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EXHIBIT 2.1
FOR INCLUSION IN NEW VALLEY CORPORATION'S
CURRENT REPORT ON FORM 8-K DATED JANUARY 31, 1997
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STOCK PURCHASE AGREEMENT
Dated as of January 31, 1997
among
BROOKEMIL LTD.,
BROOKE (OVERSEAS) LTD.,
BGLS INC.
and
NEW VALLEY CORPORATION
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TABLE OF CONTENTS
Article Page No.
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1. Purchase of Stock 1
1.1 Purchase of Stock 1
1.2 Purchase Price 2
1.3 Closing Date 2
2. Representations and Warranties 2
2.1 Representations and Warranties by the Company 2
(A) Organization of the Company 3
(B) Authorization by the Company 3
(C) Necessary Authority 3
(D) Non-Contravention 3
(E) Capital Stock 4
(F) Assets 4
(G) Liabilities 4
(H) No Violation of Law 5
(I) Tax Matters 5
(J) Employee Matters 5
(K) Real Estate and Other Matters 5
2.2 Representations and Warranties by Brooke and BGLS 5
(A) Organization 5
(B) Authorization 6
(C) Necessary Authority 6
(D) Non-Contravention 6
(E) Good Title to Shares 6
(F) Litigation 6
2.3 Representations and Warranties by NVC 7
(A) Organization of NVC 7
(B) Authorization by NVC 7
(C) Necessary Authority 7
(D) Non-Contravention 7
(E) Litigation 8
(i)
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3. Conditions to the Closing 8
3.1 Conditions to Obligations of NVC 8
(A) Regulatory Authorizations 8
(B) Representations, Warranties and Covenants 8
(C) No Proceeding or Litigation 9
(D) Fairness Opinion 9
3.2 Conditions to Obligations of Brooke 9
(A) Regulatory Authorizations 9
(B) Representations, Warranties and Covenants 9
(C) No Proceeding or Litigation 9
4. Put Option on Factory Site; Termination of Use Agreement;
Non-Compete 10
4.1 Right to Put Factory Site 10
4.2 Exercise of the Put Option 10
4.3 Put Option Closing 10
4.4 Termination Notice 10
4.5 Non-Compete 11
5. Indemnification 11
5.1 Survival of Representations and Warranties 11
5.2 Indemnification 11
5.3 Exclusive Remedy 13
6. Termination and Waiver 14
6.1 Termination 14
6.2 Effect of Termination 14
6.3 Waiver 15
7. Miscellaneous 15
7.1 Expenses; Transfer Taxes, etc. 15
7.2 Notices 15
7.3 Brokers and Financial Advisors 16
7.4 Press Releases and Confidentiality 16
7.5 Amendment 16
(ii)
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7.6 Assignment 16
7.7 No Third Party Beneficiaries 16
7.8 Further Actions 16
7.9 Severability 17
7.10 Governing Law 17
7.11 Submission to Jurisdiction 17
7.12 Counterparts 17
7.13 Headings 17
7.14 Entire Agreement 17
SCHEDULES
2.1(G) Other Payables and Liabilities
2.1(K) Real Estate and Other Matters
ANNEXES
A Form of Promissory Note
B Form of Pledge Agreement
C Form of Use Agreement
(iii)
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of January 31, 1997,
among BrookeMil Ltd., a Cayman Islands company (the "Company"), Brooke
(Overseas) Ltd., a Delaware corporation ("Brooke"), BGLS Inc., a Delaware
corporation ("BGLS"), and New Valley Corporation, a Delaware corporation
("NVC").
WITNESSETH
WHEREAS, NVC desires to purchase from Brooke, and Brooke desires to sell to
NVC, 10,483 shares of the Common Stock of the Company, comprising 99.1% of the
shares of Common Stock of the Company issued and outstanding on the date hereof
(the "Shares"), on the terms and conditions set forth herein; and
WHEREAS, contemporaneously with the purchase and sale of the Shares
pursuant to this Agreement, and as an inducement for Brooke to sell the Shares
to NVC, NVC desires that the Company enter into a use agreement with
Xxxxxxx-Xxxxx Joint Stock Company ("LDJSC"), a Russian closed joint stock
company and a majority-owned subsidiary of Brooke, pursuant to which LDJSC may
use the land and buildings at the Factory Site (as hereinafter defined) on the
terms and for the periods provided therein (the "Use Agreement");
WHEREAS, Brooke is a wholly-owned subsidiary of BGLS and, as a result, BGLS
will derive direct and indirect benefits from the transactions contemplated by
this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Purchase of Stock
1.1 Purchase of Stock. Subject to the terms and conditions herein set forth
and on the basis of the representations, warranties and agreements of the
Company, Brooke and BGLS herein contained, NVC agrees to purchase from Brooke,
and Brooke agrees to sell to NVC, the Shares for the Purchase Price (as defined
below and subject to adjustment as described in Section 1.2 below) as
hereinafter set forth. Brooke shall deliver certificates for the Shares to be
sold hereunder duly endorsed in blank, or accompanied by executed stock powers,
to NVC at the offices of NVC located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
(the "Closing"), at 9:00 A.M. on January 31, 1997, or at such other place, time
and date as NVC and Brooke may agree upon in writing, the actual time and date
on which the Closing hereunder shall occur being herein called the "Closing
Date".
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1.2 Purchase Price. The aggregate purchase price for the Shares
to be purchased by NVC from Brooke shall be $55,000,000 (the "Purchase Price"),
payable as follows:
(i) $21,500,000 by wire transfer to an account designated by
Brooke to NVC at least two business days prior to the
Closing Date; and
(ii) $33,500,000 by delivery of a promissory note of NVC (the
"Note") issued by NVC to Brooke, in the form of Annex A
hereto, which shall be secured by the pledge by NVC of
the Shares purchased hereunder pursuant to a pledge
agreement (the "Pledge Agreement"), in the form of Annex
B hereto.
1.3 Closing Date. On the Closing Date:
(A) Brooke shall deliver certificates representing the Shares
to NVC as set forth in Section 1.1 hereof.
(B) NVC shall (i) pay the portion of the Purchase Price due on
the Closing Date pursuant to Section 1.2(i) above and (ii) deliver
to Brooke the Note evidencing the portion of the Purchase Price set
forth in Section 1.2(ii) above.
(C) NVC and Brooke shall enter into and deliver the Pledge
Agreement, in the form of Annex B hereto.
(D) The Company and LDJSC shall enter into and deliver the Use
Agreement, in the form of Annex C hereto.
(E) Each of Brooke, BGLS, the Company and NVC shall deliver to
the other certified copies of resolutions of its Board of Directors
authorizing this Agreement and the other agreements and transactions
contemplated hereby.
ARTICLE II
Representations and Warranties
2.1 Representations and Warranties by the Company. The Company
represents and warrants to, and agrees with, NVC as follows:
(A) Organization of the Company. The Company has been duly
organized, and is validly existing as a corporation in good standing
under the laws of the Cayman Islands, with corporate power and
authority to own its current properties and conduct its current
business. The Company has provided
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to NVC complete and correct copies of its Memorandum of
Association, Articles of Association and any other organizational
documents required under the laws of the Cayman Islands.
(B) Authorization by the Company. This Agreement and the
agreements contemplated hereby have been duly authorized, executed
and delivered by the Company and constitute the valid and legally
binding agreements of the Company enforceable in accordance with
their terms except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the enforcement of creditors' rights or
equitable principles.
(C) Necessary Authority. All consents, approvals,
authorizations, licenses and orders, corporate or otherwise,
necessary for the execution and delivery by the Company of this
Agreement and the agreements contemplated hereby and the
consummation of the transactions contemplated hereby have been
obtained, and the Company has the full right, power and authority to
enter into this Agreement and such other agreements and to perform
its obligations hereunder and thereunder.
(D) Non-Contravention. The execution, delivery and performance
of this Agreement and the consummation of the transactions herein
contemplated by the Company do not and will not (i) violate,
conflict with or result in the breach of any provision of the
Memorandum of Association or Articles of Association of the Company,
(ii) conflict with or violate any statute, law, ordinance,
regulation, rule, code, order or other requirement or rule of law
("Laws") or any governmental order applicable to the Company or any
of its assets, properties or businesses, or (iii) conflict with,
result in any breach of, constitute a default (or event which with
the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any
rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, or result in the creation of any
security interest, pledge, mortgage, lien, charge or other
encumbrance ("Encumbrance") on any of the Shares or any property or
assets of the Company pursuant to, any contract, agreement or other
instrument or arrangement to which the Company is a party or by
which the Company or its property is bound or affected.
(E) Capital Stock. The authorized capital stock of the Company
consists solely of 900,000 shares of Common Stock, $1.00 par value,
of which 10,583 shares are validly issued, fully paid and
nonassessable, and outstanding. Prior to giving effect to the
transactions contemplated by this Agreement, all of the outstanding
shares of Common Stock of the Company are owned of record as
follows: 10,483 shares by Brooke and 100 shares by LDJSC. There are
no existing options, calls or commitments of any character relating
to the authorized and unissued capital stock of the Company or any
of its subsidiaries
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(the "Subsidiaries") or to any securities or obligations
convertible into or exchangeable for, or giving any person any right
to subscribe for or acquire from the Company or any of its
Subsidiaries, any shares of capital stock of the Company, or any of
its Subsidiaries, and no such convertible or exchangeable securities
or obligations are outstanding. The only Subsidiaries of the Company
are Gasheka Property Management LP, Xxxx Construction LP and DGC
Construction LP.
(F) Assets. On the Closing Date, the assets owned or leased by
the Company (the "Assets") shall include (i) interests in land and
buildings in Moscow, Russia at the following locations: 8, 00
Xxxxxxx Xxxxxx (Xxxxx Place I); 0 Xxxxxxx Xxxxxx (Xxxxx Place II);
and 0 Xxxxxxx Xxxxxx (the "Factory Site"); (ii) cash in an amount
equal to the amount, if any, by which prepayments of rent and
other related payments on or before the Closing Date by tenants at 0
Xxxxxxx Xxxxxx (Xxxxx Place II) exceed $13,200,000 and by tenants at
0,00 Xxxxxxx Xxxxxx (Xxxxx Place I) exceed $7,200,000; and (iii) all
of the Company's and Brooke's interests in the development of an
office building in Kiev, Ukraine. The Assets are free and clear of
all liens other than the Assumed Liabilities (as hereinafter
defined).
(G) Liabilities. On the Closing Date, the liabilities of the
Company (the "Assumed Liabilities") shall consist solely of (i)
obligations under the Loan Agreement, dated as of October 26, 1995,
as amended and supplemented, between Vneshtorgbank and the Company
and LDJSC, as co-borrowers; (ii) obligations (not to exceed
$3,200,000) under the Construction Contract, dated October, 1995, as
amended, between Xxxx Construction LP and Codest Engineering
relating to 0 Xxxxxxx Xxxxxx (Xxxxx Place II); (iii) unearned
revenue relating to prepayments of rent and other related payments
by tenants at 0,00 Xxxxxxx Xxxxxx (Xxxxx Place I) and at 0 Xxxxxxx
Xxxxxx (Xxxxx Place II); and (iv) other payables and liabilities set
forth on Schedule 2.1(G) hereto. The Company has no material
liabilities, fixed or contingent, known or unknown, liquidated or
accrued, by agreement or by operation of law, other than the
liabilities listed in the foregoing clauses (i) through (iv). The
Company has identified to NVC and has provided to NVC complete and
correct copies of all material contracts of the Company, and the
Company is not in breach or default of any of such contracts, except
for breaches or defaults which, if not cured, would not have a
material adverse effect on the Company.
(H) No Violation of Law. The business of the Company is not
being conducted in violation of any Law or any governmental order
applicable to the Company or any of its assets or properties, except
for possible violations which individually or in the aggregate would
not have a material adverse effect on the Company. To the Company's
knowledge, the Company is in compliance with all applicable
environmental Laws and the Company has not received any
communication from any governmental authority that alleges that the
Company
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is not in compliance with applicable environmental Laws where
such non-compliance would have a material adverse effect on the
Company.
(I) Tax Matters. All material tax returns and reports required
to be filed by the Company prior to the Closing Date or with respect
to taxable periods ending prior to the Closing Date have been or
will be filed with the appropriate governmental authorities prior to
the Closing Date or by the due date thereof including extensions.
Such tax returns and reports correctly reflect (and as to returns
not filed as of the date hereof, will correctly reflect) all
material tax liabilities of the Company required to be shown
thereon.
(J) Employee Matters. The Company has identified to NVC and
has provided to NVC complete and correct copies of all material
employment agreements or employee benefit plans covering present
and former employees of the Company or their beneficiaries.
(K) Real Estate and Other Matters. The Company represents
and warrants as set forth in Schedule 2.1(K) hereto.
2.2 Representations and Warranties by Brooke and BGLS. Brooke and BGLS
represent and warrant to, and agree with, NVC as follows:
(A) Organization. Brooke and BGLS have been duly incorporated
and are validly existing as corporations in good standing under the
laws of the State of Delaware, with corporate power and authority to
own their current properties and conduct their current businesses.
Brooke and BGLS are duly qualified or licensed to do business as
foreign corporations and are in good standing in all jurisdictions
that require such qualification or licensing. Brooke and BGLS have
provided to NVC complete and correct copies of their Certificates of
Incorporation and By-Laws.
(B) Authorization. This Agreement and the agreements
contemplated hereby have been duly authorized, executed and
delivered by Brooke and BGLS and constitute the valid and legally
binding agreements of Brooke and BGLS enforceable in accordance with
their terms except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting the enforcement of creditors' rights or
equitable principles.
(C) Necessary Authority. All consents, approvals,
authorizations, licenses and orders, corporate or otherwise,
necessary for the execution and delivery by Brooke and BGLS of this
Agreement and the agreements contemplated hereby and the
consummation of the transactions contemplated hereby have been
obtained, and Brooke and BGLS have the full right, power
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and authority to enter into this Agreement and such other
agreements and to perform their obligations hereunder and
thereunder.
(D) Non-Contravention. The execution, delivery and performance
of this Agreement and the consummation of the transactions herein
contemplated by Brooke and BGLS do not and will not (i) violate,
conflict with or result in the breach of any provision of the
Certificate of Incorporation or By-Laws of Brooke or BGLS, (ii)
conflict with or violate any Law or any governmental order
applicable to Brooke or BGLS, or any of their respective assets,
properties or businesses, or (iii) conflict with, result in any
breach of, constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or
cancellation of, or result in the creation of any Encumbrance on any
of the Shares or any property or assets of Brooke or BGLS pursuant
to, any contract, agreement or other instrument or arrangement to
which Brooke or BGLS is a party or by which Brooke, BGLS or any of
their respective properties or the Shares are bound or affected.
(E) Good Title to Shares. Brooke has, and immediately prior to
the Closing Date, Brooke will have, good and valid title to the
Shares to be sold by Brooke hereunder, free and clear of all
Encumbrances; and upon delivery of the Shares and payment therefor
pursuant hereto, good and valid title to the Shares, free and clear
of all Encumbrances, will pass to NVC on the Closing Date.
(F) Litigation. There is no litigation pending or, to the best
of Brooke's or BGLS' knowledge, threatened in writing (or any basis
therefor) against Brooke or BGLS that might detrimentally affect the
ability of Brooke or BGLS to perform their obligations under this
Agreement. There are no valid, effective and enforceable orders,
injunctions, or decrees of any court or arbitral body with respect
to Brooke or BGLS that might detrimentally affect the ability of
Brooke or BGLS to perform their obligations under this Agreement.
Brooke and BGLS have neither filed, nor been the subject of any
filing of, a petition under bankruptcy laws, insolvency laws, laws
for the composition of indebtedness, or laws for the reorganization
of debtors.
2.3 Representations and Warranties by NVC. NVC represents and
warrants to, and agrees with, Brooke and BGLS as follows:
(A) Organization of NVC. NVC has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Delaware, with corporate power and authority to own its
current properties and conduct its current business. NVC is duly
qualified or licensed to do business as a foreign corporation and is
in good standing in all jurisdictions that require
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such qualification and licensing. NVC has provided to Brooke
complete and correct copies of its Restated Certificate of
Incorporation and By-Laws.
(B) Authorization by NVC. This Agreement, the Note and the
Pledge Agreement has been, in the case of this Agreement, and, prior
to the Closing Date, will be, in the case of the other documents,
duly authorized, executed and delivered by NVC and constitutes, in
the case of this Agreement, and, when executed, will constitute, in
the case of the other documents, valid and legally binding
obligations of NVC enforceable in accordance with their terms except
as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting the enforcement of creditors' rights or equitable
principles.
(C) Necessary Authority. All consents, approvals,
authorizations, licenses and orders, corporate or otherwise,
necessary for the execution and delivery by NVC of this Agreement
and the agreements contemplated hereby and the consummation of the
transactions contemplated hereby have been obtained, and NVC has the
full right, power and authority to enter into this Agreement and
such other agreements and to perform its obligations hereunder and
thereunder.
(D) Non-Contravention. The execution, delivery and performance
of this Agreement and the consummation of the transactions herein
contemplated by NVC do not and will not (i) violate, conflict with
or result in the breach of any provision of the Restated Certificate
of Incorporation or By-Laws of NVC, (ii) conflict with or violate
any Law or any governmental order applicable to NVC or any of its
assets, properties or businesses, or (iii) conflict with, result in
any breach of, constitute a default (or event which with the giving
of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or
cancellation of any contract, agreement or other instrument or
arrangement to which NVC is a party or by which NVC or any of its
properties is bound or affected.
(E) Litigation. There is no litigation pending or, to the best
of NVC's knowledge, threatened in writing (or any basis therefor)
against NVC that might detrimentally affect the ability of NVC to
perform its obligations under this Agreement. There are no valid,
effective and enforceable orders, injunctions, or decrees of any
court or arbitral body with respect to NVC that might detrimentally
affect the ability of NVC to perform its obligations under this
Agreement.
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ARTICLE III
Conditions to the Closing
3.1 Conditions to Obligations of NVC. The obligations of NVC to consummate
the purchase of the Shares provided for herein are subject to the proper tender
by Brooke to NVC of the Shares, and the fulfillment, prior to or on the Closing
Date, of each of the following conditions:
(A) Regulatory Authorizations. All authorizations, consents,
orders and approvals of regulatory authorities necessary for the
performance by the Company, Brooke, BGLS or NVC of this Agreement
and the consummation of the purchase and sale of the Shares
hereunder shall have been obtained.
(B) Representations, Warranties and Covenants. The
representations and warranties of the Company, Brooke and BGLS
contained in this Agreement shall be true and correct in all
material respects at the date hereof and at and as of the Closing
Date, with the same force and effect as if made at and as of the
Closing Date (except that representations and warranties that by
their terms speak as of the Closing Date shall be true and correct
as of such date); and the Company, Brooke and BGLS shall have
performed or complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied
with by them on or prior to the Closing Date, including the delivery
of such documents and performance of such acts as are required by
Section 1.3 hereof.
(C) No Proceeding or Litigation. No action shall have been
commenced in a court of competent jurisdiction or by or before any
governmental authority against either the Company, Brooke, BGLS or
NVC seeking to restrain or materially and adversely alter the
transactions contemplated by this Agreement which, in the
reasonable, good faith determination of NVC, is likely to prevent
NVC from consummating or make it unlawful for NVC to consummate such
transactions.
(D) Fairness Opinion. NVC shall have received an opinion of
Xxxxxxxxxxx & Co. Inc., in form and substance satisfactory to NVC,
that the purchase of the Shares provided for herein is fair from a
financial point of view to NVC.
3.2 Conditions to Obligations of Brooke. The obligations of Brooke to
consummate the sale of the Shares to be sold hereunder are subject to the
payment by NVC of the Purchase Price in accordance with Section 1.2 hereof, and
the fulfillment, prior to or on the Closing Date, of each of the following
conditions:
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(A) Regulatory Authorizations. All authorizations, consents,
orders and approvals of regulatory authorities or any third parties
necessary for the performance by the Company, Brooke, BGLS or NVC of
this Agreement and the consummation of the purchase and sale of the
Shares hereunder shall have been obtained.
(B) Representations, Warranties and Covenants. The
representations and warranties of NVC contained in this Agreement
shall be true and correct in all material respects at the date
hereof and at and as of the Closing Date, with the same force and
effect as if made at and as of the Closing Date (except that
representations and warranties that by their terms speak as of the
Closing Date shall be true and correct as of such date); and NVC
shall have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed
or complied with by it on or prior to the Closing Date, including
the delivery of such documents and performance of such acts as are
required by Section 1.3 hereof.
(C) No Proceeding or Litigation. No action shall have been
commenced in a court of competent jurisdiction or by or before any
governmental authority against either the Company, Brooke, BGLS or
NVC seeking to restrain or materially and adversely alter the
transactions contemplated by this Agreement which, in the
reasonable, good faith determination of Brooke, is likely to prevent
Brooke or BGLS from consummating or make it unlawful for Brooke or
BGLS to consummate such transactions.
ARTICLE IV
Put Option on Factory Site; Termination of Use Agreement; Non-Compete
4.1 Right to Put Factory Site. Brooke hereby grants NVC the option,
exercisable at any time during the period commencing on June 30, 1997 and ending
at 5:00 P.M. local New York time on the later of December 31, 1997 or the date
LDJSC ceases to operate a tobacco factory on the Factory Site or such other time
and date as NVC and Brooke shall mutually agree (the "Put Option Period"), to
cause Brooke or Brooke's designee to purchase all of NVC's interests in the land
and buildings at the Factory Site (the "Put Option"). The purchase price (the
"Put Price") for the Put Option shall be equal to the greater of $13,600,000 or
the fair market value of such property on the date of delivery of the Exercise
Notice (as hereinafter defined), as determined by the firm which prepared the
appraisal referred to in Section 7.1 hereof or such other firm mutually
agreeable to NVC and Brooke (the "Appraisal Firm").
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4.2 Exercise of the Put Option. To exercise the Put Option, NVC shall
deliver to Brooke, during the Put Option Period, a notice (the "Exercise
Notice") of its intention to exercise the Put Option.
4.3 Put Option Closing. The closing of the purchase pursuant to the
exercise of the Put Option (the "Option Closing") shall occur on the tenth
business day following the delivery of the Exercise Notice by NVC, and shall be
held at the offices of NVC at 000 X.X. Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx, at 10:00
A.M. local time on such day, or at such other place, time and date as NVC and
Brooke shall mutually agree. At the Option Closing, NVC shall deliver to Brooke
an assignment, to the extent practicable, of all of its right and interest in
the land and buildings at the Factory Site, against payment by Brooke of the Put
Price by crediting against the Put Price the unpaid amount of the Note then
outstanding and, if the Put Price exceeds such unpaid amount, by payment by
Brooke of such excess amount in cash, by certified check or by wire transfer to
an account designated by NVC to Brooke at least two business days prior to the
Option Closing. Following the Option Closing, NVC shall from time to time, at
Brooke's reasonable request and at Brooke's expense, execute and deliver to
Brooke such instruments of assignment and shall take such other actions as
Brooke may reasonably require in order to put Brooke more fully in possession of
NVC's right and interest in the land and buildings at the Factory Site.
4.4 Termination Notice. During the period commencing on the date 270 days
after the Company gives LDJSC a written termination notice pursuant to Section
1(e) of the Use Agreement and ending on the date LDJSC vacates the Factory Site,
Brooke shall pay or shall cause LDJSC to pay NVC each month, for LDJSC's
continued use of the Factory Site, rent on a fair market basis, as determined by
the Appraisal Firm.
4.5 Non-Compete. Except with the prior written consent of NVC (which
consent shall have been approved by a majority of the independent directors of
NVC) (the "NVC Consent"), Brooke and BGLS agree that, during the period of five
years after the Closing Date, BGLS, its direct or indirect subsidiaries and
other entities controlled directly or indirectly by BGLS (other than NVC, its
subsidiaries and other entities controlled directly or indirectly by NVC) (the
"BGLS Group") will not engage in any manner in the business of managing or
developing real estate in Russia and Ukraine except with respect to the
construction of new cigarette factories and related facilities. During the
period of five years after the Closing Date, (i) the BGLS Group will not,
without the NVC Consent, hire any employees of the Company or NVC involved in
the development and management of the Assets and the real estate projects in
Russia and Ukraine currently contemplated by the Company, and (ii) the BGLS
Group shall make available to NVC and the Company at cost, on a basis consistent
with their other business commitments, such of its employees or consultants,
including, without limitation, Xxxxxx Xxxxxxxxx and Xxxxxx X. Xxxxxxxxx, as NVC
may from time to time reasonably request, in order to assist the Company and NVC
in the development and management of the Assets and the real estate projects in
Russia and Ukraine currently contemplated by the Company.
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ARTICLE V
Indemnification
5.1 Survival of Representations and Warranties. The representations and
warranties contained in this Agreement shall survive the Closing until the
second anniversary of the Closing Date; provided, however, that the
representations and warranties of the Company and Brooke contained in Sections
2.1(E) and 2.2(E) hereof shall survive the Closing indefinitely. Neither the
period of survival nor the liability of the parties hereto with respect to their
respective representations and warranties shall be reduced by any investigation
made at any time by or on behalf of any other party hereto. If written notice of
a claim has been given prior to the expiration of the applicable representations
and warranties, then the relevant representations and warranties shall survive
as to such claim until the claim has been finally resolved.
5.2 Indemnification. (A) NVC and its affiliates and their respective
successors and assigns, and the officers, directors, employees and agents of
NVC, their affiliates and their respective successors and assigns, shall be
indemnified and held harmless by Brooke and BGLS, jointly and severally, for any
and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including, without limitation, attorneys' and
consultants' fees and expenses) actually suffered or incurred by them
(including, without limitation, any action brought or otherwise initiated by any
of them) (hereinafter a "Loss"), arising out of or resulting from:
(i) the breach of any representation or warranty made by the
Company, Brooke or BGLS contained in this Agreement;
(ii) the breach of any covenant or agreement by the Company,
Brooke or BGLS contained in this Agreement, including,
but not limited to, the obligation to pay the Put Price
and the obligations set forth in Section 4.4 hereof; or
(iii) any claim by a third party with respect to any of the
Company's liabilities that is not an Assumed Liability.
(B) Brooke and BGLS and their affiliates and their respective successors
and assigns, and the officers, directors, employees and agents of Brooke and
BGLS, their affiliates and their respective successors and assigns, shall be
indemnified and held harmless by NVC for any and all Losses actually suffered or
incurred by them arising out of or resulting from:
(i) the breach of any representation or warranty made by
NVC contained in this Agreement; or
(ii) the breach of any covenant or agreement by NVC
contained in this Agreement; or
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(iii) any obligation or liability relating to the Assumed
Liabilities.
(C) To the extent that a party's undertakings set forth in this Section
5.2 may be unenforceable, such party shall contribute the maximum amount that it
is permitted to contribute under applicable law to the payment and satisfaction
of all Losses incurred by the Indemnified Parties.
(D) A party seeking indemnification hereunder (an "Indemnified Party")
shall give the party from whom indemnification may be sought hereunder (an
"Indemnifying Party") notice of any matter which an Indemnified Party has
determined has given or could give rise to a right of indemnification under this
Agreement, within 60 days of such determination, stating the amount of the Loss,
if known, and method of computation thereof, and containing a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises. The obligations and liabilities of an Indemnifying Party
under this Article V with respect to Losses arising from claims of any third
party which are subject to the indemnification provided for in this Article V
("Third Party Claims") shall be governed by and contingent upon the following
additional terms and conditions: if an Indemnified Party shall receive notice of
any Third Party Claim, the Indemnified Party shall give the Indemnifying Party
written notice of such Third Party Claim within 30 days of the receipt by the
Indemnified Party of such notice; provided, however, that the failure to provide
such written notice shall not release any Indemnifying Party from any of its
obligations under this Article V except to the extent such Indemnifying Party is
materially prejudiced by such failure. If any Indemnifying Party acknowledges in
writing its obligation to indemnify the Indemnified Party hereunder against any
Losses that may result from such Third Party Claim, then such Indemnifying Party
shall be entitled to assume and control the defense of such Third Party Claim at
its expense and through counsel of its choice if it gives notice of its
intention to do so to the Indemnified Party within five days of the receipt of
such written notice from the Indemnified Party; provided, however, that if there
exists or is reasonably likely to exist a conflict of interest that would make
it inappropriate in the judgment of the Indemnified Party in its sole and
absolute discretion, for the same counsel to represent both the Indemnified
Party and the Indemnifying Party, then the Indemnified Party shall be entitled
to retain its own counsel, in each jurisdiction for which the Indemnified Party
determines counsel is required, at the expense of the Indemnifying Party. In the
event an Indemnifying Party exercises the right to undertake any such defense
against any such Third Party Claim as provided above, the Indemnified Party
shall cooperate with such Indemnifying Party in such defense and make available
to such Indemnifying Party, at such Indemnifying Party's expense, all witnesses,
pertinent records, materials and information in the Indemnified Party's
possession or under the Indemnified Party's control relating thereto as is
reasonably required by such Indemnifying Party. Similarly, in the event an
Indemnified Party is, directly or indirectly, conducting the defense against any
such Third Party Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party,
at the Indemnifying Party's expense, all such witnesses, records, materials and
information in the Indemnifying Party's possession or under the Indemnifying
Party's control relating thereto as is reasonably required by the Indemnified
Party. No such Third Party Claim may be settled
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18
by an Indemnifying Party without the prior written consent of the Indemnified
Party, nor may any such Third Party Claim be settled by an Indemnified Party
without the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld.
5.3 Exclusive Remedy. The indemnification provided for in this Article V
shall be the sole and exclusive remedy available to the parties hereto for
Losses arising out of or resulting from the causes enumerated in Sections 5.2(A)
and (B) hereof.
ARTICLE VI
Termination and Waiver
6.1 Termination. This Agreement may be terminated at any time prior to
the Closing:
(A) by NVC if, between the date hereof and the time scheduled for the
Closing: (i) any representation or warranty of either the Company, Brooke or
BGLS contained in this Agreement shall not have been true and correct in all
material respects when made or shall not be true and correct in all material
respects at any time prior to the Closing Date; or (ii) either the Company,
Brooke or BGLS shall not have complied in all material respects with any
covenant or agreement to be complied with by it and contained in this Agreement;
or
(B) by Brooke if, between the date hereof and the time scheduled for the
Closing: (i) any representation or warranty of NVC contained in this Agreement
shall not have been true and correct in all material respects when made or shall
not be true and correct in all material respects at any time prior to the
Closing Date; or (ii) NVC shall not have complied in all material respects with
any covenant or agreement to be complied with by it and contained in this
Agreement; or
(C) by either Brooke or NVC if the Closing shall not have occurred by
January 31, 1997; provided, however, that the right to terminate this Agreement
under this Section 6.1(C) hereof shall not be available to any party whose
failure to fulfill any obligation under this Agreement shall have been the cause
of, or shall have resulted in, the failure of the Closing to occur on or prior
to such date; or
(D) by either Brooke or NVC in the event that an action shall have been
commenced in a court of competent jurisdiction or any governmental authority
shall have issued an order, decree or ruling or taken any other action seeking
to restrain, enjoin or otherwise prohibit the transactions contemplated by this
Agreement; or
(E) by the mutual written consent of Brooke and NVC.
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6.2 Effect of Termination. In the event of termination of this Agreement as
provided in Section 6.1 hereof, this Agreement shall forthwith become void and
there shall be no liability on the part of either party hereto except (a) as set
forth in Section 7.1 hereof and (b) that nothing herein shall relieve either
party from liability for any breach of this Agreement that occurred prior to the
termination of this Agreement.
6.3 Waiver. Any party to this Agreement may (a) extend the time for the
performance of any of the obligations or other acts of another party, (b) waive
any inaccuracies in the representations and warranties of another party
contained herein, or (c) waive compliance with any of the agreements or
conditions of another party contained herein. Any such extension or waiver shall
be valid only if set forth in an instrument in writing signed by the party to be
bound thereby. Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this Agreement. The
failure of any party to exercise, or the delay by any party in exercising, any
right or remedy hereunder shall not constitute a waiver of any such right or
remedy.
ARTICLE VII
Miscellaneous
7.1 Expenses; Transfer Taxes, etc. Whether or not the transactions
contemplated by this Agreement shall be consummated, each party hereto agrees
that all fees and expenses incurred by it in connection with this Agreement
shall be borne by it, except that NVC will pay all transfer taxes which may be
payable in connection with the transactions contemplated by this Agreement and
NVC and Brooke will each pay one-half of the fees and expenses of the appraisal
of 0 Xxxxxxx Xxxxxx (Xxxxx Place II) and the Factory Site.
7.2 Notices. Any notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been duly given or
made as of the date of receipt and shall be delivered personally or mailed by
registered or certified mail (postage prepaid, return receipt requested), sent
by overnight courier or sent by telecopy, to the parties at the following
addresses or telecopy numbers (or at such other address or telecopy number for
a party as shall be specified by like notice): (a) if to the Company, to
BrookeMil Ltd., P.O. Box 219, Fifth Floor, Butterfield House, Georgetown, Grand
Cayman Island, British West Indies, Attention: Xxxxx Xxxxxxxx, President,
Telecopy No. 000-000-0000; (b) if to Brooke, to Brooke (Overseas) Ltd., 000
X.X. Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxxx,
President, Telecopy No. 000-000-0000, with a copy to: Coudert Brothers, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxx,
III, Esq., Telecopy No. 000-000-0000; (c) if to BGLS, to BGLS Inc., 000 X.X.
Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxxx X. Xxx Xxxxxx, Vice
President and Chief Financial Officer, Telecopy No. 000-000-0000, with a copy
to Coudert Brothers, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxx, III, Esq., Telecopy No. 000-000-0000; and (d) if to
NVC, to New Valley Corporation, 100 S.E.
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Xxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Vice
President and Chief Financial Officer, Telecopy No. 000-000-0000, with a copy
to: Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxx X. Xxxxxxxx, P.C., Telecopy No. 000-000-0000; or to
such other address as shall be furnished in writing by any party to the others
prior to the giving of any applicable notice or communication, and such notice
or communication shall be deemed to have been given as of the date upon which
such notice or communication is first sent by telex, telecopier or other means
of instantaneous communication, and simultaneously confirmed by mail.
7.3 Brokers and Financial Advisors. Brooke and BGLS represent and warrant
to NVC, and NVC represents and warrants to Brooke and BGLS, that no broker,
finder or investment bank is entitled to any brokerage, finder's, investment
banking or other fee or commission from Brooke, BGLS or NVC, as the case may
be, based on agreements, arrangements or undertakings made by Brooke, BGLS or
NVC or in connection with the transactions contemplated hereby, other than
Xxxxxxxxxxx & Co. Inc. which has been engaged by NVC as its financial advisor.
7.4 Press Releases and Confidentiality. Except as required by Law or stock
exchange requirements, each of the parties to this Agreement hereby agrees with
each other party that (a) no press release or similar public announcement or
communication will be made or caused to be made, and (b) no information will be
divulged, furnished or made accessible to any third party, in each case,
concerning the execution or performance of this Agreement or the transactions
contemplated hereby, unless specifically approved in advance by the other
parties hereto.
7.5 Amendment. This Agreement may not be amended or modified except (a) by
an instrument in writing signed by, or on behalf of, the Company, Brooke, BGLS
and NVC or (b) by a waiver in accordance with Section 6.3 hereof.
7.6 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, except by
operation of Law and except that NVC may assign its rights and obligations under
this Agreement to any of its affiliates.
7.7 No Third Party Beneficiaries. Except for the provisions of Article V
relating to Indemnified Parties, this Agreement shall be binding upon and inure
solely to the benefit of the parties hereto and their permitted assigns and
nothing herein, express or implied, is intended to or shall confer upon any
other person or entity any legal or equitable right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
7.8 Further Actions. Each of the parties hereto agrees that, subject to its
legal obligations, it will use its best efforts to fulfill all conditions
precedent specified herein, and to do all things reasonably necessary to
consummate the transactions contemplated hereby.
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21
7.9 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
7.10 Governing Law. This Agreement shall be governed by the laws of the
State of New York without regard to conflicts of law principles.
7.11 Submission to Jurisdiction. Each party hereby consents to the
jurisdiction of the United States District Court for the Southern District of
New York and any of the courts of the State of New York in New York County in
connection with any dispute arising under this Agreement.
7.12 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.13 Headings. The headings of the Sections and Articles of this Agreement
are inserted for convenience only and shall not constitute a part hereof or
affect in any way the meaning or interpretation of this Agreement.
7.14 Entire Agreement. This Agreement, including the Annexes and Schedules
hereto and the other documents and certificates delivered pursuant to the terms
hereof, sets forth the entire agreement and understanding of the parties hereto
in respect of the subject matter contained herein, and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto.
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22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BROOKEMIL LTD.
By: /s/ Xxxxx Xxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxx
Title: President
BROOKE (OVERSEAS) LTD.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
BGLS INC.
By: /s/ Xxxxxxxx X. Xxx Xxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxx Xxxxxx
Title: Vice President and Chief
Financial Officer
NEW VALLEY CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President and Chief
Financial Officer
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Schedule 2.1(G)
BROOKEMIL LTD.
OTHER PAYABLES AND LIABILITIES
1. Notes payable to York Financial Corporation, Ltd. with a principal amount
of approximately $1,525,000 at January 15, 1997, plus accrued interest.
2. Payables to Xxxxx International for leasing commissions of approximately
$150,000 at January 15, 1997.
3. Professional fees payable of approximately $150,000 at January 15, 1997.
4. Other construction costs of approximately $970,000 relating to 0 Xxxxxxx
Xxxxxx (Xxxxx Place II) at January 15, 1997.
24
Schedule 2.1 (K)
BROOKEMIL LTD.
REAL ESTATE AND OTHER MATTERS
1. The Company is the current holder of all of the right, title and interest
of the tenant under the following leases:
(A) Land Lease Agreement dated February 3, 1992, between The Government
of the City of Moscow, as landlord, and the Company, as Tenant,
demising the land known as 0/00 Xxxxxxx Xxxxxx ("Xxxxx Place I") and
0 Xxxxxxx Xxxxxx ("Xxxxx Xxxxx XXX"), as amended to date;
(B) Land Lease Agreement dated December 30, 1996, between The Government
of the City of Moscow, as landlord, and the Company, as Tenant,
demising the land at Xxxxx Place I;
(C) Land Lease Agreement dated February 3, 1992, between The Government
of the City of Moscow, as landlord, and the Company, as Tenant,
demising the land known as 7 Gasheka Street ("Xxxxx Place II"), as
amended to date; and
(D) Lease Agreement dated August 23, 1993, between The Property
Management Committee of Moscow, as landlord, and the Company, as
Tenant, originally demising the buildings and other improvements
located at Xxxxx Place I, II and III, as amended to date,
free and clear of any Encumbrances other than, with respect to the
Company's right, title and interest in Xxxxx Place I only, a pledge or
other security interest in favor of Vneshtorgbank in connection with a
loan from Vneshtorgbank to the Company and LDJSC, as co-borrowers (the
"Vneshtorgbank Loan"). Each of the foregoing leases is in full force and
effect without default by either the landlord or the tenant thereunder.
The Company is current in the payment of all rent due under the foregoing
leases through the date hereof. The City of Moscow has separated the Land
Lease Agreement for Xxxxx Place I and III, so that separate and
independent land leases for Xxxxx Place I and Xxxxx Place III exist. The
Company has provided to NVC and Xxxxxxxxxxx & Co. Inc. ("Oppenheimer")
access to complete and correct copies of the foregoing leases and all
amendments, protocols and other documents and agreements relating thereto.
2. The Company owns the buildings and other improvements constructed at Xxxxx
Place I and II free and clear of any Encumbrances other than, with respect
to the
25
buildings and other improvements constructed at Xxxxx Place I only, the
Vneshtorgbank Loan.
3. During the entire period from and including October 3, 1993 to and
including December 18, 1996, the Company was a wholly-owned subsidiary of
LDJSC.
4. The unpaid principal balance of the Vneshtorgbank Loan, as of January 26,
1997, is $20,417,949. All interest with respect to the Vneshtorgbank Loan
has been paid through January 26, 1997. Interest is accruing with respect
to the Vneshtorgbank Loan at a per diem rate of $8,915. The maturity date
of the Vneshtorgbank Loan is October 27, 1997. Interim amortization
payments are as follows: $6,125,385 due on April 25, 1997; $4,083,589 due
on July 25, 1997; and the final payment of $10,208,975 is due on October
27, 1997. The Company has not received any notice of default under any
document or agreement relating to the Vneshtorgbank Loan. The Company has
provided to NVC and Xxxxxxxxxxx access to complete and correct copies of
all documents and agreements relating to the Vneshtorgbank Loan.
5. There is no litigation pending or, to the best of the Company's
knowledge, threatened in writing (or any basis therefor) against the
Company that might detrimentally affect the value, use or operation of the
Assets for their intended purposes and/or the ability of the Company to
perform its obligations under this Agreement. There are no valid,
effective and enforceable orders, injunctions or decrees of any court or
arbitral body with respect to the Company and/or the Assets that might
detrimentally affect the value, use or operation of the Assets for their
intended purposes and/or the ability of the Company to perform its
obligations under this Agreement. The Company has neither filed, nor been
the subject of any filing of, a petition under bankruptcy laws, insolvency
laws, laws for the composition of indebtedness, or laws for the
reorganization of debtors.
6. There are no material physical or mechanical defects with respect to the
land, the buildings and/or the other improvements comprising the Assets
(including, but not limited to, the structural and load-bearing
components, the roofs and the plumbing, heating, ventilation, air
conditioning, electrical and life safety systems of the improvements), and
all of such items (to the extent installed or constructed on the date
hereof, with respect to the building under construction at Xxxxx Place II)
are in good operating condition and repair and in compliance in all
material respects with all applicable Laws. The Company has not received,
and has no knowledge of, any notice or request from Vneshtorgbank or any
governmental agency requesting or requiring the performance of any work or
alteration in respect of the land, the buildings and/or the other
improvements comprising the Assets.
7. The use and operation of the Assets are in compliance in all material
respects with all applicable Laws (including, but not limited to,
environmental Laws). All licenses, certificates, permits, variances,
approvals, authorizations, easements,
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rights of way and the like required from all governmental authorities
having jurisdiction over the Assets, or from private parties, for the
construction, use, operation and occupancy of the Assets have been
obtained (excluding, however, any such licenses, certificates, permits,
and the like with respect to the use, operation and occupancy of the
building under construction at Xxxxx Place II, to the extent that the same
are unavailable until completion of construction). The Company neither has
received any notice nor has any knowledge that any of the foregoing
licenses, certificates, permits and the like has been suspended or revoked
or, if the same is for a term or other period of time, will not be
renewed.
8. Neither the Company nor, to the best of the Company's knowledge, any
other person or entity (including, but not limited to, LDJSC has used,
manufactured, generated, treated, stored, disposed of, or released any
hazardous materials on, under, or about the land, buildings and/or other
improvements comprising Xxxxx Place I, II and/or III, or transported any
hazardous materials over such land, buildings and/or other improvements,
except in compliance with any and all environmental Laws then in effect.
To the best of the Company's knowledge, none of such land, buildings
and/or other improvements contains or consists of any materials that
constitute or contain hazardous materials. All oil burners, incinerators,
compactors and other fuel burning devices located in or servicing such
buildings and/or other improvements comply with any and all applicable air
pollution control Laws, and operating certificates, to the extent that
same are required, have been issued therefor and are in full force and
effect.
9. The lease between the Company and Citibank with respect to Xxxxx Place I
is in full force and effect, and Citibank is in possession of all of the
premises demised to it under such lease. Other than as part of the
Assumed Liabilities, there are no free rent allowances, prepaid rents,
other prepaid charges, operating expense abatements, incomplete tenant
improvements, rebates, allowances, or other unexpired concessions or any
termination, extension, cancellation, or expansion rights under such
lease. Such lease is bona-fide in all respects, and was executed and
delivered by the Company and Citibank on an arms-length basis and in the
ordinary course of business. There is no default by the Company under the
terms of such lease (including, but not limited to, any such default that
has or might give rise to any offset, defense, claim, or counterclaim to
the payment of the rents and/or other charges payable by Citibank
thereunder), nor, to the best of the Company's knowledge, are there any
material defaults by Citibank thereunder. Neither such lease nor the
rents payable thereunder has been assigned or pledged except in connection
with the Vneshtorgbank Loan.
10. The Schedule of Leases with respect to Xxxxx Place II furnished to NVC by
the Company is complete and correct in all respects. All of the leases
referred to in such schedule are in full force and effect, pending,
however, completion of the work to be performed by the Company thereunder
and the delivery of possession of the premises demised thereunder to the
respective tenants. Other than as part of
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27
the Assumed Liabilities, there are no free rent allowances, prepaid
rents, other prepaid charges, operating expense abatements, incomplete
tenant improvements, rebates, allowances, or other unexpired concessions
or any termination, extension, cancellation, or expansion rights under
such leases. Such leases are bona-fide in all respects, and were executed
and delivered by the Company and the respective tenants thereunder on an
arms-length basis and in the ordinary course of business. There is no
default by the Company under the terms of any such lease (including, but
not limited to, any such default that has or might give rise to any
offset, defense, claim, or counterclaim to the payment of the rents and/or
other charges payable by the tenant thereunder), nor, to the best of the
Company's knowledge, are there any material defaults by the tenant
thereunder. Neither such leases nor the rents payable thereunder have been
assigned or pledged.
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