Asset Purchase Agreement

 

 

1.

Purchase and Sale of Assets

 

1.1

Description of Assets

 

 

2.

Purchase Price and Allocation

 

3.

Payment of the Purchase Price

 

3.1

Purchase Price

 

 

3.2

Vendor Goods and Services

 

4.

Assumption of Liabilities

 

5.

Representations and Warranties of the Vendor

 

5.1

Capacity to Sell

 

 

5.2

Authority to Sell

 

 

5.3

Sale Will Not Cause Default

 

 

5.4

Assets

 

 

5.5

Intangible Property

 

 

5.6

Material Change

 

 

5.7

Litigation

 

 

5.8

Conformity with Laws

 

 

5.9

Terms of Employment

 

 

5.10

Material Contracts

 

 

5.11

No Defaults

 

 

5.12

Deferred Revenue

 

 

5.13

Accuracy of Representations

 

 

6.

Covenants of the Vendor

 

 

6.1

Conduct of Business

 

 

6.2

Access by Purchaser

 

 

6.3

Taxes

 

 

6.4

Termination of Employees

 

6.5

Exclusivity

 

 

7.

Representations and Warranties of the Purchaser

 

7.1

Status of Purchaser

 

 

7.2

Authority to Purchase

 

 

8.

Covenants of the Purchaser

 

8.1

Offer Employment

 

 

8.2

Consents

 

 

9.

Survival of Representations, Warranties and Covenants; Indemnification

 

9.1

Survival of Representations, Warranties and Covenants

 

 

9.2

Indemnification

 

 

 

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10.

Conditions Precedent to the Obligations of the Purchaser

 

10.1

Vendor’s Representations and Warranties

 

 

10.2

Vendor’s Covenants

 

 

10.3

Vendor’s Certificate

 

 

11.

Conditions Precedent to the Obligations of the Vendor

 

11.1

Purchaser’s Representations and Warranties

 

 

11.2

Purchaser’s Covenants

 

 

12.

Closing

 

 

12.1

Closing Date

 

 

12.2

Place of Closing

 

 

12.3

Documents to be Delivered by the Vendor

 

 

12.4

Documents to be Delivered by the Purchaser

 

13.

Risk of Loss

 

14.

Further Assurances

 

15.

Set-Off

 

16.

Notice

 

17.

Entire Agreement

 

18.

Time of the Essence

 

19.

Applicable Law

 

20.

Mediation and Arbitration

 

21.

Successors and Assigns

 

22.

Headings

 

 

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THIS AGREEMENT is made May 8, 2007.

 

BETWEEN:

 

Semotus Solutions Inc. with offices located at Suite 202, 718 University Ave.,
Los Gatos, California 95032

 

(the “Vendor”)

 

AND:

 

Stockgroup Systems Ltd., with offices located at Suite 500 – 750 West Pender
Street, Vancouver, B.C. V6C 2T7

 

(the “Purchaser”)

 

BACKGROUND

 

A.

The Vendor carries on the business of providing software for wireless enterprise
applications, more specifically the Vendor’s software connects customers
wirelessly to critical business systems, information and processes (the
“Vendor’s Business”).

 

B.

The Vendor has agreed to sell, and the Purchaser has agreed to purchase, subject
to certain exceptions listed in this Agreement, certain assets and undertakings
of the Vendor’s Business related to its financial data wireless services and
software (the “Vendor’s Financial Data Business”) on the terms and subject to
the conditions provided in this Agreement.

 

TERMS OF AGREEMENT

 

In consideration of the premises and the covenants, agreements, representations,
warranties and payments contained in this Agreement, the parties agree with the
others as follows:

 

1.

Purchase and Sale of Assets

 

1.1

Description of Assets

 

Upon the terms and subject to the conditions of this Agreement, the Vendor
agrees to sell, assign and transfer to the Purchaser, and the Purchaser agrees
to purchase from the Vendor at Closing, the undertaking and certain assets of
the Vendor’s Financial Data Business, including, without limiting the foregoing:

 

 

(a)

all contracts, engagements or commitments to which the Vendor is entitled in
connection with the Vendor’s Financial Data Business, and in particular all
right, title and interest of the Vendor in, to and under the material agreements
and contracts (the “Material Contracts”) described in the Schedule of Material
Contracts;

 

 

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(b)

all right and interest of the Vendor to all registered and unregistered
trademarks, trade or brand names, copyrights, designs, restrictive covenants,
domain names, proprietary software (including source code) and other industrial
or intellectual property used in connection with the Vendor’s Financial Data
Business (the “Intangible Property”), including, without limitation, the
intangible property described in the Schedule of Intangible Property; and

 

 

(c)

the accounts receivable and all other debts owed to the Vendor in connection
with the Vendor’s Financial Data Business. The accounts receivable of the
Business as of Closing (“Closing Accounts Receivable”) shall remain the property
of the Vendor. Closing Accounts Receivable shall be accounted for on a basis
consistent with past practices of the Vendor’s Financial Data Business in
recognizing sales and billings. Vendor shall have the right to allow the
Vendor’s Financial Data Business to continue to receive and collect Closing
Accounts Receivable in the ordinary course of business. Purchaser shall use
commercially reasonable efforts to collect the Closing Accounts Receivable and
promptly (end of each month) remit such collections to the Vendor. Following a
period of 120 days from the Closing, the Purchaser shall remit back to the
Vendor any uncollected Closing Accounts Receivable balance and records and the
Vendor shall have the right to pursue commercially reasonable collection efforts
against such customers for the outstanding Closing Accounts Receivable amounts
still owed.

 

all of which are collectively called the “Assets”.

 

2.

Purchase Price and Allocation

 

The purchase price payable by the Purchaser to the Vendor for the Assets will be
up to Three-Hundred Fifty Thousand Dollars (USD$ 350,000).

 

3.

Payment of the Purchase Price

 

3.1

Purchase Price

 

The purchase price shall be paid and satisfied as follows:

 

(a)

The Purchase Price shall be up to a total of USD$350,000 (Three Hundred and
Fifty Thousand Dollars) for the Assets, payable as follows:

 

 

(i)

USD$150,000 (One Hundred Fifty Thousand) payable by certified cheque, wire
transfer or bankers draft payable to or to the order of the Vendor and delivered
at the Closing; and

 

(ii)

30% of Gross Revenue payable monthly to the Vendor, up to a total of $200,000
(Two Hundred Thousand Dollars) as defined in 3(c) below. If Gross Revenue falls
below twenty-five (25%) within six (6) months of Closing, fifteen percent (15%)
per month of Gross Revenue will be payable to the Vendor, up to a total of
$200,000.

 

(b)

The Purchase Price shall be deemed paid in full if any of the following events
occur:

 

 

(i)

Gross Revenue falls below USD$15,000 (Fifteen Thousand Dollars) a month; or

 

(ii)

USD$200,000 (Two Hundred Thousand Dollars) in fees have been paid; or

 

(iii)

Two years from the Closing Date.

 

 

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(c)

Gross Revenue shall mean total revenues (as determined in accordance with the
generally accepted accounting principles) that are earned by, or generated from
the Vendor’s Financial Data Business, and including the amount paid on behalf of
subscribers for per device and/or per quote stock exchange fees up to a maximum
total of USD$2500 a month.

 

(d)

Purchaser shall pay to the Vendor all monthly data feed costs per month for the
Transition Services Period in accordance with the Transition Services Agreement,
attached hereto and incorporated herein.

 

(e)

Vendor shall pay to Purchaser all fees collected by the Vendor as it relates to
a Vendor’s customer that refuses assignment of a Material Contract to the
Purchaser. Vendor shall maintain the right to invoice the customer under the
existing agreement and remit all monies collected under the agreement to the
Purchaser.

 

3.2

Vendor Goods and Services

 

As part of the Purchase Price, the Vendor shall provide the following:

 

 

(i)

moving and functioning set-up of the production environment to the Purchaser’s
facility located at 11460 Cronridge Drive, Owings Mills, MD, U.S.A.; and

 

 

(ii)

two key employees, as listed in the Schedule 3.2(ii) attached hereto and
incorporated herein, (the “Key Employees”) will be hired directly by Purchaser.

 

4.

Assumption of Liabilities

 

4.1

Assumed Indebtedness

 

Purchaser shall be responsible for liabilities under any of the Material
Contracts after the Closing (described in Section 12 below). All other
obligations and liabilities of Vendor shall be expressly excluded. Vendor shall
be responsible for all liabilities and administrative obligations related to the
Vendor’s Financial Data Business for the period up to and including the Closing
(collectively, the “Assumed Indebtedness”) and the Vendor shall indemnify and
save the Purchaser harmless from all claims, demands, suits and actions in
respect of the Assumed Indebtedness.

 

4.2

Other Obligations

 

On and after closing the Purchaser shall assume, perform and discharge all
obligations arising under the Material Contracts (except as provided in
section 4.3) and all other contracts, commitments or engagements which are
entered into by the Vendor between the date of this Agreement and closing in the
ordinary course of the Vendor’s Financial Data Business and which are not
prohibited by this Agreement or are consented to in writing by the Purchaser,
and the Purchaser shall indemnify and save the Vendor harmless from all claims,
demands, suits and actions under the Material Contracts in respect of events
after closing.

 

 

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4.3

Release of Vendor

 

At or before the Closing the Purchaser shall execute and deliver all such
covenants and assurances with respect to the Assumed Indebtedness and with
respect to the obligations assumed under section 4.2 as may reasonably be
required as a condition to the release of the Vendor from any liability in
respect of the Assumed Indebtedness.

 

5.

Representations and Warranties of the Vendor

 

The Vendor represents and warrants to the Purchaser as follows, with the intent
that the Purchaser will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated by
this Agreement.

 

5.1

Capacity to Sell

 

The Vendor is a corporation duly incorporated, validly existing and in good
standing under the laws of Nevada with respect to the filing of annual reports,
and has the power and capacity to own and dispose of the Assets and to carry on
the Vendor’s Business as now being conducted by it, and to enter into this
Agreement and carry out its terms to the full extent.

 

5.2

Authority to Sell

 

The execution and delivery of this Agreement and the completion of the
transaction contemplated by this Agreement have been duly and validly authorized
by all necessary corporate action on the part of the Vendor, and this Agreement
constitutes a legal, valid and binding obligation of the Vendor enforceable
against the Vendor in accordance with its terms except as may be limited by laws
of general application affecting the rights of creditors.

 

5.3

Sale Will Not Cause Default

 

Neither the execution and delivery of this Agreement nor the completion of the
purchase and sale contemplated by this Agreement will:

 

 

(a)

violate any of the terms and provisions of the memorandum or articles of the
Vendor, or any order, decree, statute, by-law, regulation, covenant or
restriction applicable to the Vendor or any of the Assets;

 

 

(b)

give any person the right to terminate, cancel or remove any of the Assets,
except to the extent that the consents of the other parties to the Material
Contracts are required to assign the Material Contracts; or

 

 

(c)

result in any fees, duties, taxes, assessments or other amounts relating to any
of the Assets becoming due or payable by the Purchaser in connection with the
purchase and sale.

 

5.4

Assets

 

The Vendor owns and possesses and has a good marketable title to the Assets free
and clear of all mortgages, liens, charges, pledges, security interest,
encumbrances and other claims except as described in the Schedule of Material
Contracts.

 

 

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5.5

Intangible Property

 

The Schedule of Intangible Assets is a true and correct listing of all
Intangible Property and the Vendor owns and possesses the Intangible Assets free
and clear of any and all encumbrances.

 

5.6

Material Change

 

Since the date of the Letter of Intent there has not been and change to the
Assets as described in Section 1.1 of this Agreement.

 

5.7

Litigation

 

There is no litigation or administrative or governmental proceeding or inquiry
pending, or to the knowledge of the Vendor, threatened against or relating to
the Vendor, the Vendor’s Business or any of the Assets, nor does the Vendor know
of any reasonable basis for any such action, proceeding or inquiry.

 

5.8

Conformity With Laws

 

All governmental licences and permits required for the conduct in the ordinary
course of the operations of the Vendor’s Business and the uses to which the
Assets have been put, have been obtained and are in good standing and such
conduct and uses are not in breach of any order, decree, statute, by-law,
regulation, covenant, restriction, plan or permit, including those regulating
the discharge of materials into the environment and the storage, treatment and
disposal of waste or otherwise relating to the protection of the environment and
the health and safety of persons. For greater certainty, the Assets have not
been used in a manner which does or will give rise to any obligation of
restoration or removal or any liability for the costs of restoration or removal
or for the payment of damages to any third party.

 

5.9

Terms of Employment

 

The Vendor is not a party to any collective agreement relating to the Vendor’s
Business with any labour union or other association of employees, and no part of
the Vendor’s Business has been certified as a unit appropriate for collective
bargaining. The Vendor’s Business has employees and group employee termination
legislation would not apply to a termination of all employees at one time.
Additionally, the Key Employees may be dismissed on one year’s notice or less,
without further liability.

 

5.10

Material Contracts

 

The Schedule of Material Contracts contains a true and correct listing of each
written or oral contract of the following types to be acquired or assumed by the
Purchaser:

 

 

(a)

contracts or commitments out of the ordinary course of business;

 

 

(b)

contracts or commitments involving an obligation to pay in the aggregate $100 or
more or of a duration greater than one year;

 

 

(c)

contracts or commitments in respect of the Intangible Property;

 

 

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(d)

except as required by statute or regulation, contracts or commitments in respect
of bonuses, incentive compensation, pensions, group insurance or employee
welfare plans, all of which are fully funded as determined by an independent and
reputable firm of actuaries employed by the Vendor;

 

 

(e)

employment contracts or commitments other than unwritten employment contracts of
indefinite duration entered into in the ordinary course of the Vendor’s
Business; and

 

 

(f)

contracts or commitment in respect to vendors of the Vendor.

 

5.11

No Defaults

 

Except as otherwise expressly disclosed in this Agreement or in any Schedule to
this Agreement there has not been any default in any obligation to be performed
under any Material Contract, each of which is in good standing and in full force
and effect, unamended, except as set forth in the Schedule of Material
Contracts.

 

5.12

Deferred Revenue

 

There are no deferred revenues or any other future obligation related to the
Vendor’s Financial Data Business nor does the Vendor know of any reasonable
basis for any such deferred revenue obligation. The Vendor shall indemnify and
save harmless the Purchaser from and against all deferred revenue obligations
related to the Vendor or the Vendor’s Financial Data Business.

 

5.13

Accuracy of Representations

 

No certificate or statement furnished by or on behalf of the Vendor to the
Purchaser at Closing in respect of the representations, warranties or covenants
of the Vendor will contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements misleading.

 

6.

Covenants of the Vendor

 

6.1

Conduct of Business

 

Until Closing, the Vendor shall conduct the Vendor’s Financial Data Business
diligently and only in the ordinary course and will use its best efforts to
preserve the Assets intact, to keep available to the Purchaser its present
employees and to preserve for the Purchaser its relationship with its suppliers,
customers and others having business relations with it.

 

6.2

Access by Purchaser

 

The Vendor shall give to the Purchaser and Purchaser’s counsel, accountants and
other representatives full access, during normal business hours throughout the
period prior to Closing, to all of the properties, books, contracts, commitments
and records of the Vendor relating to the Vendor’s Financial Data Business and
the Assets, and shall furnish to the Purchaser during that period all such
information as the Purchaser may reasonably request.

 

 

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6.3

Taxes

 

The Vendor has withheld and paid all Taxes required to have been withheld and
paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party pertaining to the Assets
or otherwise pertaining to the Vendor’s Financial Data Business.

 

6.4

Procure Consents

 

The Vendor shall diligently take all reasonable steps required to obtain all
consents to the assignments of the Material Contracts and any other of the
Assets for which a consent is required.

 

6.5

Exclusivity

 

The Sellers will not:

 

 

(a)

solicit, initiate, or encourage the submission of any proposal or offer from any
entity or person relating to the acquisition of the Assets or any substantial
portion of the Assets.

 

 

(b)

The Vendor will notify Stockgroup immediately if any entity or person makes any
proposal, offer, inquiry, or contact with respect to any of the foregoing.

 

7.

Representations and Warranties of the Purchaser

 

The Purchaser represents and warrants to the Vendor as follows, with the intent
that the Vendor will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated by
this Agreement.

 

7.1

Status of Purchaser

 

The Purchaser is a corporation duly incorporated, validly existing and in good
standing under the laws of the state of Nevada with respect to the filing of
annual returns, has the power and capacity to enter into this Agreement and
carry out its terms.

 

7.2

Authority to Purchase

 

The execution and delivery of this Agreement and the completion of the
transaction contemplated by this Agreement have been duly and validly authorized
by all necessary corporate action on the part of the Purchaser, and this
Agreement constitutes a legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms except as limited
by laws of general application affecting the rights of creditors.

 

8.

Covenants of the Purchaser

 

8.1

Offer Employment

 

The Purchaser does covenant with the Vendor to offer employment at Closing to
the Key Employees.

 

 

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8.2

Consents

 

The Purchaser shall at the request of the Vendor execute and deliver such
applications for consent and such assumption agreements, and provide such
information as may be necessary to obtain the consents referred to in
section 6.4 and will assist and co-operate with the Vendor in obtaining the
consents.

 

9.

Survival of Representations, Warranties and Covenants; Indemnification

 

9.1

Survival of Representations, Warranties and Covenants

 

All statements contained in any certificate or other instrument delivered under
this Agreement or in connection with the transaction contemplated by this
Agreement shall be deemed to be representations and warranties. Except as
provided in this sentence, all representations, warranties, convenants and
agreements (other than the provisions of Sections 6.3 and this Section 9.1)
shall terminate upon expiration of two (2) years after the Closing Date
(“Expiration Date”). The representations and warranties in Section 6.3 shall
survive until the expiration of the applicable statute of limitations (with
extensions) with respect to the matters addressed in such sections.

 

9.2

Indemnification.

 

Each Party shall indemnify and save and hold harmless the other and each of
their affiliates and subsidiaries, and their respective representatives, from
and against any and all Indemnified Liabilities; provided however, that the
Indemnified Party makes a written claim for indemnification against the
Indemnifying Party within the applicable survival period.

 

“Indemnified Liabilities” means

 

 

(a)

any and all liabilities or obligations, whether accrued, absolute, contingent or
otherwise, existing on or prior to the Closing Date and which, as it relates to
Vendor’s Indemnified Liabilities, are not agreed to be assumed by the Purchaser
under this Agreement;

 

 

(b)

any and all damages resulting from any misrepresentation, breach of warranty or
non-fulfillment of any covenant under this Agreement or from any
misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished under this Agreement; and

 

 

(c)

any and all claims, actions, suits, demands, costs and legal and other expenses
incident to any of the foregoing.

 

Defense of Claims. If a claim for Damages (a “Claim”) is made by a party
entitled to Indemnification or Set Off Rights hereunder against the Indemnifying
Party, the party claiming such indemnification or Set Off Rights shall give
written notice (a “Claim Notice”) to the other Party (the (“Indemnifying Party”)
as soon as practicable after the party entitled to indemnification or Set Off
Rights (the “Indemnified Party”) becomes aware of any fact, condition or event
which may give rise to Damages for which indemnification or Set Off Rights may
be sought. If any lawsuit or enforcement action is filed against any party
entitled to the benefit of indemnity or Set Off Rights hereunder, the Claim
Notice thereof shall be given to the Indemnifying Party as promptly as
practicable (and in any event within thirty (30) calendar days after the service
of the citation or summons). After such notice, if the Indemnifying Party shall
acknowledge in writing to the Indemnified Party that the Indemnifying Party
shall be obligated under the terms of its indemnity or Set Off Rights hereunder
in connection with such lawsuit or action,

 

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then the Indemnifying Party shall be entitled, if it so elects, (1) to take
control of the defense and investigation of such lawsuit or action, (2) to
employ and engage attorneys of its own choice to handle and defend the same, at
the Indemnifying Party’s cost, risk and expense unless the named parties to such
action or proceeding include both the Indemnifying Party and the Indemnified
Party and the Indemnified Party has been advised in writing by counsel that
there may be one or more legal defenses available to such Indemnified Party that
are different from or additional to those available to the Indemnifying Party,
and (3) to compromise or settle such Claim, which compromise or settlement shall
be made only with the written consent of the Indemnified Party, such consent not
to be unreasonably withheld. If the Indemnifying Party fails to assume the
defense of such Claim within fifteen (15) calendar days after receipt of the
Claim Notice, the Indemnified Party against which such Claim has been asserted
will (upon delivering notice to such effect to the Indemnifying Party) have the
right to undertake, at the Indemnifying Party’s cost and expense, the defense,
compromise or settlement of such Claim on behalf of and for the account and risk
of the Indemnifying Party. In the event the Indemnified Party assumes the
defense of the claim, the Indemnified Party will keep the Indemnifying Party
reasonably informed of the progress of any such defense, compromise or
settlement. The Indemnifying Party shall be liable for any settlement of any
action effected pursuant to and in accordance with this Section and for any
final judgment (subject to any right of appeal), and the Indemnifying Party
agrees to indemnify and hold harmless an Indemnified Party from and against any
Damages by reason of such settlement or judgment.

 

Cooperation. The Indemnified Party shall cooperate in all reasonable respects
with the Indemnifying Party and the attorneys defending the Indemnification
Claims, or Claims covered by Set Off Rights, in the investigation, trial and
defense of such lawsuit or action and any appeal arising therefrom; provided,
however, that the Indemnified Party may, at its own cost, participate in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. The parties shall cooperate with each other in any
notifications to insurers.

 

10.

Conditions Precedent to the Obligations of the Purchaser

 

All obligations of the Purchaser under this Agreement are subject to the
fulfillment at or before Closing of the following conditions:

 

10.1

Vendor’s Representations and Warranties

 

The Vendor’s representations and warranties contained in this Agreement and in
any certificate or document delivered under this Agreement or in connection with
the transactions contemplated by this Agreement will be true at and as of
Closing as if such representations and warranties were made at and as of such
time.

 

10.2

Vendor’s Covenants

 

The Vendor will have performed and complied with all agreements, covenants and
conditions required by this Agreement to be performed or complied with by it
before or at Closing.

 

10.3

Vendor’s Certificate

 

The Vendor will have delivered to the Purchaser a certificate of the President
and Secretary of the Vendor, dated the Closing Date, certifying in such detail
as the Purchaser may specify to the fulfillment of the conditions set forth in
sections 10.1 and 10.2.

 

 

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The foregoing conditions are for the exclusive benefit of the Purchaser and any
such condition may be waived in whole or in part by the Purchaser at or before
Closing by delivering to the Vendor a written waiver to that effect signed by
the Purchaser.

 

11.

Conditions Precedent to the Obligations of the Vendor

 

All objections of the Vendor under this Agreement are subject to the
fulfillment, before or at Closing, of the following conditions:

 

11.1

Purchaser’s Representations and Warranties

 

The Purchaser’s representations and warranties contained in this Agreement will
be true at and as of Closing as though such representations and warranties were
made as of such time.

 

11.2

Purchaser’s Covenants

 

The Purchaser will have performed and complied with all covenants, agreements
and conditions required by this Agreement to be performed or complied with by it
at or before Closing.

 

Each of the foregoing conditions is for the exclusive benefit of the Vendor and
any such condition may be waived in whole or part by the Vendor at or before
closing by delivering to the Purchaser a written waiver to that effect signed by
the Vendor.

 

12.

Closing

 

12.1

Closing Date

 

Subject to the terms and conditions of this Agreement, the purchase and sale of
the Assets will be completed at a closing to be held at 11:00 a.m., local time
in New York, New York, on May 8, 2007 or at such other time and date agreed upon
in writing between the parties (the “Closing Date”).

 

12.2

Place of Closing

 

The Closing will take place at the offices of the Purchaser, Suite 1500 – 2 Penn
Plaza, New York, New York.

 

12.3

Documents to be Delivered by the Vendor

 

At the Closing the Vendor will deliver or cause to be delivered to the
Purchaser:

 

 

(a)

all deeds of conveyance, bills of sale, transfer and assignments, in form and
content satisfactory to the Purchaser’s counsel, appropriate to effectively vest
a good and marketable title to the Assets in the Purchaser to the extent
contemplated by this Agreement, and immediately registrable in all places where
registration of such instruments is required;

 

 

(b)

N/A;

 

 

(c)

possession of the Assets;

 

 

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(d)

the certificate of the President and Secretary of the Vendor to be given under
section 10.3; and

 

 

(e)

certified copies of those resolutions of the shareholders and directors of the
Vendor required to be passed to authorize the execution, delivery and
implementation of this Agreement and of all documents to be delivered by the
Vendor under this Agreement;

 

12.4

Documents to be Delivered by the Purchaser

 

At the Closing the Purchaser will deliver or cause to be delivered:

 

 

(a)

a covenant of the Purchaser in favour of the Vendor agreeing to assume and pay
or perform and indemnify the Vendor against the Assumed Indebtedness and other
obligations agreed to be assumed by the Purchaser under this Agreement in the
manner and to the extent provided in this Agreement;

 

 

(b)

a certified cheque, wire transfer or banker’s draft payable to the Vendor for
that portion of the Purchase Price payable in cash; and

 

 

(c)

a statement of the Assumed Indebtedness.

 

13.

Risk of Loss

 

From the date of this Agreement to Closing, the Assets will be and remain at the
risk of the Vendor. If any of the Assets are lost, damaged or destroyed before
Closing, the Purchaser may, in lieu of terminating this Agreement under Article
10, elect by notice in writing to the Vendor to complete the purchase to the
extent possible without reduction of the purchase price, in which event all
proceeds of any insurance or compensation in respect of such loss, damage or
destruction will be payable to the Purchaser and all right and claim of the
Vendor to any such amounts not paid by Closing will be assigned to the
Purchaser.

 

14.

Further Assurances

 

The parties will execute such further and other documents and do such further
and other things as may be necessary to carry out and give effect to the intent
of this Agreement.

 

15.

Set-Off

 

Subject to the limitations set forth in this Section 15, Purchaser may withhold
and set off against the Purchase Price determined in accordance with Section
3.1(a)(ii), with the Purchase Price determined in accordance with Section
3.1(a)(i) not subject to recourse, any amount as to which the Vendor is
obligated to pay Purchaser pursuant to any provision of this Agreement (the “Set
Off Rights”). The Purchaser shall have Set Off Rights or any other right or
action permitted by law, from and against any and all costs, losses, taxes,
liabilities, damages, lawsuits, deficiencies and expenses (whether or not
arising out of third-party claims), reasonable attorneys’ fees and all amounts
paid in investigation, defense or settlement of any of the foregoing (herein,
“Damages”), incurred in connection with, arising out of, resulting from or
incident to (1) any breach of any representation or warranty or the inaccuracy
of any representation made by the Vendor in this Agreement, or (2) any breach of
any covenant or agreement made by the Vendor in this Agreement; provided,
however, that the Purchaser makes a written claim if the Purchaser chooses to
exercise its Set Off Rights against the Vendor within the applicable survival
period. As used throughout this Section 15, “Damages” means out-of-pocket
amounts actually

 

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suffered or sustained by the Indemnified Party, and shall not include any
amounts in the nature of consequential damages, lost profits, diminution in
value, damage to reputation or goodwill, or the like. In computing Damages, such
amount shall be computed net of any related recoveries to which the Indemnified
Party is entitled.

 

16.

Notice

 

All notices required or permitted to be given under this Agreement will be in
writing and personally delivered to the address of the intended recipient set
forth on the first page of this Agreement or at such other address as may from
time to time be notified by any of the parties in the manner provided in this
Agreement, and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent if sent for next day
delivery to an address by recognized overnight delivery service (e.g., Federal
Express); and upon receipt if sent by certified or registered mail, return
receipt requested.

 

17.

Entire Agreement

 

This Agreement constitutes the entire agreement between the parties and there
are no representations or warranties, express or implied, statutory or otherwise
and no collateral agreements other than as expressly set forth or referred to in
this Agreement.

 

18.

Time of the Essence

 

Time will be the essence of this Agreement.

 

19.

Applicable Law

 

This Agreement will be governed by and interpreted in accordance with the laws
of the state of Nevada (without reference to the choice of law provisions of
Nevada law).

 

20.

Mediation. Except for failure to pay fees due under this Agreement, breach of
confidentiality agreement or infringement of the other party’s intellectual
property rights in which event the affected party shall be entitled to bring an
action in any court of competent jurisdiction to (a) enjoin the acts giving rise
to the default or obtain other equitable relief, and (b) recover damages for the
other party’s breach, in the event of a dispute related to this Agreement, the
parties shall use the following procedure as a condition precedent to either
party pursuing other available remedies:

A party who believes a dispute exists (the "Disputing Party") shall notify the
other party (the "Responding Party") in writing of the dispute.  Such notice
shall state the substance and scope of the dispute, the Disputing Party’s
position, including legal and factual justifications, the remedy sought, and any
other pertinent matters. The Responding Party shall respond in writing to the
Disputing Party’s notice within five (5) business days.  Such writing shall
state the Responding Party’s position and response to each of the items included
in the Disputing Party’s notice. A telephone conference shall be held within
five (5) days between representatives of the parties having decision-making
authority regarding the dispute, to negotiate in good faith a resolution of the
dispute.

 

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If, within ten (10) business days after such telephone conference, the parties
have not succeeded in negotiating a resolution of the dispute, the parties shall
submit the dispute to a mutually agreed upon third party mediator.  The parties
shall share the mediation fees equally. Mediation shall take place at San Jose,
California or any other location mutually agreeable to the parties. In the event
the parties resolve their dispute in mediation, they shall enter into a written
agreement, which shall be binding on all parties thereto. In the event such
dispute has not been resolved within ninety (90) days after the selection of the
mediator pursuant to this Section, then, any dispute or controversy arising out
of or relating to this Agreement shall be settled by final and binding
arbitration. Such arbitration shall be conducted before a single arbitrator and,
except as otherwise set forth herein, shall be conducted in accordance with the
then-existing rules of the Arbitration Association and judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitration award shall be specifically enforceable; judgment upon
any arbitration award may be entered in any court with personal jurisdiction
over the parties and subject matter of the disputes. By entering into this
provision, it is the parties’ intention to expedite, and limit the costs
involved in, resolution of any future dispute, and therefore pre-hearing
discovery shall be limited to production of key documents and, if appropriate,
subpoena of not more than two key witnesses, as determined by the arbitrator,
and shall not extend to depositions of parties. No arbitrator shall be empowered
to award any other damages, including, but not limited to, consequential,
compensatory, or punitive damages.

 

21.

Successors and Assigns

 

This Agreement will enure to the benefit of and be binding upon the parties and
their respective successors and assigns.

 

22.

Headings

 

The headings appearing in this Agreement are inserted for convenience of
reference only and will not affect the interpretation of this Agreement.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

SEMOTUS SOLUTIONS INC.

 

Per:

/s/ Anthony Lepine                              

 

Authorized Signatory

 

STOCKGROUP SYSTEMS LTD.

 

Per:

/s/ Susan Lovell                                    

 

Authorized Signatory

 

 

 

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- 16 -

 

SCHEDULE OF MATERIAL CONTRACTS

 

Customer Contracts:

 

A.

All of the Vendor’s corporate customer contracts which include, among others,
the following:

 

 

1.

This information is confidential and therefore has been omitted.

 

B.

All of the Vendor’s individual subscriber (customers) contracts which include,
among others, the following:

 

 

1.

This information is personal in nature and has therefore been omitted.

 

Vendor Agreements:

 

 

1.

This information is confidential and therefore has been omitted.

 

 

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- 17 -

 

SCHEDULE OF INTANGIBLE PROPERTY

Domain Name Assignment

This Domain Names Assignment is delivered pursuant to the Closing under that
certain Purchase Agreement (the “Agreement”) dated as of May 8, 2007, between
Semotus Solutions Inc., as the “Seller”, and Stockgroup Systems Ltd., as the
“Purchaser”. Capitalized terms used in this Domain Names Assignment have the
same meanings given to them in the Agreement.

The Seller has delivered this instrument signed by the Seller to enable the
Purchaser to file it with any appropriate agency to indicate ownership of the
intellectual property described below and for the other purposes set forth in
this instrument. This instrument supplements and is in addition to all other
rights of the Purchaser under the Agreement and other instruments of transfer
delivered in connection with the Agreement.

The Seller has adopted and registered the Internet Domain Names listed on the
attached Attachment A (the “Domain Names”) with Network Solutions, Inc.,
Register.com or other registrars throughout the world (each a “Registrar”) on
various dates.

For good and valuable consideration, receipt of which the Seller acknowledges,
and by signing and delivering this instrument, the Seller sells, assigns,
transfers, conveys, and delivers to the Purchaser all of the Seller’s right,
title and interest in and to the Domain Names and agrees as follows:

1.

SUCCESSFUL TRANSFER. AT THE CLOSING DATE OR A COMMERCIALLY REASONABLE TIMEFRAME
THEREAFTER, THE SELLER SHALL COMPLETE, OR CAUSE TO BE COMPLETED, THE FORMAL
TRANSFER OF THE DOMAIN NAMES TO THE PURCHASER IN ACCORDANCE WITH THE APPLICABLE
DOMAIN NAMES TRANSFER PROCEDURE OF EACH REGISTRAR (THE "TRANSFER PROCEDURE").  

(a)

The Seller agrees that, for no additional compensation, the Seller will execute
any and all documents that may be necessary or appropriate to perfect the
Purchaser’s rights in and to the Domain Names, including but not limited to all
documents that may be necessary or appropriate to effect the formal transfer of
the Domain Names to the Purchaser in accordance with the Transfer Procedure. In
connection with the Transfer Procedure, the Seller will provide any information
required or requested by the Registrar or the Purchaser, including but not
limited to, the name or names identified by the Purchaser for billing,
administrative and technical contacts.

(b)

At any time, and from time to time after the Closing, the Seller agrees,
promptly upon the Purchaser’s written request, to take any and all steps
reasonably necessary to execute, acknowledge and deliver to the Purchaser any
and all further instruments and assurances necessary to complete a Successful
Transfer. “Successful Transfer” means for this purpose that Purchaser owns and
is accurately recognized as the registrant of the Domain Names in the Network
Solution, Inc.’s WHOIS database; that the Purchaser has all rights, title and
interest in and to the Domain Names; and the Purchaser is able to use or allow
others to use the Domain Names.

 

 

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- 18 -

 

2.

CEASE USE OF NAMES. AS OF THE END OF THE TRANSITION PERIOD, THE SELLER WILL STOP
ALL USE OF THE DOMAIN NAMES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, USE
FOR AN INTERNET SITE OR FOR ELECTRONIC MAIL. THE SELLER SHALL NOT ADOPT ANY NEW
USES OF THE DOMAIN NAMES.

3.

NON-INTERFERENCE. EXCEPT AS PERMITTED UNDER THAT CERTAIN TRADEMARK ASSIGNMENT
AGREEMENT EXECUTED BETWEEN SELLER AND PURCHASER ON MAY 8, 2007, SELLER AGREES
NOT TO CHALLENGE OR OBJECT TO THE PURCHASER'S (A) RIGHT TO REGISTER, USE, OWN OR
TRANSFER THE DOMAIN NAMES ANYWHERE IN THE WORLD, OR (B) RIGHT TO REGISTER, USE,
OWN OR TRANSFER ANY TRADEMARKS, SERVICE MARKS, DOMAIN NAMES OR TRADE NAMES THAT
INCLUDE OR CONSIST OF THE DOMAIN NAMES ANYWHERE IN THE WORLD. THE SELLER ALSO
AGREES NOT TO TAKE ANY ACTION THAT WOULD INTERFERE WITH ANY RIGHTS THE PURCHASER
MAY HAVE OR ACQUIRE IN THE DOMAIN NAMES AND MARKS.

4.

REPRESENTATIONS AND WARRANTIES. SELLER REPRESENTS AND WARRANTS TO PURCHASER AS
FOLLOWS AND ACKNOWLEDGES THAT PURCHASER IS RELYING ON THESE REPRESENTATIONS AND
WARRANTIES IN ENTERING INTO THIS AGREEMENT:

 

(a)

Seller is the sole registrant of the Domain Names and has sufficient authority
and right to enter into this Domain Names Assignment and perform its obligations
hereunder, and in particular, to transfer all title and ownership of the Domain
Names and the Domain Names registration to Purchaser as provided in this
Agreement, free and clear of all encumbrances;

 

(b)

As at the Closing Date, there is not outstanding or pending any proceeding under
the Uniform Dispute Resolution Policy and there have been no third party claims
or demands against Seller in connection with Seller’s registration and/or use of
the Domain Names, including claims for infringement of third party trade-mark or
other intellectual property rights;

 

(c)

There is no contract, option or any other right of any person binding upon
Seller, or which at any time may become binding upon Seller, to sell, transfer,
assign, license or in any other way dispose of or encumber the Domain Names or
the Domain Names registration other than pursuant to the provisions of this
Domain Names Assignment; and

 

(d)

Neither Seller nor any entity controlled by or under common control with Seller
is the registrant or owner of any other Domain Names that is confusingly similar
to the Domain Names.

The undersigned has signed this Domain Names Assignment on May 8, 2007.

 

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SEMOTUS SOLUTIONS, INC.

By:

/s/ Anthony Lapine                                    

Name:

Anthony Lapine                                        

 

Title:

Chief Executive Officer                            

 

 

 

--------------------------------------------------------------------------------

 

 

ATTACHMENT A

Confidential

 

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- 2 -

 

Trademark Assignment

WHEREAS, Semotus Solutions Inc., a Nevada corporation, with offices at 718
University Ave., Suite 202, Los Gatos, CA 95032 (“ASSIGNOR”) owns certain
trademarks and/or service marks, and applications and/or registrations for such
marks, as listed in Attachment A attached hereto and incorporated herein by this
reference (“MARKS”);

WHEREAS, Stockgroup Systems Ltd., a Nevada corporation (“ASSIGNEE”), desires to
acquire all of the right, title and interest of ASSIGNOR in, to and under the
MARKS, together with the goodwill of the business symbolized by the MARKS;

WHEREAS, ASSIGNOR and ASSIGNEE have entered into a certain Asset Purchase
Agreement, dated as of May 8, 2007 (the “PURCHASE AGREEMENT”), assigning, among
other things, all right, title and interest in and to the MARKS from ASSIGNOR to
ASSIGNEE;

WHEREAS, ASSIGNEE is a successor to the business of the ASSIGNOR to which the
MARKS pertain.

NOW, THEREFORE, in consideration of the Asset Purchase Price (as defined in the
Purchase Agreement) and other good and valuable consideration paid by ASSIGNEE
to ASSIGNOR, the receipt and sufficiency of which hereby is acknowledged,
ASSIGNOR does hereby assign to ASSIGNEE its entire right, title and interest in
and to the MARKS, and to the applications and/or registrations for the MARKS,
together with the goodwill of the business symbolized by the MARKS and the
portion of the business of the ASSIGNOR to which the MARKS pertain, including
the right to sue for and collect damages incurred as a result of any past,
present or future infringement, misappropriation or violation of rights related
to the MARKS.

IN WITNESS WHEREOF, ASSIGNOR has caused this Assignment to be duly executed by
an authorized officer on this 8th day of May, 2007.

SEMOTUS SOLUTIONS INC.

 

By:

/s/ Anthony Lapine                                    

Name:

Anthony Lapine                                        

 

Title:

Chief Executive Officer                            

 

 

 

--------------------------------------------------------------------------------

 

 

ATTACHMENT A

Trademarks

Confidential

 

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- 2 -

 

List of Software Included in the Intangible Property

Software includes both object code and source code related to the following
wireless services:

 

Confidential.