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
____ Common Stock
Purchase Warrants
CERTIFICATE FOR COMMON STOCK
PURCHASE WARRANTS
1. Warrants. This Warrant Certificate certifies that ___________, or
registered assigns (the "Holder"), is the registered owner of the
above-indicated number of Warrants expiring on June 23, 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 $0.39 per share ("Exercise
Price"), commencing June 23, 2005, and terminating or expiring according to
Section 4 or 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:
Twenty Five Percent (25%) of the Shares covered by the Warrant shall vest
immediately on the Grant Date, twenty five percent (25%) of the Shares
covered by the Warrant shall vest after the first six months from the Grant
Date, and 50% of the Shares covered by the Warrant shall vest on the first
annual anniversary of the Grant Date.
(c) Acceleration of Vesting Schedule. If the Holder's employment is
terminated by the Company for any reason other than for Cause, then the
vesting schedule as set forth above in Section 3(b) shall accelerate so
that 100% of the Shares covered by the Warrant shall be vested on
the Holder's Termination Date. As used herein, "Cause" shall mean (a) a
breach by the Holder of a covenant contained in the Holder's offer letter
or confidentiality agreement; (b) willful misconduct or the habitual
neglect of duties or gross misconduct materially injurious to the Parent or
the Company; (c) a charge of any felony, a misdemeanor or a crime
materially affecting the Company or Parent; (d) insubordination or
continued failure to perform in a professional manner; or (e) the continued
and habitual use of narcotics or alcohol to an extent which materially
impairs the performance of duties.
(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)
------
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 (i) and (ii) above, the
Holder may, within one (1) month following such termination, 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 one
(1) 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 offer letter.
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: ___________, 2005
SEMOTUS SOLUTIONS, INC.
Attest:
__________________________ By _______________________________________
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
- ------------------------------- --------------------------------
(Please print name and address)
- ------------------------------- --------------------------------
- ------------------------------- --------------------------------
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
- ------------------------------- --------------------------------
(Please print name and address)
- ------------------------------- --------------------------------
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:
_______________________________________________________
_______________________________________________________
(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)
------
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)
(1) [Company] to pay for fractional Shares in cash @ $ _____________ per Share.