8-K

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                                  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): February 1, 2007


                             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
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              (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 (see General Instruction A.2. below):

[X] 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 CRF 240.14d-2(b))
[ ] Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))
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ITEM 2.03  CREATION OF A DIRECT FINANCIAL OBLIGATION

We have signed an investment agreement dated February 1, 2007, by and among
Semotus and an individual investor, Miro Knezevic and Gail L. Knezevic,
Co-Trustees, Knezevic Family Trust dated June 30, 1992, relating to a cash
investment of US$200,000 (the "Investment Agreement"). The investment was taken
in the form of a promissory note (the "Convertible Promissory Note") which may
be converted by the investor at his discretion at any time into restricted
common shares of Semotus at a conversion price equal to the lesser of (a) ten
cents ($0.10) per share and (b) a fifteen percent (15%) discount from the
closing price of our common stock calculated using the average closing price
over ten consecutive trading days immediately preceding the date the investor
gives us a conversion notice, and with a floor which is not to exceed a total
maximum potential issuance of 3,557,060 shares. Additionally, during the time
period beginning from February 1, 2007 and ending on the earlier of (a) the date
the investor gives us a conversion notice and (b) February 1, 2009, if we issue
common stock or securities convertible or exercisable into stock at a price that
is less than the conversion price, then, we shall reduce a certain number of the
investor's shares from the conversion price to an adjusted price, in proportion
to the number of securities we actually issue at the adjusted price.

The unpaid principal shall accrue interest at 10% per annum and all unconverted
principal and interest is due and payable on February 1, 2009. We will incur no
placement agent fees or expenses for this investment. The issuance of the
underlying shares is dependent upon the American Stock Exchange's approval.
These funds will be used to increase our sales and marketing efforts and for
other general working capital purposes. The foregoing description of the
Investment Agreement and Convertible Promissory Note is qualified in its
entirety by reference to the full text of the Investment Agreement and
Convertible Promissory Note, which are attached hereto as Exhibits 2.2 and 4.1,
respectively, and are incorporated herein by reference.

ITEM 3.02  UNREGISTERED SALES OF EQUITY SECURITIES

We have issued a promissory note (the "Convertible Promissory Note") which may
be converted by the investor into common shares of Semotus at a conversion
priceequal to the lesser of (a) ten cents ($0.10) per share, and (b) a fifteen
percent (15%) discount from the closing price of our common stock calculated
using the average closing price over ten consecutive trading days immediately
preceding the date the investor gives us a conversion notice, and with a floor
which is not to exceed a total maximum potential issuance of 3,557,060 shares.
Additionally, during the time period beginning from February 1, 2007 and ending
on the earlier of (a) the date the investor gives us a conversion notice and (b)
February 1, 2009, if we issue common stock or securities convertible or
exercisable into stock at a price that is less than the conversion price, then,
we shall reduce a certain number of the investor's shares from the conversion
price to an adjusted price, in proportion to the number of securities we
actually issue at the adjusted price. The unpaid principal shall accrue interest
at 10% per annum and all unconverted principal and interest is due and payable
on November 1, 2008. The issuance of the underlying shares is dependent upon the
American Stock Exchange's approval.

As part the investment, we agreed to file a registration statement with the
Securities and Exchange Commission to qualify the resale of the 3,557,060
maximum total shares of common stock potentially issuable upon the conversion of
the Convertible Promissory Note.

The securities to be 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. The appropriate
restrictive legend will be placed on the certificates and stop transfer
instructions will be issued to the transfer agent.

The issuance will be made in reliance on Section 4(2) of the Act and will be
made without general solicitation or advertising. The purchasers are
sophisticated investors with access to all relevant information necessary to
evaluate the investment, who represented to us that the securities are being
acquired for investment purposes.

ITEM 9.01  FINANCIAL STATEMENTS AND EXHIBITS.


(a) Not applicable.

(b) Not applicable.

(c) Exhibits. The following exhibits are filed with this report:


Exhibit Number          Description
- --------------          -----------
2.1                     Investment Agreement dated February 1, 2007 by and among
                        Semotus Solutions, Inc. and Miro Knezevic and Gail L.
                        Knezevic, Co-Trustees, Knezevic Family Trust dated June
                        30, 1992.
4.1                     Convertible Promissory Note dated February 1, 2007.
10.1                    Registration Rights Agreement dated February 1, 2007 by
                        and among Semotus Solutions, Inc. and Miro Knezevic and
                        Gail L. Knezevic, Co-Trustees, Knezevic Family Trust
                        dated June 30, 1992.



                                   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: February 6, 2007                       By: /s/ Anthony N. LaPine
                                                      Anthony N. LaPine,
                                                      Chief Executive Officer

EX-2.1

                                                                     EXHIBIT 2.1
                                                                     -----------

                              INVESTMENT AGREEMENT

     This Agreement is dated as of the 1st day of February 2007 by and among
Semotus Solutions, Inc,, a Nevada corporation with its principal office at 718
University Ave., Suite 202, Los Gatos, CA 95032 (the "Company"), and Knezevic
Family Trust dated June 30, 1992 (the "Investor").

     WHEREAS, the Company and the Investor have been discussing a potential
investment by the Investor in the Company, the use of proceeds of that
investment is intended for the Company's general corporate purposes, including
increasing the Company's sales and marketing efforts; and

     WHEREAS, it was the mutual desire of the Company and the Investor that the
Investor's investment in the Company would take the form of a promissory note
that would be convertible into shares of the Company's common stock at any time
at the option of the holder at a rate that would be provided for in such
promissory note; and

     NOW THEREFORE, in consideration of the mutual agreements herein contained,
the parties hereto agree as follows.

1. PURCHASE OF CONVERTIBLE PROMISSORY NOTE.

Pursuant to the Convertible Promissory Note, dated the date hereof and attached
as Exhibit A, the Company has executed to the Investor the Convertible
Promissory Note. The Company hereby warrants and represents to Investor that:
(i) the Company's ability to issue the Common Shares and to pay cash dividends
for a reasonably foreseeable period into the future is not prohibited by
applicable provisions of law or the terms and provisions of any agreement of the
Company, including any agreement or instrument relating to its indebtedness or
the Company's Certificate of Incorporation or Bylaws, and the conversion as
provided for in such Convertible Promissory Note would not constitute a breach
thereof, or a default thereunder, and (ii) the making of the conversion under
such Convertible Promissory Note is not restricted or prohibited by any
applicable law, rule or regulation, except for the American Stock Exchange's
approval, which the Company will apply for as soon as possible and use its best
efforts to secure such approval.

Restrictions on Transferability. The Investor understands that the Common Shares
to be issued upon conversion will be restricted securities subject to the resale
provisions of Rule 144.

2. FURTHER INVESTMENT.

The Investor and the Company agree to discuss, from time to time, possible
future investments by the Investor in the securities of the Company in
connection with future acquisition opportunities that the Company may identify.
The Company acknowledges that no Investor has made any commitment to make any
such future investment, and that the decision to make any such future investment
is in the sole discretion of each Investor. The Investor acknowledges that the
Company has made no commitment to offer any such future investment to any
Investor, and



that the decision to make any such offer of future investment is in the sole
discretion of the Company.

3. PUBLIC STATEMENTS OR RELEASES.

Neither the Company nor any Investor shall make any public announcement with
respect to the existence or terms of this Agreement or the transactions provided
for herein without the prior approval of the other parties, which shall not be
unreasonably withheld or delayed. Notwithstanding the foregoing, nothing in this
Section 3 shall prevent any party from making any public announcement it
considers necessary in order to satisfy its obligations under the law or the
rules of any national securities exchange or market, provided such party, to the
extent practicable, provides the other parties with an opportunity to review and
comment on any proposed public announcement before it is made.

4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company hereby
represents and warrants to, and covenants with, the Purchaser as follows:

     4.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Nevada. The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property makes such qualification or
leasing necessary unless the failure to so qualify has not and could not
reasonably be expected to have a material adverse effect.

     4.2 AUTHORIZED CAPITAL STOCK. The authorized capital stock of the Company
consists of 150,000,000 common shares and 5,000,000 preferred shares. The number
of common shares, preferred shares and all subscriptions, warrants, options,
convertible securities, and other rights to purchase or otherwise acquire equity
securities of the Company issued and outstanding as at September 30, 2006, are
as set forth in the unaudited financial statements of the Company for the
quarter ended September 30, 2006 (the "Financial Statements"). The number of
common shares, preferred shares and all subscriptions, warrants, options,
convertible securities, and other rights to purchase or otherwise acquire equity
securities of the Company issued and outstanding as at December 31, 2006, is set
forth in EXHIBIT A attached hereto. The Company has reserved from its duly
authorized capital stock the maximum number of shares of common stock issuable
pursuant to this Agreement.

     4.3 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENTS. The Company
has full legal right, corporate power and authority to enter into this
Agreement, the Convertible Promissory yNote and the Registration Rights
Agreement as referenced in such Convertible Promissory Note (all of the
preceding including this Agreement, collectively, the "Transaction Agreements")
and perform the transactions contemplated hereby. The Transaction Agreements
have been duly authorized, executed and delivered by the Company. The
consummation by the Company of the transactions contemplated in the Transaction
Agreements will not violate any provision of the organizational documents of the
Company. The execution, delivery and performance of the Transaction Agreements
by the Company and the consummation by the Company of the transactions herein
and therein contemplated will not result in the creation of



any lien, charge, security interest or encumbrance upon any assets of the
Company pursuant to the terms or provisions of, or conflict with, result in the
breach or violation of, or constitute, either by itself or upon notice or the
passage of time or both, a default under any material agreement, mortgage, deed
of trust, lease, franchise, license, indenture, permit or other instrument to
which the Company is a party or by which the Company or any of its properties
may be bound or affected and in each case which individually or in the aggregate
would have a material adverse effect on the condition (financial or otherwise),
properties, business, prospects, or results of operations of the Company and its
subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT"), or any statute or
any authorization, judgment, decree, order, rule or regulation of any court or
any regulatory body, administrative agency or other governmental body applicable
to the Company or any of its respective properties. Upon its execution and
delivery, and assuming the valid execution thereof by the Investor, the
Transaction Agreements will constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

     4.4 Except as disclosed in press releases or filings with the SEC, the
Financial Statements are true, accurate, and complete as of the date of issuance
of such financial statements.

     4.5 Since December 31, 2004, Buyer has filed all forms, reports and
documents required to be filed by Buyer (the "SEC Reports") with the Securities
and Exchange Commission (the "SEC") , and as of their respective dates, the SEC
Reports (i) were prepared in accordance with and comply with the requirements of
the Securities Act of 1933, as amended and all other applicable federal law (the
"SECURITIES ACT"), and the rules and regulations of the SEC thereunder
applicable to such SEC Reports and (ii) did not at the time they were filed (or
if subsequently amended or superseded by a filing prior to the date of this
Agreement, then on the date of such subsequent filing) contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER.

     5.1 The Purchaser represents and warrants to, and covenants with, the
Company that:

          (i)  the Purchaser is knowledgeable, sophisticated and experienced in
               making, and is qualified to make, decisions with respect to
               investments in securities representing an investment decision
               like that involved in the purchase of the Shares, including
               investments in securities issued by the Company, and has
               requested, received, reviewed and understood all information it
               deems relevant in making an informed decision to purchase the
               Shares, including, without limitation, the information contained
               in the Information Documents;

          (ii) it acknowledges that the offering of the Shares pursuant to this
               Agreement has not been reviewed by the Commission or any state or
               Canadian regulatory authority;



          (iii) the Purchaser is acquiring the number of Shares set forth in the
               signature page hereto, for its own account for investment only
               and with no present intention of distributing any of the Shares
               the distribution thereof;

          (iv) the Purchaser will not, directly or indirectly, offer, sell,
               pledge, transfer or otherwise dispose of (or solicit any offers
               to buy, purchase or otherwise acquire or take a pledge of) any of
               the Shares which form such Shares except in compliance with the
               Securities Act, the Securities Act Rules and Regulations and any
               applicable state securities or blue sky laws;

          (v)  the Purchaser has completed or caused to be completed the
               American Stock Exchange Questionnaire and the Stock Certificate
               Questionnaire, attached hereto as Appendix I and Appendix II, and
               the answers thereto are true and correct as of the date hereof;

          (vi) the Purchaser has, in connection with its decision to purchase
               the number of Shares set forth on the signature page hereof, not
               relied upon any representations or other information (whether
               oral or written) other than as set forth in the Information
               Documents and the representations and warranties of the Company
               contained herein;

          (vii) the Purchaser has had an opportunity to discuss this investment
               with representatives of the Company and ask questions of them and
               such questions have been answered to the full satisfaction of the
               Purchaser; and

          (viii) the Purchaser is an "accredited investor" within the meaning of
               Rule 501 of Regulation D promulgated under the Securities Act
               because such Purchaser meets at least one of the conditions set
               forth in Appendix III hereto.

     5.2 The Purchaser acknowledges that

          (i)  except as provided for in the Registration Rights Agreement, the
               Shares have not been and are not being registered under the
               provisions of the 1933 Act, and may not be transferred unless the
               Purchaser shall have delivered to the Company an opinion of
               counsel, reasonably satisfactory in form, scope and substance to
               the Company, to the effect that the Shares to be sold or
               transferred may be sold or transferred pursuant to Rule 144
               promulgated under the 1933 Act;

          (ii) any sale of the Shares made in reliance on Rule 144 promulgated
               under the 1933 Act may be made only in accordance with the terms
               of said Rule and further, if said Rule is not applicable, any
               resale of such Shares under circumstances in which the seller, or
               the person through whom the sale is made, may be deemed to be an
               underwriter, as that term is used in the 1933 Act, may require
               compliance with some other exemption under the 1933 Act or the
               rules and regulations of the Securities and Exchange Commission
               ("Commission" or the "SEC") thereunder; and



          (iii) neither the Company nor any other person is under any obligation
               to register the Shares under the 1933 Act except as provided for
               in the Registration Rights Agreement.


     5.3 The Purchaser further represents and warrants to, and covenants with,
the Company that

          (i)  the Purchaser has full right, power, authority and capacity to
               enter into this Agreement and to consummate the transactions
               contemplated hereby and has taken all necessary action to
               authorize the execution, delivery and performance of this
               Agreement,

          (ii) (comment: purchaser is a revocable trust).(iii) upon the
               execution and delivery of this Agreement, this Agreement shall
               constitute a valid and binding obligation of the Purchaser
               enforceable in accordance with its terms, except as
               enforceability may be limited by applicable bankruptcy,
               insolvency, reorganization, moratorium or similar laws affecting
               creditors' and contracting parties' rights generally and except
               as enforceability may be subject to general principles of equity
               (regardless of whether such enforceability is considered in a
               proceeding in equity or at law).

     5.4 The Purchaser recognizes that an investment in the Shares is
speculative and involves a high degree of risk, including a risk of total loss
of the Purchaser's investment. The Investor can bear the economic risk of this
investment and can afford a complete loss thereof. The Investor has such
knowledge and prior substantial investment experience in financial and business
matters, including investment in non-listed and non-registered securities, and
has had the opportunity to read the SEC Documents and to evaluate the merits and
risks of investment in the Company and the Shares.

     5.5 All of the information provided to the Company or its agents or
representatives concerning the Purchaser's suitability to invest in the Company
and the representations and warranties contained herein, are complete, true and
correct as of the date hereof. The Purchaser understands that the Company is
relying on the statements contained herein to establish an exemption from
registration under U.S. federal and state securities laws.

     5.6 The address set forth in the signature page hereto is the Purchaser's
true and correct domicile.

     5.7 Prior to the execution of this Purchase Agreement, the Purchaser and
any affiliates of Purchaser have not participated in any hedging transactions
involving the Company's Common Stock and have not sold short any of the
Company's Common Stock. The Investor does not have a present intention to sell
the Shares, nor a present arrangement or intention to effect any distribution of
any of the Shares to or through any person or entity for purposes of selling,
offering, distributing or otherwise disposing of any of the Shares.



     5.8 The Purchaser understands and agrees that each certificate or other
document evidencing any of the Shares shall be endorsed with the legend in
substantially the form set forth below, as well as any other legends required by
applicable law, and the Purchaser covenants that the Purchaser shall not
transfer the Shares represented by any such certificate without complying with
the restrictions on transfer described in the legends endorsed on such
certificates:

          THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES
          ACT"), OR REGISTERED OR QUALIFIED UNDER ANY APPLICABLE STATE
          SECURITIES LAWS OR CANADIAN SECURITIES LAWS. THESE SECURITIES MAY NOT
          BE TRANSFERRED UNLESS (A) COVERED BY AN EFFECTIVE REGISTRATION
          STATEMENT UNDER THE SECURITIES ACT AND REGISTERED OR QUALIFIED UNDER
          APPLICABLE STATE LAW AND, IF APPLICABLE, CANADIAN SECURITIES LAWS OR
          (B) EXEMPTIONS FROM SUCH REGISTRATION OR QUALIFICATION REQUIREMENTS
          ARE AVAILABLE. AS A CONDITION TO PERMITTING ANY TRANSFER OF THESE
          SECURITIES, THE COMPANY MAY REQUIRE THAT IT BE FURNISHED WITH AN
          OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY TO THE EFFECT
          THAT NO REGISTRATION OR QUALIFICATIONS IS LEGALLY REQUIRED FOR SUCH
          TRANSFER.

     5.9 The Investor may be required to bear the economic risk of the
investment indefinitely because none of the Shares may be sold, hypothecated or
otherwise disposed of unless subsequently registered under the Securities Act
and applicable state securities laws or an exemption from registration is
available. Any resale of any of the Shares can be made only pursuant to (i) a
registration statement under the Securities Act which is effective and current
at the time of sale or (ii) a specific exemption from the registration
requirements of the Securities Act. In claiming any such exemption, the Investor
will, prior to any offer or sale or distribution of any Shares advise the
Company and, if requested, provide the Company with a reasonably acceptable
written opinion of counsel, in form and substance reasonably satisfactory to
counsel to the Company, as to the applicability of such exemption to the
proposed sale or distribution.

     5.10 The Investor understands that the exemption afforded by Rule 144
promulgated by the Commission under the Securities Act ("Rule 144") will not
become available for at least one year from the date of payment for the Shares
and any sales in reliance on Rule 144, if then available, can be made only in
accordance with the terms and conditions of that rule, including, among other
things, a requirement that the Company then be subject to, and current, in its
periodic filing requirements under the Exchange Act, and, among other things, a
limitation on the amount of shares of Common Stock that may be sold in specified
time periods and the manner in which the sale can be made; that, while the
Company's Common Stock is registered under the Exchange Act and the Company is
presently subject to the periodic reporting requirements of the Exchange Act,
there can be no assurance that the Company will remain subject to such reporting
obligations or current in its filing obligations; and that, in case Rule 144 is
not applicable to a disposition of the Shares, compliance with the registration
provisions of the Securities Act or some other exemption from such registration
provisions will be required.

     5.11 The Investor has taken no action which would give rise to any claim by
any person for brokerage commission, finder's fees or similar payments by
Investor relating to this Purchase Agreement or the transactions contemplated
hereby. The Company shall have no obligation with respect to such fees or with
respect to any claims made by or on behalf of other persons for fees



of a type contemplated in this Section that may be due in connection with the
transactions contemplated hereby. The Investor shall indemnify and hold harmless
the Company, its employees, officers, directors, agents, and partners, and their
respective affiliates, from and against all claims, losses, damages, costs
(including the costs of preparation and reasonable attorney's fees) and expenses
suffered in respect of any such claimed or existing fees, as and when incurred.

     5.12 The execution, delivery and performance of this Purchase Agreement by
the Investor, and the consummation of the transactions contemplated hereby, will
not (i) violate any provision of the Investor's corporate organizational
documents, (ii) violate, conflict with or result in the breach of any of the
terms of, result in a material modification of the effect of, otherwise, give
any other contracting party the right to terminate, or constitute (or with
notice or lapse of time or both) a default under, any contract or other
agreement to which the Investor is a party or by or to which the Investor or any
of the Investor's assets or properties may be bound or subject, (iii) violate
any order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body by which the Investor, or the assets or
properties of the Investor are bound and (iv) to the Investor's knowledge,
violate any statute, law or regulation, including but not limited to the USA
Patriot Act.

6. SURVIVAL OF REPRESENTATIVES, WARRANTIES AND AGREEMENTS.

Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein and in any certificates or documents delivered pursuant
hereto or in connection herewith shall survive following the delivery to the
Purchaser of the Convertible Promissory Note and the subsequent conversion, if
any, of such Convertible Promissory Note.

7. CAPTIONS.

The captions and paragraph headings of this Agreement are solely for the
convenience of reference and shall not affect its interpretation.

8. SEVERABILITY.

Should any part or provision of this Agreement be held unenforceable or in
conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provisions shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties hereto.

9. GOVERNING LAW.

This Agreement shall be governed by, and construed in accordance with, the laws
of the State of California, without giving effect to conflict of law principles
thereof, except with respect to matters of law concerning the internal corporate
affairs of any corporate entity which is a party to or the subject of this
Agreement, and as to those matters the law of the jurisdiction under which the
respective entity derives its powers shall govern.



10. COUNTERPARTS.

This Agreement may be signed in one or more counterparts and by facsimile, each
of which shall be an original, but all of which together shall constitute one
instrument.


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

SEMOTUS SOLUTIONS, INC.


By: /s/ Anthony LaPine
    ---------------------------
    Name: Anthony LaPine
    Title: CEO


INVESTOR:

Knezevic Family Trust dated June 30, 1992

/s/ Miro Knezevic, Co-Trustee
- ---------------------------------
Miro Knezevic, Co-Trustee


/s/ Gail L. Knezevic, Co-Trustee
- ---------------------------------
Gail L. Knezevic, Co-Trustee

EX-4.1

                                                                     EXHIBIT 4.1
                                                                     -----------

THIS NOTE, AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF, HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS AND MAY NOT BE REOFFERED, SOLD, TRANSFERRED, PLEDGED, OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (1) REGISTRATION UNDER SUCH ACT OR LAWS
OR (2) AN OPINION OF COUNSEL FOR THE COMPANY OR OTHER COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.


                             SEMOTUS SOLUTIONS, INC.
                           CONVERTIBLE PROMISSORY NOTE

$200,000                                                        1 February, 2007

FOR VALUE RECEIVED, Semotus Solutions, Inc., a Nevada corporation (the
"Company"), promises to pay to the order of MIRO KNEZEVIC AND GAIL L. KNEZEVIC,
CO-TRUSTEES, KNEZEVIC FAMILY TRUST DATED JUNE 30, 1992 (the "Payee"), at the
office of the Payee at 110 Newport Center Drive, Suite 200, Newport Beach, CA
92660, or at such other place as Payee may designate in writing, the principal
sum of Two Hundred Thousand Dollars ($200,000) (the "Principal Amount") on the
terms set forth below. Interest on the unpaid principal balance shall accrue at
a rate of ten percent (10%) per annum, from 1 February 2007 with respect to the
Principal Amount. All payments of interest and principal hereunder shall be made
in U.S. currency and without setoff, deduction or counterclaim.

     This Note is made in connection with that certain Investment Agreement
dated February 1, 2007 between Company and Payee (the "Investment Agreement").

          1. DEFINITIONS.

Capitalized terms not defined herein shall have the same meaning as set forth in
the Investment Agreement. The following terms shall have the meanings herein
specified:

     "Capital Stock" means any of the current or future authorized class or
series of capital stock of the Company.

     "Common Stock" means authorized Common Stock, $.01 par value, of the
Company, and shall include any other class or series of capital stock of the
Company that is not limited to a fixed sum in respect of the rights of the
holder thereof to participate in the liquidation or winding up of the Company.

     "Conversion Notice" shall have the meaning set forth in Section 2(a).

     "Conversion Price" shall mean the per share price(s) at which some or all
of the Principal Amount plus all accrued interest thereon is converted or
convertible pursuant to Section 2, and in all cases as adjusted pursuant to
Section 2(e).

     "Conversion Shares" means the shares of Capital Stock, issuable upon
conversion of this Note.



     "Event of Default" means an event specified in Section 4 hereof.

     "Holder" means the Payee, and each endorsee, pledgee, assignee, owner and
holder of this Note, as such; and any consent, waiver or agreement in writing by
the then Holder with respect to any matter or thing in connection with this
Note, whether altering any provision hereof or otherwise, shall bind all
subsequent Holders. Notwithstanding the foregoing, the Company may treat the
registered holder of this Note as the Holder for all purposes.

     "Principal Amount" shall have the meaning set forth in the initial
paragraph.

     "Person" means an individual, trust, partnership, firm, association,
corporation or other organization or a government or governmental authority.

          Words of one gender include the other gender; the singular includes
the plural; and the plural includes the singular, unless the context otherwise
requires.

          2. CONVERSION OF THE NOTE.

(a) Election to Convert. Holder may, at its option, exercise by written notice
(the "Conversion Notice") to the Company at any time prior to payment in full
hereof, elect to convert all or any part of the entire outstanding principal
amount of this Note plus a pro rata share of the accrued interest on the then
outstanding balance into Common Shares at a conversion price equal to the lesser
of (a) ten cents ($0.10) per share (which is the equivalent of two million
shares subject to adjustment as provided for herein) and (b) a fifteen percent
(15%) discount from the closing price of the Company's common stock calculated
using the average closing price over ten consecutive trading days immediately
preceding the Conversion Notice date , and with a floor which is not to exceed a
total maximum potential issuance of Three Million five hundred fifty seven
thousand and sixty (3,557,060) shares (subject to adjustment in the event of any
stock splits, stock dividends or other recapitalization of Common Shares) (the
"Conversion Price").

(b) Conversion Price Protection. During the time period beginning from February
1, 2007 and ending on the earlier to occur of (a) the Conversion Notice date and
(b) February 1, 2009, if the Company issues common stock or securities
convertible or exercisable into stock at a price (or conversion or exercise
right) that is less than the Conversion Price (the "Adjustment Price"), then, at
the time of such issuance(s) the Company shall reduce a certain number of Shares
from the Conversion Price to the



Adjustment Price, in proportion to the number of securities the Company actually
issues at the Adjustment Price,

For example, if the Company issues 1,000,000 shares (half as much as the Holder
would have on full conversion) at $0.08/share, the Holder would get a 50%
correction on his Conversion Price, to $0.09/share. If the Company issues
2,000,000 or more shares, the Holder would get the full Conversion Price
reduction to $0.08/share.

With respect to any adjustment to the Conversion Price or to the number of
Common Shares as provided for in this Note, the Company shall as soon as
practical send to Holder a detailed written explanation of each such adjustment.

(c) Delivery of Conversion Shares. The Capital Stock issued on conversion of
this Note (the "Conversion Shares") shall be delivered as follows:

     As promptly as practicable after conversion, the Company shall deliver to
Holder, or to such person or persons as are designated by Holder in the
Conversion Notice, a certificate or certificates representing the number of
shares of Capital Stock into which this Note or portion thereof is to be
converted in such name or names as are specified in the Conversion Notice,
rounded to the nearest whole share. Such conversion shall be deemed to have been
effected at the close of business on the date when this Note shall



have been surrendered to the Company for conversion, so that the person entitled
to receive such Conversion Shares shall be treated for all purposes as having
become the record holder of such Conversion Shares at such time.

         In the event that less than the entire outstanding principal of this
Note is converted hereunder pursuant to subsection (a) above, this Note shall
not be surrendered for cancellation but shall have the fact and amount of
conversion recorded on the face of this Note by writing acknowledged by Holder
and the Company. If less than the entire principal balance of this Note is
converted, the amount of principal converted shall be reduced to the nearest
amount that results in no fractional shares.

(d) Reservation of Shares. The Company will use its best efforts to gain the
approval of the American Stock Exchange to have the authority to issue the
Conversion Shares to the Holder. The Company agrees that, during the period
within which this Note may be converted, the Company will, at all times, have
authorized and in reserve, and will keep available solely for delivery upon the
conversion of this Note, Capital Stock and other securities and properties as
from time to time shall be receivable upon the conversion of this Note, free and
clear of all restrictions on issuance, sale or transfer other than those imposed
by law and free and clear of all pre-emptive rights. The Company agrees that the
Conversion Shares shall, at the time of such delivery, be validly issued and
outstanding, fully paid and non-assessable, and the Company will take all such
action as may be necessary to assure that the stated value or par value per
share of the Conversion Shares is at all times equal to or less than the
Conversion Price.

(e) Registration of Conversion Shares. See the Registration Rights Agreement,
attached hereto as Exhibit A and incorporated herein. The Company agrees to file
a registration statement on SEC Form S-3 within 60 days of conversion of this
Note that includes all of the Conversion Shares.

(f) Protection Against Dilution.

     (i) In the event of any consolidation with or merger of the Company with or
into another corporation (other than a merger or consolidation in which the
Company is the surviving or continuing corporation) or any sale, lease or
conveyance to another corporation of the property of the Company as an entirety
or substantially as an entirety, in either case while any principal or accrued
interest remains outstanding under this Note, then such successor, leasing or
purchasing corporation, as the case may be, shall

               (1) execute with the Holder an agreement providing that the
          Holder shall have the right thereafter to receive upon conversion of
          this Note solely the kind and amount of shares of stock and other
          securities, property, cash or any combination thereof receivable upon
          such consolidation, merger, sale, lease or conveyance by a holder of
          the number of shares of Capital Stock for which this Note might have
          been converted immediately prior to such consolidation, merger, sale,
          lease or conveyance,



               (2) make effective provision in its articles of association or
          otherwise, if necessary, in order to effect such agreement, and

               (3) set aside or reserve, for the benefit of the Holder, the
          stock, securities, property and cash to which the Holder would be
          entitled upon conversion of this Note.

     (ii) In the event of any reclassification or change of the Capital Stock
into which this Note may be converted (other than a change in par value or from
no par value to a specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes or
series of shares), or in the event of any consolidation or merger of another
corporation into the Company in which the Company is the continuing corporation
and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the Capital Stock into which this
Note may be converted (other than a change in par value, or from no par value to
a specified par value, or as a result of a subdivision or combination, but
including any change in the shares into two or more classes or series of
shares), in either case while any principal or accrued interest remains
outstanding under this Note, then the Holder shall have the right thereafter to
receive upon conversion of this Note solely the kind and amount of shares of
stock and other securities, property, cash or any combination thereof receivable
upon such reclassification, change, consolidation or merger by a holder of the
number of shares of Capital Stock for which this Note might have been converted
immediately prior to such reclassification, change, consolidation or merger.

     (iii) If the Capital Stock shall be recapitalized or reclassified or the
Company shall effect any stock dividend, stock split, or reverse stock split of
the Capital Stock, then the Conversion Shares to be issued shall be
proportionately and equitably adjusted to reflect any increase or decrease in
the number of Conversion Shares resulting from such corporate event.


          3. PAYMENT OF THIS NOTE - PRINCIPAL AND INTEREST.

(a) Payment after Milestone Deadline. All principal and interest that has not
been converted into Capital Stock pursuant to Section 2 above shall be due and
payable on February 1, 2009 (the "Maturity Date") and, at any time thereafter,
the Holder may proceed to collect such unconverted principal and accrued
interest.

(b) Payment on an Event of Default. If an Event of Default occurs and is
continuing, then the Holder of this Note may without presentment, protest,
notice or demand, all of which are expressly waived, declare this Note
immediately due and payable and demand payment of all principal and interest
that has not been converted into Common Stock pursuant to Section 2 above, and,
at any time thereafter, the Holder may proceed to collect such unconverted
principal and accrued interest.



(c) Prepayment. The Company may prepay this Note at any time after six months
after the date hereof; provided that, prior to on or before July 1, 2007, the
Company shall give Holder at least 30 days' advance written notice, and after
July 1, 2007, the Company shall give Holder at least 15 days' advance written
notice, of the Company's intent to prepay and Holder shall have the right to
convert all or any portion of this Note pursuant to Section 2(b) at any time
during such 30-day or 15-day period, as applicable.

          4. EVENTS OF DEFAULT.

The existence of any of the following conditions shall constitute an Event of
Default:

(a) Commencement of proceedings under any bankruptcy or insolvency law or other
law for the reorganization, arrangement, composition or similar relief or aid of
debtors or creditors if such proceeding remains undismissed and unstayed for a
period of 60 days following notice to the Company by the Holder.

(b) If the Company shall dissolve, liquidate or wind up its affairs or sell
substantially all of its assets.

(c) If the Company breaches any of its representations, warranties, covenants or
agreements set forth in the Investment Agreement and such breach shall not be
cured within 30 days after written notice thereof shall have been given to the
Company by the Holder.

(d) One or more final judgments are entered against the Company involving
aggregate unpaid liability not covered by insurance in excess of $1,000,000, and
such amounts are not paid in full within 30 days.

(e) Attachment or similar process of execution is levied against a material
portion of the Company's assets and such process is not terminated and any
orders issued pursuant thereto canceled within 90 calendar days.

(f) The Company is in breach of any provision of this Note, which breach (other
than a breach described in Section 4(a) through 4(e) above) continues for more
than 30 calendar days following notice to the Company by the Holder.

(g) The Company fails to pay any amounts owed under this Note on the Maturity
Date.

          5. TRANSFER.

(a) Transfer of this Note shall be subject to prior delivery by the proposed
transferee to the Company of an opinion of counsel that such transfer is in
compliance with all federal and all applicable securities laws. In order to
transfer this Note, the Holder, or its



duly authorized attorney, shall surrender this Note at the office of the Company
pursuant to Section 10 herein, accompanied by an assignment duly executed by the
Holder hereof.

(b) This Note is, and each certificate representing Conversion Shares shall be,
stamped or otherwise imprinted with a legend substantially in the following
form:

          "The securities represented hereby have not been registered under the
          Securities Act of 1933, as amended or applicable state securities laws
          and may not be reoffered, sold, transferred, pledged, or otherwise
          disposed of except pursuant to (1) registration under such act or laws
          or (2) an opinion of counsel for the Company or other counsel
          reasonably acceptable to the Company to the effect that such
          registration is not required."

          6. LOSS OR MUTILATION OF NOTE.

Upon receipt by the Company of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, together with an indemnity
reasonably satisfactory to the Company, in the case of loss, theft, or
destruction, or the surrender and cancellation of this Note, in the case of
mutilation, the Company shall execute and deliver to the Holder a new Note of
like tenor and denomination as this Note.

          7. HOLDER NOT SHAREHOLDER.

This Note does not confer upon the Holder 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 conversion hereof.

          8. WAIVERS.

The failure of Holder to enforce at any time any of the provisions of this Note
shall not, absent an express written waiver signed by Holder specifying the
provision being waived, be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Note or any part hereof or the right
of Holder thereafter to enforce each and every such provision. No waiver of any
breach of this Note shall be held to be a waiver of any other or subsequent
breach. The Company waives presentment, demand, notice of dishonor, protest and
notice of nonpayment and protest.

          9. TAXES.

The Company agrees that it will pay, when due and payable, any and all stamp,
original issue or similar taxes which may be payable in respect of the issue of
this Note and/or any Conversion Shares or certificates therefor. The Company
shall not be required to pay any stamp, original issue or similar tax which may
be payable in respect of any transfer involved in the transfer and delivery of
stock certificates to a person other than of the Payee.



          10. NOTICES.

All notices or other communications to a party required or permitted hereunder
shall be in writing and shall be delivered personally or by facsimile (receipt
confirmed electronically) to such party (or, in the case of an entity, to an
executive officer of such party) or shall be sent by a reputable express
delivery service or by certified mail, postage prepaid with return receipt
requested, addressed as follows:

if to Payee to:
Miro Knezevic, Trustee
Knezevic Family Trust
110 Newport Center Drive
Suite 200
Newport Beach, California 92660

Jack Cornman
Cornman & Swartz
19800 MacArthur Blvd., Suite 820
Irvine, CA 92612
Fax: 949 224 1505

if to the Company to:
Anthony LaPine
Semotus Solutions, Inc.
718 University Avenue, Suite 202
Los Gatos, CA 95032


     Any party may change the above specified recipient and/or mailing address
by notice to all other parties given in the manner herein prescribed. All
notices shall be deemed given on the day when actually delivered as provided
above (if delivered personally or by facsimile, provided that any such facsimile
is received during regular business hours at the recipient's location) or on the
day shown on the return receipt (if delivered by mail or delivery service).

          11. HEADINGS.

The titles and headings to the Sections herein are inserted for the convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Note. This Note shall be construed without regard to
any presumption or other rule requiring construction hereof against the party
causing this Note to be drafted.



          12. APPLICABLE LAW AND JURISDICTION.

The legality, validity, enforceability and interpretation of this Note and the
relationship of the parties hereunder shall be governed by the laws of the State
of California, without giving effect to the principles of conflict of laws,
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern. Any claim, cause of action, suit or
demand allegedly arising out of or related to this Note, or the relationship of
the parties, shall be brought exclusively in the state or federal courts located
in Orange County, California, and the parties irrevocably consent to the
exclusive jurisdiction and venue of such courts and waive any objections they
may have at any time to such exclusive jurisdiction and venue.

          13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ATTORNEYS FEE. This
Note shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties hereto. If this Note is not paid when due or if
the Company breaches any provisions of this Note, in addition to all other
amounts due herein, the Company promises to pay all costs of collection and all
reasonable attorney fees and court costs incurred by Holder.

          14. ASSIGNMENT. This Note may not be assigned by either party hereto
without the prior written consent of the other (except that the Company may
without the prior written consent of the Holder assign this Note in the event of
a merger, acquisition or reorganization to the surviving entity of such merger,
acquisition or reorganization.

IN WITNESS WHEREOF, Semotus Solutions, Inc. has caused this Convertible
Promissory Note to be signed in its name by the signature of its duly authorized
representative.

SEMOTUS SOLUTIONS, INC.

/s/ Anthony LaPine
- ----------------------
By: Anthony LaPine
Its: CEO & Chairman

EX-10.1

                                                                    EXHIBIT 10.1
                                                                    ------------

                          REGISTRATION RIGHTS AGREEMENT


THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of February 1,
2007, is by and among Semotus Solutions, Inc., a Nevada corporation ("Company")
and MIRO KNEZEVIC AND GAIL L. KNEZEVIC, CO-TRUSTEES, KNEZEVIC FAMILY TRUST DATED
JUNE 30, 1992 ("Knezevic').

                                    RECITALS

     WHEREAS, pursuant to an Investment Agreement and Convertible Promissory
Note, dated as of February 1, 2007, among the Company and Knezevic, the Company
may issue a certain number of shares of common stock of the Company (the
"Company Shares") to Knezevic; and

     WHEREAS, to induce Knezevic to execute and deliver the Investment Agreement
and Convertible Promissory Note, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended (the
"Securities Act"), and applicable state securities laws.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Company and Knezevic agree as
follows:

     1. Definitions

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

               (i) "Exchange Act" means the United States Securities Exchange
Act of 1934, as amended.

               (ii) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "Commission").

               (iii) "Registrable Securities" means the Conversion Shares issued
or issuable to Knezevic pursuant to the Convertible Promissory Note, but in any
event no less than the maximum number of shares that can be issued under such
Convertible Promissory Note (i.e. 3,557,060 shares of Common Stock) and any
shares issued in respect of such shares and any other shares of Common Stock of
the Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, such shares.



               (iv) "Registration Statement" means a registration statement of
the Company under the Securities Act that includes all of the Registrable
Securities.

               (v) "Securities Act" means the United States Securities Act of
1933, as amended.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings set forth in the Convertible Promissory Note.

     2. REGISTRATION.

          (a) MANDATORY REGISTRATION.

               (i) Unless the Registration Statement as provided for in
paragraph 2(b) herein and which includes all of the Registrable Securities is
filed and not withdrawn by July 1, 2007, the Company shall file on or before
July 1, 2007 with the Commission a Registration Statement on Form S-3 (or any
successor form thereto) covering the registration for resales of the Registrable
Securities. (ii) The Company shall use its best efforts to file the required
Registration Statement as soon as possible and to cause the Registration
Statement to become effective as soon as possible thereafter. The Company shall
use best efforts to keep the Registration Statement (whether filed under
paragraph 2(a) herein or under paragraph 2(b) herein or otherwise under this
Agreement) effective pursuant to Rule 415 at all times until such date as is the
earlier of (the "REGISTRATION PERIOD") (A) the date on which all of the
Registrable Securities have been sold and (B) the date on which the Registrable
Securities (in the reasonable opinion of counsel to Knezevic) may be immediately
sold without restriction (including without limitation as to volume) without
registration under the Securities Act.

          (b) PIGGYBACK REGISTRATION. If (but without any obligation to do so)
the Company proposes to register any of its common shares on a registration
statement (other than a registration relating solely to the sale of securities
to participants in a Company stock option plan), 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 use all best efforts to cause to be registered under the
Act all of the Registrable Securities that the Holder has requested to be
registered. 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.

          (c) ELIGIBILITY FOR FORM S-3. The Company represents and warrants that
it meets all of the requirements for the use of Form S-3 for the Registration of
the sale by Knezevic and any transferee who purchases the Registrable
Securities, and the Company shall use best efforts to file all reports required
to be filed by the Company with the Commission in a timely manner, and shall
take such other actions as may be necessary to maintain such eligibility for the
use of Form S-3. or any successor form.

     3. OBLIGATIONS OF THE COMPANY. In connection with the registration of the
Registrable Securities, the Company shall do each of the following:

                                       -2-


          (a) Prepare and file with the Commission the registration statements
required by Section 2 of this Agreement and such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectuses used in connection with the Registration Statement, each in such
form as to which Knezevic and his counsel shall not have objected, as may be
necessary to keep the Registration effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all of the
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;

          (b) Notify Knezevic, if the Registrable Securities of Knezevic are
included in the Registration Statement, and his legal counsel identified to the
Company, promptly after the same is prepared and publicly distributed, filed
with the Commission, or received by the Company, of the availability on the
Internet, including the URL, the Registration Statement, each preliminary
prospectus, each final prospectus, and all amendments and supplements thereto
and such other documents, as Knezevic may reasonably request in order to
facilitate the disposition of his Registrable Securities;

          (c) Furnish to Knezevic and his counsel copies of any correspondence
between the Company and the Commission with respect to any registration
statement or amendment or supplement thereto filed pursuant to this Agreement;

          (d) Use all reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or blue sky laws of such jurisdictions as Knezevic may reasonably
request, (ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof at all
times during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times during the Registration Period and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions, provided that in connection therewith, the Company shall not be
required to qualify as a foreign corporation or to file a general consent to the
service of process in any jurisdiction;

          (e) As promptly as practicable after becoming aware of such event,
notify Knezevic of the occurrence of any event of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and to use its best efforts to promptly prepare a
supplement or amendment to the Registration Statement or other appropriate
filing with the Commission to correct such untrue statement of omission, and to
deliver a number of copies of such supplement or amendment to Knezevic as
Knezevic may reasonably request;

          (f) As promptly as practicable after becoming aware of such event,
notify Knezevic or his transferee who holds Registrable Securities being sold
(or, in the event of an

                                       -3-


underwritten offering, the managing underwriters) of the issuance by the
Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time, and to use its best
efforts to promptly obtain the withdrawal of such stop order or other suspension
of effectiveness;

          (g) If the offering is underwritten, and the underwriter so requests,
to furnish on the date that Registrable Securities are delivered to the
underwriters for sale pursuant to such registration: (i) an opinion dated such
date of counsel representing the Company for the purposes of such registration,
addressed to the underwriters and to Knezevic in connection with such
underwriting, stating that such registration statement has become effective
under the Securities Act and that (A) to the best knowledge of such counsel, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or contemplated
under the Securities Act and (B) the registration statement, the related
prospectus and each amendment or supplement thereof comply as to form in all
material respects with the requirements of the Securities Act (except that such
counsel need not express any opinion as to financial statements or other
financial data contained therein) and (ii) a letter dated such date from the
Company's independent public accountants addressed to the underwriters and to
such Purchaser, stating that they are independent public accountants within the
meaning of the Securities Act and that, in the opinion of such accountants, the
financial statements of the Company included in the registration statement or
the prospectus, or any amendment or supplement thereof, comply as to form in all
material respects with the applicable accounting requirements of the Securities
Act, and such letter shall additionally cover such other financial matters
(including information as to the period ending no more than five business days
prior to the date of such letter) with respect to such registration as such
underwriters may reasonably request; and

               (i) Cooperate with Knezevic to facilitate the timely preparation
and delivery of certificates for the Registrable Securities to be offered
pursuant to the Registration Statement and to enable such certificates for the
Registrable Securities to be in such denominations or amounts, as the case may
be, as Knezevic may reasonably request, and registered in such names as Knezevic
may request; and, within three business days after a Registration Statement
which includes Registrable Securities is ordered effective by the Commission,
the Company shall deliver, and shall cause legal counsel selected by the Company
to deliver, to the transfer agent for the Registrable Securities (with copies to
Knezevic) an appropriate instruction and opinion of such counsel.

     4. OBLIGATIONS OF KNEZEVIC. In connection with the registration of the
Registrable Securities, Knezevic shall have the following obligations:

          (a) Knezevic shall furnish to the Company such information regarding
himself, the Registrable Securities held by him, and the intended method of
disposition of the Registrable Securities held by him, as shall be reasonably
required to effect the registration of such Registrable Securities, and Knezevic
shall execute such documents in connection with such registration as the Company
may reasonably request. At least ten days prior to the first anticipated filing
date of the Registration Statement, the Company shall notify Knezevic of the
information the Company requires from Knezevic if Knezevic elects to have any of
his Registrable Securities included in the Registration Statement.

                                      -4-


          (b) Upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3(e) or 3(f) above, Knezevic will
immediately discontinue disposition of his Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until such
copies of the supplemented or amended prospectus contemplated by Section 3(e) or
3(f) shall be furnished to him.

     5. EXPENSES OF REGISTRATION. All expenses, other than underwriting
discounts and commissions incurred in connection with registrations, filings or
qualifications pursuant to Section 3, including, without limitation, all
registration, listing, and qualification fees, printing and accounting fees, and
the fees and disbursements of counsel for the Company, shall be borne by the
Company.

     6. INDEMNIFICATION. In the event any Registrable Securities are included in
a Registration Statement under this Agreement:

          (a) To the extent permitted by law, the Company will indemnify and
hold harmless Knezevic and his transferees and controlling persons of his
transferees and their respective successors and assigns (each, an "Indemnified
Person"), against any losses, claims, damages, liabilities or expenses (joint or
several) incurred (collectively, "Claims") to which any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the Commission) or the omission to state
therein any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading, or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state or foreign securities law or any
rule or regulation under the Securities Act, the Exchange Act or any state or
foreign securities law (the matters in foregoing clauses (i) through (iii)
being, collectively, "Violations"). The Company shall, subject to the provisions
of Section 6(b) below, reimburse the Indemnified Person, promptly as such
expenses are incurred and are due and payable, for any legal and other costs,
expenses and disbursements in giving testimony or furnishing documents in
response to a subpoena or otherwise, including without limitation, the costs,
expenses and disbursements, as and when incurred, of investigating, preparing or
defending any such action, suit, proceeding or investigation (whether or not in
connection with litigation in which the Indemnified Person is a party), incurred
by him in connection with the investigation or defense of any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a) shall not (i) apply to any Claim
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of any Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto; (ii) with respect to any preliminary prospectus, inure to

                                       -5-


the benefit of any such person from whom the person asserting any such Claim
purchased the Registrable Securities that are the subject thereof (or to the
benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the final prospectus, as then amended or supplemented, if such final
prospectus was timely made available by the Company pursuant to Section 3(b)
hereof; (iii) be available to the extent that such Claim is based upon a failure
of the Indemnified Person to deliver or to cause to be delivered the prospectus
made available by the Company, if such prospectus was timely made available by
the Company pursuant to Section 3(b) hereof; or (iv) apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer of
the Registrable Securities by Knezevic pursuant to Section 9. Each Indemnified
Person will indemnify the Company and its officers and directors against any
Claims arising out of or based upon a Violation which occurs in reliance upon
and in conformity with information furnished in writing to the Company, by or on
behalf of the Indemnified Person, expressly for use in connection with the
preparation of the Registration Statement, subject to such limitations and
conditions are applicable to the Indemnification provided by the Company
pursuant to this Section 6 (for the purposes of such indemnification, the
Company and its officers and directors shall each be considered an "Indemnified
Person").

          (b) Promptly after receipt by an Indemnified Person under this Section
6 of notice of the commencement of any action (including any governmental
action), such Indemnified Person shall, if a Claim in respect thereof is to be
made against any indemnifying party under this Section 6, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and to the extent
that the indemnifying party so desires, jointly with any other indemnifying
party similarly notified, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Indemnified Person,
provided, however, that an Indemnified Person shall have the right to retain its
own counsel with the reasonable fees and expenses to be paid by the indemnifying
party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person and the
indemnifying party would be inappropriate due to actual or potential differing
interests between such Indemnified Person and any other party represented by
such counsel in such proceeding. In such event, the Company shall pay for only
one separate legal counsel for the Indemnified Person, and such legal counsel
shall be selected by the Indemnified Person. The failure to deliver written
notice to an indemnifying party within a reasonable time after the commencement
of any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person under this Section 6, except to the extent that the
indemnifying party is materially prejudiced in its ability to defend such
action. The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as such expense, loss, damage or liability is incurred and is due and
payable.

          (c) No indemnifying party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Person, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Person of an unconditional and irrevocable release from all
liability in respect of such claim or litigation.

                                       -6-


          (d) Notwithstanding the foregoing, to the extent that any provisions
relating to indemnification or contribution contained in the underwriting
agreements entered into among the Company, the underwriters and the Indemnified
Person in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in such underwriting agreements shall
be controlling as to the Registrable Securities included in the public offering;
provided, however, that if, as a result of this Section 6(d), the Indemnified
Person is or are held liable with respect to any Claim for which they would be
entitled to indemnification hereunder but for this Section 6(d) in an amount
which exceeds the aggregate proceeds received by them from the sale of
Registrable Securities included in a registration pursuant to such underwriting
agreement (the "Excess Liability"), the Company shall reimburse them for such
Excess Liability.

     7. CONTRIBUTION. To the extent any indemnification by an indemnifying party
is prohibited or limited under applicable law, the indemnifying party agrees to
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage, liability or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the Indemnified Person on the other hand in connection with the
statements or omissions which resulted in such Claim, as well as any other
relevant equitable considerations. The relative fault of the indemnifying party
and the Indemnified Person shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the omission to state
a material fact on which such Claim is based relates to information supplied by
the indemnifying party or by the Indemnified Person, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. Notwithstanding the forgoing, (a) no contribution
shall be made under circumstances where the payor would not have been liable for
indemnification under the fault standards set forth in Section 6, (b) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
such fraudulent misrepresentation and (c) contribution by any seller of
Registrable Securities shall be limited in amount to the net proceeds received
by such seller from the sale of such Registrable Securities. The Company and
Knezevic agree that it would not be just and equitable if contribution pursuant
to this Section 7 were determined by pro rata allocation (even if Knezevic and
any other party were treated as one entity for such purpose) or by any other
method of allocation that does not take account of the equitable considerations
referred to in this Section.

     8. REPORTS UNDER EXCHANGE ACT.

          (a) With a view to making available to Knezevic the benefits of Rule
144 promulgated under the Securities Act or any other similar rule or regulation
of the Commission that may at any time permit Knezevic to sell securities of the
Company to the public without registration ("Rule 144"), the Company agrees to:

               (i) make and keep public information available, as those terms
are understood and defined in Rule 144;

               (ii) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and

                                      -7-


               (iii) furnish to Knezevic, so long as Purchaser owns Registrable
Securities, promptly upon request (i) a written statement by the Company that it
has complied with the reporting requirements of the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or periodic report of the
Company and such other reports and documents so filed by the Company and (iii)
such other information and take such actions as may be reasonably requested to
permit Knezevic to sell such securities pursuant to Rule 144 without
registration.

          (b) Notwithstanding the forgoing, the Company will not be deemed to
have breached this Agreement pursuant to paragraph (a) above at any time at
which Knezevic may effect resales of all of the Registrable Securities pursuant
to one or more Registration Statements filed pursuant to this Agreement.

Upon the reasonable request of Knezevic, , the Company will (1) deliver to such
parties a written statement as to whether it has complied with such requirements
and will, at its expense, immediately upon the request of any such Holder,
deliver to such Holder a certificate, signed by the Company's principal
financial officer, stating (a) the Company's name, address and telephone number
(including area code), (b) the Company's Internal Revenue Service identification
number, (c) the Company's SEC file number, (d) the number of shares of each
class of capital stock outstanding as shown by the most recent report or
statement published by the Company, and (e) whether the Company has filed the
reports required to be filed under the Exchange Act for a period of at least
ninety (90) days prior to the date of such certificate and in addition has filed
the most recent annual report required to be filed thereunder and (2) remove any
restrictive legends on stock certificates, list such shares on the exchanges on
which such shares trade, and take such other action reasonably requested.

     9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the Company
register Registrable Securities pursuant to this Agreement shall be
automatically assigned by Knezevic to any transferee of all or any portion of
the Company Shares held by Knezevic if: (a) Knezevic agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (b) the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (i) the name and address of such transferee or
assignee and (ii) the securities with respect to which such registration rights
are being transferred or assigned; and (c) at or before the time the Company
receives the written notice contemplated by clause (b) of this sentence, the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained in this Agreement. In the event of any delay in filing
the Registration Statement as a result of such assignment, the Company shall not
be liable for any damages arising from such delay.

     10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement may
be amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the holders of a majority in interest of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each holder and the Company.

     11. MISCELLANEOUS.

                                       -8-


          (a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of the
instructions, notice or election received from the registered owner of such
Registrable Securities.

          (b) Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free
transmission) or two business days following deposit of such notice with a
nationally recognized courier service, with postage prepaid and addressed to
each of the other parties thereunto entitled at the following addresses, or at
such other addresses as a party may designate by ten days advance written notice
to each of the other parties hereto.

COMPANY:  SEMOTUS SOLUTIONS, INC.

          718 University Ave., Suite 202
          Los Gatos, CA 95032
          ATTN:  Tali Durant. Esq.
          Facsimile:  (408) 904-7699


KNEZEVIC: Miro Knezevic, Trustee
          Knezevic Family Trust
          110 Newport Center Drive
          Suite 200
          Newport Beach, California 92660
          949) 719-1192


          With a copy to : Jack Cornman
          Cornman & Swartz19800 MacArthur Blvd., Suite 820
          Irvine, CA 92612
          Fax: 949 224 1505


          (c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

          (d) This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California, except for provisions with respect to
internal corporate matters of the Company which shall be governed by the
corporate laws of the State of Nevada. This Agreement may be signed by facsimile
and in one or more counterparts, each of which shall be deemed an original. The
headings of this Agreement are for convenience of reference and shall not

                                       -9-


form part of, or affect the interpretation of, this Agreement. If any provision
of this Agreement shall be invalid or unenforceable in any jurisdiction, such
validity or unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction. Subject to the provisions of Section 11
hereof, this Agreement may be amended only by an instrument in writing signed by
the party to be charged with enforcement.

          (e) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth, or referred to
herein and in the Agreement of Merger. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.

          (f) Subject to the requirements of Section 10 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.

          (g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed.

COMPANY

SEMOTUS SOLUTIONS, INC.


By:    /s/ Anthony N. LaPine
Name:  Anthony N. LaPine
Title: CEO




PURCHASER

Knezevic Family Trust dated June 30, 1992

/s/ Miro Knezevic, Co-Trustee
- ---------------------------------
Miro Knezevic, Co-Trustee


/s/ Gail L. Knezevic, Co-Trustee
- ---------------------------------
Gail L. Knezevic, Co-Trustee


                                      -10-