Document:

Exhibit 10.2

EXHIBIT
D

to Subscription Agreement

REGISTRATION RIGHTS AGREEMENT

AGREEMENT
dated as of November 5, 2004,
between MONARCH POINTE FUND, LTD.  (the “Funds”)
and MERCATOR ADVISORY GROUP, LLC (“MAG”) (the Funds and MAG are referred
to individually as a “Holder” and collectively as the “Holders”), and
Spescom Software Inc., a California corporation (the “Company”).

WHEREAS,
the Funds have purchased, for an aggregate of $2,200,000, an aggregate of 2,200
shares of Series G Convertible Preferred Stock (the “Series G Stock”)
from the Company, and have the right to cause their Series G Stock to be
converted into shares of Common Stock, no par value (the “Common Stock”),
of the Company, pursuant to the conversion formula set forth in the Certificate
of Determination of Series G Preferred Stock as filed with the Secretary of
State of the State of California on the date hereof (the “Certificate of
Determination”);

WHEREAS,
each Fund and MAG have acquired Warrants (together, the “Warrants”) from
the Company, pursuant to which the Holders have the right to purchase in the
aggregate up to the number of shares of Common Stock equal to $1,100,000
divided by the Ceiling Price as such term is defined in the Certificate of
Determination through the exercise of such Warrants;

WHEREAS,
the Company desires to grant to the Holders the registration rights set forth
herein with respect to the shares of Common Stock issuable upon the conversion
of the Series G Stock and the exercise of the Warrants.

NOW, THEREFORE,
the parties hereto mutually agree as follows:

1.     Registrable Securities.  As used herein the terms “Registrable
Security” means each of the shares of Common Stock issued (i) upon the
conversion of the Series G Stock (the “Conversion Shares”) and (ii) upon
exercise of the Warrants (the “Warrant Shares”), provided, however, that
with respect to any particular Registrable Security, such security shall cease
to be a Registrable Security as of the date of determination that (a) it
has been effectively registered under the Securities Act of 1933, as amended
(the “Securities Act”), and disposed of pursuant thereto, or  (b) registration under the Securities
Act is no longer required for the immediate public distribution of such
security.  The term “Registrable
Securities” means any and/or all of the securities falling within the
foregoing definition of a “Registrable Security.”  In the event of any merger, reorganization,
consolidation, recapitalization or other change in corporate structure
affecting the Common Stock, such adjustment shall be made in the definition of
“Registrable Security” as is appropriate in order to prevent any dilution or
enlargement of the rights granted pursuant to this Section 1.

2.     Registration.

(a)   The
Company shall use its commercially reasonable efforts to file a registration
statement (the “Registration Statement”) with the Securities and
Exchange Commission (the “SEC”) within thirty (30) days after the date
of this Agreement in order to

register the resale of the Registrable Securities under the Securities
Act.  The Company shall use its
commercially reasonable efforts to cause the Registration Statement to become
effective no later than (a) ninety (90) days after the filing date if such
Registration Statement is not subject to SEC review, or (b) one hundred twenty
(120) days after the filing date if such Registration Statement is subject to
SEC review.  Once effective, the Company
shall use its commercially reasonable efforts to maintain the effectiveness of
the Registration Statement until the earliest of the following dates (the “Expiration
Date”) (i) the date that all of the Registrable Securities have been
sold, or (ii) the date that the Company receives an opinion of counsel to
the Company that all of the Registrable Securities may be freely traded without
registration under the Securities Act, under Rule 144 promulgated under
the Securities Act or otherwise.

(b)   The
Company will initially include in the Registration Statement as Registrable
Securities (i) Seven Million Three Hundred Thirty-Three Thousand Three Hundred
Thirty-Three (7,333,333) shares of Common Stock issuable upon conversion of the
Series G Stock and (ii) the maximum numbers of shares of Common Stock issuable
upon exercise of the Warrants.

(c)   If
(i) the Company fails to file the Registration Statement with the SEC within
thirty (30) days after the Closing Date, or (ii) the Registration Statement
fails to become effective within the applicable time period set forth in
Section 2(a) above of ninety (90) or one hundred twenty (120) days, as the case
may be, the Company shall pay to Holders an amount equal to One Thousand One
Hundred Dollars ($1,100) per day until the Registration Statement is declared
effective; provided, however, that in no event shall the aggregate liability of
the Company under this Section exceed $100,000.

3.     Covenants
of the Company with Respect to Registration.

The Company covenants and agrees as follows:

(a)   If
any stop order shall be issued by the SEC in connection therewith, the Company
shall use commercially reasonable efforts to obtain promptly the removal of
such order.  Following the effective date
of the Registration Statement, the Company shall, upon the request of any
Holder, forthwith supply such reasonable number of copies of the Registration
Statement, preliminary prospectus and prospectus meeting the requirements of
the Securities Act, and any other documents necessary or incidental to the
public offering of the Registrable Securities, as shall be reasonably requested
by the Holder to permit the Holder to make a public distribution of the
Holder’s Registrable Securities.  The
obligations of the Company hereunder with respect to the Holder’s Registrable
Securities are subject to the Holder’s furnishing to the Company such
appropriate information concerning the Holder, the Holder’s Registrable
Securities and the terms of the Holder’s offering of such Registrable
Securities as the Company may reasonably request in writing.

(b)   The
Company shall pay all costs, fees and expenses in connection with the Registration
Statement filed pursuant to Section 2 hereof including, without
limitation, the Company’s legal and accounting fees, printing expenses, and
blue sky fees and expenses; provided, however, that each Holder shall be solely
responsible for the fees of any counsel retained by the Holder in connection
with such registration and any transfer taxes or

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underwriting discounts, commissions or fees applicable to the
Registrable Securities sold by the Holder pursuant thereto.

(c)   The
Company will take all actions which may be required to qualify or register the
Registrable Securities included in the Registration Statement for the offer and
sale under the securities or blue sky laws of such states as are reasonably
requested by each Holder of such securities, provided that the Company shall
not be obligated to execute or file any general consent to service of process
or to qualify as a foreign corporation to do business under the laws of any
such jurisdiction.

4.     Additional Terms.

(a)   The
Company shall indemnify and hold harmless the Holders and each underwriter,
within the meaning of the Securities Act, who may purchase from or sell for any
Holder, any Registrable Securities, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement of a material
fact contained in the Registration Statement, any other registration statement
filed by the Company under the Securities Act with respect to the registration
of the Registrable Securities, any post-effective amendment to such
registration statements, or any prospectus included therein or caused by any
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission based upon information furnished or required to be furnished in
writing to the Company by the Holders or underwriter expressly for use therein,
which indemnification shall include each person, if any, who controls any
Holder or underwriter within the meaning of the Securities Act and each
officer, director, employee and agent of each Holder and underwriter; provided,
however, that the indemnification in this Section 4(a) with respect to any
prospectus shall not inure to the benefit of any Holder or underwriter (or to
the benefit of any person controlling any Holder or underwriter) on account of
any such loss, claim, damage or liability arising from the sale of Registrable
Securities by the Holder or underwriter, if a copy of a subsequent prospectus
correcting the untrue statement or omission in such earlier prospectus was
provided to such Holder or underwriter by the Company prior to the subject sale
and the subsequent prospectus was not delivered or sent by the Holder or
underwriter to the purchaser prior to such sale and provided further, that the
Company shall not be obligated to so indemnify any Holder or any such
underwriter or other person referred to above unless the Holder or underwriter
or other person, as the case may be, shall at the same time indemnify the
Company, its directors, each officer signing the Registration Statement and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained in the
Registration Statement, any registration statement or any prospectus required
to be filed or furnished by reason of this Agreement or caused by any omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission based
upon information furnished in writing to the Company by the Holder or
underwriter expressly for use therein.

(b)   The
Holder shall indemnify and hold harmless the Company, from and against any and
all losses, claims, damages and liabilities caused by any untrue statement of a
material

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fact contained in the Registration Statement, any registration
statement or any prospectus required to be filed or furnished by reason of this
Agreement or caused by any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, insofar as such losses, claims, damages or liabilities are caused
by any material untrue statement or material omission based upon information
furnished in writing to the Company by the Holder expressly for use therein.

(c)   If
for any reason the indemnification provided for in the preceding section is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, claim, damage, liability or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
the indemnified party as a result of such loss, claim, damage or liability in
such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations.

(d)   Promptly
after receipt by an indemnified party under this Section 4 of notice of
the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 4, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, to assume the defense thereof with counsel mutually satisfactory to
the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential conflict of interests between such indemnified party and any other
party represented by such counsel in such proceeding.  The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall relieve such indemnifying party of liability to the indemnified
party under this Section 4 only to the extent the indemnifying party is
prejudiced as a result thereof.

(e)   Neither
the filing of a Registration Statement by the Company pursuant to this
Agreement nor the making of any request for prospectuses by the Holder shall
impose upon any Holder any obligation to sell the Holder’s Registrable
Securities.

(f)    Each
Holder, upon receipt of notice from the Company that an event has occurred
which requires a Post-Effective Amendment to the Registration Statement or a
supplement to the prospectus included therein, shall promptly discontinue the
sale of Registrable Securities until the Holder receives a copy of a
supplemented or amended prospectus from the Company, which the Company shall
provide as soon as practicable after such notice.

(g)   If
the Company fails to keep the Registration Statement referred to above continuously
effective during the requisite period, then the Company shall, promptly upon
the request of any Holder, use commercially reasonable efforts to update the
Registration Statement or file a new registration statement covering the
Registrable Securities remaining unsold, subject to the terms and provisions
hereof, so that the registration of such unsold Registered Securities is
maintained for a number of days beyond the Expiration Date equal to the number
of days that the Holder is unable to sell pursuant to Section 4(f) above.

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(h)   Each
Holder agrees to provide the Company with any information or undertakings
reasonably requested by the Company in order for the Company to include any
appropriate information concerning the Holder in the Registration Statement or
in order to promote compliance by the Company or the Holder with the Securities
Act.

(i)    Each
Holder, by its acceptance of the Registrable Securities, agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of a Registration Statement hereunder.

(j)    Each Holder, on behalf of
itself, its affiliates, its successors and assigns and any other direct or
indirect transferee holding any of the Warrants, the Series G Stock or the
Registrable Securities, hereby covenants and agrees not to, directly or
indirectly, offer to “short sell”, contract to “short sell” or otherwise “short
sell” or encourage others to “short sell” any securities of the Company,
including, without limitation, shares of Common Stock that will be received as
a result of the conversion of the Series G Stock or the exercise of the
Warrants.  For purposes of this
Agreement, “short selling” shall include any sale, any trade in any option or
other derivative security, any hedging transaction relating to the securities
of the Company or any transaction intended to affect the price of the Company’s
common stock.

 

(k)   If
requested in writing by the Company and the managing underwriter of an
underwritten registered public offering by the Company of its Common Stock, the
Holders shall agree not to sell or otherwise transfer or dispose of any Common
Stock of the Company held by such Holders (other than those included in the
registration statement) for a period not to exceed 90 days following the
effective date of a registration statement of the Company filed under the
Securities Act, provided that all officers and directors of the Company enter
into similar agreements identical in terms to that of the Holders.

 

5.     Governing Law.  The Registrable Securities will be, if and
when issued, delivered in California. 
This Agreement shall be deemed to have been made and delivered in the
State of California and shall be governed as to validity, interpretation,
construction, effect and in all other respects by the internal substantive laws
of the State of California, without giving effect to the choice of law rules
thereof.

6.     Amendment.  This Agreement may only be amended by a
written instrument executed by the Company and the Holders.

7.     Entire Agreement.  This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties, oral and written,
with respect to the subject matter hereof.

8.     Execution in Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

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9.     Notices.  All communications hereunder shall be in
writing and shall be hand delivered, mailed by first-class mail, couriered by
next-day air courier or by facsimile  at
the addresses set forth below.

If to the Holders,                                                      Mercator
Advisory Group, LLC

Monarch Pointe Fund, Ltd. 

555 South Flower Street, Suite 4500

Los Angeles, CA  90071

Attention:  David Firestone

With a copy to                                                                Sheppard
Mullin Richter & Hampton LLP

333 South Hope Street

48th Floor

Los Angeles, CA  90071-1448

Telephone No.:  (213) 620-1780

Facsimile No.:  (213) 620-1398

Attention:  David C. Ulich

If to the Company,                                             Spescom
Software Inc. 

10052 Mesa Ridge Court, Suite 100

San Diego, CA  92121

Telephone No.:  (858) 625-3000 (ext.
6831)

Facsimile No.:  (858) 625-3010

Attention:  John Low

With a copy to                                                                Gibson,
Dunn & Crutcher LLP

1881 Page Mill Rd.

Palo Alto, CA  94063

Telephone No.:  (650) 849-5383

Facsimile No.:  (650) 849-5083

Attention:  Russell C. Hansen

All such notices and communications shall be deemed to have been duly
given:  (i) when delivered by hand, if
personally delivered; (ii) five business days after being deposited in the
mail, postage prepaid, if mailed certified mail, return receipt requested;
(iii) one business day after being timely delivered to a next-day air courier
guaranteeing overnight delivery; (iv) the date of transmission if sent via
facsimile to the facsimile number as set forth in this Section or the signature
page hereof prior to 4:00 p.m. on a business day, or (v) the business day
following the date of transmission if sent via facsimile at a facsimile number
set forth in this Section or on the signature page hereof after 4:00 p.m. or on
a date that is not a business day.  Change
of a party’s address or facsimile number may be designated hereunder by giving
notice to all of the other parties hereto in accordance with this Section.

 

10.   Binding Effect; Benefits.  Any Holder may assign its rights hereunder;
provided, however, that the rights of a Holder hereunder may be transferred by
such Holder or its transferee only to a person or entity who acquires Series G
Preferred Stock or Warrants convertible into or exercisable for an aggregate of
at least 200,000 shares of Common Stock.

6

This Agreement
shall inure to the benefit of, and be binding upon, the parties hereto and
their respective heirs, legal representatives, successors and permitted
assigns.  Nothing herein contained,
express or implied, is intended to confer upon any person other than the
parties hereto and their respective heirs, legal representatives and
successors, any rights or remedies under or by reason of this Agreement.

11.   Headings.  The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way limit or
affect the meaning or interpretation of any of the terms or provisions of this
Agreement.

12.   Severability.  Any provision of this Agreement which is held
by a court of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

13.   Jurisdiction.  Each of the parties irrevocably agrees that
any and all suits or proceedings based on or arising under this Agreement may
be brought only in and shall be resolved in the federal or state courts located
in the City of Los Angeles, California and consents to the jurisdiction of such
courts for such purpose.  Each of the
parties irrevocably waives the defense of an inconvenient forum to the
maintenance of such suit or proceeding in any such court.  Each of the parties further agrees that
service of process upon such party mailed by first class mail to the address
set forth in Section 9 shall be deemed in every respect effective service of
process upon such party in any such suit or proceeding.  Nothing herein shall affect the right of
either party to serve process in any other manner permitted by law.  Each of the parties agrees that a final
non-appealable judgment in any such suit or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on such judgment or in any other
lawful manner.

14.   Attorneys’ Fees and Disbursements.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party or parties shall be entitled to receive from the other party or parties
reasonable attorneys’ fees and disbursements in addition to any other relief to
which the prevailing party or parties may be entitled.

[The balance of this page is intentionally
left blank.]

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IN WITNESS WHEREOF,
this Agreement has been executed and delivered by the parties hereto as of the
date first above written.

 

	
   

  	
  SPESCOM
  SOFTWARE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ 

  	
  Carl Mostert

  
	
   

  	
  Name:

  	
   

  	
  Carl Mosert

  
	
   

  	
  Its:

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MONARCH POINTE FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ 

  	
  David Firestone

  
	
   

  	
  Name:

  	
   

  	
  David Firestone

  
	
   

  	
  Its:

  	
   

  	
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MERCATOR ADVISORY GROUP, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ 

  	
  David Firestone

  
	
   

  	
  Name:

  	
   

  	
  David Firestone

  
	
   

  	
  Its:

  	
   

  	
  Managing
  Member

  

 

8Exhibit 10.3

WARRANT TO PURCHASE COMMON STOCK

THIS WARRANT AND THE SECURITIES ISSUABLE HEREUNDER
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR THE AVAILABILITY OF
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

WARRANT
TO PURCHASE COMMON STOCK

	
  Number
  of Shares:

  	
  Up to 550,000 shares (subject to adjustment)

  
	
  Warrant Price:

  	
  $0.44 per share

  
	
  Issuance Date:

  	
  November 5, 2004

  
	
  Expiration Date:

  	
  November 5, 2007

  

 

THIS WARRANT CERTIFIES THAT for value received, Mercator Advisory
Group, LLC or its registered assigns (hereinafter called the “Holder”) is entitled to purchase
from Spescom Software Inc. (hereinafter called the “Company”),
the above referenced number of fully paid and nonassessable shares (the “Shares”) of common stock (the “Common Stock”), of Company, at the
Warrant Price per Share referenced above; the number of shares purchasable upon
exercise of this Warrant referenced above being subject to adjustment from time
to time as described herein. This Warrant is issued in connection with that
certain Subscription Agreement dated as of November 5, 2004, by and between the
Company and Holder (the “Subscription Agreement”).
The exercise of this Warrant shall be subject to the provisions, limitations
and restrictions contained herein.

1.     Term and Exercise.

1.1  Term.  This Warrant is exercisable in whole or in
part (but not as to any fractional share of Common Stock), at any time and from
time to time after the date hereof prior to 6:00 p.m. on the Expiration Date
set forth above.

1.2  Warrant Price.  The Warrant shall be exercisable at the
Warrant Price described above.

1.3  Maximum Number  of Shares.  The maximum number of Shares of Common Stock
exercisable pursuant to this Warrant is 550,000 Shares.  However, notwithstanding anything herein to
the contrary, in no event shall the Holder be permitted to exercise this
Warrant for a number of Shares greater than the number that would cause the
aggregate beneficial ownership of the Company’s
Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) of the Holder and all persons affiliated with the Holder
to equal 9.99% of the Company’s Common Stock then outstanding.

1.4  Procedure for Exercise of Warrant.  Holder may exercise this Warrant by
delivering the following to the principal office of the Company in accordance
with Section 5.1 hereof: (i) a duly executed Notice of Exercise in
substantially the form attached as Schedule A, (ii) payment of the
Warrant Price then in effect for each of the Shares being purchased, as
designated in the Notice of Exercise, and (iii) this Warrant.  Payment of the Warrant Price may be in cash,
certified or official bank check payable to the order of the Company, or wire
transfer of funds to the Company’s account (or any combination of any of the
foregoing) in the amount of the Warrant Price for each share being purchased.

1.5  Delivery of Certificate and New Warrant.  In the event of any exercise of the rights
represented by this Warrant, a certificate or certificates for the shares of
Common Stock so purchased, registered in the name of the Holder or such other
name or names as may be designated by the Holder, together with any other
securities or other property which the Holder is entitled to receive upon
exercise of this Warrant, shall be delivered to the Holder hereof, at the
Company’s expense, within a reasonable time, not exceeding fifteen (15)
calendar days, after the rights represented by this Warrant shall have been so
exercised; and, unless this Warrant has expired, a new Warrant representing the
number of Shares (except a remaining fractional share), if any, with respect to
which this Warrant shall not then have been exercised shall also be issued to
the Holder hereof within such time.  The
person in whose name any certificate for shares of Common Stock is issued upon
exercise of this Warrant shall for all purposes be deemed to have become the
holder of record of such shares on the date on which the Warrant was
surrendered and payment of the Warrant Price was received by the Company,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is on a date when the stock transfer books
of the Company are closed, such person shall be deemed to have become the
holder of such Shares at the close of business on the next succeeding date on
which the stock transfer books are open.

1.6  Restrictive Legend.  Each certificate for Shares shall bear a
restrictive legend in substantially the form as follows, together with any
additional legend required by (i) any applicable state securities laws and
(ii) any securities exchange upon which such Shares may, at the time of
such exercise, be listed:

The shares of stock evidenced
by this certificate have not been registered under the U.S. Securities Act of
1933, as amended, and may not be offered, sold, pledged or otherwise
transferred (“transferred”) in the absence of such registration or an
applicable exemption therefrom. In the absence of such registration, such
shares may not be transferred unless, if the Company requests, the Company has
received a written opinion from counsel in form and substance satisfactory to
the Company stating that such transfer is being made in compliance with all
applicable federal and state securities laws.

Any certificate issued at
any time in exchange or substitution for any certificate bearing such legend
shall also bear such legend unless, in the opinion of counsel for the Holder
thereof (which counsel shall be reasonably satisfactory to the Company), the securities
represented thereby are not, at such time, required by law to bear such legend.

1

1.7  Fractional Shares.  No fractional Shares shall be issuable upon
exercise or conversion of the Warrant. 
In the event of a fractional interest, the number of Shares to be issued
shall be rounded down to the nearest whole Share.

2.     Representations, Warranties and Covenants.

2.1  Representations and Warranties.

(a)   The Company is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and has all necessary power and authority to perform its
obligations under this Warrant;

(b)   The execution, delivery and performance of
this Warrant has been duly authorized by all necessary actions on the part of
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms; and

(c)   This Warrant does not violate and is not in
conflict with any of the provisions of the Company’s Articles of Incorporation
or Certificate of Determination, Bylaws and any resolutions of the Company’s
Board of Directors or stockholders, or any agreement of the Company, and no
event has occurred and no condition or circumstance exists that might (with or
without notice or lapse of time) constitute or result directly or indirectly in
such a violation or conflict.

2.2  Issuance of Shares.  The Company covenants and agrees that all
shares of Common Stock that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly issued, fully paid
and nonassessable, and free from all taxes, liens and charges with respect to
the issue thereof.  The Company further
covenants and agrees that it will pay when due and payable any and all federal
and state taxes which may be payable in respect of the issue of this Warrant or
any Common Stock or certificates therefor issuable upon the exercise of this
Warrant.  The Company further covenants
and agrees that the Company will at all times have authorized and reserved,
free from preemptive rights, a sufficient number of shares of Common Stock to
provide for the exercise in full of the rights represented by this
Warrant.  If at any time the number of
authorized but unissued shares of Common Stock of the Company shall not be
sufficient to effect the exercise of the Warrant in full, subject to the
limitations set forth in Section 1.3 hereto, then the Company will take all
such corporate action as may, in the opinion of counsel to the Company, be
necessary or advisable to increase the number of its authorized shares of
Common Stock as shall be sufficient to permit the exercise of the Warrant in
full, subject to the limitations set forth in Section 1.3 hereto, including without
limitation, using its best efforts to obtain any necessary stockholder approval
of such increase.  The Company further
covenants and agrees that if any shares of capital stock to be reserved for the
purpose of the issuance of shares upon the exercise of this Warrant require
registration with or approval of any governmental authority under any federal
or state law before such shares may be validly issued or delivered upon
exercise, then the Company will in good faith and as expeditiously as possible endeavor
to secure such registration or approval, as the case may be.  If and so long as the Common Stock issuable
upon the exercise of this Warrant is listed on any national securities exchange
or the Nasdaq Stock Market, the Company will, if permitted by the rules of such
exchange or market, list and keep listed on such exchange or market, upon
official notice of issuance, all shares of such Common Stock issuable upon
exercise of this Warrant.

3.     Other Adjustments.

3.1  Subdivision or Combination of Shares.  In case the Company shall at any time
subdivide its outstanding Common Stock into a greater number of shares, the
Warrant Price in effect immediately prior to such subdivision shall be
proportionately reduced, and the number of Shares subject to this Warrant shall
be proportionately increased, and conversely, in case the outstanding Common
Stock of the Company shall be combined into a smaller number of shares, the
Warrant Price in effect immediately prior to such combination shall be
proportionately increased, and the number of Shares subject to this Warrant
shall be proportionately decreased.

3.2  Dividends in Common Stock, Other Stock or
Property.  If at any
time or from time to time the holders of Common Stock (or any shares of stock
or other securities at the time receivable upon the exercise of this Warrant)
shall have received or become entitled to receive, without payment therefor:

(a)   Common Stock, Options or any shares or other
securities which are at any time directly or indirectly convertible into or
exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution;

(b)   any cash paid or payable otherwise than as a
regular cash dividend; or

(c)   Common Stock or additional shares or other
securities or property (including cash) by way of spin-off, split-up,
reclassification, combination of shares or similar corporate rearrangement
(other than Common Stock issued as a stock split or adjustments in respect of
which shall be covered by the terms of Section 3.1 above) and additional
shares, other securities or property issued in connection with a Change (as
defined below) (which shall be covered by the terms of Section 3.4 below), then
and in each such case, the Holder hereof shall, upon the exercise of this
Warrant, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clause (b) above and this clause (c)) which such
Holder would hold on the date of such exercise had such Holder been the holder
of record of such Common Stock as of the date on which holders of Common Stock
received or became entitled to receive such shares or all other additional
stock and other securities and property.

3.3  Reorganization, Reclassification,
Consolidation, Merger or Sale. 
If any recapitalization, reclassification or reorganization of the share
capital of the Company, or any consolidation or merger of the Company with
another corporation, or the sale of all or substantially all of its shares
and/or assets or other transaction (including, without limitation, a sale of
substantially all of its assets followed by a liquidation) shall be effected in
such a way that holders of Common Stock shall be entitled to receive shares,
securities or other assets or property (a “Change”), then, as a
condition of such Change, lawful and adequate provisions shall be made by the
Company whereby the Holder hereof shall thereafter have the right to purchase
and receive (in lieu of the Common Stock of the Company immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby)
such shares, securities or other assets or property as may be issued or payable
with respect to or in exchange for the number of outstanding Common Stock which
such Holder would have been entitled to receive had such Holder exercised this
Warrant immediately prior to the consummation of such Change.  The Company or its successor shall promptly
issue to Holder a new Warrant for such new securities or other property.  The new Warrant shall provide for adjustments
which shall be as nearly equivalent as may be practicable to give effect to the
adjustments provided for in this Section 3 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. 
The provisions of this Section 3.3 shall similarly apply to successive
Changes.

4.     Ownership and Transfer.

4.1  Ownership of This Warrant.  The Company may deem and treat the person in
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any
notice to the contrary until presentation of this Warrant for registration of
transfer as provided in this Section 4.

4.2  Transfer and Replacement.  Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, and upon prior
written consent of the Company, which consent shall not be unreasonably
withheld, this Warrant and all rights hereunder are transferable in whole or in
part upon the books of the Company by the Holder hereof in person or by duly
authorized attorney, and a new Warrant or Warrants, of the same tenor as this
Warrant but registered in

2

the name of the transferee or
transferees (and in the name of the Holder, if a partial transfer is effected)
shall be made and delivered by the Company upon surrender of this Warrant duly
endorsed, at the office of the Company in accordance with Section 6.1
hereof.  Upon receipt by the Company of
evidence reasonably satisfactory to it of the loss, theft or destruction, and,
in such case, of indemnity or security reasonably satisfactory to it, and upon surrender
of this Warrant if mutilated, the Company will make and deliver a new Warrant
of like tenor, in lieu of this Warrant; provided that if the Holder hereof is
an instrumentality of a state or local government or an institutional holder or
a nominee for such an instrumentality or institutional holder an irrevocable
agreement of indemnity by such Holder shall be sufficient for all purposes of
this Warrant, and no evidence of loss or theft or destruction shall be
necessary.  This Warrant shall be promptly
cancelled by the Company upon the surrender hereof in connection with any
transfer or replacement.  Except as
otherwise provided above, in the case of the loss, theft or destruction of a
Warrant, the Company shall pay all expenses, taxes and other charges payable in
connection with any transfer or replacement of this Warrant, other than income
taxes and stock transfer taxes (if any) payable in connection with a transfer
of this Warrant, which shall be payable by the Holder.  Holder will not transfer this Warrant and the
rights hereunder except in compliance with federal and state securities laws
and except after providing evidence of such compliance reasonably satisfactory
to the Company.

5.     Compliance with Securities Laws.  By acceptance of this Warrant, the Holder
hereby represents, warrants and covenants that any shares of stock purchased
upon exercise of this Warrant or acquired upon conversion thereof shall be
acquired for investment only and not with a view to, or for sale in connection
with, any distribution thereof; that the Holder has had such opportunity as
Holder has deemed adequate to obtain from representatives of the Company such
information as is necessary to permit the Holder to evaluate the merits and
risks of its investment in the Company; that the Holder is able to bear the economic
risk of holding such shares as may be acquired pursuant to the exercise of this
Warrant for an indefinite period; that the Holder understands that the shares
of stock acquired pursuant to the exercise of this Warrant or acquired upon
conversion thereof will not be registered under the Act (unless otherwise
required pursuant to exercise by the Holder of the registration rights, if any,
previously granted to the registered Holder) and will be “restricted
securities” within the meaning of Rule 144 under the Securities Act of 1933 and
that the exemption from registration under Rule 144 will not be available for
at least one year from the date of exercise of this Warrant, and even then will
not be available unless a public market then exists for the stock, adequate
information concerning the Company is then available to the public, and other
terms and conditions of Rule 144 are complied with; and that all stock
certificates representing shares of stock issued to the Holder upon exercise of
this Warrant or upon conversion of such shares may have affixed thereto a
legend substantially in the form set forth in Section 1.6 above.

6.     Miscellaneous Provisions.

6.1  Notices.  Any notice or other document required or
permitted to be given or delivered to the Holder shall be delivered or
forwarded to the Holder at c/o Mercator Advisory Group, LLC, 555 South Flower
Street, Suite 4500, Los Angeles, California 90071, Attention:  David F. Firestone (Facsimile No. 213/553
8285), or to such other address or number as shall have been furnished to the
Company in writing by the Holder, with a copy to Sheppard Mullin Richter &
Hampton LLP, 333 South Hope Street, 48th Floor, Los Angeles, California
90071-1448 Attention David C. Ulich (Facsimile No. 213/620-1398).  Any notice or other document required or
permitted to be given or delivered to the Company shall be delivered or
forwarded to the Company at 10052 Mesa Ridge Court, Suite 100, San Diego,
California, 92121, Attention:  John Low
(Facsimile No. 858/625-3010), with a copy to Gibson, Dunn & Crutcher LLP,
1881 Page Mill Rd., Palo Alto, California, 94304 Attention: Russell C. Hansen
(Facsimile No. 650/849-5083), or to such other address or number as shall have
been furnished to Holder in writing by the Company.

6.2  All notices, requests and approvals required by this
Warrant shall be in writing and shall be conclusively deemed to be given (i)
when hand-delivered to the other party, (ii) when received if sent by facsimile
at the address and number set forth above; provided that notices given by
facsimile shall not be effective, unless either (a) a duplicate copy of such
facsimile notice is promptly given by depositing the same in the mail, postage
prepaid and addressed to the party as set forth below or (b) the receiving
party delivers a written confirmation of receipt for such notice by any other
method permitted under this paragraph; and further provided that any notice
given by facsimile received after 5:00 p.m. (recipient’s time) or on a
non-business day shall be deemed received on the next business day; (iii) five
(5) business days after deposit in the United States mail, certified, return
receipt requested, postage prepaid, and addressed to the party as set forth
below; or (iv) the next business day after deposit with an international
overnight delivery service, postage prepaid, addressed to the party as set
forth below with next business day delivery guaranteed; provided that the
sending party receives confirmation of delivery from the delivery service
provider.

6.3  No Rights as Shareholder; Limitation of Liability.  This Warrant shall not entitle the Holder to
any of the rights of a shareholder of the Company except upon exercise in
accordance with the terms hereof.  No
provision hereof, in the absence of affirmative action by the Holder to
purchase shares of Common Stock, and no mere enumeration herein of the rights
or privileges of the Holder, shall give rise to any liability of the Holder for
the Warrant Price hereunder or as a shareholder of the Company, whether such
liability is asserted by the Company or by creditors of the Company.

6.4  Governing Law. 
This Warrant shall be governed by and construed in accordance with the
laws of the State of California as applied to agreements among California
residents made and to be performed entirely within the State of California,
without giving effect to the conflict of law principles thereof.

6.5  Binding Effect on Successors.  This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company’s assets and/or securities.  All of the obligations of the Company
relating to the Shares issuable upon the exercise of this Warrant shall survive
the exercise and termination of this Warrant. 
All of the covenants and agreements of the Company shall inure to the
benefit of the successors and assigns of the Holder.

6.6  Waiver, Amendments and Headings.  This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by both parties (either generally or in a  particular instance and either retroactively
or prospectively).  The headings in this
Warrant are for purposes of reference only and shall not affect the meaning or
construction of any of the provisions hereof.

6.7  Jurisdiction. 
Each of the parties irrevocably agrees that any and all suits or
proceedings based on or arising under this Agreement may be brought only in and
shall be resolved in the federal or state courts located in the City of Los Angeles,
California and consents to the jurisdiction of such courts for such
purpose.  Each of the parties irrevocably
waives the defense of an inconvenient forum to the maintenance of such suit or
proceeding in any such court.  Each of
the parties further agrees that service of process upon such party mailed by
first class mail to the address set forth in Section 5.1 shall be deemed in
every respect effective service of process upon such party in any such suit or
proceeding.  Nothing herein shall affect
the right of a Holder to serve process in any other manner permitted by
law.  Each of the parties agrees that a
final non-appealable judgment in any such suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on such judgment
or in any other lawful manner.

6.8  Attorneys’ Fees and Disbursements.  If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party or parties shall be entitled to receive from the other party or parties
reasonable attorneys’ fees and disbursements in addition to any other relief to
which the prevailing party or parties may be entitled.

3

IN
WITNESS WHEREOF,
the Company has caused this Warrant to be signed by its duly authorized officer
this 5th day of November, 2004.

 

	
  COMPANY:

  	
   

  
	
   

  	
  SPESCOM SOFTWARE INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John W. Low

  
	
   

  	
  Print Name:  John W. Low

  
	
   

  	
  Title:  Chief
  Financial officer

  

 

4

SCHEDULE A

 

FORM OF NOTICE OF EXERCISE

 

[To
be signed only upon exercise of the Warrant]

 

TO BE EXECUTED BY THE REGISTERED
HOLDER

TO EXERCISE THE WITHIN WARRANT

 

 

The undersigned hereby elects to purchase             shares
of Common Stock (the “Shares”) of Spescom Software, Inc. under the Warrant to
Purchase Common Stock dated October      ,
2004, which the undersigned is entitled to purchase pursuant to the terms of
such Warrant.   The undersigned has
delivered $               ,
the aggregate Warrant Price for             Shares
purchased herewith, in full in cash or by certified or official bank check or
wire transfer.

 

Please issue a certificate or certificates
representing such shares of Common Stock in the name of the undersigned or in
such other name as is specified below and in the denominations as is set forth
below:

 

	
   

  
	
  [Type Name of Holder as it should appear on the stock certificate]

  
	
   

  
	
   

  
	
  [Requested Denominations — if no denomination is specified, a single
  certificate will be issued]

  
	
   

  
	
  The initial address of such Holder to be entered on the books of
  Company shall be:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

The undersigned
hereby represents and warrants that the undersigned is acquiring such shares
for his own account for investment purposes only, and not for resale or with a
view to distribution of such shares or any part thereof.

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Dated:

  	
   

  
						

 

1

FORM OF ASSIGNMENT

(ENTIRE)

 

[To be signed only upon transfer
of entire Warrant]

 

TO BE EXECUTED BY THE REGISTERED
HOLDER

TO TRANSFER THE WITHIN WARRANT

 

 

FOR VALUE
RECEIVED                                                 
hereby sells, assigns and transfers unto                                                  
all rights of the undersigned under and pursuant to the within Warrant, and the
undersigned does hereby irrevocably constitute and appoint                                                  
Attorney to transfer the said Warrant on the books of                                                  ,
with full power of substitution.

 

 

 

	
   

  
	
  [Type Name of Holder]

  
	
   

  
	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  

 

 

 

NOTICE

The signature to
the foregoing Assignment must correspond exactly to the name as written upon
the face of the within Warrant, without alteration or enlargement or any change
whatsoever.

1

FORM OF ASSIGNMENT

(PARTIAL)

 

[To be signed only upon partial
transfer of Warrant]

 

TO BE EXECUTED BY THE REGISTERED
HOLDER

TO TRANSFER THE WITHIN WARRANT

 

 

FOR VALUE RECEIVED
                                                 
hereby sells, assigns and transfers unto                                                  
(i) the rights of the undersigned to purchase                             shares
of Common Stock under and pursuant to the within Warrant, and (ii) on a
non-exclusive basis, all other rights of the undersigned under and pursuant to
the within Warrant, it being understood that the undersigned shall retain,
severally (and not jointly) with the transferee(s) named herein, all rights
assigned on such non-exclusive basis. 
The undersigned does hereby irrevocably constitute and appoint                                                  
Attorney to transfer the said Warrant on the books of Spescom Software,
Inc.,  with full power of substitution.

 

 

 

	
   

  
	
  [Type Name of Holder]

  
	
   

  
	
   

  
	
   

  	
   

  
	
  By:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: 

  	
   

  

 

 

 

NOTICE

The signature to
the foregoing Assignment must correspond exactly to the name as written upon
the face of the within Warrant, without alteration or enlargement or any change
whatsoever.

1

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