Document:

Cicero Inc.

EXHIBIT 4.3

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES. 

INVESTOR WARRANT AGREEMENT

Investor Warrant Agreement (the “Warrant”), dated as of January 15, 2010, between Cicero Inc. (the “Company”) and _____________________ (the “Holder”). 

WITNESSETH: 

WHEREAS, the Company and the Holder have entered into a Securities Purchase Agreement (the “Purchase Agreement”) of even date, and the Purchase Agreement provides for, among other things, the issuance of this Warrant for the purchase of an aggregate of ____________ shares of common stock, $.001 par value per share, of the Company (“Common Stock”), as provided herein; and 

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

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

1. 

Grant and Period.

1.1

Grant.  The Holder is hereby granted the right to purchase from the Company, at any time during the exercise period, up to an aggregate of  _______ Warrant Shares of the Company at an initial exercise price (subject to adjustment as provided in Section 5 hereof) of $0.25 per Warrant Share (the “Exercise Price”), such exercise to be subject to the terms and conditions of this Warrant. 

1.2

Period.  This Warrant will be exercisable commencing on January 15, 2010, and expire at 5:00 PM on January 14, 2015 (the “Expiration Time”).  If the Expiration Time is not a Business Day in the City of New York, then the expiration date will be extended to 5:00 PM on the next Business Day in the City of New York.  “Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required by law or other government actions to close. 

1

2. 

Exercise of Warrant. 

2.1

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

2.2

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

2.3

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

				
	 
	 
	 
	 

	 
	X

	=

	Y x (A-B)/A

	 
	 
	 
	 

	where

	X

	=

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

	 
	 
	 
	 

	 
	Y

	=

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

	 
	 
	 
	 

	 
	A

	=

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

	 
	 
	 
	 

	 
	B

	=

	the Exercise Price.

	 
	 
	 
	 

2.4

Certain Defined Terms.  “Market Price” of a share of Common Stock on any date shall mean, (i) if the shares of Common Stock are traded on the Nasdaq Global Market, Nasdaq Global Select Market or the Nasdaq Capital Market, the last bid price reported on that date; (ii) if the shares of Common Stock are not quoted on a Nasdaq market and are listed on any other national securities exchange, the last sale price of the Common Stock reported by such exchange on that date; (iii) if the shares of Common Stock are not quoted on any such market or listed on any such exchange and the shares of Common Stock are traded in the over-the-counter market, the last price reported on such day by the OTC Bulletin Board; (iv) if the shares of Common Stock are not quoted on a any such market, listed on any such exchange or quoted on the OTC Bulletin Board, then the last price quoted on such day in the over-the-counter market 

2

as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting prices); or (v) if none of clauses (i)-(iv) are applicable, then as determined, in good faith, by the Board of Directors of the Company. “Date of Exercise” means the date on which the Holder shall have delivered to the Company (i) the Warrant, (ii) the applicable Subscription form attached thereto, appropriately completed and duly signed, and (iii) if applicable, payment of the Exercise Price.

3. 

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

4. 

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

5. 

Adjustments to Exercise Price and Number of Securities. 

5.1

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

5.2

Extraordinary Transactions.  If, (i) the Company effects any merger or consolidation of the Company with or into another Person and the Company is not the surviving entity, or (ii) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, (in either such case, an “Extraordinary Transaction”), then the Warrant will become the right thereafter to receive, upon exercise, 

3

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

5.3

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

5.4

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

5.5

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

6. 

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

7. 

Reservation, Validity and Listing.  The Company covenants and agrees that during the exercise period, the Company shall at all times reserve and keep available out of its authorized shares of Common Stock, solely for the purpose of issuance upon the exercise of the Warrant, such number of shares of Common Stock or other securities, properties or rights as shall be issuable upon the exercise under this Warrant. The Company covenants and agrees that, upon exercise of the Warrant, and payment of the Exercise Price therefore, all shares of Common Stock and other securities issuable upon such exercise 

4

shall be duly authorized, validly issued, fully paid, non-assessable and not subject to the preemptive rights of any shareholder. As long as the Warrant is outstanding, the Company shall use its reasonable commercial efforts to cause all shares of Common Stock issuable upon the exercise of the Warrant to be listed and quoted (subject to official notice of issuance) on all securities exchanges and systems on which the other outstanding shares of Common Stock are then listed and/or quoted, including Nasdaq, the American Stock Exchange and the OTC Bulletin Board.

8. 

Registration Rights.  The Warrant Shares issuable upon exercise of the Warrant, as adjusted pursuant to the terms of the Warrant, shall be entitled to the registration rights set forth in the Registration Rights Agreement, dated the date hereof (the “Registration Rights Agreement”), by and among the Company, the Holder and the other persons or entities that may become party thereto in accordance with the terms thereof.

9. 

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

(a)

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

(b)

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

(c)

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

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

10. Notices.  Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or delivery by telex (with correct answer back received) or facsimile at the address or number designated below (if delivered on a Business Day during normal business hours where such notice is to be received), or the first Business Day following such delivery (if delivered other than on a Business Day during normal business hours where such notice is to be received) or (b) on the second Business Day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:

5

(a)

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

	
	Cicero Inc.

	8000 Regency Parkway

	Cary, NC  27518

	Tel: (919) 380-5000

	Fax: (919) 380-5121

	Attn:  John P. Broderick

	 

	With a copy to (which copy shall not constitute notice): 

	 

	Golenbock Eiseman Assor Bell & Peskoe LLP 

	437 Madison Avenue

	New York, New York  10022

	Attn: Lawrence M. Bell, Esq.

	Tel: (212) 907-7300

	Fax: (212) 754-0330 

(b)

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

	
	 

	 

	 

	 

	Tel: 

	Fax:

	 

	With a copy to (which copy shall not constitute notice):

	 

	 

	 

	 

	 

	Tel:  

	Fax: 

	 

11. 

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

12. 

Assignment.  The Holder may assign to one or more assignees (each an “Assignee”) all, or any part, of the Warrant; provided that the Company may continue to deal solely and directly with the Holder in connection with the interest assigned to the Assignee until (i) written notice of such assignment has been given to the Company by the Holder and the Assignee, and (ii) the Holder and the Assignee have 

6

delivered to the Company a document reflecting the assignment and acceptance, as reasonably acceptable to the Company.  The assignment of the Warrant does not transfer the registration rights provided pursuant to the Registration Rights Agreement, which are unique to the initial Holder.

13. 

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

14. 

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

15. 

Severability.  If any term, provision, covenant or restriction of this Warrant is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 

16. 

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

17. 

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

18. 

Counterparts.  This Warrant may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same instrument and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

7

IN WITNESS HEREOF, the parties hereto have caused this Warrant to be duly executed by their respective authorized officer as of the date first above written. 

					
	                                                                                                        

	CICERO INC.

	 
	 
	 
	 
	 

	 
	 
	 
	By:

	/s/                                              

	 
	 
	 
	Name: 

	John Broderick

	 
	 
	 
	Title:

	CEO

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	HOLDER

	 
	 
	 
	 
	 

	 
	 
	 
	By:

	                                              

	 
	 
	 
	Name: 

	 

	 
	 
	 
	Title:

	 

	 
	 
	 
	 
	 

EXHIBIT A

FORM OF SUBSCRIPTION (CASH EXERCISE)

(To be signed only upon exercise of Warrant) 

		
	TO:

	Cicero Inc.

	 
	 

	 
	 

	 
	 

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

			
	                     

	 
	                                                                                   

	 
	 
	 

	 
	 
	 

				
	By:

	                                                                                                     

	 

	Name: 

	 
	 

	Social Security Number or Tax Identification Number: 

	                                                                        

	        

	Date:

	 
	 

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

EXHIBIT B

FORM OF SUBSCRIPTION (CASHLESS EXERCISE)

			
	TO:

	Cicero Inc.

	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

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

			
	                     

	 
	                                                                                   

	 
	 
	 

	 
	 
	 

				
	By:

	                                                                                                     

	 

	Name: 

	 
	 

	Social Security Number or Tax Identification Number: 

	                                                                        

	        

	Date:

	 
	 

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

FORM OF ASSIGNMENT

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

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

Print Name of Transferee: ____________________________________________________ 

Address: ___________________________________________________________________ 

City State Zip Code:_________________________________________________________ 

Social Security or Federal Tax ID Number: _____________________________________ 

this Warrant, originally dated __________ 2010, and issued by Cicero Inc. (“Company”), together with all right, title and interest therein, and does hereby irrevocably constitute and appoint ___________________________ as its Attorney in Fact, to transfer the Warrant on the books of the Company, with full power of substitution. 

				
	Dated: 

	                                                     

	           

	Signature:                                                                            

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	 
	 
	 

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

Exhibit 4.4

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of January 15, 2010, by and among Cicero Inc., a corporation organized and existing under the laws of the State of Delaware (the “Company”), the purchaser whose signature appears on the signature pages of this Agreement under the caption “Purchaser” and any additional purchasers of Series B Preferred Stock and Warrants (each as defined below) that become parties to this Agreement in accordance with Section 8(m) hereof (collectively, the “Purchasers”).

This Agreement is being entered into pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and the Purchaser (the “Purchase Agreement”), relating to the private offering of not less than $1,000,000 in the aggregate of Series B Preferred Stock, par value $.001 per share, of the Company (the “Series B Preferred Stock”), and warrants (the “Warrants”) to acquire shares of Common Stock, par value $.001 per share, of the Company.

The Company and the Purchasers hereby agree as follows:

1.

Definitions.

As used in this Agreement, the following terms shall have the following meanings:

“

415 Notice

”

shall have the meaning set forth in Section 2(b).

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person.  For the purposes of this definition, “control,” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing.

“Board” shall have meaning set forth in Section 3(k).

“Business Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York generally are authorized or required by law or other government actions to close.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the Common Stock, par value $.001 per share, of the Company.

“Conversion Shares” means shares of Common Stock issued or issuable upon conversion of the Series B Preferred Stock.

1

Exhibit 4.4

 “Effectiveness Date” means, subject to Section 2(b) hereof, with respect to the Registration Statement the earlier of (A) the one hundred eightieth (180th) day following the Initial Closing Date or (B) the date which is within three (3) Business Days after the date on which the Commission informs the Company (i) that the Commission will not review the Registration Statement or (ii) that the Company may request the acceleration of the effectiveness of the Registration Statement and the Company makes such request; provided that, if the Effectiveness Date falls on a Saturday, Sunday or any other day which shall be a legal holiday or a day on which the Commission is authorized or required by law or other government actions to close, the Effectiveness Date shall be the following Business Day.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Filing Date” means, subject to Section 2(b) hereof, the one hundred twentieth (120th) day following the Initial Closing Date; provided that, if the Filing Date falls on a Saturday, Sunday or any other day which shall be a legal holiday or a day on which the Commission is authorized or required by law or other government actions to close, the Filing Date shall be the following Business Day.  

“FINRA” means the Financial Industry Regulatory Authority.

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 6(c).

“Indemnifying Party” shall have the meaning set forth in Section 6(c).

“Initial Closing Date” means the date of the initial closing of the purchase and sale of the shares of Series B Preferred Stock and the Warrants pursuant to the Purchase Agreement.

“Losses” shall have the meaning set forth in Section 6(a).

“Person” means an individual or a corporation, limited or general partnership, trust, incorporated or unincorporated association, firm, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

2

Exhibit 4.4

“Prospectus” means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference in such Prospectus.

“Registrable Securities” means (i) the Conversion Shares, (ii) the Warrant Shares and (iii) shares of Common Stock issued in respect of the foregoing as a result of stock splits, stock dividends, reclassifications, recapitalizations, or other similar events.  At such time as any Conversion Shares or Warrant Shares or shares of Common Stock are sold pursuant to the Registration Statement or Rule 144, or may be sold without restriction pursuant to Rule 144, then such shares shall cease to be Registrable Securities.

“Registration Statement” means the registration statement and any additional registration statements contemplated by Section 2, including (in each case) the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement.

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 158” means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“Securities Act” means the Securities Act of 1933, as amended.

“Warrant Shares” means shares of Common Stock issued or issuable upon the exercise of the Warrants.

2.

Resale Registration.

3

Exhibit 4.4

(a)

On or prior to the Filing Date, the Company shall prepare and file with the Commission a “resale” Registration Statement providing for the resale of all Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415.  The Registration Statement shall be on Form S-1 (or another appropriate form in accordance herewith and with the Securities Act and the rules promulgated thereunder).  Such Registration Statement shall cover to the extent allowable under the Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities.  The Company shall use commercially reasonable efforts to cause the Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event prior to the Effectiveness Date, and to keep such Registration Statement continuously effective under the Securities Act until such date as is the earlier of (x) the date when all Registrable Securities covered by such Registration Statement have been sold or (y) the date on which the Registrable Securities may be sold without any restriction pursuant to Rule 144 as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company’s transfer agent to such effect (the “Effectiveness Period”).  If at any time and for any reason an additional Registration Statement is required to be filed because at such time the actual number of Conversion Shares and Warrant Shares exceeds the number of shares of Registrable Securities remaining under the Registration Statement, the Company shall have thirty (30) Business Days to file such additional Registration Statement, and the Company shall use commercially reasonable efforts to cause such additional Registration Statement to be declared effective by the Commission as soon as possible, but in no event later than ninety (90) days after.

(b)

Notwithstanding anything to the contrary set forth in this

Section 2

, in the event the Commission does not permit the Company to register all of the Registrable Securities in the Registration Statement because of the Commission’s application of Rule 415 (a “

415 Notice

”), the Company shall, within ten (10) days of receipt of the 415 Notice, register in the Registration Statement such number of Registrable Securities as is permitted by the Commission,

provided

,

 however

, that the Registrable Securities to be included in such Registration Statement or any subsequent registration statement shall be determined in the following order: (i) first, the Warrant Shares shall be registered on a pro rata basis among the Purchasers, (ii) second, the Conversion Shares shall be registered on a pro rata basis among the Purchasers, and (iii) third, any securities of the Company included or to be included in such Registration Statement pursuant to piggyback or demand registration rights shall be registered on a pro rata basis.  In the event the Commission does not permit the Company to register all of the Registrable Securities in the initial Registration Statement, the Company shall file subsequent Registration Statements to register the Registrable Securities that were not registered in the initial Registration Statement as promptly as possible and in a manner permitted by the Commission.  For purposes of this Section 2(b), “

Filing Date

”

means with respect to each subsequent Registration Statement filed pursuant hereto,

the later of (i) thirty (30) days following the sale of substantially all of the Registrable Securities included in the initial Registration Statement or any subsequent Registration Statement and (ii) six (6) months following the effective date of the initial Registration Statement or any subsequent Registration Statement, as applicable, or such earlier date as permitted by the Commission.  

For purposes of this Section 2(b), “Effectiveness Date” means with respect to each subsequent Registration Statement filed pursuant hereto, the earlier of (A) the ninetieth (90th) day following the filing date of such Registration Statement (or in the 

4

Exhibit 4.4

event the Commission reviews the Registration Statement, the one hundred twentieth (120th) day following such filing date) or (B) the date which is within three (3) Business Days after the date on which the Commission informs the Company (i) that the Commission will not review such Registration Statement or (ii) that the Company may request the acceleration of the effectiveness of such Registration Statement and the Company makes such request; provided that, if the Effectiveness Date falls on a Saturday, Sunday or any other day which shall be a legal holiday or a day on which the Commission is authorized or required by law or other government actions to close, the Effectiveness Date shall be the following Business Day.

3.

Registration Procedures.

          

In connection with the Company’s registration obligations hereunder, the Company shall:

          

(a)

Prepare and file with the Commission, on or prior to the applicable Filing Date, a Registration Statement on Form S-1 (or another appropriate form in accordance herewith and with the Securities Act and the rules promulgated thereunder) (which, subject to any comments of the Commission, shall contain a plan of distribution substantially as set forth on Exhibit A hereto) and in accordance with applicable law, rules, regulations and Commission policies, and use commercially reasonable efforts to cause the Registration Statement to become effective and remain effective as provided herein; provided, however, that not less than five (5) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto, the Company shall furnish to the Holders copies of all such documents proposed to be filed, which documents will be subject to the review of such Holders.  The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in writing within three (3) Business Days of their receipt thereof.

(b)

(i) Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and, subject to Section 2(b), prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as promptly as possible, but in no event later than twenty (20) Business Days, to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Holders true and complete copies of all material correspondence from and to the Commission relating to the Registration Statement; provided, however, that the Company shall not provide the Holders with any portion of such correspondence that in the reasonable opinion of counsel to the Company constitutes material non-public information or that is otherwise competitively sensitive; (iv) file the final prospectus pursuant to Rule 424 of the Securities Act no later than 9:00 a.m. Eastern Time on the second Business Day following the date the Registration Statement is declared effective by the Commission; and (v) comply in all material respects with the provisions of the Securities Act 

5

Exhibit 4.4

and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as so supplemented.

(c)

Notify the Holders of Registrable Securities as promptly as possible (and, in the case of (i)(A) below, not less than three (3) days prior to such filing, and in the case of (iii) below, on the same day of receipt by the Company of such notice from the Commission): (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is filed, (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or Prospectus or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the initiation or threatening of any Proceedings for that purpose; (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and (v) of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(d)

Use commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of, as promptly as possible, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction.

(e)

Promptly deliver to each Holder, without charge, one copy of the Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto; and subject to the provisions of Sections 3(e) and 3(k), the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto.

(f)

Prior to any public offering of Registrable Securities, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period 

6

Exhibit 4.4

and to do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction where it is not then so subject.

(g)

Cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement, which certificates, to the extent permitted by the Purchase Agreement and applicable federal and state securities laws, shall be free of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any Holder may reasonably request in connection with any sale of Registrable Securities.

(h)

Upon the occurrence of any event contemplated by Section 3(c)(vi), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(i)

Use commercially reasonable efforts to cause all Registrable Securities relating to the Registration Statement to be quoted on the OTC Bulletin Board or any other securities exchange, quotation system or market, if any, on which similar securities issued by the Company are then listed, quoted or traded.

(j)

Comply in all material respects with all applicable rules and regulations of the Commission and make generally available to its security holders all documents filed or required to be filed with the Commission.

(k)

Notwithstanding anything in this Agreement to the contrary, if (i) there is material non-public information regarding the Company which the Company’s Board of Directors (the “Board”) determines not to be in the Company’s best interest to disclose and which the Company is not otherwise required to disclose, (ii) there is a significant business opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board determines not to be in the Company’s best interest to disclose, or (iii) the Company is required to file a post-effective amendment to the Registration Statement to incorporate the Company’s quarterly and annual reports and audited financial statements on Forms 10-Q and 10-K, then the Company may (x) postpone or suspend filing of a registration statement for a period not to exceed sixty (60) consecutive days or (y) postpone or suspend effectiveness of a registration statement for a period not to exceed sixty (60) consecutive days; provided that the Company may not postpone or suspend effectiveness of a registration statement under this Section 3(k) for more than ninety (90) days in the aggregate during any 360 day period; provided, further, that no such postponement or suspension shall be 

7

Exhibit 4.4

permitted for consecutive sixty (60) day periods arising out of the same set of facts, circumstances or transactions.

4.

Obligations of the Holders.

(a)

It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the selling Holders shall furnish to the Company information regarding such Holder and the distribution of such Registrable Securities as is required by law to be disclosed in the Registration Statement, Prospectus, or any amendment or supplement thereto, and the Company may exclude from such registration the Registrable Securities of any such Holder who unreasonably fails to furnish such information promptly after receiving such request. Additionally, each Holder shall promptly notify the Company of any changes in the information furnished to the Company pursuant hereto.

(b)

Each Holder agrees to cooperate with the Company as reasonably requested by the Company in connection with the filing of any Registration Statement hereunder, unless such Holder has notified the Company in writing that such Holder elects to exclude all of its Registrable Securities from such Registration Statement.

(c)

Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it or an exemption therefrom in connection with sale of Registrable Securities pursuant to any Registration Statement.

(d)

Each Holder who is a member or affiliated or associated with members of FINRA will agree, if requested by FINRA, to sign a lock-up, the form of which shall be satisfactory to FINRA, with respect to any Registrable Securities.

(e)

Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(k), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(h), or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement.

5.

Registration Expenses.   

All fees and expenses incident to the performance of or compliance with this Agreement by the Company, except as and to the extent specified in this Section 5, shall be borne by the Company whether or not the Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement.  The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with the OTC Bulletin Board and/or each other securities exchange or market on which Registrable Securities are required hereunder to be quoted or listed, if any (B) with respect to filing fees required to be paid to FINRA, if any, each as applicable, and (C) in 

8

Exhibit 4.4

compliance with state securities or Blue Sky laws), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, the Company’s independent public accountants (including the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a comfort letter or comfort letters).  In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.  The Company shall not be responsible for any discounts, commissions, transfer taxes or other similar fees incurred by the Holders in connection with the sales of the Registrable Securities.

6.

Indemnification.

(a)

Indemnification by the Company.  The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, managers, partners, members, shareholders, agents, brokers, investment advisors and employees of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to any violation of securities laws by the Company or untrue or alleged untrue statement of a material fact contained in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information about the plan of distribution or regarding such Holder or such other Indemnified Party furnished or approved in writing to the Company by such Holder expressly for use therein.  The Company shall notify the Holders promptly of the institution, written threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement.

(b)

Indemnification by Holders.  Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents and employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising out of or based upon (i) any breach of this Agreement by such Holder and (ii) any untrue statement of a material fact contained in the Registration Statement, any 

9

Exhibit 4.4

Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising out of or based upon any omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information (including the plan of distribution) so furnished or approved in writing by such Holder or other Indemnifying Party to the Company specifically for inclusion in the Registration Statement or such Prospectus.  Notwithstanding anything to the contrary contained herein, each Holder shall be liable under this Section 6(b) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement.

(c)

Conduct of Indemnification Proceedings.  If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the “Indemnifying Party) in writing, and the Indemnifying Party shall be entitled to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof (including reasonable attorneys’ fees and expenses); provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such parties shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Indemnifying Party).  The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party is a party and indemnity has been sought hereunder, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

     All fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such 

10

Exhibit 4.4

Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten (10) Business Days of written notice thereof to the Indemnifying Party (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnified Party shall reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder).

(d)

Contribution.  If a claim for indemnification under Section 6(a) or 6(b) is due but unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.  The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying, Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission.  The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in Section 6(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.  In no event shall any selling Holder be required to contribute an amount under this Section 6(d) in excess of the net proceeds received by such Holder upon sale of such Holder’s Registrable Securities pursuant to the Registration Statement giving rise to such contribution obligation.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

7.

Rule 144.  Until such time as all of the Registrable Securities may be sold without restriction pursuant to Rule 144, as long as any Holder owns shares of Series B Preferred Stock, Warrants or Registrable Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act.  Until such time as all of the Registrable Securities may be sold without restriction pursuant to Rule 144, as long as any Holder owns shares of Series B Preferred Stock, Warrants or Registrable Securities, if the Company is not required to file reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will use its commercially reasonable efforts to prepare and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and 

11

Exhibit 4.4

quarterly financial statements, together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to be included in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as any other information required thereby, in the time period that such filings would have been required to have been made under the Exchange Act; provided that the provisions of this sentence shall be of no further force and effect in the event of any sale of the Company or substantially all of its assets.

8.

Miscellaneous.

(a)

Remedies.  In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, such Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.  The Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

(b)

No Inconsistent Agreements.  Neither the Company nor any of its subsidiaries has, as of the date hereof entered into and currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

(c)

Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of a majority of the Registrable Securities outstanding (the “Required Holders”).

(d)

Notices.  Any notice, demand, request, waiver or other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or delivery by telex (with correct answer back received) or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.  The addresses for such communications shall be:

		
	If to the Company:

	Cicero Inc.

8000 Regency Parkway

Cary, NC  27518

Attention: John Broderick

Tel. No.: (919) 380-5000

Fax No.:  (919) 380-5121

12

Exhibit 4.4

		
	 
	 

	with a copy to (which copy shall not constitute notice):

	Golenbock Eiseman Assor Bell & Peskoe LLP

437 Madison Avenue

New York, New York 10022

Attention: Lawrence Bell, Esq.

Tel. No.: (212) 907-7300 

Fax No.:  (212) 754-0330

	If to any Purchaser:

	To the address set forth on the signature page hereto

	 
	 

	 
	 

Any party hereto may from time to time change its address for notices by giving at least ten (10) days’ written notice of such changed address to the other party hereto.

(e)

Assignment.  The Company may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the Required Holders.  Subject to Section 8(f) below, the Holders may not assign this Agreement or any of their rights or obligations hereunder without the prior written consent of the Company.

(f)

Assignment of Registration Rights for Conversion Shares.   The rights of each Holder hereunder to have the Company register for resale the Conversion Shares in accordance with the terms of this Agreement shall be assignable by such Holder to any Person to whom shares of Preferred Stock or Conversion Shares are transferred if: (i) the Holder agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, as promptly as possible after such transfer or assignment, furnished with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section, the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement, and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement and applicable law.  The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns.  For the avoidance of doubt, the assignment of any Warrant or Warrant Shares shall not transfer the registration rights applicable to Warrant Shares provided herein, which registration rights are unique to the initial Holders of the Warrants.

(g)

Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other parties hereto, it being understood that all parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the 

13

Exhibit 4.4

party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

(h)

Cumulative Remedies.  The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

(i)

Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.  It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

(j)

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

(k)

Shares Held by the Company and its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than any Holder or transferees or successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(l)

Aggregation of Stock.  All securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.

(m)

Additional Investors.  Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of the Company’s Series B Preferred Stock, any purchaser of such shares of Series B Preferred Stock and Warrants may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed a “Purchaser” for all purposes hereunder.  No action or consent by the Purchasers shall be required for such joinder to this Agreement by such additional Purchaser, so long as such additional Purchaser has agreed in writing to be bound by all of the obligations as a “Purchaser” hereunder.

(n)

Governing Law; Submission to Jurisdiction.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without regard to the conflicts of laws principles thereof. The parties hereto hereby irrevocably agree that any suit or proceeding arising directly and/or indirectly pursuant to or under this Agreement, shall be brought solely in a federal or state court located in the State of Delaware.  By its execution hereof, the parties hereby consent and irrevocably submit to the in personam 

14

Exhibit 4.4

jurisdiction of the federal and state courts located in the City of Wilmington, State of Delaware and agree that any process in any such action may be served upon any of them personally, or by certified mail or registered mail upon them or their agent, return receipt requested, with the same full force and effect as if personally served upon them in the City of Wilmington, State of Delaware. The parties hereto waive any claim that any such jurisdiction is not a convenient forum for any such suit or proceeding and any defense or lack of in personam jurisdiction with respect thereto.  THE PARTIES HERETO AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.  THE PARTY PREVAILING THEREIN SHALL BE ENTITLED TO PAYMENT FROM THE OTHER PARTY HERETO OF ALL OF ITS REASONABLE COUNSEL FEES AND DISBURSEMENTS.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officer as of the date first above written.

			
	 
	COMPANY:

	 
	 

	 
	CICERO INC

	 
	 
	 

	 
	By:

	/s/ 

	 
	Name: John Broderick

	 
	Title:   CEO/CFO

15

Exhibit 4.4

			
	 
	PURCHASER:

	 
	 

	 
	[PURCHASER]

	 
	 
	 

	 
	By:

	/s/ 

	 
	Name: 

	 
	Title

	 
	 

	 
	Address:

	 
	 

	 
	 

	 
	 

	 
	 

	 
	 

	 
	Email:

	 
	 

	 
	 

EXHIBIT A

Plan of Distribution

The selling security holders and any of their pledgees, donees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock being offered under this prospectus on any stock exchange, market or trading facility on which shares of our common stock are traded or in private transactions.  These sales may be at fixed or negotiated prices.  The selling security holders may use any one or more of the following methods when disposing of shares:

·

ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

·

block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

·

purchases by a broker-dealer as principal and resales by the broker-dealer for its account;

·

an exchange distribution in accordance with the rules of the applicable exchange;

·

privately negotiated transactions;

·

broker-dealers may agree with the selling security holders to sell a specified number of such shares at a stipulated price per share;

·

a combination of any of these methods of sale; and

·

any other method permitted pursuant to applicable law.

The shares may also be sold under Rule 144 under the Securities Act of 1933, as amended (“Securities Act”), if available, rather than under this prospectus.  The selling security holders have the sole and absolute discretion not to accept any purchase offer or make any sale of shares if they deem the purchase price to be unsatisfactory at any particular time.

The selling security holders may pledge their shares to their brokers under the margin provisions of customer agreements.  If a selling security holder defaults on a margin loan, the broker may, from time to time, offer and sell the pledged shares.

Broker-dealers engaged by the selling security holders may arrange for other broker-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling security holders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, which commissions as to a particular broker or dealer may be in excess of customary commissions to the extent permitted by applicable law.

The selling security holders and any broker-dealers or agents that are involved in selling the shares offered under this prospectus may be deemed to be “underwriters” within the meaning of the Securities Act in connection with these sales.  Commissions received by these broker-

dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act.  Any broker-dealers or agents that are deemed to be underwriters may not sell shares offered under this prospectus unless and until we set forth the names of the underwriters and the material details of their underwriting arrangements in a supplement to this prospectus or, if required, in a replacement prospectus included in a post-effective amendment to the registration statement of which this prospectus is a part.

We have agreed to pay all fees and expenses we incur incident to the registration of the shares being offered under this prospectus.  However, each selling security holder and purchaser is responsible for paying any discounts, commissions and similar selling expenses they incur.  

We and the selling security holders have agreed to indemnify one another against certain losses, damages and liabilities arising in connection with this prospectus, including liabilities under the Securities Act.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]