EXHIBIT 4.1
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THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION, UNLESS THE HOLDER HEREOF PROVIDES THE COMPANY
WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE PROPOSED SALE OR
TRANSFER IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS.
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
Void after September 30, 2008
THIS IS TO CERTIFY that, as of this 14th day of November, 2005, for
value received and subject to the provisions hereinafter set forth,
________________________________ (the "Purchaser"), is entitled to purchase from
Semotus Solutions, Inc., a Nevada corporation (the "Company"), at any time from
the date hereof to and including September 30, 2008 (the "Expiration Date"), at
a price initially equal to Fifty Cents ($0.50) per share (the "Warrant
Calculation Price"), _____________ (______) (the "Warrant Number") shares of the
common stock of the Company (the "Stock").
The aggregate price for the shares of Stock purchasable hereunder shall
be equal to the initial Warrant Calculation Price multiplied by the number of
shares initially purchasable hereunder. Such aggregate price is not subject to
adjustment and is herein sometimes referred to as the "aggregate Warrant Price."
The Warrant Calculation Price per share is, however, subject to adjustment as
hereinafter provided (such price, or such price as last adjusted, as the case
may be, being herein referred to as the "per share Warrant Price"). The Warrant
Number is likewise subject to adjustment as hereinafter provided.
1. EXERCISE OF WARRANT. Subject to the conditions hereinafter set
forth, this Warrant may be exercised in whole at any time, or in part from time
to time, by the holder hereof, by the surrender of this Warrant (with the
subscription form at the end hereof duly executed) at the principal office of
the Company in Los Gatos, California, or at such other office as the Company may
designate by written notice to the holder hereof within the above-mentioned
period and, at the election of the holder, either by paying to the Company the
aggregate Warrant Price (or the proportionate part thereof if exercised in part)
for the shares so purchased in current funds, in which case payment shall be
made in cash or by certified or official bank check,
If this Warrant is exercised in respect of fewer than all of the shares
of Stock at the time purchasable hereunder, the holder hereof shall be entitled
to receive a new Warrant covering the number of shares in respect of which this
Warrant shall not have been exercised and setting forth the aggregate Warrant
Price applicable to such shares. Notwithstanding anything to the contrary set
forth herein, this Warrant or any new Warrant issued as the result of a partial
exercise hereof and all rights and options hereunder or thereunder shall expire
and shall be wholly null and void
to the extent this Warrant or such new warrant is not exercised before it
expires at the close of business on the Expiration Date.
2. RESERVATION OF STOCK. The Company covenants and agrees that
during the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized, and in reserve, a
sufficient number of shares of its Stock to provide for the exercise of the
rights represented by this Warrant.
3. PROTECTION AGAINST DILUTION. The Warrant Number is subject to
adjustment from time to time upon the occurrence of the events enumerated in, or
as otherwise provided in, this Section 3.
3.1 ADJUSTMENT FOR CHANGE IN CAPITAL STOCK. If the Company:
(1) pays a dividend or makes a distribution on its Stock in
shares of its Stock;
(2) subdivides or reclassifies its outstanding shares of Stock
into a greater number of shares;
(3) combines or reclassifies its outstanding shares of Stock
into a smaller number of shares;
(4) makes a distribution on its Stock in shares of capital
stock other than Stock; or
(5) issues by reclassification of its Stock any shares of its
capital stock; then the Warrant Number in effect immediately prior to
such action shall be proportionately adjusted so that the may receive
the aggregate number and kind of shares of capital stock of the Company
or other capital stock which such holder would have owned immediately
following such action if such Warrant had been exercised immediately
prior to such action. If, as a result of any adjustment pursuant to
this Section 3.1, the holder shall become entitled to receive shares of
two or more classes or series of securities of the Company or
otherwise, the Board of Directors of the Company shall equitably
determine the allocation of the adjusted Warrant Price between or among
shares of the holder of such allocation.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
Such adjustment shall be made successively whenever any event listed
above shall occur.
3.2 NOTICE OF ADJUSTMENT. Whenever the Warrant Number or
Warrant Calculation Price is adjusted under this section, the Company
shall provide notice thereof to the holder within thirty (30) days of
such adjustment.
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3.3 ADDITIONAL ADJUSTMENTS. In the event of any and all
adjustments to the Warrant Number in accordance with this Section 3,
the per share Warrant Price shall be adjusted so that it is equal to
the quotient of (a) the aggregate Warrant Price and (b) the Warrant
Number as adjusted.
4. MERGERS, CONSOLIDATIONS, SALES; NON-IMPAIRMENT OF RIGHTS. The
Company will not, by amendment of its Certificate of Incorporation or through
any reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities or any other voluntary action, avoid
or seek to avoid the performance of any of the terms of this Warrant, but will
at all times in good faith take all necessary action to carry out the intent of
all such terms. Without limiting the generality of the foregoing, the Company
(a) will not cause the par value of any securities receivable on exercise of
this Warrant to be in excess of the amount payable therefor on such exercise,
and (b) will take all action as may be necessary or appropriate so that the
Company may validly and legally issue fully paid and nonassessable shares (or
other securities or property deliverable hereunder) upon the exercise of this
Warrant. In the event the Company sells or otherwise transfers all or
substantially all of its assets to another corporation or other entity and,
following the sale or transfer, a majority of the combined voting power of the
then-outstanding securities of the other corporation or entity immediately after
the sale or transfer is held in the aggregate by the holders of Voting Stock (as
defined below) immediately prior to the sale or transfer, then, as a condition
of such sale or transfer, lawful and adequate provision shall be made whereby
the holder of this Warrant shall thereafter have the right to receive upon the
basis and upon the terms and conditions specified herein and in lieu of the
shares of Common Stock immediately theretofore purchasable hereunder, such
shares of stock, securities or assets as may (by virtue of such consolidation,
merger, sale, reorganization or reclassification) be issued or payable with
respect to or in exchange for a number of outstanding shares of Common Stock
equal to the number of shares of Common Stock immediately theretofore so
purchasable hereunder had such sale or transfer not taken place, and in any such
case appropriate provision shall be made with respect to the rights and
interests of the holder of this Warrant to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Warrant Number
and the per share Warrant Price) shall thereafter be applicable as nearly as may
be, in relation to any shares of stock, securities or assets thereafter
deliverable upon exercise of this Warrant. The Company shall not effect any such
sale or transfer unless prior to or simultaneously with the consummation
thereof, the entity purchasing such assets shall assume by written instrument,
reasonably satisfactory to the holder of this Warrant, executed and mailed or
delivered to the holder of this Warrant, the obligation to deliver to such
holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holder may be entitled to receive.
5. DISSOLUTION OR LIQUIDATION. In the event of any proposed
distribution of the assets of the Company in dissolution or liquidation (except
under circumstances when the foregoing Section 4 shall be applicable) the
Company shall mail notice thereof to the holder of this Warrant and shall make
no distribution to shareholders until the expiration of 30 days from the date of
mailing of the aforesaid notice and, in any such case, the holder of this
Warrant may exercise this Warrant within 30 days from the date of the mailing of
such notice, and all rights herein granted not so exercised within such 30 day
period shall thereafter become null and void.
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6. REDEMPTION OF WARRANTS. The Warrants are redeemable by the
Company commencing any time after the Effective Date, in whole or in part, on
not less than thirty (30) days' prior written notice (the "Redemption Notice")
at a redemption price of $.001 per Warrant, provided (a) the Warrants are
exercisable, (b) the shares underlying the Warrants are the subject of a
currently-effective registration statement, and (c) the average last sale price
of the Common Stock as reported on the American Stock Exchange, if traded
thereon, or if not traded thereon, the average last sale price if listed on
another national securities exchange (or other reporting system that provides
last sales prices), has been at least 200% of the then current Exercise Price of
the Warrants, for a period of at least 10 consecutive trading days immediately
preceding the date on which the Company gives notice of redemption. Any
redemption in part shall be made pro rata to all Warrant holders. The redemption
notice shall be mailed to the holders of the Warrants at their respective
addresses appearing in the Warrant register. Any such notice mailed in the
manner provided herein shall be conclusively presumed to have been duly given in
accordance with this Agreement whether or not the registered holder receives
such notice. No failure to mail such notice nor any defect therein or in the
mailing thereof shall affect the validity of the proceedings for such redemption
except as to a registered holder of a Warrant (i) to whom notice was not mailed
or (ii) whose notice was defective. An affidavit of the Secretary or Assistant
Secretary of the Company that notice of redemption has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein. Holders
of the Warrants will have exercise rights until the close of business on the day
immediately preceding the date fixed for redemption. In the event the Warrant
has not been exercised by written notice as described in paragraph 1 of this
Warrant by the redemption date provided in the Redemption Notice, the Warrant
shall cease to exist. From and after the date of redemption specified in the
Redemption Notice (unless the Company defaults in providing money for payment of
the redemption price), all rights of the holder of the Warrant as a warrant
holder shall cease, except for the right to receive the redemption price hereof,
without interest, and the Warrant sshall no longer be deemed outstanding.
7. FRACTIONAL SHARES. Fractional shares shall not be issued upon the
exercise of this Warrant but in any case where the holder hereof would, except
for the provisions of this paragraph, be entitled under the terms hereof to
receive a fractional share upon the complete exercise of this Warrant, the
Company shall, upon the exercise of this Warrant for the largest number of whole
shares then called for, pay a sum in cash equal to the excess of the Fair Market
Value of such fractional share over the proportional part of the per share
Warrant Price represented by such fractional share.
8. FULLY PAID STOCK; TAXES. The Company covenants and agrees that
the shares of stock represented by each and every certificate for its Stock to
be delivered on any exercise of this Warrant shall, at the time of such
delivery, be duly authorized, validly issued and outstanding and be fully paid
and nonassessable. The Company further covenants and agrees that it will pay
when due and payable any and all federal and state taxes, other than taxes on
income, which may be payable in respect of this Warrant or any Stock or
certificates therefor upon the exercise of the rights herein provided for
pursuant to the provisions hereof. The Company shall not, however, be required
to pay any tax which may be payable in respect of any transfer involved in the
transfer and delivery of stock certificates in the name other than that of
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the holder of the Warrant converted, and any such tax shall be paid by such
holder at the time of presentation.
9. CLOSING OF TRANSFER BOOKS. The holder of this Warrant shall
continue to have the right to exercise this Warrant even during a period when
the stock transfer books of the Company for its Stock are closed. The Company
shall not be required, however, to deliver certificates of its Stock upon such
exercise while such books are duly closed for any purpose, but the Company may
postpone the delivery of the certificates for such Stock until the opening of
such books, and they shall, in such case, be delivered forthwith upon the
opening thereof, or as soon as practicable thereafter.
10. RESTRICTIONS ON TRANSFERABILITY OF WARRANTS AND SHARES;
COMPLIANCE WITH SECURITIES ACT; EXCHANGE, ASSIGNMENT OR LOSS OF WARRANT. This
Warrant and the Stock issued upon the exercise hereof, and any security into
which such Stock may be convertible ("Underlying Stock") shall not be
transferable except upon the conditions hereinafter specified, which conditions
are intended to insure compliance with the provisions of the Securities Act of
1933, as amended, or any similar Federal statute at the time in effect (the
"Securities Act") in respect of the transfer of any Warrant or any such Stock or
any security into which such Stock may be convertible.
10.1 ASSIGNMENTS GENERALLY. Except as may otherwise be
expressly provided herein, this Warrant is exchangeable, without expense, at the
option of the holder, upon compliance with the express provisions of this
Section 10 and presentation and surrender of the Warrant to the Company, for
other Warrants of different denominations entitling the holder thereof to
purchase in the aggregate the same number of shares of Stock purchasable
hereunder. Any assignment shall be made by surrender of this Warrant to the
Company with the Form of Assignment annexed hereto duly executed and funds
sufficient to pay any transfer tax. Upon compliance with the express provisions
of this Section 10, the Company shall, without charge, cause to be executed and
delivered a new Warrant in the name of the assignee named in such instrument of
assignment and this Warrant shall promptly be canceled. This Warrant may be
divided or combined with other warrants that carry the same rights upon
presentation hereof to the Company together with a written notice specifying the
names and denominations in which new Warrants are to be issued and signed by the
holder hereof.
10.2 NOTICE OF PROPOSED TRANSFER; OPINION. The holder of each
Warrant or any Underlying Stock that is not the subject of a registration
statement effective under the Securities Act ("Restricted Stock"), by acceptance
thereof, agrees to give prior written notice to the Company of such holder's
intention to transfer such Warrant or the Restricted Stock (as hereinafter
defined) relating thereto or such Restricted Stock (or any portion thereof),
describing briefly the manner and circumstances of the proposed transfer,
including the identity of the proposed transferee and the consideration to be
paid thereby. Promptly after receiving such written notice, the Company shall
present copies thereof to Company counsel and, if required by the Company, to
counsel designated by such holder. If in the opinion of each such counsel the
proposed transfer may be effected without registration or qualification under
any Federal or State law of such Warrant or the Underlying Shares or such
Restricted Stock, the Company, as promptly as practicable, shall notify such
holder of such opinion and of the terms and conditions,
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if any, to be observed, whereupon such holder shall be entitled to transfer such
Warrant or such Restricted Stock, all in accordance with the terms of the notice
delivered to such holder by the Company.
If in the opinion of either of such counsel (such opinion to
state the basis of the legal conclusions reached therein) the proposed transfer
described in the written notice given pursuant to this subparagraph may not be
effected without such registration or qualification or without compliance with
the conditions of an exemptive regulation of the Commission, the Company shall
promptly notify such holder and thereafter such holder shall not be entitled to
effect such transfer until receipt of a subsequent notice from the Company
pursuant to the immediately preceding sentence or until such registration or
qualification or filing has become effective. All fees and expenses of the
Company's counsel shall be borne by the Company and the fees of the counsel, if
any, designated by any holder of this Warrant or Restricted Stock shall be borne
by such holder.
Notwithstanding anything to the contrary set forth herein, no
opinion of counsel shall be required in the case of transfers to affiliates of
the holder of this Warrant or of the Underlying Stock.
10.3. CERTAIN ASSIGNMENTS FOLLOWING REGISTRATION.
Notwithstanding anything to the contrary contained herein, if the Company has
registered the Underlying Stock pursuant to a Registration Statement which has
been declared effective by the Securities and Exchange Commission ("SEC") and,
thereafter, the holder purports to assigns all or a portion of the Underlying
Stock to any other person, the assignee shall have the right to cause the
Registration Statement to be amended or the prospectus related thereto to be
supplemented, in either case to name such assignee as a selling stockholder,
provided that (i) the use of a post-effective amendment or a supplement to the
prospectus is permitted by applicable law for such purpose, and (ii) all costs
and expenses to the Company, including without limitation legal and accounting
expenses, incurred to so amend such Registration Statement or supplement the
Prospectus shall be paid by the assignee requesting such amendment (or shared on
a pro rata basis to the extent more than one assignee requests such amendment).
10.4. RESTRICTIVE LEGENDS. Each Warrant shall bear on the face
thereof a legend substantially in the form of the notice endorsed on the first
page of this Warrant.
Each certificate for shares of Underlying Stock initially issued
upon the exercise of any Warrant and each certificate for shares of Underlying
Stock issued to a subsequent transferee of such certificate shall, unless
otherwise permitted by the provisions of this Section 10, bear on the face
thereof a legend reading substantially as follows:
THE TRANSFER, SALE, ASSIGNMENT, PLEDGE AND ENCUMBRANCE OF OTHER
DISPOSITION OF THE SHARES OF CLASS A COMMON STOCK REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE
WARRANT UNDER WHICH THESE SHARES WERE ISSUED AND WHICH TERMS CONTINUE
IN EFFECT FOLLOWING THE
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EXERCISE THEREOF. A COPY OF THE WARRANT IS ON FILE IN THE OFFICE OF THE
SECRETARY OF THE COMPANY. NO SALE OR OTHER TRANSFER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY BE EFFECTED EXCEPT PURSUANT TO THE
TERMS OF THE WARRANT.
10.5 REMOVAL OF LEGEND. In the event that the Company shall
receive an opinion of its counsel or counsel of the holder, which opinion is
reasonably acceptable to it, that, in the opinion of such counsel, such legend
is not, or is no longer, necessary or required (including, without limitation,
because of the availability of the exemption afforded by Rule 144 of the General
Rules and Regulations of the Securities and Exchange Commission), the Company
shall, or shall instruct its transfer agents and registrars to, remove such
legend from the certificates evidencing the Restricted Stock or issue new
certificates without such legend in lieu thereof.
11. PARTIAL EXERCISE AND PARTIAL ASSIGNMENT. If this Warrant be
exercised in part only, the holder hereof shall be entitled to receive a new
Warrant covering the number of shares in respect of which this Warrant shall not
have been exercised as provided in paragraph 1 hereof. If this Warrant is
partially assigned, this Warrant shall be surrendered at the principal office of
the Company (with the partial assignment form at the end hereof duly executed),
and thereupon a new Warrant shall be issued to the holder hereof covering the
number of shares not assigned and setting forth the proportionate aggregate
Warrant Price applicable to such shares not assigned. The assignee of such
partial assignment of this Warrant shall also be entitled to receive a new
Warrant covering the number of shares so assigned and setting forth the
proportionate aggregate Warrant Price applicable to such assigned shares.
12. REGISTRATION RIGHTS
12.1 DEFINITIONS. As used in this Section 12, the following
terms shall have the meanings set forth below:
(a) The terms "register," "registered" and "registration"
shall refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Act, and the declaration or
ordering of the effectiveness of such registration statement or document.
(b) The term "Registrable Securities" shall mean together in
the aggregate: (A) the Underlying Stock issued or issuable upon exercise of this
Warrant and (B) the Stock held by or issuable upon exercise of any warrant or
conversion of convertible security to any other persons with similar
registration rights as provided in this Warrant.
(c) The term "Holder" means any person owning of record
Registrable Securities.
12.2 REQUIRED REGISTRATION. The Company shall include the
Registrable Securities in a registration statement that it shall file with the
Securities and Exchange
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Commission (the "SEC") no later than ninety (90) days after the termination of
the offering being made by the Company pursuant to the PRIVATE PLACEMENT
MEMORANDUM dated August 5, 2005, as amended on September 2, 2005. The Company
shall use its best efforts to cause the registration statement to be declared
effective as soon thereafter as possible.
12.3 OBLIGATIONS OF THE COMPANY. In connection with the
registration of the Registrable Securities, the Company shall, as expeditiously
as reasonably possible:
(a) Act diligently to maintain the effectiveness of the
registration statement until the earlier of (i) September 30, 2009, (ii) one (1)
year after the Warrant has been fully exercised.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(c) Furnish to the Purchasers such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under the securities laws of
such jurisdictions as shall be reasonably requested by the Purchasers for the
distribution of the securities covered by the registration statement, provided
that the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such jurisdiction.
(f) Notify the Purchasers, promptly after the Company shall
have received notice thereof, of the time when the registration statement
becomes effective or any supplement to any prospectus forming a part of the
registration statement has been filed.
(g) Notify the Purchasers of any stop order suspending the
effectiveness of the registration statement and use its reasonable best efforts
to remove such stop order.
12.4 FURNISH INFORMATION. It shall be a condition precedent to
the obligations of the Company to take any action pursuant hereto that the
Purchaser, having chosen to have its Registrable Securities included for
registration, shall furnish to the Company such information regarding the
Purchaser, its Registrable Securities and the intended method of disposition of
such securities as shall be required to effect the registration thereof. The
Purchaser shall be required to represent to the Company that all such
information that is given is complete and accurate in all material respects. The
Purchaser shall deliver to the Company a statement in writing from the
beneficial owners of such securities that such beneficial owners bona fide
intend to sell, transfer or otherwise dispose of such securities.
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12.5 EXPENSES.
(a) Registration Expenses. All expenses incurred by the
Company in complying with the terms of Sections 12.2 and 12.3 hereof, including
without limitation, all registration and filing fees, printing expenses, fees
and disbursements of counsel for the Company, "Blue Sky" fees and expenses, and
the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the Company
which shall be paid in any event by the Company) shall be borne by the Company.
(b) Selling Expenses. All underwriting discounts,
underwriters' expense allowance, and selling commissions applicable to the sale
of Registrable Securities by the Purchasers and all fees and disbursements of
any special counsel (other than the Company's regular counsel) shall be borne by
the Purchasers of the Registrable Securities so registered pro rata on the basis
of the number of Registrable Securities so registered.
12.7 INDEMNIFICATION. In the event that any Registrable
Securities are included in a registration statement pursuant hereto:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each Purchaser, the officers, directors, employees, agents,
attorneys and partners of each Purchaser, any underwriter (as defined in the
Act) for such Purchaser and each person, if any, who controls such Purchaser or
underwriter within the meaning of the Act or the Exchange Act, against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively, a "Violation"): (A) any untrue statement
or alleged untrue statement of a material fact contained in such registration
statement, including any preliminary prospectus or final prospectus contained
therein or any amendments or supplements thereto; (B) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading; or (C) any violation or
alleged violation by the Company of the Act, the Exchange Act, any applicable
state securities law or any rule or regulation promulgated under the Act, the
Exchange Act or any applicable state securities law; and the Company will
reimburse the Purchaser for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Subsection 12.7(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be liable in any such case for any such loss,
claim, damage, liability or action to the extent that it arises out of or is
based upon a Violation which occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by any such Purchaser, underwriter or controlling person; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in said registration statement, said preliminary prospectus, said final
prospectus or said amendment or supplement in reliance upon
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and in conformity with written information furnished by such Purchaser or any
other Purchaser, for use in the preparation thereof; and further provided,
however, that the foregoing indemnity agreement is subject to the condition
that, insofar as it relates to any untrue statement, alleged untrue statement,
omission or alleged omission made in any preliminary prospectus but eliminated
or remedied in the prospectus, such indemnity agreement shall not inure to the
benefit of any underwriter or broker, if a copy of the final prospectus was not
sent or given to such person with or prior to the confirmation of the sale of
such securities to such person.
(b) To the extent permitted by law, each selling Purchaser
will indemnify and hold harmless the Company, its directors, its officers, its
employees, its agents, its attorneys, any person who controls the Company within
the meaning of the Act or the Exchange Act, any underwriter (within the meaning
of the Act) for the Company and any person who controls such underwriter against
any losses, claims, damages or liabilities joint or several) to which the
Company or any such director, officer, employee, agent, attorney, controlling
person, or underwriter or controlling person may become subject, under the Act,
the Exchange Act or other federal or state law, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any Violation, in each case to the extent (and only to the extent) that
such Violation occurs in reliance upon and in conformity with written
information furnished by the Purchaser expressly for use in connection with such
registration; and the Purchaser will reimburse any legal or other expenses
reasonably incurred by the Company or any such director, officer, controlling
person, underwriter or controlling person thereof, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Subsection
12.7(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Purchaser, which consent shall not be unreasonably withheld, and further
provided that Purchaser's obligations under this subsection shall not exceed the
amount invested by Purchaser in the securities that are included in the
registration to which the violation relates.
(c) Promptly after receipt by an indemnified party under this
Section 10.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 12.7, notify the
indemnifying party in writing of the commencement thereof, and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly notified, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to notify an
indemnifying party within a reasonable time of the commencement of any such
action, to the extent prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 10.9, but the omission so to notify the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section.
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12.8 REPORTS UNDER EXCHANGE ACT. Following registration of the
Company's securities under the Exchange Act and with a view of making available
to the Purchasers the benefits of Rule 144 promulgated under the Act and any
other rule or regulation of the SEC that may at any time permit a Purchaser to
sell securities of the Company to the public without registration, the Company
agrees to:
(a) use its best efforts to make and keep public information
available, as those terms are understood and defined in Rule 144, at all times;
and
(b) use its best efforts to file with the SEC in a timely
manner all reports and other documents required of the Company under the Act and
the Exchange Act.
12.9 PURCHASER'S ACCEPTANCE OF OBLIGATIONS. Acceptance of this
Warrant by its PURCHASER(s) shall be deemed to constitute the unqualified
acceptance by the PURCHASER of all of the terms and conditions set forth herein.
13. LOST, STOLEN WARRANTS, ETC. In case any Warrant shall be
mutilated, stolen or destroyed, the Company may issue a new Warrant of like
date, tenor and denomination and deliver the same in exchange and substitution
for and upon surrender and cancellation of any mutilated Warrant, or in lieu of
any Warrant lost, stolen or destroyed, upon receipt of evidence satisfactory to
the Company of the loss, theft or destruction of such Warrant, and upon receipt
of indemnity satisfactory to the Company.
14. WARRANT HOLDER NOT SHAREHOLDER. This Warrant does not confer upon
the holder hereof any right to vote or to consent or to receive notice as a
shareholder of the Company, as such, in respect of any matters whatsoever, or
any other rights or liabilities as a shareholder, prior to the exercise hereof
as hereinbefore provided.
15. SEVERABILITY. Should any part of this Warrant for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in force and effect as if this
Warrant had been executed with the invalid portion thereof eliminated, and it is
hereby declared the intention of the parties hereto that they would have
executed and accepted the remaining portion of this Warrant without including
therein any such part, parts or portion which may, for any reason, be hereafter
declared invalid.
16. NOTICE. All notices and other communications required or
permitted to be given under any Agreement shall be deemed given when personally
delivered or sent by certified mail, return receipt requested, postage prepaid,
overnight delivery or confirmed facsimile transmission to the parties at the
following address or fax number:
To the Company at:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
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To the Purchaser at: The address set forth in the Subscription
Agreement under which the Purchaser acquired, among other things,
this Warrant.
or, as to either party or any subsequent holder of this Warrant, to such other
address and/or facsimile number as such party designates by written notice to
the other party or parties.
17. MISCELLANEOUS.
(a) This Warrant shall be governed by, construed and enforced
in accordance with the law of the State of California, without regard to its
conflict of laws principles.
(b) The agreements which are contained herein shall survive
the exercise of this Warrant to the extent applicable thereafter.
(c) This Warrant is one of a series of substantially similar
warrants (the "Warrants") having the same exercise price and issued in
connection with the purchase of Convertible Notes of the Company. This Warrant
may be changed, waived, discharged or terminated by an instrument in writing
signed by the holders of Warrants exercisable into more than 50% of the shares
of Stock into which all the Warrants are exercisable as of the date of execution
of the change, waiver, discharge or termination.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
and attested by its duly authorized officers as of the day and year first set
forth above.
SEMOTUS SOLUTIONS, INC.
By__________________________
Xxxxxxx X. XxXxxx
President
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PURCHASE FORM
-------------
Dated __________
The undersigned hereby irrevocably elects to exercise the Warrant
represented by this Warrant to the extent of purchasing ______ Shares of Semotus
Solutions, Inc. and hereby tenders payment of the exercise price thereof.
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name _________________________________________________________
(please type or print in block letters)
Address _________________________________________________________
.................................................................................
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ______________, hereby sells, assigns and transfers
unto
Name: _________________________________________________________
(Please type or print in block letters)
Address _________________________________________________________
Semotus Solutions, Inc. represented by this Warrant to the extent of ______
shares as to which such right is exercisable and does hereby irrevocably
constitute and appoint _______________ attorney, to transfer the same on the
books of the Company with full power of substitution in the premises.
Signature _______________________________ Dated _______________
NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS IT
APPEARS UPON THE FACE OF THIS WARRANT IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
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