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Exhibit 10.4
THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS
THAT, IN THE OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE. THIS
WARRANT IS SUBJECT TO THE AGREEMENT DATED DECEMBER 16, 1997 BY AND AMONG XXXXX
XXXXXX, XXXXXXX XXXXXXX, STRATEGIC ACQUISITION PARTNERS, LLC AND TURKEY VULTURE
FUND XIII, LTD. EXERCISE OF THIS WARRANT MAY BE SUBJECT TO THE PRIOR APPROVAL OF
THE OHIO DEPARTMENT OF INSURANCE.
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CENTRAL RESERVE LIFE CORPORATION
COMMON SHARES PURCHASE WARRANT
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This certifies that, for good and valuable consideration, Central
Reserve Life Corporation, an Ohio corporation (the "Company"), grants to Xxxxx
Xxxxxx (the "Warrantholder"), the right to purchase from the Company five
hundred sixty thousand (560,000) validly issued, fully paid and nonassessable
shares (the "Warrant Shares") of the Company's Common Shares, without par value
(the "Common Shares"), at the purchase price per share of $6.00 (the "Exercise
Price"), at any time prior to 5:00 p.m., New York City time, on the Expiration
Date, all subject to the terms, conditions and adjustments herein set forth.
I. DURATION AND EXERCISE OF WARRANT.
1.1 Duration and Exercise of Warrant. Subject to the terms and
conditions set forth herein, this Warrant may be exercised, in whole or in part,
by the Warrantholder by:
(a) the surrender of this Warrant to the Company, with a duly
executed Exercise Form specifying the number of Warrant Shares to be
purchased, during normal business hours on any Business Day prior to
the Expiration Date; and
(b) the delivery of payment to the Company, for the account of
the Company, by cash, wire transfer, certified or official bank check
or any other means approved by
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the Company, of the Exercise Price for the number of Warrant Shares
specified in the Exercise Form in lawful money of the United States of
America.
(c) In addition to and without limiting the rights of the
Warrantholder under any other terms set forth herein, the Warrantholder
shall have, upon written request by the Warrantholder delivered or
transmitted to the Company together with this Warrant, the right (the
"Conversion Right") to require the Company to convert this Warrant into
Common Shares as follows: upon exercise of the Conversion Right, the
Company shall deliver to the Warrantholder (without payment by the
Warrantholder of any Exercise Price) the number of Common Shares that
is equal to the quotient obtained by dividing (x) the value of this
Warrant at the time the Conversion Right is exercised (determined by
subtracting the aggregate Exercise Price in effect immediately prior to
the exercise of the Conversion Right from the aggregate Current Market
Price (determined as provided in Section 10 below) of the Common Shares
issuable upon exercise of this Warrant immediately prior to the
exercise of the Conversion Right) by (y) the Current Market Price of
one Common Share (determined as provided in Section 10 below)
immediately prior to the exercise of the Conversion Right.
The Conversion Right referred to in this Section 1.1(c) may be
exercised by the Warrantholder by surrender of this Warrant at the
principal office of the Company or at the offices of its Shares
transfer or warrant agent, if any, together with a written statement
specifying that the Warrantholder thereby intends to exercise the
Conversion Right.
The Company agrees that such Warrant Shares shall be deemed to be issued to the
Warrantholder as the record holder of such Warrant Shares as of the close of
business on the date on which this Warrant shall have been surrendered and
payment made for the Warrant Shares as aforesaid. Notwithstanding the foregoing,
no such surrender shall be effective to constitute the Person entitled to
receive such shares as the record holder thereof while the transfer books of the
Company for the Common Shares are closed for any purpose (but not for any period
in excess of five days); but any such surrender of this Warrant for exercise
during any period while such books are so closed shall become effective for
exercise immediately upon the reopening of such books, as if the exercise had
been made on the date this Warrant was surrendered and for the number of shares
of Common Shares and at the Exercise Price in effect at the date of such
surrender.
1.2 WARRANT SHARES CERTIFICATE. A stock certificate or
certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within three Business Days after receipt of the
Exercise Form by the Company and payment of the purchase price or exercise of
the Conversion Right. No fractional shares shall be issued upon the exercise of
this Warrant, provided that the Warrantholder shall receive, in lieu of any
fractional shares, cash in an amount equal to the product of the fraction
multiplied by the Current Market Price per Common Share. If this Warrant shall
been exercised only in part, the Company shall, at the time of delivery of the
stock certificate or certificates, deliver to the Warrantholder a new
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Warrant evidencing the rights to purchase the remaining Warrant Shares, which
new Warrant shall in all other respects be identical with this Warrant.
2. RESTRICTIONS ON TRANSFER; RESTRICTIVE LEGENDS.
2.1 This Warrant, including the registration rights pursuant
to Section 7 hereof, may be offered, sold, transferred, pledged or otherwise
disposed of in whole or in part, to any person, subject to compliance with any
applicable securities laws.
2.2 Except as otherwise permitted by this Section 2, each
stock certificate for Warrant Shares issued upon the exercise of any Warrant and
each stock certificate issued upon the direct or indirect transfer of any such
Warrant Shares shall be stamped or otherwise imprinted with a legend in
substantially the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST HEREIN MAY BE OFFERED,
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS THAT, IN THE
OPINION OF COUNSEL FOR THE HOLDER, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
Notwithstanding the foregoing, the Warrantholder may require
the Company to issue a Warrant or a stock certificate for Warrant
Shares, in each case without a legend, if either (i) such Warrant or
such Warrant Shares, as the case may be, have been registered for
resale under the Securities Act, (ii) the Warrantholder has delivered
to the Company an opinion of legal counsel (from a firm reasonably
satisfactory to the Company) which opinion shall be addressed to the
Company and be reasonably satisfactory in form and substance to the
Company's counsel, to the effect that such registration is not required
with respect to such Warrant or such Warrant Shares, as the case may
be, or (iii) such Warrant or Warrant Shares are sold in compliance with
Rule 144 or Rule 144(k) (or any successor provision then in effect)
under the Securities Act, the Company receives customary
representations to such effect and the Company receives an opinion of
counsel to the Company in customary form that such legend may be
removed.
3. RESERVATION AND RESIGNATION OF SHARES.
The Company covenants and agrees as follows:
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(a) All Warrant Shares that are issued upon the exercise of
this Warrant shall, upon issuance, be validly issued, fully paid and
nonassessable, not subject to any preemptive rights, and free from all
taxes, liens, security interests, charges, and other encumbrances with
respect to the issuance thereof.
(b) During the period within which this Warrant may be
exercised, the Company shall at all times have authorized and reserved,
and keep available free from preemptive rights, a sufficient number of
Common Shares to provide for the exercise of the rights represented by
this Warrant.
4. LOSS OR DESTRUCTION OF WARRANT
Subject to the terms and conditions hereof, upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, or destruction or
mutilation of this Warrant and, in the case of loss, theft or destruction, of
such bond or indemnification as the Company may reasonably require, and, in the
case of such mutilation, upon surrender and cancellation of this Warrant, the
Company will execute and deliver a new Warrant of like tenor.
5. OWNERSHIP OF WARRANT
The Company may deem and treat the person in whose name this Warrant is
registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
6. CERTAIN ADJUSTMENTS.
6.1 The number of Warrant Shares purchasable upon the exercise of this
Warrant and the Exercise Price shall be subject to adjustment as follows:
(a) STOCK DIVIDENDS, SPLITS, COMBINATIONS. If at any time
after the date of the issuance of this Warrant the Company (i) declares
a dividend or other distribution payable in Common Shares or securities
convertible into Common Shares or subdivides its outstanding Common
Shares into a larger number or (ii) combines its outstanding Common
Shares into a smaller number, then (x) the number of Warrant Shares to
be delivered upon exercise of this Warrant will, upon the occurrence of
an event set forth in clause (i) above, be increased and, upon the
occurrence of an event set forth in clause (ii) above, be decreased so
that such Warrantholder will be entitled to receive the number of
Common Shares that such Warrantholder would have owned immediately
following such action had this Warrant been exercised immediately prior
thereto and (y) the Exercise Price in effect immediately prior to such
dividend, other distribution, subdivision or combination, as the case
may be, shall be adjusted proportionately by multiplying such Exercise
Price by a fraction, of which the numerator shall be the number of
Warrant Shares purchasable upon exercise of this Warrant immediately
prior to such adjustment
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and of which the denominator shall be the number of Warrant Shares
purchasable immediately thereafter.
(b) DISTRIBUTION OF STOCK, OTHER SECURITIES, EVIDENCE OF
INDEBTEDNESS. In case the Company shall distribute to the holders of
Common Shares, shares of its capital stock (other than Common Shares or
shares convertible into Common Shares for which adjustment is made
under Section 6.1(a)), stock or other securities of the Company or any
other Person, evidences of indebtedness issued by the Company or any
other Person, assets (excluding cash dividends) or options, Warrants or
rights to subscribe for or purchase the foregoing, then, and in each
such case, immediately following the record date fixed for the
determination of the holders of Common Shares entitled to receive such
distribution, the Exercise Price then in effect shall be adjusted by
multiplying the Exercise Price in effect immediately prior to such
record date by a fraction (i) the numerator of which shall be the
Current Market Price applicable to one Common Share less the aggregate
Fair Market Value (as determined by the Board of Directors or a duly
appointed committee thereof) of the portion of the stock, other
securities, evidences of indebtedness so distributed or of such
options, warrants or rights applicable to one Common Share (but such
numerator shall not be less than one) and (ii) the denominator of which
shall be the Current Market Price of one Common Share on such record
date (i.e. prior to such shares trading "ex-"). Such adjustment shall
become effective at the opening of business on the Business Day
following the record date for the determination of stockholders
entitled to such distribution.
(c) REORGANIZATION, MERGER, SALE OF ASSETS. In case of any
capital reorganization or reclassification or other change of
outstanding Common Shares (other than a change in par value), any
consolidation or merger of the Company with or into another Person
(other than a consolidation or merger of the Company in which the
Company is the resulting or surviving Person and which does not result
in any reclassification or change of outstanding Common Stock) or the
sale of all or substantially all of the assets of the Company or
another Person, upon exercise of this Warrant the Warrantholder shall
have the right to receive the kind and amount of shares of stock or
other securities or property to which a holder of the number of Common
Shares of the Company deliverable upon exercise of this Warrant would
have been entitled upon such reorganization, reclassification, other
change, consolidation, merger or sale had this Warrant been exercised
immediately prior to such event; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors or a
duly appointed committee thereof) shall be made in the application of
the provisions of this Section 6 with respect to the rights and
interest thereafter of the Warrantholder, to the end that the
provisions set forth in this Section 6 (including provisions with
respect to changes in and other adjustments of the Exercise Price)
shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter
deliverable upon exercise of this Warrant.
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(d) CARRYOVER. Notwithstanding any other provision of this
Section 6.1, no adjustment shall be made to the number of Common Shares
or other securities to be delivered to the Warrantholder (or to the
Exercise Price) if such adjustment represents less than 1% of the
number of shares to be so delivered, but any lesser adjustment shall be
carried forward and shall be made at the time and together with the
next subsequent adjustment that together with any adjustments so
carried forward shall amount to 1% or more of the number of shares to
be so delivered, PROVIDED HOWEVER, that, upon exercise of this warrant
pursuant to Section 1 hereof, any adjustment called for by Sections
6.1(a), (b) or (c) which has not been made as a result of this Section
6.1(d) shall be made.
6.2 NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 6.1, no
adjustment in respect of any dividends shall be made during the term of this
Warrant or upon the exercise of this Warrant. Notwithstanding any other
provision hereof, no adjustments shall be made on Warrant Shares issuable on the
exercise of this Warrant for any cash dividends paid or payable to holders of
record of Common Shares prior to the date as of which the Warrantholder shall be
deemed to be the record holder of such Warrant Shares.
6.3. NOTICE OF ADJUSTMENT. Whenever the number of Warrant Shares or the
Exercise Price of such Warrant Shares shall be adjusted, as provided in Section
6.1, the Company shall forthwith file, at the principal office of the Company
(or at such other place as may be designated by the Company), a statement,
certified by the chief financial officer of the Company, showing in detail the
facts requiring such adjustment, the computation by which such adjustment was
made and the Exercise Price that shall be in effect after such adjustment. The
Company shall also cause a copy of such statement to be sent by first class mail
postage prepaid, to the Warrantholder, at such Warrantholder's address as shown
in the records of the Company.
7. REGISTRATION STATEMENT. The Company shall, at its expense, file a
registration statement with the United States Securities and Exchange Commission
within 30 days after the date hereof to effect the registration of the resale of
the Warrant Shares under the Securities Act; provided that the Warrantholder
shall not sell any Warrant Shares pursuant to such registration statement unless
and until it provides to the Company such information as the Company may
reasonably request for use in connection with the identification of the
Warrantholder as a selling stockholder in such registration statement, or any
prospectus included therein, and no such sale shall be made by the Warrantholder
pursuant to such registration statement unless and until such information is
included by the Company in such registration statement or prospectus. The
Company shall in good faith use its best efforts and at its expense to cause
such registration statement to be declared effective as promptly as practicable
thereafter, to amend such registration statement to include additional or
revised information with respect to the selling stockholders and to include in
such registration statement the information provided by the Warrantholder as a
selling stockholder and shall notify the Warrantholder of the effectiveness
thereof and agrees to use its best efforts to maintain the effectiveness of such
registration statement until the Warrant expires according to its terms. The
Company shall indemnify and hold harmless the Warrantholder, its officers,
directors and agents and employees, each person who controls the Warrantholder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
1934
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Act) and the officers, directors, agents and employees of any such controlling
person, from and against all damage, loss, liability and expense (including,
without limitation, reasonable expenses of investigation and reasonable
attorneys' fees and expenses in connection with any action, suit or proceeding)
("Losses") incurred or suffered and arising out of or based upon any untrue or
alleged untrue statement of a material fact contained in any such registration
statement, or related prospectus, or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statement
therein not misleading, except to the extent the same are based upon information
furnished in writing to the Company by or on behalf of the Warrantholder
expressly for use therein; provided, that the Company shall not be liable to the
Warrantholder to the extent that any such Losses arise out of or are based upon
any untrue statement or alleged untrue statement or omission or alleged omission
made in any preliminary prospectus if either (A)(i) the Warrantholder failed to
send or deliver a copy of the final prospectus with or prior to the delivery of
written confirmation of the sale by the Warrantholder of a Warrant Share to the
person asserting the claim from which such Losses arise and (ii) the prospectus
would have completely corrected such untrue statement or alleged untrue
statement or such omission or alleged omission; or (B)(i) such untrue statement
or alleged untrue statement, omission or alleged omission is completely
corrected in an amendment or supplement to the prospectus and (ii) having
previously been furnished by or on behalf of the Company with copies of the
prospectus as so amended or supplemented, the Warrantholder thereafter fails to
deliver such prospectus as so amended or supplemented, prior to or concurrently
with the sale of a Warrant Share to the person asserting the claim from which
such Losses arise.
With respect to each third party claim subject to this Section (a
"Third Party Claim"), the party seeking indemnification (the "Indemnified
Party") shall give prompt notice to the indemnifying party (the "Indemnifying
Party") of the Third Party Claim, provided that failure to give such notice
promptly shall not relieve or limit the obligation of the Indemnifying Party
except to the extent the Indemnifying Party is materially prejudiced thereby. If
the remedy sought in the Third Party Claim is solely money damages or if the
Indemnified Party otherwise permits, then the Indemnifying Party, at its sole
cost and expense, may, upon notice to the Indemnified Party within fifteen (15)
days after the Indemnifying Party receives notice of the Third Party Claim,
assume the defense of the Third Party Claim. If it assumes the defense of a
Third Party Claim, then the Indemnifying Party shall select counsel reasonably
satisfactory to the Indemnified Party to conduct the defense. The Indemnifying
Party shall not consent to a settlement of, or the entry of any judgment arising
from, any Third Party Claim, unless (i) the settlement or judgment is solely for
money damages and the Indemnifying Party admits in writing its liability to hold
the Indemnified Party harmless from and against any losses, damages, expenses
and liabilities arising out of such settlement or (ii) the Indemnified Party
consents thereto, which consent shall not be unreasonably withheld. The
Indemnifying Party shall provide the Indemnified Party with fifteen (15) days
prior notice before it consents to a settlement of, or the entry of a judgment
arising from, any Third Party Claim. The Indemnified Party shall be entitled to
participate in the defense of any Third Party Claim, the defense of which is
assumed by the Indemnifying Party, with its own counsel and at its own expense.
With respect to Third Party Claims in which the remedy sought is not solely
money damages, (i) the Indemnifying
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Party shall, upon notice to the Indemnified Party within fifteen (15) days after
the Indemnifying Party receives notice of the Third Party Claim, be entitled to
participate in the defense with its own counsel at its own expense and (ii) the
Indemnified Party shall not consent to any settlement of, or entry of any
judgment arising from, such Third Party Claim unless the Indemnifying Party
consents thereto, which consent shall not be unreasonably withheld. If the
Indemnifying Party does not elect to assume or participate in the defense of any
Third Party Claim in accordance with the terms of this Section, then the
Indemnifying Party shall be bound by the results obtained by the Indemnified
Party with respect to the Third Party Claim. The parties shall cooperate in the
defense of any Third Party Claim and the relevant records of each party shall be
made available on a timely basis.
8. AMENDMENTS.
Any provision of this Warrant may be amended and the observance thereof
waived only with the written consent of the Company and the Warrantholder.
9. NOTICES OF CORPORATE ACTION.
So long as this Warrant has not been exercised in full, in the event of
(a) any taking by the Company of a record of all holders of
Common Shares for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than cash dividends or
distributions paid from the retained earnings of the Company) or other
distribution, or any right to subscribe for, purchase or otherwise
acquire any shares of stock of any class or any other securities or
property, or to receive any other right;
(b) any capital reorganization of the Company, any
reclassification (other than a change in par value of the Common
Shares) or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other Person or
any transfer of all or substantially all the assets of the Company to
any other Person; or
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company will mail to the Warrantholder a notice specifying (i) the date or
expected date on which any such record is to be taken for the purpose of such
dividend, distribution or right and the amount and character of any such
dividend, distribution or right or (ii) the date or expected date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution,
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liquidation or winding-up is to take place and the time, if any such time is to
be fixed, as of which the holders of record of Common Shares shall be entitled
to exchange their Common Shares for the securities or other property, if any,
deliverable upon such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up. Such
notice shall be delivered at least 5 days prior to the date therein specified,
in the case of any date referred to in the foregoing subdivisions (i) and (ii).
10. DEFINITIONS.
As used herein, unless the context otherwise requires, the following
terms have the following respective meanings;
"AFFILIATE" means any Person who is an "affiliate" as defined in Rule
12b-2 of the General Rules and Regulations under the Exchange Act.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which national banks are authorized by law to close in the State of Ohio.
"COMMON SHARES" has the meaning specified on the cover of this Warrant.
"COMPANY" has the meaning specified on the cover of this Warrant.
"CONVERSION RIGHT" has the meaning specified in Section 1.1(c).
"CURRENT MARKET PRICE" of a share of the Common Shares as of a
particular date (the "Determination Date") shall mean:
(i) If the Common Shares are listed or admitted for trading on
a national securities exchange (including The Nasdaq National Market
System or Small Cap Market), then the Current Market Price shall be the
average of the last 10 "daily sales prices" of the Common Shares on the
principal national securities exchange on which the Common Shares are
listed or admitted for trading on the last 10 trading days prior to the
Determination Date, or if not listed or traded on any such exchange,
then the Current Market Price shall be the average of the last 10
"daily sales prices" of the Common Shares on the over-the-counter
market on the last 10 trading days prior to the Determination Date. The
"daily sales price" shall be the closing price of the Common Shares at
the end of each day; or
(ii) If the Common Shares not so listed or admitted to
unlisted trading privileges or if no such sale is made on at least 5 of
such days, then the Current Market Price shall be reasonably determined
in good faith by the Company's Board of Directors or a duly appointed
committee of the Board of Directors (which determination shall be
reasonably described in the written notice delivered to the
Warrantholder together with the Common Shares certificates).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
(or any successor statute thereto) and the rules and regulations of the
Commission promulgated thereunder.
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"EXERCISE FORM" means an Exercise Form in the form annexed hereto as
Exhibit A.
"EXERCISE PRICE" has the meaning specified on the cover of this Warrant
as adjusted from time to time in accordance herewith.
"EXPIRATION DATE" means December 16, 2002.
"FAIR MARKET VALUE" means the amount which a willing buyer would pay a
willing seller in an arm's length transaction.
"PERSON" means any individual, firm, corporation, partnership, limited
liability company, trust, incorporated or unincorporated association, joint
venture, joint stock company, governmental authority or other entity of any
kind, and shall include any successor (by merger or otherwise) of such entity.
"SECURITIES ACT" has the meaning specified on the cover of this
Warrant, or any similar Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Act, shall include a reference to the
comparable section, if any, of any such similar Federal statute.
"WARRANTHOLDER" has the meaning specified on the cover of this Warrant.
"WARRANT SHARES" has the meaning specified on the cover of this
Warrant.
11. MISCELLANEOUS.
11.1 ENTIRE AGREEMENT. This Warrant constitutes the
entire agreement between the Company and the Warrantholder with respect to this
Warrant.
11.2 BINDING EFFECT; BENEFIT. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholder and their
respective successors and assigns. Nothing in this Warrant, expressed or
implied, is intended to or shall confer on any person other than the Company and
the Warrantholder, or their respective successors or assigns, any rights,
remedies, obligations or liabilities under or by reason of this Warrant.
11.3 SECTION AND OTHER HEADINGS. The section and other
headings contained in this Warrant are for reference purposes only and shall not
be deemed to be a part of this Warrant or to affect the meaning or
interpretation of this Warrant.
11.4 NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be by
registered or certified first-class mail, return receipt requested, telecopier,
courier service, overnight mail or personal delivery:
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(a) if to Warrantholder:
Xxxxx X. Xxxxxx
Strategic Acquisition Partners, LLC
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
XxXxxxxxx, Will & Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, P.C.
(b) if to the Company:
Central Reserve Life Corporation
00000 Xxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxx 00000
Attention: Xxxx Lick
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxx
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by courier
or overnight mail, if delivered by commercial courier service or overnight mail;
five (5) Business Days after being deposited in the mail, postage prepaid, if
mailed; and when receipt is mechanically acknowledged, if telecopied. Any party
may by notice given in accordance with this Section 11.4 designate another
address or Person for receipt of notices hereunder.
11.5 SEVERABILITY. Any term or provision of this Warrant which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceability the terms and provisions of this Warrant
or affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
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11.6 GOVERNING LAW. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF.
11.7 NO RIGHTS OR LIABILITIES AS STOCKHOLDER. Nothing
containing in this Warrant shall be determined as conferring upon the
Warrantholder any rights as a stockholder of the Company or as imposing any
liabilities on the Warrantholder to purchase any securities whether such
liabilities on the Warrantholder to purchase any securities whether such
liabilities are asserted by the Company or by creditors or stockholders of the
Company or otherwise.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.
CENTRAL RESERVE LIFE CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: CFO
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Dated: December 16, 1997
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EXHIBIT A
EXERCISE OF WARRANT
The undersigned, , pursuant to the provisions of the within
Warrant, hereby elects to purchase Common Shares of CENTRAL RESERVE LIFE
CORPORATION, covered by the within Warrant, and tenders herewith payment of the
Exercise Price in full in the form of certified or bank cashier's check or wire
transfer.
Please issue a certificate or certificates for such Common Shares in
the following name or names and denominations:
If said number of shares are not all the Common Shares issuable upon exercise of
the attached Warrant, a new Warrant is to be issued in the name of the
undersigned for the balance remaining of such shares less any faction of a share
paid in cash.
Signature
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Address:
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Note: The above signature should correspond
exactly with the name on the face of the
within Warrant.
Dated:
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