-----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, TgO/CjsXDLUdwa2Wjijdr+vryOXjHH1NJbtpadoXqvXLZR/mcxmbxz/ekdQpthGo mGlNCP52WBuc25Ui5sJNKA== 0001072613-07-001093.txt : 20070511 0001072613-07-001093.hdr.sgml : 20070511 20070511112449 ACCESSION NUMBER: 0001072613-07-001093 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20070507 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070511 DATE AS OF CHANGE: 20070511 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: 07840701 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 form8-k_15158.txt FORM 8-K DATED MAY 7, 2007 ================================================================================ 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): May 7, 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 - -------------------------------------------------------------------------------- (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)) ================================================================================ ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT In this discussion, unless otherwise specified, all references to "we", "us" and "our" mean Semotus Solutions, Inc. All dollar amounts refer to US dollars unless otherwise indicated. We have entered into a definitive Asset Purchase Agreement and Transition Services Agreement on May 8, 2007 with Stockgroup Systems, Ltd. ("Stockgroup"), relating to the sale of our wireless financial information assets (the "Agreement"). As part of the Agreement, we have agreed to sell our financial data wireless distribution technology and intellectual property, and the related wireless financial data services. The purchase price for this asset sale consists of up to $350,000; $150,000 to be paid upon the Closing and the remaining $200,000 to be paid through a monthly revenue share of 30%, subject to a reduction to 15% should total revenues fall below 25% within six months of Close, until $200,000 has been paid to us or two years have passed from the date of Closing, whichever occurs first. The foregoing description of the Asset Purchase Agreement is qualified in its entirety by reference to the full text of the Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. Additionally, on May 7, 2007 Citytalk signed a Waiver to its Agreement and Plan of Reorganization with Semotus, attached hereto as Exhibit 2.3, which allows, among other things, for us to complete the sale of assets to Stockgroup. On May 9, 2007, we issued a press release with respect to this Asset Purchase Agreement and Waiver. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS As disclosed in Item 1.01 above, we entered into an Asset Purchase Agreement with Stockgroup Systems, Ltd., whereby we agreed to dispose of our financial data wireless distribution technology and intellectual property, and the related wireless financial data services, including the Global Market Pro family of software and services. On May 9, 2007, we completed the above described disposition of assets. ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements of Business Acquired Not applicable. (b) Pro Forma Financial Information Not applicable. (c) Exhibits. The following exhibits are filed with this report: Exhibit Number Description -------------- ----------- 2.1 Asset Purchase Agreement by and among Semotus Solutions, Inc. and Stockgroup Systems, Ltd. dated May 8, 2007. 2.2 Transition Services Agreement by and among Semotus Solutions, Inc. and Stockgroup Systems, Ltd. dated May 8, 2007. 2.3 Waiver by Citytalk, Inc. dated May 7, 2007. 99.1 Press Release of Semotus Solutions, Inc. issued on May 9, 2007. 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: May 11, 2007 By: /s/ Anthony N. LaPine ------------------------ Anthony N. LaPine, Chief Executive Officer EX-2.1 2 exh2-1_15158.txt ASSET PURCHASE AGREEMENT EXHIBIT 2.1 ----------- ================================================================================ ASSET PURCHASE AGREEMENT ================================================================================ 1. PURCHASE AND SALE OF ASSETS 1.1 Description of Assets 2. PURCHASE PRICE AND ALLOCATION 3. PAYMENT OF THE PURCHASE PRICE 3.1 Purchase Price 3.2 Vendor Goods and Services 4. ASSUMPTION OF LIABILITIES 5. REPRESENTATIONS AND WARRANTIES OF THE VENDOR 5.1 Capacity to Sell 5.2 Authority to Sell 5.3 Sale Will Not Cause Default 5.4 Assets 5.5 Intangible Property 5.6 Material Change 5.7 Litigation 5.8 Conformity with Laws 5.9 Terms of Employment 5.10 Material Contracts 5.11 No Defaults 5.12 Deferred Revenue 5.13 Accuracy of Representations 6. COVENANTS OF THE VENDOR 6.1 Conduct of Business 6.2 Access by Purchaser 6.3 Taxes 6.4 Termination of Employees 6.5 Exclusivity 7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 7.1 Status of Purchaser 7.2 Authority to Purchase 8. COVENANTS OF THE PURCHASER 8.1 Offer Employment 8.2 Consents 9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION 9.1 Survival of Representations, Warranties and Covenants 9.2 Indemnification 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER 10.1 Vendor's Representations and Warranties 10.2 Vendor's Covenants 10.3 Vendor's Certificate 11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VENDOR 11.1 Purchaser's Representations and Warranties 11.2 Purchaser's Covenants 12. CLOSING 12.1 Closing Date 12.2 Place of Closing 12.3 Documents to be Delivered by the Vendor 12.4 Documents to be Delivered by the Purchaser 13. RISK OF LOSS 14. FURTHER ASSURANCES 15. SET-OFF 16. NOTICE 17. ENTIRE AGREEMENT 18. TIME OF THE ESSENCE 19. APPLICABLE LAW 20. MEDIATION AND ARBITRATION 21. SUCCESSORS AND ASSIGNS 22. HEADINGS - -------------------------------------------------------------------------------- THIS AGREEMENT is made May 8, 2007. BETWEEN: SEMOTUS SOLUTIONS INC. WITH OFFICES LOCATED AT SUITE 202, 718 UNIVERSITY AVE., LOS GATOS, CALIFORNIA 95032 (the "Vendor") AND: STOCKGROUP SYSTEMS LTD., WITH OFFICES LOCATED AT SUITE 500 - 750 WEST PENDER STREET, VANCOUVER, B.C. V6C 2T7 (the "Purchaser") BACKGROUND A. The Vendor carries on the business of providing software for wireless enterprise applications, more specifically the Vendor's software connects customers wirelessly to critical business systems, information and processes (the "Vendor's Business"). B. The Vendor has agreed to sell, and the Purchaser has agreed to purchase, subject to certain exceptions listed in this Agreement, certain assets and undertakings of the Vendor's Business related to its financial data wireless services and software (the "Vendor's Financial Data Business") on the terms and subject to the conditions provided in this Agreement. TERMS OF AGREEMENT In consideration of the premises and the covenants, agreements, representations, warranties and payments contained in this Agreement, the parties agree with the others as follows: 1. PURCHASE AND SALE OF ASSETS 1.1 DESCRIPTION OF ASSETS Upon the terms and subject to the conditions of this Agreement, the Vendor agrees to sell, assign and transfer to the Purchaser, and the Purchaser agrees to purchase from the Vendor at Closing, the undertaking and certain assets of the Vendor's Financial Data Business, including, without limiting the foregoing: (a) all contracts, engagements or commitments to which the Vendor is entitled in connection with the Vendor's Financial Data Business, and in particular all right, title and interest of the Vendor in, to and under the material agreements and contracts (the "Material Contracts") described in the Schedule of Material Contracts; (b) all right and interest of the Vendor to all registered and unregistered trademarks, trade or brand names, copyrights, designs, restrictive covenants, domain names, proprietary software (including source code) and other industrial or intellectual property used in connection with the Vendor's Financial Data Business (the "Intangible Property"), including, without limitation, the intangible property described in the Schedule of Intangible Property; and (c) the accounts receivable and all other debts owed to the Vendor in connection with the Vendor's Financial Data Business. The accounts receivable of the Business as of Closing ("Closing Accounts Receivable") shall remain the property of the Vendor. Closing Accounts Receivable shall be accounted for on a basis consistent with past practices of the Vendor's Financial Data Business in recognizing sales and billings. Vendor shall have the right to allow the Vendor's Financial Data Business to continue to receive and collect Closing Accounts Receivable in the ordinary course of business. Purchaser shall use commercially reasonable efforts to collect the Closing Accounts Receivable and promptly (end of each month) remit such collections to the Vendor. Following a period of 120 days from the Closing, the Purchaser shall remit back to the Vendor any uncollected Closing Accounts Receivable balance and records and the Vendor shall have the right to pursue commercially reasonable collection efforts against such customers for the outstanding Closing Accounts Receivable amounts still owed. all of which are collectively called the "Assets". 2. PURCHASE PRICE AND ALLOCATION The purchase price payable by the Purchaser to the Vendor for the Assets will be up to Three-Hundred Fifty Thousand Dollars (USD$ 350,000). 3. PAYMENT OF THE PURCHASE PRICE 3.1 PURCHASE PRICE The purchase price shall be paid and satisfied as follows: (a) The Purchase Price shall be up to a total of USD$350,000 (Three Hundred and Fifty Thousand Dollars) for the Assets, payable as follows: (i) USD$150,000 (One Hundred Fifty Thousand) payable by certified cheque, wire transfer or bankers draft payable to or to the order of the Vendor and delivered at the Closing; and (ii) 30% of Gross Revenue payable monthly to the Vendor, up to a total of $200,000 (Two Hundred Thousand Dollars) as defined in 3(c) below. If Gross Revenue falls below twenty-five (25%) within six (6) months of Closing, fifteen percent (15%) per month of Gross Revenue will be payable to the Vendor, up to a total of $200,000. (b) The Purchase Price shall be deemed paid in full if any of the following events occur: (i) Gross Revenue falls below USD$15,000 (Fifteen Thousand Dollars) a month; or (ii) USD$200,000 (Two Hundred Thousand Dollars) in fees have been paid; or (iii) Two years from the Closing Date. (c) Gross Revenue shall mean total revenues (as determined in accordance with the generally accepted accounting principles) that are earned by, or generated from the Vendor's Financial Data Business, and including the amount paid on behalf of subscribers for per device and/or per quote stock exchange fees up to a maximum total of USD$2500 a month. (d) Purchaser shall pay to the Vendor all monthly data feed costs per month for the Transition Services Period in accordance with the Transition Services Agreement, attached hereto and incorporated herein. (e) Vendor shall pay to Purchaser all fees collected by the Vendor as it relates to a Vendor's customer that refuses assignment of a Material Contract to the Purchaser. Vendor shall maintain the right to invoice the customer under the existing agreement and remit all monies collected under the agreement to the Purchaser. 3.2 VENDOR GOODS AND SERVICES As part of the Purchase Price, the Vendor shall provide the following: (i) moving and functioning set-up of the production environment to the Purchaser's facility located at 11460 Cronridge Drive, Owings Mills, MD, U.S.A.; and (ii) two key employees, as listed in the Schedule 3.2(ii) attached hereto and incorporated herein, (the "Key Employees") will be hired directly by Purchaser. 4. ASSUMPTION OF LIABILITIES 4.1 ASSUMED INDEBTEDNESS Purchaser shall be responsible for liabilities under any of the Material Contracts after the Closing (described in Section 12 below). All other obligations and liabilities of Vendor shall be expressly excluded. Vendor shall be responsible for all liabilities and administrative obligations related to the Vendor's Financial Data Business for the period up to and including the Closing (collectively, the "Assumed Indebtedness") and the Vendor shall indemnify and save the Purchaser harmless from all claims, demands, suits and actions in respect of the Assumed Indebtedness. 4.2 OTHER OBLIGATIONS On and after closing the Purchaser shall assume, perform and discharge all obligations arising under the Material Contracts (except as provided in section 4.3) and all other contracts, commitments or engagements which are entered into by the Vendor between the date of this Agreement and closing in the ordinary course of the Vendor's Financial Data Business and which are not prohibited by this Agreement or are consented to in writing by the Purchaser, and the Purchaser shall indemnify and save the Vendor harmless from all claims, demands, suits and actions under the Material Contracts in respect of events after closing. 4.3 RELEASE OF VENDOR At or before the Closing the Purchaser shall execute and deliver all such covenants and assurances with respect to the Assumed Indebtedness and with respect to the obligations assumed under section 4.2 as may reasonably be required as a condition to the release of the Vendor from any liability in respect of the Assumed Indebtedness. 5. REPRESENTATIONS AND WARRANTIES OF THE VENDOR The Vendor represents and warrants to the Purchaser as follows, with the intent that the Purchaser will rely on these representations and warranties in entering into this Agreement, and in concluding the purchase and sale contemplated by this Agreement. 5.1 CAPACITY TO SELL The Vendor is a corporation duly incorporated, validly existing and in good standing under the laws of Nevada with respect to the filing of annual reports, and has the power and capacity to own and dispose of the Assets and to carry on the Vendor's Business as now being conducted by it, and to enter into this Agreement and carry out its terms to the full extent. 5.2 AUTHORITY TO SELL The execution and delivery of this Agreement and the completion of the transaction contemplated by this Agreement have been duly and validly authorized by all necessary corporate action on the part of the Vendor, and this Agreement constitutes a legal, valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms except as may be limited by laws of general application affecting the rights of creditors. 5.3 SALE WILL NOT CAUSE DEFAULT Neither the execution and delivery of this Agreement nor the completion of the purchase and sale contemplated by this Agreement will: (a) violate any of the terms and provisions of the memorandum or articles of the Vendor, or any order, decree, statute, by-law, regulation, covenant or restriction applicable to the Vendor or any of the Assets; (b) give any person the right to terminate, cancel or remove any of the Assets, except to the extent that the consents of the other parties to the Material Contracts are required to assign the Material Contracts; or (c) result in any fees, duties, taxes, assessments or other amounts relating to any of the Assets becoming due or payable by the Purchaser in connection with the purchase and sale. 5.4 ASSETS The Vendor owns and possesses and has a good marketable title to the Assets free and clear of all mortgages, liens, charges, pledges, security interest, encumbrances and other claims except as described in the Schedule of Material Contracts. 5.5 INTANGIBLE PROPERTY The Schedule of Intangible Assets is a true and correct listing of all Intangible Property and the Vendor owns and possesses the Intangible Assets free and clear of any and all encumbrances. 5.6 MATERIAL CHANGE Since the date of the Letter of Intent there has not been and change to the Assets as described in Section 1.1 of this Agreement. 5.7 LITIGATION There is no litigation or administrative or governmental proceeding or inquiry pending, or to the knowledge of the Vendor, threatened against or relating to the Vendor, the Vendor's Business or any of the Assets, nor does the Vendor know of any reasonable basis for any such action, proceeding or inquiry. 5.8 CONFORMITY WITH LAWS All governmental licences and permits required for the conduct in the ordinary course of the operations of the Vendor's Business and the uses to which the Assets have been put, have been obtained and are in good standing and such conduct and uses are not in breach of any order, decree, statute, by-law, regulation, covenant, restriction, plan or permit, including those regulating the discharge of materials into the environment and the storage, treatment and disposal of waste or otherwise relating to the protection of the environment and the health and safety of persons. For greater certainty, the Assets have not been used in a manner which does or will give rise to any obligation of restoration or removal or any liability for the costs of restoration or removal or for the payment of damages to any third party. 5.9 TERMS OF EMPLOYMENT The Vendor is not a party to any collective agreement relating to the Vendor's Business with any labour union or other association of employees, and no part of the Vendor's Business has been certified as a unit appropriate for collective bargaining. The Vendor's Business has employees and group employee termination legislation would not apply to a termination of all employees at one time. Additionally, the Key Employees may be dismissed on one year's notice or less, without further liability. 5.10 MATERIAL CONTRACTS The Schedule of Material Contracts contains a true and correct listing of each written or oral contract of the following types to be acquired or assumed by the Purchaser: (a) contracts or commitments out of the ordinary course of business; (b) contracts or commitments involving an obligation to pay in the aggregate $100 or more or of a duration greater than one year; (c) contracts or commitments in respect of the Intangible Property; (d) except as required by statute or regulation, contracts or commitments in respect of bonuses, incentive compensation, pensions, group insurance or employee welfare plans, all of which are fully funded as determined by an independent and reputable firm of actuaries employed by the Vendor; (e) employment contracts or commitments other than unwritten employment contracts of indefinite duration entered into in the ordinary course of the Vendor's Business; and (f) contracts or commitment in respect to vendors of the Vendor. 5.11 NO DEFAULTS Except as otherwise expressly disclosed in this Agreement or in any Schedule to this Agreement there has not been any default in any obligation to be performed under any Material Contract, each of which is in good standing and in full force and effect, unamended, except as set forth in the Schedule of Material Contracts. 5.12 DEFERRED REVENUE There are no deferred revenues or any other future obligation related to the Vendor's Financial Data Business nor does the Vendor know of any reasonable basis for any such deferred revenue obligation. The Vendor shall indemnify and save harmless the Purchaser from and against all deferred revenue obligations related to the Vendor or the Vendor's Financial Data Business. 5.13 ACCURACY OF REPRESENTATIONS No certificate or statement furnished by or on behalf of the Vendor to the Purchaser at Closing in respect of the representations, warranties or covenants of the Vendor will contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements misleading. 6. COVENANTS OF THE VENDOR 6.1 CONDUCT OF BUSINESS Until Closing, the Vendor shall conduct the Vendor's Financial Data Business diligently and only in the ordinary course and will use its best efforts to preserve the Assets intact, to keep available to the Purchaser its present employees and to preserve for the Purchaser its relationship with its suppliers, customers and others having business relations with it. 6.2 ACCESS BY PURCHASER The Vendor shall give to the Purchaser and Purchaser's counsel, accountants and other representatives full access, during normal business hours throughout the period prior to Closing, to all of the properties, books, contracts, commitments and records of the Vendor relating to the Vendor's Financial Data Business and the Assets, and shall furnish to the Purchaser during that period all such information as the Purchaser may reasonably request. 6.3 TAXES The Vendor has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party pertaining to the Assets or otherwise pertaining to the Vendor's Financial Data Business. 6.4 PROCURE CONSENTS The Vendor shall diligently take all reasonable steps required to obtain all consents to the assignments of the Material Contracts and any other of the Assets for which a consent is required. 6.5 EXCLUSIVITY The Sellers will not: (a) solicit, initiate, or encourage the submission of any proposal or offer from any entity or person relating to the acquisition of the Assets or any substantial portion of the Assets. (b) The Vendor will notify Stockgroup immediately if any entity or person makes any proposal, offer, inquiry, or contact with respect to any of the foregoing. 7. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER The Purchaser represents and warrants to the Vendor as follows, with the intent that the Vendor will rely on these representations and warranties in entering into this Agreement, and in concluding the purchase and sale contemplated by this Agreement. 7.1 STATUS OF PURCHASER The Purchaser is a corporation duly incorporated, validly existing and in good standing under the laws of the state of Nevada with respect to the filing of annual returns, has the power and capacity to enter into this Agreement and carry out its terms. 7.2 AUTHORITY TO PURCHASE The execution and delivery of this Agreement and the completion of the transaction contemplated by this Agreement have been duly and validly authorized by all necessary corporate action on the part of the Purchaser, and this Agreement constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser in accordance with its terms except as limited by laws of general application affecting the rights of creditors. 8. COVENANTS OF THE PURCHASER 8.1 OFFER EMPLOYMENT The Purchaser does covenant with the Vendor to offer employment at Closing to the Key Employees. 8.2 CONSENTS The Purchaser shall at the request of the Vendor execute and deliver such applications for consent and such assumption agreements, and provide such information as may be necessary to obtain the consents referred to in section 6.4 and will assist and co-operate with the Vendor in obtaining the consents. 9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; INDEMNIFICATION 9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS All statements contained in any certificate or other instrument delivered under this Agreement or in connection with the transaction contemplated by this Agreement shall be deemed to be representations and warranties. Except as provided in this sentence, all representations, warranties, convenants and agreements (other than the provisions of Sections 6.3 and this Section 9.1) shall terminate upon expiration of two (2) years after the Closing Date ("Expiration Date"). The representations and warranties in Section 6.3 shall survive until the expiration of the applicable statute of limitations (with extensions) with respect to the matters addressed in such sections. 9.2 INDEMNIFICATION. Each Party shall indemnify and save and hold harmless the other and each of their affiliates and subsidiaries, and their respective representatives, from and against any and all Indemnified Liabilities; provided however, that the Indemnified Party makes a written claim for indemnification against the Indemnifying Party within the applicable survival period. "Indemnified Liabilities" means (a) any and all liabilities or obligations, whether accrued, absolute, contingent or otherwise, existing on or prior to the Closing Date and which, as it relates to Vendor's Indemnified Liabilities, are not agreed to be assumed by the Purchaser under this Agreement; (b) any and all damages resulting from any misrepresentation, breach of warranty or non-fulfillment of any covenant under this Agreement or from any misrepresentation in or omission from any certificate or other instrument furnished or to be furnished under this Agreement; and (c) any and all claims, actions, suits, demands, costs and legal and other expenses incident to any of the foregoing. Defense of Claims. If a claim for Damages (a "Claim") is made by a party entitled to Indemnification or Set Off Rights hereunder against the Indemnifying Party, the party claiming such indemnification or Set Off Rights shall give written notice (a "Claim Notice") to the other Party (the ("Indemnifying Party") as soon as practicable after the party entitled to indemnification or Set Off Rights (the "Indemnified Party") becomes aware of any fact, condition or event which may give rise to Damages for which indemnification or Set Off Rights may be sought. If any lawsuit or enforcement action is filed against any party entitled to the benefit of indemnity or Set Off Rights hereunder, the Claim Notice thereof shall be given to the Indemnifying Party as promptly as practicable (and in any event within thirty (30) calendar days after the service of the citation or summons). After such notice, if the Indemnifying Party shall acknowledge in writing to the Indemnified Party that the Indemnifying Party shall be obligated under the terms of its indemnity or Set Off Rights hereunder in connection with such lawsuit or action, then the Indemnifying Party shall be entitled, if it so elects, (1) to take control of the defense and investigation of such lawsuit or action, (2) to employ and engage attorneys of its own choice to handle and defend the same, at the Indemnifying Party's cost, risk and expense unless the named parties to such action or proceeding include both the Indemnifying Party and the Indemnified Party and the Indemnified Party has been advised in writing by counsel that there may be one or more legal defenses available to such Indemnified Party that are different from or additional to those available to the Indemnifying Party, and (3) to compromise or settle such Claim, which compromise or settlement shall be made only with the written consent of the Indemnified Party, such consent not to be unreasonably withheld. If the Indemnifying Party fails to assume the defense of such Claim within fifteen (15) calendar days after receipt of the Claim Notice, the Indemnified Party against which such Claim has been asserted will (upon delivering notice to such effect to the Indemnifying Party) have the right to undertake, at the Indemnifying Party's cost and expense, the defense, compromise or settlement of such Claim on behalf of and for the account and risk of the Indemnifying Party. In the event the Indemnified Party assumes the defense of the claim, the Indemnified Party will keep the Indemnifying Party reasonably informed of the progress of any such defense, compromise or settlement. The Indemnifying Party shall be liable for any settlement of any action effected pursuant to and in accordance with this Section and for any final judgment (subject to any right of appeal), and the Indemnifying Party agrees to indemnify and hold harmless an Indemnified Party from and against any Damages by reason of such settlement or judgment. Cooperation. The Indemnified Party shall cooperate in all reasonable respects with the Indemnifying Party and the attorneys defending the Indemnification Claims, or Claims covered by Set Off Rights, in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom; provided, however, that the Indemnified Party may, at its own cost, participate in the investigation, trial and defense of such lawsuit or action and any appeal arising therefrom. The parties shall cooperate with each other in any notifications to insurers. 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PURCHASER All obligations of the Purchaser under this Agreement are subject to the fulfillment at or before Closing of the following conditions: 10.1 VENDOR'S REPRESENTATIONS AND WARRANTIES The Vendor's representations and warranties contained in this Agreement and in any certificate or document delivered under this Agreement or in connection with the transactions contemplated by this Agreement will be true at and as of Closing as if such representations and warranties were made at and as of such time. 10.2 VENDOR'S COVENANTS The Vendor will have performed and complied with all agreements, covenants and conditions required by this Agreement to be performed or complied with by it before or at Closing. 10.3 VENDOR'S CERTIFICATE The Vendor will have delivered to the Purchaser a certificate of the President and Secretary of the Vendor, dated the Closing Date, certifying in such detail as the Purchaser may specify to the fulfillment of the conditions set forth in sections 10.1 and 10.2. The foregoing conditions are for the exclusive benefit of the Purchaser and any such condition may be waived in whole or in part by the Purchaser at or before Closing by delivering to the Vendor a written waiver to that effect signed by the Purchaser. 11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE VENDOR All objections of the Vendor under this Agreement are subject to the fulfillment, before or at Closing, of the following conditions: 11.1 PURCHASER'S REPRESENTATIONS AND WARRANTIES The Purchaser's representations and warranties contained in this Agreement will be true at and as of Closing as though such representations and warranties were made as of such time. 11.2 PURCHASER'S COVENANTS The Purchaser will have performed and complied with all covenants, agreements and conditions required by this Agreement to be performed or complied with by it at or before Closing. Each of the foregoing conditions is for the exclusive benefit of the Vendor and any such condition may be waived in whole or part by the Vendor at or before closing by delivering to the Purchaser a written waiver to that effect signed by the Vendor. 12. CLOSING 12.1 CLOSING DATE Subject to the terms and conditions of this Agreement, the purchase and sale of the Assets will be completed at a closing to be held at 11:00 a.m., local time in New York, New York, on May 8, 2007 or at such other time and date agreed upon in writing between the parties (the "Closing Date"). 12.2 PLACE OF CLOSING The Closing will take place at the offices of the Purchaser, Suite 1500 - 2 Penn Plaza, New York, New York. 12.3 DOCUMENTS TO BE DELIVERED BY THE VENDOR At the Closing the Vendor will deliver or cause to be delivered to the Purchaser: (a) all deeds of conveyance, bills of sale, transfer and assignments, in form and content satisfactory to the Purchaser's counsel, appropriate to effectively vest a good and marketable title to the Assets in the Purchaser to the extent contemplated by this Agreement, and immediately registrable in all places where registration of such instruments is required; (b) N/A; (c) possession of the Assets; (d) the certificate of the President and Secretary of the Vendor to be given under section 10.3; and (e) certified copies of those resolutions of the shareholders and directors of the Vendor required to be passed to authorize the execution, delivery and implementation of this Agreement and of all documents to be delivered by the Vendor under this Agreement; 12.4 DOCUMENTS TO BE DELIVERED BY THE PURCHASER At the Closing the Purchaser will deliver or cause to be delivered: (a) a covenant of the Purchaser in favour of the Vendor agreeing to assume and pay or perform and indemnify the Vendor against the Assumed Indebtedness and other obligations agreed to be assumed by the Purchaser under this Agreement in the manner and to the extent provided in this Agreement; (b) a certified cheque, wire transfer or banker's draft payable to the Vendor for that portion of the Purchase Price payable in cash; and (c) a statement of the Assumed Indebtedness. 13. RISK OF LOSS From the date of this Agreement to Closing, the Assets will be and remain at the risk of the Vendor. If any of the Assets are lost, damaged or destroyed before Closing, the Purchaser may, in lieu of terminating this Agreement under Article 10, elect by notice in writing to the Vendor to complete the purchase to the extent possible without reduction of the purchase price, in which event all proceeds of any insurance or compensation in respect of such loss, damage or destruction will be payable to the Purchaser and all right and claim of the Vendor to any such amounts not paid by Closing will be assigned to the Purchaser. 14. FURTHER ASSURANCES The parties will execute such further and other documents and do such further and other things as may be necessary to carry out and give effect to the intent of this Agreement. 15. SET-OFF Subject to the limitations set forth in this Section 15, Purchaser may withhold and set off against the Purchase Price determined in accordance with Section 3.1(a)(ii), with the Purchase Price determined in accordance with Section 3.1(a)(i) not subject to recourse, any amount as to which the Vendor is obligated to pay Purchaser pursuant to any provision of this Agreement (the "Set Off Rights"). The Purchaser shall have Set Off Rights or any other right or action permitted by law, from and against any and all costs, losses, taxes, liabilities, damages, lawsuits, deficiencies and expenses (whether or not arising out of third-party claims), reasonable attorneys' fees and all amounts paid in investigation, defense or settlement of any of the foregoing (herein, "Damages"), incurred in connection with, arising out of, resulting from or incident to (1) any breach of any representation or warranty or the inaccuracy of any representation made by the Vendor in this Agreement, or (2) any breach of any covenant or agreement made by the Vendor in this Agreement; provided, however, that the Purchaser makes a written claim if the Purchaser chooses to exercise its Set Off Rights against the Vendor within the applicable survival period. As used throughout this Section 15, "Damages" means out-of-pocket amounts actually suffered or sustained by the Indemnified Party, and shall not include any amounts in the nature of consequential damages, lost profits, diminution in value, damage to reputation or goodwill, or the like. In computing Damages, such amount shall be computed net of any related recoveries to which the Indemnified Party is entitled. 16. NOTICE All notices required or permitted to be given under this Agreement will be in writing and personally delivered to the address of the intended recipient set forth on the first page of this Agreement or at such other address as may from time to time be notified by any of the parties in the manner provided in this Agreement, and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method; the day after it is sent if sent for next day delivery to an address by recognized overnight delivery service (e.g., Federal Express); and upon receipt if sent by certified or registered mail, return receipt requested. 17. ENTIRE AGREEMENT This Agreement constitutes the entire agreement between the parties and there are no representations or warranties, express or implied, statutory or otherwise and no collateral agreements other than as expressly set forth or referred to in this Agreement. 18. TIME OF THE ESSENCE Time will be the essence of this Agreement. 19. APPLICABLE LAW This Agreement will be governed by and interpreted in accordance with the laws of the state of Nevada (without reference to the choice of law provisions of Nevada law). 20. MEDIATION. Except for failure to pay fees due under this Agreement, breach of confidentiality agreement or infringement of the other party's intellectual property rights in which event the affected party shall be entitled to bring an action in any court of competent jurisdiction to (a) enjoin the acts giving rise to the default or obtain other equitable relief, and (b) recover damages for the other party's breach, in the event of a dispute related to this Agreement, the parties shall use the following procedure as a condition precedent to either party pursuing other available remedies: A party who believes a dispute exists (the "Disputing Party") shall notify the other party (the "Responding Party") in writing of the dispute. Such notice shall state the substance and scope of the dispute, the Disputing Party's position, including legal and factual justifications, the remedy sought, and any other pertinent matters. The Responding Party shall respond in writing to the Disputing Party's notice within five (5) business days. Such writing shall state the Responding Party's position and response to each of the items included in the Disputing Party's notice. A telephone conference shall be held within five (5) days between representatives of the parties having decision-making authority regarding the dispute, to negotiate in good faith a resolution of the dispute. If, within ten (10) business days after such telephone conference, the parties have not succeeded in negotiating a resolution of the dispute, the parties shall submit the dispute to a mutually agreed upon third party mediator. The parties shall share the mediation fees equally. Mediation shall take place at San Jose, California or any other location mutually agreeable to the parties. In the event the parties resolve their dispute in mediation, they shall enter into a written agreement, which shall be binding on all parties thereto. In the event such dispute has not been resolved within ninety (90) days after the selection of the mediator pursuant to this Section, then, any dispute or controversy arising out of or relating to this Agreement shall be settled by final and binding arbitration. Such arbitration shall be conducted before a single arbitrator and, except as otherwise set forth herein, shall be conducted in accordance with the then-existing rules of the Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitration award shall be specifically enforceable; judgment upon any arbitration award may be entered in any court with personal jurisdiction over the parties and subject matter of the disputes. By entering into this provision, it is the parties' intention to expedite, and limit the costs involved in, resolution of any future dispute, and therefore pre-hearing discovery shall be limited to production of key documents and, if appropriate, subpoena of not more than two key witnesses, as determined by the arbitrator, and shall not extend to depositions of parties. No arbitrator shall be empowered to award any other damages, including, but not limited to, consequential, compensatory, or punitive damages. 21. SUCCESSORS AND ASSIGNS This Agreement will enure to the benefit of and be binding upon the parties and their respective successors and assigns. 22. HEADINGS The headings appearing in this Agreement are inserted for convenience of reference only and will not affect the interpretation of this Agreement. IN WITNESS WHEREOF, THE PARTIES HERETO HAVE EXECUTED THIS AGREEMENT AS OF THE DATE FIRST ABOVE WRITTEN. SEMOTUS SOLUTIONS INC. Per: /s/ Anthony N. LaPine ------------------------------- Authorized Signatory STOCKGROUP SYSTEMS LTD. Per: /s/ Susan Lovell ------------------------------- Authorized Signatory SCHEDULES CONFIDENTIAL EX-2.2 3 exh2-2_15158.txt TRANSITION SERVICES AGREEMENT EXHIBIT 2.2 ----------- TRANSITION SERVICES AGREEMENT ----------------------------- This TRANSITION SERVICES AGREEMENT (this "Agreement") is made as of May 8, 2007, by and between Semotus Solutions Inc., a Nevada corporation ("Semotus"), and Stockgroup Systems Ltd., a Nevada corporation ("Stockgroup"). Terms used but not otherwise defined herein, shall have the meaning ascribed such terms in the Purchase Agreement, as defined below. WITNESSETH: ----------- WHEREAS, pursuant to that certain Asset Purchase Agreement, dated as of May 8, 2007, by and among Stockgroup and Semotus relating to the purchase and sale of certain assets of Semotus (the "Purchase Agreement"), Semotus has agreed to sell, convey, transfer, assign and deliver to Stockgroup, and Stockgroup has agreed to acquire certain assets and to assume the Assumed Liabilities from Semotus, in each case relating exclusively to the Vendor's Financial Data Business, which the parties agree will be achieved pursuant to (i) the purchase and sale of the Assets, and (ii) the assumption of the Assumed Liabilities, all on the terms and subject to the conditions set forth in the Purchase Agreement; and WHEREAS, in connection therewith, Stockgroup and Semotus desire that Semotus provide Stockgroup with certain transition services upon the terms and provisions and subject to the conditions of this Agreement. NOW, THEREFORE, in consideration of the foregoing promises and the covenants and agreements set forth herein, Stockgroup and Semotus agrees as follows: 1. Transition Services. During the Transition Period (as defined in Section 5), upon the request of Stockgroup, Semotus agrees to provide, or cause its Affiliates to provide, to Stockgroup from the date of this Agreement for the period of time described on Annex A attached hereto with respect to each of the services, the services set forth on Annex A. Such services shall be provided under the terms and at the prices set forth on Annex A. Semotus' obligation to deliver any service is conditioned upon Semotus obtaining the consent, where necessary, of any relevant third party provider. Semotus shall use its commercially reasonable efforts, and Stockgroup and Semotus shall cooperate fully with Semotus in all respects, to obtain any consents that may be required from such licensors in order to provide any of the services hereunder. Additionally, during the Transition Period, Stockgroup agrees to provide to Semotus certain transition services to be performed by the Transferred Employees as further described on Annex A, IT Services, Item Number 6. 2. Billing and Payment. In accordance with the provisions of this Agreement, Stockgroup shall promptly pay for the actual costs including overhead and profit of all services provided under or pursuant to this Agreement as set forth in the invoices that it receives from Semotus or its Affiliates. Such charges shall be billed at the end of each calendar month during the Transition Period. All invoices shall be paid by check in accordance with the instructions provided by Semotus in writing to Stockgroup not later than thirty (30) days following receipt by Stockgroup of Semotus' invoice. Upon Stockgroup's request, Semotus shall provide Stockgroup with supporting information for such bills and invoices. 3. General Intent. Semotus shall use commercially reasonable efforts to provide the transition services which are set forth on Annex A and such other transition assistance as the parties may otherwise agree during the Transition Period. Stockgroup and its Affiliates agree to use their respective commercially reasonable efforts to terminate their need to use such assistance as soon as reasonably possible and (unless the parties otherwise agree) in all events to terminate such need with respect to each service specified in Annex A not later than the end of the period specified in Annex A for the provision of each such service. 4. Validity of Documents. The parties hereto shall be entitled to rely upon the genuineness, validity or truthfulness of any document, instrument or other writing presented in connection with the Agreement unless such document, instrument or other writing appears on its face to be fraudulent, false or forged. 5. Term of Agreement. The term of this Agreement shall commence on the date hereof and shall continue (unless sooner terminated pursuant to the terms hereof) for a period of ninety (90) days (such period the "Transition Period," or such other period as may be specified in Annex A with respect to particular services described in Annex A.) Stockgroup has the option to renew the agreement for a period extending up to October 31, 2007. Upon termination of this Agreement, all rights and obligation of each party, other than those set forth in Sections 8 and 11 of this Agreement and other than any payments by Stockgroup for services provided through the date of termination shall cease as of the effective date of such termination, and any such unpaid amounts owed by Stockgroup shall be paid in accordance with the payment provisions of Section 2. 6. Partial Termination. Any and all of the services provided by Semotus and its Affiliates hereunder, except for Items 5 and 6 under I.T. Services in Annex A, are terminable earlier than the period specified in Annex A by Stockgroup only upon thirty (30) days prior written notice to Semotus. Any such termination shall be final. 7. Assignment. This Agreement shall not be assignable in whole or in part by Semotus without the prior written consent of Stockgroup. Either Party may assign, sell, delegate or otherwise transfer this Agreement or any of its rights and obligations hereunder as part of a merger, consolidation, corporate reorganization, joint venture, lease, sale of all or a portion of its assets, sale of stock or similar event; provided that in connection with any such transaction (a) the resulting, surviving or transferee Person (any such Person, a "Successor Company") by operation of law, becomes, without more, bound by the terms and provisions of this Agreement or, if not so bound, the Successor Company expressly assumes the rights and obligations of the assigning Party under this Agreement which are being transferred to such Successor Company, and (b) A Party shall notify the other Party, in writing, promptly (and in no event more than ten (10) days) after any such assignment, sale, delegation or transfer. 8. Confidentiality. Each party hereto agrees to hold, and use its best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other 2 requirements of law, all confidential documents and information concerning this Agreement and any services provided hereunder, provided, however, that to the extent that any of them may become so legally compelled, they may only disclose such information if they shall first have used best efforts to, and, if practicable, shall have afforded the other party the opportunity to, obtain an appropriate protective order or other satisfactory assurance of confidential treatment for the information required to be disclosed. If this Agreement is terminated, Semotus will, and will use commercially reasonable efforts to cause their respective officers, directors, employees, accountants, counsel, consultants, advisors and agents to, destroy or deliver to Stockgroup, upon request, all documents and other materials, and all copies thereof, obtained by Semotus and its respective Affiliates or on their behalf from Stockgroup or any of its Affiliates in connection with this Agreement that are subject to such confidence. 9. Governing Law; Submission To Jurisdiction. This Agreement shall be deemed to be made in and in all respects shall be interpreted, construed and governed by and in accordance with the law of the state of Nevada without regard to the conflict of law principles thereof. Except with respect to any breach which adversely impacts, threatens or infringes upon a party's proprietary information or intellectual property rights which shall not be subject to mediation hereunder, no party to this Agreement may initiate litigation or arbitration with regard to any dispute with respect to this Agreement until after all remedies set forth in this Section have been exhausted. In the event of any dispute arising over this Agreement, any party shall have the right by giving written notice to the other parties hereto (the "Mediation Notice") to initiate non-binding mediation to be conducted by a mediator mutually agreed to by the parties or, in the event the parties are unable to reach such agreement within thirty (30) days following the delivery of the Mediation Notice, by a mediator appointed by the American Arbitration Association ("Arbitration Association") in accordance with the rules and regulations of the Arbitration Association, or by any other body mutually agreed upon by the parties. Mediation shall take place at San Jose, California or any other location mutually agreeable to the parties. In the event the parties resolve their dispute in mediation, they shall enter into a written agreement, which shall be binding on all parties thereto. In the event such dispute has not been resolved within ninety (90) days after the selection of the mediator pursuant to this Section, then, except with respect to any breach which adversely impacts, threatens, or infringes upon a party's proprietary information or intellectual property rights which shall not be subject to arbitration hereunder, any dispute or controversy arising out of or relating to this Agreement shall be settled by final and binding arbitration. Such arbitration shall be conducted before a single arbitrator and, except as otherwise set forth herein, shall be conducted in accordance with the then-existing rules of the Arbitration Association and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitration award shall be specifically enforceable; judgment upon any arbitration award may be entered in any court with personal jurisdiction over the parties and subject matter of the disputes. By entering into this provision, it is the parties intention to expedite, and limit the costs involved in, resolution of any future dispute, and therefore pre-hearing discovery shall be limited to production of key documents and, if appropriate, subpoena of not more than two key witnesses, as determined by the arbitrator, and shall not extend to depositions of parties. Any award shall be limited to a recovery of foreseeable, contract damages, which are a direct consequence of a breach of this Agreement. In further limitation hereof, no arbitrator shall be empowered to award any other damages, including, but not limited to, consequential, compensatory or punitive damages. 3 10. Limitation of Liability. 10.1 Stockgroup shall not be liable to Semotus, its Affiliates or any third party for any special, consequential or exemplary damages (including lost or anticipated revenues or profits relating to the same) arising from any claim relating to this Agreement or any of the services provided hereunder, whether such claim is based on warranty, contract, tort (including negligence or strict liability) or otherwise, even if an authorized representative of Stockgroup is advised of the possibility or likelihood of the same. In addition, Stockgroup shall not be liable to Semotus, any of its Affiliates or any third party for any direct damages arising from any claim relating to this Agreement or any of the services provided hereunder or required to be provided hereunder, except to the extent that such direct damages are caused by the gross negligence or willful misconduct of Stockgroup or its Affiliates. . In addition, Stockgroup's liability arising out of or relating to this Agreement shall not exceed the amount actually received by Semotus from Stockgroup under this Agreement, whether liability is based on breach of contract, breach of warranty (express, implied or otherwise), indemnity or otherwise, and whether asserted in contract, tort (including negligence and strict product liability) or otherwise, and irrespective of whether Stockgroup has been advised of the possibility of such damages. 10.2 Semotus shall not be liable to Stockgroup, its Affiliates or any third party for any special, consequential or exemplary damages (including lost or anticipated revenues or profits relating to the same) arising from any claim relating to this Agreement or any of the services provided hereunder, whether such claim is based on warranty (express, implied or otherwise), contract, tort (including negligence or strict liability) or otherwise, even if an authorized representative of Semotus is advised of the possibility or likelihood of the same. In addition, Semotus shall not be liable to Stockgroup, any of its Affiliates or any third party for any direct damages arising from any claim relating to this Agreement or any of the services provided hereunder or required to be provided hereunder, except to the extent that such direct damages are caused by the gross negligence or willful misconduct of Semotus or its Affiliates. In addition, Semotus' liability arising out of or relating to this Agreement shall not exceed the amount actually received by Semotus from Stockgroup under the Purchase Agreement, whether liability is based on breach of contract, breach of warranty (express, implied or otherwise), indemnity or otherwise, and whether asserted in contract, tort (including negligence and strict product liability) or otherwise, and irrespective of whether Semotus has been advised of the possibility of such damages. 11. Default. In the event that: (a) Stockgroup fails to pay any undisputed amount when due under this Agreement within fifteen (15) days after written notice that such payment is due Semotus may have the right to terminate this Agreement; and (b) Semotus fails to perform, or breaches or defaults under any other material term, condition or obligation of this Agreement, and such failure, breach or default is not cured within fifteen (15) days after written notice thereof, Stockgroup shall have the right to terminate this Agreement without penalty and without prejudice to any other rights and remedies of Stockgroup and its Affiliates. 4 12. Counterparts. This Agreement may be executed in one or more counterparts (including by means of telecopied signature pages), all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other parties. 13. Notices. All notices or other communications required or permitted to be delivered hereunder shall be in writing and shall be delivered by hand or sent by prepaid telex or telecopy, or sent, postage prepaid, by registered, certified or express mail, or reputable overnight courier service and shall be deemed delivered when so delivered by hand, telexed or telecopied with acknowledged receipt, or if mailed, five (5) calendar days after mailing (one (1) Business Day in the case of express mail or overnight courier service), as follows: If to Semotus: Semotus Solutions Inc. 718 University Ave., Suite 202 Los Gatos, CA 95032 Telephone: (408) 399-6120 Facsimile: (408) 904-7699 If to Stockgroup: Stockgroup 500 - 750 West Pender Street Vancouver, British Columbia V6C 2T7 Attention: Susan Lovell Telephone: (604) 331-0995 x 123 Facsimile: (604) 331-1194 or such other address or facsimile number as such party may hereafter specify in writing for the purpose by notice to the other parties hereto. 14. Amendment And Waiver. This Agreement may be amended, modified, superseded or canceled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by the parties hereto, or, in the case of a waiver, by or on behalf of the party waiving compliance. The failure of any party at any time or times to require performance of any provision hereof shall in no manner affect the right at a later time to enforce the same. No waiver by any party of any condition, or of any breach of any term, covenant, representation or warranty contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach or a waiver of any other condition or of any breach of any other term, covenant, representation or warranty. 15. Interpretation. The headings and captions contained in this Agreement and in Annex A attached hereto are for reference purposes only and shall not affect in any way the meaning or 5 interpretation of this Agreement. The use of the word "including" and all variants thereof herein shall mean "including without limitation." 16. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any person. 17. Entire Agreement. This Agreement, the Purchase Agreement and the other agreements contemplated therein contain the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings, whether written or oral, relating to such subject matter. 18. Relationship of Parties. Except as specifically provided herein, none of the parties shall act or represent or hold itself out as having authority to act as an agent or partner of the other parties, or in any way bind or commit the other party to any obligations. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture, agency, trust or other association of any kind, each party being individually responsible only for its obligations as set forth in this Agreement. 19. Force Majeure. If either Party or any of its Affiliates is prevented from complying, either totally or in part, with any of the terms or provisions of this Agreement by reason of fire, flood, hurricane, storm, strike, lockout or other labor trouble, any law, order, proclamation, regulation, ordinance, demand or requirement of any governmental authority, riot, war, rebellion or other causes beyond the reasonable control of that Party or its Affiliates or other acts of God, then upon written notice to Stockgroup, the affected provisions and/or other requirements of this Agreement shall be suspended during the period of such disability and a Party and its Affiliates shall have no liability to the other Party any of their respective Affiliates or any other party in connection herewith. Semotus shall use all commercially reasonable efforts to remove such disability within thirty (30) days of giving notice of such disability. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date and year first set forth above. SEMOTUS SOLUTIONS INC. By: /s/ Anthony N. LaPine -------------------------- Name: Anthony N. LaPine Title: CEO STOCKGROUP SYSTEMS LTD. By: /s/ Susan Lovell -------------------------- Per Mr. Marcus New CEO & President 6 ANNEX A TO TRANSITION SERVICES AGREEMENT ----------------------------- CONFIDENTIAL 7 EX-2.3 4 exh2-3_15158.txt WAIVER BY CITYTALK EXHIBIT 2.3 ----------- WAIVER TO AGREEMENT AND PLAN OF REORGANIZATION BETWEEN SEMOTUS SOLUTIONS, INC. AND CITYTALK, INC. This WAIVER is to waive certain terms and conditions to that Agreement and Plan of Reorganization by and between SEMOTUS SOLUTIONS, INC. ("SEMOTUS") and CITYTALK, INC. dated November 10, 2006, as amended (the "Agreement"). Citytalk hereby agrees to waive the following provisions to the Agreement as hereinafter provided, effective as of May 7, 2007. Section 5.4 is hereby waived by Citytalk, so that (i) Semotus may issue stock to third parties as needed to support its ongoing operations, and so that (ii) Semotus may sell or discontinue its wireless financial data services technology platform, the Global Market Pro, Equity Market Pro and Futures Market Pro wireless software and services, and all the related intellectual property rights to such technology, software and services, as well as the customer base and all associated customer and data feed agreements related to Semotus' wireless financial software and services business. Except as herein modified, all the terms and conditions of the above referenced Agreement, Schedules, Exhibits and Amendments shall remain in full force and effect. In the event of any conflict between the Waiver and the Agreement, the provisions of this Waiver shall prevail. The parties hereby agree that signatures transmitted and received via facsimile or other electronic means shall be treated for all purposes of this Waiver as original signatures and shall be deemed valid, binding and enforceable by and against both parties. BOTH PARTIES HERETO REPRESENT THAT THEY HAVE READ THIS AMENDMENT, UNDERSTAND IT, AGREE TO BE BOUND BY ALL TERMS AND CONDITIONS STATED HEREIN, AND ACKNOWLEDGE RECEIPT OF A SIGNED, TRUE AND EXACT COPY OF THIS AMENDMENT. IN WITNESS WHEREOF, the parties hereto have agreed to amend the terms and conditions of the Amendment on the day, month and year first written above. CITYTALK, INC. BY: /S/ RICHARD SULLIVAN NAME: RICHARD SULLIVAN TITLE: CEO DATE: MAY 7, 2007 EX-99.1 5 exh99-1_15158.txt PRESS RELEASE EXHIBIT 99.1 ------------ SEMOTUS SELLS FINANCIAL WIRELESS ASSETS TO STOCKGROUP PENDING MERGER WITH CITYTALK, INC. CONTINUES TO MOVE FORWARD LOS GATOS, CA - MAY 9, 2007 - Semotus Solutions, Inc. (AMEX:DLK), an innovative leader of software solutions for enterprise mobility, today announced that it has signed an agreement to sell its wireless financial information assets to Stockgroup Systems, Ltd. (OTCBB: SWEB, TSX-V: SWB). Semotus expects to benefit over the next two years through a revenue share agreement, leveraging Stockgroup's strength in the financial market niche. Commenting on the asset sale, Anthony LaPine, CEO of Semotus, stated: "I am pleased to have found a home for our legacy financial products. I am looking forward to working with Marcus New, the President and CEO of Stockgroup, and his talented team. This sale will enable Semotus to focus on our flagship product -- HiplinkXS -- and the completion of our pending merger with CityTalk." Mr. New, President and CEO of Stockgroup, commented: "Stockgroup expects to achieve significant synergy with the combination of the Semotus financial products with those recently acquired from TCS. We look forward to a rewarding and continuing relationship with Semotus to maximize the revenue these products will contribute to both companies." The asset sale was completed with the approval of CityTalk and will not have a negative affect on the pending merger between CityTalk and Semotus. Semotus is currently in the process of responding to various comments and questions from the US Securities and Exchange Commission about the offering documents to be used in connection with the proposed merger with CityTalk. Customers of Semotus' wireless financial data services should not see any change to their service. All of Semotus' wireless financial data services will continue to run uninterrupted during the transition to Stockgroup, and the financial data currently being provided through these services is expected to remain the same. ABOUT SEMOTUS SOLUTIONS, INC. Founded in 1993, Semotus Solutions (AMEX:DLK) is a provider of software for the mobile enterprise, connecting people to critical business systems, information and processes. Semotus has a Fortune 1000 customer base including Lockheed Martin, Blue Cross Blue Shield, Coca-Cola, Hewlett Packard, Nextel Communications, JP Morgan Chase and The United Nations. Semotus Solutions' software provides mobility, convenience, efficiency and profitability in the areas of workforce automation, finance, health care and m-commerce. For more information, please visit the following web sites: www.semotus.com; www.hiplinkwireless.com; www.clickmarks.com; www.xb.com. ABOUT STOCKGROUP INFORMATION SYSTEMS INC. StockgroupTM is a financial media company focused on user-generated content and collaborative technologies. The Stockgroup platform for web-based portfolio management, financial content and wireless market data is licensed to top North American brokerage firms and media companies. The Stockgroup platform is also extended through StockHouse.com, a leading online financial portal owned and operated by Stockgroup. StockHouse.com is home to BullBoardsTM message board - Canada's largest community of active investors. Recognized for its engaged audience, StockHouse.com provides a sought-after demographic for advertisers. To find out more about Stockgroup (OTCBB: SWEB, TSX-V: SWB), visit our website at www.stockgroup.com, or contact: Steve Gear Director of Capital Markets Stockgroup Information Systems Inc. Ph: 604.288.2861 / 1.800.650.1211 # # # This press release may be deemed to be solicitation material in respect of the proposed merger with Citytalk, Inc. In connection with the proposed transaction, Semotus plans to file a definitive proxy statement with the SEC. Investors and security holders of Semotus are advised to read the DEFINITIVE proxy statement and any other relevant documents filed with the SEC when they become available because those documents will contain important information about the proposed transaction. The final, definitive proxy statement will be mailed to shareholders of Semotus. The preliminary proxy statement is, and the definitive proxy statement and other relevant documents will be, available for free at the SEC's web site at http://www.sec.gov. Free copies of the preliminary proxy statement, the definitive proxy statement, when it becomes available, and Semotus' other filings with the SEC may also be obtained from Semotus. Free copies of Semotus' filings may be obtained by directing a request to Semotus Solutions, Inc., 718 University Ave., Suite 202, Los Gatos, CA 95032 Attention: Secretary. Semotus and its respective directors, executive officers and other members of its management and employees may be deemed to be soliciting proxies from Semotus' shareholders in favor of the proposed transaction. Information regarding Semotus' directors and executive officers is available in Semotus' proxy statement for its 2006 annual meeting of stockholders, which was filed with the SEC on July 26, 2006. Additional information regarding the interests of such potential participants is included in the preliminary proxy statement filed with the SEC on March 19, 2007 and will be included in the definitive proxy statement, when it becomes available. This press release contains forward-looking statements, which are made pursuant to the Safe-Harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "intends," "believes," and similar expressions reflecting something other than historical fact are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-looking statements involve a number of risks and uncertainties, including the timely development and market acceptance of products and technologies, the ability to secure additional sources of finance, the ability to reduce operating expenses, and other factors described in the Company's filings with the Securities and Exchange Commission. The actual results that the Company achieves may differ materially from any forward-looking statement due to such risks and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release. -----END PRIVACY-ENHANCED MESSAGE-----