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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 9, 1997
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Armor Holdings, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-18863 59-3392443
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State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
13386 International Parkway, Jacksonville, Florida 32218
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (904) 741-5400
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
GORANDEL TRADING LIMITED
On June 9, 1997, Armor Holdings, Inc. (the "Company") acquired 50% of
the issued ordinary share capital of Gorandel Trading Limited (the "GTL
Shares"), a corporation organized under the laws of Cyprus ("GTL") for an
aggregate purchase price of $2.37 million. DSL (Overseas) Limited ("DSL
Overseas"), an indirect wholly-owned subsidiary of the Company, owns the other
50% of the issued ordinary share capital of GTL. Upon consummation of the
acquisition, the Company owned (either directly or through subsidiaries) all of
the issued and outstanding ordinary share capital of GTL. GTL provides
specialized security services throughout Russia and Central Asia. These
security services encompass detailed threat assessments, security planning,
security training, the provision, training and supervision of specialist
manpower and other services.
The Company acquired the GTL Shares pursuant to the terms of a Share
Acquisition Agreement dated June 9, 1997 between the Company, Strontian
Holdings Limited ("Strontian"), Alpha-A Limited ("Alpha-A") and others (the
"Purchase Agreement"). In connection with the transactions contemplated by the
Purchase Agreement, the Company, among other things, acquired the GTL Shares
from Strontian and members of its management in exchange for: (i) 28,794 shares
of the Company's common stock, $.01 par value per share (the "Common Stock")
valued at approximately $300,000; (ii) $470,000 in cash paid at closing; and
(iii) $600,000 in cash to be paid on September 30, 1997, subject to the
satisfaction of certain conditions. In addition, pursuant to an agreement dated
June 9, 1997 between the Company and certain members of senior management of
GTL (the "Additional Agreement"), the Company delivered an additional $100,000
in cash at closing and 86,382 shares of Common Stock valued at $900,000 to the
senior management of GTL.
As part of the Company's acquisition of GTL, Defence Systems Limited
("Defence Systems"), a corporation incorporated under the laws of the United
Kingdom and an indirect wholly-owned subsidiary of the Company, agreed to make
available to Strontian a loan of $200,000, subject to the satisfaction of
certain conditions (the "Strontian Loan"). The Strontian Loan carries interest
at a rate equal to LIBOR plus 2% per annum. The Strontian Loan shall be repaid
on the date falling six calendar months from the date Strontian borrows money
under the Strontian Loan. Amounts owed by Strontian under the Strontian Loan
may be offset by certain sums which may be due to Strontian from the Company
pursuant to the terms of the Purchase Agreement. As security for the Strontian
Loan, Strontian and certain members of Strontian management pledged the
28,794 shares of Common Stock received pursuant to the terms of the Purchase
Agreement.
The cash portion of the GTL acquisition was funded from working
capital of the Company.
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The foregoing description of the Purchase Agreement, the Additional
Agreement and the transactions contemplated thereby is not intended to be
complete and is qualified in its entirety by the complete texts of such
agreements included as exhibits to this Form 8-K. Capitalized terms not
otherwise defined shall have their respective meanings as set forth in such
agreements.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA
FINANCIAL INFORMATION AND EXHIBITS
(a) and (b) Financial Statements and Pro Forma Financial Information.
It is impracticable at this time for the Company to provide the
financial statements that may be required to be included herein. The Company
hereby undertakes to file such required financial statements and pro forma
financial information as soon as practicable, but in no event later than August
25, 1997.
(c) Exhibits.
The following Exhibits are hereby filed as part of this Current Report
on Form 8-K.
EXHIBIT DESCRIPTION
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2.1 Share Acquisition Agreement, dated as of June 9, 1997, between the
Company, Strontian, Alpha-A Limited, and others.
10.1 Agreement, dated June 9, 1997, between the Company and members of
senior management of GTL.
10.2 Taxation Indemnity, dated June 9, 1997, by Strontian in favor of the
Company.
10.3 Services Agreement, dated June 9, 1997, between GTL, Alpha-A and
others.
10.4 Service Agreement, dated June 9, 1997, between GTL and Mikhail
Golovatov.
10.5 Deed of Covenant, dated June 9, 1997, between the Company, Defence
Systems, DSL Overseas, GTL and Igor Orekhov.
10.6 Deed of Covenant, dated June 9, 1997, between the Company, Defence
Systems, DSL Overseas, GTL and Mikhail Golovatov.
10.7 Loan Agreement, dated June 9, 1997, between Strontian and Defence
Systems.
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10.8 Stock Pledge Agreement, dated June 9, 1997, between Defence Systems,
Strontian, Mikhail Golovatov and Igor Orekhov.
10.9 Termination Agreement of a Joint Venture Agreement relating to GTL,
dated June 9, 1997, between DSL Overseas, Strontian, GTL, Defence
Systems and Alpha-A.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ARMOR HOLDINGS, INC.
/s/ Jonathan M. Spiller
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Jonathan M. Spiller
President and Chief Executive Officer
Dated: June 24, 1997
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EXHIBIT INDEX
The following exhibits are filed herewith:
EXHIBIT DESCRIPTION
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2.1 Share Acquisition Agreement, dated as of June 9, 1997, between the
Company, Strontian, Alpha-A Limited, and others.
10.1 Agreement, dated June 9, 1997, between the Company and members of
senior management of GTL.
10.2 Taxation Indemnity, dated June 9, 1997, by Strontian in favor of the
Company.
10.3 Services Agreement, dated June 9, 1997, between GTL, Alpha-A and
others.
10.4 Service Agreement, dated June 9, 1997, between GTL and Mikhail
Golovatov.
10.5 Deed of Covenant, dated June 9, 1997, between the Company, Defence
Systems, DSL Overseas, GTL and Igor Orekhov.
10.6 Deed of Covenant, dated June 9, 1997, between the Company, Defence
Systems, DSL Overseas, GTL and Mikhail Golovatov.
10.7 Loan Agreement, dated June 9, 1997, between Strontian and Defence
Systems.
10.8 Stock Pledge Agreement, dated June 9, 1997, between Defence Systems,
Strontian, Mikhail Golovatov and Igor Orekhov.
10.9 Termination Agreement of a Joint Venture Agreement relating to GTL,
dated June 9, 1997, between DSL Overseas, Strontian, GTL, Defence
Systems and Alpha-A.
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CONFORMED COPY
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Dated 9 June 1997
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(1) STRONTIAN HOLDINGS LIMITED
(2) ARMOR HOLDINGS, INC.
(3) ALPHA-A LIMITED
(4) MIKHAIL GOLOVATOV
(5) IGOR OREKHOV
SHARE ACQUISITION AGREEMENT
relating to
GORANDEL TRADING LIMITED
Travers Smith Braithwaite
10 Snow Hill
London EC1A 2AL
Telephone 0171-248 9133
Facsimile 0171-236 3728
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CONTENTS
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Clause of Agreement Page
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1 Definitions and interpretation 1
2 Sale of Shares 4
3 Consideration 5
4 Undertakings and Consideration Shares 6
5 Announcements and confidentiality 8
6 Completion 9
7 Costs 9
8 Tax 9
9 General 9
10 Notices 10
11 Applicable law and jurisdiction 11
12 Guarantees 11
13 Dispute Resolution 12
14 Service of Proceedings 13
Schedule
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1 Completion obligations 14
2 Consideration instructions 16
3 Companies in which MG and IO are interested 17
Documents in the approved terms
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1 Services Agreement
2 Termination Agreement
3 Letter of resignation
4 Board minutes of the Company
5 Employment Contract
6 Tax Indemnity
7 Loan Agreement and Pledge
8 Non-Compete Agreements
9 Investment Representation Letter
10 Escrow Agent Letter of Instruction
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THIS AGREEMENT is made on 9 June 1997
BETWEEN:-
(1) STRONTIAN HOLDINGS LIMITED, a company incorporated and registered in Cyprus
(Registration No. 56709) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("the Vendor");
(2) ARMOR HOLDINGS, INC. a corporation established under the laws of the state
of Delaware, USA, whose address for the purposes of this Agreement is 13386
International Parkway, Jacksonville, Florida 32218, USA ("AHI" or "the
Purchaser", as the context may require);
(3) ALPHA-A LIMITED, a joint stock company incorporated and registered at the
Executive Committee of Kujbishevsky, Regional Council of People's Duties in
Moscow on 24 October 1991 (Registration No. N6474) whose official address is at
105023, Moscow, Suvosovskaya Str., Building 27 ("the Guarantor");
(4) MIKHAIL GOLOVATOV, of 22-39 Bolshaya Nikitshaya Street, Moscow 103009,
Russia ("MG"); and
(5) IGOR OREKHOV, of 22-39 Bolshaya Nikitshaya Street, Moscow 103009, Russia
("IO").
IT IS AGREED as follows:-
1. Definitions and interpretation
1.1 The following words and expressions where used in this Agreement have the
meanings given to them below:-
AHI Group AHI, its subsidiaries and associates
for the time being (including, for this
purpose, the Company) and "AHI Group Company"
shall be construed accordingly;
Business in relation to a person, any business of that
person providing Security Goods and Security
Services to any firm, company, organisation
or individual requiring the same in any part
of the Relevant Area, whether carried on by
such person itself or through any agent,
contractor or subcontractor or in conjunction
in whole or part with one or more other
persons;
Business Day a weekday, other than a Saturday, on which
clearing banks are ordinarily open for
business in the City of London;
Client in relation to a person carrying on a
business,
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any person who, in the course of such
business, has been provided with Security
Goods or supplied with Security Services in
the Relevant Area, including any person who
has asked (or enquired about) such business
to provide Security Goods or provide Security
Services in the Relevant Area;
C(pound)1 a unit of currency of Cyprus known as the
Cyprus pound;
Company Gorandel Trading Limited, a company
incorporated and registered in Cyprus
(Registration No. 56442) whose registered
office is at 10 Mnasiadou Street, Elma
Building, Nicosia, Cyprus;
Completion the performance of the obligations to
complete the sale and purchase of the Shares
in accordance with Schedule 1;
Completion Date the date on which Completion occurs;
Consideration Shares the 28,794 shares of registered common stock
of AHI to be issued as part of the Initial
Consideration as stated in clause 3.1.2;
Deferred Consideration the deferred consideration for the sale and
purchase of the Shares as stated in clause
3.3;
Employment Contract the employment contract in the approved terms
to be entered into on Completion between the
Company (1) and MG (2);
Escrow Agent Instruction Letter the instruction letter in the approved terms
to the Bank of Scotland in its capacity as
Escrow Agent under the terms of this Agreement
to be signed by or on behalf of each of the
parties;
Initial Consideration the initial consideration for the sale and
purchase of the Shares as stated in clause
3.1;
Investment Representation Letter the letter of representation in the approved
terms to be addressed to the Purchaser and
signed by the Vendor, MG and IO;
Joint Venture Agreement the joint venture agreement dated 27 November
1993 between DSL (Overseas) Limited (1), the
Vendor (2), the Company (3), Defence Systems
Limited (4) and the Guarantor
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(5) relating to the Company;
Loan Agreement the loan agreement in the approved terms of
even date herewith between Defence Systems
Limited (1) and the Vendor (2);
Non-Compete Agreements the agreements in the approved terms to be
executed by MG and IO;
Pledge the security in the approved terms by way of
pledge over the Consideration Shares to be
issued to the Vendor to be executed pursuant
to the terms of the Loan Agreement;
Relevant Area as defined in the Services Agreement;
Security Goods all goods and products required in order to
provide Security Services;
Security Services the provision and management of security of
all kinds, including (without limitation)
guard and other protection services, courier
services, logistical management, medical
management, supervision and training of
security personnel, advice and consultation
on all types of security arrangements and on
situations involving security needs,
equipment supply, investigative services and
all services ancillary to or relating to such
matters;
Services Agreement the services agreement in the approved terms
to be entered into on Completion between the
Company and the Guarantor and others ("the
Alpha Companies");
Shares the 500 ordinary shares of C(pound)1 each of
the Company to be acquired by the Purchaser
in accordance with this Agreement;
Termination Agreement the termination agreement in the approved
terms to be entered into on Completion
between DSL (Overseas) Limited (1), the
Vendor (2), the Company (3), Defence Systems
Limited (4) and the Guarantor (5) terminating
the Joint Venture Agreement;
Tax Indemnity the tax indemnity in the approved terms to be
entered into on Completion between the Vendor
and the Purchaser;
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US$ the unit of currency of the USA;
Vendor Group the group of companies comprising each
holding company of the Vendor and each
subsidiary of each such holding company,
excluding the Company.
1.2 Where used in this Agreement the terms "subsidiary" and "holding company"
shall have the meanings respectively attributed to them by the Companies Act
1985 at the date of this Agreement.
1.3 A reference to any statutory provision in this Agreement:-
1.3.1 includes any order, instrument, plan, regulation, permission and
direction made or issued under such statutory provision or deriving
validity from it; and
1.3.2 shall be construed as a reference to such statutory provision as
in force at the Completion Date (including, for the avoidance of
doubt, any amendments made to such statutory provision that are in
force at the Completion Date); and
1.3.3 shall also be construed as a reference to any statutory
provision of which such statutory provision is a re-enactment or
consolidation.
1.4 The headings in this Agreement are for convenience only and shall not
affect its meaning.
1.5 References to a clause, Schedule or paragraph are (unless otherwise stated)
to a clause of and Schedule to this Agreement and to a paragraph of the
relevant Schedule.
1.6 A document expressed to be "in the approved terms" means a document, the
terms, conditions and form of which have been agreed by the parties to this
Agreement and a copy of which has been identified as such and initialled by or
on behalf of each of the parties.
1.7 Words importing one gender shall (where appropriate) include any other
gender and words importing the singular shall (where appropriate) include the
plural and vice versa.
2. Sale of Shares
2.1 The Vendor shall sell or procure to be sold with full title guarantee and
the Purchaser shall purchase the Shares upon and subject to the terms and
conditions of this Agreement.
2.2 The Vendor, MG and IO shall procure that the Purchaser acquires good title
to the Shares free from all liens, charges, encumbrances, equities and claims
whatsoever and together with all rights now or hereafter attaching to them.
2.3 The Purchaser shall not be obliged to complete the purchase of any of the
Shares unless the purchase of all of the Shares is completed simultaneously.
2.4 The Vendor, MG and IO jointly and severally warrant, represent and
undertake to the
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Purchaser that:-
2.4.1 the Vendor has the right to dispose of the Shares and the Vendor
is disposing of them free from all liens, charges, encumbrances,
equities and claims whatsoever, together with all rights now or
hereafter attaching thereto;
2.4.2 the Vendor has the requisite power and authority to enter into
and perform its obligations under this Agreement and that the
obligations purported to be so assumed are valid, binding and
enforceable obligations of the Vendor; and
2.4.3 those companies whose details are set out in Schedule 3,
comprise all of the companies carrying on the Business in which MG and
IO are interested, directly or indirectly.
2.5 The Guarantor warrants, represents and undertakes to the Purchaser that it
has the requisite power and authority to enter into and perform its obligations
under this Agreement and that the obligations purported to be so assumed are
valid, binding and enforceable obligations of the Guarantor.
3. Consideration
3.1 The Initial Consideration for the sale and purchase of the Shares shall
be:-
3.1.1 the sum of US$470,000, payable in cash at Completion; and
3.1.2 the sum of US$300,000, payable by the issue of the Consideration
Shares at Completion,
and such cash payment and issue of Consideration Shares shall be made in
accordance with the terms of the instructions set out in Part I of Schedule 2.
3.2 The Consideration Shares shall be issued as fully paid unregistered common
stock of AHI.
3.3 The Deferred Consideration for the sale and purchase of the Shares shall be
the sum of US$600,000 which shall be payable in cash on 30 September 1997
providing that at that time the Purchaser has had established to its reasonable
satisfaction that the Company has met its obligations in relation to all Kazak
and Russian taxes due up to 31 March 1997 (including, without limitation,
social taxes in respect of any employee of the Company) without incurring any
additional expenditure in respect thereof and, in the event, that the Purchaser
has not been so satisfied the Deferred Consideration shall not become payable
until such time as the Purchaser is so reasonably satisfied. The cash payment
of the Deferred Consideration shall, when it becomes due for payment be made in
accordance with the terms of the instructions set out in Part II of Schedule 2.
3.4 As soon as practicable after completion and, in any event, on or before 31
July 1997, the parties shall prepare and agree accounts for the Company
(comprising a profit and loss account and balance sheet to be prepared in
accordance with such accounting policies as the parties shall agree between
themselves) for the period from the day following the last day of the period
for which the last accounts of the Company were prepared until (and
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including) 31 May 1997 ("the Completion Accounts"). Within 15 Business Days
following the agreement of the Completion Accounts, the Purchaser shall pay or
procure the payment to the Vendor of an amount equal to 50 per cent of the
retained profits shown by the Completion Accounts less any amounts owing by the
Vendor pursuant to the Loan Agreement and less any amounts owing by any of the
Vendor, MG, IO or any of the Alpha Companies to a member of the AHI Group ("the
Retained Profit Payment"). The Vendor hereby directs that the Retained Profit
Payment shall be divided and paid in equal proportions to MG and IO.
4. Undertakings and Consideration Shares
4.1 The Vendor undertakes to the Purchaser to procure that MG and IO shall not
for a period of one year from the Completion Date, sell, charge, transfer or
otherwise dispose of all or part of or all or part of any interest in any
Consideration Shares and undertakes to the Purchaser in respect of the
Consideration Shares to be issued to it pursuant to the terms of Part I of
Schedule 2 that it will not during the period in respect of which such shares
are the subject of the Pledge sell, charge, transfer or otherwise dispose of
all or part of or all or part of any interest in such shares and that
immediately following the release of such Consideration Shares (or any part
thereof) from the Pledge, it will transfer such released Consideration Shares
to MG and IO in equal proportions.
4.2 Each of MG and IO undertake to the Purchaser that they will not for a
period of one year from the Completion Date, sell, charge, transfer or
otherwise dispose of all or part of or all or part of any interest in any
Consideration Shares which are either issued to them pursuant to the provisions
of Part I of Schedule 2 or transferred to them pursuant to the provisions of
clause 4.1.
4.3 Promptly following the issue of the same, AHI shall procure that the
certificate(s) for the Consideration Shares are deposited with the Bank of
Scotland ("the Escrow Agent") who shall retain such certificate(s) until one
year from the Completion Date ("the Lock-Up Date"). Subject to clauses 4.4.1
and 4.4.2 at the expiry of such period, the Purchaser shall procure that the
Escrow Agent release such certificate(s) to such persons as may be entitled
thereto.
4.4.1 In the event that there is any ongoing dispute, disagreement, claim or
action (which remains unsettled as at the Lock-Up Date) in relation to this
Agreement, or the Tax Indemnity, or the Services Agreement, or the Employment
Contract or the Non-Compete Agreements, or the Loan Agreement (as the case may
be), in circumstances where any of the Purchaser, the Company, Defence Systems
Limited or DSL (Overseas) Limited (a "Claiming Party") have a claim or action
against any of the Vendor, the Guarantor, MG or IO ("Relevant Persons") then
the parties agree that the certificate(s) in respect of the Consideration
Shares shall continue to be held by the Escrow Agent after the Lock-Up Date
until such claim or action is settled and for these purposes the Escrow Agent
shall be entitled to rely on confirmation in writing from the Purchaser as to
what action the Custodian should take in relation to the Consideration Shares.
4.4.2 If pursuant to a claim or action of the type referred to in clause 4.4.1,
judgement is awarded in favour of a Claiming Party or settlement is otherwise
agreed such that an amount is determined to be owed by any of the Relevant
Persons to the Claiming Party, the parties agree that the Claiming Party shall
be entitled to set-off such amount, firstly,
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against the Consideration Shares and the number of Consideration Shares
representing the said amount and any expenses of sale (by reference to the
market value of the Consideration Shares as at the date of sale pursuant to
this clause) shall be sold to satisfy the amount so owed and each of the
Relevant Persons hereby appoints the Company or any duly authorised
representative of the Company to be its attorney in relation to any such sale
and to carry out all acts and execute all documents (whether by way of deed or
otherwise) which may be necessary or desirable to effect such sale (including,
without limitation, any instrument of transfers). Each of the Relevant Persons
declare that this power of attorney, having been given to secure obligations in
connection with this clause 4.4.2, shall be irrevocable in accordance with
section 4 of the Power of Attorney Act 1971.
4.5 In consideration of the Purchaser entering into this Agreement, the Vendor
undertakes with the Purchaser that it will not either on its own account or in
conjunction with or on behalf of any other person or persons, whether directly
or indirectly, for the period of:-
4.5.1 5 years from the date of this Agreement, at any time during such period
supply Security Goods to or provide Security Services for any person which is
at the date of this Agreement or was during the immediately preceding period of
twelve months a Client of any Business of any AHI Group Company where such
Security Goods or Security Services are the same as or compete with Security
Goods supplied or Security Services provided in the course of any Business of
any AHI Group Company at the date of this Agreement or during the immediately
preceding period of twelve months;
4.5.2 5 years from the date of this Agreement at any time during such period
solicit or endeavour to solicit the custom of any person which is at the date
of this Agreement or was in the immediately preceding period of twelve months a
Client of any Business of any AHI Group Company for the supply of Security
Goods or the provision of Security Services which are the same as or compete
with those supplied or provided in the course of any Business of any AHI Group
Company at the date of this Agreement or during the immediately preceding
period of twelve months;
4.5.3 5 years from the date of this Agreement, at any time during such period
solicit or entice away or endeavour to solicit or entice away from any AHI
Group Company any person who is at the date of this Agreement, or was during
the immediately preceding period of twelve months, employed in any Business of
any AHI Group Company whether or not such person would commit a breach of his
or her contract of employment by reason of leaving service, save that this
clause 4.5.3 shall not apply to any individual employed by such AHI Group
Company in a purely secretarial or non-managerial administrative role; and
4.5.4 5 years from the Completion Date, at any time during such period carry on
or be engaged, concerned or interested in the Relevant Area in any business
which competes with the Business of any AHI Group Company as the same is
carried on from time to time, other than as holder of common stock of any
company.
4.6 Each of the undertakings contained in clause 4.5 is a separate undertaking
by the Vendor in relation to itself and its interests and shall be enforceable
by the Purchaser separately and independently of their respective right to
enforce any one or more of the other undertakings contained in clause 4.5 and
in the event that any such undertaking shall
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be found to be void but would be valid if some part were deleted or the period
or area of application were reduced, then such undertaking shall apply with
such modification as may be necessary to make it valid and effective.
4.7 The parties hereby agree and acknowledge that the undertakings contained in
clause 4.5 are reasonably necessary to protect the legitimate business
interests of those AHI Group Companies carrying on a Business from time to
time.
4.8 The parties confirm that it is agreed that following Completion the Company
shall enter into an agreement (and MG and IO shall use their respective best
endeavours to procure the same) in relation to the occupation by the Company of
office space (with an area of approximately 80m2) in Moscow 119034, Hilkov
pezeulok, 6 Building 1 ("the Building") and in addition, MG and IO shall use
their respective best endeavours to procure that there is made available for
use by the Company further appropriate office space in the Building, to serve
as a negotiations room and a director's office (which shall be available for
use by MG in his capacity as managing director of the Company) and in respect
of all such occupation by the Company it shall pay rent at the rate of $25,000
until 31 December 1997 (and on the basis that such office space is available
for use by the Company from 1 July 1997) and at the rate of US$75,000 for the
period until 31 December 1998, at which time a revised rent payment shall be
agreed between the Company and MG.
4.9 In relation to the Building, MG and IO shall use their respective best
endeavours to procure that bedroom accommodation in the Building shall be made
available for use by the Company at the rate of US$100 per night save that
there shall be no charge for the use of such bedroom accommodation by directors
of the Purchaser, the Company or DSL Holdings Limited (as the case may be).
4.10 MG and IO undertake to use their respective best endeavours to procure
that any other companies which act as a sub-contractor of the Company pursuant
to the terms of the Services Agreements enters into a non-compete agreement (in
such form as may be required by the Company) in respect of the Client for whom
Security Goods or Security Services are being provided pursuant to the
sub-contract arrangements.
5. Announcements and confidentiality
5.1 No announcement relating to the subject matter of this Agreement or any
matter ancillary to this Agreement shall be made by or on behalf of the parties
to this Agreement without the prior written approval of the other parties
provided that nothing shall prevent the Purchaser making (even in the absence
of the approval of the other parties) any announcement or disclosure required
by law, the American Stock Exchange or any other regulatory authority.
5.2 The Vendor and the Guarantor shall keep confidential and not at any time
after the date of this Agreement disclose or make known in any way to anyone
(other than the Purchaser) or use for its own or any other person's benefit any
know-how or confidential information relating to any of the customers,
suppliers or affairs of the businesses (including any prospective businesses)
of the Company or otherwise relating to the business of the Company.
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5.3 All records, papers and documents in the possession, custody or control of
or kept or made by or on behalf of the Vendor relating to the business or
affairs of the Company and of which the Company does not have a record or copy
shall be deemed to be the property of the Company and all such items shall be
delivered to the Purchaser or as the Purchaser may direct at Completion.
6. Completion
6.1 Completion shall take place at the offices of Travers Smith Braithwaite, 10
Snow Hill, London EC1A 2AL immediately after execution of this Agreement. On
such date the parties shall each perform their respective obligations in
relation to the sale and purchase of the Shares in accordance with and as set
out in the Schedule 1.
7. Costs
Each party shall pay its own costs and expenses incurred in the negotiation,
preparation and execution of this Agreement and each of the Vendor, MG and IO
represent and undertake that none of such costs and expenses have been nor will
prior to Completion be borne by the Company.
8. Tax
On Completion each of the Vendor and the Guarantor shall execute the Tax
Indemnity.
9. General
9.1 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.
9.2 Any remedy or right conferred by this Agreement on the Purchaser for breach
of this Agreement shall be in addition to and without prejudice to any other
right or remedy available to either of them.
9.3 No failure or delay by the Purchaser 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.
9.4 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.
9.5 Any release, waiver or compromise or any other arrangement which the
Purchaser gives or enters into with any party to this Agreement in connection
with this Agreement shall not affect any right or remedy of the Purchaser 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.
<PAGE>
- 10 -
9.6 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.
9.7 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.
9.8 The Vendor, the Guarantor, MG and IO 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.
9.9 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.
9.10 Each of the Vendor, the Guarantor, MG and IO acknowledges that it is
entering into this Agreement without reliance on any undertaking or
representation given by or on behalf of the Purchaser other than as expressly
contained in this Agreement provided that nothing herein shall exclude the
Purchaser from liability for fraudulent misrepresentation.
10. Notices
10.1 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.
10.2 Service of a notice must be effected by one of the following methods:-
10.2.1 personally on a director or the secretary of any party and shall be
treated as served at the time of such service;
10.2.2 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
10.2.3 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.
10.2.4 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 10.2, 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
10.2 are:
The Purchaser - Fax No. (0171) 828 2845
<PAGE>
- 11 -
The Vendor - Fax No. (007) (095) 290 3428
The Guarantor - Fax No. (007) (095) 290 3428
MG - Fax No. (007) (095) 290 3428
IO - Fax No. (007) (095) 290 3428
11. Applicable law and jurisdiction
11.1 This Agreement shall be governed by and construed in accordance with the
laws of England.
11.2 The parties irrevocably submit for the benefit of the Purchaser 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 Purchaser to proceed in the courts of any other competent
jurisdiction.
12. Guarantees
12.1 In consideration of the Purchaser entering into this Agreement with the
Vendor at the request of the Guarantor, the Guarantor hereby irrevocably and
unconditionally, as primary obligor, undertakes and guarantees to the Purchaser
(as separate undertakings and guarantees) the full, prompt and complete
performance by the Vendor of all its obligations under this Agreement (which
for the purposes of this clause 11 shall be defined to include the Tax
Indemnity) and the due and punctual payment of all sums now or subsequently
payable by the Vendor to the Purchaser under this Agreement when the same shall
become due and undertakes with the Purchaser that if the Vendor shall default
in the payment of any sum under this Agreement the Guarantor shall forthwith on
demand by the Purchaser pay such sum to the Purchaser.
12.2 The guarantees contained in clause 12.1 are continuing guarantees and
shall remain in force until all the obligations of the Vendor under this
Agreement have been fully performed and all sums payable by the Vendor under
this Agreement have been fully paid.
12.3 The obligations of the Guarantor shall not be affected by any act,
omission, matter or thing which, but for this provision, might operate to
release or otherwise exonerate the Guarantor from its obligations or affect
such obligations, including without limitation and whether or not known to the
Guarantor:-
12.3.1 any time, indulgence, waiver or consent at any time given to the Vendor
or any other person;
12.3.2 any compromise or release of or abstention from perfecting or enforcing
any right or remedy against the Vendor or any other person;
12.3.3 any legal limitation, disability, incapacity or other circumstance
relating to the Vendor or any other person or any amendment to or variation of
the terms of this Agreement or any other document referred to in this
Agreement; and
12.3.4 any irregularity, unenforceability or invalidity of any obligations of
the Vendor under this Agreement or the dissolution, amalgamation,
reconstruction or insolvency of the
<PAGE>
- 12 -
Vendor.
12.4 The guarantees contained in clause 12.1 may be enforced by the Purchaser
without the Purchaser first taking any steps or proceedings against the Vendor.
12.5 All payments to be made by the Guarantor shall be made in full, without
set-off or counterclaim and without any deduction whatsoever except to the
extent required by law.
13. Dispute Resolution
13.1 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.
13.2 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.
13.3 The place of the arbitration shall be London, England and the proceedings
shall be governed by the laws of England.
13.4 The language of the arbitration shall be English and the award shall be in
English.
13.5 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.
13.6 Notwithstanding the other provisions of this clause 13 the Purchaser 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 Purchaser 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)
<PAGE>
- 13 -
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.
13.7 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 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.
14. Service of Proceedings
Each of the Vendor, MG and IO and the Guarantor irrevocably authorises and
appoints Yakimov Andrey of 7th Floor, Egginton House, 26-28 Buckingham Gate,
London SW1E 6LD as its agent for service of proceedings in relation to any
matter arising out of or in connection with this Agreement and service on such
agent shall be deemed to be service
on the relevant person.
This Agreement has been duly executed by the parties on the date set out above.
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.
<PAGE>
- 14 -
SCHEDULE 1
Completion Obligations
Part I
Obligations of the Vendor, MG and IO
1. The Vendor, MG and IO shall deliver, or procure the delivery of, to the
Purchaser:-
1.1 duly executed transfers of the Shares by the registered holders in favour
of the Purchaser or persons nominated by the Purchaser, the share certificates
and any additional documentation necessary to establish the transferor's title
to the Shares, to authorise the executions of such transfers and to allow the
transferees (subject to due stamping) to be registered in the register of
members of the Company as holders of the Shares including, without limitation
to the generality of the foregoing, the consent of the Central Bank of Cyprus
to such transfer;
1.2 a resignation letter in the approved terms from Igor Orekhov;
1.3 evidence satisfactory to the Purchaser that:-
1.3.1 all sums owed by the Company to MG, IO, any member of the Vendor
Group or to any of the Alpha Companies or by MG, IO, any member of the
Vendor Group or any of the Alpha Companies to the Company or (as the
case may be) Defence Systems Limited have been repaid;
1.3.2 any guarantees granted or security or indemnities given by the
Company in respect of obligations of MG, IO, any member of the Vendor
Group or any of the Alpha Companies have been released or discharged;
1.4 an engrossment of the Services Agreement duly executed by the Alpha
Companies;
1.5 an engrossment of the Termination Agreement duly executed by the Vendor;
1.6 an engrossment of the Tax Indemnity referred to in Clause 8, duly executed
by the Vendor;
1.7 an engrossment of the Employment Contract duly executed by MG;
1.8 an engrossment of the Loan Agreement and the Pledge duly executed by the
Vendor;
1.9 engrossments of the Non-Compete Agreements duly executed by MG and IO, as
the case may be;
1.10 the Investment Representation Letter and the Escrow Agent Letter of
Instruction duly signed by or on behalf of the Vendor, MG and IO.
2. The Vendor shall procure (together with the Purchaser) the holding of a
meeting of the board of directors of the Company, at which board resolutions in
the approved terms shall
<PAGE>
- 15 -
be passed.
3. The Vendor shall deliver to the Purchaser or as the Purchaser directs all
records, papers and documents referred to in clause 5.3
Part II
Obligations of the Guarantor
The Guarantor shall deliver to the Purchaser an engrossment of the Termination
Agreement duly executed by it.
Part III
Obligations of the Purchaser
The Purchaser shall, conditionally upon the implementation of the matters set
out in Part I and Part II of this Schedule:-
1. Authorise the telegraphic transfer of US$470,000 in cleared funds to an
account or accounts specified by the Vendor which shall discharge the Purchaser
from its obligation to pay that part of the Initial Consideration payable under
clause 3.1.1 to the Vendor.
2. Deliver to the Vendor an engrossment of the Services Agreement duly executed
by the Company.
3. Deliver to the Vendor an engrossment of the Termination Agreement duly
executed by Defence Systems (Overseas) Limited and by Defence Systems Limited.
4. Procure that the Consideration Shares are issued in the amounts and to the
those persons specified in Schedule 2 and shall procure that the certificates
in respect of the Consideration Shares are lodged with the Escrow Agent, in
accordance with the terms of clause 4.3 which shall discharge the Purchaser
from its obligation to pay that part of the Initial Consideration under clause
3.1.2 to the Vendor.
5. Procure the delivery to the Vendor of an engrossment of the Loan Agreement
duly executed by Defence Systems Limited.
<PAGE>
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SCHEDULE 2
Consideration Instructions
Part I - Initial Consideration
1. The Initial Consideration of US$470,000 payable in cash at Completion
pursuant to clause 3.1.1 shall be paid as follows:-
1.1 the sum of US$200,000 shall be paid to MG;
1.2 the sum of US$200,000 shall be paid to IO;
1.3 the sum of US$70,000 shall be paid to the Vendor.
2. The Initial Consideration of US$300,000 payable pursuant to clause 3.1.2
shall be satisfied by the issue of the Consideration Shares as follows:-
2.1 4,799 Consideration Shares shall be issued to MG;
2.2 4,799 Consideration Shares shall be issued to IO; and
2.3 19,196 Consideration Shares shall be issued to the Vendor.
but so that such issues of Consideration Shares shall be subject to the
provisions of clauses 4.1 to 4.3 (inclusive).
Part II - Deferred Consideration
3. The Deferred Consideration of US$600,000 payable in cash pursuant to clause
3.3 shall be paid as follows:-
3.1 the sum of US$300,000 shall be paid to MG; and
3.2 the sum of US$300,000 shall be paid to IO.
<PAGE>
- 17 -
SCHEDULE 3
- ----------
Companies in which MG and IO are interested
- -------------------------------------------
Name of Company Registered Office Registered No.
- --------------- ----------------- --------------
1. Alpha-A Limited 27, Suvosovskaya Street N6474
Building 27
Moscow
2. Alpha-B Limited 27, Suvosovskaya Street -
Building 27
Moscow
3. Alpha-7 Limited 27, Suvosovskaya Street -
Building 27
Moscow
<PAGE>
- 18 -
EXECUTED as a DEED by )
STRONTIAN HOLDINGS LIMITED )
acting by its duly )
appointed attorney )
MIKHAIL GOLOVATOV )
MIKHAIL GOLOVATOV
...................................
Attorney
EXECUTED as a DEED by )
ARMOR HOLDINGS, INC. )
acting by:- )
JONATHAN SPILLER
...................................
Authorised Signatory
EXECUTED as a DEED by )
ALPHA-A LIMITED )
acting by:- )
MIKHAIL GOLOVATOV
...................................
Authorised Signatory
EXECUTED as a DEED by )
MIKHAIL GOLOVATOV ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
Solicitor
10 Snow Hill
London EC1A 2AL
<PAGE>
- 19 -
EXECUTED as a DEED by )
IGOR OREKHOV )
acting by his duly appointed ) MIKHAIL GOLOVATOV
attorney MIKHAIL GOLOVATOV )
in the presence of:- )
NEAL WATSON
Solicitor
10 Snow Hill
London EC1A 2AL
<PAGE>
CONFORMED COPY
--------------
ARMOR HOLDINGS, INC.
--------------------
To: Mikhail Golovatov ("MG")
22-39 Bolshaya Nikitshaya Street
Moscow 103009
Russia
- and -
Jezgei Manserov ("JM")
Almaty 480096
Kojawkulova Street, 171
- and -
Taliuhan Bakajanov ("TB")
Almaty 480096
Kojawkulova Street, 171
- and -
Rakhim Mendeshev ("RM")
Almaty 480096
Kojawkulova Street, 171
9 June 1997
Dear Sirs,
Acquisition ("the Acquisition") by Armor Holdings, Inc. ("AHI") of 500 ordinary
shares of C(pound)1 in Gorandel Trading Limited ("GTL") from Strontian Holdings
Limited ("Vendor") pursuant to an agreement of even date herewith ("the
Acquisition Agreement")
1. In consideration for services rendered by MG in connection with
identifying, facilitating and negotiating the Acquisition, including
negotiations with the other parties to the Acquisition Agreement, AHI
shall issue (subject to the provisions of paragraph 5 below) 21,595
shares of unregistered common stock of AHI (with a par value of US$.01
per share but which for the purposes of this Agreement have been
valued at US$10.4188 per share) to MG and shall pay, in cash, to MG
US$25,000.
2. In consideration for the value derived by MG's business relationships,
and the resulting clients and network of business associates, which
together provide intangible value to the ongoing business of GTL
acquired, AHI shall issue to MG (subject to the provisions of
paragraph 5 below) 64,787 shares of unregistered
<PAGE>
common stock of AHI (with a par value of US$.01 per share but which
for the purposes of this Agreement have been valued at US$10.4188 per
share) (which together with the shares to be issued pursuant to clause
1 above, shall be referred to in this Agreement as "the Consideration
Shares") and shall pay, in cash, to MG the sum of US$75,000.
3. Such consideration is in no way contingent upon future services of MG
and is for value received as described above.
4. Terms defined in the Acquisition Agreement shall, unless the context
otherwise requires, bear the same meaning in this Agreement.
5.1 MG undertakes to AHI that he shall not for a period of three years
from the date of this Agreement ("the Relevant Period"), sell, charge,
transfer or otherwise dispose of all or part of or all or part of any
interest in any Consideration Shares, save that MG shall:-
(a) within 30 days of the date of this Agreement transfer, in
aggregate, 9,600 Consideration Shares to JM, TB and RM in the amounts
of 4,800, 2,400 and 2,400 respectively;
(b) be entitled, at any time after the date which is one year from the
date of this Agreement, to sell, transfer or dispose of up to 23,955
Consideration Shares;
(c) be entitled, at any time after the date which is two years from
the date of this Agreement, to sell, transfer or dispose of up to
9,598 Consideration Shares; and
(d) be entitled, at the end of the Relevant Period, to sell, transfer
or dispose of the balance of any Consideration Shares still held by
the Custodian at that time,
5.2 JM, TB and RM severally undertake to AHI that they shall not for a
period of three years from the date of the respective transfers to
them pursuant to paragraph 5.1 above of those Consideration Shares
referred to in that clause, sell, charge, transfer, or otherwise
dispose of all or part of or all or part of any interest in any such
Consideration Shares.
6. Promptly following the issue of the same, AHI shall procure that the
certificate(s) for the Consideration Shares are deposited with the
Escrow Agent who shall retain such certificate(s) until the end of the
Relevant Period unless to be released earlier in accordance with the
provisions of paragraphs 5(b), (c) or (d) above. Subject to paragraphs
7.1 and 7.2 below, at the relevant time, AHI shall procure that the
Escrow Agent release such certificate(s) to the persons entitled
thereto.
7.1 In the event that there is any ongoing dispute, disagreement, claim or
action (which remains unsettled as at the date upon which any of the
Consideration Shares are to be released pursuant to paragraphs 5.1 and
5.2 above) in relation to this Agreement, or the Acquisition Agreement
or the Tax Indemnity, or the Services Agreement, or the Contract of
Employment (as the case may be), in circumstances where any of AHI,
GTL, Defence Systems Limited or Defence Systems (Overseas) Limited (a
"Claiming Party") have a claim or action against any of MG,JM, TB or
RM ("Relevant Persons") then the parties agree that the certificate(s)
in respect of the Consideration Shares shall continue to be held by
the Escrow Agent until such
<PAGE>
claim or action is settled and for these purposes the Escrow Agent
shall be entitled to rely on confirmation in writing from AHI as to
what action the Custodian should take in relation to the certificates
in respect of Consideration Shares.
7.2 If pursuant to a claim or action of the type referred to in paragraph
7.1 above, judgement is awarded in favour of a Claiming Party or
settlement is otherwise agreed such that an amount is determined to be
owed by any of the Relevant Persons to the Claiming Party, the parties
agree that the Claiming Party shall be entitled to set-off such
amount, firstly, against the relevant Consideration Shares and the
number of Consideration Shares representing the said amount and any
expenses of sale (by reference to the market value of the
Consideration Shares as at the date of sale pursuant to this
paragraph) shall be sold to satisfy the amount so owed and each of the
Relevant Persons hereby appoints AHI or any duly authorised
representative of AHI to be their attorney in relation to such sale
and to carry out all acts and execute all documents (whether by way of
deed or otherwise) which may be necessary or desirable to effect such
sale (including, without limitation, any instrument of transfer). Each
of the Relevant Persons declares that this power of attorney, having
been given to secure obligations in connection with this paragraph
7.2, shall be irrevocable in accordance with section 4 of the Powers
of Attorney Act 1971.
8.1 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.
8.2 The arbitral panel shall consist of three arbitrators, all of which at
the time of the arbitration must be independent of the Investors. 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. For the avoidance of doubt, only those Investors
in dispute shall be parties to the arbitration.
8.3 The place of the arbitration shall be London, England and the
proceedings shall be governed by the laws of England.
8.4 The language of the arbitration shall be English and the award shall
be in English.
8.5 The arbitral award may grant any relief deemed by the arbitrators to
be appropriate, including, without limitation, specific performance
and preliminary or interim relief
<PAGE>
(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.
8.6 Notwithstanding the other provisions of these paragraphs 8.1 to 8.8,
AHI 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 any Investor 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.
8.7 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 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 re-opened by
any of them.
8.8 Each of MG, JM, TB and RM irrevocably authorises and appoints Yakimov
Andrey of 7th Floor, Eggington House, 26-28 Buckingham Gate, London
SW1E 6LD as its agent for service of proceedings in relation to any
matter arising out of or in connection with this Agreement and service
on such agent shall be deemed to be
service on any of them.
9.1 This Agreement constitutes the entire and only legally binding
agreement between the parties relating to its subject matter and 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.
9.2 Any remedy or right conferred by this Agreement on AHI for breach of
this Agreement shall be in addition to and without prejudice to any
other right or remedy available it.
9.3 No failure or delay by any AHI 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.
9.4 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.
<PAGE>
9.5 Any release, waiver or compromise or any other arrangement which AHI
gives or enters into with any party to this Agreement in connection
with this Agreement shall not affect any right or remedy of any AHI
(as appropriate) 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.
9.6 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.
9.7 MG, JM, TB and RM 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.
9.8 Each of MG, JM, TB and RM acknowledges that he is entering into this
Agreement without reliance on any undertaking or representation given
by or on behalf of AHI other than as expressly contained in this
Agreement provided that nothing herein shall exclude any of them from
liability for fraudulent misrepresentation.
10.1 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.
10.2 Service of a notice must be effected by one of the following methods:-
(a) personally on a director or the secretary of any party and shall
be treated as served at the time of such service;
(b) 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
(c) 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.
11.1 This Agreement shall be governed by and construed in accordance with
the laws of England.
11.2 The parties irrevocably submit for the benefit of AHI 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 AHI to proceed in the courts of
any other competent jurisdiction.
AS WITNESS this Agreement has been executed as a Deed by and on behalf of the
parties the day and year first before written.
<PAGE>
EXECUTED as a DEED by )
ARMOR HOLDINGS, INC. )
acting by:- )
JONATHAN SPILLER
...................................
Authorised Signatory
SIGNED as a DEED by )
MIKHAIL GOLOVATOV ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
Solicitor
c/o 10 Snow Hil
London
EC1A 2AL
SIGNED as a DEED by )
JEZGEI MANSUROV )
acting by his duly appointed ) MIKHAIL GOLOVATOV
attorney MIKHAIL GOLOVATOV )
in the presence of:- )
NEAL WATSON
Solicitor
c/o 10 Snow Hil
London
EC1A 2AL
<PAGE>
SIGNED as a DEED by )
TALIUHAN BAKAJANOV )
acting by his duly appointed ) MIKHAIL GOLOVATOV
attorney MIKHAIL GOLOVATOV )
in the presence of:- )
NEAL WATSON
Solicitor
c/o 10 Snow Hil
London
EC1A 2AL
SIGNED as a DEED by )
RAKHIM MENDESHEV )
acting by his duly appointed ) MIKHAIL GOLOVATOV
attorney MIKHAIL GOLOVATOV )
in the presence of:- )
NEAL WATSON
Solicitor
c/o 10 Snow Hil
London
EC1A 2AL
<PAGE>
CONFORMED COPY
--------------
STRONTIAN HOLDINGS LIMITED
as Vendor
ARMOR HOLDINGS, INC.
as Purchaser
------------------------
TAXATION INDEMNITY
------------------------
EVRIPIDOU, GEORGIADES & CO
16 Kyriakos Matsis Avenue
Eagle House, 10th Floor
Ayioi Omoloyites
Nicosia
<PAGE>
THIS DEED is made the 9th day of June, 1997 BETWEEN:-
(1) STRONTIAN HOLDINGS LIMITED, a company incorporated and registered in
Cyprus (Registration No. 56709) whose registered office is at Mnasiadou Street,
Elma Building, Nicosia, Cyprus (the "Vendor"); and
(2) ARMOR HOLDINGS, INC. a corporation established under the laws of the
state of Delaware, USA, whose address for the purposes of this Agreement is
13386 International Parkway, Jacksonville, Florida 32218 USA (the "Purchaser").
WHEREAS:-
(A) By an agreement dated with even date herewith between, inter
alios, the Vendor and the Purchaser (the "Share Purchase Agreement") the Vendor
has agreed to sell to the Purchaser 500 ordinary shares of c(pound)1 each in
Gordandel Trading Limited (the "Company").
(B) It is a condition precedent of the Share Purchase Agreement that
this Deed be entered into upon the terms and subject to the conditions hereof.
NOW THIS DEED WITNESSETH as follows:-
1. Definitions
In this Deed:-
1.1 All defined expressions and provisions for definition used or
contained in the Agreement shall have the same meanings and effect
wheresoever used in this Deed where the context so admits.
1.2 "Claim for Tax" means a liability to make a payment of Tax, any
assessment, notice, demand, letters or other document issued, or
action taken, by or on behalf of any taxing or other competent
authority in Cyprus from which it appears that the Company is liable
to make any payment of, or is deprived or is sought to be deprived of
any Relief or right to repayment of Tax.
1.3 The expression "Event" means any event, act, omission, default,
occurrence or transaction, dealing or arrangement of any kind
whatsoever, whether or not the Company is a party thereto and includes
completion of the sale of the Shares to the Purchaser.
1.4 The expression "Relief" means any relief, allowances, credit,
exemption, set-off or deduction in computing, or against profits,
income or gains of any description or from any source, or credit
against Tax or any right to the repayment of Tax.
1.5 The expression "Liability for Tax" means:-
1.5.1 the loss of, reduction in the amount of, or setting off
against profits or a Taxation liability of, any Relief in
respect of any Taxation which would (were it not for the said
loss, reduction or setting off) have been available
<PAGE>
- 2 -
to the Company or the non-availability of a Relief which has
been assumed to be available in computing the Company's
accounts.
1.5.2 the loss of, reduction in the amount of, or setting off
against any Taxation liability of, a right to repayment of
Taxation or the non-availability of a right to repayment of
Taxation which has been assumed to be available in computing
the Company's accounts.
1.5.3 the setting off against profits or against a Taxation
liability (in either case in respect of which but for such
setting off the Company would have had a liability to pay
Taxation in respect of which a claim could have been made
under this Deed) of any Relief which is not available before
Completion but arises in respect of any Event or Events
occurring after Completion;
and the amount of the Taxation shall in such cases be deemed to be
equal to (a)(in the case of a repayment) the amount of the repayment
which would otherwise have been obtained or (b)(in the case of a
Relief) the amount of Taxation which would have been saved by the
Relief but for such loss, non-availability, reduction or set-off,
assuming such Taxation to be payable at the average rate (weighted on
a time basis) appropriate to the earliest period in respect of which
Taxation becomes payable which would not have been payable if the said
Relief had not been lost, reduced or set-off, as the case may be, had
been available.
1.6 "Tax" and "Taxation" means any charge, tax, duty, levy, liability,
withholding, impost or sum of whatever nature and any penalty, fine or
interest payable pursuant to the Taxation Statutes.
1.7 "Taxation Statutes" means statutes (and all regulations and
arrangements whatsoever made thereunder) enacted within Cyprus
providing for or imposing any charge, tax, duty or levy of a fiscal
nature and any penalty, fine or interest payable in connection with
any such tax, charge, duty or levy.
1.8 The Liability for Tax shall be deemed to be due and payable and
discharged by the Company on the earliest date on which (in the case
of a Liability for Tax falling within Clause 1.5.1(a) the resulting
Tax is due and payable, or would have been due and payable but for any
such Relief, right of set-off or repayment or (in the case of a
Liability falling within Clause 1.5.1.(b)) the resulting repayment
would have been received or (where such repayment was dependent upon
the making of an application or the satisfaction of some other
condition) the earliest date upon which such application could have
been made or such condition satisfied.
1.9 Reference to income or profits or gains earned accrued or received
shall include income or profits or gains deemed to have been or
treated as or regarded as earned, accrued or received for the purposes
of any Tax Statutes.
1.10 Reference to the result of Events on or before the date hereof shall
include the combined result of two or more Events the first of which
shall have taken place on or before the date hereof.
1.11 Taxation Statutes shall be construed as these are respectively amended
or re-
<PAGE>
- 3 -
enacted or as their operation is modified by other provisions on or
before the date hereof and shall include any provisions of which they
are re-enactments (whether with or without modification).
2. Indemnity
2.1 Subject as hereinafter provided the Vendor hereby covenants (on behalf
of itself and its legal personal representatives) with the Purchaser
that the Vendor will at all times hereafter bear one hundred percent
(100%) of any amount or amounts in respect of:-
2.1.1 any Claims for Tax or Liabilities for Tax falling on the
Company; and
2.1.2 all reasonable costs properly incurred by the Purchaser
and/or the Company in relation to any demands, actions
proceedings and claims in respect of any Claims for Tax or
Liabilities for Tax,
which arises, in any case, in connection with, or as a consequence of,
an Event entered into, or deemed to have been entered into, on or
before 31 March 1997 and fifty percent (50%) of any of such amount or
amounts in respect of the period 1 April 1997 until 31 May 1997.
2.2 The indemnity in Clause 2.1 shall not apply to any Claim for Tax or
Liability for Tax to the extent that such amount or amounts has/have
been paid by the Company prior to 31 May 1997.
3. Due Date
3.1 The Vendor shall make payment in cleared funds to the Company or to
the Purchaser as appropriate the business day prior to the date on
which the Company is required to discharge or deemed to discharge a
Claim for Tax or Liability for Tax in respect of which the Purchaser
is entitled to claim from the Vendor under this Deed.
3.2 For the purpose of Clause 3.1 the Company shall be deemed to discharge
a Claim for Tax:-
3.2.1 on the last date on which the Company pays any amount of
Tax; or
3.2.2 on the date on which any Claim for Tax would have fallen due
but for the availability of Reliefs, rights of repayment or
other rights or claims of a similar nature.
4. Notices
4.1 All notices hereunder shall be in writing signed by or on behalf of
the party giving the same and shall be served on the other party by
delivery at or by prepaid registered post, to the addressee's address
as set out herein or to such other address as may have been notified
in writing for this purpose to the party giving the same. Service of
all notices hereunder shall be deemed in the case of registered
<PAGE>
- 4 -
post to be effected ten days after posting.
5. Governing Law
5.1 This Deed shall be construed according to and governed by the laws of
Cyprus and all parties hereto irrevocably submit for the benefit of
the Purchaser to the non-exclusive jurisdiction of the Courts of
Cyprus.
IN WITNESS whereof this document has been executed as a Deed the day and year
first above written.
THE COMMON SEAL OF )
STRONTIAN HOLDINGS LIMITED )
was hereunto affixed in the ) MIKHAIL GOLOVATOV
presence of:- )
EXECUTED as a DEED by )
ARMOR HOLDINGS, INC. ) JONATHAN SPILLER
by its duly authorised signatory:- )
<PAGE>
CONFORMED COPY
--------------
Dated 9 June 1997
-----------------
(1) GORANDEL TRADING LIMITED
(2) ALPHA-A LIMITED AND OTHERS
SERVICES AGREEMENT
Travers Smith Braithwaite
10 Snow Hill
London EC1A 2AL
Telephone 0171-248 9133
Facsimile 0171-236 3728
<PAGE>
INDEX
-----
Clause Page Number
1. Definitions and interpretation 1
2. Appointment 3
3. Terms of business 3
4. Confidentiality 4
5. Liability 5
6. Force majeure 5
7. Term and termination 5
8. Assignment 6
9. No waiver 6
10. Severance 6
11. Notices 7
12. Applicable law and jurisdiction 7
13. General 7
14. Dispute Resolution 8
15. Service of Proceedings 9
Schedules
1 Alpha Companies 10
Annexures
1. Map of Relevant Area
2. Agreed sub-contract rates
<PAGE>
THIS AGREEMENT is made on 9 June 1997
BETWEEN:-
(1) GORANDEL TRADING LIMITED a company incorporated and registered in Cyprus
(registration number 56442) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("GTL"); and
(2) THE SEVERAL COMPANIES whose details are set out in Schedule 1 (the "Alpha
Companies").
IT IS AGREED as follows:-
1. Definitions and interpretation
1.1 Throughout this Agreement, including the Schedules, the following words and
phrases have the following meanings:-
Business Day a weekday, other than a Saturday, on which
clearing banks are ordinarily open for business
in the City of London;
CIS the geographical area of those states which at
the date of this Agreement are members of the
Confederation of Independent States and any
state(s), territory(ies) within such area as may
from time to time merge or result from any
reorganisation, boundary reorganisation,
amalgamation or division which may occur in
or between any such state(s);
Client in relation to a person carrying on a business,
any person who, in the course of such
business, has been provided with Security
Goods or supplied with Security Services in the
Relevant Area, including any person who has
asked (or enquired about) the provision of
Security Goods or Security Services in the
Relevant Area;
GTL Client a Client whose registered office or that of its
ultimate holding company is outside of the
Relevant Area or a Client which is a joint
venture entity or other special purpose vehicle
where one or other of the shareholders or
persons operating the business of such entity
or vehicle has its registered office or that of its
ultimate holding company outside the Relevant
<PAGE>
- 2 -
Area in respect of whom GTL has arranged (or has
been requested to arrange) the provision of
Security Goods or Security Services in the
Relevant Area;
Confidential Information information or data of a confidential nature or
which is proprietary to a party relating to the
affairs of the party or to its business;
Excepted Client a Client who is not a GTL Client;
Relevant Area the area shown edged in red on the map which
comprises the Annexure to this Agreement and
which encompasses the CIS, Latvia, Lithuania
and Estonia;
Security Goods all goods and products required in order to
provide Security Services;
Security Services the provision and management of security of all
kinds, including (without limitation) guard and
other protection services, courier services,
logistical management, medical management,
supervision and training of security personnel,
advice and consultation on all types of security
arrangements and on situations involving security
needs, equipment supply, investigative services
and all services ancillary to or relating to such
matters;
US$ the unit of currency of the USA.
1.2 Where used in this Agreement the terms "subsidiary" and "holding company"
shall have the meanings respectively attributed to them by section 736 of the
Companies Act 1985 as in force at the date of this Agreement.
1.3 A reference to any statutory provision in this Agreement:-
1.3.1 includes any order, instrument, plan, regulation, permission and
direction made or issued under such statutory provision or deriving
validity from it; and
1.3.2 shall be construed as a reference to such statutory provision as
in force at the date of this Agreement (including, for the avoidance
of doubt, any amendments made to such statutory provision that are in
force at the date of this Agreement); and
1.3.3 shall also be construed as a reference to any statutory
provision of which such statutory provision is a re-enactment or
consolidation.
<PAGE>
- 3 -
1.4 The headings in this Agreement are for convenience only and shall not
affect its meaning.
1.5 References to a clause are (unless otherwise stated) to a clause of this
Agreement.
1.6 Words importing one gender shall (where appropriate) include any other
gender and words importing the singular shall (where appropriate) include the
plural and vice versa.
2. Appointment
2.1 Subject to the provisions of clause 2.3, the Alpha Companies each agree
that for the duration of this Agreement they will not provide Security Goods or
Security Services in the Relevant Area to any Client other than to GTL (or any
other member of the group of companies of which GTL is a member) and undertake
to GTL that they shall on request by GTL provide written details of all Clients
(save for any of such Clients which are wholly state owned) for whom they act
or are sub-contracted to act.
2.2 The provisions of clause 2.1 shall not apply to the provision by the Alpha
Companies of Security Goods or Security Services within the Relevant Area where
the Client is an Excepted Client.
2.3 During the term of this Agreement GTL shall not contract for the provision
of Security Goods or Security Services in the Relevant Area without first
having offered to subcontract the provision of such Security Goods or Security
Services to any of the Alpha Companies. Such offer shall be made in writing to
the relevant Alpha Company and shall be deemed declined unless the relevant
Alpha Company shall, within a period of 7 days following the offer, have
confirmed:
2.3.1 that it is ready and able to perform the Security Services or
provide the Security Goods requested; and
2.3.2 that it is in agreement with the commercial terms proposed by
GTL in making the offer pursuant to clause 3 below.
The company to whom the offer to sub-contract is made shall be in the absolute
discretion of GTL (following consultation with an officer of Defence Systems
Group Limited).
3. Terms of business
3.1 Each of the parties will use their best endeavours to promote the provision
of Security Goods and Security Services within the Relevant Area. Each party
will market and promote the provision of Security Goods and Security Services
to Clients and potential Clients in the Relevant Area. The parties will seek to
develop and exploit markets in the Relevant Area for the provision of Security
Goods and Security Services. Each of the Alpha Companies shall have principal
responsibility for promotion of this business within the Relevant Area and GTL
shall have principal responsibility for promotion of this business outside the
Relevant Area.
3.2 Save in relation to any Excepted Clients any contact by any party hereto
with a Client
<PAGE>
- 4 -
or potential Client and any enquiry by a Client or potential Client to any
party hereto for or in connection with the provision of Security Goods or
Security Services in any part of the Relevant Area shall be directed to GTL.
GTL shall then offer to sub-contract the matter in accordance with clause 2.4.
3.3 Each order accepted in accordance with clause 2.4 shall constitute a
separate contract with GTL on the terms agreed.
3.4 The terms on which Security Goods or Security Services are to be provided
to a Client pursuant to an offer referred under clause 2.4 shall be defined by
GTL in the offer. The sub-contract shall provide for payment to the relevant
sub-contractor on the basis of the rates set out in Annexure 2 and such rates
shall be fixed for a period of one year and thereafter any increase in such
rates shall only be made following service of 90 days' written notice by the
sub-contractor and providing that GTL is able to agree with the Client a
corresponding percentage increase in the fees payable to it by the Client. The
payment to the sub-contractor shall be made as it shall direct (subject to
GTL's approval, which will not be unreasonably withheld) provided that the
sub-contractor shall deliver to GTL a monthly invoice (in US$) for sums payable
to it in respect of work undertaken during the preceding month. GTL shall make
payment to the sub-contractor of an agreed invoice within 15 days of receipt by
GTL of such invoice and shall, where it is able, make payment to the
sub-contractor in the local currency on the basis of the exchange rate quoted
by the Bank of Scotland on the date of the agreed invoice, or failing which,
shall make payment in US$.
3.5 Where Security Goods or Security Services are provided to a Client in
accordance with clause 3.4 above the sub-contractor shall take sole
responsibility for performance of the contract, shall keep GTL fully informed
of its performance and the reason for any delay or difficulty in its
performance and shall indemnify GTL against any claim by the Client made
against GTL which arises from any failure in performance or other acts or
omissions of the sub-contractor in respect of such contract.
3.6 The sub-contractor shall use its best endeavours to perform the Security
Services and deliver the Security Goods in a prompt and professional manner to
the satisfaction of the Client and in accordance with the instructions of GTL,
including in particular but without limitation, procuring that personnel wear
such uniforms as may be specified by GTL.
3.7 The parties will regularly liaise concerning the performance of orders
generated and the promotion of the business referred to in clause 3.1 above in
the best interests of the business. Where any contract with a Client has not
been properly performed or where any Client makes substantial or persistent
complaints about the performance of the contract the parties shall meet
forthwith to determine how this shall be resolved. The party in default shall
be subject to the termination provisions of clause 7.2.1 if the matter is not
resolved to the mutual satisfaction of the parties.
4. Confidentiality
Both during and after the term of this Agreement each of the parties shall, and
shall procure that its employees, contractors and agents shall, keep
confidential and not disclose to any third party any Confidential Information.
This shall not apply to any Confidential
<PAGE>
- 5 -
Information which comes into the public domain without fault on the part of a
party.
5. Liability
The liability of each of the parties to the other arising out of or in
connection with the supply of Security Services or Security Goods, whether for
direct, indirect, consequential or any other type of loss and whether the same
shall have been caused by the negligent, misrepresentation or any other fault
of the party or by any breach or non-performance by the party of this Agreement
shall in no event exceed US$1,000,000 in total and all conditions, warranties
or other terms that are expressed or implied by law or otherwise inconsistent
with the obligations of the parties expressed in this Agreement are hereby
excluded, provided always that nothing in this Agreement shall exclude the
liability of the parties for death or personal injury caused by their
respective negligence.
6. Force majeure
Neither party shall be liable to the other nor shall it be deemed to be in
default of this Agreement as a result of any delay or failure in performing its
obligations under this Agreement to the extent that any such delay or failure
arises from causes beyond its reasonable control including, but not limited to,
acts of God, acts or regulations of any governmental or supranational
authority, war or national emergency, accident, fire, riot, strikes, lock-outs
and industrial disputes.
7. Term and termination
7.1 This Agreement shall be deemed to have commenced on 31 May 1997 and shall
continue in force until 31 May 2002.
7.2 A party may, without prejudice to any other rights which it may have,
forthwith upon giving written notice to the other terminate this Agreement upon
the happening of any of the following events:-
7.2.1 if the other fails to observe or perform any of the terms or
conditions of this Agreement and such default or breach, if capable of
remedy, continues for 30 days after notice from the party specifying
the breach or default and requiring the same to be remedied;
7.2.2 if the other makes or commits such default or breach as referred
to in clause 7.2.1 which is incapable of remedy;
7.2.3 if the other ceases or threatens to cease to carry on its
business(es) or a substantial part of such business(es) or disposes or
threatens to dispose of the whole or a substantial part of its
undertaking, property or assets or stops or threatens to stop payment
of its debts generally;
7.2.4 if the other proposes or makes any scheme of arrangement or
composition with its creditors or is unable to pay its debts within
the meaning of section 123 of the Insolvency Act 1986;
<PAGE>
- 6 -
7.2.5 if a resolution is passed or a petition presented for the
winding-up of the other (other than for the purposes of a
reconstruction or amalgamation, during the course of which the other
party remains capable of performing in full its obligations under this
Agreement, and the terms of which have previously been approved in
writing by the first party);
7.2.6 if a resolution is passed or a petition presented for the
appointment of, or if the appointment is otherwise made of, a
receiver, manager, administrative receiver or like person over the
whole or any material part of the property or assets of the other
party or a resolution is passed or a petition presented for the making
of an administration order or an administration order is otherwise
made in relation to the other party;
7.2.7 if an event analogous to any of those described in clauses
7.2.4, 7.2.5 and 7.2.6 occurs in relation to a party in any territory
to whose jurisdiction it is subject;
7.2.8 if control of the other party is acquired by one or more persons
not having control of it at the date of this Agreement (and, for the
purposes of this provision, each party shall notify the other
forthwith on becoming aware of any such acquisition of control);
7.3 GTL shall not be liable to pay to any other party any compensation for loss
of profits or goodwill or for any other loss or damage whatsoever arising as a
result of the expiry or non-renewal of this Agreement under clause 7.1 above.
8. Assignment
None of the parties shall, without the prior written consent of the other,
assign, mortgage, charge, pledge or otherwise encumber, deal with or dispose of
any of its rights arising from or in connection with this Agreement nor shall
any of the Alpha Companies, without such consent, sub-contract the provision of
Security Goods or Security Services or otherwise delegate or transfer or
purport to transfer any of its obligations under this Agreement.
9. No waiver
No failure or delay by a party in exercising any remedy, right, power or
privilege 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, right, power
or privilege preclude any further exercise of the same or the exercise of any
other right, power or privilege.
10. Severance
In the event that any provision of this Agreement shall be declared by any
court or other competent authority to be void or unenforceable by reason of any
provision of applicable law it shall be deleted and the remaining provisions of
this Agreement shall continue in full force and effect.
<PAGE>
- 7 -
11. Notices
11.1 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.
11.2 Service of a notice must be effected by one of the following methods:-
11.2.1 personally on a director or the secretary of any party and
shall be treated as served at the time of such service;
11.2.2 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;
11.2.3 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;
11.2.4 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 11.2, then to the number of such party which shall
have been so notified, for 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 11.2 are:
GTL - Fax No. 44-171-233 7434
In respect of the Alpha Companies, the fax numbers set against their
respective names in Schedule 1.
12. Applicable law and jurisdiction
12.1 This Agreement shall be governed by and construed in accordance with the
laws of England.
12.2 The parties irrevocably submit 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 any of the parties to
proceed in the courts of any other competent jurisdiction.
13. General
13.1 This Agreement shall supersede all prior agreements and arrangements
between the
<PAGE>
- 8 -
parties relating to its subject matter and all such agreements and arrangements
are hereby terminated without prejudice to any rights which may have accrued to
either party. This Agreement constitutes the entire and only legally binding
agreement between the parties relating to its subject matter and 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.
13.2 Any remedy or right conferred by this Agreement on any of the parties for
breach of this Agreement shall be in addition to and without prejudice to any
other right or remedy available to any of them.
13.3 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.
13.4 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.
13.5 Each party 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.
13.6 Nothing in this Agreement shall create a partnership or establish a
relationship of principal and agent or any other relationship of a similar
nature between the parties.
13.7 Neither party hereto shall have the power or authority to bind the other
as to any matter or thing to be done save as may be specifically agreed in
writing between the parties from time to time.
14. Dispute Resolution
14.1 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.
14.2 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
<PAGE>
- 9 -
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.
14.3 The place of the arbitration shall be London, England and the proceedings
shall be governed by the laws of England.
14.4 The language of the arbitration shall be English and the award shall be in
English.
14.5 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.
14.6 Notwithstanding the other provisions of this clause GTL 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 GTL 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.
14.7 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 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.
15. Service of Proceedings
Each of the Alpha Companies irrevocably authorises and appoints Yakimov Andrey
of 7th Floor, Egginton House, 26-28 Buckingham Gate, London SW1E 6LD as its
agent for service of proceedings in relation to any matter arising out of or in
connection with this Agreement and service on such agent shall be deemed to be
service on the relevant Alpha Companies.
This Agreement has been duly executed by the parties on the date set out above.
<PAGE>
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SCHEDULE 1
Alpha Companies
1. Alpha-A Limited, a joint Stock Company incorporated and registered at
the Executive Committee of Kujbishevsky, Regional Council of Peoples
Deputies in Moscow on 24 October 1991 (registration number N6474)
whose official address is at 105023, Moscow, 27 Suvosovskaya Str.,
Building 27 (Fax no.: (007)(095) 290 3428).
2. Alpha-B Limited, a joint Stock Company incorporated and registered at
the Executive Committee of Kujbishevsky, Regional Council of Peoples
Deputies in Moscow whose official address is at 105023, Moscow, 27
Suvosovskaya Str., Building 27 (Fax no.: (007)(095) 290 3428).
3. Alpha-7 Limited, a joint Stock Company incorporated and registered at
the Executive Committee of Kujbishevsky, Regional Council of Peoples
Deputies in Moscow whose official address is at 105023, Moscow, 27
Suvosovskaya Str., Building 27 (Fax no.: (007)(095) 290 3428).
4. Alpha-K Limited, a joint Stock Company incorporated and registered at
the Executive Committee of Kujbishevsky, Regional Council of Peoples
Deputies in Moscow whose official address is at 105023, Moscow, 27
Suvosovskaya Str., Building 27 (Fax no.: (007)(095) 290 3428).
<PAGE>
- 11 -
SIGNED by RICHARD BETHELL )
for and on behalf of )
GORANDEL TRADING LIMITED ) RICHARD BETHELL
in the presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
SIGNED by MIKHAIL GOLOVATOV )
for and on behalf of )
ALPHA-A LIMITED ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
SIGNED by MIKHAIL GOLOVATOV )
for and on behalf of )
ALPHA-B LIMITED ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
SIGNED by MIKHAIL GOLOVATOV )
for and on behalf of )
ALPHA-7 LIMITED ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
SIGNED by MIKHAIL GOLOVATOV )
for and on behalf of )
ALPHA-K LIMITED ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
<PAGE>
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SERVICES AGREEMENT: ANNEXURE 1
Map of Relevant Area
<PAGE>
CONFORMED COPY
--------------
DATED 9 June 1997
-----------------
(1) GORANDEL TRADING LIMITED
- and -
(2) MIKHAIL GOLOVATOV
SERVICE AGREEMENT
Travers Smith Braithwaite
10 Snow Hill
London EC1A 2AL
Tel: 0171-248 9133
<PAGE>
I N D E X
Clause Page No.
- ------ --------
1. Interpretation 1
2. Appointment and Term 2
3. Duties 2
4. Conflicts of Interest 3
5. Salary and Bonus 3
6. Holidays 4
7. Illness or Accident 4
8. Termination 4
9. Confidentiality 6
10. Protection of Business Interests 7
11. Disciplinary and Grievance Procedure 7
12. Notices 7
13. Deductions 8
14. General 8
Schedule
- --------
1. Power of Attorney 9
2. Protection of Business Interests 11
Annexure
- --------
Map of the Relevant Area
<PAGE>
AN AGREEMENT made on 9 June, 1997
BETWEEN:-
(1) GORANDEL TRADING LIMITED a company incorporated and registered in Cyprus
(registration number 56442) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("the Company"); and
(2) MIKHAIL GOLOVATOV of 22-39 Bolshaya Nikitshaya Street, Moscow 103009,
Russia (the "Executive").
IT IS AGREED as follows:-
1. Interpretation
1.1 In this Agreement the following words and expressions shall have the
following meanings:-
"Board" the board of directors of the Company from
time to time;
"Chairman" the Chairman of the Board from time to time;
"Effective Date" the date of this Agreement;
"Group Company" any company which from time to time is:-
(a) a subsidiary undertaking of the
Company;
(b) a holding company of the Company;
(c) a subsidiary undertaking of any such
holding company; or
(d) an associated company being any
company in which the Company or any
Group Company has a shareholding of
25% or more or any company which
has a shareholding of 25% or more in
the Company or any Group Company;
"subsidiary" and "holding company" have the
meanings attributed to them by section 736 of
the Companies Act 1985;
"Term" the period of the Executive's employment
hereunder;
"Termination Date" (other than for the purposes of Schedule 2 to
this Agreement) the date on which the
employment of the Executive under this
Agreement shall terminate for whatever
<PAGE>
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reason,
and derivative expressions shall be construed accordingly.
1.2 Words and phrases which are not defined in this Agreement but which
are defined in the Act, the Companies Act 1985, or the Insolvency Act
1986 shall be construed as having those meanings.
1.3 References to any statute or any statutory provision shall be
construed as references to the statute or statutory provision as in
force at the date of this Agreement and as subsequently re-enacted or
consolidated and shall include references to any statute or any
statutory provision of which it is a re-enactment or consolidation.
1.4 Unless the context otherwise requires references in this Agreement to
the masculine gender shall, where appropriate, be deemed to include
the feminine and vice versa.
1.5 The Schedules to this Agreement are an integral part of this Agreement
and references to this Agreement include reference thereto.
2. Appointment and Term
2.1 The Company shall employ the Executive and the Executive shall serve
the Company as Managing Director on the terms set out in this
Agreement.
2.2 The Executive's employment under this Agreement shall commence on the
Effective Date and continue (subject to the provisions of this
Agreement) until terminated by either party giving to the other not
less than 12 months' previous notice in writing.
2.3 The Executive represents to the Company that he is entitled to enter
into this Agreement and to implement and carry out its terms and that
by so doing he shall not be in breach of any obligation (contractual
or otherwise) to any third party which would entitle that third party
to damages or any other remedy at law.
3. Duties
3.1 The Executive shall perform the duties and exercise the powers which
from time to time may be assigned to him or vested in him by the Board
and shall devote such of his time, ability and attention to his duties
under this Agreement as may be reasonably required for the proper
performance of his duties and he shall use his utmost endeavours to
promote the interests of the Company and any Group Company and shall
not knowingly do or willingly permit to be done anything to the
prejudice, loss or injury of the Company or any Group Company and
shall carry out such duties in a competent manner.
3.2 The Board shall be entitled at any time to require the Executive to
perform services not only for the Company but also for any Group
Company including, if so required, acting as a director of any Group
Company.
<PAGE>
- 3 -
3.3 The Executive shall at all times keep the Board promptly and fully
informed (in writing if so requested) of his conduct of the business
or affairs of the Company and any Group Company and provide such
explanations of his conduct as the Board may require.
3.4 Notwithstanding the provisions of clause 3.1, the Company may at any
time following the giving of notice by either party to terminate this
Agreement and for such period as it may specify not exceeding the
length of notice given cease to provide work for the Executive in
which event, during such period the other provisions of this Agreement
including those relating to the Executive's remuneration shall
continue to have full force and effect but the Executive shall not be
entitled to access to any premises of the Company or any Group
Company.
3.5 Subject always to clause 4, during the Term the Executive shall not
without the prior written consent of the Board engage in any
activities outside his employment which may detract from the proper
and timely performance of his duties under this Agreement.
3.6 The Executive's principal place of work shall be Moscow and he shall
undertake any travel as may be necessary for the proper performance of
his duties as the Board may from time to time require.
4. Conflicts of Interest
4.1 Save for those engagements, concerns and interests of the Executive which
are existing as at the date of this Agrement during the Term the Executive
shall not without the prior consent of the Company whether alone or jointly
with or on behalf of any other person, firm or company and whether as
principal, partner, manager, employee, contractor, director, consultant,
investor or otherwise (except as a representative or nominee of the Company or
any Group Company or otherwise with the prior consent in writing of the Board)
be engaged, concerned or interested in any other business which:-
4.1.1 is wholly or partly in competition with any business carried
on by the Company or any Group Company; or
4.1.2 as regards any goods or services is a supplier to or customer
of the Company or any Group Company.
5. Salary and Bonus
5.1 The Executive shall receive a fixed annual salary of US$40,000 which
shall accrue from day to day and be payable by equal monthly
instalments in arrears on the last working day of each calendar month
or such salary as may be agreed and confirmed to the Executive in
writing by the Board in its sole discretion from time to time.
5.2 In addition to the Executive's fixed annual salary, he shall receive
an annual bonus in respect of each financial year of the Company
calculated on a basis to be agreed by the Board and the Executive.
<PAGE>
- 4 -
5.3 The Executive shall not be entitled to any fees in respect of any
directorship of the Company or any Group Company and to give effect to
this clause the Executive shall forthwith pay to the Company or
procure that the Company is paid all such fees received.
5.4 Payment of such salary and such bonuses (if any) to the Executive
shall be made either by the Company or by another company in the Group
and, if by more than one company, in such proportion as the Board may
from time to time think fit.
5.5 In addition there shall be refunded to the Executive such sums as
shall cover all reasonable out of pocket expenses incurred by him on
the Group's business (including hotel expenses and expenses of
subsistence and travelling), which said expenses shall be evidenced in
such manner as the Company may require.
6. Holidays
6.1 The Executive shall be entitled to 25 days' holiday on full pay in
every calendar year to be taken at such reasonable time or times as
the Board shall approve. Any holiday not so used in a calendar year
may not be carried forward without the approval of the Board.
6.2 If this Agreement is terminated under clause 8.4, the Executive will
not be entitled to any payment in lieu of holiday not taken at the
Termination Date.
7. Illness or Accident
If the Executive shall be absent for up to a maximum of 90 working days in any
rolling period of twelve months owing to accident or illness so that he is
unable properly to perform his duties he shall continue to be entitled to his
full salary excluding any bonus or commission during any period of absence up
to a maximum of 90 working days in any rolling period of 12 months provided
that if at any time during such a period of absence referred to above the
Executive becomes eligible to receive benefits in respect of accident or
illness the Company shall be entitled to set off or deduct the amount of any
such benefits from the salary payable to the Executive under this clause.
During any such period of absence, the Company shall be entitled at any time to
appoint a further executive director or employee to perform the Executive's
duties and to exercise his powers.
8. Termination
8.1 The Company shall at all times be entitled to terminate the Agreement
pursuant to clause 2.2.
8.2 The Company may, at its sole and absolute discretion, terminate the
Executive's employment forthwith at any time by serving a notice under
this clause stating that the Agreement is being determined in
accordance with this clause 8.2 and undertaking to pay to the
Executive within 14 days salary in lieu of any required period of
notice or unexpired part thereof (subject to tax). For the avoidance
of doubt, where the Company terminates the Agreement in accordance
with this clause the terms of, inter alia, clause 8 and Schedule 2
shall remain in full force and effect.
<PAGE>
- 5 -
8.3 Where the Company terminates this Agreement otherwise than in
accordance with clause 2.2 or 8.2 (subject always to clause 8.4), any
damages to which the Executive may be entitled shall be calculated in
accordance with ordinary common law principles including those
relating to mitigation of loss.
8.4 Notwithstanding the provisions of clauses 8.1 and 8.2, the Company
shall be entitled, by notifying the Executive in writing, to terminate
this Agreement and the Executive's employment forthwith without any
payment by way of compensation, damages or otherwise if the Executive
shall:-
8.4.1 commit any act of serious misconduct;
8.4.2 commit any material or persistent breach of any of the terms
or conditions of this Agreement including any wilful neglect
or refusal to carry out any of his duties or to comply with
any instruction given to him by the Board;
8.4.3 have a bankruptcy order made against him or shall compound
with or enter into any voluntary arrangements with his
creditors;
8.4.4 be charged with or convicted of any criminal offence;
8.4.5 be disqualified from holding office in the Company or any
other company;
8.4.6 act in any way which may in the reasonable opinion of the
Board bring the Company or any Group Company into disrepute
or discredit; or
8.4.7 in his capacity as a director of the Company resign or be
removed, except where this has been required by the Company
pursuant to clause 8.5.1;
in which event, for the purposes of this Agreement, the Termination
Date shall be the date of the written notice terminating the
Executive's employment.
8.5 The Executive shall resign from the Board and the boards of any Group
Company of which he is director:-
8.5.1 if at any time during the Term the Executive is prevented
from performing his duties whether through sickness or
because the Company has exercised its rights under clause 3.4
or otherwise howsoever and the Company requires the Executive
to resign; and in any event
8.5.2 on the Termination Date,
and the Executive shall at the time of signing this Agreement appoint
the Company as his attorney by executing a power of attorney in the
form set out in Schedule 1 to do and sign in his name and on his
behalf any things and documents as may be required under the
constitution of each company to make his resignation effective
(including the transfer (without payment) to the Company or as the
Company may direct may qualifying shares provided by it).
8.6 The proper exercise by the Company of its right of termination under
clause 8.4
<PAGE>
- 6 -
shall be without prejudice to any other rights or remedies which the
Company or any Group Company may have or be entitled to exercise
against the Executive.
8.7 If the employment of the Executive under this Agreement shall be
terminated for the purpose of reconstruction or amalgamation only
whether by reason of the liquidation of the Company or otherwise and
he shall be offered employment with any concern or undertaking
resulting from this reconstruction or amalgamation on terms and
conditions no less favourable than the terms of this Agreement then
the Executive shall have no claim against the Company in respect of
the termination of his employment hereunder.
8.8 The Executive shall not at any time during any period when he is
required to cease the performance of his duties under clause 3.4 or
after the Termination Date make any public statements in relation to
the Company or any Group Company or any of their officers or
employees. The Executive shall not after the Termination Date
represent himself as being employed by or connected with the Company
or any Group Company.
8.9 All credit, charge and expense cards, motor cars, car keys and all
books, papers, drawings, designs, documents, records and computer
software kept or made by or in the possession or control of the
Executive relating to the businesses of the Company and any Group
Company and all other property of the Company and any Group Company
are and remain the property of the Company or such Group Company and
the Executive shall deliver all such items in his possession custody
or control at the Termination Date immediately to the Company.
9. Confidentiality
9.1 The Executive acknowledges that during the Term he shall in the
performance of his duties become aware of trade secrets and other
confidential information relating to the Company, the Group Companies,
their businesses and its or their clients or customers and their
businesses.
9.2 Without prejudice to his general duties at common law in relation to
such trade secrets and other confidential information, the Executive
shall not during the Term or at any time after the Termination Date
disclose or communicate to any person or persons or make use (other
than in the proper performance of his duties under this Agreement) and
shall use his best endeavours to prevent any disclosure, communication
or use by any other person, of any such trade secrets or confidential
information.
9.3 Since the Executive in the course of his employment or by reason of
services rendered for or offices held in any other company may obtain
knowledge of the trade secrets or other confidential information or
such company, the Executive hereby undertakes that he will at the
request and cost of the Company enter into a direct agreement or
undertaking with such other company whereby he will accept
restrictions corresponding to the restrictions herein contained (or
such of them as may be appropriate in the circumstances) in relation
to such products and services and such area and for such period as
such company may reasonably require for the protection of its
legitimate interests.
<PAGE>
- 7 -
9.4 The provisions of this clause shall cease to apply to information or
knowledge which comes into the public domain otherwise than by reason
of the default of the Executive.
9.5 For the purposes of clause 9 confidential information shall include,
but not be limited to, all and any information (whether or not
recorded in documentary form or on computer disk or tape) which
relates to:
(a) the business methods, corporate plans, management systems,
finances, maturing new business opportunities or research and
development projects of the Company;
(b) suppliers, their identities and prices;
(c) customers, their identity, needs and requirements;
(d) marketing or sales of any past, present or future product or
service of the Company including without limitation sales
targets and statistics, market share and pricing statistics,
market surveys and plans, market research reports, sales
techniques, price lists, discount structures and advertising
and promotional material;
(e) trade secrets, technical specifications and other technical
information relating to the businesses of the Company; and
(f) all information material to any dispute or litigation
involving the Company.
10. Protection of Business Interests
The Executive shall be bound by the provisions of Schedule 2.
11. Disciplinary and Grievance Procedure
11.1 Any disciplinary matters affecting the Executive will be dealt with by
the Board. If the Executive wishes to seek redress for any grievance
relating to his employment he should submit his grievance to the Board
in writing whose decision on such grievance shall be final. There are
no specific disciplinary rules affecting the Executive.
11.2 In order to investigate a complaint against the Executive, the Company
reserves the right to suspend the Executive on full pay and to exclude
the Executive from any premises of the Company and any Group Company
for so long as it deems necessary to carry out a proper investigation
and to hold any appropriate disciplinary hearings.
12. Notices
Any notice to be given under this Agreement shall be in writing.
Notices may be served by either party by personal service or by
recorded delivery or by first class post addressed to the other party
or by leaving such notice at (in the case of the
<PAGE>
- 8 -
Company) its registered office for the time being and (in the case of
the Executive) his last known address and any notice given shall be
deemed to have been served at the time at which the notice was
personally served or if sent by recorded delivery at the time of
delivery as recorded or if sent by first class post on the second
working day after posting or in the case of being left as appropriate
at the registered office or last known address, the date on which it
was so left.
13. Deductions
The Executive consents to the deduction from his wages of any sums
owing by him to the Company at any time and he also agrees to make any
payment to the Company of any sums owing by him to the Company upon
demand by the Company at any time. This clause is without prejudice to
the rights of the Company to recover any sums or balance of sums owing
by the Executive to the Company by legal proceedings.
14. General
14.1 This Agreement (including its Schedules) constitute the entire and
only legally binding agreement between the parties relating to the
employment of the Executive by the Company or any Group Company and
replaces any previous employment agreements or arrangements. No
variation to this Agreement shall be effective unless made in writing
signed by or on behalf of the parties and expressed to be such a
variation.
14.2 No failure or delay by the Company in exercising any remedy, right,
power or privilege 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, right, power or privilege preclude any further
exercise of the same or exercise of any other remedy, right, power or
privilege.
14.3 No waiver by the Company of any of the requirements of this Agreement
or of any of its rights under this Agreement shall have effect unless
given in writing and signed by the Board. No waiver of any particular
breach of the provisions of this Agreement shall operate as a waiver
of any repetition of that breach.
14.4 If any provision of this Agreement shall be, or become, void or
unenforceable for any reason within any jurisdiction, this shall
affect neither the validity of that provision within any other
jurisdiction nor any of the remaining provisions of this Agreement.
14.5 This Agreement and the rights and obligations of the parties hereto
shall be governed by and construed in accordance with the laws of
England.
14.6 In the event of any claim, dispute or difference arising out of or in
connection with this Agreement the parties hereto irrevocably agree
and submit to the non-exclusive jurisdiction of the Courts of England.
AS WITNESS the hands of the parties hereto or their duly authorised
representatives.
<PAGE>
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SCHEDULE 1
- ----------
POWER OF ATTORNEY
- -----------------
By this Power of Attorney made on 1997, I, MIKHAIL
GOLOVATOV of 22-39 Bolshaya Nikitshaya Street, Moscow 103009, Russia in
accordance with the terms of the service agreement ("the Service Agreement" of
even date between myself and Gorandel Trading Limited ("the Company") HEREBY
APPOINT the Company to act as my attorney with authority in my name and on my
behalf (so that words and expressions defined in the Service Agreement shall
have the same meanings herein):-
(a) on or after the Termination Date to do any things and sign any
documents as may be required under the constitution of the Company and
each Group Company to make my resignation as a director from those
companies effective;
(b) to sign or execute any and all agreements, instruments, deeds or other
papers and to do all such things in my name as may be necessary or
desirable to implement my obligations in connection with clause 8.5 of
the Agreement;
(c) within 2 days of the Company having requested my resignation pursuant
to clause 8.5.1 to do any thing and sign any documents to make my
resignation as a director from those Companies effective;
(d) on or after the Termination Date to sign or execute any and all
instruments, deeds or other papers and to do all such things in my
name as may be necessary or desirable to implement a transfer of all
my shares in the Company or any Group Company which I may hold as a
bare nominee for the Company or any Group Company; and
(e) to appoint any substitute and to delegate to that substitute all or
any powers conferred by this Power of Attorney.
I declare that this Power of Attorney, having been given by me to secure my
obligations in connection with clause 8.5 of the Service Agreement, shall be
irrevocable in accordance with section 4 of the Powers of Attorney Act 1971.
IN WITNESS whereof this Power of Attorney has been duly executed on the date
set out above.
<PAGE>
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EXECUTED as a DEED and )
DELIVERED by )
MIKHAIL GOLOVATOV )
in the presence of:- )
Witness name:
Address:
Occupation:
<PAGE>
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SCHEDULE 2
- ----------
PROTECTION OF BUSINESS INTERESTS
- --------------------------------
For the avoidance of doubt, the provisions of this Schedule shall not apply if
this Agreement is terminated by the Company in breach of its terms.
In this Schedule the following words and expressions shall have the following
meanings:-
"Business" the business or businesses of the Company or any
Group Company in or with which the Executive has
been involved or concerned namely the business of
providing Security Goods and Security Services to
any firm, company, organisation or individual
requiring the same in any part of the Relevant
Area, whether carried on by such person itself or
through any agent, contractor or subcontractor or
in conjunction in whole or part with one or more
other persons at any time during the period of
twelve months prior to the Termination Date;
CIS the geographical area of those states which at the
date of this Agreement are members of the
Confederation of Independent States and any
state(s), territory(ies) within such area as may
from time to time merge or result from any
reorganisation, boundary reorganisation,
amalgamation or division which may occur in or
between any such state(s);
"directly or indirectly" the Executive acting either alone
or jointly with or on behalf of any other person,
firm or company, whether as principal, partner,
manager, employee, contractor, director,
consultant, investor or otherwise;
"Key Personnel" any person who is at the Termination Date or was
at any time during the period of twelve months
prior to the Termination Date employed or engaged
as a consultant in the Business in an executive,
senior managerial or sales capacity and with whom
the Executive has had dealings other than in a de
minimis way during the course of his employment
under this Agreement;
"Prospective Client" any person firm or company who has been engaged in
negotiations at any time during the twelve months
prior to the Termination Date, with which the
Executive has been personally involved, with the
Company or any Group Company with a view to
purchasing Security Services and/or Security Goods
from the Company or any Group Company;
<PAGE>
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"Relevant Area" the area shown edged in red on the map which
comprises the Annexure to this Agreement and which
encompasses the CIS, Latvia, Lithuania and
Estonia;
"Relevant Client" any person firm or company who at any time during
the twelve months prior to the Termination Date,
has been provided with Security Goods or supplied
with Security Services in the Relevant Area,
including any person who has asked (or enquired
about) the provision of Security Goods or Security
Services in the Relevant Area with whom or which
the Executive directly dealt other than in a de
minimis way or for whom or which the Executive was
responsible on behalf of the Company or any Group
Company at any time during the said period (or the
Term if shorter);
"Relevant Period" the period of twelve months from the
Termination Date less any period during which the
Executive has not been provided with work pursuant
to clause 3.4 of this Agreement;
"Relevant Supplier" any person firm or company who at any time during
the twelve months prior to the Termination Date
was a supplier of any goods or services (other
than utilities and goods or services supplied for
administrative purposes) to the Company or any
Group Company and with whom or which the Executive
had personal dealings during the course of his
employment under this Agreement other than in a de
minimis way; and
Security Goods all goods and products required in order to
provide Security Services;
Security Services the provision and management of security of all
kinds, including (without limitation) guard and
other protection services, courier services,
logistical management, medical management,
supervision and training of security personnel,
advice and consultation on all types of security
arrangements and on situations involving security
needs, equipment supply, investigative services
and all services ancillary to or relating to such
matters;
"Termination Date" the date on which the employment of the Executive
under this Agreement shall terminate.
1. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time during the Relevant Period:-
<PAGE>
- 13 -
(a) solicit away from the Company or any Group Company; or
(b) endeavour to solicit away from the Company or any Group
Company; or
(c) employ or engage; or
(d) endeavour to employ or engage,
any Key Personnel.
2. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time within the Relevant Period:-
2.1 (a) solicit the custom of; or
(b) deal with,
any Relevant Client or Prospective Client in respect of any
Relevant Services; or
2.2 (a) interfere; or
(b) endeavour to interfere,
with the continuance of supplies to the Company and/or any
Group Company (or the terms relating to those supplies) by
any Relevant Supplier.
3. The Executive shall not without the prior written consent of the Board
directly or indirectly at any time within the Relevant Period engage
or be concerned employed or interested in any business within the
Relevant Area which (a) competes or (b) will at any time during the
period of six months from the Termination Date compete with the
Business.
4.1 The Executive acknowledges (having taken appropriate legal advice)
that the provisions of this Schedule are fair and reasonable and
necessary to protect the goodwill and interests of the Company and the
Group Companies and shall constitute separate and severable
undertakings given for the benefit of the Company and each Group
Company and may be enforced by the Company on behalf of any of them.
4.2 If any of the restrictions or obligations contained in this Schedule
is held not to be valid on the basis that it exceeds what is
reasonable for the protection of the goodwill and interests of the
Company and the Group Companies but would be valid if part of the
wording were deleted then such restriction or obligation shall apply
with such deletions as may be necessary to make it enforceable.
4.3 The Executive acknowledges and agrees that he shall be obliged to draw
the provisions of this Schedule to the attention of any third party
who may at any time before or after the termination of the Executive's
employment hereunder, offer to engage the Executive in any capacity
and for whom or with whom the Executive
<PAGE>
- 14 -
intends to work.
<PAGE>
- 15 -
SIGNED by RICHARD BETHELL )
a Director duly authorised )
for and on behalf of ) RICHARD BETHELL
GORANDEL TRADING LIMITED )
in the presence of:-
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
SIGNED by MIKHAIL )
GOLOVATOV in the ) MIKHAIL GOLOVATOV
presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
<PAGE>
CONFORMED COPY
--------------
Dated 9 June 1997
-----------------
(1) DEFENCE SYSTEMS LIMITED
(2) ARMOR HOLDINGS, INC.
(3) DSL (OVERSEAS) LIMITED
(4) GORANDEL TRADING LIMITED
(5) IGOR OREKHOV
DEED OF COVENANT
Travers Smith Braithwaite
10 Snow Hill
London EC1A 2AL
Telephone 0171-248 9133
Facsimile 0171-236 3728
<PAGE>
THIS AGREEMENT is made on 9 June 1997
BETWEEN:-
(1) DEFENCE SYSTEMS LIMITED, a company incorporated and registered in England
(Registration No. 1540857) whose registered office is at 7th Floor, Egginton
House, 25-28 Buckingham Gate, London SW1E 6LD ("Defence Systems");
(2) ARMOR HOLDINGS, INC. a corporation established under the laws of the state
of Delaware, USA, whose address for the purposes of this Agreement is 13386
International Parkway, Jacksonville, Florida 32218, USA ("AHI");
(3) DSL (OVERSEAS) LIMITED, a company incorporated and registered in Cyprus
(Registration No. 56708) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("DSL");
(4) GORANDEL TRADING LIMITED, a company incorporated and registered in Cyprus
(Registration No. 56442) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("GTL"); and
(5) IGOR OREKHOV of 22-39 Bolshaya Nikitshaya Street, Moscow 103009, Russia
("IO").
IT IS AGREED as follows:-
1. Definitions and interpretation
1.1 The following words and expressions where used in this Agreement have the
meanings given to them below:-
AHI Group AHI, its subsidiaries and associates for the time
being and "AHI Group Company" shall be
construed accordingly;
Business in relation to a person, any business of that
person providing Security Goods and Security
Services to any firm, company, organisation or
individual requiring the same in any part of the
Relevant Area, whether carried on by such
person itself or through any agent, contractor
or subcontractor or in conjunction in whole or
part with one or more other persons;
Client in relation to a person carrying on a business,
any person who, in the course of such
business, has been provided with Security
Goods or supplied with Security Services in the
Relevant Area, including any person who has
asked (or enquired about) such business to
provide Security Goods or provide Security
Services in the Relevant Area;
Relevant Area as defined in the Services Agreement;
<PAGE>
Security Goods all goods and products required in order to
provide Security Services;
Security Services the provision and management of security of all
kinds, including (without limitation) guard and
other protection services, courier services,
logistical management, medical management,
supervision and training of security personnel,
advice and consultation on all types of security
arrangements and on situations involving
security needs, equipment supply, investigative
services and all services ancillary to or relating
to such matters;
Services Agreement the services agreement dated the same date as this
Agreement between GTL and Alpha-A Limited and
others.
1.2 Where used in this Agreement the terms "subsidiary" and "holding company"
shall have the meanings respectively attributed to them by the Companies Act
1985 at the date of this Agreement.
1.3 A reference to any statutory provision in this Agreement:-
1.3.1 includes any order, instrument, plan, regulation, permission and
direction made or issued under such statutory provision or deriving
validity from it; and
1.3.2 shall be construed as a reference to such statutory provision as
in force at the date of this Agreement (including, for the avoidance
of doubt, any amendments made to such statutory provision that are in
force at the date of this Agreement); and
1.3.3 shall also be construed as a reference to any statutory
provision of which such statutory provision is a re-enactment or
consolidation.
1.4 The headings in this Agreement are for convenience only and shall not
affect its meaning.
1.5 References to a clause are (unless otherwise stated) to a clause of this
Agreement.
1.6 Words importing one gender shall (where appropriate) include any other
gender and words importing the singular shall (where appropriate) include the
plural and vice versa.
2. Undertakings by IO
2.1 In consideration of AHI entering into the share acquisition agreement of
even date herewith in relation to the acquisition by AHI from Strontian
Holdings Limited of shares in GTL at the request of IO, IO undertakes with each
of DSL, Defence Systems, GTL and AHI that he will not either on his own account
or in conjunction with or on behalf of any other person or persons, whether
directly or indirectly, for the period of:-
2.1.1 5 years from the date of this Agreement, at any time during
such period
<PAGE>
supply Security Goods to or provide Security Services for any person
which is at the date of this Agreement or was during the immediately
preceding period of twelve months a Client of any Business of any AHI
Group Company where such Security Goods or Security Services are the
same as or compete with Security Goods supplied or Security Services
provided in the course of any Business of any AHI Group Company at the
date of this Agreement or during the immediately preceding period of
twelve months;
2.1.2 5 years from the date of this Agreement at any time during such
period solicit or endeavour to solicit the custom of any person which
is at the date of this Agreement or was in the immediately preceding
period of twelve months a Client of any Business of any AHI Group
Company for the supply of Security Goods or the provision of Security
Services which are the same as or compete with those supplied or
provided in the course of any Business of any AHI Group Company at the
date of this Agreement or during the immediately preceding period of
twelve months;
2.1.3 5 years from the date of this Agreement, at any time during such
period solicit or entice away or endeavour to solicit or entice away
from any AHI Group Company any person who is at the date of this
Agreement, or was during the immediately preceding period of twelve
months, employed in any Business of any AHI Group Company whether or
not such person would commit a breach of his or her contract of
employment by reason of leaving service, save that this clause 4.1.3
shall not apply to any individual employed by such AHI Group Company
in a purely secretarial or non-managerial administrative role; and
2.1.4 5 years from the Completion Date, at any time during such period
carry on or be engaged, concerned or interested in the Relevant Area
in any business which competes with the Business of any AHI Group
Company as the same is carried on from time to time, other than as
holder of common stock of any company.
2.2 Each of the undertakings contained in clause 2.1 is a separate undertaking
by IO in relation to himself and his interests and shall be enforceable by any
of DSL, GTL, Defence Systems and AHI separately and independently of their
respective right to enforce any one or more of the other undertakings contained
in clause 2.1 and in the event that any such undertaking shall be found to be
void but would be valid if some part were deleted or the period or area of
application were reduced, then such undertaking shall apply with such
modification as may be necessary to make it valid and effective.
2.3 The parties hereby agree and acknowledge that the undertakings contained in
clause 2.1 are reasonably necessary to protect the legitimate business
interests of those AHI Group Companies carrying on a Business from time to
time.
3. Announcements and confidentiality
3.1 No announcement relating to the subject matter of this Agreement or any
matter ancillary to this Agreement shall be made by or on behalf of the parties
to this Agreement without the prior written approval of the other parties
provided that nothing shall prevent any of Defence Systems, GTL, DSL or AHI
making (even in the absence of the approval of the other parties) any
announcement or disclosure required by law, the American Stock Exchange or any
other regulatory authority.
<PAGE>
3.2 IO shall and shall procure that his associates shall keep confidential and
not at any time after the date of this Agreement disclose or make known in any
way to anyone (other than any member of the AHI Group) or use for its own or
any other person's benefit any know-how or confidential information relating to
any of the customers, suppliers or affairs of the Businesses (including any
prospective Businesses) of any AHI Group Company or otherwise relating to any
Business of any AHI Group Company.
4. Costs
Each party shall pay its own costs and expenses incurred in the negotiation,
preparation and execution of this Agreement.
5. Dispute Resolution
5.1 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 or any agreement or document forming an Annexure
(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.
5.2 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.
5.3 The place of the arbitration shall be London, England and the proceedings
shall be governed by the laws of England.
5.4 The language of the arbitration shall be English and the award shall be in
English.
5.5 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.
5.6 Notwithstanding the other provisions of this clause 5 any of Defence
Systems, AHI, DSL or GTL may seek from any court of competent jurisdiction any
interim, provisional or
<PAGE>
injunctive relief that may be necessary to protect the rights or property of
Defence Systems, AHI, DSL or GTL (as the case may be) 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.
5.7 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 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 re-opened by any of them.
5.8 IO irrevocably authorises and appoints Yakimov Andrey of 7th Floor,
Egginton House, 26-28 Buckingham Gate, London SW1E 6LD as its agent for service
of proceedings in relation to any matter arising out of or in connection with
this Agreement and service on such agent shall be deemed to be service IO.
6. Law of Agreement
6.1 This Agreement shall be governed and construed in accordance with the laws
of England.
6.2 The parties irrevocably submit 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 any of the parties to
proceed in the courts of any other competent jurisdiction.
7. General
7.1 This Agreement constitutes the entire and only legally binding agreement
between the parties relating to its subject matter and 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.
7.2 Any remedy or right conferred by this Agreement on any of GTL, DSL, Defence
Systems or AHI for breach of this Agreement shall be in addition to and without
prejudice to any other right or remedy available to any of them.
7.3 No failure or delay by any of GTL, DSL, Defence Systems or AHI or time or
indulgence given by any of them 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.
7.4 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
<PAGE>
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.
7.5 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.
7.6 IO 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.
7.7 IO acknowledges that he is entering into this Agreement without reliance on
any undertaking or representation given by or on behalf of any of GTL, DSL,
Defence Systems or AHI other than as expressly contained in this Agreement
provided that nothing herein shall exclude any of them from liability for
fraudulent misrepresentation.
8. Notices
8.1 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.
8.2 Service of a notice must be effected by one of the following methods:-
8.2.1 personally on a director or the secretary of any party and
shall be treated as served at the time of such service;
8.2.2 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
8.2.3 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. Applicable law and jurisdiction
9.1 This Agreement shall be governed by and construed in accordance with the
laws of England.
9.2 The parties irrevocably submit for the benefit of DSL, Defence Systems, GTL
and AHI 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 any of GTL, DSL, Defence Systems or AHI to proceed in the
courts of any other competent jurisdiction.
This Agreement has been duly executed by the parties on the date stated above.
AS WITNESS this Agreement has been executed as a deed by or on behalf of the
parties the day and year first before written.
<PAGE>
EXECUTED as a DEED by )
DEFENCE SYSTEMS LIMITED )
acting by:- ) RICHARD BETHELL
...................................
Director
MARTIN BRAYSHAW
...................................
Secretary
EXECUTED as a DEED by )
ARMOR HOLDINGS, INC. )
acting by:- ) JONATHAN SPILLER
...................................
Authorised Signatory
EXECUTED as a DEED by )
DSL (OVERSEAS) LIMITED )
acting by:- ) RICHARD BETHELL
...................................
Director
MARTIN BRAYSHAW
...................................
Director
EXECUTED as a DEED by )
GORANDEL TRADING LIMITED )
acting by:- ) RICHARD BETHELL
...................................
Director
MIKHAIL GOLOVATOV
...................................
Director
SIGNED as a DEED by )
IGOR OREKHOV acting by his )
duly appointed attorney MIKHAIL )
GOLOVATOV in the presence of:- ) MIKHAIL GOLOVATOV
...................................
Name: NEAL WATSON
Address: c/o 10 SNOW HILL
LONDON EC1A 2AL
Occupation Solicitor
<PAGE>
CONFORMED COPY
--------------
Dated 9 June 1997
-----------------
(1) DEFENCE SYSTEMS LIMITED
(2) ARMOR HOLDINGS, INC.
(3) DSL (OVERSEAS) LIMITED
(4) GORANDEL TRADING LIMITED
(5) MIKHAIL GOLOVATOV
DEED OF COVENANT
Travers Smith Braithwaite
10 Snow Hill
London EC1A 2AL
Telephone 0171-248 9133
Facsimile 0171-236 3728
<PAGE>
THIS AGREEMENT is made on 9 June 1997
BETWEEN:-
(1) DEFENCE SYSTEMS LIMITED, a company incorporated and registered in England
(Registration No. 1540857) whose registered office is at 7th Floor, Egginton
House, 25-28 Buckingham Gate, London SW1E 6LD ("Defence Systems");
(2) ARMOR HOLDINGS, INC. a corporation established under the laws of the state
of Delaware, USA, whose address for the purposes of this Agreement is 13386
International Parkway, Jacksonville, Florida 32218, USA ("AHI");
(3) DSL (OVERSEAS) LIMITED, a company incorporated and registered in Cyprus
(Registration No. 56708) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("DSL");
(4) GORANDEL TRADING LIMITED, a company incorporated and registered in Cyprus
(Registration No. 56442) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("GTL"); and
(5) MIKHAIL GOLOVATOV of 22-39 Bolshaya Nikitshaya Street, Moscow 103009,
Russia ("MG")
IT IS AGREED as follows:-
1. Definitions and interpretation
1.1 The following words and expressions where used in this Agreement have the
meanings given to them below:-
AHI Group AHI, its subsidiaries and associates for the time
being and "AHI Group Company" shall be
construed accordingly;
Business in relation to a person, any business of that
person providing Security Goods and Security
Services to any firm, company, organisation or
individual requiring the same in any part of the
Relevant Area, whether carried on by such
person itself or through any agent, contractor
or subcontractor or in conjunction in whole or
part with one or more other persons;
Client in relation to a person carrying on a business,
any person who, in the course of such
business, has been provided with Security
Goods or supplied with Security Services in the
Relevant Area, including any person who has
asked (or enquired about) such business to
provide Security Goods or provide Security
<PAGE>
Services in the Relevant Area;
Relevant Area as defined in the Services Agreement;
Security Goods all goods and products required in order to
provide Security Services;
Security Services the provision and management of security of all
kinds, including (without limitation) guard and
other protection services, courier services,
logistical management, medical management,
supervision and training of security personnel,
advice and consultation on all types of security
arrangements and on situations involving
security needs, equipment supply, investigative
services and all services ancillary to or relating
to such matters;
Services Agreement the services agreement
dated the same date as this
Agreement between GTL and Alpha-A
Limited and others.
1.2 Where used in this Agreement the terms "subsidiary" and "holding company"
shall have the meanings respectively attributed to them by the Companies Act
1985 at the date of this Agreement.
1.3 A reference to any statutory provision in this Agreement:-
1.3.1 includes any order, instrument, plan, regulation, permission and
direction made or issued under such statutory provision or deriving
validity from it; and
1.3.2 shall be construed as a reference to such statutory provision as
in force at the date of this Agreement (including, for the avoidance
of doubt, any amendments made to such statutory provision that are in
force at the date of this Agreement); and
1.3.3 shall also be construed as a reference to any statutory
provision of which such statutory provision is a re-enactment or
consolidation.
1.4 The headings in this Agreement are for convenience only and shall not
affect its meaning.
1.5 References to a clause are (unless otherwise stated) to a clause of this
Agreement.
1.6 Words importing one gender shall (where appropriate) include any other
gender and words importing the singular shall (where appropriate) include the
plural and vice versa.
2. Undertakings by Mikhail Golovatov
2.1 MG undertakes with each of DSL, Defence Systems, GTL and AHI that he will
not either on his own account or in conjunction with or on behalf of any other
person or persons, whether directly or indirectly, for the period of:-
<PAGE>
2.1.1 five years from the date of this Agreement, at any time during
such period supply Security Goods to or provide Security Services for
any person which is at the date of this Agreement or was during the
immediately preceding period of twelve months a Client of any Business
of any AHI Group Company where such Security Goods or Security
Services are the same as or compete with Security Goods supplied or
Security Services provided in the course of any Business of any AHI
Group Company at the relevant time or during the immediately preceding
period of twelve months;
2.1.2 five years from the date of this Agreement at any time during
such period solicit or endeavour to solicit the custom of any person
which is at the date of this Agreement, or was in the immediately
preceding period of twelve months prior a Client of any Business of
any AHI Group Company for the supply of Security Goods or the
provision of Security Services which are the same as or compete with
those supplied or provided in the course of any Business of any AHI
Group Company at the relevant time or during the immediately preceding
period of twelve months;
2.1.3 five years from the date of this Agreement, at any time during
such period solicit or entice away or endeavour to solicit or entice
away from any AHI Group Company any person who is at the date of this
Agreement, or was during the immediately preceding period of twelve
months, employed in any Business of any AHI Group Company whether or
not such person would commit a breach of his or her contract of
employment by reason of leaving service, save that this clause 2.1.3
shall not apply to any individual employed by such AHI Group Company
in a purely secretarial or non-managerial administrative role; and
2.1.4 five years form the Completion Date, at any time during such
period carry on or be engaged, concerned or interested in the Relevant
Area in any business which competes with the Business of any AHI Group
Company as the same is carried on from time to time, other than as
holder of common stock of AHI.
2.2 Each of the undertakings contained in clause 2.1 is a separate undertaking
by MG in relation to himself and his interests and shall be enforceable by any
of DSL, GTL, Defence Systems and AHI separately and independently of their
respective right to enforce any one or more of the other undertakings contained
in clause 2.1 and in the event that any such undertaking shall be found to be
void but would be valid if some part were deleted or the period or area of
application were reduced, then such undertaking shall apply with such
modification as may be necessary to make it valid and effective.
2.3 The parties hereby agree and acknowledge that the undertakings contained in
clause 2.1 are reasonably necessary to protect the legitimate business
interests of those AHI Group Companies carrying on a Business from time to
time.
3. Announcements and confidentiality
3.1 No announcement relating to the subject matter of this Agreement or any
matter ancillary to this Agreement shall be made by or on behalf of the parties
to this Agreement without the prior written approval of the other parties
provided that nothing shall prevent any of Defence Systems, GTL, DSL or AHI
making (even in the absence of the approval of the other parties) any
announcement or disclosure required by law, the American Stock Exchange or any
other regulatory authority.
<PAGE>
3.2 MG shall and shall procure that his associates shall keep confidential and
not at any time after the date of this Agreement disclose or make known in any
way to anyone (other than any member of the AHI Group) or use for its own or
any other person's benefit any know-how or confidential information relating to
any of the customers, suppliers or affairs of the Businesses (including any
prospective Businesses) of any AHI Group Company or otherwise relating to any
Business of any AHI Group Company.
4. Costs
Each party shall pay its own costs and expenses incurred in the negotiation,
preparation and execution of this Agreement.
5. Dispute Resolution
5.1 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.
5.2 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.
5.3 The place of the arbitration shall be London, England and the proceedings
shall be governed by the laws of England.
5.4 The language of the arbitration shall be English and the award shall be in
English.
5.5 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.
5.6 Notwithstanding the other provisions of this clause 5 any of Defence
Systems, AHI, GTL or DSL (as the case may be) may seek from any court of
competent jurisdiction any interim, provisional or injunctive relief that may
be necessary to protect the rights or
<PAGE>
property of any Defence Systems, AHI, GTL or DSL (as the case may be) 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.
5.7 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 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 re-opened by any of them.
5.8 MG irrevocably authorises and appoints Yakimov Andrey of 7th Floor,
Egginton House, 26-28 Buckingham Gate, London SW1E 6LD as its agent for service
of proceedings in relation to any matter arising out of or in connection with
this Agreement and service on such agent shall be deemed to be service on MG.
6. General
6.1 This Agreement constitutes the entire and only legally binding agreement
between the parties relating to its subject matter and 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.
6.2 Any remedy or right conferred by this Agreement on any of GTL, DSL, Defence
Systems or AHI for breach of this Agreement shall be in addition to and without
prejudice to any other right or remedy available to any of them.
6.3 No failure or delay by any of GTL, DSL, Defence Systems or AHI or time or
indulgence given by any of them 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.
6.4 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.
6.5 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.
6.6 MG 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.
<PAGE>
6.7 MG acknowledges that he is entering into this Agreement without reliance on
any undertaking or representation given by or on behalf of any of GTL, DSL,
Defence Systems or AHI other than as expressly contained in this Agreement
provided that nothing herein shall exclude any of them from liability for
fraudulent misrepresentation.
7. Notices
7.1 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.
7.2 Service of a notice must be effected by one of the following methods:-
7.2.1 personally on a director or the secretary of any party and
shall be treated as served at the time of such service;
7.2.2 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
7.2.3 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.
8. Applicable law and jurisdiction
8.1 This Agreement shall be governed by and construed in accordance with the
laws of England.
8.2 The parties irrevocably submit for the benefit of the Purchaser and AHI 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 any of GTL, DSL, Defence Systems or AHI to proceed in the courts of
any other competent jurisdiction.
AS WITNESS this Agreement has been executed as a deed by or on behalf of the
parties the day and year first before written.
<PAGE>
EXECUTED as a DEED by )
DEFENCE SYSTEMS LIMITED )
acting by:- ) RICHARD BETHELL
.....................................
Director
MARTIN BRAYSHAW
.....................................
Secretary
EXECUTED as a DEED by )
ARMOR HOLDINGS, INC. )
acting by:- ) JONATHAN SPILLER
.....................................
Authorised Signatory
EXECUTED as a DEED by )
DSL (OVERSEAS) LIMITED )
acting by:- ) RICHARD BETHELL
.....................................
Director
MARTIN BRAYSHAW
.....................................
Director
EXECUTED as a DEED by )
GORANDEL TRADING LIMITED )
acting by:- ) RICHARD BETHELL
.....................................
Director
MIKHAIL GOLOVATOV
.....................................
Director
<PAGE>
SIGNED as a DEED by )
MIKHAIL GOLOVATOV )
in the presence of:- ) MIKHAIL GOLOVATOV
.....................................
Name: NEAL WATSON
Address: C/O 10 SNOW HILL
LONDON EC1A 2AL
Occupation SOLICITOR
<PAGE>
CONFORMED COPY
--------------
DEFENCE SYSTEMS LIMITED
as Lender
STRONTIAN HOLDINGS LIMITED
as Borrower
------------------
LOAN AGREEMENT
------------------
EVRIPIDOU, GEORGIADES & CO
16 Kyriakos Matsis Avenue
Eagle House, 10th Floor
Ayioi Omoloyites
Nicosia
<PAGE>
THIS AGREEMENT is made the 9th day of June 1997 BETWEEN:-
(1) STRONTIAN HOLDINGS LIMITED, whose registered office is at 10 Mnasiadou
Street, Elma Building, Nicosia (the "Borrower"); and
(2) DEFENCE SYSTEMS LIMITED, a company incorporated and registered in
England (Registration No. 1540857) whose registered office is at 7th
Floor, Egginton House, 25-28 Buckingham Gate, London SW1E 6LD (the
"Lender").
WHEREAS:-
The Borrower has requested and the Lender has agreed to make available to the
Borrower a loan facility upon the terms and subject to the conditions hereof.
NOW IT IS HEREBY AGREED AS FOLLOWS:-
1. DEFINITIONS
(A) In this Agreement the following terms and expressions shall,
except where the context otherwise requires, have the following meanings:-
"Drawdown Date" means the date upon which the partes agree that the Loan shall
be drawn down.
"Encumbrances" means any mortgage, charge (whether fixed or floating), pledge,
lien, encumbrance, hypothecation, security interest, title, retention or other
security arrangement of any kind.
"Event of Default" means any one of the events referred to in Clause 8.
"Libor" means in relation to the Loan, the rate per annum determined by the
Lender for deposits in dollars for a six month period which appears in the
Financial Times as the Interbank rate fixing on the morning on the Drawdown
Date;
"Loan" means the amount of US$200.000.
"Margin" means 2 percent per annum.
"Pledge" means the pledge of 28,794 shares of Armor Holdings, Inc. (such shares
to be issued to, inter alia, the Borrower pursuant to the terms of the Share
Acquisition Agreement), in a form satisfactory to the Lender.
"Repayment Date" means the date falling 6 calendar months from the Drawdown
Date (including such day).
"Share Acquisition Agreement" means the agreement made between, inter alios,
the Borrower and Armor Holdings, Inc., under the terms of which the Borrower
has agreed to sell 500 ordinary shares of C(pound)1 each in Gorandel Trading
Limited.
"Taxes" means any present or future taxes, levies, duties, charges, fees,
deductions or
<PAGE>
- 2 -
withholdings of any nature, and shall include any interest or penalties which
may attach as a consequence of non-payment, and "Tax" and "Taxation" shall be
construed accordingly.
(B) All references in this Agreement to Clauses are to clauses of this
Agreement.
(C) Clause headings are inserted for convenience and ease of reference
only and shall not affect the interpretation hereof.
(D) All words denoting the singular number only shall include the
plural and vice versa.
(E) Words denoting natural persons shall include corporations and vice
versa.
(F) References to any law shall be deemed to include references
thereto as the same may be varied or replaced from time to time or, as
appropriate, as extended, re-enacted or amended.
(G) References in this Agreement to any agreement (including, without
limitation to the generality of the foregoing, this Agreement) or
other document or instrument shall be deemed to include references
thereto as the same may be varied, amended, novated or replaced (as
permitted by this Agreement) from time to time and to all agreements,
documents and instruments stated to be supplemental thereto.
(H)(a) The rule known as the ejusdem generis rule shall not apply and
accordingly general words introduced by the word "other" shall not be
given a restrictive meaning by reason of the fact that they are
preceded by words indicating a particular class of acts, matters or
things; and
(b) General words shall not be given a restrictive meaning by reason
of the fact that they are followed by particular examples intended to
be embraced by the general words.
2. DRAWDOWN
(A) Subject to:-
(i) The Lender having received and found to be satisfactory to
it:-
(a) A copy, certified by a director of the Borrower as
being a true and complete copy and in full force and
effect, of a resolution of the board of directors of
the Borrower approving the execution, delivery and
performance of this Agreement and authorising a person
or persons to sign and deliver on behalf of the
Borrower this Agreement, any other notices, documents
and communications to be given by the Borrower pursuant
to or in connection with this Agreement;
(b) A certified true copy of the memorandum and articles of
association and certificate of incorporation of the
Borrower;
<PAGE>
- 3 -
(c) Certified copies of all documents evidencing any other
necessary action, approval or consent with respect to
this Agreement (including, without limitation to the
generality of the foregoing, all governmental and other
official approvals and consents as the Lender deems
appropriate); and
(d) The Pledge duly executed by the parties thereto,
the Borrower may draw, in United States dollars, the entire amount (but not a
part only) of the Loan on the Drawdown Date. If the Loan is not drawn on the
Drawdown Date it shall automatically be cancelled.
3. INTEREST
(A) The Borrower will pay interest on the Loan and each part thereof
from the Drawdown Date until the final repayment of the Loan at the rate of
interest which is equal to the aggregate of:-
(i) LIBOR; and
(ii) The Margin.
(B) Interest at the rate(s) determined as aforesaid shall accrue from
day to day and be calculated on the basis of actual days elapsed and a 360 day
year and shall be paid in arrears on the Repayment Date.
(C) The Certificate of the Lender as to the rate(s) and amount of
interest payable in respect of the Loan shall be conclusive and binding on the
Borrower.
4. REPAYMENT
The Borrower shall repay the entire amount of the Loan (less the
amount (if any) of any deemed repayment or part repayment of the Loan by the
Vendor pursuant to the terms of Clause 3.4 of the Share Acquisition Agreement)
plus all interest accrued thereon on the Repayment Date.
5. REPRESENTATIONS AND WARRANTIES
(A) The Borrower represents and warrants to the Lender as follows:-
(i) The Borrower is a company duly established and
existing under the laws of Cyprus and has the power
and authority to own its assets and to conduct the
business which it conducts and/or proposes to
conduct;
(ii) The Borrower has the corporate power to enter into,
exercise its rights and perform and comply with its
obligations under this Agreement (including
borrowing the full amount of the Loan hereunder);
<PAGE>
- 4 -
(iii) The execution of this Agreement on its behalf and
the performance of its obligations hereunder have
been duly authorised by all necessary corporate
action, and the obligations expressed as being
assumed by it hereunder constitute its valid, legal
and binding obligations enforceable against it in
accordance with their terms;
(iv) Neither its execution and delivery of this Agreement
nor its exercise of any of its rights hereunder nor
its performance or observance of any of its
obligations hereunder will:-
(a) cause any indebtedness owing by it to be
prepaid or to become due or capable of
being declared due (with or without demand)
prior to the stated maturity date thereof;
(b) cause any limitation on any of its powers
whatsoever and howsoever imposed, or on the
right or ability of its directors to
exercise such powers, to be exceeded; or
(c) conflict with, or result in any breach of,
any of the terms, covenants, conditions and
provisions of, or constitute a default
under, or result in the creation or
imposition of any Encumbrance upon all or
any part of its undertaking, property or
assets pursuant to the terms of, any
statute, regulation, indenture, mortgage,
deed of trust, agreement or other
instrument, arrangement, obligation or duty
to which it is a party or is subject or by
which it is bound;
(v) The Borrower is not in default under any law,
statute, regulation, indenture, mortgage, trust
deed, agreement or other instrument, arrangement,
obligation or duty by which it is bound;
(vi) No judgment or award has been given or made by and
no litigation, arbitration or administrative
proceeding before or of any court, judicial
authority, tribunal, arbitrator or governmental
agency is taking place, pending or, to the best of
its knowledge, information and belief, being in good
faith threatened against it or against any of its
assets and which would be likely to have a material
adverse effect on its ability to observe and perform
its obligations under this Agreement or which in any
way disputes or calls into question the power or
authority of the Borrower to enter into and perform
any of such obligations;
(vii) No Event of Default has occurred at the date hereof
and no other event which with the giving of notice
and/or lapse of time might constitute an Event of
Default, has occurred;
(viii) There exists no Encumbrance on or over the whole or
any part of the undertaking or assets, present or
future (including uncalled capital);
(ix) The Borrower has not taken any corporate action nor
have any other
<PAGE>
- 5 -
steps been taken or legal proceedings been started
or threatened against the Borrower for its winding
up, dissolution or re-organisation or for the
appointment of a receiver, administrator,
administrative receiver, trustee or other similar
officer of any one or more of them or of any or all
of its property;
(x) It is not necessary or advisable in order to ensure
the legality, validity or enforceability of this
Agreement that this Agreement be filed, recorded or
enroled with any court or authority in Cyprus; and
(xi) The Borrower will not be required to make any
withholding or deduction from any payment to become
due from the Borrower hereunder.
6. UNDERTAKINGS
(A) The Borrower shall, except with the prior written consent of the
Lender and until all sums due and to become due from the Borrower under this
Agreement have been paid:-
(i) Keep its property free of all Encumbrances and
adverse claims or payments of any character,
contracts or burdens other than liens arising in the
ordinary course of business where the encumbrancer's
rights to the lien are being disputed by the
Borrower in good faith;
(ii) Forthwith upon it becoming aware of the same give
written notice to the Lender of all litigation,
arbitration or administrative proceedings commenced
before and every judgment or award given or made by
any court, judicial authority or other tribunal or
governmental agency and every notice of default or
adverse claim or demand made by any person, in each
case against the Borrower;
(iii) Immediately upon becoming aware of the occurrence of
any Event of Default or of any other event which,
solely with the giving of notice and/or lapse of
time, might constitute an Event of Default, give
notice thereof to the Lender;
(iv) Carry on its business and affairs in all respects in
a proper and efficient manner;
(v) Not channel funds to any other company or person,
howsoever relating to or connected with the
Borrower, unless this is in the context of an
at-arms-length intra-group trading;
(vi) Not sell, transfer or otherwise dispose of (whether
by one transaction or a series of transactions and
whether at any one time or over a period of time)
the whole or any part of its assets except where
such disposal is made in the ordinary course of
business or otherwise for full value as between a
willing buyer and a willing seller in cash; and
<PAGE>
- 6 -
(B) Without prejudice to any other provision of this Agreement the
Borrower undertakes to save harmless and to indemnify the Lender from and
against all loss or damage suffered by the Lender (including but not limited to
claims and demands by and liabilities owing to the Lender) arising from any
failure of the Borrower to observe, perform or comply with any provision of
this Agreement.
7. COMMISSIONS, FEES AND CHARGES
The Borrower shall pay all stamp, documentary and other like duties
and taxes, if any, to which this Agreement, or any other documentation executed
in connection herewith may be subject or give rise and shall indemnify the
Lender against any and all liabilities with respect to or resulting from any
delay or omission on the part of the Borrower to pay any such duties or taxes.
8. DEFAULT
(A) Each of the following events shall be an Event of Default:-
(i) If the Borrower shall commit any breach of or omit
to perform any of the terms and conditions of this
Agreement;
(ii) any representation or warranty made or deemed to be
made by the Borrower pursuant to this Agreement or
in any notice, certificate, instrument or statement
contemplated hereby or made or delivered pursuant
hereto is incorrect;
(iii) If the Borrower ceases or threatens to cease to
carry on all or substantially all of its operations;
(iv) If any action is taken for or with a view to the
winding up of the Borrower or the Borrower becomes
insolvent or is unable to pay its debts or enters
into dealings with any of its creditors with a view
to avoiding, or in expectation of, insolvency or
stops or threatens to stop payments generally or a
receiver is appointed over or an encumbrancer takes
possession of any of the assets of the Borrower;
(v) If at any time it is unlawful for the Borrower to
perform any of its obligations hereunder;
(vi) If a distress or an execution is levied or enforced
or sued out against or if any garnishee order is
made and served in respect of the whole or any part
of the property of the Borrower (or an analogous
proceedings or action is taken in respect of any
such property) and is not discharged within twenty
eight days of being levied, enforced, sued out or
served;
(vii) If the Borrower shall be in default under any
agreement by which it is bound, being a default
which would be likely to have a material adverse
effect on its ability to observe and perform any
obligation hereunder;
<PAGE>
- 7 -
(viii) If any order of any court or other tribunal or
governmental agency shall be made, which is likely
to have a material adverse effect on the ability of
the Borrower to observe and perform any obligations
hereunder;
(ix) If any litigation, arbitration or administrative
proceedings are commenced before any court or other
tribunal or governmental agency involving the
Borrower which would in the opinion of the Lender be
likely to have a material adverse effect on the
Borrower;
(x) If any liability of the Borrower for borrowed money
or under any guarantee or indemnity is not paid when
due or any liability of the Borrower for borrowed
money shall become due and payable or capable of
being declared due and payable prior to the stated
maturity thereof;
(xi) If any material adverse change occurs in the
business or financial situation of the Borrower;
(xii) If any governmental or other licence, approval,
authorisation, consent or exemption required to
enable the Borrower to perform any one or more of
its obligations under this Agreement is withdrawn or
modified in any manner which is likely to have a
material adverse effect on the Borrower; or
(xiii) If the Pledge or any material provision of the
Pledge shall at any time and for any reason cease to
be in full force and effect, be declared void or
voidable or shall be repudiated by any party thereto
(other than the Lender) or the validity or
enforceability of the Pledge shall at any time be
contested by any party thereto (other than the
Lender) or any such party shall deny that it has any
liability thereunder or shall give notice
terminating or purporting to terminate its
obligations thereunder.
(B) The Lender may at any time after the happening of an Event of
Default (whether or not notice shall have been given by the Borrower of such
Event of Default) by notice in writing to the Borrower declare the Loan and all
interest accrued and all other sums payable pursuant to this Agreement to be
immediately due and payable, whereupon the same shall become immediately due
and payable.
(C) In the event that the Loan shall be declared immediately due and
payable as aforesaid the Borrower will pay to the Lender all losses (including,
without prejudice to the generality of the foregoing, any losses incurred in
liquidating or employing deposits from third parties acquired or arranged to
effect or maintain the Loan or any part thereof and any loss or profit)
incurred by the Lender as a consequence of any Event of Default and/or the
declaration of the Loan to be immediately due and payable as aforesaid and/or
the timing of any payment subsequently received from the Borrower hereunder, as
to which the certificate of the Lender shall be conclusive.
<PAGE>
- 8 -
9. ASSIGNMENT
(A) This Agreement shall be binding upon, and inure to the benefit of,
the Lender and the Borrower, and their respective successors.
(B) The rights and/or obligations of the Borrower under this Agreement
shall be incapable of assignment (either in law or equity) and the Borrower
shall not assign or transfer any of its rights and/or obligations under this
Agreement (either in law or equity).
(C) The Lender may at any time transfer all or any part of its rights,
benefits and obligations hereunder by assigning to any one or more persons
(each of which is hereinafter in this Clause 9 called an "Assignee Person") all
or any part of the Lender's rights and benefits hereunder.
(D) If the Lender transfers all or any part of its rights, benefits
and obligations hereunder as provided in Clause 9(C), all references in this
Agreement to the Lender shall thereafter be construed as references to the
Lender and its Assignee Person(s) to the extent of their respective
participations and the Borrower shall thereafter look only to the Assignee
Person(s) (to the exclusion of the Lender) in respect of that proportion of the
Lender's obligations hereunder as correspond to such Assignee Person's
participation herein (or, as the case may be, in respect of those proportions)
of the Bank's obligations hereunder as correspond to such Assignee Person's
respective participation herein).
10. FURTHER ASSURANCES
The Borrower shall, on being requested by the Lender so to do, at the
Borrower's expense do or cause to be done all such acts and/or execute or cause
to be executed all such documents as may reasonably be considered necessary or
desirable to assure to the Lender the full benefit of this Agreement or the
rights, powers and remedies herein conferred on the Lender.
11. WAIVERS: REMEDIES CUMULATIVE
No failure to exercise and no delay in exercising on the part of the
Lender, any right, power or privilege hereunder and no course of dealing
between the Lender and the Borrower shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other or further exercise thereof, or the exercise of any other right,
power or privilege. The rights and remedies herein provided are cumulative and
not exclusive of any rights or remedies provided by law.
12. ENTIRE AGREEMENT
This Agreement contains the entire agreement between the Lender and
the Borrower relating to the Facility and the Loan and the terms and conditions
of this Agreement shall not be varied otherwise than by an agreement in writing
to be executed by or on behalf of the Lender and the Borrower.
13. ILLEGALITY
The illegality, invalidity or enforceability of any provision of this
Agreement under
<PAGE>
- 9 -
the law of any jurisdiction shall not affect its legality, validity or
enforceability in any other jurisdiction or the legality, validity or
enforceability of any other provision.
14. NOTICES
Any notice, demand or communication given under this Agreement shall
be in writing and shall be left at or sent by registered mail to or sent by fax
(with written confirmation) to, in the case of notices or communications served
on the Lender, fax number (0171) 233 7434 and marked for the attention of
Martin Brayshaw and, in the case of notices, demands or communications served
on the Borrower, fax number (007)(095) 290 3428 and marked for the attention of
Mikhail Golovatov or, in any case, such other address or fax number or for the
attention of such other person as may from time to time be notified in writing
by one party to the other party. Any notice, demand or communication shall be
deemed to be given on receipt thereof (which, in the case of a fax, shall be
deemed to occur at the time of transmission) provided that if receipt of any
notice demand or communication does not occur during normal business hours on a
day which is a Business Day at the place where such notice, demand or
communication is received, such notice, demand or communication shall not be
deemed to have been given until the next following Business Day at such place
of receipt.
15. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in accordance with English
law.
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.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first above written.
<PAGE>
- 10 -
SIGNED by MIKHAIL )
GOLOVATOV duly authorised for )
and on behalf of )
STRONTIAN HOLDINGS LIMITED ) MIKHAIL GOLOVATOV
in the presence of:- )
SIGNED by RICHARD BETHELL )
duly authorised for and on behalf )
of DEFENCE SYSTEMS LIMITED ) RICHARD BETHELL
in the presence of:- )
<PAGE>
CONFORMED COPY
--------------
STOCK PLEDGE AGREEMENT
----------------------
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, 25-28 Buckingham Gate, London SW1E 6LD (the "Lender");
(2) STRONTIAN HOLDINGS LIMITED, whose registered office is at 10 Mnasiadou
Street, Elma Building, Nicosia (the "Borrower");
(3) MIKHAIL GOLOVATOV, of 22-39 Bolshaya Nikitshaya Street, Moscow 103009,
Russia ("MG"); and
(4) IGOR OREKHOV, of 22-39 Bolshaya Nikitshaya Street, Moscow 103009, Russia
("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
<PAGE>
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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
<PAGE>
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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 Attorney Act 1971 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;
<PAGE>
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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.
<PAGE>
- 5 -
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. (0171) 233 7434
The Borrower - Fax No. (007)(095) 290 3428
MG - Fax No. (007)(095) 290 3428
IO - Fax No. (007)(095) 290 3428
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.
<PAGE>
- 6 -
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
<PAGE>
- 7 -
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.
<PAGE>
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EXECUTED as a DEED by )
STRONTIAN HOLDINGS LIMITED )
acting by its duly appointed )
attorney MIKHAIL GOLOVATOV ) MIKHAIL GOLOVATOV
...................................
Attorney
EXECUTED as a DEED by )
DEFENCE SYSTEMS LIMITED )
acting by:- ) RICHARD BETHELL
...................................
Authorised Signatory
EXECUTED as a DEED by )
MIKHAIL GOLOVATOV ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
EXECUTED as a DEED by )
IGOR OREKHOV )
acting by his duly appointe )
attorney MIKHAIL GOLOVATOV ) MIKHAIL GOLOVATOV
in the presence of:- )
NEAL WATSON
SOLICITOR
C/O 10 SNOW HILL
LONDON EC1A 2AL
<PAGE>
CONFORMED COPY
--------------
DATED 9 June 1997
-----------------
(1) DSL (OVERSEAS) LIMITED
(2) STRONTIAN HOLDINGS LIMITED
(3) GORANDEL TRADING LIMITED
(4) DEFENCE SYSTEMS LIMITED
(5) ALPHA-A LIMITED
TERMINATION AGREEMENT
of a
JOINT VENTURE AGREEMENT
relating to
GORANDEL TRADING LIMITED
Travers Smith Braithwaite
10 Snow Hill
London EC1A 2AL
Tel: 0171-248 9133
Fax: 0171-236 3728
<PAGE>
THIS AGREEMENT is made on 9 June 1997
BETWEEN:-
(1) DSL (OVERSEAS) LIMITED a company incorporated and registered in Cyprus
(Registration no. 56708) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("DSL");
(2) STRONTIAN HOLDINGS LIMITED a company incorporated and registered in Cyprus
(Registration no. 56709) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("SHL");
(3) GORANDEL TRADING LIMITED a company incorporated and registered in Cyprus
(Registration no. 56442) whose registered office is at 10 Mnasiadou Street,
Elma Building, Nicosia, Cyprus ("the Company");
(4) DEFENCE SYSTEMS LIMITED a company incorporated and registered in England
(Registration no. 1540857) whose registered office is at 7th Floor, Egginton
House, 25-28 Buckingham Gate, London SW1E 6LD ("Defence Systems"); and
(5) ALPHA-A LIMITED a joint stock company incorporated and registered at the
Executive Committee of Kujbishevsky, Regional Council of People's Deputies in
Moscow on 24 October 1991 (Registration no. N6474) whose official address is at
105023, Moscow, Suvosovskaya Str., Building 27 ("Alpha-A").
WHEREAS:-
(A) The parties to this Agreement are party to a Joint Venture Agreement dated
27 November 1993 relating to the Company ("the JV Agreement").
(B) The parties wish to be terminate the JV Agreement on the terms set out in
this Agreement.
IT IS NOW AGREED
1. Each of the parties hereby agrees that the JV Agreement shall be terminated
with immediate effect upon execution of this Agreement.
2. Each of the parties hereby irrevocably waives any rights, claims and
interests which any of them may have at the present or in the future under the
JV Agreement.
3. This Agreement may be executed in one or more counterparts and execution by
each of the parties of any of such counterparts will constitute due execution
of their Agreement.
4. This Agreement shall be governed by and construed in accordance with the
Laws of England and the parties hereby submit to the non-exclusive jurisdiction
of the Courts of England and Cyprus in connection with any dispute or claim
hereunder.
THIS AGREEMENT has been duly executed as a Deed on the date stated above.
<PAGE>
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EXECUTED as a Deed by )
DSL (OVERSEAS) LIMITED )
acting by:- ) RICHARD BETHELL
...................................
Director
MARTIN BRAYSHAW
...................................
Director
EXECUTED as a Deed by )
STRONTIAN HOLDINGS LIMITED )
acting by its duly appointed )
attorney MIKHAIL GOLOVATOV:- ) MIKHAIL GOLOVATOV
...................................
Attorney
EXECUTED as a Deed by )
GORANDEL TRADING LIMITED )
acting by:- ) RICHARD BETHELL
...................................
Director
MIKHAIL GOLOVATOV
...................................
Director
<PAGE>
- 3 -
EXECUTED as a Deed by )
DEFENCE SYSTEMS LIMITED )
acting by:- ) RICHARD BETHELL
...................................
Director
MARTIN BRAYSHAW
...................................
Secretary
EXECUTED as a Deed by )
ALPHA-A LIMITED )
acting by:- ) MIKHAIL GOLOVATOV
...................................
Director
