Document:

Unassociated Document

    
      

    

    Exhibit
4.17

    

    NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE 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 APPLICABLE STATE SECURITIES LAWS 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.  THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

     

    WARRANT
AGREEMENT

     

    Warrant
Agreement (the “Warrant”), dated as of  March ___, 2009, between
Cicero, Inc. (the “Company”) and ______________ (the “Holder”).

     

     

    WITNESSETH:

     

    WHEREAS,
the Company has entered into a series of loans with several lenders, one of
which is the Holder, each loan governed by terms set forth in a secured loan
note (together the “Loan”) of even date, and the Loan provides for the issuance
of this Warrant, which is one of several Warrants issued to the lenders, one of
which is the Holder, each Warrant being alike in their terms other than the
number of shares of common stock of the Company, $.001 par value (“Common
Stock”), subject thereto; and

     

    WHEREAS,
this Warrant is being issued on a private placement basis on the terms provided
herein, and the Holder understands the limitations and responsibilities of
acquiring the restricted securities comprising the Warrant and the underlying
shares of Common Stock (“Warrant Shares”) and the registration rights provided
herein.

     

    NOW,
THEREFORE, in consideration of the premises contained herein, including the
portion of the Loan by the Holder to the Company, the agreements set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

     

    1.            Grant and
Period.

     

    1.1      
    Grant.  The
Holder is hereby granted the right to purchase from the Company, at any time
during the exercise period, up to an aggregate of  _______ Warrant
Shares of the Company at an initial exercise price (subject to adjustment as
provided in Section 5 hereof) of $0.20 per Warrant Share (the “Exercise Price”),
such exercise to be subject to the terms and conditions of this
Warrant.

     

    1.2       
   Period.  The
Warrant will be exercisable commencing on March ____, 2009, and expire at 5:00
PM on March  ________, 2014 (“Expiration Time”).  If the
Expiration Time is not a business day in the City of New York, then the
expiration date will be extended to 5:00 PM on the next business day in the City
of New York.  Days on which banks are generally closed for business
and financial transactions in the City of New York, Saturdays and Sundays will
be considered a non-business day.

     

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

    

    Exhibit
4.17

     

    2.         
   Exercise of
Warrant.

     

    2.1        
  Full
Exercise.  Except as provided in Section 2.3 below, the
Holder shall effect an exercise of the Warrant by surrendering to the Company
this Warrant, together with a Subscription in the form of Exhibit A attached
thereto, duly executed by such Holder, at any time prior to the Expiration Time,
at the Company’s principal office, accompanied by payment in cash or by
certified or official bank check payable to the order of the Company in the
amount of the aggregate purchase price (the “Aggregate Price”), subject to any
adjustments provided for in the Warrant. The Aggregate Price shall be the amount
that is the result of the Exercise Price multiplied by the number of Warrant
Shares that are the subject of the Warrant (as adjusted as hereinafter provided)
being purchased by the Holder.

     

    2.2      
    Partial
Exercise.  The Warrant may also be exercised from time to time
in part by surrendering the Warrant in the manner specified in Sections 2.1 or
2.3 hereof, except that the Purchase Price payable shall be the amount that is
the result of the number of Warrant Shares being purchased hereunder multiplied
by the Exercise Price, subject to any adjustments provided for in the Warrant.
Upon any such partial exercise, the Company, at its expense, will forthwith
issue to the Holder a new Warrant of like tenor for the aggregate number of
securities (as constituted as of the date hereof) for which the Warrant shall
not have been exercised, issued in the name of the Holder or as the Holder (upon
payment by such Holder of any applicable transfer taxes) may
direct.

     

    2.3      
    Conversion
Right.  The Holder may effect an exercise of the Warrants and
pay the Exercise Price through a conversion of the Warrant (“Conversion Right”);
provided, that such right shall exist only at such time that the Company has the
obligation to provide a resale registration statement for the underlying
securities of the Warrant and the Company does not have a registration statement
effective and currently the available for the resale by the Holder of the
underlying securities of the Warrant as provided in Section 6 hereof. The Holder
may effect a Conversion Right of the Warrant by surrendering to the Company this
Warrant, together with a Subscription in the form of Exhibit B attached hereto,
duly executed by such Holder, prior to the Expiration Time, at the Company’s
principal office, upon which the Company shall issue to the Holder the number of
Warrant Shares determined as follows:

     

    
      
        
          	 
      	
                  X

                	
                  =

                	
                  Y x
      (A-B)/A

                
	 
      	 
      	 
      	 
      
	
                  where

                	
                  X

                	
                  =

                	
                  the
      number of Warrant Shares to be issued to the Holder;

                
	 
      	 
      	 
      	 
      
	 
      	
                  Y

                	
                  =

                	
                  the
      number of Warrant Shares with respect to which this Warrant is being
      exercised;

                
	 
      	 
      	 
      	 
      
	 
      	
                  A

                	
                  =

                	
                  the
      Market Price of a share of Common Stock as of the Date of Exercise;
      and

                
	 
      	 
      	 
      	 
      
	 
      	
                  B

                	
                  =

                	
                  the
      Exercise Price.

                

        

      

    

     

    2.4           Call of
Warrant.  The Company reserves the right to call the Warrant
for redemption at any time prior to its exercise, with a notice of call in
writing to the Holder of record of the Warrant, giving 30 days’ advance notice
of the call at any time if the Market Price of a share of Common Stock has been
at least 150% of the then Exercise Price of the Warrant, on each of 20 trading
days within a 30 trading day period ending on the third business day prior to
the date on which notice of the call is given. The call price of the Warrant is
to be $.005 per Warrant Share that may be then acquired upon exercise of the
Warrant. Any Warrant either not exercised or tendered back to the Company by the
end of the date specified in the notice of call shall be canceled on the books
of the Company and have no further value except for the $.005 call price per
Warrant Share.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    2.5      
    Certain Defined
Terms.  “Market Price” of a share of Common Stock on any date
shall mean, (i) if the shares of Common Stock are traded on the Nasdaq Global
Market, Nasdaq Global Select Market or the Nasdaq Capital Market, the last bid
price reported on that date; (ii) if the shares of Common Stock are not quoted
on a Nasdaq market and are listed on any other national securities exchange, the
last sale price of the Common Stock reported by such exchange on that date;
(iii) if the shares of Common Stock are not quoted on any such market or listed
on any such exchange and the shares of Common Stock are traded in the
over-the-counter market, the last price reported on such day by the OTC Bulletin
Board; (iv) if the shares of Common Stock are not quoted on a any such market,
listed on any such exchange or quoted on the OTC Bulletin Board, then the last
price quoted on such day in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); or (v) if none of clauses
(i)-(iv) are applicable, then as determined, in good faith, by the Board of
Directors of the Company and the Holders. “Date of Exercise” means the date on
which the Holder shall have delivered to the Company (i) the Warrant, (ii) the
applicable Subscription form attached thereto, appropriately completed and duly
signed, and (iii) if applicable, payment of the Exercise Price.

     

    3.       
      Issuance of
Certificates.  Upon the exercise of the Warrant, the issuance
of certificates for Warrant Shares shall be made promptly (and, in any event
within five business days thereafter) without charge to the Holder thereof
including, without limitation, any tax which may be payable in respect of the
issuance thereof, and such certificates shall (subject to the provisions of
Section 4 and Section 5 hereof) be issued in the name of, or in such names as
may be directed by, the Holder thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any such certificates in a
name other than that of the Holder and the Company shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

     

    4.         
   Restriction on
Transfer.  The Warrant and the Warrant Shares may be
transferred only pursuant to a registration statement filed under the Securities
Act of 1933, as amended (the “Securities Act”) and the applicable state
securities laws or an exemption from such registrations.  Subject to
such restrictions, the Company shall transfer the Warrant and the Warrant
Shares, from time to time, upon the books to be maintained by the Company for
that purpose, upon surrender thereof, for transfer properly endorsed or
accompanied by appropriate instructions for transfer and such other documents as
may be reasonably required by the Company, including, if required by the
Company, an opinion of its counsel to the effect that such transfer is exempt
from the registration requirements of the Securities Act, and to establish that
such transfer is being made in accordance with the terms hereof.  Upon
such surrender to the Company of this Warrant for its transfer, the Company
shall execute and deliver a new Warrant, representing the new Warrant or
Warrants in the name of the transferee or transferees and in the denomination or
denominations specified in such instructions, and shall issue to the transferor
a new Warrant evidencing the portion of the Warrant not so transferred, and this
Warrant shall promptly be cancelled.  A Warrant, if properly
transferred, may be exercised by a new holder without having a new Warrant
issued.

     

    5.     
       Adjustments to Exercise
Price and Number of Securities.

     

    5.1       
   Stock Dividends and
Splits.  If the Company, (i) pays a stock dividend on its
Common Stock, (ii) subdivides outstanding shares of Common Stock into a greater
number of shares, or (iii) combines outstanding shares of Common Stock into a
lesser number of shares, then in each such case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    5.2     
     Extraordinary
Transactions.  If, (i) the Company effects any merger or
consolidation of the Company with or into another Person and the Company is not
the surviving entity, or (ii) the Company effects any reclassification of the
Common Stock or any compulsory share exchange pursuant to which the Common Stock
is effectively converted into or exchanged for other securities, (in either such
case, an “Extraordinary Transaction”), then the Warrant will become the right
thereafter to receive, upon exercise, the same amount and kind of securities as
the Holder would have been entitled to receive upon the occurrence of such
Extraordinary Transaction if it had been, immediately prior to such
Extraordinary Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of the Warrant (the “Alternate Consideration”) in
lieu of the Warrant Shares. The aggregate Exercise Price for each Warrant will
not be affected by any such Extraordinary Transaction, but the Company shall
apportion such aggregate Exercise Price to the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, to be received in a Extraordinary Transaction, then each
Holder, to the extent practicable, shall be given the same choice as to the
Alternate Consideration it receives upon any exercise of the Warrant following
such Extraordinary Transaction. In addition, at the request of the Holder, upon
surrender of the Warrant, any successor to the Company or surviving entity in
such Extraordinary Transaction shall issue to the Holder a new Warrant
consistent with the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof. Each Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Extraordinary
Transaction.

     

    5.3       
   Adjustment in Number of
Securities.  Upon each adjustment of the Exercise Price
pursuant to the provisions of Sections 5.1 and 5.2, the number of securities
issuable upon the exercise of the Warrant shall be adjusted to the nearest full
amount by multiplying a number equal to the Exercise Price in effect immediately
prior to such adjustment by the number of securities issuable upon exercise of
the Warrant immediately prior to such adjustment and dividing the product so
obtained by the adjusted Exercise Price.

     

    5.4      
    No Adjustment of Exercise
Price in Certain Cases.  No adjustment of the Exercise Price
shall be made if the amount of said adjustment shall be less than $.01 per
Warrant Share; provided, however, that in such case any adjustment that would
otherwise be required then to be made shall be carried forward and shall be made
at the time of and together with the next subsequent adjustment which, together
with any adjustment so carried forward, shall amount to at least $.01 per
Warrant Share.

     

    5.5       
   Notice of
Adjustment.  In each case of an adjustment or readjustment of
the Exercise Price or the number and kind of any securities issuable upon
exercise of the Warrant, the Company at its expense will promptly calculate such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment, including a statement of the adjusted
Exercise Price and adjusted number of shares of Common Stock or type of
Alternate Consideration issuable upon exercise of the Warrant (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based. The Company will promptly
deliver to each Holder who makes a request in writing, a copy of each such
certificate.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    6.     
       Registration
Rights.

     

    6.1       
   Registration.

     

    6.1.1           Registration
Right.    The Company shall use its reasonable
commercial efforts to prepare and file with the SEC a registration statement
(“Registration Statement”) covering the resale of all the securities (such as
the Warrant Shares) issuable on exercise of the Warrants (“Registrable
Securities”) for a resale offering by the initial Holder to be made on a
continuous basis pursuant to Rule 415 within 75 days of the original issuance
date of this Warrant (“Filing Date”).  The Registration Statement
shall be on Form S-3 (except if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3, in which case such registration
shall be on Form S-1 or another appropriate form in accordance with the
Securities Act and the Exchange Act) and shall contain (except if otherwise
directed by the initial Holder or requested by the SEC) a “Plan of Distribution”
in substantially the form provided or approved by the initial
Holder.

     

    The Company shall use reasonable
commercial efforts to cause the Registration Statement to be declared effective
by the SEC as promptly as possible after the filing thereof, but in any event
prior to the 75 days after the required last Filing Date (“Effective Date”), and
shall use its reasonable commercial efforts to keep the Registration Statement
continuously effective under the Securities Act until the earlier of the date
that (i) all of the Registrable Securities have been sold or transferred to
persons who may trade such shares without restriction, or (ii) one year after
the original issuance date by the Company of this Warrant to the initial Holder
(the “Effectiveness Period”).  If the SEC staff or the published or
unpublished regulations or informal policies and guidelines of the SEC limit the
number of Registrable Securities that may be included in the Registration
Statement on behalf of the initial Holder at any time, and thereby require
deferral of registration of such Registrable Securities, in such case the
Company will be able to reduce the number of Registrable Securities that will be
included in the Registration Statement to the maximum number of shares that may
be allowed, provided if there are other shares of common stock outstanding that
are registered or are included on the Registration Statement because of another
effective registration right, then the Registrable Securities that are to be
included on the Registration Statement will be pro rated in as equitable a
manner as is reasonable in the determination of the Board of Directors of the
Company.

     

    Notwithstanding anything in this
Warrant to the contrary, the Company may, by written notice to the initial
Holder, suspend sales under a Registration Statement after the Effective Date
thereof and/or require that the initial Holder immediately cease the sale of
shares of Common Stock pursuant thereto and/or defer the filing of any
subsequent Registration Statement if the Company is engaged in a material
merger, acquisition or sale and the Board of Directors determines in good faith,
by appropriate resolutions, that, as a result of such activity, (A) it would be
materially detrimental to the Company (other than as relating solely to the
price of the Common Stock) to maintain a Registration Statement at such time, or
(B) it is in the best interests of the Company to suspend sales under such
Registration Statement at such time.  Upon receipt of such notice, the
initial Holder shall immediately discontinue any sales of Registrable Securities
pursuant to such registration until the initial Holder is advised in writing by
the Company that the current Prospectus or amended Prospectus, as applicable,
may be used.  In no event, however, shall this right be exercised to
suspend sales beyond the period during which (in the good faith determination of
the Company’s Board of Directors) the failure to require such suspension would
be materially detrimental to the Company.  The Company’s rights under
this section may be exercised for a period of no more than 20 Trading Days at a
time and not more than three times in any twelve-month
period.  Immediately after the end of any suspension period, the
Company shall take all necessary actions (including filing any required
supplemental prospectus) to restore the effectiveness of the applicable
Registration Statement and the ability of the initial Holder to publicly resell
their Registrable Securities pursuant to such effective Registration
Statement.

     

    6.1.2           Terms.  The
Company shall bear all fees and expenses attendant to registering the
Registrable Securities, but the Holder shall pay any and all underwriting
commissions.  The Company agrees to use its reasonable commercial
efforts to qualify or register the Registrable Securities in such states as are
reasonably requested by the initial Holder; provided, however, that in no event
shall the Company be required to register the Registrable Securities in a state
in which such registration would cause (i) the Company to be obligated to
qualify to do business in such state, or would subject the Company to taxation
as a foreign corporation doing business in such jurisdiction or (ii) the
principal stockholders of the Company to be obligated to escrow their shares of
capital stock of the Company.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    6.2         Damages.  Should
the registration or the effectiveness thereof required by Section 6.1 hereof be
delayed by the Company or the Company otherwise fails to comply with such
provisions, the Company shall, in addition to any other equitable or other
relief available to the initial Holder, be liable for any and all incidental,
special and consequential damages sustained by the initial Holder, including,
but not limited to, the loss of any profits that might have been received by the
initial Holder upon the sale of the Registrable Securities.

     

    6.3         General
Terms.

     

    6.3.1           Indemnification.  The
Company shall indemnify the Holder of the Registrable Securities to be sold
pursuant to any registration statement hereunder and each person, if any, who
controls Holder within the meaning of Section 15 of the  Securities
Act or Section 20(a) of the Securities Exchange Act of 1934, as amended
(“Exchange Act”), against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
any of them may become subject under the Securities Act, the Exchange Act or
otherwise, arising from such registration statement.  The Holder of
the Registrable Securities to be sold pursuant to such registration statement,
and their successors and assigns, shall severally, and not jointly, indemnify
the Company, its officers and directors and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section
20(a) of the Exchange Act, against all loss, claim, damage, expense or liability
(including all reasonable attorneys’ fees and other expenses reasonably incurred
in investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Securities Act, the Exchange Act or otherwise,
arising from information furnished by or on behalf of the Holder in writing, for
specific inclusion in such registration statement.

     

    6.3.2           Exercise of
Warrant.  Nothing contained in this Warrant shall be construed
as requiring the Holder to exercise the Warrant prior to or after the initial
filing of any registration statement or the effectiveness thereof.

     

    6.3.3           Rule 144
Sales.  Notwithstanding anything contained in this Section 6 to
the contrary, the Company shall have no obligation pursuant to this Section 6 to
register the Registrable Securities held by any Holder, where the Holder would
then be entitled to sell under Rule 144 within any three-month period (or such
other period prescribed under Rule 144 as may be provided by amendment thereof)
all of the Registrable Securities then held by such Holder, or (ii) where the
number of Registrable Securities held (or could be held) by such Holder is
within the volume limitations under Rule 144.

     

    6.3.4           Supplemental
Prospectus.  The Holder agrees, that upon receipt of any notice
from the Company of the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, the Holder will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until the Holder’s
receipt of the copies of a supplemental or amended prospectus, and, if so
desired by the Company, the Holder shall deliver to the Company (at the expense
of the Company) or destroy (and deliver to the Company a certificate of such
destruction) all copies, other than permanent file copies then in the Holder’s
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    7.         
   Elimination of Fractional
Interest.  The Company shall not be required to issue
certificates representing fractions of securities upon the exercise of the
Warrant, nor shall it be required to issue script or pay cash in lieu of
fractional interests, it being the intent of the parties that all fractional
interests may be eliminated, at the Company’s option, by rounding any fraction
up to the nearest whole number of shares of Common Stock or other securities,
properties or rights issuable on exercise, or in lieu thereof paying cash equal
to such fractional interest.

     

    8.         
   Reservation, Validity and
Listing.  The Company covenants and agrees that during the
exercise period, the Company shall at all times reserve and keep available out
of its authorized shares of Common Stock, solely for the purpose of issuance
upon the exercise of the Warrant, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise under
this Warrant. The Company covenants and agrees that, upon exercise of the
Warrant, and payment of the Exercise Price therefore, all shares of Common Stock
and other securities issuable upon such exercise shall be duly authorized,
validly issued, fully paid, non-assessable and not subject to the preemptive
rights of any shareholder. As long as the Warrant is outstanding, the Company
shall use its reasonable commercial efforts to cause all shares of Common Stock
issuable upon the exercise of the Warrant to be listed and quoted (subject to
official notice of issuance) on all securities exchanges and systems on which
the other outstanding shares of Common Stock are then listed and/or quoted,
including Nasdaq and the American Stock Exchange.

     

    9.         
   Notices to Warrant
Holder.  Nothing contained in this Warrant shall be construed
as conferring upon the Holder of the Warrant the right to vote or to consent or
to receive notice as a shareholder in respect of any meetings of shareholders
for the election of directors or any other matter, or as having any rights
whatsoever as a shareholder of the Company. If, however, at any time prior to
the Expiration Time of the Warrant and its exercise in full, any of the
following events shall occur:

     

    (a)           the
Company shall take a record of the holders of its shares of Common Stock for the
purpose of entitling them to receive a dividend or distribution payable
otherwise than in cash, or a cash dividend or distribution payable otherwise
than out of current or retained earnings, as indicated by the accounting
treatment of such dividend or distribution on the books of the Company;
or

     

    (b)           the
Company shall offer to all the holders of its Common Stock any additional shares
of capital stock of the Company or securities convertible into or exchangeable
for shares of capital stock of the Company, or any option, right or warrant to
subscribe therefore; or

     

    (c)           a
dissolution, liquidation or winding up of the Company (other than in connection
with a consolidation or merger) or a sale of all or substantially all of its
property, assets and business as an entirety shall be proposed;

     

    then, in
any one or more of said events, the Company to the extent practicable shall give
written notice of such event at least 15 days prior to the date fixed as a
record date of the date of closing the transfer books for the determination of
the shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, or entitled to vote on such
proposed dissolution, liquidation, winding up or sale. Such notices shall
specify such record date or the date of closing the transfer books, as the case
may be.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    10.           Notices.  All
notices, requests, consents and other communications hereunder shall be in
writing and shall be deemed to have been duly given when sent by (i) facsimile;
or (ii) delivered personally or by overnight courier or mailed by registered or
certified mail, return receipt requested:

     

    (a)           If
to the Company, to the address of below or as such may be changed from time to
time.

     

    Cicero,
Inc.

    8000
Regency Parkway, Suite 542

    Cary, NC
27518

    Fax:

    Tel:  919-380-5000

    

    With a
copy to:

    

    Golenbock
Eiseman Assor Bell & Peskoe LLP

    437
Madison Avenue

    New York,
NY  10022

    Attn:
Lawrence M. Bell, Esq.

    Fax:
(212) 754-0330

    Tel:
(212) 907-7300

    

     

    (b)           If
to the Holder, to the address set forth below or as shown on the books of the
Company as such may be changed from time to time.

     

     

    Fax:

    Tel:

    

    With a
copy to:

    

    

    Tel:

    Fax:

    

    11.           Entire Agreement:
Modification.  This Warrant contains the entire understanding
between the parties hereto with respect to the subject matter hereof, and the
terms and provisions of this Warrant may only be modified, waived or amended in
writing. Any modification, waiver or amendment executed by the Company and the
Holder (or the Holders holding a majority of the Warrant Shares or the other
securities, property or rights issuable upon exercise of the Warrants, as the
case may be) shall be binding on the Holder (or all Holders, as the case may
be). Notice of any modification, waiver or amendment shall be promptly provided
to any Holder not consenting to such modification, waiver or
amendment.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    12.           Assignment.  The
Warrant was issued initially as part of a unit with the Loan, and the Warrant
may not be detached or the ownership rights thereof separated one from the
other, except to the extent this Warrant shall be in excess of _______
shares.  The Holder may assign to one or more assignees (each an
“Assignee”) all, or any part, of the Warrant, provided, however, that
simultaneously with and as part of such assignment, it assigns a pro rata amount
of its rights under the Loan, and provide, further, the Company may continue to
deal solely and directly with the Holder in connection with the interest
assigned to the Assignee until (i) written notice of such assignment, has been
given to the Company by the Holder and the Assignee, and (ii) the Holder and its
Assignee have delivered to the Company a document reflecting the assignment and
acceptance, as reasonably acceptable to the Company.  The assignment
of the Warrant does not transfer the registration rights provided in the
Warrant, which are unique to the initial Holder.

     

    13.           Successors.  All
the covenants and provisions of the Warrant shall be binding upon and inure to
the benefit of the Company, the Holders and their respective permitted
successors and assigns hereunder.

     

    14.           Governing Law;
Submission to
Jurisdiction.  This Warrant shall be governed by and construed
in accordance with the internal laws of the State of Delaware without regard to
the conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Warrant, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction of
the federal and state courts located in the City of Wilmington, State of
Delaware and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in the City of Wilmington, State of Delaware. The
parties hereto waive any claim that any such jurisdiction is not a convenient
forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party hereto of
its reasonable counsel fees and disbursements in an amount judicially
determined.

     

    15.           Severability.  If
any provision of the Warrant shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall not affect any other provision of the
Warrant.

     

    16.           Captions.  The
caption headings of the sections of the Warrant are for convenience of reference
only and are not intended, nor should they be construed as, a part of the
Warrant and shall be given no substantive effect.

     

    17.           Benefits of This
Warrant.  Nothing in the Warrant shall be construed to give to
any person or corporation other than the Company and any registered Holder(s) of
the Warrant(s) any legal or equitable right, remedy or claim under the Warrant;
and the Warrant shall be for the sole and exclusive benefit of the Company and
any Holder(s) of the Warrant.

     

    18.           Counterparts.  The
Warrant may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and such
counterparts shall together constitute but one and the same
instrument.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    Exhibit
4.17

     

    IN
WITNESS HEREOF, the parties hereto have caused this Warrant to be duly executed,
as of the day and year first above written.

     

    

    
      
        
          
            
              
                	 
      	
                        Cicero,
      Inc.

                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	 
      	
                        John
      Broderick

                      
	 
      	 
      	
                        Chief
      Executive Officer

                      
	 
      	 
      	 
      
	 
      	
                        Holder

                      
	 
      	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	
                        Name:

                      	 
      
	 
      	
                        Title:

                      	 
      

              

            

          

        

      

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    FORM
OF SUBSCRIPTION (CASH EXERCISE)

     

    (To be
signed only upon exercise of Warrant)

    

    
      	
               
      

            	
              TO:

            	
              Cicero,
      Inc.

            

    

    

    

    The
undersigned holder of Warrant dated ________________ (the “Warrant”), of Cicero,
Inc. (the “Company”), which is being delivered herewith, hereby irrevocably
elects to purchase ______________ Warrant Shares (as defined in the Warrant),
and herewith makes payment of $ _________________ therefore, all in
accordance with the Warrant. Certificates for the Warrant Shares shall be issued
in the name of ________________ and delivered to the following
address:

     

    
      
        
          	
                  
                     

                  

                
	 
      
	 
      
	 
      

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    By:

                                  	 
      	 
	
                                    Name:

                                  	 	 
      	 
	
                                    Social
      Security Number or Tax Identification Number:

                                  	 
      	 
	
                                    Date:

                                  	 
      	 

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    (Signature
must conform in all respects to name of Holder as specified in the
Warrant)

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

     

    FORM
OF SUBSCRIPTION (CASHLESS EXERCISE)

     

    
      	
               
      

            	
              TO:

            	
              Cicero,
      Inc.

            

    

    

    

    The
undersigned holder of Warrant dated _________________ (the “Warrant”), of
Cicero, Inc. (the “Company”), which Warrant is being delivered herewith, hereby
irrevocably elects to exercise (on a conversion right basis, in accordance with
the formula set forth in Section 2.3 of the Warrant with respect to
__________________ Warrant Shares (as defined in the Warrant), all in accordance
with the Warrant. Certificates for the Warrant Shares shall be issued in the
name of _____________________ and delivered to the following
address:

    
       

      
        
          
            	
                    
                       

                    

                  
	 
      
	 
      
	 
      

          

        

      

       

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                By:

                              	 
      	 
	
                                Name:

                              	 	 
      	 
	
                                Social
      Security Number or Tax Identification Number:

                              	 
      	 
	
                                Date:

                              	 
      	 

                      

                    

                  

                

              

            

          

        

      

    

     

    (Signature
must conform in all respects to name of Holder as specified on the face of the
Warrant)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    FORM OF
ASSIGNMENT

     

    (To be
used by the registered holder if such Holder desires to transfer the
Warrant)

     

    FOR VALUE
RECEIVED ______________________________________________ hereby sells, assigns
and transfers unto:

     

    
      
        
          
            
              
                	
                        Print
      Name of Transferee:

                      	 	 
      	 
      

              

            

          

        

      

    

    

    
      
        
          
            	
                    Address:

                  	 	 
      	 
      

          

        

      

    

    

    
      
        
          	
                  City
      State Zip Code

                	 	 
      	 
      

        

      

    

    

    
      
        
          
            	
                    Security
      or Federal Tax ID Number:

                  	 	 
      	 
      

          

        

      

    

    

    this
Warrant, originally dated __________ 2009, and issued by Cicero, Inc.
(“Company”), together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ___________________________ as its
Attorney in Fact, to transfer the Warrant on the books of the Company, with full
power of substitution.

     

    
      
        
          
            
              	
                      Dated:

                    	 
      	 	
                      Signature:

                    
	 
      	 
      	 	 
      
	 
      	 
      	 	 
      
	 
      	 
      	 	 
      
	 
      	 
      	 	
                      (Signature
      must conform in all respects to name of Holder as specified on the face of
      the
Warrant)Unassociated Document

    
      

    

    
      
        
          Exhibit
10.4

           

           

          EMPLOYMENT
AGREEMENT

      

    

    This
Employment Agreement (the “Agreement”) is made and entered into this 1st day of
January, 2008, by and between CICERO INC, a Delaware corporation (the
“Company”), and John P. Broderick, a resident of the State of New Jersey (the
“Employee”).

    

    In
consideration of the mutual covenants, promises and conditions set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:

    

    
      	
              1.

            	
              Employment.  The
      Company hereby employs Employee and Employee hereby accepts such
      employment upon the terms and conditions set forth in this
      Agreement.

            

    

    

    
      	
              2.

            	
              Duties of
      Employee.  Employee will be based in New Jersey or North
      Carolina at the discretion of the Company.  Employee’s title
      will be Chief Executive Officer, Chief Financial Officer, Chief Operating
      Officer and Corporate Secretary and Employee will report directly to the
      Board of Directors of the Company.    Employee agrees
      to perform and discharge such other duties as may be assigned to Employee
      from time to time by the Company to the reasonable satisfaction of the
      Board of Directors , and such duties will be consistent with those duties
      regularly and customarily assigned by the Company to the position of Chief
      Executive Officer, Chief Financial Officer and
      Secretary.  Employee agrees to comply with all of the Company's
      policies, standards and regulations and to follow the instructions and
      directives as promulgated by the Board of Directors of the
      Company.  Employee will devote Employee's full professional and
      business-related time, skills and best efforts to such duties and will
      not, during the term of this Agreement, be engaged (whether or not during
      normal business hours) in any other business or professional activity,
      whether or not such activity is pursued for gain, profit or other
      pecuniary advantage, without the prior written consent of the Board of
      Directors of the Company.  This Section will not be construed to
      prevent Employee from (a) investing personal assets in businesses which do
      not compete with the Company in such form or manner that will not require
      any services on the part of Employee in the operation or the affairs of
      the companies in which such investments are made and in which Employee's
      participation is solely that of an investor; (b) purchasing securities in
      any corporation whose securities are listed on a national securities
      exchange or regularly traded in the over-the-counter market, provided that
      Employee at no time owns, directly or indirectly, in excess of one percent
      (1%) of the outstanding stock of any class of any such corporation engaged
      in a business competitive with that of the Company; or (c) participating
      in conferences, preparing and publishing papers or books, teaching or
      joining or participating in any professional associations or trade group,
      so long as the Board of Directors of the Company approves such
      participation, preparation and publication or teaching prior to Employee’s
      engaging therein.

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              3.

            	
              Term.  The
      term of this Agreement will be at-will, and can be terminated by either
      party at any time, with or without cause, subject to the provisions of
      Section 4 of this Agreement.

            

    

    

    
      	
              4.

            	
              Termination.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Termination by Company
      for Cause.  The Company may terminate this Agreement and
      all of its obligations hereunder immediately, including the obligation to
      pay Employee severance, vacation pay or any further accrued benefits or
      remuneration, if any of the following events
  occur:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Employee
      materially breaches any of the terms or conditions set forth in this
      Agreement and fails to cure such breach within ten (10) days after
      Employee's receipt from the Company of written notice of such breach
      (notwithstanding the foregoing, no cure period shall be applicable to
      breaches by Employee of Sections 10 through 14  of this
      Agreement);

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Employee
      commits any other act materially detrimental to the business or reputation
      of the Company;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Employee
      engages in dishonest or illegal activities or commits or is convicted of
      any crime involving fraud, deceit or moral turpitude;
  or

            

    

    

    
      	
               
      

            	
              (iv)

            	
              Employee
      dies or becomes mentally or physically incapacitated or disabled so as to
      be unable to perform Employee's duties under this Agreement even with a
      reasonable accommodation.  Without limiting the generality of
      the foregoing, Employee's inability adequately to perform services under
      this Agreement for a period of sixty (60) consecutive days will be
      conclusive evidence of such mental or physical incapacity or disability,
      unless such inability  is pursuant to a mental or physical
      incapacity or disability covered by the Family Medical Leave Act, in which
      case such sixty (60) day period shall be extended to a one hundred and
      twenty (120) day period.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Termination by Company
      Without Cause.  The Company may terminate Employee's
      employment pursuant to this Agreement for reasons other than those stated
      in Section 4(a) upon at least thirty (30) days' prior written notice to
      Employee. In the event Employee's employment with the Company is
      terminated by the Company without cause, the Company shall be obligated to
      pay Employee a lump sum severance payment equal to twelve (12) months of
      Employee’s then base salary payable within thirty (30)
      days  after the date of termination.  In addition,
      Employee will be entitled to payment of all unused vacation days at his
      current daily rate and any accrued but unpaid salary or earned bonuses.
      Any option grants or restricted stock awards made to employee will
      immediately vest. The  payment to  Employee
      for  all deferred salaries and earned bonuses will be paid
      within 30 days by the Company. Other than the severance payments set forth
      in this Section 4(b), Employee will be entitled to receive no further
      remuneration and will not be entitled to participate in any Company
      benefit programs following his termination by the Company, whether such
      termination is with or without
cause.

            

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (c)

            	
              Termination by
      Employee for Cause.  In the event of a Change of Control
      (as defined below) of the Company that results in either a substantial
      reduction or change of title in the Employee’s job duties related to his
      position as CFO or CEO, ,or a decrease in or a failure to provide the
      compensation or vested benefits under this Agreement or the Company
      initiates a substantial reduction or change of title in the Employee’s job
      duties related to his position as CFO, Employee shall have the right to
      resign his employment and will be entitled to a lump sum severance payment
      equal to twelve (12) months of Employee’s then base salary payable within
      thirty (30) days after  the date of termination  In
      addition, Employee will be entitled to payment of all unused vacation days
      at his current daily rate and a lump sum equal to all deferred salaries
      and earned bonuses. In addition, all Employee’s then outstanding but
      unvested stock options shall vest one hundred percent
      (100%).  Employee shall have 12 months from the date written
      notice is given to Employee about the announcement and closing of a
      transaction resulting in a Change in Control of the Company that would
      result in a substantial change in the Employee’s job duties or decrease
      his compensation or vested benefits under this Agreement to resign or this
      Section 4(c) shall not apply.  In the event Employee resigns
      from the Company for any other reason, Employee will not be entitled to
      receive or accrue any further Company benefits or other remuneration under
      this Agreement, and Employee specifically agrees that he will not be
      entitled to receive any severance
pay.

            

    

    

    For
purposes of this Section 4, a Change in Control shall be deemed to have occurred
if any of the following occur:

    

    
      	
               
      

            	
              (i)

            	
              the
      merger or consolidation of the Company with or into another unaffiliated
      entity, or the merger of another unaffiliated entity into the Company or
      another subsidiary thereof with the effect that immediately after such
      transaction the stockholders of the Company immediately prior to such
      transaction hold less than fifty percent (50%) of the total voting power
      of all securities generally entitled to vote in the election of directors,
      managers or trustees of the entity surviving such merger or
      consolidation.  This provision will not apply to any
      reorganization and reverse merger between the Company and any subsidiary
      (or any other similar entity established for a similar
      purpose);

            

    

    

    
      	
               
      

            	
              (ii)

            	
              the
      sale or transfer of more than fifty-one percent (51%) of the Company’s
      then outstanding voting stock (other than a restructuring event which
      results in the continuation of the Company’s business by an affiliated
      entity) to unaffiliated person or group (as such term is used in Section
      13(d)(3) of the Securities Exchange Act of 1934, as amended);
      or

            

    

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
               
      

            	
              (iii)

            	
              the
      adoption by the stockholders of the Company of a plan relating to the
      liquidation or dissolution of the
Company.

            

    

    

    5.           Compensation and
Benefits.

    

    
      	
               
      

            	
              (a)

            	
              Annual
      Salary.  During the term of this Agreement and for all
      services rendered by Employee under this Agreement, the Company will pay
      Employee a base salary of One Hundred and Seventy-Five Thousand Dollars
      ($175,000.00) per annum in equal bi-monthly
      installments.  Employee will also be entitled to earn a short
      term incentive compensation as further outlined in Exhibit
    D.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Incentive
      Compensation.  Employee is eligible for
      an  annual bonus upon the Company reaching certain pre tax
      income levels (after accounting for all bonuses)  as set forth
      in Exhibit C.  Said bonus will be payable after the annual
      accounts have been presented to the Compensation Committee. Exhibit C
      attached hereto provides the benchmarks associated with achieving the
      Incentive Compensation.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Equity
      Awards.  Employee is eligible for stock option grants and
      restricted stock awards as determined by the Compensation
      Committee.

            

    

    

    
      	
              6.

            	
              Vacation.  Employee
      shall be eligible for four (4) weeks of paid vacation annually, provided
      that such vacation is scheduled at such times that do not interfere with
      the Company’s legitimate business
needs.

            

    

    

    
      	
              7.

            	
              Other
      Benefits.  Employee will be entitled to such fringe
      benefits as may be provided from time-to-time by the Company to its
      employees, including, but not limited to, group health insurance, life and
      disability insurance, and any other fringe benefits now or hereafter
      provided by the Company to its employees, if and when Employee meets the
      eligibility requirements for any such benefit.  The Company
      reserves the right to change or discontinue any employee benefit plans or
      programs now being offered to its employees; provided, however, that all
      benefits provided for employees of the same position and status as
      Employee will be provided to Employee on an equal
  basis.

            

    

    

    
      	
              8.

            	
              Business
      Expenses.  Employee will be reimbursed for all reasonable
      expenses incurred in the discharge of Employee's duties under this
      Agreement pursuant to the Company's standard reimbursement
      policies.

            

    

    

    
      	
              9.

            	
              Withholding.  The
      Company will deduct and withhold from the payments made to Employee under
      this Agreement, state and federal income taxes, FICA and other amounts
      normally withheld from compensation due
  employees.

            

    

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              10.

            	
              Non-Disclosure of
      Proprietary Information.  Employee recognizes and
      acknowledges that the Trade Secrets (as defined below) and Confidential
      Information (as defined below) of the Company and its affiliates and all
      physical embodiments thereof (as they may exist from time-to-time,
      collectively, the “Proprietary Information”) are valuable, special and
      unique assets of the Company's and its affiliates' businesses. Employee
      further acknowledges that access to such Proprietary Information is
      essential to the performance of Employee's duties under this
      Agreement.  Therefore, in order to obtain access to such
      Proprietary Information, Employee agrees that, except with respect to
      those duties assigned to him by the Company, Employee  will hold
      in confidence all Proprietary Information and will not reproduce, use,
      distribute, disclose, publish or otherwise disseminate any Proprietary
      Information, in whole or in part, and will take no action causing, or fail
      to take any action necessary to prevent causing, any Proprietary
      Information to lose its character as Proprietary Information, nor will
      Employee make use of any such information for Employee's own purposes or
      for the benefit of any person, firm, corporation, association or other
      entity (except the Company) under any
  circumstances.

            

    

    

    For
purposes of this Agreement, the term “Trade Secrets” means information,
including, but not limited to, any technical or nontechnical data, formula,
pattern, compilation, program, device, method, technique, drawing, process,
financial data, financial plan, product plan, list of actual or potential
customers or suppliers, or other information similar to any of the foregoing,
which derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons
who can derive economic value from its disclosure or use.  For
purposes of this Agreement, the term “Trade Secrets” does not include
information that Employee can show by competent proof (i) was known to Employee
and reduced to writing prior to disclosure by the Company (but only if Employee
promptly notifies the Company of Employee’s prior knowledge); (ii) was generally
known to the public at the time the Company disclosed the information to
Employee;  (iii) became generally known to the public after disclosure
by the Company through no act or omission of Employee; or (iv) was disclosed to
Employee by a third party having a bona fide right both to possess the
information and to disclose the information to Employee.  The term
“Confidential Information” means any data or information of the Company, other
than trade secrets, which is valuable to the Company and not generally known to
competitors of the Company.  The provisions of this Section 6 will
apply to Trade Secrets for so long as such information remains a trade secret
and to Confidential Information during Employee’s employment with the Company
and for a period of two (2) years following any termination of Employee’s
employment with the Company for whatever reason.

    

    
      	
              11.

            	
              Non-Solicitation
      Covenants.  Employee agrees that during Employee's
      employment by the Company and for a period of  two (2) year
      following the termination of Employee's employment for whatever reason,
      Employee will not, directly or indirectly, on Employee's own behalf or in
      the service of or on behalf of any other individual or entity, divert,
      solicit or attempt to divert or solicit any individual or entity (i) who
      is a client of the Company at any time during the six (6)-month period
      prior to Employee's termination of employment with the Company (“Client”),
      or was actively sought by the Company as a prospective client, and (ii)
      with whom Employee had material contact while employed by the Company to
      provide  similar services or products as such provided by
      Employee for the Company to such Clients or prospects.  Employee
      further agrees and represents that during Employee's employment by the
      Company and for a period of  two (2) year following any
      termination of Employee's employment for whatever reason, Employee will
      not, directly or indirectly, on Employee's own behalf or in the service
      of, or on behalf of any other individual or entity, divert, solicit or
      hire away, or attempt to divert, solicit or hire away, to or for any
      individual or entity which is engaged in providing similar services or
      products to that provided by the Company, any person employed by the
      Company for whom Employee had supervisory responsibility or with whom
      Employee had material contact while employed by the Company, whether or
      not such employee is a full-time employee or temporary employee of the
      Company, whether or not such employee is employed pursuant to written
      agreement and whether or not such employee is employed for a determined
      period or at-will.  For purposes of this Agreement, “material
      contact” exists between Employee and a Client or potential Client when (1)
      Employee established and/or nurtured the Client or potential Client; (2)
      the Client or potential Client and Employee interacted to further a
      business relationship or contract with the Company; (3) Employee had
      access to confidential information and/or marketing strategies or programs
      regarding the Client or potential Client; and/or (4) Employee learned of
      the Client or potential Client through the efforts of the Company
      providing Employee with confidential Client information, including but not
      limited to the Client’s identify, for purposes of furthering a business
      relationship.  

            

    

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
              12.

            	
              Existing Restrictive
      Covenants.  Except as provided in Exhibit B, Employee has
      not entered into any agreement with any employer or former employer: (a)
      to keep in confidence any confidential information, or (b) to not compete
      with any former employer.  Employee represents and warrants that
      Employee's employment with the Company does not and will not breach any
      agreement which Employee has with any former employer to keep in
      confidence confidential information or not to compete with any such former
      employer.  Employee will not disclose to the Company or use on
      its behalf any confidential information of any other party required to be
      kept confidential by Employee.

            

    

    

    
      	
              13.

            	
              Return of Proprietary
      Information.  Employee acknowledges that as a result of
      Employee's employment with the Company, Employee may come into the
      possession and control of Proprietary Information, such as proprietary
      documents, drawings, specifications, manuals, notes, computer programs, or
      other proprietary material.  Employee acknowledges, warrants and
      agrees that Employee will return to the Company all such items and any
      copies or excerpts thereof, and any other properties, files or documents
      obtained as a result of Employee's employment with the Company,
      immediately upon the termination of Employee's employment with the
      Company.

            

    

    

    
      	
              14.

            	
              Proprietary
      Rights.  During the course of Employee's employment with
      the Company, Employee may make, develop or conceive of useful processes,
      machines, compositions of matter, computer software, algorithms, works of
      authorship expressing such algorithm, or any other discovery, idea,
      concept, document or improvement which relates to or is useful to the
      Company's Business (the “Inventions”), whether or not subject to copyright
      or patent protection, and which may or may not be considered Proprietary
      Information.  Employee acknowledges that all such Inventions
      will be “works made for hire” under United States copyright law and will
      remain the sole and exclusive property of the Company.  Employee
      also hereby assigns and agrees to assign to the Company, in perpetuity,
      all right, title and interest Employee may have in and to such Inventions,
      including without limitation, all copyrights, and the right to apply for
      any form of patent, utility model, industrial design or similar
      proprietary right recognized by any state, country or
      jurisdiction.  Employee further agrees, at the Company's request
      and expense, to do all things and sign all documents or instruments
      necessary, in the opinion of the Company, to eliminate any ambiguity as to
      the ownership of, and rights of the Company to, such Inventions, including
      filing copyright and patent registrations and defending and enforcing in
      litigation or otherwise all such
  rights.  

            

    

    

    Employee
will not be obligated to assign to the Company any Invention made by Employee
while in the Company's employ which does not relate to any business or activity
in which the Company is or may reasonably be expected to become engaged, except
that Employee is so obligated if the same relates to or is based on Proprietary
Information to which Employee will have had access during and by virtue of
Employee's employment or which arises out of work assigned to Employee by the
Company.  Employee will not be obligated to assign any Invention which
may be wholly conceived by Employee after Employee leaves the employ of the
Company, except that Employee is so obligated if such Invention involves the
utilization of Proprietary Information obtained while in the employ of the
Company.  Employee is not obligated to assign any Invention that
relates to or would be useful in any business or activities in which the Company
is engaged if such Invention was conceived and reduced to practice by Employee
prior to Employee's employment with the Company.  Employee agrees that
any such Invention is set forth on Exhibit “A” to this Agreement.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              15.

            	
              Remedies.  Employee
      agrees and acknowledges that the violation of any of the covenants or
      agreements contained in Sections 10 through 14 of this Agreement would
      cause irreparable injury to the Company, that the remedy at law for any
      such violation or threatened violation thereof would be inadequate, and
      that the Company will be entitled, in addition to any other remedy, to
      temporary and permanent injunctive or other equitable relief without the
      necessity of proving actual damages or posting a
  bond.

            

    

    

    
      	
              16.

            	
              Severability.  In
      case one or more of the provisions contained in this Agreement is for any
      reason held to be invalid, illegal or unenforceable in any respect, the
      parties agree that it is their intent that the same will not affect any
      other provision in this Agreement, and this Agreement will be construed as
      if such invalid or illegal or unenforceable provision had never been
      contained herein.  It is the intent of the parties that this
      Agreement be enforced to the maximum extent permitted by
    law.

            

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	
              17.

            	
              Entire
      Agreement.  This Agreement embodies the entire agreement
      of the parties relating to the subject matter of this Agreement and
      supersedes all prior agreements, oral or written, regarding the subject
      matter hereof.   No amendment or modification of this
      Agreement will be valid or binding upon the parties unless made in writing
      and signed by the parties.

            

    

    

    
      	
              18.

            	
              Governing
      Law.  This Agreement is entered into and will be
      interpreted and enforced pursuant to the laws of the State of New
      Jersey.  The parties hereto hereby agree that the appropriate
      forum and venue for any disputes between any of the parties hereto arising
      out of this Agreement shall be any federal court in the state where the
      Employee has his principal place of residence and each of the parties
      hereto hereby submits to the personal jurisdiction of any such
      court.  The foregoing shall not limit the rights of any party to
      obtain execution of judgment in any other jurisdiction.  The
      parties further agree, to the extent permitted by law, that a final and
      unappealable judgment against either of them in any action or proceeding
      contemplated above shall be conclusive and may be enforced in any other
      jurisdiction within or outside the United States by suit on the judgment,
      a certified exemplified copy of which shall be conclusive evidence of the
      fact and amount of such judgment.

            

    

    

    
      	
              19.

            	
              Surviving
      Terms.  Sections 4, 10, 11, 14, 15 and 18 of this
      Agreement shall survive termination of this
  Agreement.

            

    

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first above written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	COMPANY:	 
      	
                                    EMPLOYEE:

                                  
	 	 
      	 
      	 
      
	CICERO,
      INC.	 
      	 
      
	 	 
      	 
      	 
      
	 	 
      	 
      	 
      
	 	 
      	 
      	 
      
	      
                                    By:

                                  	
                                     

                                  	 
      	 
	      
                                    Name:

                                  	
                                     

                                  	 
      	
                                    John
      P. Broderick

                                  
	      
                                    Title:

                                  	
                                     

                                  	 
      	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    EXHIBIT
A

    

    INVENTIONS

     

    

     

    
      
        
          	 
      	
                  Employee
      represents that there are no Inventions.

                	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	___________________
	 
      	 
      	
                  Employee
      Initials

                

        

      

    

     

    
 

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
B

    

    EXISTING RESTRICTIVE
COVENANTS

     

     

     

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
C

    

    VARIABLE
COMPENSATION

    

    

    Annual Cash
Bonus:

    

    Employee
is entitled to an annual cash bonus payable after the Company has reported its
results for the year. This annual cash bonus is tied to Operating Net Income
before taxes (defined as above)  as per the chart below:

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 	
                                  Operating
      Net Income Net Income Range (before tax)

                                	 	 	 	 
	 
      	 	 	 	 	 	 	 	 	 
	 
      	 	
                                  From

                                	 	 	
                                  To

                                	 	 	 
      

                                  Variable
      Compensation

                                	 
	 
      	 	
                                  Less
      than $1,000,000

                                	 	 	 	 	 	
                                  None

                                	 
	
                                  Tier
      1

                                	 	$	$1,000,000	 	 	$	1,499,999	 	 	$	100,000	 
	
                                  Tier
      2

                                	 	$	1,500,000	 	 	$	1,999,999	 	 	$	200,000	 
	
                                  Tier
      3

                                	 	
                                  greater
      than $2,000,000

                                	 	 	 	 	 	 	$	300,000	 

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
              Performance
significantly in excess of Tier 3 may result in an additional reward at the
discretion
of the Compensation Committee

       

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    EXHIBIT
D

    

    SHORT
TERM VARIABLE COMPENSATION

    

    

    In order
to reach a targeted compensation for 2008 the Employee will receive a Bonus of
8.3% of the value of either the Continental or ACS-Humana contract effective
upon payment and capped at $25,000.

     

    

       

      12

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