CONFORMED COPY
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STOCK PLEDGE AGREEMENT
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THIS AGREEMENT is made on 9 June 1997
BETWEEN:-
(1) DEFENCE SYSTEMS LIMITED, a company incorporated and registered in England
(Registration No. 154057) whose registered office is at 7th Floor, Egginton
House, 00-00 Xxxxxxxxxx Xxxx, Xxxxxx XX0X 0XX (the "Lender");
(2) STRONTIAN HOLDINGS LIMITED, whose registered office is at 00 Xxxxxxxxx
Xxxxxx, Xxxx Xxxxxxxx, Xxxxxxx (the "Borrower");
(3) XXXXXXX GOLOVATOV, of 00-00 Xxxxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxx 000000,
Russia ("MG"); and
(4) XXXX XXXXXXX, of 00-00 Xxxxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxx 000000, Xxxxxx
("IO").
WHEREAS:-
(A) The Lender has agreed to provide the Borrower the Loan pursuant to the
terms of the Loan Agreement of even date herewith made between the Lender and
the Borrower.
(B) Each of the Borrower, MG and IO ("the Pledgors") have agreed to pledge and
grant to the Lender to secure the payment and performance of the Borrower's
obligation (collectively, the "Secured Obligations") under the Loan Agreement,
security interest in the 28,794 Armor Holdings Inc. shares of common stock par
value US$0.01 per share, to be issued to the Pledgors pursuant to the Share
Acquisition Agreement ("the Pledged Stock").
(C) It is acknowledged by the parties that each Pledgor will materially benefit
from the Loan to be advanced pursuant to the Loan Agreement.
(D) Terms defined in the Loan Agreement shall, unless the context otherwise
require have the same meaning in this Agreement.
IT IS AGREED as follows:-
1. Pledge of Stock
1.1 As collateral security for the Secured Obligations each Pledgor hereby
pledges and collaterally assigns to the Lender and grants to the Lender a first
priority security interest in the Pledged Stock.
1.2 Each Pledgor agrees to deliver all the Pledged Stock to the Lender at such
location as the Lender shall from time to time designate by written notice for
its custody at all times until termination of this Agreement, together with
such instruments of assignment and transfer as requested by the Lender.
1.3 All advances, charges, costs and expenses, including reasonable legal fees,
incurred
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or paid by the Lender in exercising any right, power or remedy conferred by
this Agreement, or in the enforcement thereof, shall become a part of the
Secured Obligations secured hereunder and shall be paid to the Lender by each
Pledgor immediately upon demand therefor.
2. Preservation and Protection of Collateral
The Lender shall be under no duty or liability with respect to the collection,
protection or preservation of the Pledged Stock, or otherwise, beyond the use
of reasonable care in the custody and preservation thereof while in its
possession.
3. Default
3.1 Should the Borrower fail to pay the Lender all Secured Obligations as of
the end of the Business Day on which such Secured Obligations become due and
payable and after the expiration of all grace or cure periods, if any, and all
extensions or waivers, if any, and should such failure continue, or should any
other Event of Default set forth in the Loan Agreement occur and be continuing
(any of the foregoing an "Event of Default"), the Lender is given full power
and authority, then or at any time thereafter, to sell, assign and deliver or
collect the whole or any part of the Pledged Stock, or any substitute therefor
or any addition thereto, in one or more sales, with or without any previous
demands or demand of performance or, to the extent permitted by law, notice or
advertisement, in such order as the Lender may elect; and any such sale may be
made either at public or private sale, either for cash or upon credit or for
future delivery, at such price as the Lender may reasonably deem fair; and the
Lender may be the purchaser of any or all Pledged Stock so sold and hold the
same thereafter in its own right free from any claim of a Pledgor or right of
redemption.
3.2 Demands of performance, advertisements and presence of property and sale
and notice of sale are hereby waived to the extent permissible by law. Any sale
hereunder may be conducted by an auctioneer or any officer or agent of the
Lender. The Pledgors recognizes that the Lender may be unable to effect a
public sale of the Pledged Stock by reason of certain prohibitions contained in
the United States Securities Act of 1933, as amended (the "Securities Act"),
and applicable state law, and may be otherwise delayed or adversely affected in
effecting any sale by reason of present or future restrictions thereon imposed
by governmental authorities, and that as a consequence of such prohibitions and
restrictions the Lender may be compelled (i) to resort to one or more private
sales to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire the stock for their own account, for investment and
not with a view to the distribution or resale thereof, or (ii) to seek
regulatory approval of any proposed sale or sales, or (iii) to limit the amount
of Pledged Stock sold to any person or group. Each Pledgor agrees and
acknowledges that private sales so made may be at prices and upon terms less
favourable to Pledgor than if such Pledged Stock was sold either at public
sales or at private sales not subject to other regulatory restrictions, and
that the Lender has no obligation to delay the sale of any of the Pledged Stock
for the period of time necessary to permit the issuer of such Pledged Stock to
register or otherwise qualify them, even if such issuer would agree to register
or otherwise qualify such Pledged Stock for public sale under the Securities
Act or applicable state law.
3.3 Each Pledgor further agrees, to the extent permitted by applicable law,
that the use
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of private sales made under the foregoing circumstances to dispose of the
Pledged Stock shall be deemed to be dispositions in a commercially reasonable
manner. Each Pledgor hereby acknowledges that a ready market may not exist for
the Pledged Stock if they are not traded on a national securities exchange or
quoted on an automated quotation system and agrees and acknowledges that in
such event the Pledged Stock may be sold for an amount less than a pro rata
share of the fair market value of the issuer's assets minus its liabilities.
3.4 In addition to the foregoing, the Lender may exercise such other rights and
remedies as may be available under the Loan Agreement, at law or in equity.
4. Proceeds of Sale
The proceeds of the sale of any of the Pledged Stock and all sums received or
collected from or on account of such Pledged Stock shall be applied to the
payment of expenses incurred or paid by the Lender in connection with any sale,
transfer or delivery of the Pledged Stock, to the payment of any other costs,
charges, reasonable attorneys' fees or expenses mentioned herein, and to the
payment of the Secured Obligations or any part thereof, all in such order and
manner as the Lender may determine and as permitted by applicable law and
regulation. The Lender shall, upon satisfaction in full of all such Secured
Obligations, pay any balance to Pledgors.
5. Presentments, Etc.
The Agent shall not be under any duty or obligation whatsoever to make or give
any presentments, demands for performances, notices of nonperformance,
protests, notice of protest or notice of dishonour in connection with any
obligations or evidences of indebtedness held thereby as collateral, or in
connection with any obligations or evidences of indebtedness which constitute
in whole or in part the Secured Obligations secured hereunder.
6. Attorney
Each Pledgor hereby appoints the Lender as such Pledgor's attorney for the
purposes of carrying out the provisions of this Agreement and taking any action
and executing any instrument which the Lender may deem necessary or advisable
to accomplish the purposes hereof, which appointment, having been given to
secure obligations in connection with this Agreement, shall be irrevocable in
accordance with Section 4 of the Power of Xxxxxxxx Xxx 0000 and coupled with an
interest; provided, that the Lender shall have and may exercise rights under
this power of attorney only upon the occurrence and during the continuance of
an Event of Default.
7. Absolute Rights and Obligations
All rights of the Lender, and all obligations of the Pledgors hereunder, shall
be absolute and unconditional irrespective of:-
7.1 any lack of validity or enforceability of the Loan Agreement or any other
agreement or instrument relating to any of the Secured Obligations;
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7.2 any change in the time, manner or place of payment of, or in any other term
of, all or any of the Secured Obligations, or any other amendment or waiver of
or any consent to any departure from the Loan Document.
8. Release
The Pledged Stock shall be released from the terms of this Agreement and all
rights and remedies of the parties under this Agreement shall cease upon
repayment and/or other satisfaction of the Loan pursuant to the terms of the
Loan Agreement.
8. General
8.1 No variation of this Agreement shall be effective unless made in writing
signed by or on behalf of all the parties and expressed to be such a variation.
8.2 Any remedy or right conferred by this Agreement on the Lender for breach of
this Agreement shall be in addition to and without prejudice to any other right
or remedy available to either of them.
8.3 No failure or delay by the Lender or time or indulgence given by it in or
before exercising any remedy or right under or in relation to this Agreement
shall operate as a waiver of the same nor shall any single or partial exercise
of any remedy or right preclude any further exercise of the same or the
exercise of any other remedy or right.
8.4 No waiver by any party of any requirement of this Agreement or of any
remedy or right under this Agreement shall have effect unless given by notice
in writing signed by such party. No waiver of any particular breach of the
provisions of this Agreement shall operate as a waiver of any repetition of
such breach.
8.5 Any release, waiver or compromise or any other arrangement which the lender
gives or enters into with any party to this Agreement in connection with this
Agreement shall not affect any right or remedy of the Lender as regards any
other party's liabilities under or in relation to this Agreement and such other
party shall continue to be bound by this Agreement as if it had been the sole
contracting party.
8.6 Time shall be of the essence of this Agreement, both as regards the dates
and periods specifically mentioned and as to any dates and periods which may by
agreement in writing between the parties be substituted for any of them.
8.7 This Agreement may be executed in two or more counterparts and execution by
each of the parties of any one of such counterparts will constitute due
execution of this Agreement.
8.8 The Pledgors shall and shall procure that any third party shall, do,
execute and perform all such further deeds, documents, assurances, acts and
things as may be necessary to give effect to this Agreement.
8.9 The provisions of this Agreement shall remain in full force and effect
after Completion so far as they then remain to be observed and performed.
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8.10 Each Pledgor acknowledges that it is entering into this Agreement without
reliance on any undertaking or representation given by or on behalf of the
Lender other than as expressly contained in this Agreement provided that
nothing herein shall exclude the Lender from liability for fraudulent
misrepresentation.
9. Notices
9.1 Any notice shall be in writing and signed by or on behalf of the person
giving it. Except in the case of personal service, any notice shall be sent or
delivered to the party to be served at the address stated at the beginning of
this Agreement. Any alteration in such details shall, to have effect, be
notified to the other parties in accordance with this clause.
9.2 Service of a notice must be effected by one of the following methods:-
9.2.1 personally on a director or the secretary of any party and shall be
treated as served at the time of such service;
9.2.2 by prepaid first class post (or by airmail if from one country to
another) and shall be treated as served on the second (or if by airmail the
fourth) Business Day after the date of posting. In proving service it shall be
sufficient to prove that the envelope containing the notice was correctly
addressed, postage paid and posted; or
9.2.3 by delivery of the notice through the letterbox of the party to be served
and shall be treated as served on the first Business Day after the date of such
delivery.
9.2.4 by sending it by facsimile transmission to the number for the party to
whom it is to be sent which is referred to below or if another number shall
have been notified by that party to all the other parties for the purposes of
this clause by notice given in accordance with this clause 9.2, then to the
number of such party which shall have been so notified, for service by
facsimile transmission which purpose the latest notification shall supersede
all previous notifications and shall be treated as served at the time of
transmission. The fax numbers of the parties for the purpose of this clause 9.2
are:
The Lender - Fax No. (0000) 000 0000
The Borrower - Fax No. (007)(000) 000 0000
MG - Fax No. (007)(000) 000 0000
IO - Fax No. (007)(000) 000 0000
10. Applicable law and jurisdiction
10.1 This Agreement shall be governed by and construed in accordance with the
laws of England.
10.2 The parties irrevocably submit for the benefit of the Lender to the
non-exclusive jurisdiction of the Courts of England and Wales in respect of any
claim, dispute or difference arising out of or in connection with this
Agreement. Nothing contained in this clause shall be taken to have limited the
right of the Lender to proceed in the courts of any other competent
jurisdiction.
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11. Dispute Resolution
11.1 Any dispute arising out of or in connection with this Agreement, including
any question regarding the existence, scope, validity or termination of this
Agreement or this clause (whether arising in contract, tort or otherwise),
shall at the nomination of the party initiating the action be referred to and
finally resolved by Arbitration under the Rule of the London Court of
International Arbitration ("LCIA"), which Rule is deemed to be incorporated by
reference into this clause to the extent not inconsistent with its provisions.
11.2 The arbitral panel shall consist of three arbitrators, all of which at the
time of the arbitration must be independent of the parties. The party
initiating arbitration (the "Claimant") shall nominate its arbitrator in its
request (the "Request"). The other party (the "Respondent") shall nominate one
arbitrator within 30 days of receipt of the Request in accordance with Article
2.1 of the Rules of the LCIA. Where there is more than one Claimant or more
than one Respondent and the Claimants or the Respondents (as the case may be)
cannot agree between themselves on the nomination of an arbitrator, the
Arbitration Court of the LCIA shall forthwith appoint both parties' arbitrators
and such arbitrators shall stand as the parties' nominated arbitrators. Within
30 days of the appointment of the parties' nominated arbitrators by the
Arbitration Court of the LCIA or the nomination of the second arbitrator, the
two arbitrators shall nominate a third arbitrator to be the Chairman of the
tribunal, failing which the Arbitration Court of the LCIA shall forthwith
appoint the Chairman.
11.3 The place of the arbitration shall be London, England and the proceedings
shall be governed by the laws of England.
11.4 The language of the arbitration shall be English and the award shall be in
English.
11.5 The arbitral award may grant any relief deemed by the arbitrators to be
appropriate, including, without limitation, specific performance and
preliminary or interim relief (including but not limited to a preliminary
injunction or temporary restraining order). The arbitral award shall state the
reasons for the award and relief granted, shall be final and binding on the
parties to the arbitration, and may include an award of costs (including the
parties' legal and other costs). Any award rendered may be confirmed, judgment
upon any award rendered may be entered, and such award or the judgment thereon
may be enforced in any court of any state or country having competent
jurisdiction.
11.6 Notwithstanding the other provisions of this clause 13 the Lender may seek
from any court of competent jurisdiction any interim, provisional or injunctive
relief that may be necessary to protect the rights or property of the Lender or
maintain the status quo during or after the pendency of the arbitration
proceeding, subject to the provisions of Article 13.2 of the Rules of the LCIA
(but excluding therefrom reference to paragraph (h) of Article 13.1 save in
circumstances where the relief sought from the Court has already been sought
from and refused by the arbitral tribunal). The institution and maintenance of
any judicial action or proceeding for any such interim, provisional or
injunctive relief shall not constitute a waiver of the right of any party to
submit the dispute to arbitration.
11.7 In the event that any or part of any arbitral award is unenforceable
outside the United Kingdom by reason of it granting injunctive relief or
specific performance (whether interim or final relief), the parties to the
arbitration agree that any of them shall be at
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liberty to apply to any court of competent jurisdiction for identical relief
and further agree that all decisions of the arbitral tribunal giving rise to
such relief shall be treated by the parties to the arbitration as giving rise
to res judicata between them and may not be reopened by any of them.
AS WITNESS this Agreement has been executed and delivered as a deed by or on
behalf of the parties the day and year first before written.
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EXECUTED as a DEED by )
STRONTIAN HOLDINGS LIMITED )
acting by its duly appointed )
attorney XXXXXXX GOLOVATOV ) XXXXXXX GOLOVATOV
...................................
Attorney
EXECUTED as a DEED by )
DEFENCE SYSTEMS LIMITED )
acting by:- ) XXXXXXX XXXXXXX
...................................
Authorised Signatory
EXECUTED as a DEED by )
XXXXXXX GOLOVATOV ) XXXXXXX GOLOVATOV
in the presence of:- )
XXXX XXXXXX
SOLICITOR
X/X 00 XXXX XXXX
XXXXXX XX0X 0XX
EXECUTED as a DEED by )
XXXX XXXXXXX )
acting by his duly appointe )
attorney XXXXXXX GOLOVATOV ) XXXXXXX GOLOVATOV
in the presence of:- )
XXXX XXXXXX
SOLICITOR
X/X 00 XXXX XXXX
XXXXXX XX0X 0XX
