stock on the date of exercise, so
long as there continues to be a public market for the Common Stock, or (y) in
the event there is no public market for the Common Stock, the fair market value
thereof as reasonably determined by the Board of Directors of the
Company.

       

      2.4.           Continued
Validity.  A holder of shares of Common Stock issued upon the
exercise of this Warrant, in whole or in part (other than a holder who acquires
such shares after the same have been publicly sold pursuant to a Registration
Statement under the Securities Act or sold pursuant to Rule 144 thereunder),
shall continue to be entitled to all rights, and subject to all obligations, to
which it would have been entitled or obligated, as applicable, as the Holder
under Sections 8, 9 and 14 of this Warrant.  The Company will, at the
time of each exercise of this Warrant, in whole or in part, upon the request of
the holder of the shares of Common Stock issued upon such exercise hereof,
acknowledge in writing, in form reasonably satisfactory to such holder, its
continuing obligation to afford to such holder all such rights; provided, however, that if such
holder shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder all such
rights.

       

      2.5           Limitation on
Exercise.  Notwithstanding anything to the contrary contained
herein, the number of shares of Common Stock that may be acquired by the Holder
upon any exercise of this Warrant (or otherwise in respect hereof) shall be
limited to the extent necessary to insure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially
owned by such Holder and its affiliates and any other Persons whose beneficial
ownership of Common Stock would be aggregated with the Holder's for purposes of
Section 13(d) of the Exchange Act, does not exceed 4.999% of the total number of
issued and outstanding shares of Common Stock (including for such purpose the
shares of Common Stock issuable upon such exercise).  For such
purposes, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  Each delivery of a notice of exercise under Section 2.1
will constitute a representation by the Holder that it has evaluated the
limitation set forth in this paragraph and determined that issuance of the full
number of Warrant Shares requested in such notice of exercise is permitted under
this paragraph.  By written notice to the Company, the Holder may
waive the provisions of this Section but (i) any such waiver will not be
effective until the 61st day after such notice is delivered to the Company, and
(ii) any such waiver will apply only to the Holder and not to any other holder
of Warrants

       

      
        
           


        

        
          5

          
            

          

        

        
           


        

      

      Exhibit
4.3


      3.  
TRANSFER; DIVISION AND
COMBINATION

       

      3.1.   Transfer.  Subject
to compliance with Section 10, transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books of the Company
to be maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company specified in Section 2.1 or the office or agency
designated by the Company pursuant to Section 11, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto duly
executed by the Holder or its agent or attorney.  Upon such surrender,
the Company shall, subject to Section 8, execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denomination
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  A Warrant, if properly assigned
in compliance with Section 8, may be exercised by a new Holder for the purchase
of shares of Common Stock without having a new Warrant issued.

       

      3.2.   Division and
Combination.  Subject to Section 8, this Warrant may be divided
or combined with other Warrants upon presentation hereof at the aforesaid office
or agency of the Company, together with a written notice specifying the names
and denominations in which new Warrants are to be issued, signed by the Holder
or its agent or attorney.  Subject to compliance with Section 3.1 and
with Section 8, as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

       

      3.3.   Expenses. The
Company shall prepare, issue and deliver at its own expense the new Warrant or
Warrants to be delivered under this Section 3.

       

      3.4.   Maintenance of
Books.  The Company agrees to maintain, at its aforesaid office
or agency, books for the registration and the registration of transfer of the
Warrants.

       

      4.  
ADJUSTMENTS.

       

      The
number of shares of Common Stock for which this Warrant is exercisable, or the
price at which such shares may be purchased upon exercise of this Warrant, shall
be subject to adjustment from time to time as set forth in this Section
4.  The Company shall give each Holder notice of any event described
below which requires an adjustment pursuant to this Section 4 at the time of
such event.

       

      4.1.           Stock Dividends,
Subdivisions and Combinations.  If at any time the Company
shall:

       

      
        
           


        

        
          6

          
            

          

        

        
           


        

      

      Exhibit
4.3


      (a)  take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution of, Additional Shares of
Common Stock;

       

      (b)  subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock; or

       

      (c)  combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock;

       

      then (i)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the occurrence of such event would own or be entitled to receive after the
happening of such event, and (ii) the Current Warrant Price shall be adjusted to
equal (A) the Current Warrant Price multiplied by the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares for which this Warrant is exercisable
immediately after such adjustment.

       

      4.2.           Certain Other
Distributions.  If at any time the Company shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive
any dividend or other distribution of:

       

      (a) cash;

       

      (b) any
evidences of its indebtedness, any shares of its stock or any other securities
or property of any nature whatsoever (other than cash, Convertible Securities or
Additional Shares of Common Stock); or

       

      (c) any
warrants or other rights to subscribe for or purchase any evidences of its
indebtedness, any shares of its stock or any other securities or property of any
nature whatsoever (other than cash, Convertible Securities or Additional Shares
of Common Stock);

       

      then (i)
the number of shares of Common Stock for which this Warrant is exercisable shall
be adjusted to equal the product of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such adjustment by a
fraction (A) the numerator of which shall be the Current Market Price per share
of Common Stock at the date of taking such record and (B) the denominator of
which shall be such Current Market Price per share of Common Stock minus the
amount allocable to one share of Common Stock of any such cash so distributable
and of the fair value (as determined in good faith by the Board of Directors of
the Company) of any and all such evidences of indebtedness, shares of stock,
other securities or property or warrants or other subscription or purchase
rights so distributable, and (ii) the Current Warrant Price shall be adjusted to
equal (A) the Current Warrant Price multiplied by the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to the adjustment
divided by (B) the number of shares for which this Warrant is exercisable
immediately after such adjustment.  A reclassification of the Common
Stock (other than a change in par value, or from par value to no par value or
from no par value to par value) into shares of Common Stock and shares of any
other class of stock shall be deemed a distribution by the Company to the
holders of its Common Stock of such shares of such other class of stock within
the meaning of this Section 4.2 and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock as a
part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4.1.

       

      
        
           


        

        
          7

          
            

          

        

        
           


        

      

      Exhibit
4.3


      4.3.           Other Provisions Applicable
to Adjustments under this Section.  The following provisions
shall be applicable to the making of adjustments of the number of shares of
Common Stock for which this Warrant is exercisable and the Current Warrant Price
provided for in this Section 4:

       

      (a) When Adjustments to Be
Made.The adjustments required by this Section 4 shall be made whenever
and as often as any specified event requiring an adjustment shall occur, except
that any adjustment of the number of shares of Common Stock for which this
Warrant is exercisable that would otherwise be required may be postponed (except
in the case of a subdivision or combination of shares of Common Stock, as
provided for in Section 4.1) up to, but not beyond the date of exercise if such
adjustment either by itself or with other adjustments not previously made adds
or subtracts less than 1% of the shares of Common Stock for which this Warrant
is exercisable immediately prior to the making of such
adjustment.  Any adjustment representing a change of less than such
minimum amount (except as aforesaid) which is postponed shall be carried forward
and made as soon as such adjustment, together with other adjustments required by
this Section 4 and not previously made, would result in a minimum adjustment or
on the date of exercise.  For the purpose of any adjustment, any
specified event shall be deemed to have occurred at the close of business on the
date of its occurrence.

       

      (b) Fractional
Interests.  In computing adjustments under this Section 4,
fractional interests in Common Stock shall be taken into account to the nearest
1/10th of a share.

       

      (c) When Adjustment Not
Required.  If the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
distribution and shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made in respect thereof
shall be rescinded and annulled.

       

      (d) Escrow of Warrant
Stock.  If after any property becomes distributable pursuant to
this Section 4 by reason of the taking of any record of the holders of Common
Stock, but prior to the occurrence of the event for which such record is taken,
and the Holder exercises this Warrant, any Additional Shares of Common Stock
issuable upon exercise by reason of such adjustment shall be deemed the last
shares of Common Stock for which this Warrant is exercised (notwithstanding any
other provision to the contrary herein) and such shares or other property shall
be held in escrow for the Holder by the Company to be issued to the Holder upon
and to the extent that the event actually takes place, upon payment of the then
Current Warrant Price.  Notwithstanding any other provision to the
contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be cancelled by the Company and
escrowed property returned.

       

      
        
           


        

        
          8

          
            

          

        

        
           


        

      

      Exhibit
4.3


      4.4.           Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets. In case
the Company shall reorganize its capital, reclassify its capital stock,
consolidate or merge with or into another corporation or other business entity
(where the Company is not the surviving corporation or where there is a change
in or distribution with respect to the Common Stock of the Company), or sell,
transfer or otherwise dispose of all or substantially all its property, assets
or business to another corporation or other business entity and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or acquiring
corporation, or any cash, shares of stock or other securities or property of any
nature whatsoever (including warrants or other subscription or purchase rights)
in addition to or in lieu of common stock of the successor or acquiring
corporation (“Other
Property”), are to be received by or distributed to the holders of Common
Stock of the Company, then each Holder shall have the right thereafter to
receive, upon exercise of such Warrant, the number of shares of common stock of
the successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property receivable upon or as a result of such
reorganization, reclassification, merger, consolidation or disposition of assets
by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such event.  In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, at the Holder's option and request, any successor to the Company or
surviving entity shall expressly assume the due and punctual observance and
performance of each and every covenant and condition of this Warrant to be
performed and observed by the Company and all the obligations and liabilities
hereunder in order to provide for adjustments of shares of Common Stock for
which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 4 and issue to the
Holder a new warrant substantially in the form of this Warrant and consistent
with the foregoing provisions and evidencing the Holder's right to purchase the
Other Property for the aggregate Current Market Price upon exercise
thereof.  For purposes of this Section 4.4, “common stock of the
successor or acquiring corporation” shall include stock of such corporation of
any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock or other securities
which are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock.  The foregoing provisions of this Section 4.4 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

      


      5.  
NOTICES TO WARRANT
HOLDERS

       

      5.1.   Notice of
Adjustments. Whenever the number of shares of Common Stock for which this
Warrant is exercisable, or whenever the price at which a share of such Common
Stock may be purchased upon exercise of the Warrants, shall be adjusted pursuant
to Section 4, the Company shall forthwith prepare a certificate to be executed
by the chief financial officer of the Company setting forth, in reasonable
detail, the event requiring the adjustment and the method by which such
adjustment was calculated (including a description of the basis on which the
Board of Directors of the Company determined the fair value of any evidences of
indebtedness, shares of stock, other securities or property or warrants or other
subscription or purchase rights referred to in Section 4.2) specifying the
number of shares of Common Stock for which this Warrant is exercisable and (if
such adjustment was made pursuant to Section 4.4) describing the number and kind
of any other shares of stock or Other Property for which this Warrant is
exercisable, and any change in the purchase price or prices thereof, after
giving effect to such adjustment or change.  The Company shall
promptly cause a signed copy of such certificate to be delivered to each Holder
in accordance with Section 14.2.  The Company shall keep at its office
or agency designated pursuant to Section 11 copies of all such certificates and
cause the same to be available for inspection at said office during normal
business hours by any Holder or any prospective purchaser of a Warrant
designated by a Holder thereof.

       

      
        
           


        

        
          9

          
            

          

        

        
           


        

      

      Exhibit
4.3


      5.2.   Notice of Corporate
Action. If at any time:

       

      (a) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend (other than a cash dividend payable out
of earnings or earned surplus legally available for the payment of dividends
under the laws of the jurisdiction of incorporation of the Company) or other
distribution, or any right to subscribe for or purchase any evidences of its
indebtedness, any shares of stock of any class or any other securities or
property, or to receive any other right;

       

      (b) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation; or

       

      (c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

       

      then, in
any one or more of such cases, the Company shall give to the Holder (i) at least
ten (10) days’ prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, and (ii) in the case of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up, at least ten (10) days’ prior written notice of the date when the same shall
take place.  Such notice in accordance with the foregoing clause also
shall specify (A) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, the date on which the holders
of Common Stock shall be entitled to any such dividend, distribution or right,
and the amount and character thereof, and (B) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up.  Each such written notice shall be sufficiently given if addressed
to the Holder and delivered in accordance with Section 14.2.

       

      5A.  
COMPANY
POWER

       

      The Company has all corporate power
necessary for the authorization, execution and delivery of this Warrant and this
Warrant constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, moratorium and other laws of general
application affecting the enforcement of creditors’ rights.

       

      
        
           


        

        
          10

          
            

          

        

        
           


        

      

      
        
          Exhibit
4.3


          6.    RESERVATION
AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY
GOVERNMENTAL AUTHORITY

        

      

      
      

      


      From and
after the Closing Date, the Company shall at all times reserve and keep
available for issue upon the exercise of Warrants such number of its authorized
but unissued shares of Common Stock as will be sufficient to permit the exercise
in full of all outstanding Warrants.  All shares of Common Stock which
shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of such Warrant, shall be duly and validly
issued and fully paid and nonassessable, and not subject to preemptive
rights.

      


      Before
taking any action which would result in an adjustment in the number of shares of
Common Stock for which this Warrant is exercisable or in the Current Warrant
Price, the Company shall obtain all such authorizations or exemptions thereof,
or consents thereto, as may be necessary from any public regulatory body or
bodies having jurisdiction thereof.

      


      If any
shares of Common Stock required to be reserved for issuance upon exercise of
Warrants require registration or qualification with any governmental authority
or other governmental approval or filing under any Federal or state law
(otherwise than as provided in Section 8) before such shares may be so issued,
the Company will in good faith and as expeditiously as possible and at its
expense endeavor to cause such shares to be duly registered.

      
        
           

          7.   TAKING OF RECORD; STOCK AND WARRANT AND
WARRANT TRANSFER BOOKS

           

          In the
case of all dividends or other distributions by the Company to the holders of
its Common Stock with respect to which any provision of Section 4 refers to the
taking of a record of such holders, the Company will in each such case take such
a record and will take such record as of the close of business on a Business
Day.  The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its stock transfer books or
Warrant transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.

        

      

       

      8.  
RESTRICTIONS ON
TRANSFERRABILITY

       

      The
Warrants and the Warrant Stock shall not be transferred except in accordance
with the terms and conditions of the Purchase Agreement.

      


      9.  
SUPPLYING
INFORMATION

       

      The
Company shall cooperate with each Holder of a Warrant and each holder of
Restricted Common Stock in supplying such information as may be reasonably
necessary for such holder to complete and file any information reporting forms
presently or hereafter required by the Commission as a condition to the
availability of an exemption from the Securities Act for the sale of any Warrant
or Restricted Common Stock.

       

      
        
           


        

        
          11

          
            

          

        

        
           


        

      

      Exhibit
4.3


      10.  
LOSS OR
MUTILATION

       

      Upon
receipt by the Company from any Holder of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of this
Warrant and indemnity reasonably satisfactory to it, and in case of mutilation
upon surrender and cancellation hereof, the Company will execute and deliver in
lieu hereof a new Warrant of like tenor to such Holder; provided, in the case
of mutilation, no indemnity shall be required if this Warrant in identifiable
form is surrendered to the Company for cancellation.

       

      11.  
OFFICE OF
COMPANY

       

      As long
as any of the Warrants remain outstanding, the Company shall maintain an office
or agency (which may be the principal executive offices of the Company) where
the Warrants may be presented for exercise, registration of transfer, division
or combination as provided in this Warrant.

       

      12.  
FILINGS

      


      So long
as the Company has a class of equity securities registered pursuant to Section
12 of the Exchange Act, the Company will file on or before the required date all
regular or periodic reports (pursuant to the Exchange Act) required to be filed
with the Commission pursuant to the Exchange Act and will deliver to the Holder
promptly upon their becoming available (unless such reports are available
through the Commission’s EDGAR system) one copy of each report, notice or proxy
statement sent by the Company to its stockholders generally, and of each regular
or periodic report (pursuant to the Exchange Act) and any Registration
Statement, prospectus or written communication (other than transmittal letters)
(pursuant to the Securities Act), filed by the Company with (a) the Commission
or (b) any securities exchange on which shares of Common Stock are
listed.

      


      13.  
NO RIGHTS AS
STOCKHOLDERS; LIMITATIONS OF LIABILITY

      


      Except as
otherwise provided herein, this Warrant shall not entitle the Holder to any
rights as a stockholder of the Company, including, without limitation, the right
to vote, to receive dividends and other distributions or to receive notice of or
attend meetings of stockholders or any other proceedings of the Company unless
and to the extent exercised for shares of Common Stock in accordance with the
terms hereof.  No provision hereof, in the absence of affirmative
action by the Holder to exercise its rights to purchase shares of Common Stock
hereunder, and no enumeration herein of the rights or privileges of the Holder
hereof, shall give rise to any liability of such Holder for the purchase price
of any Common Stock or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.

      


      14.  
MISCELLANEOUS

       

      14.1.         Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of the Holder shall operate as a waiver
of such right or otherwise prejudice the Holder’s rights, powers or
remedies.  If the Company fails to make, when due, any payments
provided for hereunder, or fails to comply with any other provision of this
Warrant, the Company shall pay to the Holder such amounts as shall be sufficient
to cover any costs and expenses including, but not limited to, reasonable
attorneys’ fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing
any of its rights, powers or remedies hereunder.

       

      
        
           


        

        
          12

          
            

          

        

        
           


        

      

      Exhibit
4.3


      14.2.         Notice
Generally.  Any notice, demand, request, consent, approval,
declaration, delivery or other communication hereunder to be made pursuant to
the provisions of this Warrant shall be sufficiently given or made if in writing
and either delivered in person with receipt acknowledged or sent by registered
or certified mail, return receipt requested, postage prepaid, or by telecopy and
confirmed by telecopy answerback, addressed as follows:

       

      


       

      If to the
Company:              Cicero,
Inc.

      8000
Regency Parkway

      Suite
542

      Cary, NC 27518

      Attn: John P.
Broderick

      


      If to the Holder: At its last
known address appearing on the books and records of the Company maintained for
such purpose.

      


      or at
such other address as may be substituted by notice given as herein
provided.  The giving of any notice required hereunder may be waived
in writing by the party entitled to receive such notice.  Every
notice, demand, request, consent, approval, declaration or other communication
hereunder shall be deemed to have been duly given and effective on the earliest
of (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section prior to 6:30
p.m. (New York City time) on a business day, (b) the next business day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section on a day that is not a
business day or later than 6:30 p.m. (New York City time) on any business day,
(c) the business day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. As used herein, a “business day” means
any day except Saturday, Sunday and any day which shall be a federal legal
holiday or a day on which banking institutions in the State of New York are
authorized or required by law or other governmental action to
close.

      


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

       

      14.4.         Successors and
Assigns. Subject to the provisions of Sections 3.1 and 8, this Warrant
and the rights evidenced hereby shall inure to the benefit of and be binding
upon the successors of the Company and the successors and assigns of the
Holder.  The provisions of this Warrant are intended to be for the
benefit of all Holders from time to time of this Warrant and, with respect to
Section 8 hereof, holders of Warrant Stock, and shall be enforceable by any such
Holder or holder of Warrant Stock.

       

      
        
           


        

        
          13

          
            

          

        

        
           


        

      

      Exhibit
4.3


      14.5.         Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

       

      14.6          Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Warrant.

       

      14.7          Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

       

      14.8          Governing Law. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware, without regard to the
principles of conflicts of law thereof.  Each party agrees that all
proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Warrant (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) (each a "Proceeding") shall be
commenced exclusively in the state and federal courts sitting in the State of
Delaware.  Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the State of
Delaware for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of this Warrant), and hereby irrevocably waives, and
agrees not to assert in any Proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such Proceeding is
improper.  Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such Proceeding
by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Warrant and agrees that such service shall constitute good and
sufficient service of process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Each party hereto hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Warrant or the
transactions contemplated hereby. If either party shall commence a Proceeding to
enforce any provisions of this Warrant, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding

       

      
        
           


        

        
          14

          
            

          

        

        
           


        

      

      Exhibit 4.3


      IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and its
corporate seal to be impressed hereon as of the day and year first above
written.

       

       

      
 

      
        
          	 	CICERO, INC.	 
	 	 	 	 
	 	 	missing1	 


        

        
           

           

          
             


          

          
            15

            
              

            

          

          
             


          

        
Exhibit 4.3



      EXHIBIT
A

       

      SUBSCRIPTION
FORM

      [To be
executed only upon exercise of Warrant]

       

      The
undersigned registered owner of this Warrant irrevocably exercises this Warrant
for the purchase of ______ Shares of Common Stock of CICERO, INC., and herewith
makes payment therefor, all at the price and on the terms and conditions
specified in this Warrant and requests that certificates for the shares of
Common Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered to _____________
whose address is ________________________________________ and, if such shares of
Common Stock shall not include all of the shares of Common Stock issuable as
provided in this Warrant, that a new Warrant of like tenor and date for the
balance of the shares of Common Stock issuable hereunder be delivered to the
undersigned.

       

      _______________________________

      (Name of
Registered Owner)

       

      _______________________________

      (Signature
of Registered Owner)

       

      _______________________________

      (Street
Address)

       

      _______________________________

      (City)     (State)                                (Zip
Code)

       

      
        	
                NOTICE:

              	
                The
      signature on this subscription must correspond with the name as written
      upon the face of the within Warrant in every particular, without
      alteration or enlargement or any change
  whatsoever.

              


      

      
         

        
           


        

        
          16

          
            

          

        

        
           


        

      
Exhibit 4.3


      EXHIBIT
B

       

      ASSIGNMENT
FORM

       

      FOR VALUE
RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

       

      
        	Name and Address of
      Assignee        	 	
                No. of Shares
      of 

              
	 	 	
                Common
      Stock  

              
	 	 	
              
	  

                ­­___________________________________                                                   

              	 	 _____________
	  

                 

                ___________________________________                                                   

              	 	 
	  

                


                ___________________________________                                                   

              	 	 
	
                 

                 

                 ___________________________________                                                   

              	 	 


      

                                                                                                         

      and does
hereby irrevocably constitute and appoint __________________________
attorney-in-fact to register such transfer on the books of CICERO, INC.,
maintained for the purpose, with full power of substitution in the
premises.

       

       

      
        	Dated:
      __________________	 	Print
      Name:____________________________     
	 	 	
                 

                 

              
	 	 	Signature:_____________________________  
	 	 	
                 

                 

              
	 	 	Witness:______________________________   


      

       

         

      
        	
                NOTICE:

              	
                The
      signature on this subscription must correspond with the name as written
      upon the face of the within Warrant in every particular, without
      alteration or enlargement or any change
  whatsoever.

              


      

       

      
        
           


        

        
          17