EXHIBIT 4.1
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NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE OR CANADIAN PROVINCE, OR UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE SECURITIES ARE RESTRICTED
AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN
EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
SEMOTUS SOLUTIONS, INC.
Incorporated Under the Laws of the State of Nevada
400,000 Common Stock
Purchase Warrants
CERTIFICATE FOR COMMON STOCK
PURCHASE WARRANTS
1. Warrants. This Warrant Certificate certifies that ARI KAPLAN, or
registered assigns (the "Holder"), is the registered owner of the
above-indicated number of Warrants expiring on March 28, 2015 ("Expiration
Date"). One (1) Warrant entitles the Holder to purchase one share of common
stock, $.01 par value ("Share"), from Semotus Solutions, Inc., a Nevada
corporation ("Company"), at a purchase price of $0.37 per share ("Exercise
Price"), commencing March 28, 2005, and terminating or expiring according to
Section 4, upon surrender of this Warrant Certificate with the exercise form
hereon (or the Warrant Conversion Form in the case of a warrant conversion
pursuant to Section 3(b) below) duly completed and executed with payment of the
Exercise Price at the offices of the Company, 16400 Lark Ave., Suite 230, Los
Gatos, CA 95032.
2. Transfer of Warrants. The Warrants represented by this Warrant
Certificate shall not be transferable except upon the death of the Holder and
then only to the estate of the Holder or pursuant to the Holder's will or the
applicable laws of descent and distribution.
3. (a) Exercise of Warrant. The Warrant may be exercised in whole
or in part in accordance with the vesting schedule set forth below, on or before
the Expiration Date or Termination Date upon surrender of the Warrant in
conjunction with Form of Election to Purchase and the payment at the Exercise
Price stipulated above. If the Warrant is exercised in part, then the Holder
shall be entitled to receive a new Warrant covering the remaining number of
Warrant Shares not exercised.
(b) Vesting Schedule. The Employee will have the right, but
not the obligation, to exercise the Option shares for an amount equivalent to
the Exercise Price in accordance with the following schedule:
One Fourth (1/4) of the Shares covered by the Option shall vest
immediately on the Grant Date; and thereafter, One-Thirty-Sixth (1/36)
of the total Shares covered by this Option, rounded to the nearest
whole Share, shall vest after each monthly anniversary of the Date of
Grant.
(c) Conversion Right. In addition to and without limiting the
rights of the Warrantholder under the terms of the Warrant, the Holder shall
have the right (the "Conversion Right") to convert this Warrant or any portion
thereof into Shares as provided in this Section 3 at any time or from time to
time prior to its expiration.) Upon exercise of the Conversion Right with
respect to a particular number of Warrants (the
"Converted Warrants"), the Company shall deliver to the Holder, without payment
by the Holder of any Exercise Price or any cash or other consideration, that
number of Shares computed using the following formula:
X = Y(A-B)
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A
Where: X = the number of Shares and/or Warrants to be
issued to the Holder;
Y = the number of Shares and/or Warrants to be
converted under this Warrant;
A = the Current Market Price of one share of Common
Stock; and
B = the Share Exercise Price.
4. Termination and Expiration of Warrants.
(a) Expiration of Warrant. No Warrant may be exercised or
converted after 5:00 p.m. Pacific Time on the Expiration Date and any Warrant
not exercised or converted by such time shall become void, unless the Expiration
Date of this Warrant is extended by the Company.
(b) Termination of Warrant. Except as provided below in this
Section, this Warrant shall terminate and may not be exercised if the Holder
ceases to be employed by the Company or any Parent or Subsidiary of the Company.
The Holder shall be considered to be employed by the Company for all purposes
under this Warrant if the Holder is an officer or full-time employee of the
Company or any Parent, Subsidiary or Affiliate of the Company or if the board of
directors of the Company determines that the Holder is rendering substantial
services as a part-time employee, consultant or adviser to the Company or any
Parent, Subsidiary or Affiliate of the Company. The board of directors of the
Company shall have discretion to determine whether the Holder has ceased to be
employed by the Company or any Parent, Subsidiary or Affiliate of the Company
and the effective date on which such employment terminated (the "Termination
Date").
(i) Death. If the Holder's employment is terminated by death,
the Holder's estate shall have the right, for a period of six (6) months
following the date of the Holder's death, to exercise this Warrant to the extent
it was exercisable by the Holder on the date of death. The Holder's estate shall
mean the Holder's legal representative upon death or any person who acquires the
right to exercise this Warrant by reason of such death under the Holder's will
or the laws of intestate succession.
(ii) Disability. If The Holder's employment is terminated
because of a permanent and total disability (as defined in the Internal Revenue
Code Section 22(e)(3)), The Holder or the Holder's estate may, within six (6)
months following such termination, exercise this Warrant to the extent it was
exercisable by the Holder on the date of such termination.
(iii) Other Termination. If the Holder's employment is
terminated for any reason other than those provided in Subsections above, the
Holder may, within the later of (A) three (3) months following such termination
and (B) three (3) months following the first anniversary of the Grant Date,
exercise this Warrant to the extent it was exercisable by the Holder on the date
of such termination. This Warrant shall terminate upon the expiration of such
three (3) month period.
(c) Transfer to Related Corporation. In the event the Holder
leaves the employ of the Company to become an employee of any Parent or
Subsidiary or if the Holder leaves the employ of any such Parent or Subsidiary
to become an employee of the Company or of another Parent or Subsidiary, the
Holder shall be deemed to continue as an employee of the Company for all
purposes of this Agreement.
(d) No Right to Employment. Nothing in this Warrant shall
confer on the Holder any right to continue in the employ of, or other
relationship with, the Company or any Parent, Subsidiary or Affiliate of the
Company or limit in any way the right of the Company or any Parent, Subsidiary
or Affiliate of the Company to terminate the Holder's employment or other
relationship at any time, in accordance with the Holder's employment agreement.
5. Adjustment of Exercise Price. After each adjustment of the Exercise
Price pursuant to this paragraph 5, the number of shares of Common Stock
purchasable on the exercise of each Warrant shall be the number derived by
dividing such adjusted pertinent Exercise Price into the original pertinent
Exercise Price. The pertinent Exercise Price shall be subject to adjustment as
follows:
In the event, prior to the expiration of the Warrants by
exercise or by their terms, the Company shall issue any shares of its
Common Stock as a share dividend or shall subdivide the number of
outstanding shares of Common Stock into a greater number of shares,
then, in either of such events, the Exercise Price per share of Common
Stock purchasable pursuant to the Warrants in effect at the time of
such action shall be reduced proportionately and the number of shares
purchasable pursuant to the Warrants shall be increased
proportionately. Conversely, in the event the Company shall reduce the
number of shares of its outstanding Common Stock by combining such
shares into a smaller number of shares, then, in such event, the
Exercise Price per share purchasable pursuant to the Warrants in effect
at the time of such action shall be increased proportionately and the
number of shares of Common Stock at that time purchasable pursuant to
the Warrants shall be decreased proportionately. Any dividend paid or
distributed on the Common Stock in shares of any other class of the
Company or securities convertible into shares of Common Stock shall be
treated as a dividend paid in Common Stock to the extent that shares of
Common Stock are issuable on the conversion thereof.
6. Adjustments for Reorganization, Consolidation, Merger, or Sale of
Assets. If at any time while the Warrant, or any portion thereof, remains
outstanding and unexpired, should there occur a reorganization, merger, or
consolidation; or should there occur a sale or transfer of the Company's assets
or properties substantially in entirety as part of a reorganization, merger or
consolidation, then lawful provision shall be made so that the Holder shall
thereafter be entitled to receive upon exercise of the Warrant, or any unexpired
exercisable portion thereof, the number of shares of stock or other securities
or property of the successor corporation resulting from such reorganization,
consolidation, merger, sale or transfer that the Holder would have been entitled
to if the Warrant, or portions thereof, had been exercised immediately prior to
the event. The foregoing shall apply similarly to any successive
reorganizations, consolidations, mergers, sales or transfers that may occur
while the Warrant, or any portion thereof, remains exercisable.
7. Reservation of Stock Underlying the Warrant. At all times until the
expiration of the Warrant, the Company will authorize, reserve, and keep
available, solely for issuance and delivery upon the exercise of the Warrant,
the shares of Common Stock of the Company that shall be receivable upon exercise
of the Warrant.
8. Underlying Stock to be Fully Paid and Non-Assessable. The Company
covenants that the shares of Common Stock issuable upon exercise of the Warrant
shall be duly and validly issued, fully paid, non-assessable, and free of any
liens, charges, and all taxes with respect to the issue thereof.
9. No Impairment. The Company shall not, by amendment of its
Certificate of Incorporation or other method or venue, avoid or seek to avoid
the observance or performance of any of the terms of the Warrant, but shall at
all times, in good faith, take all such actions as may be necessary or
appropriate in order to protect the rights of the Holder thereunder against
impairment.
10. Independent Tax Advice. The Holder agrees that the Holder has or
will obtain the advice of independent tax counsel regarding the federal and
state income tax consequences of the receipt and exercise of this Warrant and of
the disposition of Common Stock acquired upon exercise hereof, including advice
regarding the imposition of the alternative minimum tax on tax preferences
generated by exercise of warrants and regarding any potential holding period
requirements for preferential tax treatment. THE HOLDER ACKNOWLEDGES THAT HE OR
SHE HAS NOT RELIED AND WILL NOT RELY UPON ANY ADVICE OR REPRESENTATIONS BY THE
COMPANY OR BY ITS EMPLOYEES OR REPRESENTATIVES WITH RESPECT TO THE TAX TREATMENT
OF THIS WARRANT OR ANY SHARES ISSUED PURSUANT HERETO.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its President and by its Secretary.
Dated: March 28, 2005
SEMOTUS SOLUTIONS, INC.
Attest:
/s/ Tali Durant By: /s/ Anthony N. LaPine
Tali Durant, Secretary Anthony N. LaPine, President
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder if he desires to exercise
Warrants evidenced by the within Warrant Certificate)
To Semotus Solutions, Inc.:
The undersigned hereby irrevocably elects to exercise ____________
Warrants, evidenced by the within Warrant Certificate for, and to purchase
thereunder, ________________ full shares of Common Stock issuable upon exercise
of said Warrants and delivery of $____________ and any applicable taxes.
The undersigned requests that certificates for such shares be issued in
the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
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(Please print name and address)
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If said number of Warrants shall not be all the Warrants evidenced by
the within Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so exercised be issued in the name of
and delivered to:
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(Please print name and address)
Dated: ____________________ Signature: _____________________________________
NOTICE: The above signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever, or if signed by
any other person the Form of Assignment hereon must be duly executed
and if the certificate representing the shares or any Warrant
Certificate representing Warrants not exercised is to be registered in
a name other than that in which the within Warrant Certificate is
registered, the signature of the holder hereof must be guaranteed.
Signature Guaranteed: __________________________________________
SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF
ONE OF THE FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST
STOCK EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
FORM OF ELECTION TO CONVERT
(To be executed by the Holder if he desires to exercise
Warrants evidenced by the within Warrant Certificate)
TO: Semotus Solutions, Inc.
Pursuant to Section 3(b) of the Warrant, he undersigned hereby
irrevocably elects to convert ____________ Warrants, evidenced by the within
Warrant Certificate for, and to purchase thereunder, ________________ full
shares of Common Stock issuable upon conversion of said Warrants. A conversion
calculation is attached hereto.
The undersigned requests that certificates for such shares be issued in
the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
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(Please print name and address)
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If said number of Warrants shall not be all the Warrants evidenced by
the within Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so converted be issued in the name of
and delivered to:
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(Please print name and address)
Dated: ____________________ Signature: ____________________________________
NOTICE: The above signature must correspond with the name as written upon the
face of the within Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever, or if signed by
any other person the Form of Assignment hereon must be duly executed
and if the certificate representing the shares or any Warrant
Certificate representing Warrants not exercised is to be registered in
a name other than that in which the within Warrant Certificate is
registered, the signature of the holder hereof must be guaranteed.
Signature Guaranteed: __________________________________________
SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
CALCULATION OF WARRANT CONVERSION
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X = Y(A-B)
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A
Where: X = the number of Shares and/or Warrants to be issued
to the Holder;
Y = the number of Shares and/or Warrants to be
converted under this Warrant;
A = the Current Market Price of one share of Common
Stock; and
B = the Share Exercise Price.
Fractional Converted Shares = (1)
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(1) <<Company>> to pay for fractional Shares in cash @ $ per Share.
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