EXHIBIT 2.2
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AGREEMENT
This Agreement is dated as of the 23rd day of April 2008 by and among
Semotus Solutions, Inc,, a Nevada corporation with its principal office at 000
Xxxxxxxxxx Xxx., Xxxxx 000, Xxx Xxxxx, XX 00000 (the "Company"), and Flint
Telecom Limited, a company limited by shares organized under the Irish Companies
Xxx 0000 to 2003 (the "Investor").
WHEREAS, the Company and the Investor have been discussing a potential
investment by the Investor in the Company; the use of proceeds of that
investment is intended for the Company's general corporate purposes; and
WHEREAS, it was the mutual desire of the Company and the Investor that
the Investor's investment in the Company would take the form of a promissory
note that would be convertible into shares of the Company's common stock, $.01
par value per share (the "Common Shares") at any time at the option of the
holder at a rate that would be agreed to by the Company and the Investor; and
NOW THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows.
1. PURCHASE OF CONVERTIBLE PROMISSORY NOTE.
1.1 SALE AND PURCHASE OF NOTE. The Company has authorized (i) the
sale and issuance to the Investor of a convertible promissory note in the
principal amount of $200,000 (the "Convertible Promissory Note") and (ii) the
issuance of such shares of Common Stock to be issued upon conversion of the
Convertible Promissory Note. The Convertible Promissory Note shall have the
rights, preferences, privileges and restrictions set forth in the form of
Convertible Promissory Note attached hereto as Exhibit A. The Investor
understands that the Common Shares to be issued upon conversion will be
restricted securities subject to the resale provisions of Rule 144.
1.2 CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place no later than three business days
from the date hereof at such date, time, or location as mutually agreed upon by
the Company and Investor.
1.3 ACTIONS TO OCCUR AT THE CLOSING. At the Closing, the Company will
deliver to the Investor the Convertible Promissory Note, against payment of the
purchase price therefor by check or wire transfer made payable to the order of
the Company.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The
Company hereby represents and warrants to, and covenants with, the Investor as
follows:
2.1 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Nevada. The Company is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
makes such qualification or leasing necessary unless the failure to so qualify
has not and could not reasonably be expected to have a material adverse effect.
2.2 AUTHORIZED CAPITAL STOCK. The authorized capital stock of the
Company consists of (i) 50,000,000 shares of common stock, $.01 par value per
share, of which 2,249,164 shares are issued and outstanding, 274,264 shares are
reserved for issuance under outstanding warrants, and 280,673 shares are
reserved for issuance under outstanding options and (ii) 5,000,000 shares of
preferred stock, $0.001 par value per share, none of which are outstanding. The
Company has reserved from its duly authorized capital stock the maximum number
of shares of Common Shares issuable pursuant to this Agreement and the
Convertible Promissory Note.
2.3 DUE EXECUTION, DELIVERY AND PERFORMANCE OF THE AGREEMENTS. The
Company has full legal right, corporate power and authority to enter into this
Agreement, to deliver the Convertible Promissory Note and perform the
transactions contemplated hereby and thereby. This Agreement and the Convertible
Promissory Note have been duly authorized, executed and delivered by the
Company. The consummation by the Company of the transactions herein contemplated
will not violate any provision of the organizational documents of the Company.
The execution, delivery and performance of this Agreement and the Convertible
Promissory Note by the Company and the consummation by the Company of the
transactions herein and therein contemplated will not result in (i) the creation
of any lien, charge, security interest or encumbrance upon any assets of the
Company pursuant to the terms or provisions of, (ii) conflict with, result in
the breach or violation of, or constitute, either by itself or upon notice or
the passage of time or both, a default under any material agreement, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
to which the Company is a party or by which the Company or any of its properties
may be bound or affected and in each case which individually or in the aggregate
would have a material adverse effect on the condition (financial or otherwise),
properties, business, prospects, or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"), (iii) violate any
provision of law, statute, rule or regulation, or any ruling, writ, injunction,
order, judgment or decree of any court, administrative agency or other
governmental body applicable to it, or any of its properties or assets, or (iii)
violate its Certificate of Incorporation or Bylaws. Upon its execution and
delivery, and assuming the valid execution thereof by the Investor, this
Agreement and the Convertible Promissory Note will constitute a valid and
binding obligation of the Company, enforceable against the Company in accordance
with their respective terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
2.4 COMPLIANCE WITH SECURITIES LAWS. The offer and sale of the
Convertible Promissory Note as contemplated hereby and the issuance and delivery
of the Common Shares to the Investor upon the conversion thereof are each exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act"), and under applicable state securities and "blue sky" laws, as currently
in effect. All shares of capital stock and other securities issued by the
Company at or prior to the Closing have been issued in transactions exempt from
registration
under the Securities Act, and all applicable state securities or "blue sky"
laws. The Company has not violated the Securities Act or any applicable state
securities or "blue sky" laws in connection with the issuance of any shares of
capital stock or other securities at or prior to the Closing. The Company has
not offered any of its capital stock, or any other securities, for sale to or
solicited any offers to buy any of the foregoing from the Company, or otherwise
approached or negotiated with any other person in respect thereof, in such a
manner as to require registration under the Securities Act. None of the events
described in Item 401(f) of Regulation S-K under the Securities Act has occurred
during the last five years with respect to any director or officer of the
Company.
4. PUBLIC STATEMENTS OR RELEASES. Neither the Company nor Investor
shall make any public announcement with respect to the existence or terms of
this Agreement or the transactions provided for herein without the prior
approval of the other, which shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, nothing in this Section 4 shall prevent any party
from making any public announcement it considers necessary in order to satisfy
its obligations under the law or the rules of any national securities exchange
or market, provided such party, to the extent practicable, provides the other
party with an opportunity to review and comment on any proposed public
announcement before it is made.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
5.1 The Investor represents and warrants to, and covenants with, the
Company that:
(i) the Investor is knowledgeable, sophisticated and experienced in
making, and is qualified to make, decisions with respect to
investments in securities representing an investment decision
like that involved in the purchase of the Convertible
Promissory Note, including investments in securities issued by
the Company, and has requested, received, reviewed and
understood all information it deems relevant in making an
informed decision to purchase the Convertible Promissory Note;
(ii) it acknowledges that the offering of the Convertible Promissory
Note pursuant to this Agreement has not been reviewed by the
Securities Exchange Commission ("Commission") or any state or
other regulatory authority;
(iii) the Investor is acquiring the Convertible Promissory Note for
its own account and not on behalf of or for the benefit of any
U.S. person and the sale and resale of the Convertible
Promissory Note have not been prearranged with any buyer in the
United States, and the Investor has no present intention of
making any distribution thereof;
(iv) the Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers
to buy, purchase or otherwise acquire or take a pledge of) any
of the Convertible Promissory Note or the Common Shares
underlying such Convertible Promissory Note except in
compliance with the
Securities Act, the Securities Act Rules and Regulations and
any applicable state securities or blue sky laws;
(v) the Investor has had an opportunity to discuss this investment
with representatives of the Company and ask questions of them
and such questions have been answered to the full satisfaction
of the Investor;
(vi) the Investor is not a "U.S. person" within the meaning of Rule
902(o) of Regulation S promulgated under the Securities Act and
qualifies as an "accredited investor" within the meaning of
Rule 501 of Regulation D promulgated under the Securities Act;
(vii) the Convertible Promissory Note was not offered to Investor in
the United States and at the time of execution of this
Investment Agreement and of any offer to the Investor to
purchase the Convertible Promissory Note hereunder, the
Investor was physically outside the United States;
(viii) the Investor hereby agrees that all offers and sales of the
Convertible Promissory Note and the underlying Common Shares
prior to the expiration of a period commencing on the Closing
and ending six months thereafter (the "Distribution Compliance
Period") shall not be made to U.S. persons or for the account
or benefit of U.S. persons and shall otherwise be made in
compliance with the provisions of Regulation S; and
(ix) neither Investor nor any person acting directly or indirectly
on its behalf has the intention of entering, or will enter
during the Distribution Compliance Period into any put option,
short position or any hedging transaction or other similar
instrument or position with respect to the Common Shares.
5.2 The Investor acknowledges that
(i) the Convertible Promissory Note and the underlying Common
Shares have not been and are not being registered under the
provisions of the Securities Act, and may not be transferred
unless the Investor shall have delivered to the Company an
opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, to the effect that the Convertible
Promissory Note and the underlying Common Shares to be sold or
transferred may be sold or transferred pursuant to Rule 144 or
other exemption promulgated under the Securities Act;
(ii) any sale of the Shares made in reliance on Rule 144 promulgated
under the Securities Act may be made only in accordance with
the terms of said Rule and further, if said Rule is not
applicable, any resale of such Convertible Promissory Note or
underlying Common Shares under circumstances in which the
seller, or the person through whom the sale is made, may be
deemed to be an underwriter, as that term is used in the
Securities Act, may require compliance with some other
exemption under the Securities Act or the Securities Act Rules
and Regulations of the Commission thereunder; and
(iii) neither the Company nor any other person is under any
obligation to register the Convertible Promissory Note or the
underlying Common Shares under the Securities Act.
5.3 The Investor further represents and warrants to, and covenants
with, the Company that
(i) the Investor has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to
authorize the execution, delivery and performance of this
Agreement;
(ii) the Investor is duly organized, validly existing and in good
standing under the laws of the its jurisdiction of
organization; and
(iii) upon the execution and delivery of this Agreement, this
Agreement shall constitute a valid and binding obligation of
the Investor enforceable in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally
and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
5.4 The Investor recognizes that an investment in the Convertible
Promissory Note and the underlying Common Shares is speculative and involves a
high degree of risk, including a risk of total loss of the Investor's
investment. The Investor can bear the economic risk of this investment and can
afford a complete loss thereof.
5.5 All of the information provided to the Company or its agents or
representatives concerning the Investor's suitability to invest in the Company
and the representations and warranties contained herein, are complete, true and
correct as of the date hereof. The Investor understands that the Company is
relying on the statements contained herein to establish an exemption from
registration under U.S. federal and state securities laws.
5.6 The Investor understands and agrees that each certificate or
other document evidencing the Convertible Promissory Note and any of the
underlying Common Shares shall be endorsed with the legend in substantially the
form set forth below, as well as any other legends required by applicable law,
and the Investor covenants that the Investor shall not transfer the securities
represented by any such certificate without complying with the restrictions on
transfer described in the legends endorsed on such certificates:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
PURSUANT TO REGULATION S, PROMULGATED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED ("SECURITIES ACT"), AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (A) THE
PROVISIONS OF REGULATION S, (B) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (C) SUCH OTHER EXEMPTIONS FROM SUCH
REGISTRATION. HEDGING TRANSACTIONS WITH RESPECT TO SUCH SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT. AS A
CONDITION TO PERMITTING ANY TRANSFER OF THESE SECURITIES, THE COMPANY
MAY REQUIRE THAT IT BE FURNISHED WITH AN OPINION OF COUNSEL ACCEPTABLE
TO THE COMPANY TO THE EFFECT THAT NO REGISTRATION OR QUALIFICATIONS IS
LEGALLY REQUIRED FOR SUCH TRANSFER.
5.7 The Investor has taken no action which would give rise to any
claim by any person for brokerage commission, finder's fees or similar payments
by Investor relating to this Agreement or the transactions contemplated hereby.
The Company shall have no obligation with respect to such fees or with respect
to any claims made by or on behalf of other persons for fees of a type
contemplated in this Section that may be due in connection with the transactions
contemplated hereby. The Investor shall indemnify and hold harmless the Company,
its employees, officers, directors, agents, and partners, and their respective
affiliates, from and against all claims, losses, damages, costs (including the
costs of preparation and attorney's fees) and expenses suffered in respect of
any such claimed or existing fees, as and when incurred.
6. SURVIVAL OF REPRESENTATIVES, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein and in any certificates or documents delivered pursuant
hereto or in connection herewith shall survive following the delivery to the
Investor of the Convertible Promissory Note being purchased and the payment
therefor.
7. CAPTIONS.
The captions and paragraph headings of this Agreement are solely for
the convenience of reference and shall not affect its interpretation.
8. SEVERABILITY.
Should any part or provision of this Agreement be held unenforceable or
in conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provisions shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties hereto.
9. GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Nevada, without giving effect to conflict of law
principles thereof, except with respect to
matters of law concerning the internal corporate affairs of any corporate entity
which is a party to or the subject of this Agreement, and as to those matters
the law of the jurisdiction under which the respective entity derives its powers
shall govern.
10. COUNTERPARTS.
This Agreement may be signed in one or more counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the day and year first above written.
SEMOTUS SOLUTIONS, INC.
By: /s/ Xxxxxxx XxXxxx
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Name: Xxxxxxx XxXxxx
Title: Chief Executive Officer
FLINT TELECOM LIMITED
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
