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EXHIBIT 4.11
WARRANT
SOLUTIONS AMERICA, INC.
THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933,
AS AMENDED, NOR REGISTERED OR QUALIFIED UNDER THE SECURITIES LAW OF ANY STATE;
THIS WARRANT MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN CONTRAVENTION
OF APPLICABLE FEDERAL OR STATE LAWS.
42,785 SHARES OF COMMON STOCK (.50% OF THE ISSUED AND OUTSTANDING SHARES OF
COMMON STOCK) MAY 24, 2000
THIS CERTIFIES THAT, for value received, Xxxxxxx X. Xxxxxxx ("Warrant Holder"),
or registered assigns, has the right to purchase from Solutions America, Inc.
("Company"), prior to December 31, 2004, up to the number of shares of the
Common Stock of the Company set forth above ("Shares") at a price per share
("Warrant Price") equal to 75% of the average bid price as reported in the Wall
Street Journal over the thirty day period prior to the exercise of the Warrant.
The rights represented by this Warrant may be exercised at any time by
delivering to the President of the Company at the Company's principal executive
office: (1) an Election to Purchase in the form appended hereto as Exhibit "A";
(2) this Warrant; and (3) payment for the Shares. Warrant Holder may exercise
the Warrant in part or in whole from time to time. Notwithstanding the
foregoing, the Company shall not be required to issue any Shares unless the
Company has received satisfactory evidence that the representations of the
Warrant Holder set forth in the Election to Purchase are true and correct at the
time of such exercise, and has determined that the issuance of Shares does not
violate an), applicable securities or other law or regulation.
This Warrant shall not entitle the Warrant Holder to any voting rights,
registration rights, pre-emptive rights or rights as a stockholder of the
Company. Any amendment to this Warrant shall be in writing executed by the
Company and the Warrant Xxxxxx. In the event of any stock split, stock dividend,
recapitalization or other reorganization by the Company, or issuance of any
shares of Company stock to other persons, this Warrant shall apply with respect
to the same number of shares of Common Stock of the Company into which the
number of Shares covered by this Warrant would be converted or otherwise
entitled if such shares were outstanding prior to such event, so that Warrant
Holder shall be entitled to purchase the same percentage of the Common Stock of
the Company, and the exercise price per Share outstanding after such event shall
be such that the aggregate purchase price for all of the shares then covered by
this Warrant shall be the same as prior to such event.
If the Company merges with another company and the Company is not the surviving
entity, then the Company agrees to cause (as a precondition of the completion of
the merger) the surviving entity (the "Survivor") to issue Warrant Holder a new
warrant for the number of shares of common stock of the Survivor equivalent to
the number of shares of the Survivor for which the Shares would have been
exchanged at the closing of the merger, provided, however, that, if the
anticipated merger with Avenue Entertainment Group is consummated, such Warrant
shall be issued at the level of the publicly traded company.
In the event the Company undertakes a registration of any shares in the Company,
the Company shall include in such registration the Shares, subject to customary
cutbacks and other customary underwriters' requirements.
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This Warrant shall be governed by and construed in accordance with the laws of
the State of California. Any controversy or claim arising under, out of or in
connection with this Warrant, including without limitation claims arising under
Federal and State securities laws and applicable common law, shall be settled by
arbitration conducted in Los Angeles, California, in accordance with the
commercial rules of the American Arbitration Association then in effect.
IN WITNESS WHEREOF, Solutions America, Inc. has caused this Warrant to be signed
by its duly authorized officer as of the date above.
Solutions America, Inc.
By: /s/ XXXX XXXXXXXX
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PRESIDENT
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EXHIBIT "A" to WARRANT
ELECTION TO PURCHASE
SOLUTIONS AMERICA, INC.
The undersigned ("Warrant Holder") hereby elects to purchase ________________
shares ("Shares") of Common Stock of Solutions America, Inc., a California
corporation (the "Company") pursuant to the Warrant Holder's right to purchase
set forth in that certain Warrant dated May 24, 2000.
Warrant Holder makes the following representations and covenants:
1. Warrant Xxxxxx has had an opportunity to make inquiries to the Company about
investment in the Shares, and Warrant Holder has no unanswered questions.
2. Warrant Xxxxxx is aware of the Company's business, prospects and financial
condition, and has acquired sufficient information about the Company to
reach an informed decision to acquire the Shares.
3. Warrant Xxxxxx is able to evaluate the merits and risks of the investment.
4. Warrant Holder recognizes that investment in the Shares involves special and
substantial risks of loss, and may result in the loss of all of Warrant
Xxxxxx's investment.
5. WARRANT HOLDER IS AN ACCREDITED INVESTOR AS THAT TERM IS USED IN RULE 501 OF
THE SECURITIES AND EXCHANGE COMMISSION BY REASON OF THE FACT THAT, AS SET
FORTH IN RULE 501: (1) WARRANT HOLDER'S INDIVIDUAL INCOME IN EACH OF THE TWO
MOST RECENT YEARS, AND WARRANT HOLDER'S REASONABLY EXPECTED INCOME FOR THE
CURRENT YEAR, EXCEEDS $200,000; OR (2) WARRANT HOLDER'S JOINT INCOME WITH
THAT OF WARRANT HOLDER'S SPOUSE IN EACH OF THE TWO MOST RECENT YEARS, AND
WARRANT XXXXXX'S REASONABLY EXPECTED JOINT INCOME WITH THAT OF WARRANT
HOLDER'S SPOUSE FOR THE CURRENT YEAR, EXCEEDS $300,000; OR (3) WARRANT
HOLDER'S INDIVIDUAL NET WORTH OR JOINT NET WORTH WITH THAT OF WARRANT
HOLDER'S SPOUSE CURRENTLY EXCEEDS $1,000,000; OR (4) WARRANT HOLDER
OTHERWISE MEETS THE DEFINITION OF ACCREDITED INVESTOR AS SET FORTH IN RULE
501.
6. Warrant Holder has the basic means to provide for Warrant Holder's current
needs and personal contingencies, separate from the amount invested in the
Shares; and has the ability to bear the economic risks of this investment,
including the complete loss of the investment.
7. Warrant Holder has no need for liquidity in this investment.
ELECTION TO PURCHASE
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SOLUTIONS AMERICA, INC.
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8. Warrant Holder is acquiring the Shares for investment for Warrant Xxxxxx's
own account and not with a view to, or for resale in connection with, any
distribution, and not otherwise with any present intention of selling,
transferring or otherwise distributing the Shares.
9. Warrant Holder understands that the Shares have not been registered under
the Securities Act of 1933 ("1933 Act") by reason of their issuance in a
transaction exempt from the registration and prospectus delivery
requirements of the 1933 Act pursuant to Section 4(2) of the 1933 Act.
Warrant Holder understands that Rule 144 promulgated under the 1933 Act is
not presently available and may not in the future be available with respect
to the Shares.
(a) Warrant Holder understands that the Shares have not been qualified
or registered under any state securities law ("State Securities Law") by
reason of applicable exemptions thereunder.
(b) Warrant Holder understands that the applicability of the exemptions
under the 1933 Act and State Securities Laws depends upon, among other
things, the bona fide nature of Warrant Holder's intent to acquire the
Shares' for investment and not with a view to their resale or
distribution.
(c) Warrant Holder understands that Warrant Holder must hold the Shares
indefinitely, that Warrant Holder may not dispose of the Shares unless
registered under the 1933 Act and registered or qualified under
applicable State Securities Laws, or there are exemptions from
registration and qualification.
(d) Warrant Holder further understands that Warrant Holder cannot be
assured that any exemption from the registration or qualification
requirements will be available if Warrant Holder should desire to sell
or transfer the Shares, and therefore that Warrant Holder may not be
able to sell or otherwise transfer the Shares under the circumstances,
in the amount, or at the time that Warrant Holder may desire.
10. Warrant Holder understands that certificates evidencing the Shares will be
imprinted with such legend or legends as in the opinion of legal counsel for
the Company are required by state and federal law, including a legend which
prohibits the transfer of the Shares unless the Shares are registered or
such registration is not required, substantially as follows:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS (1) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, OR (2)
THE TRANSFER IS MADE IN COMPLIANCE WITH SECURITIES AND EXCHANGE
COMMISSION RULE 144, OR (3) THE COMPANY RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
ELECTION TO PURCHASE
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SOLUTIONS AMERICA, INC.
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11. Warrant Xxxxxx acknowledges and agrees that the Company has not granted to
Warrant Holder any registration rights in respect to the Shares (except as
expressly provided in the Warrant), nor any pre-emptive or other rights to
subscribe to additional shares of any class of the Company's stock.
12. Warrant Holder acknowledges that Warrant Holder has been advised to consult
with Warrant Holder's own legal counsel regarding the execution and delivery
of this Election to Purchase, that Warrant Holder has received no advice or
explanation concerning the meaning or effect of this Election to Purchase
from the Company, its agents or its legal counsel, and that Warrant Holder
has consulted with Warrant Xxxxxx's own legal counsel to the extent that
Warrant Holder has deemed necessary.
13. This Election to Purchase shall be governed by and construed in accordance
with the laws of the State of California. Any controversy or claim arising
under, out of or in connection with this Election to Purchase, including
without limitation claims arising under the Federal and State securities
laws and applicable common law, shall be settled by arbitration conducted in
San Francisco, California, in accordance with the commercial rules of the
American Arbitration Association then in effect.
Dated:
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Signature of Warrant Holder
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Tax Identification Number Printed Name
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Street City State ZIP
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(Print exact name in which the Shares should be issued.)
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