Document:

ex10_22.htm

    
      
        

      
Exhibit 10.22

    

    CICERO,
INC.

    

    2007
EMPLOYEE  STOCK OPTION PLAN

    
      
        
        

      

      
         

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.22

    TABLE OF
CONTENTS

    

    

    
      	 
      	 
      	
              Page

            
	
              ARTICLE
      I.

            	
              PURPOSE

            	
              1

            
	 	 	 
	
              ARTICLE
      II.

            	
              DEFINITIONS

            	
              1

            
	 	 	 
	
              ARTICLE
      III.

            	
              ADMINISTRATION

            	
              3

            
	 	 	 
	
              ARTICLE
      IV.

            	
              SHARE
      AND OTHER LIMITATIONS

            	
              5

            
	 	 	 
	
              ARTICLE
      V.

            	
              ELIGIBILITY

            	
              6

            
	 	 	 
	
              ARTICLE
      VI.

            	
              STOCK
      OPTION GRANTS

            	
              6

            
	 	 	 
	
              ARTICLE
      VII.

            	
              NON-TRANSFERABILITY

            	
              9

            
	 	 	 
	
              ARTICLE
      VIII.

            	
              CHANGE
      IN CONTROL PROVISIONS

            	
              9

            
	 	 	 
	
              ARTICLE
      IX.

            	
              TERMINATION
      OR AMENDMENT OF PLAN

            	
              11

            
	 	 	 
	
              ARTICLE
      X.

            	
              UNFUNDED
      PLAN

            	
              11

            
	 	 	 
	
              ARTICLE
      XI.

            	
              GENERAL
      PROVISIONS

            	
              11

            
	 	 	 
	
              ARTICLE
      XII.

            	
              EFFECTIVE
      DATE OF PLAN

            	
              13

            
	 	 	 
	
              ARTICLE
      XIII.

            	
              TERM
      OF PLAN

            	
              13

            
	 	 	 
	
              ARTICLE
      XIV.

            	
              NAME
      OF PLAN

            	
              13

            

    

    

    
      
        
          
          

        

        
           

          
            

          

        

        
          
          

        

      

    

    
       

      Exhibit
10.22

    

     

     

    CICERO,
INC.

    

    2007
EMPLOYEE  STOCK OPTION PLAN

    

    

    ARTICLE
I

    

    PURPOSE

    

    The
purpose of this Cicero, Inc. 2007 Employee Stock Option Plan (the “Plan”) is to
enhance the profitability and value of Cicero, Inc. (the “Company”) for the
benefit of its shareholders by enabling the Company to offer certain employees
and Consultants (as defined herein) of the Company and its Subsidiaries (as
defined herein) and non-employee directors of the Company stock based incentives
in the Company, thereby creating a means to raise the level of stock ownership
by employees, Consultants and non-employee directors in order to attract, retain
and reward such individuals and strengthen the mutuality of interests between
such individuals and the Company’s shareholders.

    

    

    ARTICLE
II

    

    DEFINITIONS

    

    For
purposes of this Plan, the following terms shall have the following
meanings:

    

    2.1.           “Board”
shall mean the Board of Directors of the Company.

    

    2.2.           “Cause”
shall mean, with respect to a Participant’s Termination of Relationship, unless
otherwise determined by the Committee at grant, willful misconduct in connection
with the Participant’s employment of consultancy or willful failure to perform
his or her employment of consultancy responsibilities in the best interests of
the Company (including, without limitation, breach by the Participant of any
provision of any employment, non-disclosure, non-competition or other similar
agreement between the Participant and the Company), as determined by the
Committee, which determination shall be final, conclusive and
binding.  With respect to a Participant’s Termination of Directorship,
Cause shall mean any act or failure to act that constitutes “cause” for removal
of a director under applicable New Jersey law.

    

    2.3.           “Change
in Control” shall have the meaning set forth in Article VIII.

    

    2.4.           “Code”
shall mean the Internal Revenue Code of 1986, as amended.  Any
reference to any section of the Code shall also be a reference to any successor
provision.

    

    2.5.           “Committee”
shall mean a committee of the Board appointed from time to time by the Board,
which Committee shall be intended to consist of three or more directors who are
non-employee directors as defined in Rule 16b-3 (as defined herein) and outside
directors as defined under Section 162(m) of the Code (as defined
herein).  If for any reason the appointed Committee does not meet the
requirements of Rule 16b-3 or Section 162(m) of the Code, such noncompliance
with the requirements of Rule 16b-3 or Section 162(m) of the Code shall not
affect the validity of the awards, grants, interpretations or other actions of
the Committee.  Notwithstanding the forgoing, with respect to grants
of Options to non-employee directors and any action hereunder relating to
Options held by non-employee directors, the Committee shall mean the
Board.  If and to the extent that no Committee exists which has the
authority to administer the Plan, the functions of the Committee shall be
exercised by the Board.

    

    2.6.           “Common
Stock” means the Common Stock, par value $0.001 per share, of the
Company.

    

    2.7.           “Consultant”
means any advisor or consultant to the Company or its subsidiaries who is
eligible pursuant Article V to be granted Options under this Plan.

    

    2.8.           “Disability”
shall mean total and permanent disability, as defined in Section 22(e)(3) of the
Code.

    
      
        
        

      

      
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      Exhibit
10.22

    2.9.           “Effective
Date” shall mean the effective date of the Plan as defined in Article
XII.

    

    2.10.         “Eligible
Employee” shall mean the employees of the Company and its subsidiaries who are
eligible pursuant to Article V to be granted Options under this
Plan.

    

    2.11.         “Exchange
Act” shall mean the Securities Exchange Act of 1934.

    

    2.12.         “Fair
Market Value” for purposes of this Plan, unless otherwise required by an
applicable provision of the Code or any regulations issued thereunder, shall
mean, as of any date, the last sales price reported for the Common Stock on the
applicable date (i) as reported by the principal national securities exchange in
the United States on which it is then traded, or (ii) if not traded on any such
national securities exchange, as quoted on an automated quotation system
sponsored by the National Association of Securities Dealers.  If the
Common Stock is not readily tradable on a national securities exchange or any
system sponsored by the National Association of Securities Dealers, its Fair
Market Value shall be set in good faith by the Committee.  For
purposes of the grant of any Option, the applicable date shall be the date for
which the last sales price is available at the time of the grant.

    

    2.13.        “Good
Reason” shall mean, with respect to a Participant’s Termination of Relationship,
unless otherwise determined by the Committee at grant, a voluntary termination
due to “good reason,” as the Committee, in its sole discretion, decides to treat
as a Good Reason termination.  Notwithstanding the foregoing, with
respect to a Participant’s Termination of Employment, Good Reason shall mean, in
the case where there is an employment agreement between the Company or a
Subsidiary and the Participant in effect at the time of the grant that defines
“good reason” (or words of like import), a termination that is or would be
deemed “good reason” (or words of like import) as defined under such employment
agreement at the time of grant.

    

    2.14.        “Incentive
Stock Option” shall mean any Stock Option awarded under this Plan intended to
be, and designated as, an “Incentive Stock Option” within the meaning of Section
422 of the Code.

    

    2.15.        “Non-Qualified
Stock Option” shall mean any Stock Option awarded under this Plan that is not an
Incentive Stock Option.

    

    2.16.        “Participant”
shall mean the following persons to whom an Option has been granted pursuant to
this Plan: (i) Eligible Employees of the Company or its Subsidiaries; (ii)
Consultants of the Company or its Subsidiaries; and (iii) non-employee directors
of the Company.

    

    2.17.        “Retirement”
with respect to a Participant’s Termination of Relationship shall mean a
Termination of Relationship without Cause from the Company and/or a Subsidiary
by a Participant who has attained (i) at least the age of sixty-five (65) or
(ii) such earlier date after age fifty-five (55) as approved by the Committee
with regard to such Participant.  With respect to a Participant’s
Termination of Directorship, Retirement shall mean the failure to stand for
reelection or the failure to be reelected after a Participant has attained the
age of sixty-five (65).

    

    2.18.        “Rule
16b-3” shall mean Rule 16b-3 under Section 16(b) of the Exchange Act as then in
effect or any successor provision.

    

    2.19.        “Section
162(m) of the Code” shall mean the exception for performance based compensation
under Section 162(m) of the Code and any Treasury regulations
thereunder.

    

    2.20.        “Stock
Options” or “Option” shall mean any option to purchase shares of Common Stock
granted to Eligible Employees, Consultants or non-employee directors pursuant to
Article VI.

    

    2.21.        “Subsidiary”
shall mean any corporation that is defined as a subsidiary corporation in
Section 424(f) of the Code.

    

    2.22.        “Ten
Percent Shareholder” shall meant a person owning Common Stock of the Company
possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company as defined in Section 422 of the
Code.

    
      
        
        

      

      
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      Exhibit
10.22

    2.23.        “Termination
of Consultancy” shall mean (i) an individual is no longer acting as a Consultant
to the Company or a Subsidiary or (ii) when an entity which is retaining a
Participant as a Consultant ceases to be a Subsidiary, unless the Participant
thereupon is retained as a Consultant by the Company or another
Subsidiary.

    

    2.24.        “Termination
of Directorship” shall mean, with respect to a non-employee director, that the
non-employee director has ceased to be a director of the Company for any
reason.

    

    2.25.    
   “Termination of Employment” shall mean (i) a termination of
service (for reasons other than a military or personal leave of absence granted
by the Company) of a Participant from the Company and its Subsidiaries or (ii)
when an entity which is employing a Participant ceases to be a Subsidiary,
unless the Participant thereupon becomes employed by the Company or another
Subsidiary.

    

    2.26.        “Termination
of Relationship” shall mean a Termination of Employment or a Termination of
Consultancy, as applicable.

    

    2.27.        “Transfer”
or “Transferred” shall mean anticipate, alienate, attach, sell, assign, pledge,
encumber, charge or otherwise transfer.

    
 

    2.28.        “Withholding
Election” shall have the meaning set forth in Section 11.4.

    

    

    ARTICLE
III

    

    ADMINISTRATION

    

    

    3.1.           The
Committee.  The Plan shall be administered and interpreted by
the Committee.

    

    3.2.           Awards.  The
Committee shall have full authority to grant Stock Options, pursuant to the
terms of this Plan.  In particular, the Committee shall have the
authority:

    

    (a)            to
select the Eligible Employees, Consultants and non-employee directors to whom
Stock Options may from time to time be granted hereunder;

    

    (b)            to
determine whether and to what extent Stock Options are to be granted hereunder
to one or more Eligible Employees, Consultants or non-employee
directors;

    

    (c)            to
determine, in accordance with the terms of the Plan, the number of shares of
Common Stock to be covered by each Stock Option granted to an Eligible Employee,
Consultant or non-employee director;

    

    (d)            to
determine the terms and conditions, not inconsistent with the terms of this
Plan, of any Stock Options granted hereunder to an Eligible Employee, Consultant
or non-employee director (including, but not limited to, the share price, any
restriction or limitation, any vesting schedule or acceleration thereof, or any
forfeiture restrictions or waiver thereof, and the share of Common Stock
relating thereto, based on such factors, if any, as the Committee shall
determine, in its sole discretion);

    

    (e)            to
determine whether and under what circumstances a Stock Option may be settled in
cash and/or Common Stock under Subsection 6.3(d);

     

    (f)            to
determine whether to require Eligible Employees, Consultants, and non-employee
directors, as a condition of the granting of any Option, to not sell or
otherwise dispose of shares acquired pursuant to the exercise of an Option for a
period of time as determined by the Committee, in its sole discretion, following
the date of the acquisition of such Option.

    
      
        
        

      

      
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      Exhibit
10.22

    3.3.           Guidelines.  Subject
to Article IX hereof, the Committee shall have the authority to:

    

    (a)            adopt,
alter and repeal such administrative rules, guidelines and practices governing
this Plan and perform all acts, including the delegation of its administrative
responsibilities, as it shall, from time to time, deem advisable;

    

    (b)            construe
and interpret the terms and provisions of this Plan and any Option granted under
this Plan (and any agreements relating thereto); and

    

    (c)            otherwise
supervise the administration of this Plan.

    

    The
Committee may correct any defect, supply any omission or reconcile any
inconsistency in this Plan or in any agreement relating thereto in the manner
and to the extent it shall deem necessary to carry this Plan into effect, but
only to the extent any such action would be permitted under the applicable
provisions of Rule 16b-3 (if any) and the applicable provisions of Section
162(m) of the Code (if any).  The Committee may adopt special
guidelines and provisions for persons who are residing in, or subject to, the
taxes of, countries other than the United States to comply with applicable tax
and securities laws.  If and solely to the extent applicable, this
Plan is intended to comply with Rule 16b-3 and Section 162(m) of the Code and
shall be limited, construed and interpreted in a manner so as to comply
therewith.

    

    3.4.            Decisions
Final.  Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board or the
Committee (or any of its members) arising out of or in connection with the Plan
shall be within the absolute discretion of all and each of them, as the case may
be, and shall be final, conclusive and binding on the Company and all employees,
directors, consultants and Participants and their respective heirs, executors,
administrators successors and assigns.

    

    3.5.            Reliance on
Counsel.  The Company, the Board or the Committee may consult
with legal counsel, who may be counsel for the Company or other counsel, with
respect to its obligations or duties hereunder, or with respect to any action or
proceeding or any question of law, and shall not be liable with respect to any
action taken or omitted by it in good faith pursuant to the advice of such
counsel.

    

    3.6.            Procedures.  If
the Committee is appointed, the Board shall designate one of the member of the
Committee as chairman and the Committee shall hold meetings, subject to the
Bylaws of the Company, at such times and places as it shall deem
advisable.  A majority of the Committee members shall constitute a
quorum.  All determinations of the Committee shall be made by a
majority of its members.  Any decision or determination reduced to
writing and singed by all Committee members in accordance with the Bylaws of the
Company shall be fully effective as if it had been made by a vote at a meeting
duly called and held.  The Committee shall keep minutes of its
meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable.

    

    3.7.            Designation of Advisors –
Liability.

    

    (a)            The
Committee may designate officers of the Company and professional advisors to
assist the Committee in the administration of the Plan and may grant authority
to employees to execute agreements or other documents on behalf of the
Committee.

    

     (b)            The
Committee may employ such legal counsel, consultants and agents as it may deem
desirable for the administration of the Plan and may rely upon any opinion
received from any such counsel or consultant and any computation received from
such consultant or agent.  Expenses incurred by the Committee or Board
in the engagement of any such counsel, consultant or agent shall be paid by the
Company.  The Committee, its members and any person designated
pursuant to paragraph 3.7.1 above shall not be liable for any action or
determination made in good faith with respect to the Plan.  To the
maximum extent permitted by applicable law, no officer or former officer of the
Company or member or former member of the Committee or the Board shall be liable
of any action or determination made in good faith with respect to the Plan or
any Stock Option granted under it.  To the maximum extent permitted by
applicable law and the Certificate of Incorporation and Bylaws of the Company
and to the extent not covered by insurance, each officer or former officer and
member and former member of the Committee or the Board shall be indemnified and
held harmless by the Company against any cost or expense (including reasonable
fees of counsel reasonably acceptable to the Company) or liability (including
any sum paid in settlement of a claim with the approval of the Company), and
advanced amounts necessary to pay the foregoing at the earliest time and to the
fullest extent permitted, arising out of any act or omission to act in
connection with the Plan, except to the extent arising out of such officer’s or
former officer’s, member’s or former member’s own fraud or bad
faith.  Such indemnification shall be in addition to any rights of
indemnification the officers, directors or members or former officers, director
or members may have under applicable law or under the Certificate of
Incorporation or Bylaws of the Company or Subsidiary.  Notwithstanding
anything else herein, this indemnification will not apply to the actions or
determinations made by an individual with regard to Stock Options granted to him
or her under this Plan.

    
      
        
        

      

      
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      Exhibit
10.22

    ARTICLE
IV

    

    SHARE AND
OTHER LIMITATIONS

    

    4.1.            Shares.

    

    (a)            General
Limitation.  The aggregate number of shares of Common Stock
which may be issued under this Plan with respect to which Stock Options may be
granted shall not exceed 4,500,000 shares (subject to increase or decrease
pursuant to Section 4.2) which may be either authorized and unissued Common
Stock or Common Stock held or acquired for the treasury of the
Company.  If any Stock Option granted under this Plan expires,
terminates or is cancelled for any reason without having been exercised in full
or the Company repurchases any Stock Option pursuant to Section 6.3(f), the
number of shares of Common Stock underlying the repurchased Option, and/or the
number of shares of Common Stock underlying any unexercised Option shall again
be available for the purposes of Options under the Plan.

    

    (b)            Individual Participant
Limitations.  The maximum number of shares of Common Stock
subject to any Option which may be granted under this Plan to each Participant
shall not exceed 1,000,000 shares (subject to any increase or decrease pursuant
to Section 4.2) during any fiscal year of the Company.

    

    4.2.            Changes.

    

    (a)            The
existence of the Plan and the Options granted hereunder shall not affect in any
way the right or power of the Board or the shareholders of the Company to make
or authorize any adjustment, recapitalization, reorganization or other change in
the Company’s capital structure or its business, any merger or consolidation of
the Company or any Subsidiary, any issue of bonds, debentures, preferred or
prior preference stock ahead of or affecting Common Stock, the dissolution or
liquidation of the Company or any Subsidiary, any sale or transfer of all or
part of the assets or business or any other corporate act of
proceeding.

    

    (b)            In
the event of any such change in the capital structure or business of the Company
by reason of any stock dividend or distribution, stock split or reverse stock
split, recapitalization, reorganization, merger, consolidation, split-up,
combination or exchange of shares, distribution with respect to its outstanding
Common Stock or capital stock other than Common Stock, sale or transfer of all
or part of the assets or business, reclassification of its capital stock, or any
similar changes affecting the Company’s capital structure or business and the
Committee determines an adjustment is appropriate under the Plan, the number and
kind of shares or other property (including cash) to be issued upon exercise of
an outstanding Option and the purchase price thereof shall be appropriately
adjusted consistent with such change in such manner as the Committee may deem
equitable to prevent substantial dilution or enlargement of the rights granted
to, or available for, Participants under this Plan or as otherwise necessary to
reflect the change, and, any such adjustment determined by the Committee shall
be final, conclusive and binding on the Company and all Participants and
employees and their respective heirs, executors, administrators, successors and
assigns.

    
      
        
        

      

      
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      Exhibit
10.22

    (c)            Fractional
Shares of Common Stock resulting from any adjustment in Options pursuant to this
Article IV shall be aggregated until, and eliminated at, the time of exercise by
rounding down from fractions less than one-half (1/2) and rounding up for
fractions equal to or greater than one-half (1/2).  No cash
settlements shall be made with respect to fractional shares eliminated by
rounding.  Notice of any adjustment shall be given by the Committee to
each Participant whose Option has been adjusted and such adjustment (whether or
not such notice is given) shall be effective and binding for all purposes of the
Plan.

    

    (d)            In
the event of a merger or consolidation in which the Company is not the surviving
entity or in the event of any transaction that results in the acquisition of all
or substantially all of the Company’s outstanding Common Stock by a single
person or entity or by a group of persons or entities acting in concert, or in
the event of the sale or transfer of all or substantially all of the Company’s
assets (all of the foregoing being referred to as “Acquisition Events”), then
the Committee may, in its sole discretion, terminate all outstanding Options of
Eligible Employees, Consultants and non-employee directors, effective as of the
date of the Acquisition Event, by delivering notice of termination to each such
Participant at least twenty (20) days prior to the date of consummation of the
Acquisition Event; provided, however, that during the period from the date on
which such notice of termination is delivered to the consummation of the
Acquisition Event, , each such Participant shall have the right to exercise in
full all of his or her Options that are outstanding (without regard to
exercisability otherwise contained in the Option Agreement) but contingent on
occurrence of the Acquisition Event, and provided that if the Acquisition Event
does not take place within the specified period after giving such notice for any
reason whatsoever, the notice and exercise shall be null and void.

    

    If the
Acquisition Event occurs, to the extent the Committee does not terminate the
outstanding Options pursuant to this Section 4.2(d), then the provisions of
Section 4.2(b) shall apply.

    

    

    ARTICLE
V

    

    ELIGIBILITY

    

    All
employees and Consultants of the Company and its subsidiaries and all
non-employee directors of the Company are eligible to be granted Stock Options
under this Plan.  Eligibility under this Plan may be determined by the
Committee in its sole discretion.

    

    

    ARTICLE
VI

    

    STOCK
OPTION GRANTS

    

    6.1.            Options.  Each
Stock Option granted hereunder shall be one of two types: (i) an Incentive Stock
Option intended to satisfy the requirements of Section 422 of the Code; or (ii)
a Non-Qualified Stock Option.

    

    6.2.            Grants.  The
Committee shall have the authority to grant to any Eligible Employee one or more
Incentive Stock Options, Non-Qualified Stock Options or both types of Stock
Options.  The Committee shall have the authority to grant to any
Consultants one or more Non-Qualified Stock Options.  The Board shall
have the authority to grant to any non-employee director one or more
Non-Qualified Stock Options.  To the extent that any Stock Option does
not qualify as an Incentive Stock Option (whether because of its provisions or
the time or manner of its exercise or otherwise), such Stock Option or the
portion thereof which does not qualify, shall constitute a separate
Non-Qualified Stock Option.

    

    6.3.            Terms of
Options.  Options granted under this Plan shall be subject to
the following terms and conditions, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of this Plan,
as the Committee shall deem desirable:

    

     (a)            Option Price.  The
option price per share of Common Stock purchasable under an Incentive Stock
Option shall be determined by the Committee at the time of grant but shall not
be less than 100% of the Fair Market Value of the share of Common Stock at the
time of grant; provided, however, if an Incentive Stock Option is granted to a
Ten Percent Shareholder, the purchase price shall be no less than 110% of the
Fair Market Value of the Common Stock.  The purchase price of shares
of Common Stock subject to Non-Qualified Stock Options shall be determined by
the Committee.

    
      
        
        

      

      
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      Exhibit
10.22

    (b)            Option Term.  The
term of each Stock Option shall be fixed by the Committee, but no Stock Option
shall be exercisable more than ten (10) years after the date the Option is
granted; provided, however, that the term of an Incentive Stock Option granted
to a Ten Percent Shareholder may not exceed five (5) years.

    

    (c)            Exercisability.  Stock
Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee at grant.  If the
Committee provides, in its sole discretion, that any Stock Option is exercisable
subject to certain limitations (including, without limitation, that it is
exercisable only in installments or within certain time periods), the Committee
may waive such limitations on the exercisability  at any time at or
after the grant date in whole or in part (including, without limitation, that
the Committee may waive the installment exercise provisions or accelerate the
time which Options may be exercised), based on such factors, if any, as the
Committee shall determine, in its sole discretion.

    

    (d)           Method of
Exercise.  Subject to whatever installment exercise and waiting
period provisions apply under 6.3(c) above, Stock Options may be exercised in
whole or in part at any time during the Option term, by giving written notice of
exercise to the Company specifying the number of shares to be
purchased.  Such notice shall be accompanied by payment in full of the
purchase price in such form, or other arrangement for the satisfaction of the
purchase price, as the Committee may accept.  If and to the extent
determined by the Committee in its sole discretion at or after the grant,
payment in full or in part may also be made in the form of Common Stock withheld
from the shares to be received on the exercise of the Stock Option hereunder or
Common Stock owned by the Participant (and for which the Participant has good
title, free and clear or all liens and encumbrances) based on the Fair Market
Value of the Common Stock on the payment date as determined by the
Committee.  No shares of Common Stock shall be issued until payment,
as provided herein, therefore has been made or provided for and the Participant
shall have none of the rights of a holders of shares of Common Stock until such
shares of Common Stock have been issued.

    

    (e)            Incentive Stock Option
Limitations.  To the extent that the aggregate Fair Market
value (determined as of the time of grant) of the Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by an Eligible
Employee during any calendar year under the Plan and/or other stock option plan
of the Company or any Subsidiary or parent corporation (within the meaning of
Section 424(e) of the Code) exceeds $100,000, such Options shall be treated as
Options which are not Incentive Stock Options.

    

    Should
the foregoing provision not be necessary in order for the Stock Options to
qualify as Incentive Stock Options, or should any additional provisions be
required, the Committee may amend the Plan accordingly, without the necessity of
obtaining the approval of the shareholders of the Company.

    

    (f)            Buy Out and Settlement
Provisions.  The Committee may at any time on behalf of the
Company offer to buy out an Option previously granted, based on such terms and
conditions as the Committee shall establish and communicate to the Participant
at the time that such offer is made.

    

    (g)            Form, Modification, Extension and
Renewal of Options.  Subject to the terms and conditions and
within the limitations of the Plan, an Option shall be evidenced by such form of
agreement or grant as approved by the Committee, and the Committee may modify,
extend or renew outstanding Options granted under the Plan (provided that the
rights of a Participant are not reduced without his consent), or accept the
surrender of outstanding Options (up to the extent not theretofore exercised)
and authorize the granting of new Options in substitution thereof (to the extent
not theretofore exercised).

    

    (h)            Other Terms and
Conditions.  Options may contain such other provisions, which
shall not be inconsistent with any of the foregoing terms of the Plan, as the
Committee shall deem appropriate including, without limitation, permitting
“reloads” such that the same number of Options are granted as the number of
Options exercised, shares used to pay for the exercise price of Options or
shares used to pay withholding taxes (“Reloads”).  With respect to
Reloads, the exercise price of the new Stock Option shall be the Fair Market
Value on the date of the Reload and the term of the Stock Option shall be the
same as the remaining term of the Options that are exercised, if applicable, or
such other exercise price and term as determined by the
Committee.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.22

    6.4.           Termination of
Relationship.  The following rules apply with regard to Options
upon the Termination of Relationship of a Participant:

    

    (a)            Termination by Reason of
Death.  If a Participant’s Termination of Relationship is by
reason of death, any Stock Option held by such Participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant’s
estate are reduced, thereafter, may be exercised, to the extent exercisable at
the Participant’s death, by the legal representative of the estate, at any time
within a period of one (1) year from the date of such death, but in no event
beyond the expiration of the stated term of the Stock Option.

    

    (b)            Termination by Reason of
Disability.  If a Participant’s Termination of Relationship is
by reason of Disability, any Stock Option held by such Participant, unless
otherwise determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter, may be exercised, to the extent exercisable
at the Participant’s termination, by the Participant (or the legal
representative of the Participant’s estate if the Participant dies after
termination) at any time within a period of one (1) year from the date of such
termination, but in no event beyond the expiration of the stated term of such
Stock Option.

    

    (c)            Termination by Reason of
Retirement.  If a Participant’s Termination of Relationship is
by reason of Retirement, any Stock Option held by such Participant, unless
otherwise determined by the Committee at grant, or, if no rights of the
Participant are reduced, thereafter, shall be fully vested and may thereafter be
exercised by the Participant at any time within a period of one (1) year from
the date of such termination, but in no event beyond the expiration of the
stated term of such Stock Option; provided, however, that, if the Participant
dies within such exercise period, any unexercised Stock Option held by such
Participant shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of one (1) year (or such other
period as the Committee may specify at grant or, if no rights of Participant’s
estate are reduced, thereafter) from the date of such death, but in no event
beyond the expiration of the stated term of such Stock Option.

    

    (d)            Involuntary Termination Without
Cause or Termination for Good Reason.  If a Participant’s
Termination of Relationship is by involuntary termination without Cause or for
Good Reason, any Stock Option held by such Participant, unless otherwise
determined by the Committee at grant or, if no rights of the Participant are
reduced, thereafter, may be exercised, to the extent exercisable at termination,
by the Participant at any time within a period of ninety (90) days from the date
of such termination, but in no event beyond the expiration of the stated term of
such Stock Option.

    

    (e)            Termination Without Good
Reason.  If a Participant’s Termination of Relationship is
voluntary but without Good Reason and such Termination of Relationship occurs
prior to, or more than ninety (90) days after, the occurrence of an event which
would be grounds for Termination of Relationship by the Company for Cause
(without regard to any notice or cure period requirements), any Stock Option
held by the Participant, unless otherwise determined by the Committee at grant
or, if no rights of the Participant are reduced, thereafter, may be exercised,
to the extent exercisable at termination, by the Participant at any time within
a period of thirty (30) days from the date of such Termination of Relationship,
but in no event beyond the expiration of the stated term of such Stock
Option.

    

    (f)            Other
Termination.  Unless otherwise determined by the Committee at
grant or, if no rights of the Participant are reduced, thereafter, if a
Participant’s Termination of Relationship is for any reason other than death,
Disability, Retirement, Good Reason, involuntary termination without Cause or
voluntary termination as provided in Subsection 6.4(e) above, any Stock Option
held by such Participant shall thereupon terminate and expire as of the date of
termination, provided that (unless the Committee determines a different period
upon grant or, if no rights of the Participant are reduced, thereafter) in the
event such termination is for Cause or is a voluntary termination without Good
Reason or voluntary resignation within ninety (90) days after occurrence of an
event which would be grounds for Termination of Relationship by the Company for
Cause (without regard to any notice or cure period requirement), any Stock
Option held by Participant at the time of occurrence of the event which would be
grounds for Termination of Relationship for Cause shall be deemed to have
terminated and expired upon occurrence of the event which would be grounds for
Termination of Relationship by the Company for Cause.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.22

    6.5.           Termination of
Directorship.  The following rules apply with regard to Options
upon Termination of Directorship:

    

    (a)            Death, Disability or Otherwise
Ceasing to be a Director Other than for Cause.  Except as
otherwise determined by the Committee at grant or, if no rights of the
Participant are reduced, thereafter, upon the Termination of Directorship, on
account of Disability, death, Retirement, resignation, failure to stand for
reelection or failure to be reelected or otherwise other than as set forth in
6.5(b) below, all outstanding Options then exercisable and not exercised by the
Participant prior to such Termination of Directorship shall remain exercisable,
to the extent exercisable at the Termination of Directorship, by the Participant
or, in the case of death, by the Participant’s estate or by the person given
authority to exercise such Options by his or her will or by operation of law,
for a one (1) year period commencing on the date of the Termination of
Directorship, provided that such one (1) year period shall not extend beyond the
expiration of the stated term of such Options.

    

    (b)            Cause.  Upon
removal, failure to stand for reelection or failure to be re-nominated for
Cause, or if the Company obtains or discovers information after Termination of
Directorship that such Participant had engaged in conduct that would have
justified a removal for Cause during such directorship, all outstanding Options
of such Participant shall immediately terminate and shall be null and
void.

    

    (c)            Cancellation of
Options.  No Options that were not exercisable during the
period such person serves as a director shall thereafter become exercisable upon
a Termination of Directorship for any reason or no reason whatsoever, and such
Options shall terminate and become null and void upon Termination of
Directorship.

    

    

    ARTICLE
VII

    

    NON-TRANSFERABILITY

    

    No Stock
Option shall be Transferable by the Participant otherwise than by will or by the
laws of descent and distribution.  All Stock Options shall be
exercisable, during the Participant’s lifetime, only by the
Participant.  No Stock Option shall, except as otherwise specifically
provided by law or herein, be Transferable  in any manner, and any
attempt to Transfer any such Option shall be void, and no such Option shall in
any manner be liable for or subject to the debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such Option, nor
shall it be subject to attachment or legal process for or against such
person.

    

    ARTICLE
VIII

    

    CHANGE IN
CONTROL PROVISIONS

    

    8.1            Benefits.  In
the event of a Change in Control of the Company (as defined below), except as
otherwise provided by the Committee upon the grant of an Option, the Participant
shall be entitled to the following benefits:

    

    (a)            Subject
to paragraph (b) below, all outstanding Options of the Participants granted
prior to the Change in Control shall be fully vested and immediately exercisable
in their entirety.  The Committee, in its sole discretion, may provide
for the purchase of any such Stock Options by the Company for an amount of cash
equal to the excess of the Change in Control price (as defined below) of the
shares of Common Stock covered by the Stock Options, over the aggregate exercise
price of such Stock Options.  For purposes of this Section 8.1, Change
in Control price shall mean the higher of (i) the highest price per share of
Common Stock paid  in any transaction related to the Change in Control
of the Company or (ii) the highest Fair Market Value per share of Common Stock
at any time during thr sixty (60) day period preceding a Change in
Control.

    

    (b)            Notwithstanding
anything to the contrary herein, unless the Committee provides otherwise at the
time an Option is granted to an Eligible Employee or Consultant hereunder or
thereafter, no acceleration of exercisability shall occur with respect to such
Option if the Committee reasonably determines in good faith, prior to the
occurrence of the Change in Control, that the Options shall be honored or
assumed, or new rights substituted therefore (each such honored, assumed or
substituted option hereinafter called an “Alternative Option”), by such
Participant’s employer (or the parent of such employer), or in the case of a
Consultant, by the entity (or its parent or subsidiary) which retains the
Consultant, immediately following the Change in Control, provided that any such
Alternative Option must meet the following criteria:

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.22

    (i)           the
Alternative Option must be based on stock which is traded on an established
securities market, or which will be traded within thirty (30) days of the Change
in Control;

    

    (ii)          the
Alternative Option must provide such Participant with rights and entitlements
substantially equivalent to or better then the rights, terms and conditions
applicable under such Option, including, but not limited to, an identical or
better exercise schedule; and

    

    (iii)         the
Alternative Option must have economic value substantially equivalent to the
value of such Option (determined at the time of the Change in
Control).

    

    For
purposes of Incentive Stock Options, any assumed or substituted Option shall
comply with the requirements of Treasury regulation §1.425-1 (and any amendment
thereto).

    

    8.2            Change in
Control.  A Change in Control shall be deemed to have
occurred:

    

    (a)            upon
any “person” as such term is used in Section 13(d) and 14(d) of the Exchange Act
(other than the Company, any trustee or other fiduciary holding securities under
any employee benefit plan of the Company, any company owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership in Common Stock of the Company), becoming the
owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding securities (including,
without limitation, securities owned at the time of any increase in
ownership);

    

    (b)            upon
a merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more then fifty percent (50%) of the combined voting power of
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or

    

    (c)            upon
the shareholders’ of the Company approval of a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets other than the sale of all or
substantially all of the assets of the Company to a person or persons who
beneficially own, directly or indirectly, at least fifty percent
(50%)  or more of the combined voting power of the outstanding voting
securities of the Company at the time of the sale.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.22

    ARTICLE
IX

    

    TERMINATION
OR AMENDMENT OF PLAN

    

    9.1           Termination or
Amendment.  Notwithstanding any other provisions of this Plan,
the Board may at any time, and from time to time, amend, in whole or in part,
any or all of the provisions of the Plan, or suspend or terminate it entirely,
retroactively or otherwise; provided, however, that, unless otherwise required
by law or specifically provided herein, the rights of a Participant with respect
to the Options granted prior to such amendment, suspension or termination, may
not be impaired without the consent of the Participant and, provided further,
without the approval of the shareholders of the Company, if and to the extent
required by the applicable provisions of Rule 16b-3 or under the applicable
provisions of Section 162(m) of the Code or, with regard to Incentive Stock
Options, Section 422 of the Code, no amendment may be made which would: (i)
increase the maximum individual Participant limitations under Section 4.1(b);
(ii) change the classification of employees eligible to receive Options under
this Plan; (iii) extend the maximum option period under Section 6.3; or (iv)
require shareholder approval in order for the Plan to continue to comply with
the applicable provisions, if any, of Section 162(m) of the Code or, with
regards to Incentive Stock Options, Section 422 of the Code.  In no
event may the Plan be amended without the approval of the shareholders of the
Company  in accordance with applicable law or other requirements to
increase the aggregate number of shares of Common Stock that may be issued under
the Plan or to make any other amendment that would require shareholder approval
under the rules of any exchange or system on which the Company’s securities are
listed or traded at the request of the Company.

    

    The
Committee may amend the terms of any Option theretofore granted, prospectively
or retroactively, but, subject to Article IV above or as otherwise specifically
provided herein, no such amendment or other action by the Committee shall impair
the rights of any holder without the holder’s consent.

    

    

    ARTICLE
X

    

    UNFUNDED
PLAN

    

    10.1.         Unfunded Status if
Plan.  This Plan is intended to constitute an “unfunded” plan
for incentive compensation.  With respect to any payments as to which
a Participant has a fixed and vested interest but which are not yet made to a
Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.

    

    

    ARTICLE
XI

    

    GENERAL
PROVISIONS

    

    11.1.         Legend.  The
Committee may require each person receiving shares of Common Stock pursuant to
the exercise of a Stock Option under the Plan to represent to and agree with the
Company in writing that the Participant is acquiring the shares without a view
to distribution thereof.  In addition to any legend required by this
Plan, the certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on
Transfer.

    

    All
certificates for shares of Common Stock delivered under the Plan shall be
subject to such stock transfer orders and other restrictions as the Committee
may deem advisable under the rules, regulations and other requirement of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities association system upon whose
system the Common Stock is then quoted, any applicable federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.22

    11.2.         Other
Plans.  Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

    

    11.3.         No Rights to
Employment/Consultancy/Directorship.  Neither this Plan nor the
grant of any Option hereunder shall give any Participant or other individual any
right with respect to continuance of employment or consultancy by the Company or
any Subsidiary, nor shall there be a limitation in any way on the right of the
Company or any Subsidiary by which an employee is employed or if a consultant,
retained, to terminate his employment or consultancy at any
time.  Neither this Plan nor the grant of any Option hereunder shall
impose any obligation on the Company to retain any Participant as a director,
nor shall it impose on the part of any Participant any obligation to remain as a
director of the Company.

    

    11.4.         Withholding of
Taxes.  The Company shall have the right, if necessary or
desirable (as determined by the Company), to deduct from any payment to be made
to a Participant, or to otherwise require, prior to the issuance or delivery of
any shares of Common Stock or the payment of any cash hereunder, payment by the
Participant of, any Federal, state or local taxes required by law to be
withheld.

    

    The
Committee may permit any such withholding obligation with regard to any
Participant to be satisfied by reducing the number of shares of Common Stock
otherwise deliverable or by delivering shares of Common Stock already
owned.  Any fraction of a share of Common Stock required to satisfy
such tax obligations shall be disregarded and the amount due shall be paid
instead of cash by the Participant.

    

    11.5.         Listing and Other
Conditions.

    

    (a)            As
long as the Common Stock is listed on a national securities exchange or system
sponsored by a national securities association, the issue of any shares of
Common Stock pursuant to the exercise of an Option shall be conditioned upon
such shares being listed on such exchange or system.  The Company
shall have no obligation to issue such shares unless and until such shares are
so listed, and the right to exercise any Option with respect to such shares
shall be conditioned upon such listing and shall be suspended until such listing
has been effected.

    

    (b)            If
at any time counsel to the Company shall be of the opinion that any sale or
delivery of shares of Common Stock pursuant to the exercise of an Option is or
may in the circumstances be unlawful or result in the imposition of excise taxes
on the Company under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or
delivery, or to make any application of to effect or to maintain any
qualification or registration under the Securities Act of 1933, as amended, or
otherwise with respect to the shares of Common Stock, and the right to exercise
any Option shall be suspended until, in the opinion of said counsel, such sale
or delivery shall be lawful or will not result in the imposition of excise taxes
on the Company.

    

    (c)            Upon
termination of any period of suspension under this Section 11.5, any Option
affected by such suspension which shall not have expired or terminated shall be
reinstated as to all shares available before suspension and as to shares which
would otherwise have become available during the period of such suspension, but
no such suspension shall extend the term of any Option.

    

    11.6.         Governing
Law.  This Plan shall be governed and constructed in accordance
with the laws of the State of New Jersey (regardless of the law that might
otherwise govern under applicable New Jersey principals of conflicts of
laws).

    

    11.7.         Construction.  Wherever
any words are used in this Plan in the masculine gender they shall be construed
as though they were also used in the feminine gender in all cases where they
would so apply, and wherever any words are used herein in the singular form they
shall be construed as though they were also used in the plural form in all cases
where they would so apply.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      Exhibit
10.22

    11.8.         Other
Benefits.  No Stock Option granted under this Plan shall be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or its Subsidiaries nor affect any benefits under any other
benefit plan now or subsequently in effect under which the availability or
amount of benefits is related to the level of compensation.

    

    11.9.         Costs.  The
Company shall bear all expenses included in the administering this Plan,
including expenses of issuing Common Stock pursuant to the exercise of any
Options hereunder.

    

    11.10.       No Right to Same
Benefits.  The provisions of Options need not be the same with
respect to each Participant, and such Options to individual Participants need
not be the same in subsequent years.

    

    11.11.       Death/Disability.  The
Committee may in its discretion require the transferee of a Participant to
supply it with written notice of the Participant’s death or Disability and to
supply it with a copy of the will (in the case of a Participant’s death) or such
other evidence as the Committee deems necessary to establish the validity of the
transfer of an Option.  The Committee may also require the agreement
of the transferee to be bound by all of the terms and conditions of the
Plan.

    

    11.12.       Section 16(b) of the
Exchange Act.  All elections and transactions under the Plan by
persons subject to Section 16 of the Exchange Act involving shares of Common
Stock are intended to comply with any applicable exemptive condition under Rule
16b-3.  To the extent applicable, the Committee may establish and
adopt written administrative guidelines, designated to facilitate compliance
with Section 16(b) of the Exchange Act, as it may deem necessary or proper for
the administration and operation of the Plan and the transaction of business
thereunder.  For purposes of this paragraph, the Company shall be
deemed publicly held when and if the Company has a class of common equity
securities registered under Section 12 of the Exchange Act.

    

    11.13.       Severability of
Provisions.  If any provision of the Plan shall be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provisions hereof, and the Plan shall be construed and enforced as if such
provisions had not been included.

    

    11.14.       Headings and
Captions.  The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan and
shall not be employed in the construction of the Plan.

    

    

    ARTICLE
XII

    

    EFFECTIVE
DATE OF PLAN

    

    The Plan
shall take effect upon adoption by the Board, but the Plan (and any grants of
Options made prior to the shareholder approval mentioned herein) shall be
subject to the requisite approval of the shareholders of the
Company.  In the absence of such approval, such Options shall be null
and void.

    

    

    ARTICLE
XIII

    

    TERM OF
PLAN

    

    No Stock
Option shall be granted pursuant to the Plan on or after the tenth anniversary
of the earlier of the date the Plan is adopted or the date of shareholder
approval, but Options granted prior to such tenth anniversary may extend beyond
that date.

    

    

    ARTICLE
XIV

    

    NAME OF
PLAN

    

    This Plan
shall be known as the Cicero, Inc. 2007 Employee Stock Option Plan.

     

     

    13ex10_23.htm

    
      
        

      
Exhibit 10.23

    AGREEMENT

    

    Dated October 30,
2007

    

    

    The
parties to this agreement are Cicero Inc. (the “Company”) and BluePhoenix
Solutions Ltd. (“BluePhoenix”).

    

    Pursuant
to a guaranty agreement between BluePhoenix  and Bank Hapoalim B.M.
(the “Bank”), BluePhoenix  has guaranteed certain obligations of the
Company under the Company’s promissory note (the “Bank Note”) dated September
28, 2001, in favor of the Bank, which is due and payable on or about October 30,
2007 (the “Guaranty”).   The outstanding principal amount of the
Bank Note is $1,971,000.

    

    The
parties wish to enter into an agreement with respect to, among other things, (a)
the repayment in full of the Bank Note, and (b) the issuance by the Company to
BluePhoenix of (i) a  senior note in the principal amount of
$1,021,000 in the form of exhibit A (the “New Note”) and (ii) 2,546,149
fully-paid and nonassessable shares of the Company’s common stock, free and
clear of any adverse claim (the “Shares”).

    

    Accordingly,
the parties agree as follows:

    

    1.           Repayment of the Bank
Note.   Simultaneously with the execution and delivery of
this agreement, (a) the Company is repaying $300,000 principal amount of the
Bank Note and all accrued interest on the Bank Note to the date of this
agreement, (b) BluePhoenix is repaying $1,671,000 principal amount of the Bank
Note, (c) the Bank is discharging the Company and BluePhoenix from all
liabilities and obligations in respect of the Bank Note and the Guaranty, and
(d)  the Company is issuing to BluePhoenix the Note and the
Shares.  Accordingly, the Company has no further liabilities or
obligations  arising from (y) the agreement pursuant to exhibit 6.1.1
of the asset purchase agreement dated August 8, 2001 between the Company and
BluePhoenix, which required that the Company repay the indebtedness under the
Bank Note immediately upon the consummation of a financing by the Company or any
of its direct or indirect subsidiaries to the extent of 10% of any net proceeds
of any such financing, or (z) any Irrevocable Instruction Letters issued by the
Company to any bank pursuant to any Guaranty Extension Agreement between the
Company and BluePhoenix requiring the Company to repay certain amounts under the
Bank Note.

    

    2.           Negative
Covenant.     As long as any portion of the New
Note remains outstanding, the Company shall not, and shall not permit any of its
subsidiaries to, incur or otherwise create any indebtedness for borrowed money,
except for Permitted Indebtedness (as defined below).  As used in this
agreement, the term “Permitted Indebtedness” means  (a) indebtedness
for borrowed money of the Company that is not due and payable as to principal
prior to the repayment in full of the indebtedness under the New Note and that
is not secured, directly or indirectly, by the grant of a security interest in
any assets or shares of the Company or any of its subsidiaries or an agreement
not to grant any such security interest, unless the indebtedness under the New
Note is equally and ratably secured, or (b) indebtedness set forth in exhibit
A.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
10.23

    

    3.           Option to Acquire Additional
Shares.  If the Company fails to pay when due
any  principal of or interest on the New Note,
BluePhoenix  may, at its option, exercisable from time to time by
notice given to the Company, elect to require the Company to issue to
BluePhoenix  a number of  fully paid and nonassessable
shares of the Company’s common stock, free and clear of any adverse claim,
determined by dividing the amount of that payment by 75% of the average closing
sale price of a share of such stock on the ten trading days immediately
preceding the exercise of such option (or, if there is no closing sale price on
a particular trading day, the average of the closing bid and asked price on that
trading day shall be used).  If, from time to time, BluePhoenix makes
that election, the Company shall, not later than five business days after such
election, issue to BluePhoenix a certificate evidencing such
shares.

    

    
      
        	
              	
                4.

              	
                Registration

              

      

    

     

    (a)           The
Company agrees that all shares issued pursuant to section 1 shall be registered
for sale by BluePhoenix pursuant to a registration statement on Form S-1 to be
filed with the Securities and Exchange Commission (the “SEC”) before February 1,
2008. The Company shall use its reasonable best efforts to cause such
registration statement to be declared effective not later than April 1, 2008
(the “Effective Date”), and to remain effective and current thereafter, until
(a) all the certificates evidencing the unsold shares covered by the
registration statement cease to bear any restrictive legends, (b) no such shares
are subject to any stop transfer orders, and (c) all the unsold shares covered
by the registration statement may be sold publicly without registration under
the Securities Act of 1933 (without limitation as to volume in any
period).  If the registration statement referred to above shall not
have been declared effective on  or before April 1, 2008 or
shall  not be current on April 1, 2008, the Company shall immediately
issue to BluePhoenix 50,000 additional shares of its common stock.  If
the registration statement is required to be effective and current but is not
effective and current on any August 1, December 1, or April 1 thereafter, the
Company shall, at each such time, issue to BluePhoenix an additional 50,000
shares of its common stock.

    

    (b)           Notwithstanding
anything to the contrary in this section 4, if the Company is or becomes a party
to any agreement with any other person or entity respecting registration of
shares under Securities Act of 1933, which agreement contains provisions
entitling such other person or entity to rights  not otherwise
provided to BluePhoenix  under this section 4, this section 4 shall be
deemed amended to the extent necessary to provide BluePhoenix  such
additional rights (but without adversely affecting the rights otherwise provided
under this section 4).

    

    5.           Partnership. Both
parties have expressed a mutual interest in forming a partnership to explore
additional capabilities to market and sell Cicero. Specifically, BluePhoenix has
indicated a willingness to establish a partnership with the Company for the
purpose of including the Company’s Cicero product in its desktop modernization
solutions. Each party shall use all reasonable efforts to negotiate the terms of
such a partnership within 30 days after the date of this
agreement.  The parties agree that, notwithstanding the foregoing,
neither party shall have any liability or obligation if for any reason or for no
reason the parties fail so to agree on the terms of such
partnership.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
10.23

    6.           Releases

    

    (a)           The
Company, on its own behalf and on behalf of each of its subsidiaries and
controlled affiliates, hereby releases, acquits, and forever discharges
BluePhoenix and its affiliates, agents, representatives, officers, directors,
and employees, whether in their individual or representative capacities, and
their successors and assigns from, and acknowledge the full accord and
satisfaction of, any and all claims, accounts, debts, obligations, demands,
damages, actions, or suits of whatever nature, whether in contract, tort, or
otherwise, now accrued known or unknown, arising out of any and all transactions
and occurrences up to and including the execution and delivery of this
agreement.

    

    (b)           BluePhoenix
on its own behalf and on behalf of each of its subsidiaries and controlled
affiliates, hereby releases, acquits and forever discharges the Company and its
affiliates, agents, representatives, officers and directors and employees
whether in their individual or representative capacities, and their successors
and assigns from, and acknowledge the full accord and satisfaction of, any and
all claims, accounts, debts, obligations, demands, damages, actions, or suits of
whatever nature, whether in contract, tort, or otherwise, now accrued known or
unknown, arising out of any and all transactions and occurrences up to and
including the execution and delivery of this agreement.

    

    (c)           Notwithstanding
anything to the contrary in this section 6, nothing in this section 6 is
intended to, or shall, release either party from any liabilities or obligations
under this agreement or the New Note.

    

    7.           Miscellaneous

    

    (a)          Governing
Law.   This agreement shall be governed by and construed
in accordance with the law of the state of New York, without giving effect to
its conflict of law principles.

    

    (b)          Headings.   The
section headings of this agreement are for reference purposes only, and are to
be given no effect in the construction or interpretation of this
agreement.

    

    (c)          Notices.   All
notices and other communications under this agreement shall be in writing and
may be given by any of the following methods: (i) personal delivery; (ii)
facsimile transmission; (iii) registered or certified mail, postage prepaid,
return receipt requested; or (iv) overnight delivery service.  Notices
shall be sent to the appropriate party at its address or facsimile number given
below (or at such other address or facsimile number for that party as shall be
specified by notice given under this section 7(c)):

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
10.23

    

    
      	 
      	
              (y)

            	
              if
      to the Company, to it at:

            
	 
      	 
      	 
      
	 
      	 
      	
              8000
      Regency Parkway, Suite 542

            
	 
      	 
      	
              Cary,
      North Carolina 27518

            
	 
      	 
      	
              Attention:  Mr.
      John Broderick

            
	 
      	 
      	 
      
	 
      	 
      	
              With
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Golenbock,
      Eiseman, Assor, Bell and Peskoe, LLP

            
	 
      	 
      	
              437
      Madison Avenue

            
	 
      	 
      	
              New
      York, NY 10022

            
	 
      	 
      	
              Attention:
      Lawrence Bell, Esq.

            
	 
      	 
      	 
      
	 
      	
              (z)

            	
              if
      to BluePhoenix, to it at:

            
	 
      	 
      	 
      
	 
      	 
      	
              8
      Maskit Street

            
	 
      	 
      	
              P.O.
      Box 2062

            
	 
      	 
      	
              Herzlia
      46120

            
	 
      	 
      	
              Israel

            
	 
      	 
      	
              Attention:  Chief
      Financial Officer

            
	 
      	 
      	 
      
	 
      	 
      	
              with
      a copy to:

            
	 
      	 
      	 
      
	 
      	 
      	
              Law
      Office of Edward W. Kerson

            
	 
      	 
      	
              80
      University Place, Third Floor

            
	 
      	 
      	
              New
      York, New York 10003-4564

            

    

    

    All such
notices and communications shall be deemed received upon (v) actual receipt by
the addressee, (vi) actual delivery to the appropriate address, or (vii) in the
case of a facsimile transmission, upon transmission by the sender and issuance
by the transmitting machine of a confirmation slip confirming that the number of
pages constituting the notice have been transmitted without error.  In
the case of notices sent by facsimile transmission, the sender shall
contemporaneously mail a copy of the notice to the addressee at the address
provided for above.  However, such mailing shall in no way alter the
time at which the facsimile notice is deemed received.

    

    (d)           Separability.   The
invalidity of unenforceability of any provision of this agreement shall not
affect the validity or enforceability of any other provision of this agreement,
which shall remain in full force and effect.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
10.23

    (e)          
Waiver.   Either
party may waive compliance by the other with any provision of this
agreement.  No waiver of any provision shall be construed as a waiver
of any other provision.  Any waiver must be in writing and signed by
the waiving party.

    

    (f)             Counterparts.   This
agreement may be executed in counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and the same
instrument.

    

    (g)           Submission to
Jurisdiction.  Each party hereby irrevocably submits to the
jurisdiction of the Supreme Court of the State of New York, New York County, in
connection with any claim or controversy under this Agreement, and agrees to
waive any claim of forum inconvenience (or other similar claim) in connection
therewith.

    

    (h)           Entire
Agreement.  This agreement is a complete statement of all the
terms of the arrangements between the parties with respect to the matters
provided for, supersedes all previous agreements and understandings between the
parties with respect to those matters, and cannot be changed or terminated
orally.

    

    
      	 
      	
              CICERO,
      INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              John
      Broderick

            
	 
      	 
      	
              Chief
      Executive and Chief Financial Officer

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              BLUEPHOENIX
      SOLUTIONS  LTD.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      

    

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    Exhibit
10.23

    

    SENIOR PROMISSORY
NOTE

    

    

    $1,021,000.00

    
      	
              New York, New York

            	
              October 30,
2007

            

    

    

    

    FOR VALUE
RECEIVED, the undersigned, Cicero Inc., a Delaware corporation (the "Maker"),
hereby promises to pay, in lawful money of the United States of America, to the
order of BluePhoenix Solutions (the "Payee"), the principal sum of
$1,021,000.00, at such address  as the holder of this promissory note
and security agreement (this “Note”) may specify from time to time by notice
given to the Maker at 8000 Regency Parkway, Suite 542, Cary, North Carolina
27518, Attention:  Mr. John Broderick (the “Maker’s
Address”).  The Maker agrees to pay interest (computed on the basis of
a 360-day year of twelve 30-day months) on the outstanding principal amount of
this Note at a rate of LIBOR +1% per annum until the principal shall have become
due and payable.  The Maker agrees to pay $350,000 of principal on
January 30, 2009, and $671,000 of principal on December 31, 2011. Accrued and
unpaid interest on the unpaid principal amount hereof shall be payable on each
Required Payment Date.

    

    Notwithstanding
any provision to the contrary in this Note, the entire principal sum of this
Note, and all accrued and unpaid interest thereon, shall immediately become due
and payable (without demand for payment, notice of non-payment, presentment,
notice of dishonor, protest, notice of protest, or any other notice, all of
which are hereby expressly waived by the Maker) upon the occurrence of any of
the following (any such occurrence, a “Default”):

    

    
      (a)          
the
default by the Maker of any payment or other obligation under this Note;
or

    

    

    (b)           the
entry of an order, judgment, or decree by a court of competent jurisdiction for
relief in respect of the Maker under any applicable federal or state bankruptcy
or reorganization law or other similar law, and the continuance of any such
order, judgment, or decree unstayed, unbonded, and in effect for a period of 30
consecutive days, or (i) the Maker shall file a petition or an answer or consent
seeking relief under any applicable federal or state bankruptcy or
reorganization law or other similar law, or (ii) the consent by the Maker to the
filing of any such petition or to the appointment of or taking possession by a
trustee, custodian, or other similar official of the Maker or any substantial
part of its assets, or (iii) the failure of  the Maker generally to
pay its debts as such debts become due, or the taking of action by the Maker in
furtherance of any such action.

    

    If the
Maker fails to make any payment of principal of, or interest on this Note in
accordance with the preceding provisions of this Note, the Company shall issue
to the Payee, as promptly as practicable, a number of shares of the Company’s
fully paid and nonassessable shares of common stock equal to the product of 100
and the then unpaid balance under this Note. Nothing in this paragraph is
intended to, or shall, affect the Maker’s obligations, or the Payee’s rights,
under this Note, including, without limitation, the obligation of the Maker to
pay principal of, and interest on, this Note in accordance with the preceding
provisions of this Note.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
       

      Exhibit
10.23

      

    

    Failure
or delay of the Payee to assert any right or remedy herein shall not be deemed a
waiver of such right or remedy or of any other right hereunder.  A
waiver on one occasion shall not operate as a bar to or waiver of any such right
or remedy on any future occasion.  No single, partial, or other
exercise of any right or remedy by the Payee shall preclude any other or future
exercise thereof.  No waiver by the Payee will be effective, unless it
is in writing and signed by the Payee.

    

    This Note
may not be changed or terminated orally, nor may any of its provisions be
waived, except by an agreement in writing signed by the party against whom
enforcement of such change or termination is sought.

    

    If at any
time this transaction would be usurious under applicable law, then, regardless
of any provision in this Note to the contrary, it is agreed that the total of
all consideration that constitutes interest under applicable law that is
contracted for, charged, or received upon this Note shall under no circumstances
exceed the maximum rate of interest allowed by applicable law now or hereafter
in effect, and any excess theretofore paid shall be credited on this Note by the
holder hereof or refunded to the Maker, if this Note has been paid.

    

    The
remedies provided for herein shall be in addition to all other remedies
existing, in the Payee's favor, under the applicable law (including equity) of
any jurisdiction.

    

    This Note
and the legality, validity, and performance of the terms hereof shall be
governed by and enforced, determined, and construed in accordance with the
internal laws of the State of New York applicable to commercial contracts,
transactions, and obligations entered into, and to be performed in, New York,
and without giving effect to the conflict of laws principles
thereof.

    

    The Maker
hereby irrevocably submits to the jurisdiction of the Supreme Court of the State
of New York, New York County, in connection with any claim or controversy under
this Note.

    

    The Maker
hereby agrees to be bound by any expedited process or procedure in effect from
time to time under New York law for the enforcement by the Payee of his rights
under this Note.

    

    This Note
shall be binding upon the Maker and the Maker's successors, and
assigns.

    

    The Maker
shall pay all costs of collection (including reasonable counsel fees and
disbursements), if default is made in payment of this Note, and, in addition,
shall reimburse the

    Payee for
all costs and expenses in connection with the preparation and negotiation of
this Note.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
       

      Exhibit
10.23

       

    

    Any
notice under this Note shall be in writing and shall be considered given when
mailed by registered mail, return receipt requested, as follows:

    

    If to the
Maker, to it at the Maker’s address (or at such other address as the Maker may
specify by notice given to the Payee from time to time)

    

    If to the
Payee, to it at the Payee’s address of  8 Maskit Street, P.O. Box
2062, Herzlia 46120, Israel, Attention:  Chief Financial
Officer..

    

    The Maker
acknowledges that, except as set forth in this Note, neither the Maker nor the
Payee has entered into any agreement with the other with respect to the subject
matter of this Note.

    

    

    
      	 
      	
              CICERO
      INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 	 
      
	 
      	 
      	
              John
      Broderick

            
	 
      	 
      	
              Chief
      Executive and Chief Financial
Officer

            

    

    

       

      3

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