-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KiRRjun+GvQtDOsTm7EEd0rDqptPFmDU3Lby5h7DHKIOboBQEClTfTlH6wGWqXY1 aFoPSBdl+RFevhbSvVT9wQ== 0001072613-05-002658.txt : 20051117 0001072613-05-002658.hdr.sgml : 20051117 20051117114334 ACCESSION NUMBER: 0001072613-05-002658 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20051114 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051117 DATE AS OF CHANGE: 20051117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SEMOTUS SOLUTIONS INC CENTRAL INDEX KEY: 0000832370 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 954599440 STATE OF INCORPORATION: NV FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15569 FILM NUMBER: 051211750 BUSINESS ADDRESS: STREET 1: 16400 LARK AVE STREET 2: SUITE 230 CITY: LOS GATOS STATE: CA ZIP: 95032 BUSINESS PHONE: 4083587100 MAIL ADDRESS: STREET 1: 16400 LARK AVE STREET 2: SUITE 230 CITY: LOS GATOS STATE: CA ZIP: 95032 FORMER COMPANY: FORMER CONFORMED NAME: DATALINK NET INC DATE OF NAME CHANGE: 19990707 FORMER COMPANY: FORMER CONFORMED NAME: DATALINK SYSTEMS CORP /CA/ DATE OF NAME CHANGE: 19960723 FORMER COMPANY: FORMER CONFORMED NAME: LORD ABBOTT INC DATE OF NAME CHANGE: 19920703 8-K 1 form8k_13987.txt SEMOTUS SOLUTIONS, INC. FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 14, 2005 SEMOTUS SOLUTIONS, INC. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) NEVADA 0-21069 36-3574355 - -------------------------------------------------------------------------------- (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 718 University Ave., Suite 202 Los Gatos, CA 95032 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (408) 399-6120 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13(c)) ================================================================================ ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT Semotus Solutions, Inc. ("Semotus") has signed definitive subscription agreements on November 14, 2005 by and among Semotus and certain individual investors, relating to an equity private placement of US$700,000. For more details on this transaction, please see Item 3.02 below. ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES. Semotus has closed an equity private placement of US$700,000. Under the terms of the private placement, Semotus sold an aggregate of 700,000 Units, consisting of 2,800,000 shares of common stock at $0.25 per share and 1,400,000 share purchase warrants. Each warrant entitles the holder to purchase an additional share of common stock at a price of $0.50 per share until September 30, 2008. 720,000 of these warrants are not exercisable until May 14, 2005. In connection with the private placement, we paid a placement fee to the placement agent, Bathgate Capital Partners, of $56,000, and issued 420,000 share purchase warrants exercisable at $0.30 per share. After payment of expenses in the amount of $14,000 and placement fees, Semotus received net proceeds of $630,000. As part of the private placement, Semotus has agreed to file a registration statement with the Securities and Exchange Commission to qualify the resale of the 2,800,000 shares of common stock and the 1,820,000 shares of common stock issuable upon the exercise of the share purchase warrants. These funds will be used to increase our sales and marketing efforts and for other general working capital purposes. The securities issued in this private placement have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act of 1933. With respect to these transactions, Semotus relied on Section 4(2) of the Securities Act of 1933, as amended. The investors were given complete information concerning Semotus and represented that the shares were being acquired for investment purposes. The issuances were made without general solicitation or advertising. The appropriate restrictive legend was placed on the certificates and stop transfer instructions were issued to the transfer agent. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS. (a) N/A. (b) N/A. (c) Exhibits. The following exhibits are filed with this report: EXHIBIT NUMBER DESCRIPTION ------- ----------- 2.1 Form of Subscription Agreement for a total of $340,000 by and among Semotus Solutions, Inc. and certain Investors. 2.2 Form of amended Subscription Agreement (including a six month hold on the warrants) for a total of $360,000 by and among Semotus and certain Investors 4.1 Form of Warrant to purchase up to a maximum total of 680,000 shares of Semotus Solutions, Inc. common stock issued to the Investors dated November 14, 2005. 4.2 Form of Warrant to purchase up to a maximum total of 720,000 shares of Semotus Solutions, Inc. common stock issued to the Investors dated November 14, 2005. 4.3 Form of Warrant to purchase up to a maximum total of 420,000 shares of Semotus' common stock issued to Bathgate Capital Partners dated November 14, 2005. SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized. SEMOTUS SOLUTIONS, INC. Date: November 16, 2005 By: /s/ Anthony N. LaPine -------------------------------- Anthony N. LaPine, President and Chief Executive Officer EX-2.1 2 exh2-1_13987.txt FORM OF SUBSCRIPTION AGREEMENT EXHIBIT 2.1 ----------- BROKER'S NAME: ------------------------------------------------------- IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING. SIGNIFICANT REPRESENTATIONS ARE CALLED FOR HEREIN. SUBSCRIPTION AGREEMENT and LETTER OF INVESTMENT INTENT Semotus Solutions, Inc. 718 University Ave., Suite 202 Los Gatos, CA 95032 Gentlemen: The undersigned (the "Subscriber") hereby tenders this subscription for the purchase of securities (the "Securities") of Semotus Solutions, Inc. (the "Company"), consisting of units ("Units") comprising shares ("Shares") of the Company's common stock and common stock purchase warrants ("Warrants"). The Units are described in the Private Placement Memorandum dated August 5, 2005 (the Memorandum"). The Subscriber understands that a subscription for the Securities may be rejected for any reason and that, in the event that this subscription is rejected, the funds delivered herewith will be promptly returned, without interest thereon or deduction therefrom. By execution below, the Subscriber acknowledges that the Company is relying upon the accuracy and completeness of the representations contained herein in complying with their obligations under applicable securities laws. 1. Subscription Commitment. The Subscriber acknowledges that the minimum subscription is $25,000. The Subscriber hereby subscribes for the purchase of the number of Securities specified below and, as full payment therefor, agrees to pay in cash, the amount set forth below by check made payable to " Semotus Solutions, Inc. Escrow Account," or by wire transfer to the escrow account of the Company. ___________________ At $1.00 per Unit for Number of Units an aggregate of $ __________________ The Subscriber understands that this subscription is not binding on the Company until accepted by the Company, which acceptance is at the discretion of the Company and is to be evidenced by the Company's execution of this Subscription Agreement where indicated. If the subscription is rejected, the Company shall return to the Subscriber, without interest or deduction, any payment tendered by the Subscriber, and the Company and the Subscriber shall have no further obligation to each other hereunder. Unless and until rejected by the Company, this subscription shall be irrevocable by the Subscriber. The Subscriber understands that the Company may, in the event that the offering to which the Memorandum relates is oversubscribed, reduce this subscription in any amount and to any extent, whether or not pro rata reductions are made of any other investor's subscription. 2. Representations and Warranties. In order to induce the Company to accept this subscription, the Subscriber hereby represents and warrants to, and covenants with, the Company as follows: (a) The Subscriber has received and had the opportunity to review the Memorandum, including the Exhibits thereto, and has been given access to full and complete information regarding the Company and has utilized such access to the Subscriber's satisfaction for the purpose of obtaining such information regarding the Company as the Subscriber has reasonably requested; and, particularly, the Subscriber has been given reasonable opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and to obtain any additional information, to the extent reasonably available; (b) Except for the Memorandum, the Subscriber has not been furnished with any other materials or literature relating to the offer and sale of the Securities; except as set forth in the Memorandum, no representations or warranties have been made to the Subscriber by the Company, any selling agent of the Company, or any agent, employee, or affiliate of the Company or such selling agent. (c) The Subscriber believes that an investment in the securities is suitable for the Subscriber based upon the Subscriber investment objectives and financial needs. The Subscriber (i) has adequate means for providing for the Subscriber's current financial needs and personal contingencies; (ii) has no need for liquidity in this investment; (iii) at the present time, can afford a complete loss of such investment; and (iv) does not have an overall commitment to investments which are not readily marketable that is disproportionate to the Subscriber's net worth, and the Subscriber's investment in the Securities will not cause such overall commitment to become excessive. (d) The Subscriber, in reaching a decision to subscribe, has such knowledge and experience in financial and business matters that the Subscriber is capable of reading and interpreting financial statements and evaluating the merits and risk of an investment in the Securities and has the net worth to undertake such risks. (e) The Subscriber was not offered or sold the Securities, directly or indirectly, by means of any form of general advertising or general solicitation, including, but not limited to, the following: (1) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar medium of or broadcast over television or radio; or (2) to the knowledge of the undersigned, any seminar or meeting whose attendees had been invited by any general solicitation or general advertising. (f) The Subscriber has obtained, to the extent the Subscriber deems necessary, the Subscriber's own personal professional advice with respect to the risks inherent in the investment in the securities, and the suitability of an investment in the Securities in light of the Subscriber's financial condition and investment needs; (g) The Subscriber recognizes that the Securities as an investment involves a high degree of risk, including those set forth under the caption "Risk Factors" in the Memorandum. (h) The information contained in this agreement is true, complete and correct in all material respects as of the date hereof; the Subscriber understands that the Company's determination that the exemption from the registration provisions of the Securities Act of 1933, as amended (the "Act"), which is based upon non-public offerings and applicable to the offer and sale of the Securities, is based, in part, upon the representations, warranties, and agreements made by the Subscriber herein; and the Subscriber consents to the disclosure of any such information, and any other information furnished to the Company, to any governmental authority, self-regulatory organization, or, to the extent required by law, to any other person. (i) The Subscriber realizes that (i) the purchase of the Securities is a long-term investment; (ii) the purchaser of the Securities must bear the economic risk of investment for an indefinite period of -2- time because the Securities have not been registered under the Securities Act of 1933 or under the securities laws of any state and, therefore, the Securities cannot be resold unless they are subsequently registered under said laws or exemptions from such registrations are available; (iii) there is presently no public market for the Securities and the Subscriber may be unable to liquidate the Subscriber's investment in the event of an emergency, or pledge the Securities as collateral for a loan; and (iv) the transferability of the Securities is restricted and (A) requires conformity with the restrictions contained in paragraph 2 below and (B) legends will be placed on the certificate(s) representing the Securities referring to the applicable restrictions on transferability; and (j) The Subscriber certifies, under penalties of perjury, that the Subscriber is NOT subject to the backup withholding provisions of Section 3406(a)(i)(C) of the Internal Revenue Code. (k) Stop transfer instructions will be placed with the transfer agent for the Securities, and a legend may be placed on any certificate representing the Securities substantially to the following effect: THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN THE ACT AND REGULATION D UNDER THE ACT. AS SUCH, THE PURCHASE OF THIS SECURITY WAS NECESSARILY WITH THE INTENT OF INVESTMENT AND NOT WITH A VIEW FOR DISTRIBUTION. THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. FURTHERMORE, IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN, WITHOUT THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE PROPOSED TRANSFER OR SALE DOES NOT AFFECT THE EXEMPTIONS RELIED UPON BY THE COMPANY IN ORIGINALLY DISTRIBUTING THE SECURITY AND THAT REGISTRATION IS NOT REQUIRED. 3. Restricted Nature of the Securities. The Subscriber has been advised and understands that (a) the Securities have not been registered under the Securities Act of 1933 or applicable state securities laws and that the securities are being offered and sold pursuant to exemptions from such laws; (b) the Memorandum may not have been filed with or reviewed by certain state securities administrators because of the limited nature of the offering; (c) except as provided in paragraph 11 hereunder, the Company is under no obligation to register the Securities under the Act or any state securities laws, or to take any action to make any exemption from any such registration provisions available. The Subscriber represents and warrants that the Securities are being purchased for the Subscriber's own account and for investment purposes only, and without the intention of reselling or redistributing the same; the Subscriber has made no agreement with others regarding any of the Securities; and the Subscriber's financial condition is such that it is not likely that it will be necessary to dispose of any of such Securities in the foreseeable future. The Subscriber is aware that, in the view of the Securities and Exchange Commission, a purchase of such securities with an intent to resell by reason of any foreseeable specific contingency or anticipated change in market value, or any change in the condition of the Company, or in connection with a contemplated liquidation settlement of any loan obtained for the acquisition of such securities and for which such securities were pledged, would represent an intent inconsistent with the representations set forth above. The Subscriber further represents and agrees that if, contrary to the foregoing intentions, the Subscriber should later desire to dispose of or transfer any of such securities in any manner, the Subscriber shall not do so unless and until (i) said Securities shall have first been -3- registered under the Act and all applicable securities laws; or (ii) the Subscriber shall have first delivered to the Company a written notice declaring such holder's intention to effect such transfer and describe in sufficient detail the manner and circumstances of the proposed transfer, which notice shall be accompanied either by a written opinion of legal counsel who shall be reasonably satisfactory to the Company, which opinion shall be addressed to the Company and reasonably satisfactory in form and substance to the Company's counsel, to the effect that the proposed sale or transfer is exempt from the registration provisions of the Act and all applicable state securities laws, or by a "no action" letter from the Securities and Exchange Commission to the effect that the transfer of the Securities without registration will not result in recommendation by the staff of the Commission that action be taken with respect thereto. 4. Residence. The Subscriber represents and warrants that the Subscriber is a bona fide resident of, is domiciled in and received the offer and made the decision to invest in the Securities in the state set forth on the signature page hereof, and the Securities are being purchased by the Subscriber in the Subscriber's name solely for the Subscriber's own beneficial interest and not as nominee for, or on behalf of, or for the beneficial interest of, or with the intention to transfer to, any other person, trust or organization, except as specifically set forth in paragraph 15 of this Subscription Agreement and Letter of Investment Intent. 5. Investor Qualification. The Subscriber represents and warrants that the Subscriber or the purchaser of the Securities named in paragraph 15 comes within at least one category marked below, and that for any category marked the Subscriber has truthfully set forth the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS PARAGRAPH WILL BE KEPT STRICTLY CONFIDENTIAL. The Subscriber agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below. Category I _____ The Subscriber is an individual (not a partnership, corporation, etc.) whose individual net worth, or joint net worth with the Subscriber's spouse, presently exceeds $1,000,000. EXPLANATION. In calculation of net worth the Subscriber may include equity in personal property and real estate, including the Subscriber's principal residence, cash, short term investments, stocks and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property. Category II _____ The Subscriber is an individual (not a partnership, corporation, etc.) who had an individual net income in excess of $200,000 in each of the last two years, or joint income with his/her spouse in excess of $300,000 in each of the last two years, and has a reasonable expectation of reaching the same income level in the current year. Category III _____ The Subscriber is an executive officer or director of the Company. Category IV _____ The Subscriber is a bank; savings and loan; insurance company; registered broker or dealer; registered investment company; registered business development company; licensed small business investment company ("SBIC"); or employee benefit plan within the meaning of Title I of ERISA whose plan fiduciary is either a bank, savings and loan, insurance company or registered investment advisor or whose total assets exceed $5,000,000; or a self-directed -4- employee benefit plan with investment decisions made solely by persons that are accredited investors. _________________________________________________________ _________________________________________________________ (describe entity) Category V _____ The Subscriber is a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. _________________________________________________________ _________________________________________________________ (describe entity) Category VI _____ The Subscriber is an entity with total assets in excess of $5,000,000 which was not formed for the purpose of investing in the Units and which is one of the following: _____ a corporation; or _____ a partnership; or _____ a business trust; or _____ a tax-exempt organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended. _________________________________________________________ _________________________________________________________ (describe entity) Category VII _____ The Subscriber is a trustee for a trust that is revocable by the grantor at any time (including an IRA) and the grantor qualifies under either Category I or Category II above. A copy of the declaration of trust or trust agreement and a representation as to the net worth or income of the grantor is enclosed. Category VIII_____ The Subscriber is an entity all the equity owners of which are "accredited investors" within one or more of the above categories, other than Category IV or Category V. [IF RELYING UPON THIS CATEGORY ALONE, EACH EQUITY OWNER MUST COMPLETE A SEPARATE COPY OF THIS AGREEMENT.] _________________________________________________________ _________________________________________________________ (describe entity) -5- Category IX _____ The Subscriber is a trust with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. 6. NASD Questionnaire. (a) Are you a member of the NASD,(1) a person associated with a member(2) of the NASD, or an affiliate of a member? Yes _________ No _________ If "Yes," please list any members of the NASD with whom you are associated or affiliated. ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ (b) If you are a corporation, are any of your officers, directors or 5% shareholders a member of the NASD, a person associated with a member of the NASD, or an affiliate of a member? Yes _________ No _________ If "Yes," please list the name of the respective officer, director, or 5% shareholder and any members of the NASD with whom they are associated or affiliated. ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ _______________ (1) The NASD defines a "member" as being either any broker or dealer admitted to membership in the NASD or any officer or partner of such a member, or the executive representative of such a member or the substitute for such representative. (2) The NASD defines a "person associated with a member" as being every sole proprietor, general or limited partner, officer, director or branch manager or such member, or any natural person occupying a similar status or performing similar functions, or any natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by such member (for example, any employee), whether or not any such person is registered or exempt from registration without the NASD. Thus, "person associated with a member" includes a sole proprietor, general or limited partner, officer, director or branch manager or an organization of any kind (whether a corporation, partnership or other business entity) which itself is a "member" or a "person associated with a member." In addition, an organization of any kind is a "person associated with a member" if its sole proprietor or anyone of its general or limited partners, officers, director or branch managers is a "member" or "person associated with a member." -6- 7. Additional Representations. The undersigned, if other than an individual, makes the following additional representations: (a) The Subscriber was not organized for the specific purpose of acquiring the Securities; and (b) This Subscription Agreement and Letter of Investment Intent has been duly authorized by all necessary action on the part of the Subscriber, has been duly executed by an authorized officer or representative of the Subscriber, and is a legal, valid and binding obligation of the Subscriber enforceable in accordance with its terms. 8. Sophistication. The Subscriber further represents and warrants that he has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of an investment in the Securities and protecting the Subscriber's own interests in this transaction, and does not desire to utilize the services of any other person in connection with evaluating such merits and risks. 9. Reliance on Representations. The Subscriber understands the meaning and legal consequences of the representations, warranties, agreements, covenants, and confirmations set out above and agrees that the subscription made hereby may be accepted in reliance thereon. The Subscriber agrees to indemnify and hold harmless the Company and any selling agent (including for this purpose their employees, and each person who controls either of them within the meaning of Section 20 of the Securities Exchange Act of 1934, as amended) from and against any and all loss, damage, liability or expense, including reasonable costs and attorney's fees and disbursements, which the Company, or such other persons may incur by reason of, or in connection with, any representation or warranty made herein not having been true when made, any misrepresentation made by the Subscriber or any failure by the Subscriber to fulfill any of the covenants or agreements set forth herein, in the Purchaser Questionnaire or in any other document provided by the Subscriber to the Company. 10. Transferability and Assignability. Neither this Subscription Agreement nor any of the rights of the Subscriber hereunder may be transferred or assigned by the Subscriber. The Subscriber agrees that the Subscriber may not cancel, terminate, or revoke this Subscription Agreement or any agreement of the Subscriber made hereunder (except as otherwise specifically provided herein) and that this Subscription Agreement shall survive the death or disability of the Subscriber and shall be binding upon the Subscriber's heirs, executors, administrators, successors, and assigns. 11. Registration Rights. The Company shall include the Shares and the shares underlying the Warrants in a registration statement to be filed with the SEC no later than 90 days after the termination of the offering, and to use its best efforts to cause the registration statement to be declared effective as soon as possible thereafter. 12. Survival. The representations and warranties of the Subscriber set forth herein shall survive the sale of the Units pursuant to this Subscription Agreement. 13. Notices. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or mailed by certified or registered mail, return receipt requested, postage prepaid, as follows: if to the Subscriber, to the address set forth below; and if to the Company to the address at the beginning of this letter, or to such other address as the Company or the Subscriber shall have designated to the other by like notice. -7- 14. (Applicable to FLORIDA residents only.) The Subscriber has been informed and recognizes that (a) the Units have not been registered under the Florida Securities Act, and (b) under Section 517.061(12) of the Florida Securities Act, the Subscriber may void the sale of any Securities within three (3) days after the tender of this Subscription Agreement and payment hereunder to the Company. 15. 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. 16. Title. Manner in Which Title is To Be Held. Place an "X" in one space below: (a)______ Individual Ownership (b)______ Community Property (c)______ Joint Tenant with Right of Survivorship (both parties must sign) (d)______ Partnership (e)______ Tenants in Common (f)______ Corporation (g)______ Trust (h)______ Other (Describe): ______________________________________________________________ ______________________________________________________________ ______________________________________________________________ Please print above the exact name(s) in which the Securities are to be held. 17. State of Residence. My state of residence and the state in which I received the offer to invest and made the decision to invest in the Securities is ________________________. 18. Date of Birth. My date of birth is: ____________________ 19. Appendices. The information contained on the attached Stock Certificate Questionnaire and the American Stock Exchange Questionnaire is accurate. IN NO EVENT WILL THE COMPANY, THE PLACEMENT AGENT, OR ANY OF THEIR AFFILIATES OR THE PROFESSIONAL ADVISORS ENGAGED BY THEM BE LIABLE IF FOR ANY REASON RESULTS OF OPERATIONS OF THE COMPANY ARE NOT AS PROJECTED IN THE DOCUMENTS. INVESTORS MUST LOOK SOLELY TO, AND RELY ON, THEIR OWN ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF INVESTING IN THE SECURITIES. SIGNATURE PAGE ON NEXT PAGE -8- SIGNATURES The Subscriber hereby represents he has read this entire Subscription Agreement and the Memorandum dated August 5, 2005. Dated: _________________ INDIVIDUAL Address to Which Correspondence Should be Directed ______________________________________ ______________________________________ Signature (Individual) ______________________________________ ______________________________________ ______________________________________ Signature (All record holders City, State and Zip Code should sign) ______________________________________ ______________________________________ Name(s) Typed or Printed Tax Identification or Social Security Number ______________________________________ (____)________________________________ Telephone Number -9- CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY Address to Which Correspondence Should be Directed ______________________________________ ______________________________________ Name of Entity ______________________________________ By: __________________________________ ______________________________________ *Signature City, State and Zip Code Its: _________________________________ ______________________________________ Title Tax Identification or Social Security Number ______________________________________ (____)________________________________ Name Typed or Printed Telephone Number * If Securities are being subscribed for by an entity, the Certificate of Signatory must also be completed. CERTIFICATE OF SIGNATORY TO BE COMPLETED IF SECURITIES ARE BEING SUBSCRIBED FOR BY AN ENTITY. I,_______________________________, am the __________________________ of __________________________________________ (the "Entity"). I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and Letter of Investment Intent and to purchase and hold the Securities, and certify that the Subscription Agreement and Letter of Investment Intent has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity. IN WITNESS WHEREOF, I have hereto set may hand this ______ day of _______, 2005. _____________________________________ Signature -10- ACCEPTANCE This Subscription Agreement is accepted as of __________________________, 200__. SEMOTUS SOLUTIONS, INC. By: _____________________________ Authorized Officer Date: ___________________________ -11- APPENDIX I STOCK CERTIFICATE QUESTIONNAIRE Please provide us with the following information: 1. The exact name that your Shares are to be registered in (this is the name that will appear on your stock certificate(s)). You may use a nominee name if appropriate: __________________________________________________________________________ 2. The relationship between the Purchaser and the Registered Holder listed in response to item 1 above: __________________________________________________________________________ 3. The mailing address of the Registered Holder listed in response to item 1 above: __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ 4. The Social Security Number or Tax Identification Number of the Registered Holder listed in response to item 1 above: __________________________________________________________________________ 5. The name of the financial institution of the Purchaser which will be wiring funds representing the purchase price of the Shares: __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ -12- APPENDIX II AMERICAN STOCK EXCHANGE QUESTIONNAIRE The American Stock Exchange ("Amex") routinely performs a due diligence on investors who have entered into transactions with Amex listed companies. In an effort to expedite this process, please respond as accurately as possible to the questions listed below: - -- Is the investor a domestic or offshore entity? ____________________________ - -- Country of domicile or registry of investor. ______________________________ - -- Is the investor a private equity fund, investment manager, general partner or other? _________________________________________________________________ - -- List all officers, directors, controlling shareholders, individuals, general partners with dispositive power or voting control (use attached sheet). - -- Bank from which investor will wire funds.__________________________________ - -- Whether the investor intends to hold the shares in its own name or street name. ___________________________________________________________________________ - -- Which brokerage firm will the investor use to hold the shares, if any? ___________________________________________________________________________ - -- Is the investor affiliated with any other purchaser of the Company's securities pursuant to this transaction? ___________________________________________________________________________ - -- How was the investor contacted for an investment in the Company?___________ ___________________________________________________________________________ -13- OFFICERS, DIRECTORS, ETC ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ -14- EX-2.2 3 exh2-2_13987.txt FORM OF AMENDED SUBSCRIPTION AGREEMENT EXHIBIT 2.2 ----------- BROKER'S NAME: ------------------------------ IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING. SIGNIFICANT REPRESENTATIONS ARE CALLED FOR HEREIN. SUBSCRIPTION AGREEMENT and LETTER OF INVESTMENT INTENT Semotus Solutions, Inc. 718 University Ave., Suite 202 Los Gatos, CA 95032 Gentlemen: The undersigned (the "Subscriber") hereby tenders this subscription for the purchase of securities (the "Securities") of Semotus Solutions, Inc. (the "Company"), consisting of units ("Units") comprising shares ("Shares") of the Company's common stock and common stock purchase warrants ("Warrants"). EACH UNIT CONSISTS OF FOUR SHARES OF COMMON STOCK AND TWO COMMON STOCK PURCHASE WARRANTS. THE WARRANTS WILL BE EXERCISABLE BEGINNING SIX (6) MONTHS FROM THE CLOSE OF THIS OFFERING AND ENDING SEPTEMBER 30, 2008 (THIS WARRANT HOLDING PERIOD IS AN AMENDMENT TO THE OFFERING MEMORANDUM). INVESTORS INITIALS: _______ The Subscriber understands that a subscription for the Securities may be rejected for any reason and that, in the event that this subscription is rejected, the funds delivered herewith will be promptly returned, without interest thereon or deduction therefrom. By execution below, the Subscriber acknowledges that the Company is relying upon the accuracy and completeness of the representations contained herein in complying with their obligations under applicable securities laws. 1. Subscription Commitment. The Subscriber acknowledges that the minimum subscription is $25,000. The Subscriber hereby subscribes for the purchase of the number of Securities specified below and, as full payment therefor, agrees to pay in cash, the amount set forth below by check made payable to " Semotus Solutions, Inc. Escrow Account," or by wire transfer to the escrow account of the Company. At $1.00 per Unit for ------------------- an aggregate of $ Number of Units --------------------- The Subscriber understands that this subscription is not binding on the Company until accepted by the Company, which acceptance is at the discretion of the Company and is to be evidenced by the Company's execution of this Subscription Agreement where indicated. If the subscription is rejected, the Company shall return to the Subscriber, without interest or deduction, any payment tendered by the Subscriber, and the Company and the Subscriber shall have no further obligation to each other hereunder. Unless and until rejected by the Company, this subscription shall be irrevocable by the Subscriber. The Subscriber understands that the Company may, in the event that the offering to which the Memorandum relates is oversubscribed, reduce this subscription in any amount and to any extent, whether or not pro rata reductions are made of any other investor's subscription. 2. Representations and Warranties. In order to induce the Company to accept this subscription, the Subscriber hereby represents and warrants to, and covenants with, the Company as follows: (a) The Subscriber has received and had the opportunity to review the Memorandum, including the Exhibits thereto, and has been given access to full and complete information regarding the Company and has utilized such access to the Subscriber's satisfaction for the purpose of obtaining such information regarding the Company as the Subscriber has reasonably requested; and, particularly, the Subscriber has been given reasonable opportunity to ask questions of, and receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and to obtain any additional information, to the extent reasonably available; (b) Except for the Memorandum, the Subscriber has not been furnished with any other materials or literature relating to the offer and sale of the Securities; except as set forth in the Memorandum, no representations or warranties have been made to the Subscriber by the Company, any selling agent of the Company, or any agent, employee, or affiliate of the Company or such selling agent. (c) The Subscriber believes that an investment in the securities is suitable for the Subscriber based upon the Subscriber investment objectives and financial needs. The Subscriber (i) has adequate means for providing for the Subscriber's current financial needs and personal contingencies; (ii) has no need for liquidity in this investment; (iii) at the present time, can afford a complete loss of such investment; and (iv) does not have an overall commitment to investments which are not readily marketable that is disproportionate to the Subscriber's net worth, and the Subscriber's investment in the Securities will not cause such overall commitment to become excessive. (d) The Subscriber, in reaching a decision to subscribe, has such knowledge and experience in financial and business matters that the Subscriber is capable of reading and interpreting financial statements and evaluating the merits and risk of an investment in the Securities and has the net worth to undertake such risks. (e) The Subscriber was not offered or sold the Securities, directly or indirectly, by means of any form of general advertising or general solicitation, including, but not limited to, the following: (1) any advertisement, article, notice or other communication published in any newspaper, magazine, or similar medium of or broadcast over television or radio; or (2) to the knowledge of the undersigned, any seminar or meeting whose attendees had been invited by any general solicitation or general advertising. (f) The Subscriber has obtained, to the extent the Subscriber deems necessary, the Subscriber's own personal professional advice with respect to the risks inherent in the investment in the securities, and the suitability of an investment in the Securities in light of the Subscriber's financial condition and investment needs; (g) The Subscriber recognizes that the Securities as an investment involves a high degree of risk, including those set forth under the caption "Risk Factors" in the Memorandum. (h) The information contained in this agreement is true, complete and correct in all material respects as of the date hereof; the Subscriber understands that the Company's determination that the exemption from the registration provisions of the Securities Act of 1933, as amended (the "Act"), which is based upon non-public offerings and applicable to the offer and sale of the Securities, is based, in part, upon the representations, warranties, and agreements made by the Subscriber herein; and the Subscriber consents to the disclosure of any such information, and any other information furnished to the Company, to any governmental authority, self-regulatory organization, or, to the extent required by law, to any other person. -2- Semotus Solutions, Inc. Subscription Agreement (i) The Subscriber realizes that (i) the purchase of the Securities is a long-term investment; (ii) the purchaser of the Securities must bear the economic risk of investment for an indefinite period of time because the Securities have not been registered under the Securities Act of 1933 or under the securities laws of any state and, therefore, the Securities cannot be resold unless they are subsequently registered under said laws or exemptions from such registrations are available; (iii) there is presently no public market for the Securities and the Subscriber may be unable to liquidate the Subscriber's investment in the event of an emergency, or pledge the Securities as collateral for a loan; and (iv) the transferability of the Securities is restricted and (A) requires conformity with the restrictions contained in paragraph 2 below and (B) legends will be placed on the certificate(s) representing the Securities referring to the applicable restrictions on transferability; and (j) The Subscriber certifies, under penalties of perjury, that the Subscriber is NOT subject to the backup withholding provisions of Section 3406(a)(i)(C) of the Internal Revenue Code. (k) Stop transfer instructions will be placed with the transfer agent for the Securities, and a legend may be placed on any certificate representing the Securities substantially to the following effect: THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN THE ACT AND REGULATION D UNDER THE ACT. AS SUCH, THE PURCHASE OF THIS SECURITY WAS NECESSARILY WITH THE INTENT OF INVESTMENT AND NOT WITH A VIEW FOR DISTRIBUTION. THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE. FURTHERMORE, IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY OR ANY INTEREST THEREIN, WITHOUT THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE PROPOSED TRANSFER OR SALE DOES NOT AFFECT THE EXEMPTIONS RELIED UPON BY THE COMPANY IN ORIGINALLY DISTRIBUTING THE SECURITY AND THAT REGISTRATION IS NOT REQUIRED. 3. Restricted Nature of the Securities. The Subscriber has been advised and understands that (a) the Securities have not been registered under the Securities Act of 1933 or applicable state securities laws and that the securities are being offered and sold pursuant to exemptions from such laws; (b) the Memorandum may not have been filed with or reviewed by certain state securities administrators because of the limited nature of the offering; (c) except as provided in paragraph 11 hereunder, the Company is under no obligation to register the Securities under the Act or any state securities laws, or to take any action to make any exemption from any such registration provisions available. The Subscriber represents and warrants that the Securities are being purchased for the Subscriber's own account and for investment purposes only, and without the intention of reselling or redistributing the same; the Subscriber has made no agreement with others regarding any of the Securities; and the Subscriber's financial condition is such that it is not likely that it will be necessary to dispose of any of such Securities in the foreseeable future. The Subscriber is aware that, in the view of the Securities and Exchange Commission, a purchase of such securities with an intent to resell by reason of any foreseeable specific contingency or anticipated change in market value, or any change in the condition of the Company, or in connection with a contemplated liquidation settlement of any loan obtained for the acquisition of such securities and for which such securities were pledged, would represent an intent inconsistent with the representations set forth above. The Subscriber further represents and agrees that if, contrary to the -3- Semotus Solutions, Inc. Subscription Agreement foregoing intentions, the Subscriber should later desire to dispose of or transfer any of such securities in any manner, the Subscriber shall not do so unless and until (i) said Securities shall have first been registered under the Act and all applicable securities laws; or (ii) the Subscriber shall have first delivered to the Company a written notice declaring such holder's intention to effect such transfer and describe in sufficient detail the manner and circumstances of the proposed transfer, which notice shall be accompanied either by a written opinion of legal counsel who shall be reasonably satisfactory to the Company, which opinion shall be addressed to the Company and reasonably satisfactory in form and substance to the Company's counsel, to the effect that the proposed sale or transfer is exempt from the registration provisions of the Act and all applicable state securities laws, or by a "no action" letter from the Securities and Exchange Commission to the effect that the transfer of the Securities without registration will not result in recommendation by the staff of the Commission that action be taken with respect thereto. 4. Residence. The Subscriber represents and warrants that the Subscriber is a bona fide resident of, is domiciled in and received the offer and made the decision to invest in the Securities in the state set forth on the signature page hereof, and the Securities are being purchased by the Subscriber in the Subscriber's name solely for the Subscriber's own beneficial interest and not as nominee for, or on behalf of, or for the beneficial interest of, or with the intention to transfer to, any other person, trust or organization, except as specifically set forth in paragraph 15 of this Subscription Agreement and Letter of Investment Intent. 5. Investor Qualification. The Subscriber represents and warrants that the Subscriber or the purchaser of the Securities named in paragraph 15 comes within at least one category marked below, and that for any category marked the Subscriber has truthfully set forth the factual basis or reason the Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS PARAGRAPH WILL BE KEPT STRICTLY CONFIDENTIAL. The Subscriber agrees to furnish any additional information which the Company deems necessary in order to verify the answers set forth below. Category I The Subscriber is an individual (not a partnership, ----- corporation, etc.) whose individual net worth, or joint net worth with the Subscriber's spouse, presently exceeds $1,000,000. EXPLANATION. In calculation of net worth the Subscriber may include equity in personal property and real estate, including the Subscriber's principal residence, cash, short term investments, stocks and securities. Equity in personal property and real estate should be based on the fair market value of such property less debt secured by such property. Category II The Subscriber is an individual (not a partnership, ----- corporation, etc.) who had an individual net income in excess of $200,000 in each of the last two years, or joint income with his/her spouse in excess of $300,000 in each of the last two years, and has a reasonable expectation of reaching the same income level in the current year. Category III The Subscriber is an executive officer or director of the ----- Company. Category IV The Subscriber is a bank; savings and loan; insurance ----- company; registered broker or dealer; registered investment company; registered business development company; licensed small business investment company ("SBIC"); or employee benefit plan within the meaning of Title I of ERISA whose plan fiduciary is either a bank, savings and loan, insurance company or registered -4- Semotus Solutions, Inc. Subscription Agreement investment advisor or whose total assets exceed $5,000,000; or a self-directed employee benefit plan with investment decisions made solely by persons that are accredited investors. ---------------------------------------------------------- ---------------------------------------------------------- (describe entity) Category V The Subscriber is a private business development company ----- as defined in Section 202(a)(22) of the Investment Advisers Act of 1940. ---------------------------------------------------------- ---------------------------------------------------------- (describe entity) Category VI The Subscriber is an entity with total assets in excess of ----- $5,000,000 which was not formed for the purpose of investing in the Units and which is one of the following: a corporation; or ----- a partnership; or ----- a business trust; or ----- a tax-exempt organization described in Section ----- 501(c)(3) of the Internal Revenue Code of 1986, as amended. ---------------------------------------------------------- ---------------------------------------------------------- (describe entity) Category VII The Subscriber is a trustee for a trust that is revocable ----- by the grantor at any time (including an IRA) and the grantor qualifies under either Category I or Category II above. A copy of the declaration of trust or trust agreement and a representation as to the net worth or income of the grantor is enclosed. Category VIII The Subscriber is an entity all the equity owners of which ----- are "accredited investors" within one or more of the above categories, other than Category IV or Category V. [IF RELYING UPON THIS CATEGORY ALONE, EACH EQUITY OWNER MUST COMPLETE A SEPARATE COPY OF THIS AGREEMENT.] ---------------------------------------------------------- ---------------------------------------------------------- (describe entity) Category IX The Subscriber is a trust with total assets in excess of ----- $5,000,000, not formed for the specific purpose of acquiring the Securities, whose purchase is directed by a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment. -5- Semotus Solutions, Inc. Subscription Agreement 6. NASD Questionnaire. (a) Are you a member of the NASD,(1) a person associated with a member(2) of the NASD, or an affiliate of a member? Yes No ----- ----- If "Yes," please list any members of the NASD with whom you are associated or affiliated. ----------------------------------------------------------------------- ----------------------------------------------------------------------- ----------------------------------------------------------------------- (b) If you are a corporation, are any of your officers, directors or 5% shareholders a member of the NASD, a person associated with a member of the NASD, or an affiliate of a member? Yes No ----- ----- If "Yes," please list the name of the respective officer, director, or 5% shareholder and any members of the NASD with whom they are associated or affiliated. ----------------------------------------------------------------------- ----------------------------------------------------------------------- ----------------------------------------------------------------------- - --------------- (1) The NASD defines a "member" as being either any broker or dealer admitted to membership in the NASD or any officer or partner of such a member, or the executive representative of such a member or the substitute for such representative. (2) The NASD defines a "person associated with a member" as being every sole proprietor, general or limited partner, officer, director or branch manager or such member, or any natural person occupying a similar status or performing similar functions, or any natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by such member (for example, any employee), whether or not any such person is registered or exempt from registration without the NASD. Thus, "person associated with a member" includes a sole proprietor, general or limited partner, officer, director or branch manager or an organization of any kind (whether a corporation, partnership or other business entity) which itself is a "member" or a "person associated with a member." In addition, an organization of any kind is a "person associated with a member" if its sole proprietor or anyone of its general or limited partners, officers, director or branch managers is a "member" or "person associated with a member." -6- Semotus Solutions, Inc. Subscription Agreement 7. Additional Representations. The undersigned, if other than an individual, makes the following additional representations: (a) The Subscriber was not organized for the specific purpose of acquiring the Securities; and (b) This Subscription Agreement and Letter of Investment Intent has been duly authorized by all necessary action on the part of the Subscriber, has been duly executed by an authorized officer or representative of the Subscriber, and is a legal, valid and binding obligation of the Subscriber enforceable in accordance with its terms. 8. Sophistication. The Subscriber further represents and warrants that he has such knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks of an investment in the Securities and protecting the Subscriber's own interests in this transaction, and does not desire to utilize the services of any other person in connection with evaluating such merits and risks. 9. Reliance on Representations. The Subscriber understands the meaning and legal consequences of the representations, warranties, agreements, covenants, and confirmations set out above and agrees that the subscription made hereby may be accepted in reliance thereon. The Subscriber agrees to indemnify and hold harmless the Company and any selling agent (including for this purpose their employees, and each person who controls either of them within the meaning of Section 20 of the Securities Exchange Act of 1934, as amended) from and against any and all loss, damage, liability or expense, including reasonable costs and attorney's fees and disbursements, which the Company, or such other persons may incur by reason of, or in connection with, any representation or warranty made herein not having been true when made, any misrepresentation made by the Subscriber or any failure by the Subscriber to fulfill any of the covenants or agreements set forth herein, in the Purchaser Questionnaire or in any other document provided by the Subscriber to the Company. 10. Transferability and Assignability. Neither this Subscription Agreement nor any of the rights of the Subscriber hereunder may be transferred or assigned by the Subscriber. The Subscriber agrees that the Subscriber may not cancel, terminate, or revoke this Subscription Agreement or any agreement of the Subscriber made hereunder (except as otherwise specifically provided herein) and that this Subscription Agreement shall survive the death or disability of the Subscriber and shall be binding upon the Subscriber's heirs, executors, administrators, successors, and assigns. 11. Registration Rights. The Company shall include the Shares and the shares underlying the Warrants in a registration statement to be filed with the SEC no later than 90 days after the termination of the offering, and to use its best efforts to cause the registration statement to be declared effective as soon as possible thereafter. 12. Survival. The representations and warranties of the Subscriber set forth herein shall survive the sale of the Units pursuant to this Subscription Agreement. 13. Notices. All notices or other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered personally or mailed by certified or registered mail, return receipt requested, postage prepaid, as follows: if to the Subscriber, to the address set forth below; and if to the Company to the address at the beginning of this letter, or to such other address as the Company or the Subscriber shall have designated to the other by like notice. -7- Semotus Solutions, Inc. Subscription Agreement 14. (Applicable to FLORIDA residents only.) The Subscriber has been informed and recognizes that (a) the Units have not been registered under the Florida Securities Act, and (b) under Section 517.061(12) of the Florida Securities Act, the Subscriber may void the sale of any Securities within three (3) days after the tender of this Subscription Agreement and payment hereunder to the Company. 15. 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. 16. Title. Manner in Which Title is To Be Held. Place an "X" in one space below: (a) Individual Ownership (b) Community Property ----- (c) Joint Tenant with Right of Survivorship (both parties must sign) ----- (d) Partnership ----- (e) Tenants in Common ----- (f) Corporation ----- (g) Trust ----- (h) Other (Describe): ----- ----------------------------------------------------------------- ----------------------------------------------------------------- ----------------------------------------------------------------- Please print above the exact name(s) in which the Securities are to be held. 17. State of Residence. My state of residence and the state in which I received the offer to invest and made the decision to invest in the Securities is _____________________________________. 18. Date of Birth. My date of birth is:__________________________ 19. Appendices. The information contained on the attached Stock Certificate Questionnaire and the American Stock Exchange Questionnaire is accurate. IN NO EVENT WILL THE COMPANY, THE PLACEMENT AGENT, OR ANY OF THEIR AFFILIATES OR THE PROFESSIONAL ADVISORS ENGAGED BY THEM BE LIABLE IF FOR ANY REASON RESULTS OF OPERATIONS OF THE COMPANY ARE NOT AS PROJECTED IN THE DOCUMENTS. INVESTORS MUST LOOK SOLELY TO, AND RELY ON, THEIR OWN ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF INVESTING IN THE SECURITIES. SIGNATURE PAGE ON NEXT PAGE -8- Semotus Solutions, Inc. Subscription Agreement SIGNATURES The Subscriber hereby represents he has read this entire Subscription Agreement and the Memorandum dated August 5, 2005. Dated: _________________ INDIVIDUAL Address to Which Correspondence Should be Directed ______________________________________ ______________________________________ Signature (Individual) ______________________________________ ______________________________________ ______________________________________ Signature (All record holders City, State and Zip Code should sign) ______________________________________ ______________________________________ Name(s) Typed or Printed Tax Identification or Social Security Number ______________________________________ (____)________________________________ Telephone Number -9- Semotus Solutions, Inc. Subscription Agreement CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY Address to Which Correspondence Should be Directed ______________________________________ ______________________________________ Name of Entity ______________________________________ By: __________________________________ ______________________________________ *Signature City, State and Zip Code Its: _________________________________ ______________________________________ Title Tax Identification or Social Security Number ______________________________________ (____)________________________________ Name Typed or Printed Telephone Number * If Securities are being subscribed for by an entity, the Certificate of Signatory must also be completed. CERTIFICATE OF SIGNATORY TO BE COMPLETED IF SECURITIES ARE BEING SUBSCRIBED FOR BY AN ENTITY. I,_______________________________, am the __________________________ of __________________________________________ (the "Entity"). I certify that I am empowered and duly authorized by the Entity to execute and carry out the terms of the Subscription Agreement and Letter of Investment Intent and to purchase and hold the Securities, and certify that the Subscription Agreement and Letter of Investment Intent has been duly and validly executed on behalf of the Entity and constitutes a legal and binding obligation of the Entity. IN WITNESS WHEREOF, I have hereto set may hand this ______ day of _______, 2005. _____________________________________ Signature -10- Semotus Solutions, Inc. Subscription Agreement ACCEPTANCE This Subscription Agreement is accepted as of __________________________, 200__. SEMOTUS SOLUTIONS, INC. By: _____________________________ Authorized Officer Date: ___________________________ -11- Semotus Solutions, Inc. Subscription Agreement APPENDIX I STOCK CERTIFICATE QUESTIONNAIRE Please provide us with the following information: 1. The exact name that your Shares are to be registered in (this is the name that will appear on your stock certificate(s)). You may use a nominee name if appropriate: __________________________________________________________________________ 2. The relationship between the Purchaser and the Registered Holder listed in response to item 1 above: __________________________________________________________________________ 3. The mailing address of the Registered Holder listed in response to item 1 above: __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ 4. The Social Security Number or Tax Identification Number of the Registered Holder listed in response to item 1 above: __________________________________________________________________________ 5. The name of the financial institution of the Purchaser which will be wiring funds representing the purchase price of the Shares: __________________________________________________________________________ __________________________________________________________________________ __________________________________________________________________________ -12- Semotus Solutions, Inc. Subscription Agreement APPENDIX II AMERICAN STOCK EXCHANGE QUESTIONNAIRE The American Stock Exchange ("Amex") routinely performs a due diligence on investors who have entered into transactions with Amex listed companies. In an effort to expedite this process, please respond as accurately as possible to the questions listed below: - -- Is the investor a domestic or offshore entity? ____________________________ - -- Country of domicile or registry of investor. ______________________________ - -- Is the investor a private equity fund, investment manager, general partner or other? _________________________________________________________________ - -- List all officers, directors, controlling shareholders, individuals, general partners with dispositive power or voting control (use attached sheet). - -- Bank from which investor will wire funds.__________________________________ - -- Whether the investor intends to hold the shares in its own name or street name. ___________________________________________________________________________ - -- Which brokerage firm will the investor use to hold the shares, if any? ___________________________________________________________________________ - -- Is the investor affiliated with any other purchaser of the Company's securities pursuant to this transaction? ___________________________________________________________________________ - -- How was the investor contacted for an investment in the Company?___________ ___________________________________________________________________________ -13- Semotus Solutions, Inc. Subscription Agreement OFFICERS, DIRECTORS, ETC ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ -14- Semotus Solutions, Inc. Subscription Agreement EX-4.1 4 exh4-1_13987.txt FORM OF WARRANT EXHIBIT 4.1 ----------- THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE HOLDER HEREOF PROVIDES THE COMPANY WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE PROPOSED SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS. WARRANT TO PURCHASE SHARES OF COMMON STOCK Void after September 30, 2008 THIS IS TO CERTIFY that, as of this 14th day of November, 2005, for value received and subject to the provisions hereinafter set forth, ________________________________ (the "Purchaser"), is entitled to purchase from Semotus Solutions, Inc., a Nevada corporation (the "Company"), at any time from the date hereof to and including September 30, 2008 (the "Expiration Date"), at a price initially equal to Fifty Cents ($0.50) per share (the "Warrant Calculation Price"), _____________ (______) (the "Warrant Number") shares of the common stock of the Company (the "Stock"). The aggregate price for the shares of Stock purchasable hereunder shall be equal to the initial Warrant Calculation Price multiplied by the number of shares initially purchasable hereunder. Such aggregate price is not subject to adjustment and is herein sometimes referred to as the "aggregate Warrant Price." The Warrant Calculation Price per share is, however, subject to adjustment as hereinafter provided (such price, or such price as last adjusted, as the case may be, being herein referred to as the "per share Warrant Price"). The Warrant Number is likewise subject to adjustment as hereinafter provided. 1. EXERCISE OF WARRANT. Subject to the conditions hereinafter set forth, this Warrant may be exercised in whole at any time, or in part from time to time, by the holder hereof, by the surrender of this Warrant (with the subscription form at the end hereof duly executed) at the principal office of the Company in Los Gatos, California, or at such other office as the Company may designate by written notice to the holder hereof within the above-mentioned period and, at the election of the holder, either by paying to the Company the aggregate Warrant Price (or the proportionate part thereof if exercised in part) for the shares so purchased in current funds, in which case payment shall be made in cash or by certified or official bank check, If this Warrant is exercised in respect of fewer than all of the shares of Stock at the time purchasable hereunder, the holder hereof shall be entitled to receive a new Warrant covering the number of shares in respect of which this Warrant shall not have been exercised and setting forth the aggregate Warrant Price applicable to such shares. Notwithstanding anything to the contrary set forth herein, this Warrant or any new Warrant issued as the result of a partial exercise hereof and all rights and options hereunder or thereunder shall expire and shall be wholly null and void to the extent this Warrant or such new warrant is not exercised before it expires at the close of business on the Expiration Date. 2. RESERVATION OF STOCK. The Company covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and in reserve, a sufficient number of shares of its Stock to provide for the exercise of the rights represented by this Warrant. 3. PROTECTION AGAINST DILUTION. The Warrant Number is subject to adjustment from time to time upon the occurrence of the events enumerated in, or as otherwise provided in, this Section 3. 3.1 ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company: (1) pays a dividend or makes a distribution on its Stock in shares of its Stock; (2) subdivides or reclassifies its outstanding shares of Stock into a greater number of shares; (3) combines or reclassifies its outstanding shares of Stock into a smaller number of shares; (4) makes a distribution on its Stock in shares of capital stock other than Stock; or (5) issues by reclassification of its Stock any shares of its capital stock; then the Warrant Number in effect immediately prior to such action shall be proportionately adjusted so that the may receive the aggregate number and kind of shares of capital stock of the Company or other capital stock which such holder would have owned immediately following such action if such Warrant had been exercised immediately prior to such action. If, as a result of any adjustment pursuant to this Section 3.1, the holder shall become entitled to receive shares of two or more classes or series of securities of the Company or otherwise, the Board of Directors of the Company shall equitably determine the allocation of the adjusted Warrant Price between or among shares of the holder of such allocation. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. 3.2 NOTICE OF ADJUSTMENT. Whenever the Warrant Number or Warrant Calculation Price is adjusted under this section, the Company shall provide notice thereof to the holder within thirty (30) days of such adjustment. 2 3.3 ADDITIONAL ADJUSTMENTS. In the event of any and all adjustments to the Warrant Number in accordance with this Section 3, the per share Warrant Price shall be adjusted so that it is equal to the quotient of (a) the aggregate Warrant Price and (b) the Warrant Number as adjusted. 4. MERGERS, CONSOLIDATIONS, SALES; NON-IMPAIRMENT OF RIGHTS. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid the performance of any of the terms of this Warrant, but will at all times in good faith take all necessary action to carry out the intent of all such terms. Without limiting the generality of the foregoing, the Company (a) will not cause the par value of any securities receivable on exercise of this Warrant to be in excess of the amount payable therefor on such exercise, and (b) will take all action as may be necessary or appropriate so that the Company may validly and legally issue fully paid and nonassessable shares (or other securities or property deliverable hereunder) upon the exercise of this Warrant. In the event the Company sells or otherwise transfers all or substantially all of its assets to another corporation or other entity and, following the sale or transfer, a majority of the combined voting power of the then-outstanding securities of the other corporation or entity immediately after the sale or transfer is held in the aggregate by the holders of Voting Stock (as defined below) immediately prior to the sale or transfer, then, as a condition of such sale or transfer, lawful and adequate provision shall be made whereby the holder of this Warrant shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore purchasable hereunder, such shares of stock, securities or assets as may (by virtue of such consolidation, merger, sale, reorganization or reclassification) be issued or payable with respect to or in exchange for a number of outstanding shares of Common Stock equal to the number of shares of Common Stock immediately theretofore so purchasable hereunder had such sale or transfer not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Warrant Number and the per share Warrant Price) shall thereafter be applicable as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon exercise of this Warrant. The Company shall not effect any such sale or transfer unless prior to or simultaneously with the consummation thereof, the entity purchasing such assets shall assume by written instrument, reasonably satisfactory to the holder of this Warrant, executed and mailed or delivered to the holder of this Warrant, the obligation to deliver to such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to receive. 5. DISSOLUTION OR LIQUIDATION. In the event of any proposed distribution of the assets of the Company in dissolution or liquidation (except under circumstances when the foregoing Section 4 shall be applicable) the Company shall mail notice thereof to the holder of this Warrant and shall make no distribution to shareholders until the expiration of 30 days from the date of mailing of the aforesaid notice and, in any such case, the holder of this Warrant may exercise this Warrant within 30 days from the date of the mailing of such notice, and all rights herein granted not so exercised within such 30 day period shall thereafter become null and void. 3 6. REDEMPTION OF WARRANTS. The Warrants are redeemable by the Company commencing any time after the Effective Date, in whole or in part, on not less than thirty (30) days' prior written notice (the "Redemption Notice") at a redemption price of $.001 per Warrant, provided (a) the Warrants are exercisable, (b) the shares underlying the Warrants are the subject of a currently-effective registration statement, and (c) the average last sale price of the Common Stock as reported on the American Stock Exchange, if traded thereon, or if not traded thereon, the average last sale price if listed on another national securities exchange (or other reporting system that provides last sales prices), has been at least 200% of the then current Exercise Price of the Warrants, for a period of at least 10 consecutive trading days immediately preceding the date on which the Company gives notice of redemption. Any redemption in part shall be made pro rata to all Warrant holders. The redemption notice shall be mailed to the holders of the Warrants at their respective addresses appearing in the Warrant register. Any such notice mailed in the manner provided herein shall be conclusively presumed to have been duly given in accordance with this Agreement whether or not the registered holder receives such notice. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for such redemption except as to a registered holder of a Warrant (i) to whom notice was not mailed or (ii) whose notice was defective. An affidavit of the Secretary or Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Holders of the Warrants will have exercise rights until the close of business on the day immediately preceding the date fixed for redemption. In the event the Warrant has not been exercised by written notice as described in paragraph 1 of this Warrant by the redemption date provided in the Redemption Notice, the Warrant shall cease to exist. From and after the date of redemption specified in the Redemption Notice (unless the Company defaults in providing money for payment of the redemption price), all rights of the holder of the Warrant as a warrant holder shall cease, except for the right to receive the redemption price hereof, without interest, and the Warrant sshall no longer be deemed outstanding. 7. FRACTIONAL SHARES. Fractional shares shall not be issued upon the exercise of this Warrant but in any case where the holder hereof would, except for the provisions of this paragraph, be entitled under the terms hereof to receive a fractional share upon the complete exercise of this Warrant, the Company shall, upon the exercise of this Warrant for the largest number of whole shares then called for, pay a sum in cash equal to the excess of the Fair Market Value of such fractional share over the proportional part of the per share Warrant Price represented by such fractional share. 8. FULLY PAID STOCK; TAXES. The Company covenants and agrees that the shares of stock represented by each and every certificate for its Stock to be delivered on any exercise of this Warrant shall, at the time of such delivery, be duly authorized, validly issued and outstanding and be fully paid and nonassessable. The Company further covenants and agrees that it will pay when due and payable any and all federal and state taxes, other than taxes on income, which may be payable in respect of this Warrant or any Stock or certificates therefor upon the exercise of the rights herein provided for pursuant to the provisions hereof. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the transfer and delivery of stock certificates in the name other than that of 4 the holder of the Warrant converted, and any such tax shall be paid by such holder at the time of presentation. 9. CLOSING OF TRANSFER BOOKS. The holder of this Warrant shall continue to have the right to exercise this Warrant even during a period when the stock transfer books of the Company for its Stock are closed. The Company shall not be required, however, to deliver certificates of its Stock upon such exercise while such books are duly closed for any purpose, but the Company may postpone the delivery of the certificates for such Stock until the opening of such books, and they shall, in such case, be delivered forthwith upon the opening thereof, or as soon as practicable thereafter. 10. RESTRICTIONS ON TRANSFERABILITY OF WARRANTS AND SHARES; COMPLIANCE WITH SECURITIES ACT; EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This Warrant and the Stock issued upon the exercise hereof, and any security into which such Stock may be convertible ("Underlying Stock") shall not be transferable except upon the conditions hereinafter specified, which conditions are intended to insure compliance with the provisions of the Securities Act of 1933, as amended, or any similar Federal statute at the time in effect (the "Securities Act") in respect of the transfer of any Warrant or any such Stock or any security into which such Stock may be convertible. 10.1 ASSIGNMENTS GENERALLY. Except as may otherwise be expressly provided herein, this Warrant is exchangeable, without expense, at the option of the holder, upon compliance with the express provisions of this Section 10 and presentation and surrender of the Warrant to the Company, for other Warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Stock purchasable hereunder. Any assignment shall be made by surrender of this Warrant to the Company with the Form of Assignment annexed hereto duly executed and funds sufficient to pay any transfer tax. Upon compliance with the express provisions of this Section 10, the Company shall, without charge, cause to be executed and delivered a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. This Warrant may be divided or combined with other warrants that carry the same rights upon presentation hereof to the Company together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the holder hereof. 10.2 NOTICE OF PROPOSED TRANSFER; OPINION. The holder of each Warrant or any Underlying Stock that is not the subject of a registration statement effective under the Securities Act ("Restricted Stock"), by acceptance thereof, agrees to give prior written notice to the Company of such holder's intention to transfer such Warrant or the Restricted Stock (as hereinafter defined) relating thereto or such Restricted Stock (or any portion thereof), describing briefly the manner and circumstances of the proposed transfer, including the identity of the proposed transferee and the consideration to be paid thereby. Promptly after receiving such written notice, the Company shall present copies thereof to Company counsel and, if required by the Company, to counsel designated by such holder. If in the opinion of each such counsel the proposed transfer may be effected without registration or qualification under any Federal or State law of such Warrant or the Underlying Shares or such Restricted Stock, the Company, as promptly as practicable, shall notify such holder of such opinion and of the terms and conditions, 5 if any, to be observed, whereupon such holder shall be entitled to transfer such Warrant or such Restricted Stock, all in accordance with the terms of the notice delivered to such holder by the Company. If in the opinion of either of such counsel (such opinion to state the basis of the legal conclusions reached therein) the proposed transfer described in the written notice given pursuant to this subparagraph may not be effected without such registration or qualification or without compliance with the conditions of an exemptive regulation of the Commission, the Company shall promptly notify such holder and thereafter such holder shall not be entitled to effect such transfer until receipt of a subsequent notice from the Company pursuant to the immediately preceding sentence or until such registration or qualification or filing has become effective. All fees and expenses of the Company's counsel shall be borne by the Company and the fees of the counsel, if any, designated by any holder of this Warrant or Restricted Stock shall be borne by such holder. Notwithstanding anything to the contrary set forth herein, no opinion of counsel shall be required in the case of transfers to affiliates of the holder of this Warrant or of the Underlying Stock. 10.3. CERTAIN ASSIGNMENTS FOLLOWING REGISTRATION. Notwithstanding anything to the contrary contained herein, if the Company has registered the Underlying Stock pursuant to a Registration Statement which has been declared effective by the Securities and Exchange Commission ("SEC") and, thereafter, the holder purports to assigns all or a portion of the Underlying Stock to any other person, the assignee shall have the right to cause the Registration Statement to be amended or the prospectus related thereto to be supplemented, in either case to name such assignee as a selling stockholder, provided that (i) the use of a post-effective amendment or a supplement to the prospectus is permitted by applicable law for such purpose, and (ii) all costs and expenses to the Company, including without limitation legal and accounting expenses, incurred to so amend such Registration Statement or supplement the Prospectus shall be paid by the assignee requesting such amendment (or shared on a pro rata basis to the extent more than one assignee requests such amendment). 10.4. RESTRICTIVE LEGENDS. Each Warrant shall bear on the face thereof a legend substantially in the form of the notice endorsed on the first page of this Warrant. Each certificate for shares of Underlying Stock initially issued upon the exercise of any Warrant and each certificate for shares of Underlying Stock issued to a subsequent transferee of such certificate shall, unless otherwise permitted by the provisions of this Section 10, bear on the face thereof a legend reading substantially as follows: THE TRANSFER, SALE, ASSIGNMENT, PLEDGE AND ENCUMBRANCE OF OTHER DISPOSITION OF THE SHARES OF CLASS A COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT UNDER WHICH THESE SHARES WERE ISSUED AND WHICH TERMS CONTINUE IN EFFECT FOLLOWING THE 6 EXERCISE THEREOF. A COPY OF THE WARRANT IS ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMPANY. NO SALE OR OTHER TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE EFFECTED EXCEPT PURSUANT TO THE TERMS OF THE WARRANT. 10.5 REMOVAL OF LEGEND. In the event that the Company shall receive an opinion of its counsel or counsel of the holder, which opinion is reasonably acceptable to it, that, in the opinion of such counsel, such legend is not, or is no longer, necessary or required (including, without limitation, because of the availability of the exemption afforded by Rule 144 of the General Rules and Regulations of the Securities and Exchange Commission), the Company shall, or shall instruct its transfer agents and registrars to, remove such legend from the certificates evidencing the Restricted Stock or issue new certificates without such legend in lieu thereof. 11. PARTIAL EXERCISE AND PARTIAL ASSIGNMENT. If this Warrant be exercised in part only, the holder hereof shall be entitled to receive a new Warrant covering the number of shares in respect of which this Warrant shall not have been exercised as provided in paragraph 1 hereof. If this Warrant is partially assigned, this Warrant shall be surrendered at the principal office of the Company (with the partial assignment form at the end hereof duly executed), and thereupon a new Warrant shall be issued to the holder hereof covering the number of shares not assigned and setting forth the proportionate aggregate Warrant Price applicable to such shares not assigned. The assignee of such partial assignment of this Warrant shall also be entitled to receive a new Warrant covering the number of shares so assigned and setting forth the proportionate aggregate Warrant Price applicable to such assigned shares. 12. REGISTRATION RIGHTS 12.1 DEFINITIONS. As used in this Section 12, the following terms shall have the meanings set forth below: (a) The terms "register," "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of the effectiveness of such registration statement or document. (b) The term "Registrable Securities" shall mean together in the aggregate: (A) the Underlying Stock issued or issuable upon exercise of this Warrant and (B) the Stock held by or issuable upon exercise of any warrant or conversion of convertible security to any other persons with similar registration rights as provided in this Warrant. (c) The term "Holder" means any person owning of record Registrable Securities. 12.2 REQUIRED REGISTRATION. The Company shall include the Registrable Securities in a registration statement that it shall file with the Securities and Exchange 7 Commission (the "SEC") no later than ninety (90) days after the termination of the offering being made by the Company pursuant to the PRIVATE PLACEMENT MEMORANDUM dated August 5, 2005, as amended on September 2, 2005. The Company shall use its best efforts to cause the registration statement to be declared effective as soon thereafter as possible. 12.3 OBLIGATIONS OF THE COMPANY. In connection with the registration of the Registrable Securities, the Company shall, as expeditiously as reasonably possible: (a) Act diligently to maintain the effectiveness of the registration statement until the earlier of (i) September 30, 2009, (ii) one (1) year after the Warrant has been fully exercised. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Purchasers such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its best efforts to register and qualify the securities covered by such registration statement under the securities laws of such jurisdictions as shall be reasonably requested by the Purchasers for the distribution of the securities covered by the registration statement, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdiction. (f) Notify the Purchasers, promptly after the Company shall have received notice thereof, of the time when the registration statement becomes effective or any supplement to any prospectus forming a part of the registration statement has been filed. (g) Notify the Purchasers of any stop order suspending the effectiveness of the registration statement and use its reasonable best efforts to remove such stop order. 12.4 FURNISH INFORMATION. It shall be a condition precedent to the obligations of the Company to take any action pursuant hereto that the Purchaser, having chosen to have its Registrable Securities included for registration, shall furnish to the Company such information regarding the Purchaser, its Registrable Securities and the intended method of disposition of such securities as shall be required to effect the registration thereof. The Purchaser shall be required to represent to the Company that all such information that is given is complete and accurate in all material respects. The Purchaser shall deliver to the Company a statement in writing from the beneficial owners of such securities that such beneficial owners bona fide intend to sell, transfer or otherwise dispose of such securities. 8 12.5 EXPENSES. (a) Registration Expenses. All expenses incurred by the Company in complying with the terms of Sections 12.2 and 12.3 hereof, including without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, "Blue Sky" fees and expenses, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company) shall be borne by the Company. (b) Selling Expenses. All underwriting discounts, underwriters' expense allowance, and selling commissions applicable to the sale of Registrable Securities by the Purchasers and all fees and disbursements of any special counsel (other than the Company's regular counsel) shall be borne by the Purchasers of the Registrable Securities so registered pro rata on the basis of the number of Registrable Securities so registered. 12.7 INDEMNIFICATION. In the event that any Registrable Securities are included in a registration statement pursuant hereto: (a) To the extent permitted by law, the Company will indemnify and hold harmless each Purchaser, the officers, directors, employees, agents, attorneys and partners of each Purchaser, any underwriter (as defined in the Act) for such Purchaser and each person, if any, who controls such Purchaser or underwriter within the meaning of the Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a "Violation"): (A) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (B) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (C) any violation or alleged violation by the Company of the Act, the Exchange Act, any applicable state securities law or any rule or regulation promulgated under the Act, the Exchange Act or any applicable state securities law; and the Company will reimburse the Purchaser for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Subsection 12.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Purchaser, underwriter or controlling person; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in said registration statement, said preliminary prospectus, said final prospectus or said amendment or supplement in reliance upon 9 and in conformity with written information furnished by such Purchaser or any other Purchaser, for use in the preparation thereof; and further provided, however, that the foregoing indemnity agreement is subject to the condition that, insofar as it relates to any untrue statement, alleged untrue statement, omission or alleged omission made in any preliminary prospectus but eliminated or remedied in the prospectus, such indemnity agreement shall not inure to the benefit of any underwriter or broker, if a copy of the final prospectus was not sent or given to such person with or prior to the confirmation of the sale of such securities to such person. (b) To the extent permitted by law, each selling Purchaser will indemnify and hold harmless the Company, its directors, its officers, its employees, its agents, its attorneys, any person who controls the Company within the meaning of the Act or the Exchange Act, any underwriter (within the meaning of the Act) for the Company and any person who controls such underwriter against any losses, claims, damages or liabilities joint or several) to which the Company or any such director, officer, employee, agent, attorney, controlling person, or underwriter or controlling person may become subject, under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by the Purchaser expressly for use in connection with such registration; and the Purchaser will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or controlling person thereof, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Subsection 12.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Purchaser, which consent shall not be unreasonably withheld, and further provided that Purchaser's obligations under this subsection shall not exceed the amount invested by Purchaser in the securities that are included in the registration to which the violation relates. (c) Promptly after receipt by an indemnified party under this Section 10.9 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 12.7, notify the indemnifying party in writing of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, 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 differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to notify an indemnifying party within a reasonable time of the commencement of any such action, to the extent prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 10.9, but the omission so to notify the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section. 10 12.8 REPORTS UNDER EXCHANGE ACT. Following registration of the Company's securities under the Exchange Act and with a view of making available to the Purchasers the benefits of Rule 144 promulgated under the Act and any other rule or regulation of the SEC that may at any time permit a Purchaser to sell securities of the Company to the public without registration, the Company agrees to: (a) use its best efforts to make and keep public information available, as those terms are understood and defined in Rule 144, at all times; and (b) use its best efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the Exchange Act. 12.9 PURCHASER'S ACCEPTANCE OF OBLIGATIONS. Acceptance of this Warrant by its PURCHASER(s) shall be deemed to constitute the unqualified acceptance by the PURCHASER of all of the terms and conditions set forth herein. 13. LOST, STOLEN WARRANTS, ETC. In case any Warrant shall be mutilated, stolen or destroyed, the Company may issue a new Warrant of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or in lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Warrant, and upon receipt of indemnity satisfactory to the Company. 14. WARRANT HOLDER NOT SHAREHOLDER. This Warrant does not confer upon the holder hereof any right to vote or to consent or to receive notice as a shareholder of the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof as hereinbefore provided. 15. SEVERABILITY. Should any part of this Warrant for any reason be declared invalid, such decision shall not affect the validity of any remaining portion, which remaining portion shall remain in force and effect as if this Warrant had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto that they would have executed and accepted the remaining portion of this Warrant without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid. 16. NOTICE. All notices and other communications required or permitted to be given under any Agreement shall be deemed given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, overnight delivery or confirmed facsimile transmission to the parties at the following address or fax number: To the Company at: 718 University Avenue, Suite 202 Los Gatos, California 95032 Attention: President 11 To the Purchaser at: The address set forth in the Subscription Agreement under which the Purchaser acquired, among other things, this Warrant. or, as to either party or any subsequent holder of this Warrant, to such other address and/or facsimile number as such party designates by written notice to the other party or parties. 17. MISCELLANEOUS. (a) This Warrant shall be governed by, construed and enforced in accordance with the law of the State of California, without regard to its conflict of laws principles. (b) The agreements which are contained herein shall survive the exercise of this Warrant to the extent applicable thereafter. (c) This Warrant is one of a series of substantially similar warrants (the "Warrants") having the same exercise price and issued in connection with the purchase of Convertible Notes of the Company. This Warrant may be changed, waived, discharged or terminated by an instrument in writing signed by the holders of Warrants exercisable into more than 50% of the shares of Stock into which all the Warrants are exercisable as of the date of execution of the change, waiver, discharge or termination. IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested by its duly authorized officers as of the day and year first set forth above. SEMOTUS SOLUTIONS, INC. By__________________________ Anthony N. LaPine President 12 PURCHASE FORM ------------- Dated __________ The undersigned hereby irrevocably elects to exercise the Warrant represented by this Warrant to the extent of purchasing ______ Shares of Semotus Solutions, Inc. and hereby tenders payment of the exercise price thereof. INSTRUCTIONS FOR REGISTRATION OF STOCK Name _________________________________________________________ (please type or print in block letters) Address _________________________________________________________ ................................................................................. ASSIGNMENT FORM --------------- FOR VALUE RECEIVED, ______________, hereby sells, assigns and transfers unto Name: _________________________________________________________ (Please type or print in block letters) Address _________________________________________________________ Semotus Solutions, Inc. represented by this Warrant to the extent of ______ shares as to which such right is exercisable and does hereby irrevocably constitute and appoint _______________ attorney, to transfer the same on the books of the Company with full power of substitution in the premises. Signature _______________________________ Dated _______________ NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS IT APPEARS UPON THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. 13 EX-4.2 5 exh4-2_13987.txt FORM OF WARRANT EXHIBIT 4.2 ----------- THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE HOLDER HEREOF PROVIDES THE COMPANY WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE PROPOSED SALE OR TRANSFER IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS. WARRANT TO PURCHASE SHARES OF COMMON STOCK Void after September 30, 2008 THIS IS TO CERTIFY that, as of this 14th day of November, 2005, for value received and subject to the provisions hereinafter set forth, ______________________________ (the "Purchaser"), is entitled to purchase from Semotus Solutions, Inc., a Nevada corporation (the "Company"), at any time from SIX (6) MONTHS FROM the date hereof to and including September 30, 2008 (the "Expiration Date"), at a price initially equal to Fifty Cents ($0.50) per share (the "Warrant Calculation Price"), _____________ (______) (the "Warrant Number") shares of the common stock of the Company (the "Stock"). The aggregate price for the shares of Stock purchasable hereunder shall be equal to the initial Warrant Calculation Price multiplied by the number of shares initially purchasable hereunder. Such aggregate price is not subject to adjustment and is herein sometimes referred to as the "aggregate Warrant Price." The Warrant Calculation Price per share is, however, subject to adjustment as hereinafter provided (such price, or such price as last adjusted, as the case may be, being herein referred to as the "per share Warrant Price"). The Warrant Number is likewise subject to adjustment as hereinafter provided. 1. EXERCISE OF WARRANT. Subject to the conditions hereinafter set forth, this Warrant may be exercised in whole or in part from SIX (6) MONTHS FROM NOVEMBER 14, 2005, by the holder hereof, by the surrender of this Warrant (with the subscription form at the end hereof duly executed) at the principal office of the Company in Los Gatos, California, or at such other office as the Company may designate by written notice to the holder hereof within the above-mentioned period and, at the election of the holder, either by paying to the Company the aggregate Warrant Price (or the proportionate part thereof if exercised in part) for the shares so purchased in current funds, in which case payment shall be made in cash or by certified or official bank check, If this Warrant is exercised in respect of fewer than all of the shares of Stock at the time purchasable hereunder, the holder hereof shall be entitled to receive a new Warrant covering the number of shares in respect of which this Warrant shall not have been exercised and setting forth the aggregate Warrant Price applicable to such shares. Notwithstanding anything to the contrary set forth herein, this Warrant or any new Warrant issued as the result of a partial exercise hereof and all rights and options hereunder or thereunder shall expire and shall be wholly null and void to the extent this Warrant or such new warrant is not exercised before it expires at the close of business on the Expiration Date. 2. RESERVATION OF STOCK. The Company covenants and agrees that during the period within which the rights represented by this Warrant may be exercised, the Company will at all times have authorized, and in reserve, a sufficient number of shares of its Stock to provide for the exercise of the rights represented by this Warrant. 3. PROTECTION AGAINST DILUTION. The Warrant Number is subject to adjustment from time to time upon the occurrence of the events enumerated in, or as otherwise provided in, this Section 3. 3.1 ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company: (1) pays a dividend or makes a distribution on its Stock in shares of its Stock; (2) subdivides or reclassifies its outstanding shares of Stock into a greater number of shares; (3) combines or reclassifies its outstanding shares of Stock into a smaller number of shares; (4) makes a distribution on its Stock in shares of capital stock other than Stock; or (5) issues by reclassification of its Stock any shares of its capital stock; then the Warrant Number in effect immediately prior to such action shall be proportionately adjusted so that the may receive the aggregate number and kind of shares of capital stock of the Company or other capital stock which such holder would have owned immediately following such action if such Warrant had been exercised immediately prior to such action. If, as a result of any adjustment pursuant to this Section 3.1, the holder shall become entitled to receive shares of two or more classes or series of securities of the Company or otherwise, the Board of Directors of the Company shall equitably determine the allocation of the adjusted Warrant Price between or among shares of the holder of such allocation. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event listed above shall occur. 3.2 NOTICE OF ADJUSTMENT. Whenever the Warrant Number or Warrant Calculation Price is adjusted under this section, the Company shall provide notice thereof to the holder within thirty (30) days of such adjustment. 2 3.3 ADDITIONAL ADJUSTMENTS. In the event of any and all adjustments to the Warrant Number in accordance with this Section 3, the per share Warrant Price shall be adjusted so that it is equal to the quotient of (a) the aggregate Warrant Price and (b) the Warrant Number as adjusted. 4. MERGERS, CONSOLIDATIONS, SALES; NON-IMPAIRMENT OF RIGHTS. The Company will not, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issuance or sale of securities or any other voluntary action, avoid or seek to avoid the performance of any of the terms of this Warrant, but will at all times in good faith take all necessary action to carry out the intent of all such terms. Without limiting the generality of the foregoing, the Company (a) will not cause the par value of any securities receivable on exercise of this Warrant to be in excess of the amount payable therefor on such exercise, and (b) will take all action as may be necessary or appropriate so that the Company may validly and legally issue fully paid and nonassessable shares (or other securities or property deliverable hereunder) upon the exercise of this Warrant. In the event the Company sells or otherwise transfers all or substantially all of its assets to another corporation or other entity and, following the sale or transfer, a majority of the combined voting power of the then-outstanding securities of the other corporation or entity immediately after the sale or transfer is held in the aggregate by the holders of Voting Stock (as defined below) immediately prior to the sale or transfer, then, as a condition of such sale or transfer, lawful and adequate provision shall be made whereby the holder of this Warrant shall thereafter have the right to receive upon the basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore purchasable hereunder, such shares of stock, securities or assets as may (by virtue of such consolidation, merger, sale, reorganization or reclassification) be issued or payable with respect to or in exchange for a number of outstanding shares of Common Stock equal to the number of shares of Common Stock immediately theretofore so purchasable hereunder had such sale or transfer not taken place, and in any such case appropriate provision shall be made with respect to the rights and interests of the holder of this Warrant to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Warrant Number and the per share Warrant Price) shall thereafter be applicable as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon exercise of this Warrant. The Company shall not effect any such sale or transfer unless prior to or simultaneously with the consummation thereof, the entity purchasing such assets shall assume by written instrument, reasonably satisfactory to the holder of this Warrant, executed and mailed or delivered to the holder of this Warrant, the obligation to deliver to such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to receive. 5. DISSOLUTION OR LIQUIDATION. In the event of any proposed distribution of the assets of the Company in dissolution or liquidation (except under circumstances when the foregoing Section 4 shall be applicable) the Company shall mail notice thereof to the holder of this Warrant and shall make no distribution to shareholders until the expiration of 30 days from the date of mailing of the aforesaid notice and, in any such case, the holder of this Warrant may exercise this Warrant within 30 days from the date of the mailing of such notice, and all rights herein granted not so exercised within such 30 day period shall thereafter become null and void. 3 6. REDEMPTION OF WARRANTS. The Warrants are redeemable by the Company commencing any time after the Effective Date, in whole or in part, on not less than thirty (30) days' prior written notice (the "Redemption Notice") at a redemption price of $.001 per Warrant, provided (a) the Warrants are exercisable, (b) the shares underlying the Warrants are the subject of a currently-effective registration statement, and (c) the average last sale price of the Common Stock as reported on the American Stock Exchange, if traded thereon, or if not traded thereon, the average last sale price if listed on another national securities exchange (or other reporting system that provides last sales prices), has been at least 200% of the then current Exercise Price of the Warrants, for a period of at least 10 consecutive trading days immediately preceding the date on which the Company gives notice of redemption. Any redemption in part shall be made pro rata to all Warrant holders. The redemption notice shall be mailed to the holders of the Warrants at their respective addresses appearing in the Warrant register. Any such notice mailed in the manner provided herein shall be conclusively presumed to have been duly given in accordance with this Agreement whether or not the registered holder receives such notice. No failure to mail such notice nor any defect therein or in the mailing thereof shall affect the validity of the proceedings for such redemption except as to a registered holder of a Warrant (i) to whom notice was not mailed or (ii) whose notice was defective. An affidavit of the Secretary or Assistant Secretary of the Company that notice of redemption has been mailed shall, in the absence of fraud, be prima facie evidence of the facts stated therein. Holders of the Warrants will have exercise rights until the close of business on the day immediately preceding the date fixed for redemption. In the event the Warrant has not been exercised by written notice as described in paragraph 1 of this Warrant by the redemption date provided in the Redemption Notice, the Warrant shall cease to exist. From and after the date of redemption specified in the Redemption Notice (unless the Company defaults in providing money for payment of the redemption price), all rights of the holder of the Warrant as a warrant holder shall cease, except for the right to receive the redemption price hereof, without interest, and the Warrant sshall no longer be deemed outstanding. 7. FRACTIONAL SHARES. Fractional shares shall not be issued upon the exercise of this Warrant but in any case where the holder hereof would, except for the provisions of this paragraph, be entitled under the terms hereof to receive a fractional share upon the complete exercise of this Warrant, the Company shall, upon the exercise of this Warrant for the largest number of whole shares then called for, pay a sum in cash equal to the excess of the Fair Market Value of such fractional share over the proportional part of the per share Warrant Price represented by such fractional share. 8. FULLY PAID STOCK; TAXES. The Company covenants and agrees that the shares of stock represented by each and every certificate for its Stock to be delivered on any exercise of this Warrant shall, at the time of such delivery, be duly authorized, validly issued and outstanding and be fully paid and nonassessable. The Company further covenants and agrees that it will pay when due and payable any and all federal and state taxes, other than taxes on income, which may be payable in respect of this Warrant or any Stock or certificates therefor upon the exercise of the rights herein provided for pursuant to the provisions hereof. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the transfer and delivery of stock certificates in the name other than that of 4 the holder of the Warrant converted, and any such tax shall be paid by such holder at the time of presentation. 9. CLOSING OF TRANSFER BOOKS. The holder of this Warrant shall continue to have the right to exercise this Warrant even during a period when the stock transfer books of the Company for its Stock are closed. The Company shall not be required, however, to deliver certificates of its Stock upon such exercise while such books are duly closed for any purpose, but the Company may postpone the delivery of the certificates for such Stock until the opening of such books, and they shall, in such case, be delivered forthwith upon the opening thereof, or as soon as practicable thereafter. 10. RESTRICTIONS ON TRANSFERABILITY OF WARRANTS AND SHARES; COMPLIANCE WITH SECURITIES ACT; EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This Warrant and the Stock issued upon the exercise hereof, and any security into which such Stock may be convertible ("Underlying Stock") shall not be transferable except upon the conditions hereinafter specified, which conditions are intended to insure compliance with the provisions of the Securities Act of 1933, as amended, or any similar Federal statute at the time in effect (the "Securities Act") in respect of the transfer of any Warrant or any such Stock or any security into which such Stock may be convertible. 10.1 ASSIGNMENTS GENERALLY. Except as may otherwise be expressly provided herein, this Warrant is exchangeable, without expense, at the option of the holder, upon compliance with the express provisions of this Section 10 and presentation and surrender of the Warrant to the Company, for other Warrants of different denominations entitling the holder thereof to purchase in the aggregate the same number of shares of Stock purchasable hereunder. Any assignment shall be made by surrender of this Warrant to the Company with the Form of Assignment annexed hereto duly executed and funds sufficient to pay any transfer tax. Upon compliance with the express provisions of this Section 10, the Company shall, without charge, cause to be executed and delivered a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. This Warrant may be divided or combined with other warrants that carry the same rights upon presentation hereof to the Company together with a written notice specifying the names and denominations in which new Warrants are to be issued and signed by the holder hereof. 10.2 NOTICE OF PROPOSED TRANSFER; OPINION. The holder of each Warrant or any Underlying Stock that is not the subject of a registration statement effective under the Securities Act ("Restricted Stock"), by acceptance thereof, agrees to give prior written notice to the Company of such holder's intention to transfer such Warrant or the Restricted Stock (as hereinafter defined) relating thereto or such Restricted Stock (or any portion thereof), describing briefly the manner and circumstances of the proposed transfer, including the identity of the proposed transferee and the consideration to be paid thereby. Promptly after receiving such written notice, the Company shall present copies thereof to Company counsel and, if required by the Company, to counsel designated by such holder. If in the opinion of each such counsel the proposed transfer may be effected without registration or qualification under any Federal or State law of such Warrant or the Underlying Shares or such Restricted Stock, the Company, as promptly as practicable, shall notify such holder of such opinion and of the terms and conditions, 5 if any, to be observed, whereupon such holder shall be entitled to transfer such Warrant or such Restricted Stock, all in accordance with the terms of the notice delivered to such holder by the Company. If in the opinion of either of such counsel (such opinion to state the basis of the legal conclusions reached therein) the proposed transfer described in the written notice given pursuant to this subparagraph may not be effected without such registration or qualification or without compliance with the conditions of an exemptive regulation of the Commission, the Company shall promptly notify such holder and thereafter such holder shall not be entitled to effect such transfer until receipt of a subsequent notice from the Company pursuant to the immediately preceding sentence or until such registration or qualification or filing has become effective. All fees and expenses of the Company's counsel shall be borne by the Company and the fees of the counsel, if any, designated by any holder of this Warrant or Restricted Stock shall be borne by such holder. Notwithstanding anything to the contrary set forth herein, no opinion of counsel shall be required in the case of transfers to affiliates of the holder of this Warrant or of the Underlying Stock. 10.3. CERTAIN ASSIGNMENTS FOLLOWING REGISTRATION. Notwithstanding anything to the contrary contained herein, if the Company has registered the Underlying Stock pursuant to a Registration Statement which has been declared effective by the Securities and Exchange Commission ("SEC") and, thereafter, the holder purports to assigns all or a portion of the Underlying Stock to any other person, the assignee shall have the right to cause the Registration Statement to be amended or the prospectus related thereto to be supplemented, in either case to name such assignee as a selling stockholder, provided that (i) the use of a post-effective amendment or a supplement to the prospectus is permitted by applicable law for such purpose, and (ii) all costs and expenses to the Company, including without limitation legal and accounting expenses, incurred to so amend such Registration Statement or supplement the Prospectus shall be paid by the assignee requesting such amendment (or shared on a pro rata basis to the extent more than one assignee requests such amendment). 10.4. RESTRICTIVE LEGENDS. Each Warrant shall bear on the face thereof a legend substantially in the form of the notice endorsed on the first page of this Warrant. Each certificate for shares of Underlying Stock initially issued upon the exercise of any Warrant and each certificate for shares of Underlying Stock issued to a subsequent transferee of such certificate shall, unless otherwise permitted by the provisions of this Section 10, bear on the face thereof a legend reading substantially as follows: THE TRANSFER, SALE, ASSIGNMENT, PLEDGE AND ENCUMBRANCE OF OTHER DISPOSITION OF THE SHARES OF CLASS A COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT UNDER WHICH THESE SHARES WERE ISSUED AND WHICH TERMS CONTINUE IN EFFECT FOLLOWING THE 6 EXERCISE THEREOF. A COPY OF THE WARRANT IS ON FILE IN THE OFFICE OF THE SECRETARY OF THE COMPANY. NO SALE OR OTHER TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE EFFECTED EXCEPT PURSUANT TO THE TERMS OF THE WARRANT. 10.5 REMOVAL OF LEGEND. In the event that the Company shall receive an opinion of its counsel or counsel of the holder, which opinion is reasonably acceptable to it, that, in the opinion of such counsel, such legend is not, or is no longer, necessary or required (including, without limitation, because of the availability of the exemption afforded by Rule 144 of the General Rules and Regulations of the Securities and Exchange Commission), the Company shall, or shall instruct its transfer agents and registrars to, remove such legend from the certificates evidencing the Restricted Stock or issue new certificates without such legend in lieu thereof. 11. PARTIAL EXERCISE AND PARTIAL ASSIGNMENT. If this Warrant be exercised in part only, the holder hereof shall be entitled to receive a new Warrant covering the number of shares in respect of which this Warrant shall not have been exercised as provided in paragraph 1 hereof. If this Warrant is partially assigned, this Warrant shall be surrendered at the principal office of the Company (with the partial assignment form at the end hereof duly executed), and thereupon a new Warrant shall be issued to the holder hereof covering the number of shares not assigned and setting forth the proportionate aggregate Warrant Price applicable to such shares not assigned. The assignee of such partial assignment of this Warrant shall also be entitled to receive a new Warrant covering the number of shares so assigned and setting forth the proportionate aggregate Warrant Price applicable to such assigned shares. 12. REGISTRATION RIGHTS 12.1 DEFINITIONS. As used in this Section 12, the following terms shall have the meanings set forth below: (a) The terms "register," "registered" and "registration" shall refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of the effectiveness of such registration statement or document. (b) The term "Registrable Securities" shall mean together in the aggregate: (A) the Underlying Stock issued or issuable upon exercise of this Warrant and (B) the Stock held by or issuable upon exercise of any warrant or conversion of convertible security to any other persons with similar registration rights as provided in this Warrant. (c) The term "Holder" means any person owning of record Registrable Securities. 12.2 REQUIRED REGISTRATION. The Company shall include the Registrable Securities in a registration statement that it shall file with the Securities and Exchange 7 Commission (the "SEC") no later than ninety (90) days after the termination of the offering being made by the Company pursuant to the PRIVATE PLACEMENT MEMORANDUM dated August 5, 2005, as amended on September 2, 2005. The Company shall use its best efforts to cause the registration statement to be declared effective as soon thereafter as possible. 12.3 OBLIGATIONS OF THE COMPANY. In connection with the registration of the Registrable Securities, the Company shall, as expeditiously as reasonably possible: (a) Act diligently to maintain the effectiveness of the registration statement until the earlier of (i) September 30, 2009, (ii) one (1) year after the Warrant has been fully exercised. (b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition of all securities covered by such registration statement. (c) Furnish to the Purchasers such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them. (d) Use its best efforts to register and qualify the securities covered by such registration statement under the securities laws of such jurisdictions as shall be reasonably requested by the Purchasers for the distribution of the securities covered by the registration statement, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such jurisdiction. (f) Notify the Purchasers, promptly after the Company shall have received notice thereof, of the time when the registration statement becomes effective or any supplement to any prospectus forming a part of the registration statement has been filed. (g) Notify the Purchasers of any stop order suspending the effectiveness of the registration statement and use its reasonable best efforts to remove such stop order. 12.4 FURNISH INFORMATION. It shall be a condition precedent to the obligations of the Company to take any action pursuant hereto that the Purchaser, having chosen to have its Registrable Securities included for registration, shall furnish to the Company such information regarding the Purchaser, its Registrable Securities and the intended method of disposition of such securities as shall be required to effect the registration thereof. The Purchaser shall be required to represent to the Company that all such information that is given is complete and accurate in all material respects. The Purchaser shall deliver to the Company a statement in writing from the beneficial owners of such securities that such beneficial owners bona fide intend to sell, transfer or otherwise dispose of such securities. 8 12.5 EXPENSES. (a) Registration Expenses. All expenses incurred by the Company in complying with the terms of Sections 12.2 and 12.3 hereof, including without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, "Blue Sky" fees and expenses, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company) shall be borne by the Company. (b) Selling Expenses. All underwriting discounts, underwriters' expense allowance, and selling commissions applicable to the sale of Registrable Securities by the Purchasers and all fees and disbursements of any special counsel (other than the Company's regular counsel) shall be borne by the Purchasers of the Registrable Securities so registered pro rata on the basis of the number of Registrable Securities so registered. 12.7 INDEMNIFICATION. In the event that any Registrable Securities are included in a registration statement pursuant hereto: (a) To the extent permitted by law, the Company will indemnify and hold harmless each Purchaser, the officers, directors, employees, agents, attorneys and partners of each Purchaser, any underwriter (as defined in the Act) for such Purchaser and each person, if any, who controls such Purchaser or underwriter within the meaning of the Act or the Exchange Act, against any losses, claims, damages or liabilities (joint or several) to which they may become subject under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a "Violation"): (A) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (B) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (C) any violation or alleged violation by the Company of the Act, the Exchange Act, any applicable state securities law or any rule or regulation promulgated under the Act, the Exchange Act or any applicable state securities law; and the Company will reimburse the Purchaser for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Subsection 12.7(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon 9 and in conformity with written information furnished expressly for use in connection with such registration by any such Purchaser, underwriter or controlling person; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in said registration statement, said preliminary prospectus, said final prospectus or said amendment or supplement in reliance upon and in conformity with written information furnished by such Purchaser or any other Purchaser, for use in the preparation thereof; and further provided, however, that the foregoing indemnity agreement is subject to the condition that, insofar as it relates to any untrue statement, alleged untrue statement, omission or alleged omission made in any preliminary prospectus but eliminated or remedied in the prospectus, such indemnity agreement shall not inure to the benefit of any underwriter or broker, if a copy of the final prospectus was not sent or given to such person with or prior to the confirmation of the sale of such securities to such person. (b) To the extent permitted by law, each selling Purchaser will indemnify and hold harmless the Company, its directors, its officers, its employees, its agents, its attorneys, any person who controls the Company within the meaning of the Act or the Exchange Act, any underwriter (within the meaning of the Act) for the Company and any person who controls such underwriter against any losses, claims, damages or liabilities joint or several) to which the Company or any such director, officer, employee, agent, attorney, controlling person, or underwriter or controlling person may become subject, under the Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by the Purchaser expressly for use in connection with such registration; and the Purchaser will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or controlling person thereof, in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the indemnity agreement contained in this Subsection 12.7(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Purchaser, which consent shall not be unreasonably withheld, and further provided that Purchaser's obligations under this subsection shall not exceed the amount invested by Purchaser in the securities that are included in the registration to which the violation relates. (c) Promptly after receipt by an indemnified party under this Section 10.9 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 12.7, notify the indemnifying party in writing of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly notified, 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 differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to notify an indemnifying party within a reasonable time of the commencement of any such action, to the extent prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 10.9, but the omission so to notify the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section. 10 12.8 REPORTS UNDER EXCHANGE ACT. Following registration of the Company's securities under the Exchange Act and with a view of making available to the Purchasers the benefits of Rule 144 promulgated under the Act and any other rule or regulation of the SEC that may at any time permit a Purchaser to sell securities of the Company to the public without registration, the Company agrees to: (a) use its best efforts to make and keep public information available, as those terms are understood and defined in Rule 144, at all times; and (b) use its best efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the Exchange Act. 12.9 PURCHASER'S ACCEPTANCE OF OBLIGATIONS. Acceptance of this Warrant by its PURCHASER(s) shall be deemed to constitute the unqualified acceptance by the PURCHASER of all of the terms and conditions set forth herein. 13. LOST, STOLEN WARRANTS, ETC. In case any Warrant shall be mutilated, stolen or destroyed, the Company may issue a new Warrant of like date, tenor and denomination and deliver the same in exchange and substitution for and upon surrender and cancellation of any mutilated Warrant, or in lieu of any Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to the Company of the loss, theft or destruction of such Warrant, and upon receipt of indemnity satisfactory to the Company. 14. WARRANT HOLDER NOT SHAREHOLDER. This Warrant does not confer upon the holder hereof any right to vote or to consent or to receive notice as a shareholder of the Company, as such, in respect of any matters whatsoever, or any other rights or liabilities as a shareholder, prior to the exercise hereof as hereinbefore provided. 15. SEVERABILITY. Should any part of this Warrant for any reason be declared invalid, such decision shall not affect the validity of any remaining portion, which remaining portion shall remain in force and effect as if this Warrant had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto that they would have executed and accepted the remaining portion of this Warrant without including therein any such part, parts or portion which may, for any reason, be hereafter declared invalid. 16. NOTICE. All notices and other communications required or permitted to be given under any Agreement shall be deemed given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, overnight delivery or confirmed facsimile transmission to the parties at the following address or fax number: To the Company at: 718 University Avenue, Suite 202 Los Gatos, California 95032 Attention: President 11 To the Purchaser at: The address set forth in the Subscription Agreement under which the Purchaser acquired, among other things, this Warrant. or, as to either party or any subsequent holder of this Warrant, to such other address and/or facsimile number as such party designates by written notice to the other party or parties. 17. MISCELLANEOUS. (a) This Warrant shall be governed by, construed and enforced in accordance with the law of the State of California, without regard to its conflict of laws principles. (b) The agreements which are contained herein shall survive the exercise of this Warrant to the extent applicable thereafter. (c) This Warrant is one of a series of substantially similar warrants (the "Warrants") having the same exercise price and issued in connection with the purchase of Convertible Notes of the Company. This Warrant may be changed, waived, discharged or terminated by an instrument in writing signed by the holders of Warrants exercisable into more than 50% of the shares of Stock into which all the Warrants are exercisable as of the date of execution of the change, waiver, discharge or termination. IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and attested by its duly authorized officers as of the day and year first set forth above. SEMOTUS SOLUTIONS, INC. By __________________________ Anthony N. LaPine President 12 PURCHASE FORM ------------- Dated __________ The undersigned hereby irrevocably elects to exercise the Warrant represented by this Warrant to the extent of purchasing ______ Shares of Semotus Solutions, Inc. and hereby tenders payment of the exercise price thereof. INSTRUCTIONS FOR REGISTRATION OF STOCK Name _________________________________________________________ (please type or print in block letters) Address _________________________________________________________ ................................................................................. ASSIGNMENT FORM --------------- FOR VALUE RECEIVED, ______________, hereby sells, assigns and transfers unto Name: _________________________________________________________ (Please type or print in block letters) Address _________________________________________________________ Semotus Solutions, Inc. represented by this Warrant to the extent of ______ shares as to which such right is exercisable and does hereby irrevocably constitute and appoint _________ attorney, to transfer the same on the books of the Company with full power of substitution in the premises. Signature _______________________________ Dated _______________ NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS IT APPEARS UPON THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. 13 EX-4.3 6 exh4-3_13987.txt FORM OF WARRANT EXHIBIT 4.3 ----------- NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR CANADIAN PROVINCE, OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES ARE RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS. SEMOTUS SOLUTIONS, INC. Incorporated Under the Laws of the State of Nevada No. A-1 420,000 Common Stock Purchase Warrants CERTIFICATE FOR COMMON STOCK PURCHASE WARRANTS 1. Warrants. This Warrant Certificate certifies that BATHGATE CAPITAL PARTNERS, or registered assigns (the "Holder"), is the registered owner of the above-indicated number of Warrants expiring on November 14, 2010 ("Expiration Date"). One (1) Warrant entitles the Holder to purchase one share of common stock, $.01 par value ("Share"), from Semotus Solutions, Inc., a Nevada corporation ("Company"), at a purchase price of $0.30 per share ("Exercise Price"), commencing November 14, 2005, and terminating on the Expiration Date ("Exercise Period"), upon surrender of this Warrant Certificate with the exercise form hereon (or the Warrant Conversion Form in the case of a warrant conversion pursuant to Section 3(b) below) duly completed and executed with payment of the Exercise Price at the offices of the Company, 718 University Ave., Suite 202, Los Gatos, CA 95032. 2. Transfer of Warrants. The Warrants represented by this Warrant Certificate shall not be transferable except upon the death of the Holder and then only to the estate of the Holder or pursuant to the Holder's will or the applicable laws of descent and distribution. 3. (a) Exercise of Warrant. The Warrant may be exercised in whole or in part at any time on or before the Expiration Date upon surrender of the Warrant in conjunction with Form of Election to Purchase and the payment at the Exercise Price stipulated above. If the Warrant is exercised in part, then the Holder shall be entitled to receive a new Warrant covering the remaining number of Warrant Shares not exercised. (b) Conversion Right. In addition to and without limiting the rights of the Warrantholder under the terms of the Warrant, the Holder shall have the right (the "Conversion Right") to convert this Warrant or any portion thereof into Shares as provided in this Section 2.4 at any time or from time to time prior to its expiration. ) Upon exercise of the Conversion Right with respect to a particular number of Warrants (the "Converted Warrants"), the Company shall deliver to the Holder, without payment by the Holder of any Exercise Price or any cash or other consideration, that number of Shares computed using the following formula: X = Y(A-B) ------ A Where: X = the number of Shares and/or Warrants to be issued to the Holder; Y = the number of Shares and/or Warrants to be converted under this Warrant; A = the Current Market Price of one share of Common Stock; and B = the Share Exercise Price. 4. Expiration of Warrants. No Warrant may be exercised or converted after 5:00 p.m. Pacific Time on the Expiration Date and any Warrant not exercised or converted by such time shall become void, unless the Expiration Date of this Warrant is extended by the Company. 5. Piggy Back Registration Rights. (a) If (but without any obligation to do so) Company proposes to register any of the Shares on a registration statement (other than a registration relating solely to the sale of securities to participants in a Company stock plan, a registration relating to a corporate reorganization or other transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Shares, a registration in which the only Shares being registered are Shares issuable upon conversion of debt securities that are also being registered, or if there is a managing underwriter of the offering of shares referred to in the registration statement and such managing underwriter advises the Company in writing that the Shares proposed to be included in the offering will have an adverse effect on its ability to successfully conclude the offering), Company shall, at such time, promptly give the Holder written notice of such registration. Upon the written request of the Holder given within ten (10) days after mailing of such notice by Company, Company shall, subject to the final approval of the other holder(s) of securities (including the underwriter, if applicable) intended to be included on such registration statement, use all reasonable efforts to cause to be registered under the Act all of the Shares that the Holder has requested to be registered (b) Unless otherwise approved by Company, the Holder shall have the right to include its Shares in no more than one registration statement filed by Company in accordance with this Section. (c) Company shall have the right to terminate or withdraw any registration initiated by it under this Section prior to the effectiveness of such registration. The expenses of such withdrawn registration shall be borne by Company. 6. Adjustment of Exercise Price. After each adjustment of the Exercise Price pursuant to this paragraph 5, the number of shares of Common Stock purchasable on the exercise of each Warrant shall be the number derived by dividing such adjusted pertinent Exercise Price into the original pertinent Exercise Price. The pertinent Exercise Price shall be subject to adjustment as follows: In the event, prior to the expiration of the Warrants by exercise or by their terms, the Company shall issue any shares of its Common Stock as a share dividend or shall subdivide the number of outstanding shares of Common Stock into a greater number of shares, then, in either of such events, the Exercise Price per share of Common Stock purchasable pursuant to the Warrants in effect at the time of such action shall be reduced proportionately and the number of shares purchasable pursuant to the Warrants shall be increased proportionately. Conversely, in the event the Company shall reduce the number of shares of its outstanding Common Stock by combining such shares into a smaller number of shares, then, in such event, the Exercise Price per share purchasable pursuant to the Warrants in effect at the time of such action shall be increased proportionately and the number of shares of Common Stock at that time purchasable pursuant to the Warrants shall be decreased proportionately. Any dividend paid or distributed on the Common Stock in shares of any other class of the Company or securities convertible into shares of Common Stock shall be treated as a dividend paid in Common Stock to the extent that shares of Common Stock are issuable on the conversion thereof. 7. Adjustments for Reorganization, Consolidation, Merger, or Sale of Assets. If at any time while the Warrant, or any portion thereof, remains outstanding and unexpired, should there occur a reorganization, merger, or consolidation; or should there occur a sale or transfer of the Company's assets or properties substantially in entirety as part of a reorganization, merger or consolidation, then lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of the Warrant, or any unexpired exercisable portion thereof, the number of shares of stock or other securities or property of the successor corporation resulting from such reorganization, consolidation, merger, sale or transfer that the Holder would have been entitled to if the Warrant, or portions thereof, had been exercised immediately prior to the event. The foregoing shall apply similarly to any successive reorganizations, consolidations, mergers, sales or transfers that may occur while the Warrant, or any portion thereof, remains exercisable. 8. Reservation of Stock Underlying the Warrant. At all times until the expiration of the Warrant, the Company will authorize, reserve, and keep available, solely for issuance and delivery upon the exercise of the Warrant, the shares of Common Stock of the Company that shall be receivable upon exercise of the Warrant. 9. Underlying Stock to be Fully Paid and Non-Assessable. The Company covenants that the shares of Common Stock issuable upon exercise of the Warrant shall be duly and validly issued, fully paid, non-assessable, and free of any liens, charges, and all taxes with respect to the issue thereof. 10. No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or other method or venue, avoid or seek to avoid the observance or performance of any of the terms of the Warrant, but shall at all times, in good faith, take all such actions as may be necessary or appropriate in order to protect the rights of the Holder thereunder against impairment. IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its President and by its Secretary. Dated: November 14, 2005 SEMOTUS SOLUTIONS, INC. Attest: ______________________ By _______________________________________ Tali Durant, Secretary Anthony N. LaPine, President FORM OF ELECTION TO PURCHASE (To be executed by the Holder if he desires to exercise Warrants evidenced by the within Warrant Certificate) To Semotus Solutions, Inc.: The undersigned hereby irrevocably elects to exercise ____________ Warrants, evidenced by the within Warrant Certificate for, and to purchase thereunder, ________________ full shares of Common Stock issuable upon exercise of said Warrants and delivery of $____________ and any applicable taxes. The undersigned requests that certificates for such shares be issued in the name of: PLEASE INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER ___________________________________ ___________________________________ (Please print name and address) ___________________________________ ___________________________________ ___________________________________ ___________________________________ If said number of Warrants shall not be all the Warrants evidenced by the within Warrant Certificate, the undersigned requests that a new Warrant Certificate evidencing the Warrants not so exercised be issued in the name of and delivered to: _________________________________________________________________ (Please print name and address) _________________________________________________________________ _________________________________________________________________ Dated: __________ Signature: ___________________________________ NOTICE: The above signature must correspond with the name as written upon the face of the within Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever, or if signed by any other person the Form of Assignment hereon must be duly executed and if the certificate representing the shares or any Warrant Certificate representing Warrants not exercised is to be registered in a name other than that in which the within Warrant Certificate is registered, the signature of the holder hereof must be guaranteed. Signature Guaranteed: __________________________________________ SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE. FORM OF ELECTION TO CONVERT (To be executed by the Holder if he desires to exercise Warrants evidenced by the within Warrant Certificate) TO: Semotus Solutions, Inc. Pursuant to Section 3(b) of the Warrant, he undersigned hereby irrevocably elects to convert ____________ Warrants, evidenced by the within Warrant Certificate for, and to purchase thereunder, ________________ full shares of Common Stock issuable upon conversion of said Warrants. A conversion calculation is attached hereto. The undersigned requests that certificates for such shares be issued in the name of: PLEASE INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER ___________________________________ ___________________________________ (Please print name and address) ___________________________________ ___________________________________ If said number of Warrants shall not be all the Warrants evidenced by the within Warrant Certificate, the undersigned requests that a new Warrant Certificate evidencing the Warrants not so converted be issued in the name of and delivered to: _________________________________________________________________ (Please print name and address) _________________________________________________________________ _________________________________________________________________ Dated: __________ Signature: ___________________________________ NOTICE: The above signature must correspond with the name as written upon the face of the within Warrant Certificate in every particular, without alteration or enlargement or any change whatsoever, or if signed by any other person the Form of Assignment hereon must be duly executed and if the certificate representing the shares or any Warrant Certificate representing Warrants not exercised is to be registered in a name other than that in which the within Warrant Certificate is registered, the signature of the holder hereof must be guaranteed. Signature Guaranteed: __________________________________________ SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE. CALCULATION OF WARRANT CONVERSION --------------------------------- X = Y(A-B) ------ A Where: X = the number of Shares and/or Warrants to be issued to the Holder; Y = the number of Shares and/or Warrants to be converted under this Warrant; A = the Current Market Price of one share of Common Stock; and B = the Share Exercise Price. Fractional Converted Shares = ______________________________________________ (1) (1) ((Company)) to pay for fractional Shares in cash @ $ ___________ per Share. -----END PRIVACY-ENHANCED MESSAGE-----