Exhibit 4.3
PARENT GUARANTEE AGREEMENT
BETWEEN
CRM HOLDINGS, LTD.
AS PARENT GUARANTOR,
AND
THE BANK OF NEW YORK TRUST COMPANY, NATIONAL ASSOCIATION,
AS GUARANTEE TRUSTEE
DATED AS OF NOVEMBER 14, 2006
CRM USA HOLDINGS TRUST I
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S>
<C>
<C>
ARTICLE I
INTERPRETATION AND
DEFINITIONS.............................................................1
Section 1.1.
Interpretation....................................................................1
Section 1.2.
Definitions.......................................................................2
ARTICLE II
REPORTS....................................................................................5
Section 2.1.
Intentionally
Omitted.............................................................5
Section 2.2.
Periodic Reports to the Guarantee
Trustee.........................................5
Section 2.3.
Event of Default;
Waiver..........................................................6
Section 2.4.
Event of Default;
Notice..........................................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE
TRUSTEE.........................................6
Section 3.1.
Powers and Duties of the Guarantee
Trustee........................................6
Section 3.2.
Certain Rights of the Guarantee
Trustee...........................................7
Section 3.3.
Compensation......................................................................9
Section 3.4.
Indemnity.........................................................................9
Section 3.5.
Securities.......................................................................10
ARTICLE IV
GUARANTEE
TRUSTEE.........................................................................10
Section 4.1.
Guarantee Trustee;
Eligibility...................................................10
Section 4.2.
Appointment, Removal and Resignation of the Guarantee
Trustee....................11
ARTICLE V
PARENT
GUARANTEE..........................................................................11
Section 5.1.
Parent
Guarantee.................................................................11
Section 5.2.
Waiver of Notice and
Demand......................................................12
Section 5.3.
Obligations Not
Affected.........................................................12
Section 5.4.
Rights of Holders and the
Trust..................................................13
Section 5.5.
Guarantee of
Payment.............................................................13
Section 5.6.
Subrogation......................................................................13
Section 5.7.
Independent
Obligations..........................................................14
Section 5.8.
Enforcement......................................................................14
ARTICLE VI
SUBORDINATION.............................................................................14
Section 6.1.
Intentionally
Omitted............................................................14
Section 6.2.
Subordination....................................................................14
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
C
PAGE
----
<S>
<C>
<C>
ARTICLE VII
TERMINATION...............................................................................15
Section 7.1.
Termination......................................................................15
ARTICLE VIII
MISCELLANEOUS.............................................................................15
Section 8.1.
Successors and
Assigns...........................................................15
Section 8.2.
Amendments.......................................................................15
Section 8.3.
Notices..........................................................................15
Section 8.4.
Benefit..........................................................................16
Section 8.5.
Governing
Law....................................................................17
Section 8.6.
Submission to
Jurisdiction.......................................................17
Section 8.7.
Counterparts.....................................................................17
Section 8.8.
The
Indenture....................................................................17
ARTICLE IX
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE AND OWNERSHIP
OF THE COMPANY.........17
Section 9.1.
Parent Guarantor May Consolidate, etc., Only on Certain
Terms....................17
Section 9.2.
Limitation on
Dividends..........................................................18
Section 9.3.
Successor Company
Substituted....................................................18
Section 9.4.
Ownership of the
Company.........................................................19
ARTICLE X
REPRESENTATIONS AND
WARRANTIES............................................................19
Section 10.1.
Representations and Warranties of Parent
Guarantor...............................19
</TABLE>
-ii-
<PAGE>
This Parent Guarantee Agreement, dated as of November 14, 2006,
executed and delivered by CRM Holdings, Ltd., an exempted holding
company
incorporated under the laws of Bermuda (the "Parent Guarantor") and
The Bank of
New York Trust Company, National Association, a limited purpose
national banking
association with trust powers, as trustee (in such capacity, the
"Guarantee
Trustee"), for the benefit of the Trust (as defined herein) and the
Holders (as
defined herein) from time to time of the Preferred Securities (as
defined
herein) of the Trust.
W I T N E S S E T H :
Whereas, pursuant to an Indenture, dated as of the date hereof
(the
"Indenture"), among CRM USA Holdings, Inc., a Delaware corporation
(the
"Company"), the Parent Guarantor and The Bank of New York Trust
Company,
National Association, the Company is issuing Thirty Six Million
Eighty Three
Thousand Dollars ($36,083,000) aggregate principal amount of its
junior
subordinated debt securities (the "Debt Securities") having the
terms set forth
in the Indenture to CRM USA Holdings Trust I, a Delaware statutory
trust (the
"Trust"), and evidencing loans made to the Company by the Trust of
proceeds from
the issuance of undivided preferred beneficial interests in the
assets of the
Trust (the "Preferred Securities"), and undivided common beneficial
interests in
the assets of the Trust (collectively, the "Trust Securities");
Whereas, the Parent Guarantor owns one hundred percent (100%) of
the
outstanding shares of capital stock of the Company, and will
substantially
benefit from the issuance of the Debt Securities by the Company and
the purchase
by the Holders of the Preferred Securities; and
Whereas, as incentive for the Holders to purchase Preferred
Securities
from the Trust and for the Trust to purchase the Debt Securities
with the
proceeds from such purchase, the Parent Guarantor desires
irrevocably and
unconditionally to agree, to the extent set forth herein, to pay to
the Trust
the Parent Guarantee Payments (as defined herein) and to make
certain other
payments on the terms and conditions set forth herein.
Now, therefore, in consideration of the purchase by each Holder
of
Preferred Securities and the purchase of the Debt Securities by the
Trust, the
Parent Guarantor executes and delivers this Parent Guarantee
Agreement to
provide as follows for the benefit of the Holders from time to time
of the
Preferred Securities and the Trust:
ARTICLE I
Interpretation and Definitions
SECTION 1.1.
Interpretation.
In this Parent Guarantee Agreement, unless the context
otherwise
requires:
(a)
capitalized terms used in this Parent Guarantee
Agreement but not defined in the preamble herein have the
respective
meanings assigned to them in Section 1.2;
(b)
the words
"include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation";
<PAGE>
(c) all
references to "the Parent Guarantee Agreement" or
"this Parent Guarantee Agreement" are to this Parent Guarantee
Agreement, as modified, supplemented or amended from time to
time;
(d) all
references in this Parent Guarantee Agreement to
articles and sections are to articles and sections of this
Parent
Guarantee Agreement unless otherwise specified;
(e) the words
"hereby", "herein", "hereof" and
"hereunder" and other words of similar import refer to this
Parent
Guarantee Agreement as a whole and not to any particular
Article,
Section or other subdivision;
(f) a
reference to the singular includes the plural and
vice versa;
(g) a
reference to the "Guarantor" shall be deemed to
refer to the Parent Guarantor; and
(h) the
masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 1.2.
Definitions.
As used in this Parent Guarantee Agreement, the terms set forth
below
shall, unless the context otherwise requires, have the following
meanings:
"Affiliate" has the meaning given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Beneficiaries" means any Person to whom the Trust is or
hereafter becomes indebted or liable.
"Board of Directors" of any Person means either the board of
directors
of such Person or any duly authorized committee of that
board.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"Debt" means, with respect to any Person, whether recourse is
to all or a portion of the assets of such Person, whether
currently
existing or hereafter incurred, and whether or not contingent
and
without duplication, (i) every obligation of such Person for
money
borrowed; (ii) every obligation of such Person evidenced by
bonds,
debentures, debt securities or other similar instruments,
including
obligations incurred in connection with the acquisition of
property,
assets or businesses; (iii) every reimbursement obligation of
such
Person with respect to letters of credit, bankers' acceptances
or
similar facilities issued for the account of such Person; (iv)
every
obligation of such Person issued or assumed as the deferred
purchase
price of property or services (but excluding trade accounts
payable
arising in the ordinary course of business); (v) every capital
lease
obligation of such Person;
2
<PAGE>
(vi) all indebtedness of such Person, whether incurred on or prior
to
the date of this Parent Guarantee Agreement or thereafter incurred,
for
claims in respect of derivative products, including interest
rate,
foreign exchange rate and commodity forward contracts, options,
swaps
and similar arrangements; (vii) every obligation of the type
referred
to in clauses (i) through (vi) of another Person and all dividends
of
another Person the payment of which, in either case, such Person
has
guaranteed or is responsible or liable for, directly or indirectly,
as
obligor or otherwise; and (viii) any renewals, extensions,
refundings,
amendments or modifications of any obligation of the type referred
to
in clauses (i) through (vii).
"Event of Default" means a default by the Parent Guarantor on
any of its payment or other obligations under this Parent
Guarantee
Agreement; provided, that except with respect to a default in
payment
of any Parent Guarantee Payments, such default shall not be an
Event of
Default unless the Parent Guarantor shall have received notice of
such
default in accordance with the terms herein from the Guarantee
Trustee,
the Trust or any Holder and shall have failed to cure such
default
within thirty (30) days after receipt of such notice.
"Guarantee Trustee" means The Bank of New York Trust Company,
National Association, until a Successor Guarantee Trustee, as
defined
below, has been appointed and has accepted such appointment
pursuant to
the terms of this Parent Guarantee Agreement, and thereafter means
each
such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Trust, of any Preferred Securities; provided, that,
in
determining whether the holders of the requisite percentage of
Preferred Securities have given any request, notice, consent or
waiver
hereunder, "Holder" shall not include the Parent Guarantor, the
Guarantee Trustee or any Affiliate of the Parent Guarantor or
the
Guarantee Trustee.
"Indenture" means the Indenture, dated as of November 14,
2006, among the Company, the Parent Guarantor and The Bank of New
York
Trust Company, National Association, not in its individual capacity
but
solely as trustee, and any indenture supplemental thereto pursuant
to
which the Debentures are to be issued to the Institutional
Trustee.
"List of Holders" has the meaning specified in Section 2.1.
"Majority in Liquidation Amount of the Preferred Securities"
means Holder(s) of outstanding Preferred Securities, voting
together as
a class, but separately from the holders of Common Securities, of
more
than fifty percent (50%) of the aggregate liquidation amount
(including
the stated amount that would be paid on redemption, liquidation
or
otherwise, plus accrued and unpaid distributions to, but excluding,
the
date upon which the voting percentages are determined) of all
Preferred
Securities then outstanding.
"Obligations" means any costs, expenses or liabilities (but
not including liabilities related to taxes) of the Trust, other
than
obligations of the Trust to pay to holders of any Preferred
Securities
the amounts due such holders pursuant to the terms of the
Preferred
Securities.
3
<PAGE>
"Officer's Certificate" means, with respect to any Person, a
certificate signed by the Chief Executive Officer, Chief
Financial
Officer, President, the Treasurer or the Secretary of such Person,
and
delivered to the Guarantee Trustee. Any Officer's Certificate
delivered
with respect to compliance with a condition or covenant provided
for in
this Parent Guarantee Agreement (other than the certificate
provided
pursuant to Section 2.2) shall include:
(a) a
statement that the officer signing the Officer's
Certificate has read the covenant or condition and the
definitions
relating thereto;
(b) a brief
statement of the nature and scope of the
examination or investigation undertaken by such officer in
rendering
the Officer's Certificate;
(c) a
statement that such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as
to
whether or not such covenant or condition has been complied with;
and
(d) a
statement as to whether, in the opinion of such
officer, such condition or covenant has been complied with.
"Parent Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Debt
Securities, to the extent not fully and promptly paid or made by
the
Company
immediately after the expiration of any applicable grace or
cure period applicable to the Company under the terms of the
Indenture:
(a) any accumulated and unpaid payments of interest or principal,
or
other amounts, required to be paid on the Debt Securities on
the
Maturity Date, Redemption Date or Special Redemption Date (each
as
defined in the Indenture), or upon expiration of the Extension
Periods
allowed under Section 2.11 of the Indenture; and (b) payment of
any
other amounts to be paid by the Company under the Indenture.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint
stock company, limited
liability company, trust, unincorporated
association, government or any agency or political subdivision
thereof
or any other entity of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any Senior Vice President, any Vice President, any
Assistant
Vice President, the Secretary, any Assistant Secretary, the
Treasurer,
any Assistant Treasurer, any Trust Officer or Assistant Trust
Officer
or any other officer of the Corporate Trust Department of the
Guarantee
Trustee and also means, with respect to a particular corporate
trust
matter, any other officer to whom such matter is referred because
of
that officer's knowledge of and familiarity with the particular
subject.
4
<PAGE>
"Senior Debt" means the principal of and any premium and
interest on (including interest accruing on or after the filing of
any
petition in bankruptcy or for reorganization relating to the
Parent
Guarantor whether or not such claim for post-petition interest
is
allowed in such proceeding) all Debt of the Parent Guarantor,
whether
incurred on or prior to the date of the Indenture or thereafter
incurred, unless it is provided in the instrument creating or
evidencing the same or pursuant to which the same is outstanding,
that
such obligations are subordinated in right of payment to the
Preferred
Securities.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended and as in effect on the date of this Parent
Guarantee
Agreement.
"Successor Guarantee
Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee
under
Section 4.1.
Capitalized or otherwise defined terms used but not otherwise
defined herein
shall have the meanings assigned to such terms in the Indenture as
in effect on
the date hereof.
ARTICLE II
Reports
SECTION 2.1.
Intentionally Omitted.
SECTION 2.2. Periodic
Reports to the Guarantee Trustee.
(a) The Parent
Guarantor shall deliver to the Guarantee Trustee,
within one hundred twenty (120) days after the end of each fiscal
year of the
Parent Guarantor ending after the date of this Parent Guarantee
Agreement, an
Officer's Certificate covering the preceding fiscal year, stating
whether or not
to the knowledge of the signer thereof the Parent Guarantor is in
default in the
performance or observance of any of the terms or provisions or any
of the
conditions of this Parent Guarantee Agreement (without regard to
any period of
grace or requirement of notice provided hereunder) and, if the
Parent Guarantor
shall be in default thereof, specifying all such defaults and the
nature and
status thereof of which such person has knowledge.
(b) The Parent
Guarantor shall furnish (i) to the Guarantee
Trustee; (ii) Cohen & Company, 2929 Arch Street, Suite 1703,
Philadelphia,
Pennsylvania 19104 or such other address as designated by Cohen
& Company; and
(iii) any Holder of the Preferred Securities reasonably identified
to the
Company and the Trust (which identification may be made either by
such Holder or
Cohen & Company) a duly completed and executed certificate
substantively and
substantially in the form attached hereto as Exhibit A, including
the financial
statements referenced in such Exhibit, which certificate and
financial
statements shall be so furnished by the Parent Guarantor not later
than forty
five (45) days after the end of each of the first three fiscal
quarters of each
fiscal year of the Parent Guarantor and not later than ninety (90)
days after
the end of each fiscal year of the Parent Guarantor.
5
<PAGE>
SECTION 2.3. Event of
Default; Waiver.
Neither the Trust nor holders of the Debt Securities shall have
the
right to waive any past Event of Default without the consent of the
Holders of a
Majority in Liquidation Amount of the Preferred Securities. The
Holders of a
Majority in Liquidation Amount of the Preferred Securities may, on
behalf of the
Holders, the Trust or the holders of Debt Securities waive any past
Event of
Default and its consequences. Upon such waiver, any such Event of
Default shall
cease to exist, and any Event of Default arising therefrom shall be
deemed to
have been cured, for every purpose of this Parent Guarantee
Agreement, but no
such waiver shall extend to any subsequent or other default or
Event of Default
or impair any right consequent therefrom.
SECTION 2.4. Event of
Default; Notice.
(a) The
Guarantee Trustee shall, within ninety (90) days after the
occurrence of a default, transmit to the Trust, the Parent
Guarantor and the
Holders notices of all defaults actually known to the Guarantee
Trustee, unless
such defaults have been cured or waived before the giving of such
notice;
provided, that, except in the case of a default in the payment of a
Parent
Guarantee Payment, the Guarantee Trustee shall be protected in
withholding such
notice if and so long as the Board of Directors, the executive
committee or a
trust committee of directors and/or Responsible Officers of the
Guarantee
Trustee in good faith determines that the withholding of such
notice is in the
interests of the Holders. For the purpose of this Section 2.4, the
term
"default" means any event that is, or after notice or lapse of time
or both
would become, an Event of Default.
(b) The
Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have
received written
notice, or a Responsible Officer charged with the administration of
this Parent
Guarantee Agreement shall have obtained written notice, of such
Event of Default
from the Parent Guarantor, the Company, a holder of Debt Securities
or a Holder.
ARTICLE III
Powers, Duties and Rights of the Guarantee Trustee
SECTION 3.1. Powers
and Duties of the Guarantee Trustee.
(a) This
Parent Guarantee Agreement shall be held by the Guarantee
Trustee for the benefit of the Holders, the holders of Debt
Securities and the
Trust, and the Guarantee Trustee shall not transfer this Parent
Guarantee
Agreement to any Person except a Holder or a holder of Debt
Securities
exercising its rights pursuant to Section 5.4(d) or (iii) to a
Successor
Guarantee Trustee upon acceptance by such Successor Guarantee
Trustee of its
appointment to act as Successor Guarantee Trustee. The right, title
and interest
of the Guarantee Trustee shall automatically vest in any Successor
Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its
appointment
hereunder, and such vesting and succession of title shall be
effective whether
or not conveyancing documents have been executed and delivered
pursuant to the
appointment of such Successor Guarantee Trustee.
6
<PAGE>
(b) The
rights, immunities, duties and responsibilities of the
Guarantee Trustee shall be as provided by this Parent Guarantee
Agreement and
there shall be no other duties or obligations, express or implied,
of the
Guarantee Trustee. Notwithstanding the foregoing, no provisions of
this Parent
Guarantee Agreement shall require the Guarantee Trustee to expend
or risk its
own funds or otherwise incur any financial liability in the
performance of any
of its duties hereunder, or in the exercise of any of its rights or
powers, if
it shall have reasonable grounds for believing that repayment of
such funds or
adequate indemnity against such risk or liability is not reasonably
assured to
it. Whether or not herein expressly so provided, every provision of
this Parent
Guarantee Agreement relating to the conduct or affecting the
liability of or
affording protection to the Guarantee Trustee shall be subject to
the provisions
of this Section 3.1. To the extent that, at law or in equity, the
Guarantee
Trustee has duties and liabilities relating to the Trust, the
Parent Guarantor
or the Holders, the Guarantee Trustee shall not be liable to any
Holder for the
Guarantee Trustee's good faith reliance on the provisions of this
Parent
Guarantee Agreement. The provisions of this Parent Guarantee
Agreement, to the
extent that they restrict the duties and liabilities of the
Guarantee Trustee
otherwise existing at law or in equity, are agreed by the Parent
Guarantor and
the Holders to replace such other duties and liabilities of the
Guarantee
Trustee.
(c) No
provision of this Parent Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its
own negligent
action, negligent failure to act or own willful misconduct, except
that:
(i) the
Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of
the
Guarantee Trustee, unless it shall be proved that the Guarantee
Trustee
was negligent in ascertaining the pertinent facts upon which
such
judgment was made; and
(ii)
the
Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good
faith
in accordance with the direction of t
