1
REPRESENTATIVE'S WARRANT AGREEMENT
REPRESENTATIVE'S WARRANT AGREEMENT (the "Representative's Warrant
Agreement" or "Agreement"), dated as of _________ 1998, between COMMERCE
CASUALTY GROUP, INC.. (the "Company"), and FIRST LONDON SECURITIES CORPORATION
(the "Representative").
W I T N E S S E T H:
WHEREAS, the Representative has agreed, pursuant to that certain
underwriting agreement dated as of the date hereof by and between the Company
and the Representative (the "Underwriting Agreement"), to act as the
Representative of the Underwriters in connection with the Company's proposed
public offering (the "Public Offering") of 2,000,000 Units (the "Units") at
$5.1875 per Unit (the "Initial Public Offering Price), each Unit consisting of
one share (the "Shares") of Common Stock, $.001 par value per share (the "Common
Stock"); one Redeemable Series A Common Stock Purchase Warrant (the "Series A
Warrants"); and one Redeemable Series B Common Stock Purchase Warrant (the
"Series B Warrants")(the "Public Warrants");
WHEREAS, each Series A Warrant entitles the holder to purchase one
share of Common Stock at a price of $ 6.00 per share during the five-year period
commencing on the date of the Prospectus. The Series A Warrants are redeemable
by the Company for $9.00 per Warrant. Each Series B Warrant entitles the holder
to purchase one share of Common Stock at a price of $ 7.00 per share during the
five-year period commencing on the date of the Prospectus. The Series B Warrants
are redeemable by the Company for $10.00 per Warrant. Redemption requires not
less than 30 nor more than 60 days written notice provided there is then in
effect a current registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the issuance and sale of the
Common Stock upon the exercise of the Warrants;
WHEREAS, 2,000,000 Units shall be offered for sale at the Initial
Public Offering Price with each Share being sold $5.00 per share (the "Common
Stock IPO Price"), each Series A Warrant being sold at $.125 per Series A
Warrant and each Series B Warrant being sold at $.0625 per Series B Warrant
(collectively, the "Warrant IPO Price");
WHEREAS, the Company proposes to issue to the Representative and/or
persons related to the Representative as those persons are defined in Rule 2710
of the NASD Conduct Rules (the "Holder"), 200,000 warrants ("Representative's
Warrants") to purchase 200,000 Units, each of which is identical to those
offered to the public; and
WHEREAS, the Representative's Warrants to be issued pursuant to this
Agreement will be issued on the Closing Date (as such term is defined in the
Underwriting Agreement) by the Company to the holders ("Holders") in
consideration for, and as part of the compensation in connection with, the
Representative acting as Representative pursuant to the Underwriting Agreement.
NOW, THEREFORE, in consideration of the premises, the payment by the
Representative to the Company of ONE HUNDRED DOLLARS AND NO CENTS ($100.00), the
agreements
2
herein set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Grant and Period.
The Public Offering has been registered under a Registration Statement
on Form SB-2 (File No. 333-________) (the "Registration Statement") and declared
effective by the Securities and Exchange Commission (the "SEC" or "Commission")
on _______________________ (the "Effective Date"). This Agreement is entered
into pursuant to the Underwriting Agreement between the Company and the
Representative, as Representative of the Underwriters, in connection with the
Public Offering.
Pursuant to the Representative Warrants, the Holders are hereby granted
the right to purchase from the Company, at any time during the four year period
commencing ______, 1998 (one year from the Effective Date) (the "Purchase Date")
and expiring at 5:00 New York time on _____, 2003, (four years after the
Purchase Date) (the "Expiration Time"), up to 200,000 Units at an initial
exercise price (subject to adjustment as provided in Article 8) of $6.225 per
Unit (120% of the Initial Public Offering Price) (the "Unit Exercise Price"),
subject to the terms and conditions of this Agreement. Each Representative's
Warrant is exercisable to purchase one Underlying Unit at an initial exercise
price (subject to adjustment as provided in Article 8) during the four year
period commencing on the Purchase Date and ending on the Expiration Time.
Except as specifically otherwise provided herein, the Units, the
Underlying Shares, the shares underlying Series A Warrants and underlying Series
B Warrants constituting the Warrant Securities shall bear the same terms and
conditions as such securities described under the caption "Description of
Securities" in the Registration Statement, and as designated in the Company's
Certificate of Incorporation and any amendments thereto, and the Underlying
Warrants shall be governed by the terms of the Warrant Agreement executed in
connection with the Public Offering (the "Warrant Agreement"), except as
provided herein, and the Holders shall have registration rights under the Act,
for the Shares, the Underlying Warrants, and the Underlying Warrant Shares, as
more fully described in paragraph Article 7 of this Representative's Warrant
Agreement. In the event of any extension of the expiration date or reduction of
the exercise price of the Public Warrants, the same such changes to the
Underlying Warrants shall be simultaneously effected, except that the Underlying
Warrants shall expire no later than five years from the Effective Date.
2. Warrant Certificates.
The warrant certificates (the "Warrant Certificate") delivered and to
be delivered pursuant to this Agreement shall be in the form set forth in the
form of Warrant Certificate, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.
2
3
3. Exercise of Warrant.
3.1 Full Exercise.
(a) A Holder may effect a cash exercise of any of the Representative's
Warrants by surrendering the Warrant Certificate, together with a Subscription
in the form of Exhibit 1 attached thereto, duly executed by such Holder to the
Company, at any time prior to the Expiration Time, at the Company's principal
office, accompanied by payment in cash or by certified or official bank check
payable to the order of the Company in the amount of the aggregate purchase
price of such Warrant Securities, subject to any adjustments provided for in
this Agreement. The aggregate purchase price hereunder for each Holder shall be
equal to the exercise price for each Unit (as adjusted as hereinafter provided).
(b) In lieu of the payment of the Representative Warrant Exercise Price
in the manner required by Section 3.1(a), the Holder shall have the right to pay
such exercise price for the shares of Units being so purchased by the surrender
to the Company of any exercisable but unexercised portion of such Holder's
Representative's Warrants having a then Value (as defined below) equal to such
exercise price multiplied by the number of Units being purchased upon such
exercise ("Cashless Exercise Right"). The sum of (i) the number of Units being
purchased upon exercise of the non-surrendered portion of the Common Stock
Representative's Warrants or the Underlying Warrants, as the case may be,
pursuant to this Cashless Exercise Right and (ii) the number of shares of Common
Stock underlying the portion of the warrants being so surrendered, shall not in
any event be greater than the total number of shares of Common Stock purchasable
upon the complete exercise of the warrants being so surrendered, if the Share
Exercise Price or the Underlying Warrant Share Exercise Price, as the case may
be, were paid in cash. The Value of the portion of the Common Stock
Representative's Warrants or Underlying Warrants, as the case may be, being
surrendered shall equal the remainder derived from subtracting (1) the Share
Exercise Price or the Underlying Share Exercise Price, as the case may be,
multiplied by the number of shares of Common Stock underlying the portion of the
warrants being so surrendered from (2) the Market Value (as defined below) of a
share of Common Stock multiplied by the number of shares of Common Stock
underlying the portion of the warrants being so surrendered. The Market Value
shall be determined on a per share basis as of the close of the business day
preceding the exercise, which determination shall be made as follows: (x) if the
Common Stock is listed for trading on a national or regional stock exchange or
is included on the Nasdaq National Market or SmallCap Market, the average
closing sale price quoted on such exchange or the Nasdaq National Market or
SmallCap Market that is published in The Wall Street Journal for the ten trading
days immediately preceding the date of exercise, or if no trade of the Common
Stock shall have been reported during such period, the last sale price so quoted
for the next day prior thereto on which a trade in the Common Stock was so
reported; or (y) if the Common Stock is not so listed, admitted to trading or
included, the average of the closing highest reported bid and lowest reported
ask price as quoted on the National Association of Securities Dealer's OTC
Bulletin Board or in the "pink sheets" published by the National Daily Quotation
Bureau for the first day immediately preceding the date of exercise on which the
Common Stock is traded. The Cashless Exercise Right may be exercised by the
Holder by delivering the Warrant Certificate to the Company together with a
Subscription in the form of Exhibit 2 attached thereto, duly executed by such
Holder, in which case no payment of cash will be required.
3
4
3.2 Partial Exercise.
The Warrant Securities referred to in Section 3.1 above also may be
exercised from time to time in part by surrendering the Warrant Certificate in
the manner specified in Section 3.1, except that with respect to a cash
exercise, the purchase price payable with respect to such exercise shall be
equal to the number of Warrant Securities being purchased hereunder multiplied
by the exercise price for such Warrant Security, subject to any adjustments
provided for in this Agreement. Upon any such partial exercise, the Company, at
its expense, will forthwith issue to the Holder hereof a new Warrant Certificate
or Warrants of like tenor calling in the aggregate for the number of securities
(as constituted as of the date hereof) for which the Warrant Certificate shall
not have been exercised, issued in the name of the Holder hereof or as such
Holder (upon payment by such Holder of any applicable transfer taxes) may
direct.
4. Issuance of Certificates.
Upon the exercise of the Warrants or the Underlying Units, the issuance
of certificates for the underlying shares of Common Stock or other securities,
as applicable, shall be made forthwith (and in any event within three business
days thereafter) without charge to the Holder thereof including, without
limitation, any tax which may be payable in respect of the issuance thereof, and
such certificates shall (subject to the provisions of Articles 5 and 7) be
issued in the name of, or in such names as may be directed by, the Holder
thereof; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the Holder and
the Company shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid
to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
The Warrant Certificates and the certificates representing the shares
of Common Stock or other securities, as applicable, shall be executed on behalf
of the Company by the manual or facsimile signature of the then present Chairman
or Vice Chairman of the Board of Directors or Chairman or Vice Chairman of the
Company under its corporate seal reproduced thereon, attested to by the manual
or facsimile signature of the then present Secretary or Assistant Secretary of
the Company. Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or transfer.
5. Restriction On Transfer of Warrants.
The Holder of a Warrant Certificate, by acceptance thereof, covenants
and agrees that the Warrants may not be sold, transferred, assigned,
hypothecated or otherwise disposed of, in whole or in part, except (a) to
officers of the Representative or to officers and partners of the other
Underwriters or Selected Dealers participating in the Public Offering; (b) by
will; or (c) by operation of law.
4
5
6. Exercise Price.
6.1 Initial and Adjusted Exercise Prices.
The initial Share Exercise Price of each Representative's Warrant shall
be $6.225 per Unit (120% of the IPO Price). The adjusted exercise price of any
Warrant Security shall be the price which shall result from time to time from
any and all adjustments of the initial exercise price in accordance with the
provisions of Article 8. The Warrant Representative's Warrants and the
Underlying Warrants are exercisable during the four year period commencing on
the Purchase Date.
6.2 Exercise Price.
The term "exercise price" herein shall mean the initial exercise price
or the adjusted exercise price, depending upon the context.
7. Registration Rights.
7.1 Registration Under the Securities Act of 1933.
The Shares, the Underlying Series A Warrants, the Underlying Series B
Warrants and the Underlying Warrant Shares (collectively the "Registrable
Securities") have been registered under the Securities Act of 1933, as amended
(the "Act"). Upon exercise, in part or in whole, of the Warrants, certificates
representing the Shares, the Underlying Warrants or the Underlying Warrants
Shares, as the case may be, shall bear the following legend in the event there
is no current registration statement effective with the Commission at such time
as to such securities:
The securities represented by this certificate may not be offered or
sold except pursuant to (i) an effective registration statement under
the Securities Act of 1933, as amended (the `Act'), (ii) to the extent
applicable, Rule 144 under the Act (or any similar rule under such Act
relating to the disposition of securities) , or (iii) an opinion of
counsel, if such opinion shall be reasonably satisfactory to counsel to
the issuer, that an exemption from registration under such Act and
applicable state securities laws is available.
7.2 Piggyback Registration.
If, at any time commencing after the Effective Date of the Public
Offering and expiring seven (7) years thereafter, the Company prepares and files
a post-effective amendment to the Registration Statement, or a new registration
statement, under the Act, or files a Notification on Form 1-A or otherwise
registers securities under the Act, or files a similar disclosure document with
the Commission (collectively the "Registration Documents") as to any of its
securities under the Act (other than under a registration statement pursuant to
Form S-8 or Form S-4 or small business issue equivalent), it will give written
notice by registered mail, at least 30 days prior to the filing of each such
Registration Document, to the Representative and to all other Holders of the
Registrable Securities of its intention to do so. If the Representative or other
Holders of the Registrable
5
6
Securities notify the Company within 20 days after receipt of any such notice of
its or their desire to include any such Registrable Securities in such proposed
Registration Documents, the Company shall afford the Representative and such
Holders of such Registrable Securities the opportunity to have any Registrable
Securities registered under such Registration Documents or any other available
Registration Document.
Notwithstanding the provisions of this Section 7.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 7.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing but prior to
the effective date thereof.
7.3 Demand Registration.
(a) At any time commencing one year after the Effective Date of the
Public Offering, and expiring four years thereafter, the Holders of Registrable
Securities representing more than 50% of such securities at that time
outstanding shall have the right (which is in addition to the registration
rights under Section 7.2), exercisable by written notice to the Company, to have
the Company prepare and file with the Commission at the sole expense of the
Company, on one occasion, a registration statement and/or such other documents,
including a prospectus, and/or any other appropriate disclosure document as may
be reasonably necessary in the opinion of both counsel for the Company and
counsel for the Representative and Holders, in order to comply with the
provisions of the Act, so as to permit a public offering and sale of their
respective Registrable Securities for nine consecutive months (or such longer
period of time as permitted by the Act) by such Holders and any other Holders of
any of the Registrable Securities who notify the Company within ten days after
being given notice from the Company of such request (a "Demand Registration"). A
Demand Registration shall not be counted as a Demand Registration hereunder
until such Demand Registration has been declared effective by the SEC and
maintained continuously effective for a period of at least nine months , subject
to reasonable "black-out" periods in which event such nine months shall be
extended by a number of days equal to the duration and the "black-out" periods,
or such shorter period when all Registrable Securities included therein have
been sold in accordance with such Demand Registration, provided that a Demand
Registration shall be counted as a Demand Registration hereunder if the Company
ceases its efforts in respect of such Demand Registration at the request of the
majority Holders making the demand for a reason other than a material and
adverse change in the business, assets, prospects or condition (financial or
otherwise) of the Company and its subsidiaries taken as a whole.
(b) The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by the majority of the Holders to
all other registered Holders of any of the Registrable Securities within ten
days from the date of the receipt of any such registration request.
(c) In addition to the registration rights under Section 7.2 and
subsection (a) of this Section 7.3, at any time commencing one year after the
Effective Date of the Public Offering, and expiring four years thereafter, the
Holders of any Registrable Securities representing more than 50% of such
securities shall have the right, exercisable by written request to the Company,
to have the
6
7
Company prepare and file, on one occasion, with the Commission a registration
statement or any other appropriate disclosure document so as to permit a public
offering and sale for nine consecutive months (or such longer period of time as
permitted by the Act) by any such Holder of Registrable Securities; provided,
however, that the provisions of Section 7.4(b) shall not apply to any such
registration request and registration and all costs incident thereto shall be at
the expense of the Holder or Holders participating in the offering pro-rata.
(d) Any written request by the Holders made pursuant to this Section
7.3 shall:
(i) Specify the number of Registrable Securities which the
Holders intend to offer and sell and the minimum price at which the
Holders intend to offer and sell such securities;
(ii) State the intention of the Holders to offer such
securities for sale;
(iii) Describe the intended method of distribution of such
securities; and
(iv) Contain an undertaking on the part of the Holders to
provide all such information and materials concerning the Holders and
take all such action as may be reasonably required to permit the
Company to comply with all applicable requirements of the Commission
and to obtain acceleration of the effective date of the registration
statement.
(e) In the event the Company receives from the Holders of any
Registrable Securities representing more than 50% of such securities at that
time outstanding, a request that the Company effect a registration on Form S-3
with respect to the Registrable Securities and if Form S-3 is available for such
offering, the Company shall, as soon as practicable, effect such registration as
would permit or facilitate the sale and distribution of the Registrable
Securities as are specified in the request. All expenses incurred in connection
with a registration requested pursuant to this Subsection (e) shall be borne by
the Company. Registrations effected pursuant to this Subsection (e) shall not be
counted as registrations pursuant to Sections 7.3 (a) and 7.3 (c).
7.4 Covenants of the Company With Respect to Registration.
In connection with any registration under Section 7.2 or 7.3, the
Company covenants and agrees as follows:
(a) The Company shall use its best efforts to file a registration
statement within 45 days of receipt of any demand pursuant to Section 7.3, and
shall use its best efforts to have any such registration statement declared
effective at the earliest practicable time. The Company will promptly notify
each seller of such Registrable Securities, and confirm such advice in writing,
(i) when such registration statement becomes effective, (ii) when any
post-effective amendment to such registration statement becomes effective, and
(iii) of any request by the SEC for any amendment or supplement to such
registration statement or any prospectus relating thereto or for additional
information.
7
8
The Company shall furnish to each seller of such Registrable Securities
such number of copies of such registration statement and of each such amendment
and supplement thereto (in each case including each preliminary prospectus and
summary prospectus) in conformity with the requirements of the Act, and such
other documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities by such seller.
(b) The Company shall pay all costs (excluding transfer taxes, if any,
and fees and reasonable expenses of Holder's counsel (such costs of counsel not
to exceed $10,000)), fees and expenses in connection with all registration
statements filed pursuant to Sections 7.2 and 7.3(a) including, without
limitation, the Company's legal and accounting fees, printing expenses, blue sky
fees and expenses. If the Company shall fail to comply with the provisions of
Section 7.3(a), the Company shall, in addition to any other equitable or other
relief available to the Holder, be liable for any or all special and
consequential damages sustained by the Holder requesting registration of their
Registrable Securities.
(c) The Company shall prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be reasonably necessary to keep such registration statement
effective for at least nine months, and to comply with the provisions of the Act
with respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the seller or sellers of Registrable Securities set forth in such
registration statement. If at any time the SEC should institute or threaten to
institute any proceedings for the purpose of issuing a stop order suspending the
effectiveness of any such registration statement, the Company will promptly
notify each seller of such Registrable Securities and will use all reasonable
efforts to prevent the issuance of any such stop order or to obtain the
withdrawal thereof as soon as possible. The Company will use its good faith
reasonable efforts and take all reasonably necessary action which may be
required in qualifying or registering the Registrable Securities included in a
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are required by the Holder, provided that the
Company shall not be obligated to execute or file any general consent to service
of process or to qualify as a foreign corporation to do business under the laws
of any such jurisdiction. The Company shall use its good faith reasonable
efforts to cause such Registrable Securities covered by such registration
statement to be registered with or approved by such other governmental agencies
or authorities of the United States or any state thereof as may be reasonably
necessary to enable the seller or sellers thereof to consummate the disposition
of such Registrable Securities.
(d) The Company shall indemnify the Holder of the Registrable
Securities to be sold pursuant to any registration statement and each person, if
any, who controls such Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement but only to
the same extent and with the same effect as the provisions pursuant to which the
Company has agreed to indemnify the Representative as contained in the
Underwriting Agreement.
8
9
(e) If requested by the Company prior to the filing of any registration
statement covering the Registrable Securities, each of the Holders of the
Registrable Securities to be sold pursuant to a registration statement, and
their successors and assigns, shall severally, and not jointly, indemnify the
Company, its officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage or expense or liability (including
all expenses reasonably incurred in investigating, preparing or defending
against any claim whatsoever) to which they may become subject under the Act,
the Exchange Act or otherwise, arising from written information furnished by
such Holder, or their successors or assigns, for specific inclusion in such
registration statement to the same extent and with the same effect as the
provisions contained in the Underwriting Agreement pursuant to which the
Representative have agreed to indemnify the Company, except that the maximum
amount which may be recovered from each Holder pursuant to this paragraph or
otherwise shall be limited to the amount of net proceeds received by the Holder
from the sale of the Registrable Securities.
(f) Nothing contained in this Agreement shall be construed as requiring
the Holders to exercise their Warrants or Underlying Warrants prior to the
filing of any registration statement or the effectiveness thereof.
(g) The Company shall not permit the inclusion of any securities other
than the Registrable Securities to be included in any registration statement
filed pursuant to Section 7.3 without the prior written consent of the Holders
of the Registrable Securities representing a majority of such securities.
(h) The Company shall furnish to each Holder participating in the
offering and to each underwriter, if any, a signed counterpart, addressed to
such Holder or underwriter, of (i) an opinion of counsel to the Company, dated
the effective date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under the Underwriting Agreement), and (ii) a "cold comfort" letter
dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, a letter dated the date
of the closing under the Underwriting Agreement) signed by the independent
public accountants who have issued a report on the Company's financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of such accountants' letter,
with respect to events subsequent to the date of such financial statements, as
are customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities.
(i) The Company shall deliver promptly to each Holder participating in
the offering requesting the correspondence and memoranda described below and the
managing underwriter copies of all correspondence between the Commission and the
Company, its counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to the registration statement and
permit each Holder and underwriter to do such investigation, upon reasonable
advance notice, with respect to information contained in or omitted from the
registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access
9
10
to books, records and properties and opportunities to discuss the business of
the Company with its officers and independent auditors, all to such reasonable
extent and at such reasonable times and as often as any such Holder shall
reasonably request.
(j) With respect to a registration statement filed pursuant to Section
7.3, the Company, if requested, shall enter into an Underwriting Agreement with
the managing underwriter, reasonably satisfactory to the Company, selected for
such underwriting by Holders holding a majority of the Registrable Securities
requested to be included in such underwriting. Such agreement shall be
satisfactory in form and substance to the Company, each Holder and such managing
underwriters, and shall contain such representations, warranties and covenants
by the Company and such other terms as are customarily contained in agreements
of that type used by the managing underwriter. The Holders, if required by the
underwriter to be parties to any underwriting agreement relating to an
underwritten sale of their Registrable Securities, may, at their option, require
that any or all the representations, warranties and covenants of the Company to
or for the benefit of such underwriters shall also be made to and for the
benefit of such Holders. Such Holders shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution.
(k) Notwithstanding the provisions of Section 7.2 or Section 7.3 of
this Agreement, the Company shall not be required to effect or cause the
registration of Registrable Securities pursuant to Section 7.2 or Section 7.3 if
and to the extent that, within 30 days after its receipt of a request to
register such Registrable Securities (i) counsel for the Company delivers an
opinion to the Holders requesting registration of such Registrable Securities,
in form and substance satisfactory to counsel to such Holder, to the effect that
the entire number of Registrable Securities proposed to be sold by such Holders
may otherwise be sold, in the manner proposed by such Holder, without
registration under the Securities Act, or (ii) the SEC shall have issued a
no-action position, in form and substance reasonably satisfactory to counsel for
the Holder requesting registration of such Registrable Securities, to the effect
that the entire number of Registrable Securities proposed to be sold by such
Holder may be sold by it, in the manner proposed by such Holder, without
registration under the Securities Act.
(l) After completion of the Public Offering, the Company shall not,
directly or indirectly, enter into any merger, business combination or
consolidation in which (i) the Company shall not be the surviving corporation
and (ii) the stockholders of the Company are to receive, in whole or in part,
capital stock or other securities of the surviving corporation, unless the
surviving corporation shall, prior to such merger, business combination or
consolidation, agree in writing to assume the obligations of the Company under
this Agreement, and for that purpose references hereunder to "Registrable
Securities" shall be deemed to include the securities which the Holders would be
entitled to receive in exchange for Registrable Securities under any such
merger, business combination or consolidation, provided that to the extent such
securities to be received are convertible into shares of Common Stock of the
issuer thereof, then any such shares of Common Stock as are issued or issuable
upon conversion of said convertible securities shall also be included within the
definition of "Registrable Securities".
10
11
8. Adjustments to Exercise Price and Number of Securities.
8.1 Adjustment for Dividends, Subdivisions, Combinations or
Reclassification.
In case the Company shall (a) pay a dividend or make a distribution in
shares of its capital stock (whether shares of Common Stock or of capital stock
of any other class), (b) subdivide its outstanding shares of Common Stock into a
greater number of shares, (c) combine its outstanding shares of Common Stock
into a smaller number of shares, or (d) issue by reclassification of its shares
of Common Stock any shares of capital stock of the Company; then, and in each
such case, the Share Exercise Price, the Underlying Warrant Exercise Price and
the number of Warrants in effect immediately prior to such action shall be
adjusted so that the Holder thereafter upon the exercise hereof shall be
entitled to receive the number and kind of shares of the Company which such
Holder would have owned immediately following such action had this warrant been
exercised immediately prior thereto. An adjustment made pursuant to this Section
shall become effective immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this Section, the Holder shall
become entitled to receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose determination shall be
conclusive) shall determine the allocation of the adjusted Share Exercise Price
and Underlying Warrant Exercise Price between or among shares of such class of
capital stock.
Immediately upon any adjustment of the exercise price of any Warrant
pursuant to this Section, the Company shall send written notice thereof to the
Holder of Warrant Certificates (by first class mail, postage prepaid), which
notice shall state the exercise price of such Warrant resulting from such
adjustment, and any increase or decrease in the number of Warrant Securities to
be acquired upon exercise of the Warrants, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
8.2 Adjustment For Reorganization, Merger or Consolidation.
In case of any reorganization of the Company or consolidation of the
Company with, or merger of the Company with, or merger of the Company into,
another corporation (other than a consolidation or merger which does not result
in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental Warrant agreement providing that the Holder of each
Warrant then outstanding or to be outstanding shall have the right thereafter
(until the expiration of such Warrant) to receive, upon exercise of such
Warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the number
of shares of Common Stock of the Company for which such Warrant might have been
exercised immediately prior to such reorganization, consolidation, merger,
conveyance, sale or transfer. Such supplemental Warrant agreement shall provide
for adjustments which shall be identical to the adjustments provided in Section
8.1 and such registration rights and other rights as provided in this Agreement.
The Company shall not effect any such consolidation, merger, or similar
transaction as contemplated by this Section 8.2, unless prior to or
simultaneously with the consummation thereof, the successor corporation (if
other than the Company) resulting from such consolidation or
11
12
merger or the corporation purchasing, receiving, or leasing such assets or other
appropriate corporation or entity shall assume, by written instrument executed
and delivered to the Holders, the obligation to deliver to the Holders, such
shares of stock, securities, or assets as, in accordance with the foregoing
provisions, such holders may be entitled to purchase, and to perform the other
obligations of the Company under this Agreement. The above provision of this
Subsection shall similarly apply to successive consolidations or successively
whenever any event listed above shall occur.
8.3 Dividends and Other Distributions.
In the event that the Company shall at any time prior to the exercise
of all of the Warrants and Underlying Warrants distribute to its stockholders
any assets, property, rights, evidences of indebtedness, securities (other than
a distribution made as a cash dividend payable out of earnings or out of any
earned surplus legally available for dividends under the laws of the
jurisdictions of incorporation of the Company), whether issued by the Company or
by another, the Holders of the unexercised Warrants shall thereafter be
entitled, in addition to the shares of Common Stock or other securities and
property receivable upon the exercise thereof, to receive, upon the exercise of
such Warrants, the same property, assets, rights, evidences of indebtedness,
securities or any other thing of value that they would have been entitled to
receive at the time of such distribution as if the Warrants had been exercised
immediately prior to such distribution. At the time of any such distribution,
the Company shall make appropriate reserves to ensure the timely performance of
the provisions of this subsection or an adjustment to the exercise price of such
Warrants, which shall be effective as of the day following the record date for
such distribution.
8.4 Adjustment in Number of Securities.
Upon each adjustment of the exercise price of Warrants pursuant to the
provisions of this Article 8, the number of securities issuable upon the
exercise of each Warrant and Underlying Warrant shall be adjusted to the nearest
full amount by multiplying a number equal to the exercise price in effect
immediately prior to such adjustment by the number of securities issuable upon
exercise of the Warrants and the Underlying Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted exercise price.
8.5 No Adjustment of Exercise Price in Certain Cases.
No adjustment of the exercise price of any Warrant shall be made if the
amount of said adjustment would be less than $.05 per security; provided,
however, that in any such case any adjustment that would otherwise be required
then to be made shall be carried forward and shall be made at the time of and
together with the next subsequent adjustment which, together with any adjustment
so carried forward, shall amount to at least $.05 per security.
12
13
8.6 Accountant's Certificate of Adjustment.
In each case of an adjustment or readjustment of the Share Exercise
Price, Underlying Warrant Exercise Price or the number of any securities
issuable upon exercise of the Warrants or the Underlying Warrants, the Company,
at its expense, shall cause independent certified public accountants of
recognized standing selected by the Company (who may be the independent
certified public accountants then auditing the books of the Company) to compute
such adjustment or readjustment in accordance herewith and prepare a certificate
showing such adjustment or readjustment, and shall mail such certificate, by
first class mail, postage prepaid, to any Holder of the Warrants or the
Underlying Warrants, as the case may be, at the Holder's address as shown on the
Company's books. The certificate shall set forth such adjustment or
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based including, but not limited to, a statement of (i) the
Share Exercise Price or the Underlying Warrant Share Exercise Price at the time
in effect, and (ii) the number of additional securities and the type and amount,
if any, of other property which at the time would be received upon exercise of
the Warrants or Underlying Warrants, as the case may be.
8.7 Adjustment of Underlying Warrant Exercise Price.
With respect to any of the Underlying Warrants whether or not the
Underlying Warrants have been exercised (or are exercisable) and whether or not
the Underlying Warrants are issued and outstanding, the Underlying Warrant Share
Exercise Price and the number of Underlying Warrant Shares shall be
automatically adjusted in accordance with the Warrant Agreement between the
Company and the Company's transfer agent, upon occurrence of any of the events
relating to adjustments described therein. Thereafter, the Underlying Warrants
shall be exercisable at such adjusted Underlying Warrant Share Exercise Price
for such adjusted number of Underlying Warrant Shares or other securities,
properties or rights.
9. Exchange and Replacement of Warrant Certificates.
Each Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal executive office of
the Company, for a new Warrant Certificate of like tenor and date representing
in the aggregate the right to purchase the same number of securities in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrants, if
mutilated, the Company will make and deliver a new Warrant Certificate of like
tenor, in lieu thereof.
13
14
10. Elimination of Fractional Interest.
The Company shall not be required to issue certificates representing
fractions of shares of Common Stock upon the exercise of the Warrants or
Underlying Warrants, nor shall it be required to issue script or pay cash in
lieu of fractional interests, it being the intent of the parties that all
fractional interests may be eliminated, at the Company's option, by rounding any
fraction up to the nearest whole number of shares of Common Stock or other
securities, properties or rights, or in lieu thereof paying cash equal to such
fractional interest multiplied by the current value of a share of Common Stock.
11. Reservation and Listing.
The Company shall at all times reserve and keep available out of its
authorized shares of Common Stock, solely for the purpose of issuance upon the
exercise of the Warrants and the Underlying Warrants, such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise thereof. The Company covenants and agrees that, upon exercise of
the Warrants or the Underlying Warrants, and payment of the exercise price
therefor, all shares of Common Stock and other securities issuable upon such
exercise shall be duly and validly issued, fully paid, non-assessable and not
subject to the preemptive rights of any stockholder. As long as the Warrants and
Underlying Warrants shall be outstanding, the Company shall use its best efforts
to cause all shares of Common Stock issuable upon the exercise of the Warrants
and the Underlying Warrants to be listed and quoted (subject to official notice
of issuance) on all securities exchanges and systems on which the Common Stock
and/or the Public Warrants may then be listed and/or quoted, including Nasdaq.
12. Notices to Warrant Holders.
Nothing contained in this Agreement shall be construed as conferring
upon the Holders of the Warrants or the Underlying Warrants the right to vote or
to consent or to receive notice as a stockholder in respect of any meetings of
stockholders, for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company. If, however, at any time
prior to the expiration of the Warrants and the Underlying Warrants and their
exercise, any of the following events shall occur:
(a) The Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) The Company shall offer to all the holders of its Common Stock any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company, or any option, right
or warrant to subscribe therefor; or
14
15
(c) A dissolution, liquidation or winding up of the Company (other than
in connection with a consolidation or merger) or a sale of all or substantially
all of its property, assets and business as an entirety shall be proposed;
then, in any one or more of said events, the Company shall give written notice
of such event at least 15 days prior to the date fixed as a record date of the
date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution, convertible or exchangeable securities
or subscription rights, or entitled to vote on such proposed dissolution,
liquidation, winding up or sale. Such notices shall specify such record date or
the date of closing the transfer books, as the case may be. Failure to give such
notice or any defect therein shall not affect the validity of any action taken
in connection with the declaration or payment of any such dividend, or the
issuance of any convertible or exchangeable securities, or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding up or
sale.
13. Underlying Warrants.
The form of the certificate representing the Underlying Warrants (and
the form of election to purchase shares of Common Stock upon the exercise of the
Underlying Warrants and the form of assignment printed on the reverse thereof)
shall be substantially as set forth in the exhibits to the Warrant Agreement.
Subject to the terms of this Agreement, one Underlying Warrant shall evidence
the right to initially purchase one fully paid and nonassessable share of Common
Stock at an initial purchase price of $7.8125 during the four year period
commencing on the Purchase Date and ending at the Effective Time, at which time
the Underlying Warrants Share shall expire. The Underlying Warrant Share
Exercise Price and the number of Underlying Warrant Shares issuable upon the
exercise of the Underlying Warrants are subject to adjustment, whether or not
the Warrants have been exercised and the Underlying Warrants have been issued,
in the manner and upon the occurrence of the events set forth in the Warrant
Agreement, which is hereby incorporated herein by reference and made a part
hereof as if set forth in its entirety herein. Subject to the provisions of this
Agreement and upon issuance of the Underlying Warrants, each registered holder
of such Underlying Warrant shall have the right to purchase from the Company
(and the Company shall issue to such registered holders) up to the number of
fully paid and nonassessable shares of Common Stock (subject to adjustment as
provided in the Warrant Agreement) set forth in such Warrant Certificate, free
and clear of all preemptive rights of stockholders, provided that such
registered Holder complies with the terms governing exercise of the Underlying
Warrant set forth in the Warrant Agreement, and pays the applicable Underlying
Warrant Share Exercise Price, determined in accordance with the terms of the
Warrant Agreement. Upon exercise of the Underlying Warrants, the Company shall
forthwith issue to the registered holder of any such Underlying Warrant in his
name or in such name as may be directed by him, certificates for the number of
shares of Common Stock so purchased. Except as otherwise provided herein and in
this Agreement, the Underlying Warrants shall be governed in all respects by the
terms of the Warrant Agreement. The Underlying Warrants shall be transferable in
the manner provided in the Warrant Agreement, and upon any such transfer, a new
Underlying Warrant certificate shall be issued promptly to the transferee. The
Company covenants to send to each Holder, irrespective of whether or not the
Warrants have been exercised, any and all notices required by the Warrant
Agreement to be sent to holders of Underlying Warrants.
15
16
14. Notices.
All notices, requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly given when personally
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the registered Holder of any of the Registrable
Securities, to the address of such Holder as shown on the books of the Company;
or
(b) If to the Underwriters:
First London Securities Corporation
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Copy to: Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
If to the Company: Commerce Casualty Group, Inc.
0000 XxxxxXxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxx X. X. Xxxxxx, III, Chief Operating Officer
Copy to: Xxxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxxxxx Xxxx
Xxxxx 00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
15. Entire Agreement: Modification.
This Agreement (and the Underwriting Agreement and Warrant Agreement to
the extent applicable) contain the entire understanding between the parties
hereto with respect to the subject matter hereof, and the terms and provisions
of this Agreement may not be modified, waived or amended except in a writing
executed by the Company and the Holders of at least a majority of Registrable
Securities (based on underlying numbers of shares of Common Stock). Notice of
any modification, waiver or amendment shall be promptly provided to any Holder
not consenting to such modification, waiver or amendment.
16
17
16. Successors.
All the covenants and provisions of this Agreement shall be binding
upon and inure to the benefit of the Company, the Holders and their respective
successors and assigns hereunder.
17. Termination.
This Agreement shall terminate at 5:00 New York time on December 31,
2002. Notwithstanding the foregoing, the indemnification provisions of Section 7
shall survive such termination.
18. Governing Law; Submission to Jurisdiction.
This Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Texas and for all
purposes shall be construed in accordance with the laws of said State without
giving effect to the rules of said State governing the conflicts of laws.
19. Severability.
If any provision of this Agreement shall be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision of this Agreement.
20. Captions.
The caption headings of the Sections of this Agreement are for
convenience of reference only and are not intended, nor should they be construed
as, a part of this Agreement and shall be given no substantive effect.
21. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Representative and any other
registered Holder of the Warrant Certificates or Registrable Securities any
legal or equitable right, remedy or claim under this Agreement; and this
Agreement shall be for the sole and exclusive benefit of the Company and the
Representative and any other Holder of the Warrant Certificates or Registrable
Securities.
22. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
17
18
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
Commerce Casualty Group, Inc.
By:
---------------------------------------
Xxxx X. X. Xxxxxx, III
Chief Operating Officer
Attest:
------------------------
___ Secretary
FIRST LONDON SECURITIES CORPORATION
By:
---------------------------------------
Xxxxxxx X. Xxxxxxx, President
EXHIBIT A
19
WARRANT CERTIFICATE
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, (ii) TO THE
EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT
RELATING TO THE DISPOSITION OF SECURITIES), OR (iii) AN OPINION OF COUNSEL, IF
SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL FOR THE ISSUER, THAT AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M, NEW YORK TIME ON __________, 2002
NO. W-______
___________ Common Stock ___________ Warrant
Representative's Representative's
Warrants Warrants
or
__________ Underlying
Warrants
This Warrant Certificate certifies that ___________________, or
registered assigns, is the registered holder (the "Holder") of _____________
Common Stock Representative's Warrant, ________ Warrant Representative's
Warrants and _________________ Underlying Warrants of Commerce Casualty Group,
Inc. (the "Company"). Each Common Stock Representative's Warrant permits the
Holder to purchase initially, at any time from December 31, 1998 (the "Purchase
Date") until 5:00 p.m. New York Time on December 31, 2002 (the "Expiration
Time"), one share of the Company's Common Stock at the initial exercise price,
subject to adjustment in certain events (the "Share Exercise Price"), of $8.25
per share (165% of the Common Stock IPO Price). Each Warrant Representative's
Warrant permits the Holder to purchase initially, at any time from the Purchase
Date until the Expiration Time, one Underlying Warrant at the initial exercise
price, subject to adjustment in certain events, of $.15625 per Underlying
Warrant (125% of the Warrant IPO Price) (the "Underlying Warrant Exercise
Price"). Each Underlying Warrant permits the Holder thereof to purchase, at any
time from the Purchase Date until the Expiration Time, one share of the
Company's Common Stock at the initial exercise price, subject to adjustment in
certain events, of $7.8125 per share.
20
Any exercise of Common Stock Representative's Warrants, Warrant
Representative's Warrants, or Underlying Warrants shall be effected by surrender
of this Warrant Certificate and payment of the exercise price thereof at an
office or agency of the Company, but subject to the conditions set forth herein
and in the Representative's Warrant Agreement dated as of December 31, 1997,
between the Company and First London Securities Corporation (the
"Representative's Warrant Agreement"). Payment of the exercise price shall be
made by certified check or official bank check in New York Clearing House funds
payable to the order of the Company in the event there is no cashless exercise
pursuant to Section 3.1(b) of the Representative's Warrant Agreement. The Common
Stock Representative's Warrants, the Warrant Representative's Warrants, and the
Underlying Warrants are collectively referred to as "Warrants".
No Warrant may be exercised after the Expiration Time, at which time
all Warrants evidenced hereby, unless exercised prior thereto, hereby shall
thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Representative's Warrant
Agreement, which Representative's Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to for a
description of the rights, limitation or rights, obligations, duties and
immunities thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of the Warrants.
The Representative's Warrant Agreement provides that upon the
occurrence of certain events, the exercise price, the type and the number of the
Company's securities issuable thereupon may, subject to certain conditions, be
adjusted. In such event, the Company will, at the request of the holder, issue a
new Warrant Certificate evidencing the adjustment in the exercise price and the
number or type of securities, as the case may be, issuable upon the exercise of
the Warrants; provided, however, that the failure of the Company to issue such
new Warrant Certificates shall not in any way change, alter, or otherwise
impair, the rights of the holder as set forth in the Representative's Warrant
Agreement.
Upon due presentment for registration or transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferees in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the
Representative's Warrant Agreement, without any charge except for any tax or
other governmental charge imposed in connection with such transfer.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
2
21
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the Holder, and for all other
purposes, and the Company shall not be affected by any notice to the contrary.
All terms used in this Warrant Certificate which are defined in the
Representative's Warrant Agreement shall have the meanings assigned to them in
the Representative's Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated as of January 15, 1998
COMMERCE CASUALTY GROUP, INC.
By:
------------------------------------
Xxxx X. Xxxxxxxx, President
(Seal)
Attest:
--------------------------------
Xxxxxxx X. Xxxxxxx, Secretary
3
22
EXHIBIT 1
FORM OF SUBSCRIPTION (CASH EXERCISE)
(To be signed only upon exercise of Warrant)
TO: Commerce Casualty Group, Inc.
0000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
The undersigned, the Holder of Warrant Certificate number ____ (the
"Warrant"), representing ______________ Common Stock Representative's Warrants,
__________ Warrant Representative's Warrants and _______________ Underlying
Warrants of Commerce Casualty Group, Inc. (the "Company"), which Warrant
Certificate is being delivered herewith, hereby irrevocably elects to exercise
the purchase right provided by the Warrant Certificate for, and to purchase
thereunder, _____________ Shares, _____________ Underlying Warrants __________
underlying Warrant Shares of the Company, and herewith makes payment of
$____________ therefor, and requests that the certificates for such securities
be issued in the name of, and delivered to, _________________________________
_____________________________ whose address is
____________________________________, all in accordance with the
Representative's Warrant Agreement and the Warrant Certificate.
Dated:____________________________
-------------------------------------------
(Signature must conform in all respects to
name of Holder as specified on the face of
the Warrant Certificate)
-------------------------------------------
-------------------------------------------
(Address)
4
23
EXHIBIT 2
FORM OF SUBSCRIPTION (CASHLESS EXERCISE)
TO: Commerce Casualty Group, Inc.
0000 Xxxx Xxxxxxx
Xxxxx, Xxxxxxx 00000
The undersigned, the Holder of Warrant Certificate number ____ (the
"Warrant"), representing ___________ Common Stock Representative's Warrants and
_________________ Underlying Warrants of Commerce Casualty Group, Inc. (the
"Company"), which Warrant is being delivered herewith, hereby irrevocably elects
the cashless exercise of the purchase right provided by the Representative's
Warrant Agreement and the Warrant Certificate for, and to purchase thereunder,
shares of the Company Common Stock in accordance with the formula provided at
Article 3 of the Representative's Warrant Agreement. The undersigned requests
that the certificates for such shares be issued in the name of, and delivered
to _______, whose address is _________, all in accordance with the Warrant
Certificate.
Dated:____________________
-------------------------------------------
(Signature must conform in all respects to
name of Holder as specified on the face of
the Warrant Certificate)
-------------------------------------------
-------------------------------------------
(Address)
5
24
(FORM OF ASSIGNMENT)
(To be exercised by the registered holder if such holder desires to
transfer the Warrant Certificate.)
FOR VALUE RECEIVED ___________________________________________________________
hereby sells, assigns and transfers unto
(Print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint___________________________
________________________________________________ Attorney, to transfer the
within Warrant Certificate on the books of the within-named Company, and full
power of substitution.
Dated:______________________
Signature:
-------------------------------------------
(Signature must conform in all respects to
name of holder as specified on the fact of
the Warrant Certificate)
-------------------------------------------
(Insert Social Security or Other Identifying
Number of Assignee)
6
