Exhibit 2
REORGANIZATION AGREEMENT
This Reorganization Agreement is entered into as of December 7, 2005 (this
"Agreement") by and among:
(i) CRM Holdings, Ltd., a Bermuda company ("CRM Holdings");
(ii) Compensation Risk Managers, LLC, a limited liability company
organized under the laws of New York ("CRM");
(iii) Compensation Risk Managers of California, LLC, a limited liability
company organized under the laws of California ("CRM CA") and a wholly-owned
subsidiary of CRM;
(iv) EIMAR, L.L.C., a limited liability company organized under the laws
of New York ("Eimar" and, collectively with CRM and CRM CA, the "Limited
Liability Companies");
(v) Twin Bridges (Bermuda) Ltd., a Bermuda company ("Twin Bridges");
(vi) the following individuals, who are individually referred to herein as
an "Existing Shareholder" and collectively as the "Existing Shareholders":
Xxxxxx X. Xxxxxx, Xx.;
Xxxxxx X. Xxxxxx, Xx.;
Xxxxxx X. Xxxxxx;
Xxxxx X. Xxxxxxx;
Xxxxxxx Xxxxxxx, Xx.;
Xxxx Xxxxxxx;
Xxxxx X. Xxxxxxx, Xx.;
Xxxxx X. Xxxxxxxx; and
Xxxxxxxx Xxxxxxxx
(Messrs. Xxxxxxx Xxxxxxx, Xx., Xxxx Xxxxxxx, Xxxxx X. Xxxxxxx, Xx.,
Xxxxxxxx and Xxxxxxxx are sometimes individually referred to herein as a
"Village Shareholder" and collectively as the "Village Shareholders"); and
(vii) Village Holdings, LLC, a limited liability company organized under
the laws of New York ("Village Holdings").
CRM Holdings, CRM, CRM CA, Eimar, Twin Bridges, each of the Existing
Shareholders, the Village Shareholders and Village Holdings are sometimes
individually referred to herein as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, it is contemplated that, prior to the consummation of the
transactions set forth in Section 1.1 hereof, Village Holdings will liquidate
and distribute its interests in each of CRM and Eimar to the Village
Shareholders, so that the Village Shareholders will hold their respective
interests in CRM and Eimar directly;
WHEREAS, CRM has retained a firm of professional advisors (the
"Professional Advisor") to appraise the relative value of the Limited Liability
Companies, on the one hand, and Twin Bridges, on the other hand, and to render a
written report with respect thereto (the "Report");
WHEREAS, CRM Holdings was incorporated on September 7, 2005 to acquire all
of the outstanding membership interests in the Limited Liability Companies and
the outstanding share capital of Twin Bridges immediately prior to the closing
of CRM Holdings' initial public offering (the "Public Offering") of its common
shares, US$0.01 par value per share (the "CRM Holdings Common Shares"),
registered with the U.S. Securities and Exchange Commission on Form S-1 (the
"Registration Statement") in accordance with the requirements of the U.S.
Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, the Existing Shareholders desire to contribute all of the issued
and outstanding membership interests in CRM and Eimar to CRM USA Holdings Inc.
("CRM USA Holdings"), a corporation to be duly incorporated under the laws of
the State of Delaware prior to the Closing (as defined in Section 5.1 hereof),
in exchange for all of the issued and outstanding shares of common stock of CRM
USA Holdings;
WHEREAS, the Existing Shareholders desire to contribute (a) all of the
issued and outstanding capital stock of CRM USA Holdings they receive in such
contribution and exchange and (b) all of the issued and outstanding shares of
Twin Bridges to CRM Holdings in exchange for CRM Holdings Common Shares and
class B shares, par value US$0.01 per share, of CRM Holdings (the "CRM Holdings
Class B Shares"), and CRM Holdings desires to effect such exchange;
WHEREAS, immediately after such contribution and exchange, CRM Holdings
desires that CRM USA Holdings cause CRM to distribute to CRM USA Holdings all of
the issued and outstanding membership interests in its wholly-owned subsidiary,
CRM CA; and
WHEREAS, Xxxx Finance Limited, a Bermuda company that is beneficially
owned by the partners of Xxxxxxx Xxxxxxxx Xxxxxx, currently owns 1,200,000 CRM
Holdings Common Shares;
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants and agreements contained in this Agreement and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Parties hereto
hereby agree as follows:
ARTICLE I
CONTRIBUTION OF CRM AND EIMAR TO CRM USA HOLDINGS;
CONTRIBUTION OF CRM USA HOLDINGS TO CRM HOLDINGS
1.1 Immediately prior to the Closing, the Parties hereby agree that they
shall take such action and execute and deliver all such documents and
instruments as may be necessary or appropriate so that:
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(a) The Professional Advisor completes and delivers to each of the Parties
and to the Underwriters (as defined in Section 4.1(a) hereof) the Report signed
by the Professional Advisor;
(b) Village Holdings shall distribute to the Village Shareholders, in
proportion to their membership interests in Village Holdings, all of the
membership interests in each of CRM and Eimar owned by Village Holdings;
(c) Each of CRM, CRM CA and Eimar shall file a properly executed IRS Form
8832 to elect to be taxed as an association for U.S. federal tax purposes
effective on the Closing Date (as defined in Section 5.1 hereof);
(d) CRM Holdings shall cause CRM USA Holdings to be duly incorporated as a
corporation that is validly existing and in good standing under the laws of the
State of Delaware.
1.2 At the Closing, each of the Existing Shareholders shall contribute all
of his membership interests in CRM and Eimar, equal to the percentage of all
membership interests in CRM and Eimar, respectively, set forth opposite his name
on Exhibit A-1 hereto to CRM USA Holdings in exchange for a number of shares of
common stock, par value US$0.01 per share, of CRM USA Holdings (the "CRM USA
Holdings Common Stock") equal to the percentage of all outstanding shares of CRM
USA Holdings Common Stock set forth opposite his name on Exhibit A-1 hereto.
1.3 At the Closing, each of the Existing Shareholders shall contribute the
shares of CRM USA Holdings Common Stock received pursuant to Section 1.2 hereof
to CRM Holdings in exchange for a number of CRM Holdings Common Shares (a
portion of which may be CRM Holdings Class B Shares) equal to the percentage of
the aggregate outstanding CRM Holdings Common Shares and CRM Holdings Class B
Shares (after giving effect to the purchase set forth in Section 3.3 hereof) set
forth opposite his name on Exhibit A-2 hereto.
1.4 The Existing Shareholders shall effect the contributions provided for
in Sections 1.2 and 1.3 hereof and in Section 2.1 hereof by delivering to the
transferees provided for in such Sections certificates, duly registered in the
respective names of the Existing Shareholders, together with duly executed stock
powers or other appropriate instruments of transfer.
ARTICLE II
CONTRIBUTION OF TWIN BRIDGES
TO CRM HOLDINGS
2.1 At the Closing, each of the Existing Shareholders shall contribute his
common shares, par value US$1.00 per share, of Twin Bridges (the "Twin Bridges
Common Shares") in the amounts set forth on Exhibit A-3 hereto to CRM Holdings
in exchange for a number of CRM Holdings Common Shares (a portion of which may
be CRM Holdings Class B Shares) equal to the percentage of the aggregate
outstanding CRM Holding Common Shares and CRM Holdings Class B Shares (after
giving effect to the purchase described in Section 3.3 hereof) set forth
opposite his name on Exhibit A-3 hereto.
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ARTICLE III
DISTRIBUTION BY CRM OF ITS MEMBERSHIP INTERESTS IN CRM CA
TO CRM USA HOLDINGS;
PURCHASE OF CRM HOLDINGS COMMON SHARES
FROM XXXX FINANCE LIMITED
3.1 Immediately following the completion of the contributions set forth in
Sections 1.2, 1.3 and 2.1 hereof, CRM shall distribute all of the membership
interests it holds in CRM CA to CRM USA Holdings as a dividend.
3.2 CRM Holdings hereby agrees that it will take all actions that may be
necessary to cause CRM USA Holdings and CRM to effect the distribution described
in Section 3.1 hereof.
3.3 Immediately following the completion of the distribution described in
Section 3.1 hereof, CRM Holdings shall purchase from Xxxx Finance Limited for
US$12,000 the 1,200,000 CRM Holdings Common Shares held by Xxxx Finance Limited.
ARTICLE IV
CLOSING CONDITIONS
The obligations of each of the Parties to complete the actions set forth
in Articles I, II and III of this Agreement shall be subject to the prior or
simultaneous fulfilment of the following conditions precedent:
4.1 Matters Relating to the Public Offering.
(a) Each of the Existing Shareholders shall be a selling shareholder under
the Underwriting Agreement (the "Underwriting Agreement") to be entered into
among CRM Holdings, Sandler X'Xxxxx & Partners, L.P., as representative of the
several underwriters to be named in Schedule I thereto (the "Underwriters") and
the selling shareholders to be named therein (the "Selling Shareholders"); the
Underwriting Agreement shall be executed and delivered by or on behalf of each
of the Existing Shareholders in form and substance satisfactory to each Existing
Shareholder; and the Underwriting Agreement shall be in full force and effect.
(b) The secondary offering of CRM Holdings Common Shares by the Existing
Shareholders at the First Time of Delivery shall, in the aggregate, constitute
all of the CRM Holdings Common Shares sold to the Underwriters pursuant to the
Underwriting Agreement at the First Time of Delivery except only for CRM
Holdings Common Shares sold to the Underwriters by the Company.
(c) All closing conditions set forth in the Underwriting Agreement shall
have been satisfied or waived by the Underwriters, other than the closing
condition regarding the consummation of the transactions contemplated by this
Agreement.
(d) The payment to CRM Holdings and the Selling Shareholders of the
purchase price for the CRM Holdings Common Shares to be sold and purchased by
the Underwriters pursuant
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to the Underwriting Agreement at the First Time of Delivery shall have been
unconditionally authorized by the Underwriters subject only to the consummation
of the transactions contemplated by this Agreement.
4.2 No Legal Preclusion. No statute, rule, regulation, executive order,
decree, ruling or preliminary or permanent injunction shall, after the date
hereof, have been enacted, entered, promulgated or enforced by any federal,
state, provincial, local or foreign government, court, arbitration, agency or
commission or other governmental, regulatory, judicial or administrative body or
authority, including self-regulating organizations (each, a "Governmental
Entity"), that prohibits, restrains or enjoins the consummation of the
transactions contemplated by this Agreement.
4.3 No Proceedings. No claim, action, suit, arbitration, inquiry,
proceeding or investigation shall have been commenced by or before any
Governmental Entity which seeks to restrain or materially and adversely alter
the transactions contemplated by this Agreement, taken as a whole.
ARTICLE V
CLOSING
5.1 Closing. Unless this Agreement is terminated pursuant to Article VII
hereof, and subject to the satisfaction of the conditions precedent set forth in
Article IV hereof, the closing (the "Closing") of the transactions contemplated
by this Agreement shall take place at the offices of Xxxxx & XxXxxxxx LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the same day as the First
Time of Delivery (as defined in the Underwriting Agreement) for the Public
Offering (the "Closing Date"). A meeting will be held at the offices of Xxxxx &
XxXxxxxx LLP at 10 a.m., Eastern time, on the Business Day next preceding such
Closing Date, at which meeting the final drafts of the documents to be delivered
at the Closing will be available for review by the Parties hereto. For the
purposes of this Agreement, "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in New York are generally authorized or obligated by law or executive order to
close.
5.2 Deliveries at Closing. At the Closing, the Parties hereby agree that
the following acts shall be taken and the following deliveries shall be made, in
the order reflected below:
(a) Each of CRM, CRM CA, Eimar, Twin Bridges and the Existing Shareholders
shall have furnished or caused to be furnished to U.S. counsel and Bermuda
counsel to CRM Holdings and to the Underwriters such certificates as to such
matters as such counsel or the Underwriters may reasonably request;
(b) Each of the Existing Shareholders shall contribute the membership
interests in CRM and Eimar owned by him as shown on Exhibit A-1 to CRM USA
Holdings in accordance with Section 1.2 hereof. In exchange for such membership
interests in CRM and Eimar, CRM USA Holdings shall issue CRM USA Holdings Common
Stock to the Existing Shareholders in accordance with Section 1.2 hereof,
credited as fully paid and non-assessable, and deliver to the
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Existing Shareholders duly executed share certificates representing such CRM USA
Holdings Common Stock registered in their respective names;
(c) Each of the Existing Shareholders shall contribute his shares of CRM
USA Holdings Common Stock received pursuant to 5.2(b) hereof to CRM Holdings in
accordance with Section 1.3 hereof. In exchange for such shares of CRM USA
Holdings Common Stock, CRM Holdings shall issue CRM Holdings Common Shares and
CRM Holdings Class B Shares to the Existing Shareholders in accordance with
Section 1.3 hereof, credited as fully paid and non-assessable, and deliver to
the Existing Shareholders duly executed share certificates representing such CRM
Holdings Common Shares and CRM Holdings Class B Shares registered in their
respective names;
(d) Each of the Existing Shareholders shall contribute the Twin Bridges
Common Shares owned by him as shown on Exhibit A-3 to CRM Holdings in accordance
with Section 2.1 hereof. In exchange for such Twin Bridges Common Shares, CRM
Holdings shall issue CRM Holdings Common Shares and CRM Holdings Class B Shares
to the Existing Shareholders in accordance with Section 2.1 hereof, credited as
fully paid and non-assessable, and deliver to the Existing Shareholders duly
executed share certificates representing such CRM Holdings Common Shares and CRM
Holdings Class B Shares registered in their respective names;
(e) CRM shall distribute all of the membership interests in CRM CA it owns
to CRM USA Holdings;
(f) CRM Holdings shall issue separate share certificates representing the
CRM Holdings Common Shares and the CRM Holdings Class B Shares issued pursuant
to Section 5.2(c) hereof, and the CRM Holdings Common Shares and the CRM
Holdings Class B Shares issued pursuant to Section 5.2(d) hereof;
(g) CRM Holdings shall purchase from Xxxx Finance Limited the 1,200,000
CRM Holdings Common Shares held by Xxxx Finance Limited for US$12,000;
(h) Each Existing Shareholder or Village Holdings, as the case may be,
shall sign the Form 8832 for CRM and Eimar, and CRM shall sign the Form 8832 for
CRM CA, and each Existing Shareholder, Village Holdings and CRM shall sign all
other forms requested by CRM Holdings; and
(i) Each Party hereto shall deliver such other documents as any other
Party hereto or the Underwriters or their respective counsel may reasonably
request.
5.3 Issuance of Shares. Each Existing Shareholder acknowledges and
understands that all of the securities to be issued to such Existing Shareholder
as contemplated by this Agreement will be issued bearing the legend set forth
below:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE OR
FOREIGN SECURITIES LAWS. THEY MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED
OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND ANY
APPLICABLE STATE OR FOREIGN SECURITIES
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LAWS OR THE ISSUER OF THESE SECURITIES RECEIVES AN OPINION OF COUNSEL
SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED."
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of CRM Holdings and Twin Bridges. In
order to induce each other Party to enter into this Agreement and to consummate
the transactions contemplated hereby, each of CRM Holdings and Twin Bridges
hereby represents and warrants, severally and not jointly, to each other Party
hereto and to the Underwriters that:
(a) Organization. Such Party has been duly incorporated and is validly
existing in good standing under the laws of its jurisdiction of incorporation.
Such Party has the requisite corporate power and authority to execute and
deliver this Agreement and to otherwise perform its obligations under this
Agreement. CRM Holdings will have the requisite corporate power and authority to
issue the CRM Holdings Common Shares and the CRM Holdings Class B Shares as
contemplated by this Agreement prior to the Closing.
(b) Valid and Binding Obligation. This Agreement has been duly authorized,
executed and delivered by such Party and constitutes a valid and binding
obligation of such Party enforceable against such Party in accordance with its
terms. All corporate action necessary for the authorization, creation, issuance
and delivery of the shares to be issued by CRM Holdings as contemplated by this
Agreement has been taken.
(c) Compliance With Applicable Laws and Other Instruments. Neither the
execution nor delivery of, nor the performance of or compliance with, this
Agreement nor the consummation of the transactions contemplated hereby will,
with or without the giving of notice or passage of time, conflict with or result
in a breach of or violation of any of the terms or provisions of, or constitute
a default under, or result in the imposition of any lien or encumbrance upon any
of its assets or properties under, any statute, indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which such Party is a
party or by which such Party is bound or to which any of the properties or
assets of such Party is subject, nor will any such action result in any
violation of the constituent documents of such Party (including, in the case of
CRM Holdings, its bye-laws and its amended and restated bye-laws), or any law or
statute or any order, rule or regulation of any Governmental Entity having
jurisdiction over such Party or the property or assets of such Party. Such Party
is not subject to any restriction which would prohibit such Party from entering
into or performing such Party's obligations under this Agreement.
(d) Validity of Shares. The shares, if any, to be issued pursuant to this
Agreement by CRM Holdings, when issued and delivered pursuant to the terms of
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable and free and clear of all pledges, liens, encumbrances and
restrictions, except to the extent the transfer thereof may be restricted by
applicable U.S. federal or state or foreign securities laws.
(e) No Approvals. Based in part upon the representations of the Existing
Shareholders in Section 6.3(d) hereof, no consent, authorization, approval,
permit or order of or
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registration or filing with any Governmental Entity is required under any laws
or regulations in connection with the execution and delivery of this Agreement
or the offer, issuance or delivery of the shares of capital stock to be issued
pursuant to this Agreement, or the performance of the other transactions
contemplated hereby by such Party, except that the permission of the Bermuda
Monetary Authority is required, and a letter of permission has been issued for
the issuance of shares in CRM Holdings to the Existing Shareholders.
(f) Share Capital. Such Party has an authorized share capital as set forth
opposite its name on Exhibit B hereto, and the number of shares of each class of
capital stock listed opposite its name on Exhibit B hereto constitutes all the
issued shares of capital stock of such Party. Except as contemplated by this
Agreement or as described in the Underwriting Agreement or the Registration
Statement, there are no outstanding subscriptions, options, warrants, calls,
contracts, demands, commitments, convertible securities or other agreements or
arrangements of any character or nature whatever under which such Party is
obligated to issue any securities of any kind representing an ownership interest
in it.
(g) Future Ownership. CRM Holdings hereby represents and warrants that
following the consummation of all transactions contemplated by Articles I
through III of this Agreement, in accordance with the terms and conditions of
this Agreement, CRM Holdings will own of record and beneficially all of the
issued shares of capital stock of CRM USA Holdings and Twin Bridges, and CRM USA
Holdings will own of record and beneficially all of the issued membership
interests in CRM, CRM CA and Eimar.
(h) Certain Information. All historical information provided to the
Professional Advisor by CRM Holdings or Twin Bridges, as the case may be, in
connection with the Report was true, correct and complete in all material
respects when provided, and all forward-looking statements provided to the
Professional Advisor by CRM Holdings or Twin Bridges, as the case may be, were
reasonable in the judgment of CRM Holdings or Twin Bridges, as the case may be,
when made and based on assumptions that CRM Holdings or Twin Bridges, as the
case may be, believed to be reasonable under the circumstances then pertaining.
6.2 Representations and Warranties of the Limited Liability Companies. In
order to induce each other Party hereto to enter into this Agreement and to
consummate the transactions contemplated hereby, each of the Limited Liability
Companies hereby represents and warrants, severally and not jointly, to each
other Party hereto and to the Underwriters that:
(a) Organization. Such Party has been duly organized and is validly
existing in good standing as a limited liability company under the laws of its
jurisdiction of organization. Such Party has the requisite power and authority
to execute and deliver this Agreement and to perform its obligations under this
Agreement.
(b) Valid and Binding Obligation. This Agreement has been duly authorized,
executed and delivered by such Party and constitutes a valid and binding
obligation of such Party enforceable against such Party in accordance with its
terms.
(c) Compliance With Applicable Laws and Other Instruments. Neither the
execution nor delivery of, nor the performance of or compliance with, this
Agreement nor the
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consummation of the transactions contemplated hereby will, with or without the
giving of notice or passage of time, conflict with or result in a breach of or
violation of any of the terms or provisions of, or constitute a default under,
or result in the imposition of any lien or encumbrance upon any of its assets or
properties under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Party is a party or by
which such Party is bound or to which any of the properties or assets of such
Party is subject, nor will any such action result in any violation of the
constituent documents of such Party, or any law or statute or any order, rule or
regulation of any Governmental Entity having jurisdiction over such Party or the
property or assets of such Party, other than CRM obtaining insurance broker
licenses from the State of New York and State of California Insurance
DEPARTMENTS. Such Party is not subject to any restriction which would prohibit
such Party from entering into or performing such Party's obligations under this
Agreement.
(d) No Approvals. No consent, authorization, approval, permit or order of
or registration or filing with any Governmental Entity is required under any
laws or regulations in connection with the execution and delivery of this
Agreement by such Party or the performance of the transactions contemplated
hereby by such Party, except that the permission of the Bermuda Monetary
Authority is required, and a letter of permission has been issued for the issue
of shares by CRM Holdings as a result of the contribution of the CRM USA
Holdings Common Stock by the Existing Shareholders to CRM Holdings, and except
as set forth in Section 6.2(c) hereof.
(e) Membership Interests. Such Party has membership interests issued as
set forth opposite its name on Exhibit C hereto, and such interests constitute
all the issued membership interests of such Party. Except as contemplated by
this Agreement, there are no outstanding subscriptions, options, warrants,
calls, contracts, demands, commitments, convertible securities or other
agreements or arrangements of any character or nature whatever under which such
Party is obligated to issue any membership interests or securities of any kind
representing an ownership interest in it. CRM further represents and warrants
that it is the sole record and beneficial owner of all issued membership
interests in CRM CA.
(f) Certain Information. All historical information provided to the
Professional Advisor by such Party in connection with the preparation of the
Report was true, correct and complete in all material respects when provided,
and all forward-looking statements provided to the Professional Advisor by such
Party were reasonable in the judgment of such Party when made and based on
assumptions that such Party believed to be reasonable under the circumstances
then pertaining.
(g) Tax Classification Election. Such Party has not made an election to
change its classification for U.S. federal tax purposes effective as of a date
during the sixty (60) months preceding the Closing Date, and is not otherwise
precluded from making an effective election to be taxed as an association for
U.S. federal income tax purposes as of the Closing Date.
6.3 Representations and Warranties of the Existing Shareholders and
Village Holdings. In order to induce each other Party hereto to enter into this
Agreement and to consummate the transactions contemplated hereby, each Existing
Shareholder and Village
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Holdings hereby represents and warrants, severally and not jointly, to each
other Party hereto and to the Underwriters that:
(a) Valid and Binding Obligation. This Agreement has been duly authorized,
executed and delivered by such Party and constitutes a valid and binding
obligation of such Party enforceable against such Party in accordance with its
terms. Each of the Village Shareholders and Village Holdings hereby represents
and warrants, severally and not jointly, that Village Holdings has been duly
organized, is validly existing in good standing as a limited liability company
under the laws of New York, and has the requisite power and authority to execute
and deliver this Agreement and to perform its obligations under this Agreement.
(b) Compliance With Applicable Laws and Other Instruments. Neither the
execution nor delivery of, nor the performance of or compliance with, this
Agreement nor the consummation of the transactions contemplated hereby will,
with or without the giving of notice or passage of time, conflict with or result
in a breach of or violation of any of the terms or provisions of, or constitute
a default under, or result in the imposition of any lien or encumbrance upon any
of such Party's assets or properties under, any statute, indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which such
Party is a party or by which such Party is bound or to which any of the
properties or assets of such Party is subject, nor will any such action result
in any violation of the constituent documents, if any, of such Party or any law
or statute or any order, rule or regulation of any Governmental Entity having
jurisdiction over such Party or the property or assets of such Party. Such Party
is not subject to any restriction which would prohibit such Party from entering
into or performing such Party's obligations under this Agreement.
(c) No Approvals. Except as otherwise provided in Sections 6.1(e) and
6.2(d) of this Agreement, no consent, authorization, approval, permit or order
of or registration or filing with any Governmental Entity is required under any
laws or regulations in connection with the execution and delivery of this
Agreement by such Party or the performance of the transactions contemplated
hereby by such Party.
(d) Investment Intent. Such Party is an "accredited investor", as such
term is defined in Regulation D promulgated under the Securities Act, and either
(i) has an individual net worth, or joint net worth with his spouse, in excess
of U$1,000,000; or (ii) has had an individual income in excess of US$200,000, or
joint income in excess of US$300,000, in each of the previous two years, and
such Party reasonably expects to have such income in the current year. The CRM
Holdings Common Shares and CRM Holdings Class B Shares to be issued to such
Party hereunder are being acquired for investment for such Party's own account,
and such Party will not sell such shares unless such shares are registered under
the Securities Act or sold pursuant to an exemption therefrom. Such Party
understands that such shares have not been registered under the Securities Act
or any state securities laws by reason of their contemplated issuance in
transactions exempt from the registration requirements of the Securities Act
pursuant to Section 4(2) thereof and applicable state securities laws, and that
the reliance of CRM Holdings and others upon these exemptions is predicated in
part upon this representation by such Party. Such Party further understands that
such shares may not be transferred or resold without (i) registration under the
Securities Act and any applicable state or foreign securities laws, or (ii) an
available exemption from the registration requirements of the Securities Act and
applicable state
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or foreign securities laws. Such Party understands that an exemption from such
registration may not presently be available pursuant to Rule 144 under the
Securities Act. Such Party understands that any sales pursuant to Rule 144 can
be made only in full compliance with the provisions of Rule 144. In addition,
such Party (i) is able to bear the loss of such Party's entire investment in
such shares, and (ii) has such knowledge of CRM Holdings, CRM USA Holdings, the
Limited Liability Companies and Twin Bridges and experience in business matters
that such Party is capable of evaluating the merits and risks of the investment
to be made by such Party pursuant to this Agreement.
(e) Beneficial Owner. (i) With respect to Messrs. Xxxxxx, Sr., Xxxxxx,
Jr., Xxxxxx and Xxxxxxx, each such Party represents and warrants, severally and
not jointly, that such Party is the sole record and beneficial owner of the
membership interests in CRM and Eimar set forth opposite his name on Exhibit C
hereto and is the sole record and beneficial owner of the number of Twin Bridges
Common Shares set forth opposite his name on Exhibit A-3 hereto. Such membership
interests constitute all of the membership interests such Party owns in CRM and
Eimar, and such shares constitute all of the Twin Bridges Common Shares such
Party owns in Twin Bridges. Immediately prior to the Closing, such Party will
have good and valid title to such membership interests and common shares, free
and clear of all pledges, liens, encumbrances and restrictions of whatever
character, with full power and authority to transfer, exchange or otherwise
dispose of such membership interests and shares as contemplated hereby.
(i) With respect to the Village Shareholders, each Village Shareholder
represents and warrants, severally and not jointly, that, on the date of this
Agreement, such Party is the sole record and beneficial owner of the membership
interests in Village Holdings set forth opposite his name on Exhibit C hereto.
Each of the Village Shareholders and Village Holdings represents and warrants,
severally and not jointly, that such interests constitute all of the issued
membership interests in Village Holdings and, except as contemplated by this
Agreement, that there are no outstanding subscriptions, options, warrants,
calls, contracts, demands, commitments, convertible securities or other
agreements or arrangements of any character or nature whatever under which
Village Holdings is obligated to issue any membership interests or securities of
any kind representing an ownership interest in it. Each of the Village
Shareholders and Village Holdings further represents and warrants, severally and
not jointly, that Village Holdings is the sole record owner of the membership
interests in CRM and Eimar set forth opposite the name of Village Holdings on
Exhibit C hereto, such membership interests constitute all of the membership
interests Village Holdings owns in the Limited Liability Companies and that
prior to the Closing such membership interests will be distributed to the
Village Shareholders in proportion to their membership interests in Village
Holdings. Each of the Village Shareholders further represents and warrants,
severally and not jointly, that such Party is the sole record and beneficial
owner of the Twin Bridges Common Shares set forth opposite his name on Exhibit
A-3 hereto, and such Twin Bridges Common Shares constitute all of the common
shares such Party owns in Twin Bridges. Each of the Village Shareholders and
Village Holdings further represents and warrants, severally and not jointly,
that immediately prior to the Closing, such Party will have good and valid title
to such membership interests or shares, as the case may be, free and clear of
all pledges, liens, encumbrances and restrictions of whatever character, with
full power and authority to transfer, exchange or otherwise dispose of such
membership interests or shares as contemplated hereby.
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(ii) Immediately prior to the consummation of the transactions
contemplated by this Agreement, such Party will be the sole record and
beneficial owner of the percentage of membership interests in CRM and Eimar set
forth opposite his name on Exhibit A-1 hereto. The aggregate membership
interests in each of CRM and Eimar set forth on Exhibit A-1 hereto will,
immediately prior to the consummation of the transactions contemplated by this
Agreement, constitute all of the issued and outstanding membership interests of
each of CRM and Eimar, respectively. All of the issued and outstanding
membership interests of CRM CA are owned of record and beneficially by CRM, and
CRM has, and upon the consummation of the transactions contemplated by this
Agreement, CRM USA Holdings will have, good and valid title to such membership
interests free and clear of all pledges, liens, encumbrances and restrictions of
whatever character, and CRM has full power and authority to transfer, exchange
or otherwise dispose of its membership interests in CRM CA as contemplated
hereby. The total number of issued and outstanding Twin Bridges Common Shares is
120,000, and immediately prior to the consummation of the transactions
contemplated by this Agreement, such Party will be the sole record and
beneficial owner of the number of Twin Bridges Common Shares set forth opposite
his name on Exhibit A-3 hereto. Such membership interests and shares will
constitute all of the membership interests in and shares of capital stock, as
the case may be, such Party owns in CRM, Eimar and Twin Bridges. At the Closing,
such Party will have good and valid title to such membership interests and
shares free and clear of all pledges, liens, encumbrances and restrictions of
whatever character, with full power and authority to transfer, exchange or
otherwise dispose of such membership interests and shares as contemplated
hereby. Such Party will take or cause to be taken all required actions on such
Party's part so that, upon consummation of such transfer, exchange or other
disposition as contemplated hereby, CRM Holdings and/or CRM USA Holdings, as the
case may be, will become the sole record and beneficial owner of and have good
and valid title to all of such membership interests and shares free and clear of
all pledges, liens, encumbrances and restrictions of whatever character.
(f) Exculpation Among Existing Shareholders. Such Party acknowledges that
in making such Party's decision to consummate the exchange of such Party's
membership interests and shares, as the case may be, in CRM, Eimar and Twin
Bridges, for CRM Holdings Common Shares, CRM Holdings Class B Shares or CRM USA
Holdings Common Stock as contemplated hereby, such Party is not relying on any
other Existing Shareholder or any other person, firm, company or entity;
provided, however, that each Party is relying on the representations, warranties
and covenants of each other Party hereto contained in this Agreement including,
without limitation, the representations and warranties set forth in Sections
6.1(h), 6.2(f) and 6.4 hereof, which representations and warranties are true,
correct and complete in all material respects.
6.4 Representations and Warranties of Messrs. Xxxxxx, Jr., Xxxxxx and
Xxxxxxxx. Each of Xxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxxx and Xxxxx X. Xxxxxxxx
hereby represents and warrants, severally and not jointly, to each other Party
hereto and to the Underwriters that all historical information provided to the
Professional Advisor by such Party, whether on behalf of himself or on behalf of
the Limited Liability Companies or Twin Bridges, in connection with the
preparation of the Report was true, correct and complete in all material
respects when provided, and all forward-looking statements so provided to the
Professional Advisor by such Party were reasonable in the judgment of such Party
when made and based on assumptions that such Party believed to be reasonable
under the circumstances then pertaining.
12
ARTICLE VII
TERMINATION
This Agreement shall terminate and be of no further force and effect (i)
upon the mutual written agreement of the Parties hereto and the consent of the
representative of the Underwriters or (ii) if any of the Parties hereto
materially breaches its obligations hereunder, which breach is not remedied or
waived within 2 Business Days. No such termination shall relieve any Party from
liability for any breach of this Agreement prior to the time of termination.
ARTICLE VIII
INDEMNIFICATION
Each of the Existing Shareholders and each of the Village Shareholders,
severally and not jointly, hereby agrees to indemnify and hold harmless each of
CRM Holdings, CRM USA Holdings and Twin Bridges (the "Indemnified Parties") from
and against any and all loss, liability, damage, cost or expense (including,
without limitation, reasonable costs of investigation and reasonable fees and
expenses of counsel and other professionals) suffered or incurred by any of the
Indemnified Parties as a result of, or arising from or in connection with, any
breach of any representation or warranty contained in this Agreement by such
Existing Shareholder or such Village Shareholder, as the case may be, or any
breach or non-performance of any covenant or agreement contained in this
Agreement by such Existing Shareholder or such Village Shareholder, as the case
may be; provided, however, that:
(1) none of the representations and warranties set forth in Sections
6.1(h), 6.2(f) and 6.4 hereof shall be deemed to be breached solely because the
U.S. Internal Revenue Service challenges or disagrees with the Report, whether
or not the U.S. Internal Revenue Service is ultimately successful in such
challenge;
(2) any loss, liability, damage, cost or expense resulting from a breach
of Section 6.1(h), 6.2(f) or 6.4 hereof shall be limited to only those losses,
liabilities, damages, costs or expenses resulting from the value of the Limited
Liability Companies being 80% or more of the combined value of the Limited
Liability Companies and Twin Bridges;
(3) in no event shall the aggregate liability under this Agreement of any
Existing Shareholder or Village Shareholder, as the case may be, whether in his
capacity as an Existing Shareholder or a Village Shareholder or both, exceed the
amount which, after taking into account any tax benefits accruing to such
shareholder arising from such indemnification payment, is equal to (a) the net
proceeds received by such shareholder in any secondary offering pursuant to the
Underwriting Agreement, minus (b) the greater of the total amount of taxes (i)
payable by such shareholder as a result of the transactions contemplated by this
Agreement, or (ii) paid by such shareholder as a result of the transactions
contemplated by this Agreement but only to the extent that the shareholder is
barred from obtaining a refund of such taxes on the date notice of a claim for
indemnification is received;
13
(4) in the event of a breach of Section 6.4 with respect to the same
information being given by two or more of the Existing Shareholders named
therein, any resulting liability shall be apportioned among such Existing
Shareholders based on their proportionate beneficial ownership of CRM; and
(5) the obligation of any Existing Shareholder or Village Shareholder, as
the case may be, to indemnify the Indemnified Parties shall terminate one year
from the Closing Date; provided, however, that with respect to a breach of
Section 6.4, such obligation shall terminate three months after the latest of
(a) the expiration of the statute of limitations applicable to the U.S. federal
income tax return of CRM Holdings for its tax year which includes the Closing
Date, (b) the expiration of the statute of limitations provided for in Section
7874(e)(4)(A) of the Internal Revenue Code of 1986, as amended (the "Code"),
with respect to the transactions contemplated by this Agreement, or (c) the last
expiration of the statute of limitations applicable to the U.S. federal income
tax return of any Existing Shareholder or Village Shareholder for the tax year
which includes the Closing Date.
The Parties hereby agree that the sole and exclusive remedy of a Party to
this Agreement (or any beneficiary hereunder) for any claim arising under this
Agreement against another Party hereto following the Closing shall be the
indemnification provided in this Article VIII, and each Party agrees that it
will not pursue any other remedy, other than specific performance or other
equitable relief with respect to the transactions contemplated by Section 5.2
hereof and any other covenants contained herein to be performed by the Parties
hereto at or prior to the Closing Date if all conditions to Closing as set forth
in Article IV hereof have been met.
ARTICLE IX
GENERAL PROVISIONS
9.1 Entire Agreement. This Agreement constitutes the entire agreement of
the Parties hereto with respect to the matters referred to herein and supersedes
all prior agreements and understandings, written or oral, among the Parties with
respect to the subject matter thereof.
9.2 Further Assurances. At any time and from time to time after the date
of this Agreement, each Party hereto hereby covenants and agrees that such Party
shall execute and deliver such further agreements, assignments and other
documents and instruments, and shall take such further actions, as may be
necessary or advisable to perform such Party's obligations hereunder and to
otherwise carry out the intent and provisions of this Agreement and the
transactions contemplated hereby.
9.3 Legal Representation; Consents. Xxxxx & XxXxxxxx LLP and Xxxxxxx
Xxxxxxxx Xxxxxx are representing CRM Holdings in connection with the
transactions contemplated by this Agreement. Each of the Parties hereto (other
than CRM Holdings) specifically consents to Xxxxx & XxXxxxxx LLP and Xxxxxxx
Xxxxxxxx Xxxxxx representing CRM Holdings in connection with the transactions
contemplated by this Agreement and represents that such Party is relying upon
the advice of such Party's own counsel or advisers in connection with the
transactions contemplated hereby.
14
9.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its
conflicts of law principles.
9.5 Jurisdiction. Each of the Parties hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City
in any action or proceeding arising out of or relating to this Agreement, or the
breach hereof, or for recognition or enforcement of any judgment with respect
thereto, and each of the Parties hereby irrevocably and unconditionally agrees
that all claims in respect of any such action or proceeding shall be heard and
determined in any such court. Each of the Parties hereby agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each of the Parties hereby further agrees that it will not
assert that any such court is not a convenient forum, or that there is a more
convenient forum, for any such action or proceeding. Each of the Parties agrees
that service of process or any other documents or papers in any such action or
proceeding may be made in accordance with the notice provisions of Section 9.12
hereof.
9.6 Counterparts. This Agreement and any amendments hereto may be executed
in one or more counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument.
9.7 Amendment and Waiver. This Agreement may not be waived, changed,
amended, modified or terminated except by an instrument in writing signed by, or
on behalf of, all of the Parties to this Agreement and with the consent of the
representative of the Underwriters. No failure or delay by any Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
9.8 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the respective successors (including, without
limitation, the Corporations), permitted assigns and legal representatives of
the Parties hereto and the Underwriters.
9.9 No Third-Party Beneficiaries. The provisions of this Agreement shall
in no way create any third-party beneficiary rights, directly or indirectly,
under this Agreement, except in favor of the Underwriters.
9.10 Assignment. No Party hereto may assign any of its rights or
obligations under this Agreement without the prior written consent of each of
the other Parties hereto and by the representative of the Underwriters, and any
such purported assignment shall be null and void.
9.11 Survival. The representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing until one year following
the Closing Date; provided, however, the representations and warranties provided
in Section 6.4 hereof shall survive until three months after the latest of (a)
the expiration of the statute of limitations applicable to the U.S. federal
income tax return of CRM Holdings for its tax year which includes the Closing
15
Date, (b) the expiration of the statute of limitations provided for in Section
7874(e)(4)(A) of the Code with respect to the transactions contemplated by this
Agreement, or (c) the last expiration of the statute of limitations applicable
to the U.S. federal income tax return of any Existing Shareholder or Village
Shareholder for the tax year which includes the Closing Date.
9.12 Notices. All notices, requests and other communications hereunder
shall be in writing and shall be delivered by courier or other means of personal
service (including by means of an internationally recognized courier service or
professional messenger service), or sent by telecopy or mailed first class,
postage prepaid, by certified mail, return receipt requested, in all cases,
addressed to:
To CRM Holdings or Twin Bridges:
x/x XXX Xxxxxxxx, Xxx.
X.X. Xxx XX 0000
Xxxxxxxx XX HX Bermuda
Attention: Xxxxxx X. Xxxxxx, Xx. and Xxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
To any of the Limited Liability Companies and Messrs.
Xxxxxx, Sr., Xxxxxx, Jr., Xxxxxxxx, Xxxxxx and Xxxxxxx:
c/o Compensation Risk Managers, LLC
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq., General Counsel
Facsimile: (000) 000-0000
To Village Holdings or to any of Messrs. Xxxxxxx Xxxxxxx,
Xx,. Xxxx Xxxxxxx, Xxxxx X. Xxxxxxx, Xx. and Xxxxxxxx:
c/o Xxxxx X. Xxxxxxxx
Compensation Risk Managers, LLC
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
In each case, with a copy (which shall not constitute notice),
to:
Xxxxx & XxXxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
16
Attention: Xxxxxx Xxx, Esq.
Facsimile: (000) 000-0000
-and-
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
All notices, requests and other communications shall be deemed given on the date
of actual receipt or delivery as evidenced by written receipt, acknowledgement
or other evidence of actual receipt or delivery to the address. In case of
service by telecopy, a copy of such notice shall be personally delivered or sent
by registered or certified mail, in the manner set forth above, within 3
Business Days thereafter. Either party hereto may from time to time by notice in
writing served as set forth above designate a different address or a different
or additional person to which all such notices or communications thereafter are
to be given.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
17
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized signatories as of the
date first written above.
CRM HOLDINGS, LTD.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Co-Chief Executive Officer
[Reorganization Agreement]
COMPENSATION RISK MANAGERS, LLC
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
[Reorganization Agreement]
COMPENSATION RISK MANAGERS
OF CALIFORNIA, LLC
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
[Reorganization Agreement]
EIMAR, L.L.C.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: President
[Reorganization Agreement]
TWIN BRIDGES (BERMUDA) LTD.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman of the Board
[Reorganization Agreement]
/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Xxxxxx X. Xxxxxx, Xx.
[Reorganization Agreement]
/s/ Xxxxxx X. Xxxxxx, Xx.
-----------------------------------
Xxxxxx X. Xxxxxx, Xx.
[Reorganization Agreement]
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
[Reorganization Agreement]
/s/ Xxxxxxx Xxxxxxx, Xx.
-----------------------------------
Xxxxxxx Xxxxxxx, Xx.
[Reorganization Agreement]
/s/ Xxxx Xxxxxxx
-----------------------------------
Xxxx Xxxxxxx
[Reorganization Agreement]
/s/ Xxxxx X. Xxxxxxx, Xx.
-----------------------------------
Xxxxx X. Xxxxxxx, Xx.
[Reorganization Agreement]
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxx
[Reorganization Agreement]
/s/ Xxxxxxxx Xxxxxxxx
-----------------------------------
Xxxxxxxx Xxxxxxxx
[Reorganization Agreement]
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxx
[Reorganization Agreement]
VILLAGE HOLDINGS, LLC
By: /s/ Xxxx Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Member
[Reorganization Agreement]
EXHIBIT A-1
-----------------------------------------------------------------------------------------------------
NAME OF EXISTING PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
SHAREHOLDER OUTSTANDING OUTSTANDING OUTSTANDING
MEMBERSHIP MEMBERSHIP SHARES OF CRM
INTERESTS IN CRM INTERESTS IN EIMAR TO USA HOLDINGS
TO BE CONTRIBUTED BE CONTRIBUTED TO COMMON STOCK TO
TO CRM USA CRM USA HOLDINGS BE RECEIVED
HOLDINGS
-----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 23.75% 23.75% 23.75%
-----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 23.75% 23.75% 23.75%
-----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 23.75% 23.75% 23.75%
-----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx, Xx. 4.75% 4.75% 4.75%
-----------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx 4.75% 4.75% 4.75%
-----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xx. 4.75% 4.75% 4.75%
-----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx 4.75% 4.75% 4.75%
-----------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxx 4.75% 4.75% 4.75%
-----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 5.00% 5.00% 5.00%
-----------------------------------------------------------------------------------------------------
EXHIBIT A-2
----------------------------------------------------------------------------------------------------
NAME OF CRM USA PERCENTAGE OF OUTSTANDING PERCENTAGE OF OUTSTANDING
HOLDINGS SHAREHOLDER SHARES OF CRM USA CRM HOLDINGS COMMON
HOLDINGS COMMON STOCK SHARES TO BE RECEIVED
TO BE CONTRIBUTED TO CRM
HOLDINGS
----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 23.75% 23.75% x A
----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 23.75% 23.75% x A*
----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 23.75% 23.75% x A*
----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx, Xx. 4.75% 4.75% x A
----------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx 4.75% 4.75% x A
----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xx. 4.75% 4.75% x A
----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx 4.75% 4.75% x A
----------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxx 4.75% 4.75% x A
----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 5.00% 5.00% x A
----------------------------------------------------------------------------------------------------
* A portion of these shares may be non-voting CRM Holdings Class B Shares.
A equals the amount obtained by dividing (i) the value of the Limited
Liabilities Companies as set forth in the Report by (ii) the total value of the
Limited Liability Companies and Twin Bridges as set forth in the Report,
expressed as a percentage.
EXHIBIT A-3
----------------------------------------------------------------------------------------------------
NAME OF TWIN BRIDGES NUMBER (PERCENTAGE) OF PERCENTAGE OF OUTSTANDING
SHAREHOLDER OUTSTANDING TWIN BRIDGES CRM HOLDINGS COMMON
COMMON SHARES TO BE SHARES TO BE RECEIVED
CONTRIBUTED TO CRM
HOLDINGS
----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 28,500 (23.75%) 23.75% x B
----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Xx. 28,500 (23.75%) 23.75% x B*
----------------------------------------------------------------------------------------------------
Xxxxxx X. Xxxxxx 28,500 (23.75%) 23.75% x B*
----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx, Xx. 5,700 (4.75%) 4.75% x B
----------------------------------------------------------------------------------------------------
Xxxx Xxxxxxx 5,700 (4.75%) 4.75% x B
----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx, Xx. 5,700 (4.75%) 4.75% x B
----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxxx 5,700 (4.75%) 4.75% x B
----------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxx 5,700 (4.75%) 4.75% x B
----------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxxxx 6,000 (5%) 5.00% x B
----------------------------------------------------------------------------------------------------
* A portion of these shares may be non-voting CRM Holdings Class B Shares.
B equals the amount obtained by dividing (i) the value of Twin Bridges as set
forth in the Report by (ii) the total value of Twin Bridges and the Limited
Liability Companies as set forth in the Report, expressed as a percentage.
EXHIBIT B
------------------------------------------------------------------------------------------------------
COMPANY AUTHORIZED SHARE CAPITAL NUMBER OF SHARES OF EACH
CLASS OF CAPITAL STOCK
ISSUED OR TO BE ISSUED
------------------------------------------------------------------------------------------------------
CRM Holdings US$500,000,000, divided into 1,200,000 common shares issued and
50,000,000,000 shares, par value outstanding as of December [__],
US$0.01 per share, of which 2005.*
15,457,115 shares have been
designated as common shares and
790,000 shares have been
designated as class B shares
------------------------------------------------------------------------------------------------------
CRM USA Holdings
------------------------------------------------------------------------------------------------------
Twin Bridges US$120,000, consisting of 120,000 120,000 common shares issued and
common shares, par value $1.00 per outstanding
share
------------------------------------------------------------------------------------------------------
* These shares will be purchased by CRM Holdings pursuant to Section 3.3 of this
Agreement.
EXHIBIT C
ISSUED MEMBERSHIP INTERESTS
------------------------------------------------
COMPANY HOLDER PERCENTAGE
--------------------------------------------------------------------------------
CRM Xxxxxx X. Xxxxxx, Xx. 23.75%
Xxxxxx X. Xxxxxx, Xx. 23.75%
Xxxxxx X. Xxxxxx 23.75%
Village Holdings, LLC 23.75%
Xxxxx X. Xxxxxxx 5.00%
--------------------------------------------------------------------------------
CRM CA Compensation Risk 100%
Managers, LLC
--------------------------------------------------------------------------------
Eimar Xxxxxx X. Xxxxxx, Xx. 23.75%
Xxxxxx X. Xxxxxx, Xx. 23.75%
Xxxxxx X. Xxxxxx 23.75%
Village Holdings, LLC 23.75%
Xxxxx X. Xxxxxxx 5.00%
--------------------------------------------------------------------------------
Village Holdings Xxxxxxx Xxxxxxx, Xx. 20.0%
Xxxx Xxxxxxx 20.0%
Xxxxx X. Xxxxxxx, Xx. 20.0%
Xxxxx X. Xxxxxxxx 20.0%
Xxxxxxxx Xxxxxxxx 20.0%
--------------------------------------------------------------------------------
