EXHIBIT 10.1
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ANNEX IV
TO
SECURITIES PURCHASE
AGREEMENT
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated as of May, 16 2006 (this
"Agreement"), is made by and between SEMOTUS SOLUTIONS, INC., a Nevada
corporation, with headquarters located at 000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxx
Xxxxx, XX 00000 (the "Company"), and Southridge Partners LP, a Delaware limited
partnership ("SRP"), and Southshore Capital Fund Ltd, a Cayman Island
corporation ("Southshore") (each of SRP and Southshore is an "Investor" and
collectively are the "Investors"),.
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of the Common
Stock and Warrant Purchase Agreement, dated as of May 16, 2006, between the
Investor and the Company (the "Purchase Agreement"; terms not otherwise defined
herein shall have the meanings ascribed to them in the Purchase Agreement), the
Company has agreed to issue and sell to the Investor the Shares; and
WHEREAS, the Company has agreed to issue the Warrants to the Investor
in connection with the sale of the Shares, and the Warrants may be exercised for
the purchase of shares of Common Stock (the "Warrant Shares") upon the terms and
conditions of the Warrants; and
WHEREAS, to induce the Investor to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investor hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.
(b) "Held Shares Value" means the aggregate Purchase Price for Shares
acquired by the Investor and not yet sold.
(c) "Investor" means the Investor or any permitted transferee or
assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof and who holds Registrable Securities, as the
context may require.
(d) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the Commission.
(e) "Registrable Securities" means the Common Stock and the Warrant
Shares.
(f) "Registration Statement" means a registration statement of the
Company under the Securities Act covering Registrable Securities on Form S-3, if
the Company is then eligible to file using such form, and if not eligible, on
Form SB-2 or other appropriate form.
(g) "Required Effective Date" means 75 days after the Required Filing
Date.
Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Common Stock and Warrant Purchase
Agreement or in the Rules of the SEC.
2. REGISTRATION.
(a) MANDATORY REGISTRATION. The Company shall prepare and file with the
SEC, as soon as practicable but not later than 45 days after the Closing (the
"Required Filing Date"), a Registration Statement registering for resale by the
Investor a sufficient number of shares of Common Stock for the Investor to sell
all of the Registrable Securities. The Registration Statement shall also state
that, in accordance with Rules 416 and 457 under the Securities Act, it also
covers such indeterminate number of additional shares of Common Stock as may
become issuable to prevent dilution resulting from stock splits, or stock
dividends. The Company will use its reasonable best efforts to cause such
Registration Statement to be declared effective on a date (the "Initial Required
Effective Date") which is no later than the earlier of (Y) five (5) business
days after oral or written notice by the SEC that it may be declared effective
or (Z) the Required Effective Date.
(b) PAYMENTS BY THE COMPANY.
(i) If the Registration Statement covering the Registrable Securities
is not filed by the Required Filing Date, or declared effective by the Required
Effective Date, then the Company will make payments to the Investor in such
amounts and at such times as shall be determined pursuant to this Section 2(b).
(ii) The amount (the "Periodic Amount") to be paid by the Company to
the Investor shall be determined as of each Computation Date (as defined below)
and such amount shall be equal to the Periodic Amount Percentage (as defined
below) of the Purchase Price for the Common Stock for the period from the date
following the Required Effective Date to the first
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relevant Computation Date, and thereafter to each subsequent Computation Date.
The "Periodic Amount Percentage" means one percent (1%) of the Purchase Price of
the Common Stock for the first (1st) Computation Date and two percent (2%) of
the Purchase Price of the Common Stock for each Computation Date thereafter up
to and including the fifteenth (15th) Computation Date. Anything in the
preceding provisions of this paragraph (ii) to the contrary notwithstanding,
after the relevant Effective Date the Purchase Price shall be deemed to refer to
the sum of the Held Shares Value. By way of illustration and not in limitation
of the foregoing, if the Registration Statement is not declared effective until
165 days after the Closing Date, the Periodic Amount to be paid by the Company
will be (1% for days 120 -150 + 2% (pro-rated) for days 151-165) of the Purchase
Price.
(iii) Each Periodic Amount will be payable by the Company, except as
provided in the other provisions of this subparagraph (iv), in cash or other
immediately available funds to the Investor (1) on the third business day after
the Required Effective Date, and (2) on the earlier of (A) the third business
day after each thirtieth day thereafter, (B) the third business day after the
date the Registration Statement is filed or is declared effective, in each case
without requiring demand therefor by the Investor. Notwithstanding the
provisions of the first sentence of this subparagraph (iii), at the mutual
agreement of the Company and the Investor, any time before the Periodic Amount
is paid, all or a portion of the Periodic Amount can be paid by the issuance of
additional shares of Common Stock to the Investor ("Periodic Amount Shares") in
an amount equal to the Periodic Amount being paid thereby divided by the average
Closing Price for the last ten (10) trading days prior to the Computation Date.
Any Adjustment Shares, to the extent adjustment shares are issued prior to the
registration statement going effective, and any Periodic Amount Shares issued
pursuant to this subsection (iii) shares shall be included as Registrable
Shares.
(iv) The parties acknowledge that the damages which may be incurred by
the Investor if the Registration Statement has not been declared effective by
the Required Effective Date may be difficult to ascertain. The parties agree
that the Periodic Amounts represent a reasonable estimate on the part of the
parties, as of the date of this Agreement, of the amount of such damages. The
Company shall only be obligated to make payments to the Investors pursuant to
this Section 2(b) for Periodic Amounts accruing and payable through the
fifteenth (15th) Computation Date.
(v) Notwithstanding the foregoing, the amounts payable by the Company
pursuant to this provision shall not be payable to the extent any delay in the
effectiveness of the Registration Statement occurs because of an act of, or a
failure to act or to act timely by the Investor or its counsel.
(vi) "Computation Date" means (A) the date which is the earlier of
thirty (30) days after the Required Filing Date or the Required Effective Date
(with respect to payments due as contemplated by Section 2(b)(ii) hereof), as
the case may be, and (B) each date which is thirty (30) days after the previous
Computation Date.
3. OBLIGATIONS OF THE COMPANY. In connection with the registration of
the Registrable Securities, the Company shall do each of the following:
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(a) Prepare and file, with the SEC a Registration Statement with
respect to not less than the number of Registrable Securities as provided in
Section 2(a) above, but only the Registrable Securities, and thereafter use its
reasonable best efforts to cause such Registration Statement relating to
Registrable Securities to become effective by the Required Effective Date and
keep the Registration Statement effective at all times during the period (the
"Registration Period") continuing until the earlier of (i) the date when the
Investor may sell all Registrable Securities under Rule 144(k) without volume or
other restrictions or limits, (ii) the date the Investor no longer owns any of
the Registrable Securities, which Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, or (iii) one
(1) year after the Effective Date of the Registration Statement.
(b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, use its reasonable
best efforts to comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities of the Company covered by the
Registration Statement until such time as all of such Registrable Securities
have been disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof as set forth in the Registration Statement;
(c) Permit a single counsel designated by the Investor (which, until
further notice, shall be deemed to be Southridge Capital Management LLC, who has
requested to receive such notification; the "Investor's Counsel") to review the
Registration Statement and all amendments and supplements thereto for a
reasonable period of time (but not less than three (3) business days) prior to
their filing with the SEC, and not file any document in a form to which such
counsel reasonably objects;
(d) Notify the Investor's Counsel and any managing underwriters
immediately (and, in the case of (i)(A) below, not less than three (3) business
days prior to such filing) and (if requested by any such person) confirm such
notice in writing no later than one (1) business day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement is proposed to be filed; (B) whenever the SEC
notifies the Company whether there will be a "review" of such Registration
Statement; (C) whenever the Company receives (or a representative of the Company
receives on its behalf) any oral or written comments from the SEC in respect of
a Registration Statement (copies or, in the case of oral comments, summaries of
such comments (as such comments relate to the Investor) shall be promptly
furnished by the Company to the Investors); and (D) with respect to the
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the SEC or any other Federal or state
governmental authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii) of the issuance by
the SEC of any stop order suspending the effectiveness of the Registration
Statement covering any or all of the Registrable Securities or the initiation of
any proceedings for that purpose; (iv) if at any time any of the representations
or warranties of the Company contained in
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any agreement (including any underwriting agreement) contemplated hereby ceases
to be true and correct in all material respects; (v) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (vi) of the occurrence of any event that to the best knowledge of
the Company makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. In
addition, the Company shall furnish the Investor's Counsel with copies of all
intended written responses to the comments contemplated in clause (C) of this
Section 3(d) that relate to Investors not later than one (1) business day in
advance of the filing of such responses with the SEC so that the Investors shall
have the opportunity to comment thereon;
(e) Furnish to Investor's Counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one (1) copy of the Registration Statement, each preliminary prospectus
and prospectus, and each amendment or supplement thereto, all correspondence to,
with, or from the SEC, and (ii) such number of copies of a prospectus, and all
amendments and supplements thereto (as contemplated in Section 3(d) above) and
such other documents, as the Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by the Investor;
(f) As promptly as practicable after becoming aware thereof, notify the
Investor of the happening of any event of which the Company has knowledge, as a
result of which the prospectus included in the Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Investor as such Investor may reasonably
request;
(g) As promptly as practicable after becoming aware thereof, notify the
Investor who holds Registrable Securities being sold (or, in the event of an
underwritten offering, the managing underwriters) of the issuance by the SEC of
a Notice of Effectiveness or any notice of effectiveness or any stop order or
other suspension of the effectiveness of the Registration Statement at the
earliest possible time;
(h) Use its reasonable efforts to secure and maintain the designation
and listing of all the Registrable Securities covered by the Registration
Statement on the Principal Trading Market within the meaning of Rule 11Aa2-1 of
the SEC under the Exchange Act and the quotation of the Registrable Securities
on the Principal Trading Market;
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(i) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the initial Effective
Date;
(j) Cooperate with the Investor who holds Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the Registration Statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts as the case may be, as the Investors may reasonably
request, and, within five (5) business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel selected by the Company to deliver,
to the transfer agent for the Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and opinion of such counsel, which shall
include, without limitation, directions to the transfer agent to issue
certificates of Registrable Securities (including certificates for Registrable
Securities to be issued after the Effective Date and replacement certificates
for Registrable Securities previously issued) without legends or other
restrictions; provided that the Company has received the deliveries required in
the Purchase Agreement;
(k) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement; and
(l) Use its reasonable best efforts to comply with all applicable rules
and regulations of the Commission and make generally available to its security
holders earning statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 not later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period is a
fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the Company
after the effective date of the Registration Statement, which statement shall
cover said 12-month period, or end shorter periods as is consistent with the
requirements of Rule 158.
4. OBLIGATIONS OF THE INVESTORS. In connection with the registration of
the Registrable Securities, the Investor shall have the following obligations:
(a) The Investor, by the Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless the Investor has notified the Company in writing of
the Investor's election to exclude all of the Investor's Registrable Securities
from the Registration Statement; and
(b) The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or
3(g), above, the Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until the Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g) and, if
so directed by
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the Company, the Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in the Investor's possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.
5. EXPENSES OF REGISTRATION. All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, including,
without limitation, all registration, listing, and qualifications fees, printers
and accounting fees, and the fees and disbursements of counsel for the Company
(but excluding the Investor's Counsel fees and expenses) shall be borne by the
Company.
6. INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors, if
any, of such Investor, the officers, if any, of such Investor, each person, if
any, who controls any Investor within the meaning of the Securities Act or the
Exchange Act (each, an "Indemnified Person" or "Indemnified Party"), against any
losses, claims, damages, liabilities or expenses (joint or several) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective amendment
thereof, or any prospectus included therein: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or 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, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the final prospectus (as
amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law (the matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to clause (b) of this Section 6, the Company shall
reimburse the Investors, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a) shall not (I) apply to a Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto,
after such prospectus was made available by the Company pursuant to Section 3(c)
hereof; (II) be available to the extent such Claim is based on a failure of the
Investor to deliver or cause to be delivered the prospectus made available by
the Company or the amendment or supplement thereto made available by the
Company; (III) be
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available to the extent such Claim is based on the delivery of a prospectus by
the Investor after receiving notice from the Company under Section 3(f), (g) or
(h) hereof (other than a notice regarding the effectiveness of the Registration
Statement or any amendment or supplement thereto), or (IV) apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed. Each Investor will indemnify, severally and not jointly, the Company
and its officers, directors and agents (each, an "Indemnified Person" or
"Indemnified Party") against any claims arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished in
writing to the Company, by or on behalf of such Investor, expressly for use in
connection with the preparation of the Registration Statement or the amendment
or supplement thereto, subject to such limitations and conditions as are
applicable to the indemnification provided by the Company to this Section 6.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.
(b) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice 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 noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated
and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party provided such
counsel is of the opinion that all defenses available to the Indemnified Party
can be maintained without prejudicing the rights of the indemnifying party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
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7. CONTRIBUTION. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
except where the seller has committed fraud (other than a fraud by reason of the
information included or omitted from the Registration Statement as to which the
Company has not given notice as contemplated under Section 3 hereof) or
intentional misconduct, contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS UNDER SECURITIES ACT AND EXCHANGE ACT. With a view to making
available to Investor the benefits of Rule 144 promulgated under the Securities
Act or any other similar rule or regulation of the SEC that may at any time
permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) furnish to Investor so long as Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of the Securities Act and the
Exchange Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company and (iii)
such other information as may be reasonably requested to permit Investor to sell
such securities pursuant to Rule 144 without Registration.
(d) The Company will, at the request of any Holder of Registrable
Securities, in connection with the sale of some or all of the Registrable
Securities pursuant to Rule 144 upon receipt from such Holder of a certificate
certifying (i) that such Holder has held such Registrable Securities for a
period of not less than one (1) year, (ii) that such Holder has not been an
affiliate (as defined in Rule 144) of the company for more than the ninety (90)
preceding days, and (iii) as to such other matters as may be appropriate in
accordance with such Rule, remove from the stock certificate representing such
Registrable Securities that portion of any restrictive legend which relates to
the registration provisions of the Securities Act, provided, however, that, if
the Company fails to provide such instructions and opinion within three business
days of receipt of the above certifications (i) through (iii), at the Company's
cost and expense, counsel to Investor may provide such instructions and opinion
to the transfer agent regarding the removal of the restrictive legend.
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9. ASSIGNMENT OF THE REGISTRATION RIGHTS. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investor to any transferee of the Registrable
Securities only if the transferee is (i) an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D promulgated under the 1933 Act, (ii)
represents and warrants to the Company all the representations and warranties as
listed in Section 3 of the Common Stock Purchase Agreement, and (iii) the
Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee and (b) the securities with respect to which such registration rights
are being transferred or assigned.
10. AMENDMENT OF REGISTRATION RIGHTS. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Investor. Any amendment or waiver
effected in accordance with this Section 10 shall be binding upon the Investor
and the Company.
11. MISCELLANEOUS.
(a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.
(b) Notices required or permitted to be given hereunder shall be given
in the manner contemplated by the Purchase Agreement, (i) if to the Company or
to the Investor, to their respective address contemplated by the Purchase
Agreement, and (ii) if to any other Investor, at such address as such Investor
shall have provided in writing to the Company, or at such other address as each
such party furnishes by notice given in accordance with this Section 11(b).
(c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.
(d) The corporate laws of the State of Nevada shall govern all issues
concerning the relative rights of the Company and the Investor as its
stockholder. All other questions concerning this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York without regard to the principles of conflicts of law thereof. . The
parties hereto hereby submit to the exclusive jurisdiction of the United States
federal and state courts located in New York County, State of New York with
respect to any dispute arising under this Agreement or the transactions
contemplated hereby.
(e) The Company and the Investor hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the parties hereto
against the other in respect of any matter arising out of or in connection with
this Agreement or any of the other Transaction Agreements.
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(f) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.
(g) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.
(h) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.
(i) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning thereof.
(j) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.
(k) The Company acknowledges that any failure by the Company to perform
its obligations under Section 2(a) hereof, or any delay in such performance
could result in loss to the Investors, and the Company agrees that, in addition
to any other liability the Company may have by reason of such failure or delay,
the Company shall be liable for all direct damages caused by any such failure or
delay, unless the same is the result of force majeure. Neither party shall be
liable for consequential damages.
(l) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof. This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
by their respective officers thereunto duly authorized as of the day and year
first above written.
COMPANY:
SEMOTUS SOLUTIONS, INC.
By: /s/ Xxxxxxx X. XxXxxx
-------------------------------------
Name: Xxxxxxx X. XxXxxx
Title: CEO
INVESTORS:
Southridge Partners LP
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
Southshore Capital Fund Ltd
By: /s/ Xxxxx Xxxx
-------------------------------------
Name: Xxxxx Xxxx
Title: Director
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