EXHIBIT 10.1
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INTEREST PURCHASE AGREEMENT NO. 1-WRI
DATED DECEMBER 21, 2001
BETWEEN
WESTERN REALTY DEVELOPMENT LLC,
AS THE SELLER,
ANDANTE LIMITED,
AND
AS THE PURCHASER
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TABLE OF CONTENTS
INDEX OF EXHIBITS..................................................................iii
ARTICLE I DEFINITIONS AND INTERPRETATION..................................2
1.01 Definitions..............................................................2
ARTICLE II SALE OF INTEREST AND CLOSING....................................7
2.01 Purchase and Sale........................................................7
2.02 Purchase Price...........................................................7
2.03 Closing..................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................10
3.01 Organization and Good Standing..........................................11
3.02 Enforceability; No Conflict.............................................12
3.03 Ownership of Interest...................................................12
3.04 Financial Statements....................................................13
3.05 Books and Records.......................................................13
3.07 No Undisclosed Liabilities..............................................14
3.08 Material Adverse Change.................................................14
3.09 Absence of Certain Changes and Events...................................14
3.10 Immovable Property and Encumbrances.....................................15
3.11 Condition and Sufficiency of Assets.....................................16
3.12 Intellectual Property...................................................16
3.13 Contracts; No Defaults..................................................16
3.14 Insurance...............................................................17
3.15 Taxes...................................................................17
3.16 Employees...............................................................18
3.17 Environmental, Occupational Safety and Health Matters...................18
3.18 Compliance with Law; Governmental Authorizations........................19
3.19 Legal Proceedings; Orders...............................................19
3.20 Brokers or Finders......................................................20
3.21 Disclosure..............................................................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER................21
4.01 Organization............................................................21
4.02 Enforceability; No Conflict; Consents...................................21
4.03 Proceedings.............................................................22
4.04 Brokers or Finders......................................................22
ARTICLE V NOTICE AND CURE................................................22
5.01 Notification by Non-Breaching Party.....................................22
ARTICLE VI COVENANTS......................................................22
6.01 Governmental Approvals and Third Party Consents.........................22
6.02 Fulfillment of Conditions...............................................22
6.03 No Payments to and from Affiliates......................................23
6.04 Record Access and Retention.............................................23
6.05 Cooperation and Further Assurances on Tax Matters.......................23
6.06 Cooperation During the Transition Period................................24
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ARTICLE VII INDEMNIFICATION................................................24
7.01 Indemnification by the Seller...........................................24
7.02 Indemnification by the Purchaser........................................24
7.03 Limitations on Liability of Seller......................................24
7.04 Indemnification Procedure...............................................25
ARTICLE VIII TERMINATION....................................................26
8.01 Termination.............................................................26
8.02 Effect of Termination...................................................26
ARTICLE IX MISCELLANEOUS..................................................26
9.01 Notices and Payments....................................................26
9.02 Entire Agreement........................................................27
9.03 Expenses................................................................28
9.04 Public Announcements....................................................28
9.05 Confidentiality.........................................................28
9.06 Waiver..................................................................28
9.07 Amendment...............................................................28
9.08 No Third Party Beneficiary..............................................28
9.09 No Assignment, Binding Effect...........................................29
9.10 Governing Law and Arbitration...........................................29
9.11 Invalid Provisions......................................................29
9.12 Counterparts............................................................29
9.13 BrookeMil's Undertaking.................................................29
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INDEX OF EXHIBITS
1. One Percent Agreement
2. Seller's Disclosure Schedule
3. Amended and Restated Western Realty Investments LLC Limited Liability
Company Agreement (Third Restatement)
4. New Valley Guaranty
5. Plan of WR Premises
6. Letters to Banks
7. Mutual Agreements and Resolutions on Termination of Employment
Agreement
8. Payment Information
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This INTEREST PURCHASE AGREEMENT is entered into as of December 21,
2001 by and between WESTERN REALTY DEVELOPMENT LLC, a Delaware limited liability
company with its address at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇ (the "Seller"), ANDANTE LIMITED, a Bermuda limited company with its
address at ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇-▇▇-▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇ (▇▇▇
"Purchaser"; the Seller and the Purchaser shall be referred to herein
individually as a "Party" and collectively as the "Parties"), and BROOKEMIL
LTD., a Cayman Islands company with its address at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ House, ▇▇▇▇▇▇ Town, Grand Cayman, B.W.I. ("BrookeMil").
WITNESSETH
WHEREAS, the Seller owns 100% of the membership interest (the
"Interest") of Western Realty Investments LLC, a limited liability company
organized and existing under the laws of the State of Delaware (the "Company");
WHEREAS, the Company owns a 99% interest in Limited Liability Company
Western Realty, a limited liability company organized and existing under the
laws of the Russian Federation ("Western Realty");
WHEREAS, New Valley Corporation, a company organized and existing under
the laws of the State of Delaware ("New Valley"), owns the other 1% interest in
Western Realty (the "Minority Interest") (subject to the completion of the state
registration of the amendments to the Governing Documents of Western Realty
reflecting the transfer of the Minority Interest to New Valley);
WHEREAS, Western Realty owns a 100% interest in Limited Liability
Company Gasheka Realty, a limited liability company organized and existing under
the laws of the Russian Federation ("Gasheka Realty");
WHEREAS, Western Realty (i) owns the building located at ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇, Russian Federation (the "▇▇▇▇▇ II Building"), and
holds leasehold rights to the land plot of approximately 0.3887 hectares,
including the land plot of approximately 0.2332 hectares whereupon the ▇▇▇▇▇ II
Building is located (the "▇▇▇▇▇ II Land Lease"), and (ii) owns the buildings
located at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (which are buildings 1, 2 and 3), Moscow, Russian
Federation (the "▇▇▇▇▇ III Buildings" and collectively with the ▇▇▇▇▇ II
Building, the "Buildings"), and holds leasehold rights to the land plot of
approximately 0.7413 hectares, including the land plot whereupon the ▇▇▇▇▇ III
Buildings are located (the "▇▇▇▇▇ III Land Lease," and collectively with the
▇▇▇▇▇ II Land Lease, the "Land Leases"; and the Buildings and the Land Leases
shall be referred to herein collectively as the "Immovable Property");
WHEREAS, the Seller desires to sell, and the Purchaser desires to
purchase, on the terms and subject to the conditions set forth in this
Agreement, the Interest;
WHEREAS, as a condition of the proposed transaction and simultaneously
therewith, New Valley desires to sell, and BMT Management Limited ("BMT"), a
Bermuda limited company, desires to purchase, on the terms and subject to the
conditions of an interest purchase agreement in the form attached hereto as
Exhibit 1 (the "One Percent Agreement"), the Minority Interest (providing that
the title to the Minority Interest will be transferred to
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BMT upon the completion of the state registration of the amendments to the
Governing Documents of Western Realty reflecting the transfer of the Minority
Interest to New Valley);
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereto
agree as follows:
ARTICLE I DEFINITIONS AND INTERPRETATION
1.01 Definitions
The following terms shall have the following meanings:
"Accounts Receivable" shall mean (a) all accounts receivable and other
rights to payment from lessees and any other customers of the Company, Western
Realty and/or Gasheka Realty (as relevant) and the full benefit of all security
for such accounts or rights to payment, (b) all other accounts or notes
receivable of the Company, Western Realty and/or Gasheka Realty (as relevant),
and the full benefit of all security for such accounts or notes, and (c) any
claim, remedy or other right related to any of the foregoing.
"Acquisition Date" shall mean the date on which Western Realty's title
to the ▇▇▇▇▇ II Building or the ▇▇▇▇▇ III Buildings was state registered, as the
case may be.
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person. As used in this definition, "control" (including,
with its correlative meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise) of any other
Person, provided that, in any event, any Person which owns, directly or
indirectly, a majority of the securities having ordinary voting power for the
election of directors or other governing body of a corporation or a majority of
the partnership or other ownership interests of any other Person (other than as
a limited partner of such other Person) will be deemed to control such
corporation or other Person.
"Agreement" shall mean this Interest Purchase Agreement.
"Balance Sheet" is defined in Section 3.04.
"BMT" is defined in the Recitals.
"Buildings" is defined in the Recitals.
"Business Documents" is defined in Section 6.04.
"Closing" shall mean the closing of the purchase of the Interest
hereunder and the Minority Interest under the One Percent Agreement.
"Closing Date" shall mean the date of the Closing.
"Company" is defined in the Recitals.
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"Contract" shall mean any contract in effect (including any amendment
thereto) by which the Company, Western Realty and/or Gasheka Realty is bound (as
relevant).
"Contravene" -- an act or omission would "Contravene" something if, as
the context requires, the act or omission would:
(a) conflict with it, violate it, result in a breach or violation
of or failure to comply with it, or constitute a default under it;
(b) give any Governmental Authority or other Person the right to
challenge, revoke, withdraw, suspend, cancel, terminate or modify it, to
exercise any remedy or obtain any relief under it, or to declare a default or
accelerate the maturity of any obligation under it; or
(c) result in the creation of an Encumbrance on the interests in
or assets of the Company.
"Consent" shall mean any approval, consent, ratification, waiver or
other authorization, other than that of a Governmental Authority.
"▇▇▇▇▇ II Building" is defined in the Recitals.
"▇▇▇▇▇ III Buildings" is defined in the Recitals.
"▇▇▇▇▇ II Land Lease" is defined in the Recitals.
"▇▇▇▇▇ III Land Lease" is defined in the Recitals.
"Employees" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇.
"Encumbrance" shall mean any charge, claim, mortgage, servitude,
easement, right of way, community or other marital property interest, covenant,
equitable interest, license, lease or other possessory interest, lien, option,
pledge, security interest, preference, priority, right of first refusal, other
third party right or similar restriction, other than arising by operation of
law.
"Environmental Law" shall mean any Law that requires or relates to (a)
advising appropriate Governmental Authorities, employees or the public of
intended or actual releases of pollutants or hazardous substances or materials,
violations of discharge limits or other prohibitions and the commencement of
activities, such as resource extraction or construction, that could have
significant impact on the environment, (b) preventing or reducing to acceptable
levels the release of pollutants or hazardous substances or materials into the
environment, (c) reducing the quantities, preventing the release or minimizing
the hazardous characteristics of wastes that are generated, (d) assuring that
products are designed, formulated, packaged and used so that they do not present
unreasonable risks to human health or the environment when used or disposed of,
(e) protecting resources, species or ecological amenities, (f) reducing to
acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil or other potentially harmful substances, (g) cleanup
of pollutants that have been released, preventing the threat of release, or
paying the costs of such cleanup or prevention, or (h) making responsible
parties pay private parties, or groups of them, for damages done to their health
or the environment, or permitting self-appointed representatives of the public
interest to recover for injuries done to public assets.
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"GAAP" means accounting principles generally accepted in the United
States of America set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standard Board
("FASB") or, if FASB ceases to exist, any successor thereto; provided, however,
that for the purposes of determining compliance with covenants in this
Agreement, "GAAP" means such generally accepted accounting principles as in
effect of the date hereof.
"Gasheka Realty" is defined in the Recitals.
"Governing Document" shall mean any charter, articles, by-laws,
certificates, statements, statutes or other documents and all amendments to the
same filed or registered in connection with the creation, formation or
organization of an entity and any contract among interestholders, partners or
members of such entity (provided that, with respect to Western Realty and
Gasheka Realty, medical fund, pension fund and similar registration documents,
other than registrations with the Moscow Registration Chamber, State
Registration Chamber and the tax inspectorate, shall not be considered Governing
Documents).
"Governmental Authority" shall mean any court, tribunal, arbitrator,
legislature, government, ministry, committee, inspectorate, authority, agency,
commission, official or other competent authority of the Russian Federation, any
other country or any state, as well as any county, city or other political
subdivision of any of the foregoing.
"Governmental Authorization" shall mean any consent, license, permit or
registration issued, granted, given or otherwise made available by or under the
authority of any Governmental Authority.
"Hazardous Activity" shall mean the distribution, generation, handling,
importing, management, manufacturing, processing, production, refinement,
release, storage, transfer, transportation, treatment or use (including any
withdrawal or other use of groundwater) of Hazardous Materials in, on, under,
about or from any of the Immovable Property or any part thereof into the
environment, and any other act, business, operation or thing that increases the
danger, or risk of danger, or poses an unreasonable risk of harm to individuals
or property on or off the Immovable Property, or that may affect the value of
any of the Immovable Property or the Company, Western Realty or Gasheka Realty.
"Hazardous Material" shall mean any waste or other substance that is
listed, defined, designated or classified as, or otherwise determined to be,
hazardous, radioactive or toxic or a pollutant or a contaminant under any
Environmental Law.
"Immovable Property" is defined in the Recitals.
"Indebtedness" at any date means all liabilities and obligations,
contingent or otherwise:
(i) in respect of borrowed money (whether or not the recourse of
the lender is to the whole of the assets or only to a portion
thereof);
(ii) evidenced by bonds, notes, debentures or similar instruments;
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(iii) representing the unpaid balance of deferred purchase price of
any property or services under Contracts which contemplate
deferred payment for a period over 90 days;
(iv) for the payment of money relating to a capitalized lease
obligation;
(v) reflecting any advance payments and/or security deposits
received from customers or tenants;
(vi) evidenced by a letter of credit or a reimbursement obligation
of such person with respect to any letter of credit;
(vii) under interest and or currency swap and hedging obligations or
any options;
(viii) with respect to the redemption, repayment or other purchase of
capital stock;
(ix) all interest accrued but unpaid; and
(x) arising under any guarantee of all or any liabilities of
others of the kind described in the preceding clauses (i)-(ix)
that the Company, Western Realty or Gasheka Realty (as
relevant) has guaranteed or that are otherwise its legal
liability or which are secured by any assets or property of
the Company, Western Realty or Gasheka Realty (as relevant);
which in accordance with GAAP are required to be shown on the balance
sheet for such date as liabilities.
"Interest" is defined in the Recitals.
"Interim Balance Sheet" is defined in Section 3.04.
"Indemnified Party" is defined in Section 7.04.
"Indemnifying Party" is defined in Section 7.04.
"Land Leases" is defined in the Recitals.
"Law" shall mean all laws, decrees, resolutions, instructions,
statutes, rules, regulations, acts, ordinances and other pronouncements having
the effect of law or regulation of the Russian Federation, any other country or
any state, as well as any county, city or other political subdivision of any of
the foregoing.
"LCIA Rules" is defined in Section 9.10.
"Liabilities" means all liabilities and obligations, contingent or
otherwise, whether or not required under GAAP to be shown on the balance sheet
as liabilities (and whether or not appropriate provisions for such liabilities
and obligations are, in accordance with GAAP, required to be made) under which
payments of whatever nature (including, but not limited to penalties, repayment
or indebtedness, interest, remedies, reimbursement, compensation and losses)
that the Company, Western Realty and/or Gasheka Realty can be required to make.
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"Lease Agreements" shall mean the lease agreements for the Buildings
and all amendments thereto, except for the Land Leases.
"Material Contract" shall mean any of the Land Leases, any of the Lease
Agreements or any other Contract by which Western Realty is bound (including any
amendments thereto), the value of which is in excess of $20,000.
"Minority Interest" is defined in the Recitals.
"New Valley" is defined in the Recitals.
"Non-Vacant WR Premises" is defined in Section 2.03(e).
"Occupational Safety and Health Law" shall mean any Law designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, and any program, whether governmental or private (such as
those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"One Percent Agreement" is defined in the Recitals.
"Order" shall mean any order, injunction, decree, ruling, assessment or
arbitration award of any Governmental Authority or arbitrator or any Contract
with any Governmental Authority pertaining to compliance with Law.
"Ordinary Course of Business" refers to actions taken in the Company's,
Western Realty's or Gasheka Realty's (as is appropriate in context) normal
operation, consistent with practices of Persons in its same line of business and
having no material adverse effect on financial or other condition, results of
operations, assets, liabilities, equity, business or prospects of the Company,
Western Realty and/or Gasheka Realty (as relevant).
"Party" is defined in the Recitals.
"Person" shall mean any natural person, corporation, general
partnership, simple partnership, limited partnership, proprietorship, other
business organization, trust, union, association or Governmental Authority,
whether incorporated or unincorporated; a reference to any Person shall include
such Person's successors and permitted assigns under any agreement, instrument,
contract or other document.
"Proceeding" shall mean any action, arbitration, audit, examination,
investigation, hearing, litigation or suit (whether civil, criminal,
administrative, judicial or investigative, whether fiscal or non-fiscal, whether
formal or informal, and whether public or private) commenced, brought, conducted
or heard by or before, or otherwise involving, any Governmental Authority or
arbitrator.
"Purchase Price" is defined in Section 2.02.
"Purchaser" is defined in the Recitals.
"Released WR Premises" is defined in Section 2.03(e).
"Seller" is defined in the Recitals.
6
"Seller's Companies" shall mean the Company, BrookeMil Limited, New
Valley, JSC VNIIKholodmash, JSC Kremlin Site, JSC Kamennyi Most and any other
Affiliates of the Seller.
"Seller's Companies Personnel" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ Grigorieva, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Socklakova, Igor Svirshchevsky, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Yana
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Tsepunov and ▇▇▇▇▇▇ Smagarinsky.
"Seller's Disclosure Schedule" shall mean the disclosure schedule
attached hereto as Exhibit 2.
"Survival Period" is defined in Section 8.02(b).
"Tax" or "Taxes" shall mean all federal, state, local, foreign and
other taxes, charges, fees, duties (including customs duties), levies or
assessments, including income, gross receipts, net proceeds, alternative or
add-on minimum, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, value added, stamp, leasing, lease,
user, transfer, fuel, excess profits, occupational, interest equalization,
windfall profits, severance, license, payroll, environmental, capital stock,
disability, employee's income withholding, other withholding, unemployment and
social security taxes, that are imposed by any Governmental Authority, and
including any interest, penalties or additions to tax attributable thereto.
"Tax Return" shall mean any report, return or other information
required to be supplied to a Governmental Authority in connection with any
Taxes.
"TEO" is defined in Section 3.10(e).
"Transition Period" shall mean the period between the Closing and
February 28, 2002.
"Western Realty" is defined in the Recitals.
"WR Premises" shall mean Suite 550, office room at level 0 (adjacent to
the canteen) and room at level 0-garage (formerly the garage manager's office)
in the ▇▇▇▇▇ II Building.
ARTICLE II SALE OF INTEREST AND CLOSING
2.01 Purchase and Sale
Subject to the terms and conditions contained in this Agreement, the
Seller agrees to sell to the Purchaser, and the Purchaser agrees to purchase
from the Seller, the Interest at the Closing.
2.02 Purchase Price
The total purchase price for the Interest shall be thirty two million
nine hundred eighty six thousand eight hundred and eighty six US Dollars
(US$32,986,856) (the "Purchase Price"). If subsequent to the date hereof the
Purchaser identifies any Indebtedness of the Company, Western Realty and/or
Gasheka Realty as a group on a consolidated basis which
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(i) is not disclosed in the Seller's Disclosure Schedule and (ii) is in the
aggregate in excess of fifty thousand US Dollars (US$50,000); but which existed
at the date hereof, then, notwithstanding the provisions of Section 7.03 which
shall not apply to this Section 2.02, the Purchase Price shall be decreased and
the Seller shall forthwith repay to the Purchaser the full amount of any
resulting overpayment of the Purchase Price.
2.03 Closing
The Closing will take place at the offices of Western Realty, located
at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, or at such other place as the
Purchaser and the Seller mutually agree, at 12:00 pm local time no later than
December 21, 2001. At the Closing:
(a) Payment
The Purchaser shall pay to the Seller the Purchase Price by wire
transfer of immediately available funds to the Seller's account specified in
accordance with Section 9.01(b).
(b) Transfer of Interest
Immediately upon receipt by the Seller of a written confirmation from
the Seller's bank that the Purchase Price has been received in full into the
Seller's account, the Purchaser and the Seller shall execute an Amended and
Restated Western Realty Investments LLC Limited Liability Company Agreement
(Third Restatement) in the form attached hereto as Exhibit 3 in order to record
the Purchaser as holding a 100% participation interest in the Company and
appoint new officers of the Company.
(c) Transfer of the Minority Interest
Simultaneously with the transfer of the Interest under Section 2.03(b),
(i) the Purchaser shall procure that BMT executes, and the Seller shall procure
that New Valley executes, the One Percent Agreement, and (ii) the Purchaser
shall procure that BMT make payment for the Minority Interest in accordance with
the One Percent Agreement.
(d) Guaranty of New Valley
New Valley shall provide a guaranty in favor of the Purchaser in the
form attached hereto as Exhibit 4.
(e) Premises and Assets
(i) The Seller shall, upon the Closing, procure that
vacant possession of rooms Nos. 1, 4, 10 and 11 in
Suite 550 in the ▇▇▇▇▇ II Building (the "Released WR
Premises") is given to Western Realty. For the
purposes of this Section 2.03(e), "vacant possession"
shall mean leaving the Released WR Premises with all
furniture and computer hardware but free of the
possessions and assets of all the companies other
than Western Realty, including the Seller's
Companies. The Seller shall also, upon the Closing,
procure that possession of rooms 2, 3, 5, 6, 7, 8,
and 9 with the adjoining corridor and the reception
area in Suite 550, office room at level 0 (adjacent
to the canteen) and room at level 0-garage (formerly
the garage manager's office) in the ▇▇▇▇▇ II
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Building (collectively, the "Non-Vacant WR Premises")
is given to Western Realty, subject to clause (ii)
below. The relevant room numbers are shown on the
plan attached hereto as Exhibit 5.
(ii) After the Closing, the Purchaser shall procure that
Western Realty allows the Seller's Companies
Personnel the access to, and presence in, the
Non-Vacant WR Premises during the Transition Period,
but on the condition that none of those using such
Non-Vacant WR Premises shall conduct their business
in a manner that may disturb Western Realty in its
Ordinary Course of Business.
(f) Archives and Documents
The Seller shall, having first ensured that all documents and
correspondence of the Company, Western Realty and Gasheka Realty are in good
order and have been transferred to room No. 1 at the WR Premises, transfer such
documents and correspondence to the Purchaser by transferring the keys to room
No. 1 to the Purchaser or to the representative designated by the Purchaser,
subject to Sections 6.04 and 6.06. The Seller shall also leave intact, on the
equipment referred to in clause (k) below, all computer databases and financial
records of the Company, Western Realty and Gasheka Realty and provide to the
Purchaser the passwords and other similar information necessary in order for the
Purchaser to gain full access to them.
(g) Powers of Attorney
The Seller shall deliver to the Purchaser a list and copies of all
subsisting powers of attorney issued by the Company, Western Realty and/or
Gasheka Realty (except for those issued by Western Realty to ▇▇▇▇▇ International
Inc. or its employees) and shall deliver to the Purchaser the original powers of
attorney for all cars belonging to Western Realty. The Purchaser shall deliver
to the Seller a replacement power of attorney from Western Realty in favor of
▇▇▇▇▇▇ ▇▇▇▇▇ in respect of the Range Rover car (Registration No. AE3 62C),
effective during the Transition Period.
(h) Bank Signatures
The Seller shall deliver to the Purchaser letters to the Bank of
America (the bank of the Company in the United States), ZAO Raiffeisenbank
Austria (the bank of the Company, Western Realty and Gasheka Realty in Russia),
Citibank T/O and SBS-Agro (the banks of Western Realty in Russia), being all the
banks with which the Company, Western Realty and Gasheka Realty have banking
relationships, such letters to be in the form attached hereto as Exhibit 6,
stating that from the date of the Closing, (i) the powers of the signatories for
the bank accounts of the Company, Western Realty and Gasheka Realty are no
longer valid, and (ii) all crypto-keys, passwords and/or other authentication
instruments are no longer valid, except that all the rights of ▇▇▇▇▇
International Inc. and its employees, to have the powers of the signatories with
respect to, and use, on behalf of Western Realty, the accounts of Western Realty
at Citibank T/O (including remote computer line system and use of all
crypto-keys, passwords and/or other authentication instruments) shall continue.
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(i) Motor Vehicles
Following the Closing, the Purchaser shall permit ▇▇▇▇▇▇ ▇▇▇▇▇ to drive
the Range Rover in accordance with the power of attorney to be issued to ▇▇▇▇▇▇
▇▇▇▇▇ pursuant to Section 2.03(g).
(j) Employees
The Seller shall deliver to the Purchaser (i) duly executed agreements
on mutual termination of employment with the Employees of Western Realty and
member resolutions regarding the same in the form attached hereto as Exhibit 7,
and (ii) resignation letters from the officers of the Company and Gasheka
Realty.
(k) IT equipment, Software and Databases
Upon the Closing, the Seller shall leave in the WR Premises all
computers, computer servers, other IT, network, telecommunication and office
equipment located in the WR Premises immediately prior to the Closing. The
Seller shall, upon the Closing, procure that all computers and computer servers
left in the WR Premises are free of any files, information and/or databases not
related to the business, affairs and activities of the Company, Western Realty
and/or Gasheka Realty (and if such is left, neither the Company, Western Realty,
Gasheka Realty nor the Purchaser will be liable for any loss, damage thereto or
disclosure thereof).
The Purchaser shall procure that Western Realty shall during the
Transition Period:
(i) allocate some server space for keeping files, databases and
other information related to the activities of the Seller's Companies;
(ii) allow the Seller's Companies Personnel to use the computers in
rooms 6, 7, 8 and 9 and one computer in the reception area in the WR Premises;
(iii) provide to personnel of the Seller's Companies access to the
server space mentioned in clause (i) above, to electronic mail, and to internet
lines;
provided that the matters set forth in clauses (i), (ii) and (iii)
above are procured in a manner that does not disturb Western Realty in its
Ordinary Course of Business, and further provided that the personnel of the
Seller's Companies will not have access to information files or databases
related to the activities of the Company, Western Realty and/or Gasheka Realty.
ARTICLE III REPRESENTATIONS AND WARRANTIES
The Seller represents and warrants to the Purchaser that, as of the
Closing, except as set forth in the Seller's Disclosure Schedule:
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3.01 Organization and Good Standing
The Company
(a) The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware,
United States of America, with full power and authority to conduct its business
as presently conducted, to own or use the properties and assets that it purports
to own or use, and to perform all its obligations under all Contracts to which
it is a party. The Company does not need to be qualified to do business in a
foreign jurisdiction.
(b) The Seller has delivered to the Purchaser copies of the
Governing Documents of the Company, as currently in effect.
(c) No person other than those listed in the Seller's Disclosure
Schedule has any right or authority to represent the Company, to enter into any
legal binding commitments on behalf of the Company or in any way to acquire
assets or create liabilities for the Company.
Western Realty
(d) Western Realty is a limited liability company duly organized
and validly existing under the laws of the Russian Federation, with full power
and authority to conduct its business as presently conducted, to own or use the
properties and assets that it purports to own or use, and to perform all its
obligations under all Contracts to which it is a party.
(e) The Seller has delivered to the Purchaser copies of the
Governing Documents of Western Realty, as currently in effect, and the
amendments to the Governing Documents submitted for state registration. The only
country in which Western Realty has any form of presence is the Russian
Federation.
(f) No person other than those listed in the Seller's Disclosure
Schedule has any right or authority to represent Western Realty, to enter into
any legal binding commitments on behalf of Western Realty or in any way to
acquire assets or create liabilities for Western Realty.
Gasheka Realty
(g) Gasheka Realty is a limited liability company duly organized
and validly existing under the laws of the Russian Federation, with full power
and authority to conduct its business but with no property assets (except for
the charter capital) or Contracts to which it is a Party.
(h) The Seller has delivered to the Purchaser copies of the
Governing Document of Gasheka Realty, as currently in effect. The only country
in which Gasheka Realty has any form of presence is Russia.
(i) No person other than those listed in the Seller's Disclosure
Schedule has any right or authority to represent Gasheka Realty, to enter into
any legal binding commitments on behalf of Gasheka Realty or in any way to
acquire assets or create liabilities for Gasheka Realty.
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3.02 Enforceability; No Conflict
(a) The Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Delaware,
United States of America. The Seller has the absolute and unrestricted right,
power and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement, which actions have been duly authorized and
approved by all necessary action of the governing bodies of the Seller. Assuming
due authorization, execution and delivery of this Agreement by the Purchaser,
this Agreement constitutes the legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with its terms.
(b) Neither the Seller nor the Company nor Western Realty nor
Gasheka Realty is nor will it be required to give any notice to any Person or
obtain any Consent or Governmental Authorization in connection with the
execution and delivery of this Agreement or the consummation or performance of
any of the transactions contemplated by this Agreement, except for those which
have already been given or obtained, as the case may be.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated by it will
directly or indirectly (with or without notice or lapse of time):
(i) Contravene any provision of the Governing Documents
of the Seller, the Company, Western Realty or Gasheka
Realty;
(ii) Contravene any Contract, Governmental Authorization,
Law or Order to which the Seller, the Company,
Western Realty or Gasheka Realty, or any of the
assets owned or used by any of them, may be subject;
or
(iii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets
owned or used by the Seller, the Company, Western
Realty or Gasheka Realty.
(d) Neither the execution and delivery of this Agreement by the
Seller nor the consummation or performance by the Seller, New Valley, and/or
BrookeMil of any of the transactions contemplated hereby will give any Person
the right to prevent, delay, or otherwise interfere with any of such
transactions pursuant to any provision of the Seller's Governing Documents, any
resolution adopted by the board of managers or the holders of interests in the
Seller, any Law or Order to which the Seller may be subject, or any contract to
which the Seller is a party or by which the Seller may be bound.
(e) The power of attorney from BrookeMil Limited to ▇▇▇▇▇▇ ▇▇▇▇▇
dated August 18, 2000 is valid and permits ▇▇▇▇▇▇ ▇▇▇▇▇ to sign this Agreement
and thereby create a legally binding obligation on the part of BrookeMil.
3.03 Ownership of Interest
(a) The Company
The Interest constitutes 100% of the membership interests of the
Company. The Interest (a) has been duly authorized and validly granted; (b) is
fully paid; and (c) is not subject to any pre-emptive or similar rights or any
Encumbrances. No certificates were issued in regard to the Interest. The Seller
has the full legal and beneficial interest in the Interest.
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(b) Western Realty
The interest of the Company in the charter capital of Western Realty
constitutes 99% of the charter capital of Western Realty. The remaining 1%
interest in the charter capital of Western Realty is owned by New Valley. All
the interests in the charter capital of Western Realty: (a) have been duly
authorized and validly granted; (b) were fully paid; and (c) are not subject to
any pre-emptive or similar rights (except as provided by the Law on Limited
Liability Companies or the Governing Documents of Western Realty) or any
Encumbrances. The Company and New Valley collectively have the full legal and
beneficial interest in Western Realty.
3.04 Financial Statements
The Seller has delivered to the Purchaser unaudited consolidated
balance sheets for the Company (including Western Realty and Gasheka Realty)
with an attached line item breakdown for each of the years 1999 and 2000 (the
"Balance Sheet"), and unaudited consolidated balance sheets for the Company with
line item breakdowns as at October 31, 2001 (the "Interim Balance Sheet") and as
at November 30, 2001. Such financial statements (including the balance sheets
and statements of income, cash flow and interestholders' equity) and notes have
been prepared in accordance with the books and records of the Company, Western
Realty and Gasheka Realty and fairly present the consolidated financial
condition and the results of operations, changes in interestholders' equity and
cash flow of the Company as at the respective dates of and for the periods
referred to in such financial statements, all in accordance with GAAP except as
otherwise noted in the notes or schedules, subject in the case of interim
financial statements to normal recurring year-end adjustments (the effect of
which will not, individually or in the aggregate, be materially adverse). The
financial statements referred to in this Section reflect the consistent
application of accounting principles throughout the periods involved. No
financial statements of any Person other than the Company, Western Realty and
Gasheka Realty are required by GAAP to be included in the consolidated financial
statements of the Company.
3.05 Books and Records
The books of account, minute books and other records of or pertaining
to the Company, Western Realty and Gasheka Realty, as applicable, all of which
have been made available to the Purchaser, are accurate and complete in all
material respects and have been maintained in accordance with sound business
practices, including the maintenance of an adequate system of internal controls.
The minute books of the Company, Western Realty and Gasheka Realty contain
accurate and complete records of all action of the governing bodies taken by the
participants and the board of managers of the Company, Western Realty and
Gasheka Realty, as applicable, and no such action has been taken for which
minutes have not been prepared and are not contained in such minute books.
3.06 Accounts Receivable
Neither the Company nor Gasheka Realty has any Accounts Receivable.
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3.07 No Undisclosed Liabilities
Neither the Company nor Western Realty nor Gasheka Realty has any
Liabilities except for the Indebtedness or Liabilities in each case disclosed in
the Seller's Disclosure Schedule.
3.08 Material Adverse Change
Since the date of the Interim Balance Sheet, there has been no material
adverse change in the financial or other condition, results of operations,
assets (considered in the aggregate), liabilities, equity, business or prospects
of the Company, Western Realty or Gasheka Realty, as applicable, and no event
has occurred or condition has arisen that (a) may result in such a change, (b)
has materially impeded or may materially impede the ongoing operations of the
Company, Western Realty and/or Gasheka Realty, as applicable, or (c) has
significantly adversely affected or may significantly adversely affect any
material asset of the Company, Western Realty and/or Gasheka Realty, as
applicable, or any of the Lease Agreements.
3.09 Absence of Certain Changes and Events
Since the date of the Interim Balance Sheet, each of the Company,
Western Realty and Gasheka Realty, as applicable, has conducted its business
only in the Ordinary Course of Business and there has not been any:
(a) grant of any equity option or right to purchase interests in
the Company, Western Realty and/or Gasheka Realty; grant of any rights in the
interests of the Company, Western Realty and/or Gasheka Realty; or declaration
or payment of any dividend or other distribution with respect to any such
interests;
(b) amendment to the Governing Documents of the Company, Western
Realty and/or Gasheka Realty;
(c) payment or increase by the Company, Western Realty and/or
Gasheka Realty of any bonuses, salaries or other compensation to any director,
officer or employee, or entry into any employment, severance or similar Contract
with any director, officer or employee, in each case to the extent inconsistent
with prior practices;
(d) damage to or destruction or loss of any asset or property of
the Company, Western Realty and/or Gasheka Realty with an aggregate value to the
Company, Western Realty and/or Gasheka Realty in excess of $20,000, whether or
not covered by insurance;
(e) cancellation or waiver of any claims or rights in respect of
the Company, Western Realty and/or Gasheka Realty, except in the Ordinary Course
of Business;
(f) material acceleration or delay in the payment of accounts
payable or in the collection of Accounts Receivable;
(g) material change in the accounting methods used by the Company,
Western Realty and/or Gasheka Realty; or
(h) any Contract by the Company, Western Realty and/or Gasheka
Realty to do any of the foregoing.
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3.10 Immovable Property and Encumbrances
(a) Neither the Company nor Gasheka Realty has any rights to any
immovable property. The Seller's Disclosure Schedule contains (i) an accurate
description of all buildings to which Western Realty has ownership rights; (ii)
an accurate list of land leases to which it is a party; and (iii) an accurate
list of all the Lease Agreements.
(b) To the best of the Seller's knowledge (which phrase in the
context of this Section 3.10 (b) shall include the best of BrookeMil Limited's
knowledge), Western Realty and its predecessor in title have complied with
applicable Law (i) to the extent Western Realty's rights to the Buildings have
been acquired through privatization and (ii) in obtaining the Land Leases,
except as, in each such case, the failure to so comply would not have a material
adverse affect on the business of Western Realty. Western Realty owns good and
marketable title to the Immovable Property, free and clear of any Encumbrances.
Western Realty owns good and transferable title to all of its other assets free
and clear of any Encumbrances. Notwithstanding any provision herein to the
contrary, no representation is made in this Agreement with respect to any assets
located in the ▇▇▇▇▇ III Buildings or to any furniture, office equipment and
other movable assets located in the WR Premises, except as expressly provided
herein with respect to the ▇▇▇▇▇ III Building and the ▇▇▇▇▇ III Land Lease. The
Seller shall not, and shall not permit the Seller's Companies to, make any
claims or demands with respect to such furniture, office equipment and other
movable assets located in the ▇▇▇▇▇ III Building or the WR Premises.
(c) The Seller has delivered to the Purchaser true and complete
copies of (i) all documents in the possession of the Seller by which or which
may be at all relevant to the manner in which Western Realty and its predecessor
in title acquired their interests in the Immovable Property, (ii) all insurance
policies and surveys in the possession of the Seller, the Company, Western
Realty and/or Gasheka Realty of or pertaining to the Immovable Property, and
(iii) all Contracts and other documents evidencing, creating or constituting
Encumbrances upon the Immovable Property.
(d) Use of the land plots leased under the Land Leases for the
purposes for which they are presently being used is permitted under applicable
Law. The construction of the ▇▇▇▇▇ II Building and the use of the ▇▇▇▇▇ II
Building and the ▇▇▇▇▇ III Buildings are in compliance with applicable Law. No
part of either the ▇▇▇▇▇ II Building or the ▇▇▇▇▇ III Buildings encroaches on
any land plot (or part of a land plot) not leased under the Land Leases, and
there are no buildings, structures, fixtures or other improvements primarily
situated on adjoining property which encroach on any part of the land plots
leased under the Land Leases. The land plots leased under the Land Leases (i)
abut on and have direct vehicular access to Ulitsa Gasheka, and (ii) are
supplied with public utilities and other services appropriate for the operation
of the Buildings. The Seller does not have actual knowledge of any existing or
proposed plan to modify or realign any street or highway or any existing or
proposed state taking that would result in the taking of all or any part of any
Immovable Property or that would prevent or hinder the continued use of any
Immovable Property as heretofore used in the conduct of the business of Western
Realty. No Person other than Western Realty and the lessees and sub-lessees
under the Lease Agreements is in possession of any portion of the Immovable
Property.
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(e) There is a valid Technical & Economic Feasibility Study and
Technical Conditions ("TEO"), and pursuant to the TEO, there are sufficient
utility capacities for electricity, gas, hot and cold water and sewage allocated
for the redevelopment of the ▇▇▇▇▇ III Building as an office complex.
3.11 Condition and Sufficiency of Assets
The ▇▇▇▇▇ II Building is structurally sound, is in good operating
condition and repair, ordinary wear and tear excepted, is free from latent and
patent defects, and is adequate for the uses to which it is being put. Each item
of movable and immovable property of Western Realty, including but not limited
to the mechanical and electrical engineering systems and HVAC in the ▇▇▇▇▇ II
Building, is in good operating condition and repair, ordinary wear and tear
excepted, is free from latent and patent defects and is suitable for immediate
use in the Ordinary Course of Business. The Immovable Property and such other
property of Western Realty constitute all the assets necessary for the continued
operation of Western Realty after the Closing in the same manner as before the
Closing. The ▇▇▇▇▇ III Building is not structurally dangerous.
3.12 Intellectual Property
Neither the Company, Western Realty nor Gasheka Realty has registered
any intellectual property rights except that Western Realty has registered the
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ domain name. No other intellectual property rights are
necessary for the operation of the business of the Company, Western Realty
and/or Gasheka Realty, except for the software licenses and permits. The
Company, Western Realty and Gasheka Realty each has all necessary licenses and
other permits for software used by it. Neither the Company, Western Realty nor
Gasheka Realty is in Contravention of the intellectual property rights of third
parties.
3.13 Contracts; No Defaults
(a) The Seller's Disclosure Schedule contains an accurate and
complete list of all Material Contracts entered into by Western Realty and all
Contracts entered into by the Company and Gasheka Realty, and the Seller has
delivered to the Purchaser a true and complete copy of each of such Contracts.
(b) With the exception of the Lease Agreements, (i) each Material
Contract is in full force and effect and to the best of the Seller's knowledge
is enforceable in accordance with its terms, (ii) to the best of the Seller's
knowledge, no event has occurred or circumstance exists that (with or without
notice or lapse of time) is likely to constitute or result directly or
indirectly in Contravention of any Material Contract, and (iii) neither the
Seller, nor the Company, nor Western Realty nor Gasheka Realty nor any Person
acting on behalf of Western Realty with its explicit or implied consent, has
given or received notice or other communication (written or oral) regarding any
actual, alleged or potential Contravention of any Material Contract.
(c) Each Lease Agreement is in full force and effect and to the
best of the Seller's knowledge is enforceable in accordance with its terms. No
party to any of the Lease Agreements has Contravened any of the applicable terms
of such Lease Agreement in a manner that has prompted either Western Realty or
▇▇▇▇▇ International Inc. to spend material amounts of management time dealing
with such Contravention.
16
(d) There are currently no renegotiations of, attempts to
re-negotiate or outstanding rights to re-negotiate any Material Contracts (other
than as set forth therein), nor has any written demand for renegotiation of such
Material Contracts been made.
(e) Payments have been made by Western Realty to the Company
and/or Seller to reimburse fees paid to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and/or his Affiliates.
Neither the previous provision nor the future absence of such payments or the
provision of relevant services following the Closing will have an adverse effect
on the business of the Company, Western Realty or Gasheka Realty.
3.14 Insurance
Neither the Company nor Western Realty has ever participated in a
self-insurance program, retrospective premium program or captive insurance
program. The Company, Western Realty and/or Gasheka Realty maintains in full
force and effect insurance to the extent customary for the business being
conducted by Western Realty in the market where it is being conducted with
respect to the type of real estate similar to Immovable Property. The Seller's
Disclosure Schedule contains a list and a brief description of each insurance
policy in effect issued to the Company, Western Realty and/or Gasheka Realty.
The Seller's Disclosure Schedule also contains a list and brief description of
all circumstances, potential claims, claims, damages, injuries, occurrences,
losses and lawsuits for which the Company, or any Person on its behalf, has
provided notice to any insurer or otherwise sought coverage under any insurance
policy or program identified in the Seller's Disclosure Schedule (including
settled and outstanding claims). The Seller, the Company, Western Realty and
Gasheka Realty have, to the extent applicable, complied with each such insurance
policy and program and have not failed to give any notice or present any claim
thereunder in a due and timely manner which failure would reasonably be expected
to result in a loss or forfeiture of any material right thereunder.
3.15 Taxes
(a) All Tax Returns required to be filed by the Company, Western
Realty or Gasheka Realty, to the extent applicable, prior to the date hereof
have been filed with the appropriate Governmental Authorities by the due date
thereof including extensions. Such Tax Returns correctly reflect all Tax
liabilities required to be shown thereon. All Taxes shown as due and owing on
all such Tax Returns have been paid, or withheld or paid, as the case may be.
(b) There are no Encumbrances upon any properties or assets of the
Company, Western Realty and/or Gasheka Realty arising from any failure or
alleged failure to pay any Tax.
(c) The Company, Western Realty and Gasheka Realty are not subject
to any tax sharing, indemnity or allocation agreement other than under the
Contracts.
(d) The Company does not have and has never had any assets of a
kind that would prevent it from being treated as a disregarded entity for the
purposes of the tax laws of the United States and is not and never has been
engaged in any US trade or business (as determined by law for US tax purposes).
17
(e) The Company is a domestic eligible entity with a single owner
treated as a disregarded entity for the purposes of the tax laws of the United
States and is treated as such on the US income tax return of the ultimate
owner(s) of the Seller, and other than the transactions contemplated by this
Agreement, there is no event or circumstance known to the Seller or the
Guarantor nor has the Seller, the Company or their respective Affiliates taken
any action or omitted to take any action which may result in a change of this
status.
(f) Except to the extent that any failures to take any actions set
forth below do not individually or in the aggregate have a material adverse
effect on the business or financial condition of the Company, Western Realty
and/or Gasheka Realty, (i) all Tax Returns of Western Realty required by Law are
sufficiently substantiated by the accounting and tax records required by Law,
and (ii) the documents and records referred is in this Section have been
retained in accordance with Law and in such a manner so as to be readily
available if legitimately requested by a competent Governmental Authority.
3.16 Employees
(a) Neither the Company nor Gasheka Realty has any employees and
has never had any employees but have and had officers. Western Realty's only
employees are the Employees.
(b) Western Realty is in material compliance with all Laws
relating to employment practices and terms and conditions of employment. Western
Realty is not liable for the payment of any material fines, penalties or other
amounts, however designated, for failure to comply with any of the foregoing
Laws.
(c) There is no pending or threatened Proceeding against or
affecting Western Realty relating to the alleged violation of any Law pertaining
to labor relations or employment matters.
(d) At the Closing the employment of the Employees has been
lawfully terminated and there are no liabilities of either Western Realty or the
Company to the Employees (including any resulting from such termination) or the
offices and directors of the Company, Western Realty and/or Gasheka Realty.
3.17 Environmental, Occupational Safety and Health Matters
(a) The Company, Western Realty and Gasheka Realty, to the extent
applicable, are in material compliance with, and have not been and are not in
Contravention of or liable under, any Environmental Law or Occupational Safety
and Health Law with respect to the ▇▇▇▇▇ II Building. In respect of the
Immovable Property, neither the Seller nor the Company nor Western Realty nor
any Person acting on behalf of Western Realty with its explicit or implied
consent nor Gasheka Realty, as applicable, has received any actual or threatened
Order, notice or other communication from any Governmental Authority or other
Person, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or threatened obligation to undertake or
bear the cost of any liabilities arising under the Environmental Law or the
Occupational Safety and Health Law, and, with respect to the ▇▇▇▇▇ II Building,
neither the Company nor Western Realty has any basis to expect the above.
18
(b) The Seller has delivered to the Purchaser true and complete
copies of any reports, studies, analyses, tests or monitoring results possessed
or initiated by the Seller or the Company pertaining to Hazardous Materials or
Hazardous Activities in, on or under the Immovable Property, or concerning
compliance by the Seller, the Company, Western Realty and/or Gasheka Realty with
the Environmental Laws.
3.18 Compliance with Law; Governmental Authorizations
(a) Without limiting the scope of any other representation in this
Agreement, and except as any non-compliance, event, action, Contravention or
other matters described below would not have a material adverse effect on the
Company, Western Realty and/or Gasheka Realty, (i) the Company, Western Realty
and Gasheka Realty are, and at all times since the Acquisition Date have been,
in full compliance with each Law that is or was applicable to it or to the
conduct of its business or the ownership or use of any of its assets, (ii) no
event has occurred or circumstance exists that (with or without notice or lapse
of time) may cause the Company, Western Realty and/or Gasheka Realty to
Contravene any Law or give rise to any obligation on the part of the Company,
Western Realty and/or Gasheka Realty to undertake, or to bear all or any portion
of the cost of, any remedial action of any nature, and (iii) neither the Seller
nor the Company nor Western Realty nor Gasheka Realty has received at any time
since the Acquisition Date any notice or other communication (whether oral or
written) from any Governmental Authority regarding any actual, alleged or
potential Contravention of any Law by the Company, Western Realty or Gasheka
Realty or any actual, alleged or potential obligation on the part of the
Company, Western Realty or Gasheka Realty to undertake, or to bear all or any
portion of the cost of, any remedial action of any nature.
(b) Except to the extent that any Contraventions, failures to take
any actions or other matters set forth below would not have a material adverse
effect on the Company, Western Realty and/or Gasheka Realty, (i) the Company,
Western Realty and Gasheka Realty have all the Governmental Authorizations
necessary to permit the Company, Western Realty and Gasheka Realty to conduct
their business lawfully in the manner in which they currently conduct such
business, (ii) the Company, Western Realty and Gasheka Realty are, and at all
times since the Acquisition Date have been, in full compliance with the
requirements of each such Governmental Authorization, and no event has occurred
or circumstance exists that would (with or without notice or lapse of time)
constitute or result directly or indirectly in Contravention of any Governmental
Authorization, (iii) neither the Seller nor the Company nor Western Realty nor
Gasheka Realty has received at any time since the Acquisition Date any notice or
other communication (whether oral or written) from any Governmental Authority
regarding any actual, alleged or potential Contravention of any Governmental
Authorization by the Company, Western Realty or Gasheka Realty, (iv) all
applications required to have been filed for the renewal of such Governmental
Authorizations have been duly filed on a timely basis with the appropriate
Governmental Authorities, and all other filings required to have been made with
respect to such Governmental Authorizations have been duly made on a timely
basis with the appropriate Governmental Authorities, and (v) all such
Governmental Authorizations are renewable by their terms or in the Ordinary
Course of Business.
3.19 Legal Proceedings; Orders
(a) The Seller's Disclosure Schedule lists any pending Proceedings
(i) by or against the Company, Western Realty and/or Gasheka Realty or other
Proceedings known to the Seller that otherwise relate to or may affect the
business of, or any of the assets owned or
19
used by, the Company, Western Realty and/or Gasheka Realty or (ii) that
challenge, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, any of the contemplated transactions. No other
such Proceeding has been threatened, and no event has occurred or circumstance
exists that is likely to give rise to the commencement of any such Proceeding.
The Seller has delivered to the Purchaser copies of all pleadings,
correspondence and other documents relating to such Proceedings. Such
Proceedings will not have a material adverse effect on the financial or other
condition, results of operations, assets, liabilities, equity, business or
prospects of the Company, Western Realty and/or Gasheka Realty.
(b) To the Seller's knowledge, no officer, director, agent or
employee of the Company, Western Realty or Gasheka Realty is subject to any
Order that prohibits such officer, director, agent or employee from engaging in
or continuing any conduct, activity or practice relating to the business of the
Company, Western Realty or Gasheka Realty.
(c) Except to the extent that any failures to take any actions set
forth below do not have a material adverse effect on the Company, Western Realty
and/or Gasheka Realty, (i) the Company, Western Realty and Gasheka Realty are,
and at all times since the Acquisition Date have been, in full compliance with
all of the terms and requirements of each Order to which they, or any of the
assets owned or used by them, are or have been subject, (ii) no event has
occurred or circumstance exists that may constitute or result in (with or
without notice or lapse of time) a violation of or failure to comply with any
term or requirement of any Order to which the Company, Western Realty or Gasheka
Realty, or any of the assets owned or used by the Company, Western Realty or
Gasheka Realty, is subject, (iii) neither the Seller nor the Company nor Western
Realty nor Gasheka Realty has received, at any time since the Acquisition Date,
any notice or other communication (whether oral or written) from any
Governmental Authority regarding any actual, alleged or potential violation of,
or failure to comply with, any term or requirement of any Order to which the
Company, Western Realty or Gasheka Realty, or any of the assets owned or used by
the Company, Western Realty or Gasheka Realty, is or has been subject.
3.20 Brokers or Finders
All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried out by the Seller without the intervention
of any Person on behalf of the Seller in such manner as to give rise to any
valid claim by any Person against the Purchaser or the Seller for any finder's
fee, brokerage commission or similar payment, except that the Seller has engaged
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and New Era Trading International Corporation to provide
brokerage and other services in connection with such transactions and will be
solely responsible for their fees with respect to such services.
3.21 Disclosure
No representation or warranty of the Seller in this Agreement and no
statement in the Seller's Disclosure Schedule contains any material untrue
statement or omits to state a material fact necessary to make the statements
herein or therein, in light of the circumstances in which they were made, not
misleading. No notice given pursuant to this Agreement will contain any untrue
statement or omit to state a material fact necessary to make the statements
therein or in this Agreement, in light of the circumstances in which they were
made, not misleading. The Seller has no knowledge of any fact that has specific
application to the Company, Western Realty or Gasheka Realty (other than general
economic or industry
20
conditions) and that could have a material adverse effect on the financial or
other condition, results of operations, assets, liabilities, equity, business or
prospects (including the re-development of the ▇▇▇▇▇ III Buildings according to
the TEO) of the Company, Western Realty or Gasheka Realty which fact has not
been set forth in this Agreement or the Seller's Disclosure Schedule.
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Seller that, as of the
Closing:
4.01 Organization
The Purchaser is a limited liability company duly organized, validly
existing and in good standing under the laws of Bermuda.
4.02 Enforceability; No Conflict; Consents
(a) The Purchaser has the absolute and unrestricted right, power
and authority to execute and deliver this Agreement and to perform its
obligations under this Agreement, which actions have been duly authorized and
approved by all necessary action of the governing bodies of the Purchaser.
Assuming due authorization, execution and delivery of this Agreement by the
Seller, this Agreement constitutes the legal, valid and binding obligation of
the Purchaser, enforceable against the Purchaser in accordance with its terms.
(b) The Purchaser is not and will not be required to give any
notice to any Person or obtain any Consent or Governmental Authorization in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the transactions contemplated by this Agreement, except
for those which have already been applied for, given or obtained, as the case
may be.
(c) Neither the execution and delivery of this Agreement nor the
consummation or performance of any of the transactions contemplated by it will
directly or indirectly (with or without notice or lapse of time):
(i) Contravene any provision of the Governing Documents
of the Purchaser;
(ii) Contravene any Contract, Governmental Authorization,
Law or Order to which the Purchaser, or any of the
assets owned or used by it, may be subject; or
(iii) result in the imposition or creation of any
Encumbrance upon or with respect to any of the assets
owned or used by the Purchaser.
(d) Neither the execution and delivery of this Agreement by the
Purchaser nor the consummation or performance by the Purchaser of any of the
transactions contemplated hereby will give any Person the right to prevent,
delay, or otherwise interfere with any of such transactions pursuant to any
provision of the Purchaser's Governing Documents, any resolution adopted by the
directors or the shareholders/members of the Purchaser, any Law or Order to
which the Purchaser may be subject, or any contract to which the Purchaser is a
party or by which the Purchaser may be bound.
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4.03 Proceedings
There is no actual, pending or threatened Proceeding against the
Purchaser that challenges, or may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the contemplated
transactions, and no event has occurred or circumstance exists that may give
rise to the commencement of any such Proceeding.
4.04 Brokers or Finders
All negotiations relating to this Agreement and the transactions
contemplated hereby have been carried out by the Purchaser without the
intervention of any Person on behalf of the Purchaser in such manner as to give
rise to any valid claim by any Person against the Seller or the Purchaser for
any finder's fee, brokerage commission or similar payment.
ARTICLE V NOTICE AND CURE
5.01 Notification by Non-Breaching Party
Each Party will notify the other Party in writing of any violation or
breach by the other Party, as soon as practicable after such Party becomes aware
of such violation or breach of any representation, warranty, covenant or
agreement made by the other Party in this Agreement, whether occurring or
arising before, on or after the date of this Agreement.
ARTICLE VI COVENANTS
6.01 Governmental Approvals and Third Party Consents
In case any consents, approvals and actions of, filings with and
notices to any Governmental Authority are necessary to permit the Parties to
perform their respective obligations under this Agreement and to consummate the
transactions contemplated hereby and are required to have been obtained, made or
given (as applicable) by any Party pursuant to applicable Law, then each Party
will: (a) take all steps necessary to obtain such consents, approvals or actions
of, to make all filings with and to give all notices to the Governmental
Authorities or any other Person, (b) provide such other information and
communications to the other Party, such Governmental Authorities or other
Persons as the other Party or such Governmental Authorities or other Persons may
request in connection therewith and execute all documents as may be reasonably
requested by the other Party in connection therewith, and (c) cooperate with the
other Party as promptly as practicable in obtaining all consents, approvals or
actions of, making all filings with, and giving all notices to, the Governmental
Authorities or other Persons required of such other Party to consummate the
transactions contemplated hereby.
6.02 Fulfillment of Conditions
Each Party will take all commercially reasonable steps necessary or
desirable and proceed diligently and in good faith to satisfy each condition to
the obligations of the Seller and the Purchaser contained in this Agreement.
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6.03 No Payments to and from Affiliates
The Parties hereby agree that after the Closing, the Parties shall not,
and shall not permit their Affiliates to claim any amounts from the other Party
and/or its Affiliates (including, in case of the Purchaser, inter alia, the
Company, Western Realty and Gasheka Realty) due under any documents other than
this Agreement or any documents entered into at or after the Closing. With
respect to the amount payable by Western Realty to the Company, as shown in the
Seller's Disclosure Schedule, which was initially payable to New Valley, the
Seller shall cause their respective Affiliates, officers, employees, agents,
accountants and representatives to provide the documentation and agreements
necessary for the transfer of this payable to be correctly reflected in the
statutory accounting records of Western Realty.
6.04 Record Access and Retention
The Purchaser agrees to retain or cause to be retained all accounting,
business, litigation, financial and tax records (including, without limitation,
work papers) (i) relating to the Company, Western Realty and Gasheka Realty or
their respective businesses in existence on the Closing Date, or (ii) coming
into existence after the Closing Date which relate to the Company, Western
Realty and Gasheka Realty or their respective businesses prior to the Closing
Date (the "Business Documents"), in each case for a period of six years from the
Closing Date (or, for records relating to a Tax Return, the later of the
expiration of the relevant statute of limitations or six years from the date
such Tax Return was filed). At any time following eight years from the Closing
Date, the Purchaser, at its election, may notify the Seller of its desire to
transfer records to the Seller and, if the Seller does not desire to receive
such records, the Purchaser may destroy or otherwise dispose of such undesired
records. In addition, the Purchaser agrees that from and after the Closing Date,
it will not unreasonably refuse to provide the Seller or its representatives,
after reasonable notice and during normal business hours, access to and copies
of such Business Documents as are necessary to properly prepare for, file,
prove, answer, prosecute and/or defend any financial statements, Tax Return and
any other filing, audit, judicial or administrative Proceeding relating to
Taxes, or any third party protest, claim, suit, inquiry or other Proceeding by
any third party against the Seller or any of its Affiliates and, if requested by
the Seller, will use reasonable efforts to abide with any record retention
agreement entered into with tax authorities.
6.05 Cooperation and Further Assurances on Tax Matters
Subject to Article VII hereof, the Parties without further
consideration shall reasonably cooperate with each other, and shall cause their
respective Affiliates, officers, employees, agents, accountants and
representatives to reasonably cooperate with each other in connection with the
preparation of Tax Returns and conducting Tax audits or other Proceedings in
respect of any Taxes. In the event of any Tax audit, Tax hearing or other such
Tax Proceeding involving the Company, Western Realty or Gasheka Realty for which
either the Purchaser or the Seller may be liable under this Agreement, each
Party shall provide reasonable notification to the other Party prior to the
commencement of such event. During any such Tax Proceeding, each Party agrees to
reasonably consult and take into account the views (in a manner consistent with
positions taken prior to the Closing) of the other Party. Each Party shall also
have the right to request that its representative be present during such Tax
audit, Tax hearing or other such Tax Proceeding. At the Seller's request, the
Purchaser agrees to execute a power of attorney authorizing the Seller's
representative to argue at any
23
Tax Proceeding for any Taxes arising in any period for which the Seller may be
liable under this Agreement.
6.06 Cooperation During the Transition Period
The Seller shall cooperate with the Purchaser in the smooth transition
as a result of the transactions contemplated hereby, and shall ensure at its own
expense, full assistance to the Purchaser and Western Realty from the Seller's
Companies Personnel (including a driver during business hours) in the orderly
transfer of all matters of the Company, Western Realty and Gasheka Realty during
the Transition Period. In particular, the Seller shall use its best efforts to
ensure that the Seller's Companies Personnel will cooperate (including being
present at the WR Premises when necessary) with the Purchaser in such transition
efforts during the Transition Period.
ARTICLE VII INDEMNIFICATION
7.01 Indemnification by the Seller
Subject to Sections 7.03 and 7.04, in the event the Closing occurs, the
Seller shall indemnify the Purchaser in respect of, and hold the Purchaser
harmless from and against, any and all losses suffered, incurred or sustained by
the Purchaser resulting from, arising out of or relating to any
misrepresentation, breach of warranty or non-fulfillment of or failure to
perform any covenant or agreement on the part of the Seller contained in this
Agreement (to the extent not expressly waived in writing by the Purchaser).
7.02 Indemnification by the Purchaser
Subject to Sections 7.03 and 7.04, in the event the Closing occurs, the
Purchaser shall indemnify the Seller in respect of, and hold the Seller harmless
from and against, any and all losses suffered, incurred or sustained by the
Seller resulting from, arising out of or relating to any misrepresentation,
breach of warranty or non-fulfillment of or failure to perform any covenant or
agreement on the part of the Purchaser contained in this Agreement (to the
extent not waived in writing by the Seller).
7.03 Limitations on Liability of Seller
Notwithstanding any other provision of this Agreement to the contrary:
(a) the aggregate liability of the Seller in respect of all claims
hereunder shall be limited to fifteen million US Dollars (US$ 15,000,000);
(b) the Seller will have no liability in respect of any claim to
the extent that such claim arose due to anything voluntarily done or omitted to
be done after the Closing by the Purchaser or any of its successors or assigns;
(c) the Seller will have no liability in respect of any claim to
the extent that such claim relates to any loss for which the Purchaser actually
recovers under the terms of any insurance policy in effect at the Closing Date;
(d) the Seller will have no liability in respect of any claim if,
as of the time such claim is made, the aggregate amount of all claims for
indemnification made by the Purchaser
24
under this Article VII does not exceed seven hundred and fifty thousand US
Dollars (US$ 750,000); but when such a claim is made in excess of such figure
the Purchaser shall itself bear the first US$ 200,000 of any proven loss.
(e) the Purchaser shall not be entitled to be paid more than once,
in respect of any claim arising out of the same subject matter;
(f) if any potential claim shall arise by reason of a liability of
the Seller which is contingent only, then the Seller shall not be under any
obligation to make any payment in respect of such claim until such time as the
contingent liability ceases to be contingent and becomes actual; and
(g) as used in this Section 7.03, "claim" shall mean any claim
which would (but for this Article VII) be capable of being made against the
Seller.
7.04 Indemnification Procedure
(a) Proceedings
In the event that any claim is asserted against any Party hereto, or
any Party hereto is made a party defendant in any Proceeding, and such claim or
Proceeding involves a matter which is the subject of a claim for
indemnification, then such Party (an "Indemnified Party") shall (i) promptly
give written notice pursuant to Section 9.01 to the Purchaser or the Seller, as
the case may be (the "Indemnifying Party"), of such claim or Proceeding, and
(ii) not make any admission of liability, agreement or compromise with any
Person in relation to such claim without prior written notice to the
Indemnifying Party; and such Indemnifying Party shall have the right to join in
the defense of said claim or Proceeding at such Indemnifying Party's own cost
and expense and, if the Indemnifying Party agrees in writing to be bound by and
to promptly pay the full amount of any final judgment from which no further
appeal may be taken to the extent such judgment involves an indemnifiable claim
under this Article VII and subject to the limitations in Section 7.03, and if
the Indemnified Party is reasonably assured of the Indemnifying Party's ability
to satisfy such agreement, then, at the option of the Indemnifying Party, such
Indemnifying Party may take over the defense of such claim or Proceeding, except
that, in such case, the Indemnified Party shall have the right to join in the
defense of said claim or Proceeding at its own cost and expense.
(b) Indemnification Claim
Notwithstanding any provision in this Agreement to the contrary, no
Party shall have any liability with respect to any claim for indemnification
hereunder unless (i) such Indemnified Party shall have made a written claim for
indemnification against the Indemnifying Party, (ii) such claim is made in good
faith, (iii) written particulars of such claim (giving such details of the
specific matter in respect of which such claim is made as are then in the
possession of the Indemnified Party) have been provided to the Indemnifying
Party, and (iv) such claim is made within the Survival Period specified in
Section 8.02(b).
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ARTICLE VIII TERMINATION
8.01 Termination
This Agreement shall terminate and the transactions contemplated hereby
shall be abandoned:
(a) at any time prior to the Closing, by mutual written agreement
of the Seller and the Purchaser; or
(b) if the Closing shall not have occurred on or before December
21, 2001.
8.02 Effect of Termination
(a) If this Agreement is validly terminated pursuant to Section
8.01, this Agreement will forthwith become null and void, and there will be no
liability or obligation on the part of the Seller or the Purchaser (or any of
their respective officers, directors, employees, agents or other representatives
or Affiliates), except that the provisions in Sections 3.20, 4.04, 9.03 and 9.05
will continue to apply following any such termination.
(b) The Seller and the Purchaser have the right to rely fully upon
the representations, warranties, covenants and agreements of the other contained
in this Agreement. Unless otherwise noted herein, all representations,
warranties, covenants and agreements of the Seller and the Purchaser contained
in this Agreement will survive the Closing and remain in effect until August 30,
2003 (the "Survival Period").
ARTICLE IX MISCELLANEOUS
9.01 Notices and Payments
(a) Notices
All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile transmission or sent by courier to the Parties at the following
addresses or facsimile numbers:
If to the Seller, to:
Western Realty Development LLC
c/o New Valley Corporation
▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
Tel.: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
26
If to the Purchaser, to:
Andante Limited
C/o: ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
P.O. Box HM 666,
▇▇▇▇▇▇▇▇ ▇▇ CX, Bermuda
Fax: ▇ (▇▇▇) ▇▇▇ ▇▇ ▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to BrookeMil, to:
BrookeMil Ltd.
▇.▇. ▇▇▇ ▇▇▇
Fifth Floor
Butterfield House
▇▇▇▇▇▇ Town, Grand Cayman, B.W.I.
Fax: ▇ (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ III
All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section 9.01, be deemed
given upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number as provided in this Section 9.01, be deemed given upon receipt,
and (iii) if delivered by courier in the manner described above to the address
as provided in this Section 9.01, be deemed given upon confirmed receipt. Any
Party from time to time may change its address, facsimile number or other
information for the purpose of notices to that Party by giving written notice
specifying such change to the other Party hereto.
(b) Payments
All payments made to the Seller or the Purchaser, respectively, shall
be made to the relevant Party's account specified in Exhibit 8 attached hereto,
or to such other account as the relevant Party may choose to use, in which case
such Party shall give the other Party a five (5) business days advance written
notice of any such change.
9.02 Entire Agreement
This Agreement supersedes all prior discussions and agreements between
the Parties with respect to the subject matter hereof, and contains the sole and
entire agreement between the Parties hereto with respect to the subject matter
hereof and thereof (subject to Section 9.05).
27
9.03 Expenses
Except as otherwise expressly provided in this Agreement, whether or
not the transactions contemplated hereby are consummated, each of the Parties
will pay its own costs and expenses, including, without limitation, legal fees,
incurred in connection with the negotiation and execution of this Agreement, the
Closing and the transactions contemplated hereby.
9.04 Public Announcements
At all times at or before the Closing, unless required by applicable
Law or rules of a relevant stock exchange, neither the Seller nor the Purchaser
will issue or make any reports, statements or releases to the public or,
generally, to the employees, customers, suppliers or other Persons without the
consent of the other, which consent shall not be unreasonably withheld.
9.05 Confidentiality
Prior to the Closing, each Party hereto will comply with the terms of
the Confidentiality Agreement between the Purchaser and the Seller dated
November 26, 2001. In the event the transactions contemplated hereby are not
consummated, upon the request of the other Party, each Party hereto will, and
will cause its Affiliates and their respective representatives to, promptly
redeliver or cause to be redelivered all copies of documents and information
furnished by the other Party in connection with this Agreement or the
transactions contemplated hereby and destroy or cause to be destroyed all notes,
memoranda, summaries, analyses, compilations and other writings related thereto
or based thereon prepared by the Party which was furnished such documents and
information or its representatives. Following the Closing, this Section 9.05
will not apply solely to the documents and information concerning the Company,
Western Realty and/or Gasheka Realty.
9.06 Waiver
Any term or condition of this Agreement may be waived at any time by
the Party that is entitled to the benefit thereof, but no such waiver shall be
effective unless set forth in a written instrument duly executed by or on behalf
of the Party waiving such term or condition. No waiver by any Party of any term
or condition of this Agreement, in any one or more instances, shall be deemed to
be or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion. All remedies, either under this Agreement or
by law or otherwise afforded, will be cumulative and not alternative.
9.07 Amendment
This Agreement may be amended, supplemented or modified only by a
written instrument duly executed by or on behalf of each Party hereto.
9.08 No Third Party Beneficiary
The terms and provisions of this Agreement are intended solely for the
benefit of each Party hereto and their respective successors or permitted
assigns, and it is not the intention of the Parties to confer third party
beneficiary rights upon any other Person.
28
9.09 No Assignment, Binding Effect
Neither this Agreement nor any right, interest or obligation hereunder
may be assigned by any Party hereto without the prior written consent of the
other Party hereto and any attempt to do so will be void, except for assignments
and transfers by operation of law. Subject to this Section 9.09, this Agreement
is binding upon and inures to the benefit of the Parties hereto and their
respective successors and assigns. Nothing in this Section 9.09 shall restrict
the Purchaser from selling or otherwise transferring the Interest to any third
party after the Closing.
9.10 Governing Law and Arbitration
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, United States of America, without giving
effect to any conflicts of laws principles thereof which would result in the
application of the laws of another jurisdiction. Any dispute, controversy or
claim (whether in contract, tort or otherwise) arising under, relating to or in
connection with this Agreement shall be referred to and determined by
arbitration under the Rules of the London Court of the International Arbitration
(the "LCIA Rules"), which are deemed to be incorporated by reference into this
Section 9.10. The tribunal shall consist of three arbitrators: the claimant
Party shall appoint one arbitrator, the respondent Party shall appoint one
arbitrator, and the two arbitrators so appointed shall appoint the third
arbitrator, in accordance with the LCIA Rules. The place of arbitration shall be
London. Except for such arbitration proceeding, no action, lawsuit or other
proceeding (other than the action or proceeding for enforcement of an arbitral
award) shall be brought by or between the Parties to this Agreement in
connection with any matter arising out of or in connection herewith.
9.11 Invalid Provisions
If any provision of this Agreement is held to be illegal or invalid
under any present or future law, and if the rights or obligations of any Party
hereto under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this Agreement will be
construed and enforced as if such illegal or invalid provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal or
invalid provision or by its severance herefrom and (d) in lieu of such illegal
or invalid provision, there will be added automatically as a part of this
Agreement a legal and valid provision as similar in terms to such illegal or
invalid provision as may be possible.
9.12 Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
9.13 BrookeMil's Undertaking
BrookeMil, which is a party to this Agreement solely for the purposes
of giving the undertaking in this Section 9.13, undertakes to the Purchaser, at
BrookeMil's expense, to take all necessary steps to finalize the state
registration of the ▇▇▇▇▇ III Land Lease in the name of Western Realty.
IN WITNESS WHEREOF, this Interest Purchase Agreement has been duly
executed and delivered by each Party hereto as of the day and year first above
written.
29
THE SELLER
WESTERN REALTY DEVELOPMENT LLC
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
30
THE PURCHASER
ANDANTE LIMITED
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
31
BROOKEMIL LTD.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Attorney-in-Fact
32