Document:

Exhibit 10.22

 

 

 

6th March, 2006

 

Mr. David Brown, Director 

Flagstone Reinsurance
Holdings Limited 

23 Church Street, 3rd
Floor 

Hamilton HM 11, Bermuda

 

Dear David

 

Re: Mont Fort Re Ltd.

 

This letter will confirm our
agreement to the transfer of our share holdings in Mont Fort Re Ltd. on the terms set out below.

 

	
  Shares

  	
   

  	
  370,000
  Common Shares of par value US$1 each.

  
	
   

  	
   

  	
   

  
	
  Consideration:

  	
   

  	
  U$50,000

  
	
   

  	
   

  	
   

  
	
  Governing
  Law:

  	
   

  	
  This
  letter agreement shall be governed and construed in accordance with the laws
  of Bermuda.

  
	
   

  	
   

  	
   

  
	
  Representations
  & Warranties

  	
   

  	
  We
  hereby represent and warrant that we are transferring the referred to above
  free and clear of any liens or encumbrances.

  

 

Please
confirm your acceptance of the foregoing by returning a signed copy of this
letter to us at the address below.

 

 

	
  Haverford (Bermuda) Ltd.

  	
  Flagstone Reinsurance
  Holdings Limited

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signed:

  	
  /s/ Mark Byrne

  	
   

  	
  Signed:

  	
  /s/ David Brown

  	
   

  
	
  Mark Byrne

  	
  David Brown

  
	
  Director

  	
  Director

  

 

 

 

 

 

 

 

 

 

 

Haverford (Bermuda) Ltd.

 

Crawford House, 23 Church Street, Hamilton HM 11, Bermuda Mailing
Address:

Suite 224, 12 Church Street Hamilton HM 11, Bermuda

 

Tel: +1 441-296-8272            Fax:
 +1 441-296-4927           E-Mail: info@haverford.bmExhibit 10.23

 

 

AIRCRAFT MANAGEMENT AND

JOINT USE AGREEMENT

 

1.             PARTIES:

 

Whereas,

 

Longtail Aviation
Ltd. (referred to herein as “Longtail”), is in the business of providing
aircraft management services to aircraft owners;

 

Flagstone
Westwind Holdings Limited a Bermuda exempted company limited by shares,
existing under the laws of Bermuda (referred to herein as “OWNER”), is the
owner or lessee of a certain Israel Aircraft Industries Westwind 1124A
aircraft, serial number 337, Bermuda registration number VP-BLT (referred to
herein as “the Aircraft”);

 

The rules
applicable to operations conducted by Longtail pursuant to this Agreement
include JAR-OPS 1, AN(OT)O, Bermuda Airworthiness Requirements, and other
regulations applicable to Bermuda–registered aircraft operated in Public
Transport and Private operations (hereinafter referred to as “Applicable
Regulations”); and

 

This Aircraft
Management and Joint Use Agreement (referred to herein as “this Agreement”) is
entered into as of the 1st day of August, 2006, by and between OWNER
and Longtail.

 

2.             USE OF AIRCRAFT IN AIR CARRIAGE

 

2.1.         Under
and subject to the terms and conditions set forth in this Agreement, OWNER
hereby grants to Longtail the non-exclusive right to use and operate the
Aircraft in Private and Public Transport operations during the term of this
Agreement, and OWNER hereby grants to Longtail the rights to use and exercise
operational control over the Aircraft during the term of this Agreement and
under the terms set forth herein.

 

2.2.         OWNER
shall deliver the Aircraft at OWNER’s expense, in good repair, condition and
working order to Longtail at the Bermuda International Airport, or at such
other place as may be mutually agreed upon. The aircraft shall have a current
Bermuda Certificate of Airworthiness, and shall have documentation which
demonstrates that the Aircraft is in all respects airworthy and mechanically
suitable for immediate operation and use under the Applicable Regulations.

 

Longtail Aviation Ltd.

Suite 113, MPA Hangar, Southside, St.
David’s  DD02, Bermuda Mailing Address:
P O Box DD310,

St. David’s DDBX, Bermuda

Tel: +1 441-293-5971  
Fax: +1 441-293-5972   Web Site: www.longtailaviation.bm

BDA/AOC/0104

 

 

3.             TERM:

 

3.1.         The
Term of this Agreement shall commence on the date first above-written, and
shall be for an initial period of twenty four (24) calendar months. Thereafter,
the Term shall be renewed automatically for successive periods of 12 months
unless terminated under the provisions of this Agreement. Beginning with first
renewal, either party shall have the right to cancel this Agreement without
cause upon written notice to the other, ninety (90) days prior to the renewal
date.

 

3.2.         In
the event of the sale of the Aircraft by OWNER, OWNER shall have the right to
terminate this Agreement upon ninety days written notice to Longtail. OWNER
shall honor all charter commitments booked by Longtail for the aircraft during
either such notice period, or shall reimburse Longtail for all of its costs and
expenses in providing alternative equivalent or better transportation to enable
Longtail to meet such commitments.

 

4.             MANAGEMENT FEES AND AIRCRAFT EXPENSES:

 

4.1.         OWNER
shall pay Longtail a management fee of Six Thousand ($6,000) Dollars per month
during the term of this Agreement.

 

4.2.         OWNER
shall bear all maintenance expenses incurred in connection with the operation
of the Aircraft. Maintenance expenses borne by OWNER shall include, without
limitation, all required inspections, inspections to determine or verify the
Aircraft’s conformity to the requirements of the Applicable Regulations, parts
replacement due to normal wear and tear, MSP and the costs associated with
documenting and tracking the Aircraft’s initial maintenance status and
continuing airworthiness (Continuous Airworthiness Maintenance Program (“CAMP”)
or an equivalent thereto) under the Applicable Regulations.

 

4.3.         OWNER
shall bear all fuel expenses incurred in the operation of the Aircraft. Longtail
shall make a reasonable attempt to locate fuel for the Aircraft at the most
competitive price per gallon subject to other operational constraints and in
the same way it manages other aircraft. The benefit of any fuel discount or
rebate program will be passed on to OWNER 100%.

 

4.4.         OWNER
shall provide and maintain as needed an advance of $250,000 on account for
expenses, on the inception date of this contract, and shall maintain an advance
of this amount quarterly throughout the contracts life, so as to allow Longtail
to make payments on OWNERS behalf of the expenses described in this Agreement.

 

4.5.         Within
Fifteen (15) days after the end of each month during the Term of this
Agreement, Longtail shall deliver to OWNER an accounting of Aircraft hours 

 

2

 

flown and
charter revenue. Payments due OWNER hereunder shall become due and payable
thirty days after the end of the month in which the obligation for payment
accrues, to the extent they exceed the quarterly advance described in 4.4.

 

4.6.         Longtail
shall prepare financial statements of OWNER, to the reasonable satisfaction of
the parent company of OWNER, and shall cooperate and assist with the parent
company’s audit and internal audit processes.

 

4.7.         The
cost of providing up to 3 flight crew in connection with the operation of the
Aircraft shall be billed to and paid by OWNER. Flight crewmembers shall at all
times be under the exclusive control of Longtail. In the event that a
crewmember the cost of whom is assigned to OWNER is used by Longtail in an
aircraft other than the Aircraft, Longtail shall pay OWNER for such use at the
rate of $300 per day or portion thereof.

 

4.8.         OWNER
shall bear all hangar expenses incurred in the operation of the Aircraft,
except to the extent that such expenses can be re-billed to charter customers. Longtail
shall make a reasonable attempt to locate hangar rent for the Aircraft at the
best competitive price whenever such hangar space is needed or requested by
OWNER. Longtail will provide hangar space for the Aircraft in Bermuda for $6,000
per month or as otherwise notified to OWNER from time to time in advance.

 

4.9.         Owner
shall bear all costs of landing fees, catering, aircraft supplies, airport
fees, navigation fees and handling charges incurred in connection with the
operation of the Aircraft for Owner.

 

4.10.       OWNER
shall bear the cost of providing and keeping current a complete set of
navigation manuals for the Aircraft, including coverage for the United States,
Canada, Latin America and South America, and the cost of providing and keeping
current navigation databases for all navigation equipment installed in the
Aircraft.

 

4.11.       OWNER
shall bear the cost of providing, inspecting and re-certifying all necessary
and appropriate emergency equipment for the Aircraft, including all such
equipment installed in the Aircraft by the manufacturer, all such equipment
required by Applicable Regulations for extended over-water operations under JAR
OPS 1, and all such equipment requested by OWNER or deemed necessary and
appropriate by Longtail, including life jackets, life raft, pyrotechnic
signaling devices, portable emergency oxygen, passenger oxygen masks, EROS crew
oxygen masks, at least two (2) flight crew smoke/fire hoods, one (1) Halon 1211
and one (1) Halon 1301 fire extinguishers, one JAR OPS compliant First Aid Kit,
one JAR OPS compliant Emergency Medical Kit, and one (1) portable
de-fibrillator. OWNER shall also bear the cost of training and re-training

 

3

 

crewmembers in
the use of all such equipment.

 

4.12.       OWNER
shall pay the cost of training at SimuFlite or FlightSafety for up to three (3)
crewmembers. All other required flight training (e.g., Line Checks, supervised
Line Flying) may be accomplished in the Aircraft, and OWNER agrees to make the
Aircraft available at no charge for this purpose as necessary. Required
checkrides performed by Longtail Line Training Captains will be billed at the
rate of $500.00 per checkride. Longtail will make reasonable efforts to
accomplish day and night landing currency requirements in the simulator, but
may use the aircraft for this purpose when strictly necessary.

 

4.13.       Longtail
shall be responsible for and shall pay when due any and all fines or penalties
which may be imposed in connection with the operation of the aircraft, except
to the extent that such fines or penalties are imposed in connection with
operations conducted by OWNER or as a result of actions of its officers,
directors, members or shareholders.

 

4.14.       Interest
shall accrue at the rate of 6 (6%) percent per annum on all sums owed by either
party to the other, beginning on the date that such amount becomes due and
payable hereunder.

 

5.            CHARTER USE OF THE
AIRCRAFT

 

5.1.         On
a per trip basis Longtail shall pay OWNER $2,000 per charter hour flown.

 

6.             OWNER’S RIGHT TO USE THE AIRCRAFT:

 

6.1.         OWNER
may schedule the Aircraft for use in the same manner as charter customers,
using Longtail’s normal scheduling procedures. Such flights may be conducted on
behalf of Owner by Longtail as Public Transport flights, and in this event Longtail
will maintain operational control of the aircraft during such flights.

 

6.2.         Subject
to the terms of this Agreement and subject to Aircraft availability and prior
booking, OWNER retains the right to schedule and operate the Aircraft for its
own purposes during the term of this Agreement, and to assume operational
control of the aircraft during such flights. OWNER shall be solely responsible,
during any such flights, to verify and ensure the continuing airworthiness of
the Aircraft and the compliance with all Applicable Regulations in connection
with any such flights. During any such operations, OWNER shall be responsible
to liase with Longtail’s Technical Director with respect to any airworthiness
issues and/or the correction thereof which may arise during the flight. At the
conclusion of any such operations, OWNER shall be responsible to report any
uncorrected airworthiness defects to Longtail’s Technical Director.

 

4

 

6.3.         OWNER
may require Longtail to cancel a charter to conduct a flight for OWNER, on at
least 12 hours notice. In this case, OWNER will pay to Longtail the cost of
conducting the flights in an alternative aircraft, including any lost profit
margin to Longtail.

 

6.4.         In
the event either party fails to return the Aircraft to the other party, unless
such failure is caused by emergency maintenance or weather delays, according to
a prearranged schedule of use, the other party agrees to indemnify and hold
harmless the injured party from all costs, expenses and/or legal liability
associated with the failure to return the Aircraft as scheduled.

 

7.             INSURANCE:

 

7.1.         OWNER
shall provide and maintain aircraft insurance in amounts which meet Longtail’s
requirements and to the extent customary in the operation of similar aircraft
for similar purposes. All such insurance shall be maintained at the sole cost
and expense of OWNER and shall list OWNER and Longtail, as their interests may
appear, as named insureds. Longtail shall be furnished with a copy of the
policy and all endorsements thereon.

 

7.2.         The
Aircraft hull shall be covered in the amount of not less than One Million Five
Hundred ($1,500,000.00) Dollars. Liability insurance shall be in an amount not
less than One Hundred Fifty Million ($150,000,000) Dollars.

 

7.3.         All
such policies of insurance shall provide that they will not be canceled except
upon 30 days prior written notice to OWNER and Longtail. OWNER may provide such
insurance through Longtail’s fleet policy, or may provide such coverage through
its own sources or agents, at OWNER’s sole option, but in any event all costs
of such coverage shall be borne solely by OWNER.

 

8.             WARRANTIES AND REPRESENTATIONS:

 

8.1.         Longtail
hereby represents and warrants to OWNER that it will operate the Aircraft under
a current and valid Bermuda Air Operator Certificate and in accordance with the
Applicable Regulations, as those Regulations are applicable to the operation
being conducted. Longtail wil maintain the Air Operator’s Certificate at its own
expense.

 

8.2.         Longtail
will not permit the Aircraft to be used except for lawful purposes. Longtail
shall not permit the Aircraft to be loaded, used, operated, maintained or
stored negligently, improperly or in violation of any law. Longtail will always
use and operate the Aircraft in a manner which will not cause or permit
cancellation or

 

5

 

suspension of any FAA or Bermuda Certificate, registration or any
insurance policy required to be in effect under this Agreement.

 

8.3.         Longtail
will not permit the Aircraft to be operated by other than currently qualified,
rated and certified pilots and crew. Such pilots will have at least the minimum
total pilot hours required by carriers of insurance on the Aircraft and will
meet all requirements of insurers and Applicable Regulations.

 

8.4.         Longtail
represents and warrants that it is a corporation limited by shares duly
organized, validly existing and in good standing under the laws of Bermuda, and
that it has full power to execute and deliver this Agreement and is
appropriately authorized under its terms. OWNER represents and warrants that it
is a corporation limited by shares duly organized, validly existing and in good
standing under the laws of Bermuda, and that it has full power to execute and
deliver this Agreement and is appropriately authorized under its terms.

 

9.             RECORD OF FLIGHT TIMES, INSPECTIONS AND REVENUE
DOCUMENTS:

 

Longtail will
maintain copies of all appropriate records of the Aircraft, including, but not
limited to, flight time and number of landing cycles, and shall make such
records available for inspection by OWNER upon notice during Longtail’s normal
business hours. Should OWNER require an independent audit of these records,
such audit will be performed at OWNER’s expense.

 

10.           MAINTENANCE OF AIRCRAFT:

 

10.1.       All
inspections, repairs, modifications, airworthiness directives, service
bulletins and overhaul work necessary (under the Applicable Regulations or
Longtail’s approved manuals and procedures) to maintain the Aircraft in an
airworthy condition suitable for operations under the Applicable Regulations
shall be performed in accordance with the Applicable Regulations at the
direction and under the supervision and control of a qualified individual
designated by Longtail as Technical Director.

 

10.2.       The
Technical Director will make reasonable efforts to maintain the Aircraft in the
most cost-effective manner. OWNER shall have the right at any time to observe
the performance of such maintenance and to inspect and audit any and all
records of such maintenance and/or, at OWNER’s sole cost and expense, to hire
independent maintenance professionals to perform such observation, review,
inspection and/or audit. OWNER understands and acknowledges that some
maintenance on the Aircraft will be performed under contract by entities and/or
facilities other than Longtail.

 

6

 

10.3.        OWNER
agrees to pay such facilities directly and in a timely manner for all maintenance
performed on the Aircraft by such facilities according to the terms required by
such facilities. Longtail has the right but not the obligation to make any such
payments on behalf of OWNER, in which case OWNER shall promptly reimburse
Longtail for same. OWNER understands and agrees that any and all maintenance
performed by OWNER will be done by appropriately licensed and trained
technicians, and will be performed and properly documented in accordance with
all Applicable Regulations and in accordance with Longtail’s approved manuals
and procedures.

 

10.4.       OWNER
will deliver all maintenance and repair records pertaining to the Aircraft,
including a complete and current set of maintenance manuals for the Aircraft,
to Longtail when the Aircraft is delivered to Longtail, and will bear the cost
of keeping all such manuals and records current; Longtail will, in turn,
deliver all such records and manuals, together with those generated during the
term of this Agreement, to OWNER upon the termination of this Agreement.

 

10.5.       Any
and all replacement parts, additions or improvements to the Aircraft shall
become the exclusive property of the OWNER.

 

10.6.       Maintenance
services during normal business hours will be provided by Longtail at the
then-current shop rate, currently $90 per hour, and outside of normal business
hours at 150% of that rate. When travel is required, Longtail will charge $300
per travel day per staff member, plus airfare.

 

11.           LIENS; TAXES:

 

Longtail shall
keep the Aircraft free and clear of all liens and encumbrances, except for any
security interests which may be granted to OWNER’s lenders. Longtail shall not
be responsible for any sales and/or use taxes which may become due and payable
in connection with the purchase of the Aircraft or in connection with payments
made to OWNER pursuant to this Agreement.

 

12.           ACCIDENTS:

 

Longtail shall
attempt to notify OWNER within Twelve (12) hours of any accident or other
occurrences which cause damage to the Aircraft or which is required to be
reported to the Bermuda Department of Civil Aviation or any carrier of
insurance on the Aircraft.

 

13.           SURRENDER:

 

Upon
expiration or earlier termination of the Agreement, Longtail shall return the
Aircraft in good repair, condition and working order, normal wear and tear excepted.

 

7

 

14.           ASSIGNMENT:

 

This Agreement
shall inure to the benefit of and be binding upon the heirs, legatees, personal
representatives of, survivors, successors and assigns of the parties hereto,
provided, however, that this Agreement shall not be assignable without the
consent of the parties hereto, which consent shall not be unreasonably
withheld.

 

15.           DEFAULT:

 

If either party to this Agreement fails to pay any amount herein
provided within Fifteen (15) days after the same is due and payable, or if
either party fails to perform any other of its obligations under this Agreement
within Fifteen (15) days after the other party shall have demanded in writing
performance thereof, the aggrieved party shall have the right but not the
obligation:

 

15.1.       To
immediately terminate this Agreement;

 

15.2.       To
declare immediately due and payable all rents and other sums owed due and
payable under this Agreement;

 

15.3.       In
the case of default by Longtail, to take possession of the Aircraft or disable
it, without further demand or notice, without any court order, and without
incurring any liability to Longtail for any damages whatsoever occasioned by
such an action, in the event of such repossession, and of effectuating a return
of the Aircraft to the airport at which the Aircraft is customarily hangared;
and

 

15.4.       In
the case of default by OWNER, to place a mechanic’s lien or other lien on the
Aircraft to the extent allowed by applicable law;  and

 

15.5.       To
pursue any other remedy now or hereafter existing at law or equity.

 

In the event either party takes any action pursuant to this Paragraph 15,
the prevailing party shall be entitled to recover its reasonable attorney’s
fees and expenses, and interest at the rate of one and a half percent per month
on all amounts not paid when due.

 

16.           ADDITIONAL DOCUMENTS:

 

At the request
of either party to this Agreement, the other party shall execute and deliver,
or cause to be executed and delivered, any documents or take any action reasonably
necessary or appropriate to the implementation of the intent of this Agreement,
or any assignment thereof.

 

8

 

17.          MISCELLANEOUS:

 

17.1.       Time
is of the essence of this Agreement, and all terms, conditions and covenants
contained herein. The Aircraft is and at all times hereunder shall remain the
property of OWNER, and Longtail shall have no right, title, or interest therein
except as expressly granted hereunder.

 

17.2.       This
Agreement may not be amended orally, but only by written instruments executed
and delivered by OWNER and Longtail; provided that a fax, telex, telegram or
cable duly acknowledged by a return communication of like or similar kind by
the recipient shall be deemed to be a written instrument or notice for purpose
of this subparagraph.

 

17.3.       Paragraph
headings are for convenience only and shall have no bearing on the
interpretation of any term or provision of the Agreement.

 

17.4.       In
case any one or more of the provisions contained in this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
in this lease and this lease shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.

 

18.           OTHER DUTIES:

 

Longtail
agrees to arrange for the performance of the following additional services, and
to bill OWNER for same at cost: Longtail shall keep aircraft clean inside and
out. All damage to aircraft and all maintenance discrepancies shall be repaired
or corrected as quickly as possible, it being in the interest of both Longtail
and OWNER to have aircraft available for use.

 

19.           GOVERNING LAW:

 

This Agreement shall be governed by and construed in accordance with
the laws of Bermuda. Should litigation between the parties arise in connection
with this Agreement, the prevailing party shall be entitled to reimbursement
for reasonable attorney’s fees and expenses.

 

9

 

20.          NOTICES:

 

20.1.       Any
notices, requests and demands in connection with this Agreement shall be in
writing, and shall be served either by personal delivery, registered or
certified mail, postage prepaid, return receipt requested, or by fax, telex,
telegram or cable. Notices shall be delivered to:

 

	
  Longtail:

  	
  LONGTAIL
  AVIATION LTD.

  
	
   

  	
  Suite 113,
  MPA Hangar

  
	
   

  	
  St. Georges
  Parish

  
	
   

  	
  Bermuda DD02

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Roger Brydon

  
	
   

  	
   

  	
  Head of
  Ground Operations

  
	
   

  	
   

  
	
   

  	
   

  
	
  OWNER:

  	
  FLAGSTONE
  WESTWIND HOLDINGS

  LIMITED

  
	
   

  	
  Crawford
  House

  
	
   

  	
  23 Church
  Street

  
	
   

  	
  Hamilton HM
  11

  
	
   

  	
  Bermuda

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Todd White

  
	
   

  	
   

  	
  General
  Counsel

  

 

IN WITNESS WHEREOF, the parties
have executed this Agreement as of the month, day and year first above-written.

 

	
  OWNER:

  	
  FLAGSTONE WESTWIND HOLDINGS

  LIMITED

  
	
   

  	
  /s/ James
  O’Shaughnessy

  	
   

  
	
   

  	
  By: James
  O’Shaughnessy

  
	
   

  	
  Its Director

  
	
   

  	
   

  
	
  Longtail:

  	
  LONGTAIL
  AVIATION LTD.

  
	
   

  	
  /s/ Anthony
  Philip

  	
   

  
	
   

  	
  By: Anthony
  Philip

  
	
   

  	
  Its
  Secretary

  

 

10

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