JOINT VENTURE AGREEMENT
BETWEEN
BF&M PROPERTIES LIMITED
AND
PXRE GROUP LTD
DATED: June 2001
XXXXXXX XXXX & XXXXXXX
BARRISTERS & ATTORNEYS
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
P.O. Box HM 666
Xxxxxxxx XX CX
Bermuda
d.636466
THIS AGREEMENT is made the 20th day of June 2001
BETWEEN:-
(1) BF&M PROPERTIES LIMITED, a Bermuda local company having its registered
office at 000 Xxxxx Xxx Xxxx, Xxxxxxxx, Xxxxxxx ("XX&X");
(2) PXRE GROUP LTD., a Bermuda exempted company having is registered office
at 0 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx ("XXXX");
(BF&M and PXRE are sometimes hereinafter collectively referred to as
"the Parties")
WHEREAS:
(A) The Parties wish hereby to agree to establish a local Bermuda
company (hereinafter the "Company") which shall construct an
office building on the Property to be leased to the Parties,
affiliated parties and third parties as set out herein;
(B) BF&M intends to transfer and convey the Property into the
Company on certain terms and conditions in order to assist the
joint venture hereinafter described;
(C) Each of the Parties will subscribe for shares in the Company
with a view to BF&M holding 60% and PXRE holding 40% of the
shares of the Company as described herein;
(D) PXRE intends to arrange the payment and loan of sufficient
funds to the Company for the construction of the Office
Premises;
(E) The Parties have agreed to enter into this Agreement to govern
their respective rights in relation to the before recited
matters.
NOW in consideration of the premises It is HEREBY AGREED AS FOLLOWS:-
1. INTERPRETATION
1.1 In this Agreement where the context so admits:-
the "Act" means the Companies Xxx 0000 of Bermuda.
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"Architects" means the firm of architects doing business in
Bermuda known as OBM Limited.
"Bermudian" means Bermudian as described in section 113 of the
Act. "Board of Directors" or "Board" means the Board of
Directors of the Company as elected or appointed from time to
time.
"Bye-laws" means the Bye-laws of the Company as amended from
time to time.
"Company" means the Company incorporated in accordance with
Clause 2.1 of this Agreement.
"Completion Date" means the date that the Architects and the
Department of Planning issue a Certificate of Occupancy
certifying that the Office Premises are available for
occupancy.
"Development" means the construction on the Property of an
office building of the size and specifications and design
described in the latest working drawings drawn by the
Architects dated March 8, 2000 and attached hereto as Exhibit
A.
"Leases" means the leases to be granted by the Company in
accordance with Clause 15.
"Office Premises" means the office building to be constructed
on the Property pursuant to the Development.
"Option Value" means the value of the Office Premises
(excluding the land) as determined by a Certified Chartered
Surveyor, the identity of whom shall be agreed between BF&M
and PXRE, within four weeks after the exercise by BF&M of the
option to purchase all of the Shares of the Company held by
PXRE as provided in Clause 8 hereof.
The "Property" means ALL THAT lot of land described in the
Schedule hereto.
"Shares" means common shares of the Company of BD$1.00 par
value each.
1.2 References to statutory provisions shall be construed as
reference to those provisions as respectively amended or
re-enacted or as their application is modified by other
provisions from time to time (whether before or after the date
hereof).
1.3 In this Agreement, words denoting the plural include the
singular and vice versa, and words denoting the masculine
include the feminine.
1.4 Headings are inserted for convenience only and shall not
affect the construction of this document.
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1.5 Covenants, warranties and representations shall be separate
and independent and save as expressly provided shall not be
limited by reference to any other covenant, warranty or
representation or provision in this Agreement.
2. THE COMPANY
2.1 (a) BF&M procured the incorporation of a local Bermuda
company (the "Company") on 21 March 2001 with the
capacity to own the Property and to undertake the
Development.
(b) The initial authorised share capital of the Company
consists of 12,000 Shares. Immediately following
execution of this Agreement the authorized share
capital of the Company shall be increased to 20,000
Shares.
(c) All of the authorised and issued Shares shall rank
equally in all respects as to voting rights, rights
to receive dividends and distributions of capital
upon a winding up of the Company;
(d) The Company shall pay any and all stamp duty on the
authorised share capital and on any share premium out
of the subscription proceeds received for the issue
of Shares.
2.2 The name of the Company is "Xxxx'x Bay Properties Limited" or
such other name as the Parties may agree from time to time.
3. BF&M
BF&M hereby agrees to:
(a) subscribe for 12,000 Shares of BD$1.00 par value
each in the Company and pay up the nominal value of
such shares in the amount of BD$12,000.00 in cash in
consideration of the issue to it of the 12,000 Shares
of the Company credited as fully paid; and
(b) transfer and convey all of its right, title and
interest in the Property into the Company as a
contribution to surplus immediately following
execution of this Agreement by PXRE.
4. PXRE
PXRE hereby agrees to:
(a) subscribe for 8,000 Shares of BD$1.00 par value each
in the Company and pay up the nominal value of such
shares in the amount of BD$8,000.00 in cash in
consideration of the issue to it of the 8,000 Shares
of the Company credited as fully paid; and
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(b) pay D$866.667.00 to the Company as a contribution to
surplus immediately following the issue to it of the
8,000 Shares of the Company.
5. RESTRICTION OF ASSIGNMENT, SALE OR TRANSFER OF INTEREST AND SHARES
5.1 Each of the Parties hereby mutually convenants with the other
that it shall not assign, sell or transfer, pledge or
hypothecate or otherwise dispose of or encumber any of their
respective Shares nor assign, sell, transfer, pledge or
hypothecate or otherwise dispose of or encumber any right or
rights to or in any property rights, voting rights, or other
interest (whether legal or equitable) which may be attached to
the Shares or otherwise arising by virtue of the Party (or its
nominee) being a shareholder of the Company except as
expressly permitted by this Clause 5.
5.2 Either Party may transfer all (but not less than all) their
Shares to any company with which it is affiliated or which is
a subsidiary of it ("affiliated") and "subsidiary" in this
Clause 5 having the meanings set out in section 86 of the Act)
without the consent of the other. Any such transfer of Shares
to any affiliated or subsidiary company as permitted by this
Clause 5.2, shall be subject to the condition that the
transferee first agrees with the other Party in writing to be
bound by the terms of this Agreement and, in the case of any
such transfer by PXRE, such transfer shall be subject to a
further condition that PXRE shall guarantee in writing in a
form acceptable to BF&M the performance by the transferee of
its obligations under this Agreement.
5.3 (a) If a Party (the "Selling Shareholder") at any time
receives a bona fide offer from a third party with
whom it deals at arms' length to purchase all, but
not less than all, of the Shares owned by the Selling
Shareholder and if the Selling Shareholder wishes to
accept such offer, the Selling Shareholder shall
immediately give notice in writing (the "First
Notice") to the other Party (the "Remaining
Shareholder") informing the Remaining Shareholder
that the Selling Shareholder wishes to accept such
offer and attaching a copy of such offer and offering
to sell all of the Shares which are the subject of
such offer (the "Offered Shares") to the Remaining
Shareholder upon the same terms and conditions
specified in the offer attached to the First Notice,
provided that if PXRE is the Remaining Shareholder
they may purchase or identify a Bermudian purchaser
to purchase the Shares.
(b) Within 30 days of the giving of the First Notice (the
"Acceptance Date"), the Remaining Shareholder may
give notice in writing (the "Purchase Notice") to the
Selling Shareholder indicating that the Remaining
Shareholder wishes to purchase the Offered Shares on
the terms and conditions set forth in the offer
attached to the First Notice. On receipt of a
Purchase Notice, the Selling Shareholder shall be
bound to sell, and the Remaining Shareholder shall be
bound to purchase all of the Offered
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Shares on the terms and conditions specified in the
offer attached to the First Notice.
(c) If the Remaining Shareholder has not delivered a
Purchase Notice by the Acceptance Date, the Selling
Shareholder shall be entitled to sell all, but not
less than all, the Offered Shares to such third
party, but on terms no more favorable to the
purchaser than were detailed to the Remaining
Shareholder in the First Notice. If the Offered
Shares are sold to the said third party, such sale
shall be completed one hundred and twenty days after
the giving of the First Notice, provided that if such
sale is not completed within such time period the
Offered Shares shall again become subject to the
provisions of this section and so on from time to
time.
(d) Any purchase and sale as between the Selling
Shareholder and the Remaining Shareholder shall be
completed on the sixtieth day after the giving of the
First Notice. The closing shall take place at the
offices of the Selling Shareholder and the purchase
price for the Offered Shares to be purchased and sold
shall be paid in the manner provided by the terms of
the offer attached to the First Notice against
delivery of certificates representing the Offered
Shares together with a duly signed instrument of
transfer and resignations of those directors of the
Company nominated by the Selling Shareholder.
5.4 Either Party shall each be entitled to assign, sell, transfer,
pledge or hypothecate or otherwise dispose of their respective
Shares or interests arising out of their status as a
shareholder free of any restriction under the terms of this
Agreement if prior written consent for such assignment, sale,
transfer, pledge, hypothecation or disposal is given by the
other Party.
5.5 The Parties agree to exercise their voting rights in the
Company so as to procure that the Company shall not assign,
sell, transfer or dispose of the Property or the Office
Premises without the written consent of both Parties.
6. BOARD OF DIRECTORS AND BUILDING COMMITTEE
6.1 The Board of Directors of the Company shall consist of 5
(five) directors of whom 2 (two) may be nominated by PXRE and
the remainder shall be nominated by BF&M and both Parties
undertake to vote their Shares to ensure the election of all
such nominees.
6.2 (a) The Parties shall procure the formation of a Building
Committee of the Board of Directors consisting of 2
members, one member of which shall be a director
nominated by PXRE and one member of which shall be a
director nominated by BF&M, which committee shall be
responsible for the management and administration of
the Development.
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(b) The Building Committee shall meet whenever necessary
to consider the progress of the construction of the
Development and to make any decisions and take such
actions as are necessary to expedite in an efficient
manner the completion of the Development.
7. CONSTRUCTION LOANS AND PROMISSORY NOTES
7.1 PXRE agrees that it shall lend or it shall cause one of its
subsidiaries or affiliates (which shall remain a subsidiary or
affiliate of PXRE for the duration of the period that the
mortgage(s) to be granted pursuant to clause 7.2 hereof remain
outstanding or PXRE shall cause such subsidiary or affiliate
to assign such mortgage(s) to another PXRE subsidiary or
affiliate prior to any disposition of such entity by PXRE) to
lend to the Company from time to time such funds as are
necessary to finance the complete construction of the Office
Premises as contemplated by this Agreement (hereinafter the
"Loans") provided that such Loans in the aggregate shall not
exceed BD$7,000,000.00 (seven million dollars) PXRE shall
advance or cause to be advanced a Loan to the Company upon
being given not less than 30 days written notice that the
Company requires the same. Such notice shall specify the date
of advance and the amount of the Loan (subject always to the
limit on the aggregate amount of all Loans as set out above).
The Company shall submit such a request only if the Building
Committee (to be constituted in accordance with clause 6.2)
has approved the same.
7.2 Each Loan made to the Company by or on behalf of PXRE shall be
evidenced by a promissory note from the Company for the amount
of the Loan which shall bear interest at a variable rate to be
fixed initially on the date of issue of such promissory note
and thereafter on the first day of each calendar quarter being
the lower of 7% per annum and 2% less than the average of the
prevailing per annum first mortgage rates of banks and deposit
companies in Bermuda on such date. Interest shall accrue on
each Loan from the date of drawdown and shall be due and
payable on the last day of each calendar quarter commencing
one year after completion of the Office Premises but only to
the extent that the Company has cash surplus to its needs
arising from income in excess of all operating expenses.
Repayments of principal of Loans will commence 30 days after
the first calendar quarter in which the Company has cash
surplus to its needs arising from income in excess of all
operating expenses (including payments of interest), subject
to approval of the Building Committee of the amount of all
such payments of principal, which shall be reviewed on a
quarterly basis. Notwithstanding the foregoing, such
repayments will commence no later than 2 years following the
completion of the Office Premises and all Loans shall be fully
repaid no later than 20 years from the date of the first
principal payment. The principal and interest of the first
Loan shall be secured by a first mortgage on the Property upon
terms mutually agreeable to the Parties and each subsequent
Loan shall be secured by a further charge on the Property.
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7.3 The Parties agree that the costs of construction of the Office
Premises shall be financed, firstly, out of the subscription
monies of BD$20,000 (twenty thousand dollars) to be paid into
the Company by BF&M and PXRE less the costs of the
incorporation of the Company, secondly, out of BD$866,667.00
(eight hundred sixty-six thousand six hundred sixty-seven
dollars) of the contribution to surplus to be paid into the
Company by PXRE and thereafter out of the monies loaned to the
Company pursuant to section 7.2. It is the intention of the
Parties that the amount of capital paid in on account of the
Shares to be issued to BF&M and PXRE less the costs of the
incorporation of the Company together with the contribution to
surplus and Loans to be made by PXRE pursuant to this
Agreement shall be sufficient to enable the Office Premises to
be constructed. It is understood and agreed that in the event
any further funding shall be required by the Company, PXRE
shall have the option but not the obligation of providing such
additional funding upon terms mutually acceptable to PXRE and
BF&M. In the event (i) PXRE elects not to make such additional
financing available to the Company; or (ii) PXRE's additional
financing terms are not acceptable to BF&M, it is understood
and agreed that all such additional funding required by the
Company to complete construction of the Office Premises shall
be obtained from institutional or private lenders upon terms
and conditions (including the giving of any mortgage security
upon the Property) normally applicable to similar building
construction projects in Bermuda.
7.4 The Parties shall procure that:
(a) the Board of Directors, as soon as practical after
the transfer of the Property to the Company, pass
resolutions authorising the borrowing from PXRE or
one of its subsidiaries or affiliates of such sum or
sums of money as may be necessary to finance the
construction of the Office Premises;
(b) the resolutions referred to in sub-paragraph (a)
above shall provide that no further borrowing shall
be made by the Company from any other company, person
or incorporated body or entity without the prior
written approval of PXRE;
(c) the Board of Directors shall specifically approve by
resolution each tranche of the Loans prior to each
borrowing and shall cause the Company to issue a
promissory note for each such additional tranche.
7.5 Upon the full repayment of any amounts outstanding under the
Loans in accordance with the terms of the promissory notes,
the promissory notes shall be cancelled and returned to the
Company.
8. Repayment of Loans - Share Purchase Option
At any time after the full repayment of the Loans by the Company, BF&M
shall have the right upon 60 days prior written notice to PXRE to
purchase all of the Shares held by PXRE at a purchase price calculated
as follows:
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A+ 0.4 (B-C)
where:-
A is the aggregate subscription price paid by PXRE for
its Shares and contributed surplus paid in by PXRE;
B is the Option Value; and
C is the original cost of the Development.
9. RETAINED EARNINGS
9.1 The Parties agree that cash arising from income in excess of
all operating expenses shall firstly be applied to the
repayment of the Loans in accordance with Clause 7.2.
9.2 The Parties agree to procure that the Board of Directors will
adopt a policy of not declaring dividends or making any
distributions to shareholders prior to the full repayment of
the Loans in accordance with the terms of the promissory
notes.
10. BF&M COVENANTS, REPRESENTATIONS AND WARRANTIES
10.1 BF&M hereby covenants, represents and warrants that:
(a) it is duly organised and validly existing as a local
company in good standing under the laws of the
Islands of Bermuda;
(b) it is the sole legal and beneficial holder of good
and marketable title to the Property free and clear
of all encumbrances whatsoever;
(c) it has taken all necessary corporate action and has
obtained all of the necessary consents and
permissions from the Bermuda Monetary Authority and
has taken all other action required to authorise the
execution, delivery and performance of this Agreement
so that when duly executed by or on behalf of BF&M,
this Agreement will constitute the valid and binding
obligations of BF&M in accordance with the terms
hereof.
10.2 To the intent that BF&M is now and shall at all times be
Bermudian so that the Company is able to carry on the business
contemplated in this Agreement without a licence under the
Act, BF&M hereby warrants, represents and covenants that BF&M
shall as and when applicable take all necessary steps in order
to ensure BF&M is at the date hereof and will continue to be
at least 80% beneficially owned by Bermudians as required by
the Act.
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11. PXRE COVENANTS, REPRESENTATIONS AND WARRANTIES
11.1 PXRE hereby covenants, represents and warrants that:
(a) it is duly organised and validly existing as an
exempted company in good standing under the laws of
Bermuda;
(b) it has taken all corporate and other actions required
to authorise the execution, delivery and performance
of this Agreement so that when duly executed by or on
behalf of PXRE, this Agreement will constitute the
valid and binding obligations of PXRE in accordance
with the terms hereof;
11.2 PXRE shall be responsible to obtain all governmental and
regulatory consents and permissions required for the issue of
Shares by the Company to PXRE including the permission of the
Controller of Foreign Exchange.
12. MUTUAL COVENANTS
12.1 Each of the Parties covenants with the other as separate
covenants that it will exercise its voting rights as a
shareholder of the Company to procure that:-
(a) The Company at all times complies with the provisions
of its bye-laws as amended from time to time by
resolution of the Company in general meeting;
(b) except as contemplated by this Agreement, the Company
shall not issue any shares, amend its Memorandum of
Association, incur any major liability or obligation,
encumber its assets, or commence any new type of
business, other than for the purposes of constructing
the Office Premises, or managing the rental thereof
and any related business.
(c) it will, as soon as practicable after the date
hereof, exercise its voting rights as a shareholder
and use its best endeavours to procure that:
(i) the Company adopts Bye-laws in a form which
gives effect to the provisions of this
Agreement;
(ii) the Company will obtain a building permit
from the Department of Planning which
enables the Company to complete the
Development in accordance with terms hereof.
12.2 Subject to the discretion of the Court, the Parties agree that
their respective covenants in this Clause 12 are given in
contemplation of injunctive relief and of specific performance
as suitable remedies and that failing such discretionary
remedies they shall procure that the Company is wound up in
accordance with the Act.
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13. PROPERTY COVENANTS
BF&M hereby covenants, represents and warrants that:
(a) it has good and marketable title to the Property free from any
encumbrance and that there are appurtenant to the Property all
rights and easements necessary for its use and enjoyment;
(b) it will transfer the aforesaid good and marketable title of
the Property to the Company as described in Clause 3;
(c) all restrictions, conditions and convenants affecting the
Property will have been observed and performed up to the date
of transfer of the Property to the Company.
14. THE DEVELOPMENT
The Parties shall procure that:
(a) The Company appoints and employs the Architects as its
architects in Bermuda in relation to the Development;
(b) The Company applies for a final building permit and all other
permits necessary for the Company lawfully to complete the
Development as soon as practical following the transfer of the
Property to the Company;
(c) The Company appoints the Building Committee in accordance with
Clause 6.2 (a) of this Agreement as its duly authorised
representative with authority to act on behalf of the Company
in relation to all dealings and negotiations with the
Architects and to procure that the Building Committee use its
best endeavours to arrange for and/or supervise all other
necessary development activities such as:
(i) preparation of a space program and interior adjacency
requirements;
(ii) development of a basic informational package for the
Architects, identifying project scope and budget;
(iii) selection of consultant for complete interior fit-up
package, including design development, working
drawings and specifications;
(iv) final review of all submissions to the Planning
Department and other relevant authorities to be made
by the Architects on behalf of the Company;
(v) approval of all utility and special consulting
contracts;
(vi) determination of the construction contracts form,
selection of all building contractors,
subcontractors, inspectors and special consultants,
and approval of all invoices in connection with the
entire development phase; and
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(vii) actions and all other things required to effect
completion of the Development and related matters.
15. THE LEASES
15.1 The portion of the Office Premises to be leased to BF&M will
include the two basement levels. In the event that BF&M does
not require all of the space in the two basement levels of the
Office Premises, such surplus will be first made available to
PXRE.
15.2 The portion of the Office Premises to be leased to PXRE will
include the ground floor (i.e. at the level of Xxxxx Bay
Road), the second floor of Office Premises and any space which
the Company is permitted to develop above the second floor. A
separate entrance will be constructed giving access to such
ground floor and above areas for the exclusive use of PXRE
(and any permitted sub-lessees).
15.3 Each of the Parties shall procure that the Company grants
leases to each of the Parties of such portion of the Office
Premises as shall be agreed by the Parties prior to the
commencement of construction which shall be upon, inter alia,
the following terms:-
(a) the Leases granted to PXRE and BF&M shall each be for
a term of 5 years commencing on and from the
Completion Date with an option on the part of the
lessee to renew for two further terms of 5 years
each;
(b) all leases will be at market rates as determined from
time to time and will be in the usual commercial form
including that all maintenance charges relative to
the interior of the building will be charged to the
lessees based on the percentage such lessees occupies
of the net rental floor space in the building. Each
lessee will be responsible to decorate and fit out
the interior of the lease premises (with the Company
being responsible for the fitting out of common use
areas, if any).
(c) the rent and service charge payable under each Lease
shall be calculated and paid as provided in the
agreed Lease save that the Parties and the Company
may agree to vary these rents from time to time.
15.4 If for any reason any one of the Parties would prefer that all
or any part of the Office Premises which it lets from the
Company be instead let directly or sublet with the prior
written consent of BF&M (such consent not to be unreasonably
withheld) to a third party, then at either Party's request,
the Parties shall procure that the Board of Directors
authorise the grant of such letting and enter into any deeds
or documents as shall be required in order to let such part of
the Office Premises to the relevant third party.
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15.5 Notwithstanding the provisions of Clause 15.4, no leases shall
be granted by the Company to any third party unless both of
the Parties agree and approve in writing the identity of the
proposed third party lessee.
15.6 The Office Premises shall be used solely as business offices
and all leases shall contain appropriate restrictions on use.
16. SUPERVENING ILLEGALITY
In the event that at any time any applicable law, rule, regulation or
government policy is such that any or all of the provisions of this
Agreement and the schedules hereto are void or unenforceable the
parties hereto shall make their best endeavours to renegotiate the
matters referred to hereunder with the intent that their respective
rights and obligations shall approximate, as near as practicable their
rights and obligations under this Agreement and the schedules hereto on
the assumption that no part of this Agreement and the schedules hereto
is void or unenforceable.
17. TERMINATION
17.1 "Termination Event" means the occurrence or non-occurrence of
any of the following:
(a) The Company is not incorporated and duly organized in
accordance with the terms of this Agreement by 30th
June, 2001;
(b) Either Party fails to perform or observe any of the
provisions, terms, conditions covenants and/or
provisions of this Agreement and does not remedy such
failure within 60 days of notice from the other Party
requiring it to do so;
(c) Failure by the Company to observe any of the
provisions, terms, covenants and/or conditions of
this Agreement or the promissory notes and does not
remedy such failure within 60 days of notice from one
of the Parties requiring it to do so;
(d) Any event or condition referred to in the promissory
notes occurs or fails to occur so that as a result
thereof, the indebtedness included therein may be
declared due and payable prior to the date on which
such indebtedness would otherwise become due and
payable;
(e) Failure by the Company to pay any indebtedness for
borrowed money due at final maturity pursuant to a
demand by PXRE under any promissory notes issued in
accordance with this Agreement;
(f) If any representation or warranty made in writing to
either Party by either Party or in connection with
the making of the Loans, or any certificate,
statement or report made or delivered in compliance
with this
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Agreement, shall have been false or misleading in any
material respect when made or delivered to either
Party;
(g) If the Company commences or is subject to proceedings
for the winding-up or dissolution or liquidation of
the Company, whether involuntary or voluntary;
(h) If the Company issues Shares or either Party
transfers or attempts to transfer Shares in
contravention of any provision or provisions of this
Agreement;
(i) The final building permit in respect of the
Development has not been granted, remains subject to
appeal or is ineffective for the purposes of this
Agreement 365 days after the date of execution of
this Agreement;
(j) Any tests conducted by engineers, surveyors,
geologists or other experts relating to the quality
and condition of the Property, including matters
relating to the subsurface thereof which reveals
anything that materially adversely affects the
Development which is known by either Party and has
not been disclosed in writing to the non-knowing
Party prior to the execution hereof;
(k) The plans referred in the definition of Development
are not approved by the appropriate governmental
authorities and such approval has not been granted or
remains subject to appeal by September 30, 2001;
17.2 On the happening of a Termination Event either Party may elect
to have BF&M purchase PXRE's Shares in the Company, if it has
any provided that in the event BF&M shall have caused the
Termination Event, only PXRE shall be entitled to elect to
have BF&M purchase PXRE's shares in the Company and in the
event PXRE shall have caused the Termination Event, only BF&M
shall be entitled to have BF&M purchase PXRE's shares in the
Company.
17.3 After the happening of a Termination Event, if either Party
wishes to exercise its right under Clause 17.2 it shall give
the other Party notice in writing of such election in
accordance with clause 18 within 60 days of the Termination
Event.
18. SHARE ACQUISITION OR WINDING UP
18.1 In the event that either Party wishes to exercise its rights
under Clause 17.2 hereof it (the "First Party") shall give
notice in writing of its offer (the "Offer Notice") to buy (in
the case of BF&M) or sell (in the case of PXRE) the Shares
owned by PXRE, specifying in the Offer Notice the price at
which it is prepared to buy or sell, as the case may be,
provided that such price shall not be in excess of the amount
which would be calculated in accordance with Clause 8.
18.2 Within 30 days of the date on which the Offer Notice is given,
the Party given the Offer Notice (the "Second Party") may by
notice in writing to the First Party:
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(a) accept the offer in the Offer Notice; or
(b) indicate that it requires that the price be
determined by arbitration and shall in such notice
nominate one arbitrator who has accepted the
reference.
If the Second Party fails to give notice in accordance with
either paragraph (a) or paragraph (b) above it shall be deemed
to have accepted the Offer Notice, and the purchase and sale
of the PXRE Shares shall be completed in accordance with the
terms and conditions set out in the Offer Notice.
18.3 In the event that the Second Party gives notice pursuant to
Clause 18(2)(b), the First Party shall within 30 days of the
date of such notice nominate an arbitrator who has accepted
such reference and by this Agreement BF&M and PXRE submit to
arbitration by two arbitrators (one appointed by each of them)
pursuant to the Arbitration Xxx 0000 of the Islands of
Bermuda. The arbitrators shall determine the price to be paid
by BF&M for PXRE's Shares in the Company on the basis of a
willing vendor and purchaser and taking account of the market
value of the Office Premises and any other assets of the
Company at the date of the Notice, provided that the price
shall not be in excess of the amount which would be calculated
in accordance with Clause 8.
18.4 The price of PXRE's Shares offered under Clause 18.2(b) shall
be deemed to have become payable on the 90th day after the
date on which the Offer Notice was given and thereafter shall
bear interest at 7% per annum.
18.5 If the price to be paid for any Shares is determined by
arbitration, a contract for the sale and purchase of these
Shares shall be deemed to have come into effect on the date
the award of the arbitrators becomes final and is no longer
the subject of appeal; and, unless otherwise agreed, any
contract for the sale and purchase of shares pursuant to this
clause shall be completed within 7 days of the date of the
contract and shall be deemed to contain a provision that the
Shares are sold free and clear of all liens charges and
encumbrances and together with all rights (including dividends
or other distributions) attaching to them on and from the date
of the Offer Notice.
18.6 PXRE shall have no obligation to make the Loans after
completion of the sale of its Shares in accordance with this
Clause 18.
19. ARBITRATION
Should any dispute arise between the parties in respect of and
concerning matters remaining to be agreed in respect of any matters to
be interpreted under this Agreement (and including the determination of
the price of shares offered for sale under [Section 18] hereof), any
such dispute may be referred to arbitration pursuant to the provisions
of the Arbitration Xxx 0000 of Bermuda and each of the Parties hereby
submits to the jurisdiction of the arbitrator or arbitrators appointed
in accordance therewith; and the arbitration hearing shall be conducted
in Bermuda.
Page -15-
20. COSTS
Each Party to this Agreement shall pay its own legal costs of and
incidental to this Agreement and the obligations hereby undertaken. The
Parties shall share the costs of stamp duty, all governmental fees of
preparation of building plans, architect plans, architect models,
demolition costs, estimates and all costs related to the planning of
the construction of the Office Premises which are incurred prior to
incorporation of the Company in the following proportions:
PXRE as to 40%
BF&M as to 60%
After the incorporation of the Company, all such costs shall be paid by
the Company. The Company shall also be responsible for the costs of its
incorporation and any costs associated with the mortgage(s) to secure
the Loans referred to in Clauses 7.1 and 7.2 hereof.
21. INSOLVENCY
Each of the Parties hereby covenants with the others as separate
covenants that in the event that the Company is unable to pay its debts
as and when they fall due and that this position arises other than by
reason of failure of the Parties or the Company to comply with the
provisions of this Agreement, the leases of the Office Premises to be
granted in accordance with this Agreement or the promissory notes, they
shall procure that the Company is wound up.
22. BOOKS OF ACCOUNT
Each of the parties hereby covenants with the others, as separate
covenants, that it shall procure that accurate books and accounts shall
be kept by the Company in accordance with the Act, showing all of its
assets, liabilities, operations, transactions and financial condition;
and that as soon as practicable after the end of each fiscal year of
the Company (but in no event later than one hundred and twenty days
after the end of any fiscal year), a general accounting and audit shall
be made by chartered accountants in Bermuda, covering all matters and
things customarily included in such accounts and audits, and a full
detailed statement shall be furnished by the Company to the Parties
hereto. At any time following receipt of the Company's detailed
statement either Party or their authorized representative shall be
entitled to inspect the books and records of the Company.
23. NOTICES
All notices, acceptances, agreements, requests, demands, consents,
waivers and other communications required or otherwise given under any
of the provisions of this Agreement shall be in writing and shall be
deemed to have been duly given and received if delivered by hand to the
address of the addressee as follows:
Page -16-
If to PXRE, at:
00 Xxxxx Xxxxxx
Xxxxxxxx XX 12
Attention: Xxxxxxx X. Xxxxx
If to BF&M, at:
000 Xxxxx Xxx Xxxx
Xxxxxxxx XX 00
Attention: Xxxx Xxxxx
or to such other address and with such other copies as the address may
have specified in a written notice duly given to the sender.
24. MANAGEMENT OF THE OFFICE PREMISES
The Parties hereto hereby agree and declare that they shall use their
best endeavours to ensure that the management of the Office Premises
after completion shall continue to be the responsibility of the
Building Committee of the Board of the Company.
25. NAME OF OFFICE PREMISES
The business name of the Office Premises shall be "PXRE House" until
PXRE disposes of all of its beneficial interest in the Company or
ceases to be the primary tenant.
26. INSURANCE
The Parties agree to procure that the Company obtain an insurance
program from BF&M General Insurance Company Limited to cover the
Company against all appropriate insurable risks within reasonable
limits both in respect of the period of construction and thereafter.
27. PROVISIONS RELATING TO THIS AGREEMENT
27.1 This Agreement shall be binding upon and enure for the benefit
of the respective successors of the Parties named herein but
shall not be assignable save as permitted or required under
the Bye-laws or this Agreement. Nothing in this Agreement,
express or implied, is intended to confer on any other person
not a party hereto any right or remedy under or by reason of
this Agreement.
27.2 This Agreement (together with any documents referred to
herein) supersedes any prior negotiations and agreements
(written or oral) and constitutes the whole of the agreement
among all of the parties hereto and no variations, amendments
or alterations to this Agreement shall be effective unless
made in writing by the Parties.
Page -17-
27.3 No failure to exercise any right or remedy under this
Agreement shall constitute a waiver of any right or remedy and
no exercise of any right or remedy shall constitute a waiver
of any other right or remedy.
27.4 For the avoidance or doubt it is hereby agreed and declared
that all obligations hereunder are several.
27.5 Notwithstanding that any document referred to herein is stated
to be scheduled or annexed hereto, it need not be so scheduled
or annexed provided that a copy of it is annotated as being
the document referred to in this Agreement and such annotating
is executed by or on behalf of each of the parties hereto.
27.6 Each of the Parties hereto hereby agrees that it shall not
make any statement to the media regarding any matter
contemplated in this Agreement save after reasonable
consultation with the other Party and that in making any such
statement or publishing any material relevant to any matter
contemplated by this Agreement, it shall have due regard for
the reasonable interests of the other parties.
27.7 Nothing in this Agreement shall constitute or be deemed to
constitute a partnership between the Parties and none of them
shall have any authority to bind the others in any way.
27.8 It is acknowledged and agreed that this Agreement may be
executed by the Parties in counterparts.
28. TERMINATION
This Agreement shall terminate, after PXRE acquires Shares, upon either
Party ceasing to hold Shares in the Company as a result of any
transaction permitted by the terms of this Agreement, provided that
such termination shall be without prejudice to any obligations or
rights of either Party which have accrued prior to such termination and
shall not effect any provision which is expressly or by implication to
come into effect on or to continue in effect after such termination.
29. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Islands of Bermuda and the Parties hereby submit (save
where arbitration is expressly provided for) to the non-exclusive
jurisdiction of the Supreme Court of Bermuda.
Page -18-
IN WITNESS whereof the Parties hereto have caused this Agreement to be executed
in duplicate under seal the day and year first above written.
THE COMMON SEAL OF BF&M PROPERTIES )
LIMITED was hereunto affixed )
in the presence of:- Xxxxxxx Xxxxxx)
Director STAMP
/s/ Xxxxx Xxxxxxxxx
Secretary STAMP
/s/ N. Xxxx Xxxxx
THE COMMON SEAL OE PXRE GROUP LTD. )
was hereunto affixed in the )
presence of:- )
Executive Vice-President
/s/ Xxxxxxx Xxxxx
Secretary
/s/ Xxxxx Xxxxx
(Stamp Duty to be affixed)
Page -19-
SCHEDULE
ALL THAT certain parcel of land situate in Pembroke Parish in the Islands of
Bermuda delineated on the plan (prepared by Xxxxx Waddington Ltd. Surveyors of
Hamilton, Bermuda and being Drawing No. LS 6550 dated September 2000) annexed
hereto and thereon outlined in Red and containing in area 0.050 of an Hectare
and bounded NORTHERLY by the Public Road delineated on the Plan and designated
thereon as and known as "Xxxxx Bay Road" and there measuring on a straight line
from West to East 14.93 metres EASTERLY by land of BF&M Limited and there
measuring 34.83 metres SOUTH-EASTERLY and SOUTHERLY by the Waters of Xxxxxxxx
Harbour and there measuring on two straight lines from East to West 1.13 metres
and 15.26 metres and WESTERLY by other land now or lately in the possession of
the heirs or devisees of Xxxxx Xxxxxxxx Xxxxx deceased and there measuring 30.14
metres OR HOWEVER OTHERWISE the said parcel of land may be bounded may measure
or ought to be described TOGETHER WITH the building thereon erected known as
"Scarborough", 000 Xxxxx Xxx Xxxx, Xxxxxxxx (Xxxx Ref: 3/18 3148 7376) and all
other houses buildings fixtures walls fences ways rights-of-way rights lights
liberties privileges easements advantages and appurtenances whatsoever to the
said parcel of land belonging or in anywise appertaining or usually held or
enjoyed therewith or reputed as part thereof or appurtenant thereto.
