8th May 2007 07:00
BAE SYSTEMS PLC07 May 2007 Not for release, publication or distribution in, or into, the United States,Canada, Japan or Australia, or any other jurisdiction where to do the same wouldconstitute a violation of the relevant laws of such jurisdiction. BAE SYSTEMS PLC ANNOUNCES PROPOSED ACQUISITION OF ARMOR HOLDINGS INC. AND PLACING TO RAISE APPROXIMATELY £750 MILLION 7 May 2007 BAE Systems plc ("BAE Systems" or the "Company") announces that its wholly-ownedUS subsidiary BAE Systems, Inc. has entered into a definitive merger agreementto acquire Armor Holdings Inc. ("Armor Holdings") for $88 per share in cash,representing a total consideration for Armor Holdings' fully diluted sharecapital of approximately $4,144 million (£2,080 million). Including theassumption of net debt of $388 million (£195 million), the transaction is valuedat $4,532 million (£2,275 million). Headquartered in Jacksonville Florida, Armor Holdings is a major manufacturer oftactical wheeled vehicles and a leading provider of vehicle and individualarmour systems and survivability technologies for the military and adjacent lawenforcement and commercial security markets. Armor Holdings reported sales of$2,361million and profit before tax of $214 million for the year ended 31December 2006. As at 31 December 2006 Armor Holdings had total assets of$2,318 million. Armor Holdings employs over 8,000 people in 63 locationsthroughout the US and internationally, including the UK. The proposed acquisition will be financed through a combination of a placing ofnew ordinary shares in BAE Systems (the "Placing"), which is expected to raiseapproximately £750 million before expenses, and existing internal resources. ThePlacing, which will be jointly undertaken by Hoare Govett Limited ("Hoare Govett") and UBS Limited ("UBS" and, together, the "Managers"), is being launched onTuesday 8 May 2007, and is not conditional upon the completion of the proposedacquisition. The proposed acquisition is expected to be immediately accretive to BAE Systems'earnings as well as delivering returns in excess of BAE Systems' cost of capitalin the second full year (2009) following the proposed acquisition, beforegoodwill and amortization. The proposed acquisition is a significant step in the implementation of BAESystems' strategy to grow as the premier global defence and aerospace companyby: - expanding and developing its business in the United States, - expanding its global land systems business, and - developing its worldwide through-life support, solutions and services activities. The proposed acquisition will strengthen BAE Systems' position as one of theworld's leading land systems businesses. The integration of Armor Holdings intoBAE Systems Land and Armaments sector is expected to increase BAE Systems' USsales by more than $3 billion by the addition of complementary revenue streamsfrom several priority tactical vehicle programmes. BAE Systems' globalmarketing presence will enhance Armor Holdings ability to offer tactical wheeledvehicle replacement programmes in overseas markets. Current operations by armed forces have clearly signalled the urgent requirementfor increased survivability and more effective armour systems. The combinationof the complementary technologies of BAE Systems and Armor Holdings will betterserve this need. BAE Systems brings expertise in combat vehicle design, rapidprototyping and survivability systems, and Armor Holdings brings expertise inautomotive design and lean, high-volume manufacturing technologies. The combined business will be well-positioned to address significant newtactical vehicle requirements. The US and UK armed forces, and many othernations' armed forces, are experiencing an increased demand for tactical wheeledvehicles with increased survivability. Approximately 60% of the US Army'scurrent stated medium truck requirements is still to be manufactured. Thisrequirement, together with additional opportunities in relation to new vehicleprogrammes - such as the Family of Medium Tactical Vehicles (FMTV), theMine-Resistant Ambush Protected (MRAP) vehicle, and future prospects such as theJoint Light Tactical Vehicle (JLTV) - are expected to be valued at over $10billion. The proposed acquisition creates a significant opportunity for growth inreadiness and sustainment activity. Armor Holdings has an installed base of morethan 30,000 tactical wheeled vehicles and is addressing potential requirementsto produce up to 60,000 more over the next 10 years. Combined with BAE Systems'existing installed base of approximately 88,000 vehicles worldwide, thisacquisition enables Armor Holdings customers to benefit from enhanced logisticsand support through integration with BAE Systems' well established reset,upgrade and support capability. On completion of the proposed acquisition it is intended that Armor Holdingswill be integrated into BAE Systems Land and Armaments sector. It is intendedthat retention agreements will be put in place to address leadership continuitygoing forward. In advance of BAE Systems' planned communication to investors at its AGM onWednesday 9 May the company has reviewed the current trading outlook. It hasconcluded that, notwithstanding the translation effects on the financial resultsof the Company's US operations arising from recent weakness of the US dollar,BAE Systems continues to anticipate a further year of good growth in 2007, inparticular from the Land & Armaments sector and from further progress in UKprogrammes. The Company anticipates good operating cash flow again in 2007. Commenting on the proposed acquisition, Mike Turner, Chief Executive of BAESystems, said: "Armor Holdings is a strong business with an excellent track record and a highlyregarded management team. The combination of Armor Holdings with BAE Systems'existing land systems business, will strengthen our capabilities to the benefitof the US and UK armed forces and their international allies." Walt Havenstein, President and CEO of BAE Systems, Inc. added: "BAE Systems, Inc. has a demonstrated record of excellent stewardship havingincreased investment, grown jobs and improved performance in its acquired USbusinesses. BAE Systems and Armor Holdings share a common commitment tonational security and support for the men and women of the armed forces." The proposed acquisition is conditional, amongst other things, upon receivingcertain required regulatory clearances and the approval of Armor Holdings'shareholders and is expected to close in the third quarter. The Placing The Placing by Hoare Govett and UBS of new ordinary shares, representingapproximately 5.9% per cent. of BAE Systems' existing issued share capital, isexpected to raise approximately £750 million (before expenses) and willcontribute to the funding for the proposed acquisition. The number of ordinaryshares to be sold in the Placing and the placing price will be decided at theclose of the accelerated bookbuilding period and BAE Systems will make a furtherannouncement thereafter. The Placing is not conditional on the completion of theproposed acquisition. The placing shares will rank equally in all respects with the existing ordinaryshares of the Company, including the right to receive all future dividends andother distributions, other than the final dividend for the year ended 31December 2006 of 6.9 pence per ordinary share announced on 22 February 2007.Subject to shareholder approval, the final dividend will be paid on 1 June 2007to shareholders registered on 20 April 2007. The ex-dividend date was 18 April2007. Application will be made for the placing shares to be admitted to the OfficialList maintained by the UK Listing Authority and to be admitted for trading bythe London Stock Exchange on its main market for listed securities. Admissionof the placing shares is expected to take place on 11 May 2007. In connectionwith the Placing, BAE Systems has agreed not to issue ordinary shares (otherthan the placing shares) for a period beginning on the date of this announcementand ending 90 days after admission, subject to certain customary exceptionsincluding with the prior consent of the Managers. Attention is drawn to the detailed terms and conditions of the Placing describedin Appendix 1 to this announcement and, in particular, to the requirement that aPlacee (as defined in Appendix 1) must either have made a nationalitydeclaration (which is still in effect and correct) or must make a nationalitydeclaration in accordance with the provisions of the Company's articles ofassociation before the directors of the Company are entitled to register aPlacee's allocation. This declaration can be made through CREST or via adeclaration form, which can be obtained from either of the managers. Issued by: BAE Systems plc London For further information please contact:- BAE Systems Investors: Andy Wrathall tel: 01252 383820 Media: Charlotte Lambkin tel: 01252 383836 Hoare Govett (Joint Corporate Broker) Corporate Broking Neil Collingridge tel: 020 7678 1692 Luke Simpson tel: 020 7678 5173 Syndicate Jeremy Thompson tel: 020 7678 1760 Tom Perry tel: 020 7678 6571 UBS Securities LLC (Financial adviser to BAE Systems) Kevin Cox tel: 212-821-4699 Sameer Singh tel: 212-821-3609 UBS Limited (Joint Corporate Broker) Corporate Broking Phil Shelley tel: 0207 568 2730 James Archer tel: 0207 567 5423 Syndicate Christopher Smith tel: 0207 568 4389 Tom Johnson tel: 0207 568 1417 Hoare Govett Limited and ABN AMRO Bank N.V. (London branch), which areauthorised and regulated by the Financial Services Authority, are actingexclusively for BAE Systems and for no one else solely in connection with thePlacing and will not be responsible to anyone other than BAE Systems forproviding the protections afforded to the customers of Hoare Govett Limited andABN AMRO Bank N.V. (London branch) or for providing advice in relation to thePlacing or any transaction or arrangement referred to in this announcement. UBS Limited, which is authorised and regulated by the Financial ServicesAuthority, is acting exclusively for BAE Systems and for no one else solely inconnection with the Placing and will not be responsible to anyone other than BAESystems for providing the protections afforded to the customers of UBS Limitedor for providing advice in relation to the Placing or any transaction orarrangement referred to in this announcement. This announcement is for information purposes only and does not constitute anoffer or invitation to acquire or dispose of any securities or investment advicein any jurisdiction. This announcement includes "forward-looking statements". All statements otherthan statements of historical facts included in this announcement, including,without limitation, those regarding the Company's financial position, businessstrategy, plans and objectives of management for future operations, the expectedtiming and strategic and financial effects of the proposed acquisition andtrends in the U.S. defence budget and the defence industry, are forward-lookingstatements. Such forward-looking statements involve known and unknown risks,uncertainties and other important factors which could cause the actual results,performance or achievements of the Company or the markets and economies in whichthe Company operates to be materially different from future results, performanceor achievements expressed or implied by such forward-looking statements,including, without limitation, risks related to: the integration of ArmorHoldings 's business with the Company's, the costs related to the proposedacquisition, inability to obtain, or meet conditions imposed for, requiredgovernmental and regulatory approvals and consents and inability to obtain theapproval of the shareholders of Armor Holdings for the proposed acquisition.The Company cannot give any assurance that the proposed acquisition will becompleted or that it will be completed on the terms described in thisannouncement. This announcement is not an offer for sale within the United States of anysecurity of the Company. Securities of the Company, including its ordinaryshares, may not be offered or sold in the United States absent registrationunder the U.S. securities laws or unless exempt from registration under suchlaws. No statement in this announcement is intended to be a profit forecast and nostatement in this announcement should be interpreted to mean that earnings pershare of BAE Systems for the current or future financial years would necessarilymatch or exceed the historical published earnings per share of BAE Systems. This material is not a proxy solicitation and is not a substitute for the proxystatement Armor Holdings, Inc. will file with the US Securities and ExchangeCommission (SEC). Investors are urged to read the proxy statement when itbecomes available, because it will contain important information. The proxystatement and other documents, which will be filed by Armor Holdings with theSEC, will be available free of charge at the SEC's website, www.sec.gov, or byvisiting Armor Holdings' website at www. Armor Holdings .com. Not for release, publication or distribution in, or into, the United States,Canada, Japan or Australia, or any other jurisdiction where to do the same wouldconstitute a violation of the relevant laws of such jurisdiction. APPENDIX 1 Further Information on the Placing IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THISANNOUNCEMENT, THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN, AND ANYOFFER IF MADE SUBSEQUENTLY, ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARYACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OFINVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHOHAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE (1)"QUALIFIED INVESTORS" AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES ANDMARKETS ACT 2000 ("FSMA"), BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE2.1(e)(i), (ii) OR (iii) OF DIRECTIVE 2003/71/EC (THE "PROSPECTUS DIRECTIVE")AND (2) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000(FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") OR ARE PERSONS WHOFALL WITHIN ARTICLE 49(2)(a) TO (d) ("HIGH NET WORTH COMPANIES, UNINCORPORATEDASSOCIATIONS, ETC") OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS"RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREINMUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.PERSONS DISTRIBUTING THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) MUST SATISFYTHEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TOWHICH THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES ISAVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANTPERSONS. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE ORSUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THE NEW ORDINARY SHARES THAT ARETHE SUBJECT OF THE PLACING (THE "PLACING SHARES") REFERRED TO HEREIN HAVE NOTBEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, ASAMENDED (THE "SECURITIES ACT") AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITEDSTATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR A TRANSACTION NOT SUBJECT TO,THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. Relevant Persons choosing to participate in the Bookbuilding Process and, ifrelevant, the Placing ("Placees") will be deemed to have read and understoodthis announcement (including this appendix) in its entirety and to be making anysuch offer to participate on the terms and conditions, and to be providing therepresentations, warranties, acknowledgements and undertakings, contained inthis appendix. In particular each such Placee represents, warrants and acknowledges that: 1. it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business; 2. in the case of a Relevant Person in a member state of the EEA which has implemented the Prospectus Directive (each a "Relevant Member State") who acquires any Placing Shares pursuant to the Placing: (i) it is a Qualified Investor; and (ii) in the case of any Placing Shares acquired by it as afinancial intermediary, as that term is used in Article 3(2) of the ProspectusDirective, (i) the Placing Shares acquired by it in the Placing have not beenacquired on behalf of, nor have they been acquired with a view to their offer orresale to, persons in any Relevant Member State other than Qualified Investorsor in circumstances in which the prior consent of the Managers has been given tothe offer or resale; or (ii) where Placing Shares have been acquired by it onbehalf of persons in any member state of the EEA other than Qualified Investors,the offer of those Placing Shares to it is not treated under the ProspectusDirective as having been made to such persons; and 3. it is acquiring the Placing Shares for its own account or isacquiring the Placing Shares for an account with respect to which it exercisessole investment discretion and that it (and any such account) is outside theUnited States or it is a dealer or other professional fiduciary in the UnitedStates acting on a discretionary basis for non-US beneficial owners (other thanan estate or trust), in reliance upon Regulation S under the US Securities Actof 1933, as amended (the "Securities Act"); or, if it is not outside the UnitedStates, is a qualified institutional buyer ("QIB") as defined in Rule 144A underthe Securities Act and has executed an investment letter in the form provided toit and has delivered the same to the relevant Manager and the Company. The Company, the Managers and their respective Affiliates will rely upon thetruth and accuracy of the foregoing representations, acknowledgements andagreements. This announcement (including this appendix) does not constitute an offer to sellor issue or the solicitation of an offer to buy or subscribe for Placing Sharesin any jurisdiction including, without limitation, the United Kingdom,Australia, Canada, Japan or the United States. This announcement and theinformation contained herein is not for publication or distribution, directly orindirectly, to persons in Australia, Canada, Japan or the United States, or inany jurisdiction in which such publication or distribution is unlawful. The Placing Shares referred to in this announcement have not been and will notbe registered under the Securities Act and may not be offered, sold ortransferred within the United States except pursuant to an exemption from, or ina transaction not subject to, the registration requirements of the SecuritiesAct. Any offering to be made in the United States will be made to a limitednumber of QIBs pursuant to an exemption from registration under the SecuritiesAct in a transaction not involving any public offering. The Placing Shares arebeing offered and sold outside the United States in accordance with Regulation Sunder the Securities Act. The Placing Shares have not been approved ordisapproved by the US Securities and Exchange Commission, any state securitiescommission in the United States or other regulatory authority in the UnitedStates, nor have any of the foregoing authorities passed upon or endorsed themerits of the Placing or the accuracy or adequacy of this announcement. Anyrepresentation to the contrary is a criminal offence in the United States. The distribution of this announcement and the Placing and/or issue of thePlacing Shares in certain jurisdictions may be restricted by law. No action hasbeen taken by the Company or the Managers that would permit an offer of suchPlacing Shares or possession or distribution of this announcement or any otheroffering or publicity material relating to such Placing Shares in anyjurisdiction where action for that purpose is required. Persons to whoseattention this announcement is drawn are required by the Company and theManagers to inform themselves about and to observe any such restrictions. In this appendix, unless the context otherwise requires, the "Company" or "BAESystems" means BAE Systems plc and "Placee" includes a person (includingindividuals, funds or others) on whose behalf a commitment to acquire PlacingShares has been given. Details of the Placing Agreement and the Placing Shares Pursuant to the Placing Agreement, each of the Managers has, on the terms andsubject to the satisfaction of certain conditions set out therein, undertakenseverally, and not jointly and severally, to use its reasonable endeavours asagent of the Company to seek to procure Placees for the Placing Shares. The Placing Shares will, when issued, be credited as fully paid and will rankpari passu in all respects with the existing issued ordinary shares of 2.5 penceper share in the capital of the Company, with the right to receive all dividendsand other distributions declared, made or paid in respect of such ordinaryshares after the date of issue of the Placing Shares (other than the finaldividend to be paid, subject to shareholder approval, to shareholders in theCompany on 1 June 2007). Application for listing and admission to trading Application will be made to the UK Listing Authority for the Placing Shares tobe admitted to the Official List and to the London Stock Exchange plc for themto be admitted to trading by the London Stock Exchange on its market for listedsecurities ("Admission"). It is expected that Admission will take place at 8.00a.m. on Friday 11 May 2007 and that dealings in the Placing Shares on the mainmarket for listed securities of the London Stock Exchange will commence at thattime. Bookbuild Commencing at 7.00 a.m. on Tuesday 8 May 2007, each of the Managers will beconducting an accelerated bookbuilding process (the "Bookbuilding Process") todetermine demand for participation in the Placing by the Placees. This appendixgives details of the terms and conditions of, and the mechanics of participationin, the Placing. No commissions will be paid to Placees or by Placees in respectof any Placing Shares. The Managers and the Company will be entitled to effect the Placing by suchalternative method to the Bookbuilding Process as they may, in their solediscretion, determine. Participation in, and principal terms of, the Bookbuilding Process By participating in the Bookbuilding Process and, if relevant, the Placing,Placees will be deemed to have read and understood this announcement (includingthis appendix) in its entirety and to be participating and making an offer forPlacing Shares on the terms and conditions, and to be providing therepresentations, warranties, acknowledgements and undertakings, contained inthis appendix. Persons who are eligible to participate in the Bookbuilding Process and thePlacing should communicate their bid by telephone to their usual sales contactat Hoare Govett or UBS. Each of Hoare Govett and UBS is arranging the Placingseverally, and not jointly and severally, as agent of the Company. A furtherannouncement will be made by the Company following the close of the BookbuildingProcess detailing the Placing Price (as described below) at which the PlacingShares are to be placed (the "Pricing Announcement"). The Managers and their respective Affiliates are entitled to participate asprincipal in the Bookbuilding Process. The Bookbuilding Process will establish a single price (the "Placing Price")payable to the Managers by all Placees. The timing of the closing of the book, pricing and allocations is at thediscretion of the Managers and the Company. Details of the Placing Price will beannounced as soon as practicable after the close of the Bookbuilding Process.The Managers and the Company may, at their sole discretion, accept bids that arereceived after the Bookbuilding Process has closed. A bid in the Bookbuilding Process will be made on the terms and conditions inthis appendix and will not be capable of variation or revocation after the closeof the Bookbuilding Process. To the fullest extent permissible by law, neither of the Managers nor any oftheir holding companies, subsidiaries, branches, affiliates or associatedundertakings or any subsidiary, branch, affiliate or associated undertaking ofany such holding company nor any of their respective directors, officers oremployees (each an "Affiliate") shall have any liability to Placees (or to anyother person whether acting on behalf of a Placee or otherwise). In particular,neither the Managers nor any of their Affiliates shall have any liability(including, to the extent permissible by law, any fiduciary duties) in respectof its conduct of the Bookbuilding Process or of such alternative method ofeffecting the Placing as the Managers and the Company may agree. If successful, each Placee's allocation of Placing Shares, and the PlacingPrice, will be confirmed to Placees orally by the relevant Manager following theclose of the Bookbuilding Process and a conditional advice note will bedispatched as soon as possible thereafter. The relevant Manager's oralconfirmation to any such Placee will constitute a legally binding commitmentupon such Placee to acquire the number of Placing Shares allocated to it at thePlacing Price on the terms and conditions set out in this appendix and inaccordance with the Company's Memorandum and Articles of Association. Each Placee will be required to make a "nationality declaration" (see"Registration and Settlement" below for further details). Each Placee will have an immediate, separate, irrevocable and bindingobligation, owed to the relevant Manager, to pay to it (or as it may direct) incleared funds an amount equal to the product of the Placing Price and the numberof Placing Shares such Placee has agreed to acquire. All obligations under the Placing will be subject to the fulfilment of theconditions referred to below under "Conditions of the Placing". Conditions of the Placing The Placing is conditional upon the Placing Agreement becoming unconditional andnot having been terminated in accordance with its terms. Each Manager's obligations under the Placing Agreement are, and the Placing is, conditional on, inter alia: 1. the publication of the Pricing Announcement through a RegulatoryInformation Service by no later than 7.30 a.m. (London time) on Thursday 10 May2007 (or by such later time and/or date as the Company and the Managers mayagree); 2. the Company allotting, subject only to Admission, the Placing Sharesand having complied with its obligations under the Placing Agreement to procurethat the Placing Shares which are to be issued in uncertificated form arecredited to the CREST stock account of ABN Amro Bank N.V. (London branch)notified to the Company by Hoare Govett in accordance with the PlacingAgreement; 3. Admission and Commencement of Trading occurring no later than 8.00a.m. (London time) on Friday 11 May 2007 (or such later time and/or date as theCompany and the Managers may agree); 4. the Company not being in breach of its obligations under thisAgreement on or prior to the Closing Date (such date being specified in theTerms of Sale which form part of the Placing Agreement) in a respect which ismaterial in the context of the Placing; 5. the Managers having received certain signed legal opinions on theClosing Date; 6. the warranties given by the Company in the Placing Agreement beingtrue and accurate and not misleading on and as of the date of the PlacingAgreement and as at the Closing Date; 7. the delivery by the Company to the Managers immediately prior toAdmission of a certificate in the form set out in the Placing Agreement signedby a duly authorised officer of the Company; 8. (i) the acquisition agreement having been entered into on or beforethe date of the placing agreement and remaining in full force and effect andnot having lapsed or been terminated prior to Admission; and (ii) no eventhaving arisen at any time prior to Admission which gives any party to theacquisition agreement a right to terminate it; 9. the execution of the Terms of Sale (which form part of the PlacingAgreement) prior to 7:30am on Thursday 10 May 2007; 10. the subscription and transfer agreement to be entered into between theCompany, Hoare Govett Limited and BAE Systems (Jersey) Limited ("JerseyCo")having become wholly unconditional except for the condition relating toAdmission and there having occurred no default or breach by the Company orJerseyCo of its terms by the time immediately prior to Admission; 11. the option agreement having been duly executed and delivered by theCompany and there having occurred no default or breach by the Company orJerseyCo of its terms by the time immediately prior to Admission. If theconditions in the Placing Agreement are not satisfied or waived in accordancewith the Placing Agreement within the stated time periods (or such later timeand/or date as the Company and the Managers may agree), or the Placing Agreementis terminated in accordance with its terms, the Placing will lapse and thePlacees' rights and obligations in respect of the Placing as described in thisannouncement (including this appendix) shall cease and terminate at such timeand each Placee agrees that no claim can be made by or on behalf of the Placee(or any person on whose behalf the placee is acting) in respect thereof. By participating in the Bookbuilding Process, each Placee agrees that its rightsand obligations cease and terminate only in the circumstances described aboveand under "Right to terminate under the Placing Agreement" below and will not becapable of rescission or termination by it. The Managers may, in their absolute discretion and upon such terms as they thinkfit, waive compliance or extend the time and/or date for fulfilment by theCompany with the whole or any part of certain of the Company's obligations inrelation to the conditions in the Placing Agreement (other than waivingconditions 1 and 2 above). The Managers reserve the right to waive or to extendthe time and/or date for fulfilment of certain of the conditions in the PlacingAgreement. Any such extension or waiver will not affect Placees' commitments asset out in this appendix. None of UBS, Hoare Govett nor any of their respective Affiliates nor the Companyshall have any liability to any Placee (or to any other person whether acting onbehalf of a Placee or otherwise) in respect of any decision any of them may makeas to whether or not to waive or to extend the time and/or date for thesatisfaction of any condition to the Placing nor for any decision any of themmay make as to the satisfaction of any condition or in respect of the Placinggenerally. The Placing Agreement, and therefore the Placing, are not conditional on theproposed acquisition of Armor Holdings, Inc. A subsidiary of the Company hasentered into a merger agreement providing for the proposed acquisition asdescribed elsewhere in this announcement. However, no assurance can be giventhat the proposed acquisition will be completed or completed on the termsdescribed in the announcement (including in relation to the considerationpayable). Right to terminate under the Placing Agreement Either of the Managers may, at any time before Admission, terminate thisAgreement by giving notice to the Company if: 1. in the opinion of such Manager (acting in good faith), any of theWarranties is untrue, inaccurate or misleading or, if repeated at any time up toand including Admission, would be untrue, inaccurate or misleading by referenceto the facts then subsisting in any respect which such Manager regards asmaterial in the context of the Placing and/or Admission; 2. in the opinion of such Manager (acting in good faith), the Company isin breach of any of its obligations under the Placing Agreement in any respectwhich such Manager regards as material in the context of the Placing and/orAdmission; 3. in the opinion of such Manager (acting in good faith), there has beena material adverse change or a prospective material adverse change in thefinancial or trading position or prospects of the Company and/or the Group; or 4. in the absolute discretion of such Manager, there has been a changein national or international financial, political, economic or stock marketconditions (primary or secondary); an incident of terrorism, outbreak orescalation of hostilities, war, declaration of martial law or any other calamityor crisis; a suspension or material limitation in trading of the Ordinary Sharesor securities generally on any stock exchange; any change in currency exchangerates or exchange controls or a disruption of settlement systems or a materialdisruption in commercial banking as would be, in the opinion of such Manager(acting in good faith), likely to prejudice the success of the Placing ordealings in the Placing Shares following Admission. If the Placing Agreement is terminated in accordance with its terms, thePlacees' rights and obligations in respect of the Placing as described in thisannouncement (including this appendix) shall cease and terminate at such timeand each Placee agrees that no claim can be made by or on behalf of the Placee(or any person on whose behalf the placee is acting) in respect thereof. By participating in the Placing, each Placee agrees with the Company and theManagers that the exercise by the Company or the Managers of any right oftermination or any other right or other discretion under the Placing Agreementshall be within the absolute discretion of the Company or the Managers (as thecase may be) and that neither the Company nor the Managers need make anyreference to such Placee and that neither the Company, the Managers nor any oftheir respective Affiliates shall have any liability to such Placee (or to anyother person whether acting on behalf of a Placee or otherwise) whatsoever inconnection with any such exercise. By participating in the Bookbuilding Process and the Placing, each Placee agreesthat its rights and obligations terminate only in the circumstances describedabove and will not be capable of rescission or termination by it after oralconfirmation by the relevant Manager following the close of the BookbuildingProcess. No Prospectus No prospectus or other offering document has been or will be submitted to beapproved by the Financial Services Authority or by the competent authority inany other jurisdiction in relation to the Placing, and Placees' commitments willbe made solely on the basis of the information contained in this announcementand acquisition announcement (including this appendix). Each Placee, byparticipating in the Bookbuilding Process and, if relevant, the Placing,confirms that it has neither received nor relied on any information,representation, warranty or statement made by or on behalf of either of theManagers or the Company other than the content of this announcement (includingthis appendix). Neither of the Managers nor the Company nor any person acting ontheir behalf nor any of their holding companies, subsidiaries, branches,affiliates or associated undertakings or any subsidiary, branch, affiliate orassociated undertaking of any such holding company nor any of their respectivedirectors, officers or employees, has or shall have any liability for anyPlacee's decision to participate in the Bookbuilding Process and, if relevant,the Placing based on any other information, representation, warranty orstatement including (but not limited to) any publicly available or filedinformation. Each Placee acknowledges, agrees and warrants that it has reliedon its own investigation of the business, financial or other position of theCompany in deciding whether to participate in the Bookbuilding Process and, ifrelevant, the Placing. Nothing in this paragraph shall exclude the liability ofany person for fraudulent misrepresentation. Registration and Settlement Settlement of transactions in the Placing Shares following Admission will takeplace within the CREST system, subject to certain exceptions. The Managers andthe Company reserve the right to require settlement for and delivery of thePlacing Shares to Placees by such other means as they deem necessary if deliveryor settlement is not practicable within the CREST system within the timetableset out in this announcement (including this appendix) or would not beconsistent with the regulatory requirements in any Placee's jurisdiction. Each Placee allocated Placing Shares in the Placing will be sent a conditionaladvice note stating the number of Placing Shares allocated to it, the PlacingPrice and the aggregate amount owed by such Placee to the relevant Manager. Inagreeing to acquire the number of Placing Shares set out in the conditionaladvice note, such Placee agrees that it will do all things necessary to ensurethat delivery and payment is completed in accordance with either the standingCREST instructions or the certificated settlement instructions which it has inplace with Hoare Govett or UBS, as the case may be. Each Placee will be required to make a "nationality declaration" as part of thesettlement process. Under Article 43 of the Company's Articles of Associationevery person (whether or not an existing holder of Ordinary Shares) seeking topurchase or be allotted Ordinary Shares must make a nationality declarationbefore the directors of the Company are entitled to register such person as aholder of such Ordinary Shares. A Placee which is settling its acquisition ofPlacing Shares through CREST can make the nationality declaration through CREST. A Placee which is not settling its acquisition of Placing Shares through CRESTmust apply to one of the Managers for a nationality declaration form andcomplete and return such form to one of the Managers no later than noon on theday before Admission. If a Placee does not make the required nationalitydeclaration or if a completed nationality declaration indicates that theallocation of Placing Shares to such Placee would be in breach of the Company'sArticles of Association, no allocation of Placing Shares will be made to suchperson. Article 43 of the Company's Articles of Association restricts a "Foreign Person"(as defined in the Company's Articles of Association) having an interest inshares in the Company carrying more than 15% of the voting rights. A ForeignPerson broadly includes any person who is not a British citizen, BritishDependent Territories citizen or a British Overseas citizen by virtue of theBritish Nationality Act 1981 ('Foreigner'), any (i) corporation other than acorporation which is incorporated under the laws of any part of (and which hasits principal place of business and central management and control in) theUnited Kingdom; or (ii) government or government department or government agencyor body other than of the United Kingdom or any part thereof; or (iii)municipal, local, statutory or other authority or any undertaking or bodyestablished in any country other than the United ('Foreign Corporation'), or acorporation of which one third or more of the directors are Foreigners orForeign Corporations or are accustomed to act in accordance with thesuggestions, instructions or directions of foreigners or Foreign Corporations;or of which 30 per cent. of the voting shares are held by Foreigners or Foreigncorporations (as defined in the Company's Articles of Association). The aboveare summaries of the relevant definitions. Each Placee should refer to theCompany's Articles of Association for further information on Article 43 inrelation to Foreign Persons. Settlement through CREST will be on a T+3 basis unless otherwise notified by therelevant Manager. Interest is chargeable daily on payments not received from Placees on the duedate in accordance with the arrangements set out above at the rate of 5percentage points above prevailing LIBOR as determined by the Managers. Each Placee is deemed to agree that, if it does not comply with theseobligations, the relevant Manager may sell any or all of the Placing Sharesallocated to it on such Placee's behalf and retain from the proceeds, for suchManager's own account and benefit, an amount equal to the aggregate amount owedby the Placee plus any interest due. The relevant Placee will, however, remainliable for any shortfall below the aggregate amount owed by it and may berequired to bear any stamp duty or stamp duty reserve tax (together with anyinterest or penalties) which may arise upon the sale of such Placing Shares onsuch Placee's behalf. Insofar as Placing Shares are registered in a Placee's name or that of itsnominee or in the name of any person for whom a Placee is contracting as agentor that of a nominee for such person, such Placing Shares should, subject asprovided below, be so registered free from any liability to UK stamp duty orstamp duty reserve tax. No participant will be entitled to receive any fee orcommission in connection with the Placing. If Placing Shares are to be delivered to a custodian or settlement agent,Placees should ensure that the conditional advice note is copied and deliveredimmediately to the relevant person within that organisation. Representations and Warranties By participating in the Bookbuilding Process and, if relevant, the Placing, eachPlacee (and any person acting on such Placee's behalf), unless otherwise agreedby the Managers and the Company: 1. represents and warrants that it has received and read thisannouncement (including this appendix) in its entirety and that its acquisitionof Placing Shares is subject to and based upon all the terms, conditions,representations, warranties, acknowledgements, agreements and undertakings andother information contained herein; 2. represents and warrants that it has not received a prospectus orother offering document in connection with the placing of the Placing Shares andacknowledges that no prospectus or other offering document has been prepared inconnection with the placing of the Placing Shares; 3. acknowledges that the content of this announcement is exclusively theresponsibility of the Company and that neither of the Managers, nor any of theirrespective Affiliates nor any person acting on any such person's behalf has orshall have any liability for any information or representation relating to theCompany or the Placing. Each Placee further represents, warrants and agreesthat, except as otherwise provided in paragraph 21 below, the only informationon which it is entitled to rely and on which such Placee has relied incommitting itself to acquire Placing Shares is contained in this announcement,such information being all that it deems necessary to make an investmentdecision in respect of the Placing Shares. Nothing in this paragraph shallexclude the liability of any person for fraudulent misrepresentation; 4. represents and warrants that it has neither received nor relied onany confidential price sensitive information concerning the Company in acceptingthis invitation to participate in the Placing; 5. represents and warrants that it has neither received nor relied onany other information, representation, warranty or statement made by either ofthe Managers or the Company and neither of the Managers nor any of theirrespective Affiliates nor the Company will be liable for any Placee's decisionto accept this invitation to participate in the Placing based on any otherinformation, representation, warranty or statement. Each Placee furtheracknowledges and agrees that it has relied on its own investigation of thebusiness, financial or other position of the Company in deciding to participatein the Bookbuilding Process and the Placing. Nothing in this paragraph shallexclude the liability of any person for fraudulent misrepresentation; 6. represents and warrants that it, or the beneficial owner, asapplicable, is entitled to acquire Placing Shares under the laws of all relevantjurisdictions which apply to it, or the beneficial owner, as applicable, andthat it has fully observed such laws and obtained all such governmental andother guarantees and other consents in either case which may be requiredthereunder and complied with all necessary formalities; 7. represents and warrants that it has the power and authority to carryon the activities in which it is engaged, to acquire Placing Shares and toexecute and deliver all documents necessary for such acquisition; 8. represents and warrants that it is, or at the time the Placing Sharesare acquired it will be, the beneficial owner of such Placing Shares, and thatthe beneficial owner of such Placing Shares is not a resident of Australia,Canada or Japan; 9. acknowledges that the Placing Shares have not been and will not beregistered in the United States under the Securities Act or under the securitieslaws of any of the states of the United States or under the securitieslegislation of Australia, Canada or Japan and, subject to certain exceptions,may not be offered, sold, taken up, renounced or delivered or transferred,directly or indirectly, within those jurisdictions; 10. understands (and, if it is a beneficial owner of the Placing Shares,it has been advised) that the Placing Shares have not been and will not beregistered under the Securities Act or with any securities regulatory authorityof any state or other jurisdiction of the United States, that the issue of suchPlacing Shares to it is being made to it in reliance on an exemption from theregistration requirements of the Securities Act in a transaction not involvingany public offering under Section 4(2) of the Securities Act; 11. is aware and understands that an investment in the Placing Sharesinvolves a considerable degree of risk and no U.S. federal or state or non-U.S.agency has made any finding or determination as to the fairness for investmentor any recommendation or endorsement of the Placing Shares; 12. is acquiring the Placing Shares for its own account, or for one ormore accounts as to each of which it exercises sole investment discretion andeach of which accounts is a QIB, for investment purposes, and not with a viewto, or for resale in connection with, the distribution thereof, in whole or inpart, in the United States. It understands that the Placing Shares are beingissued to it either through CREST or in certificated, definitive form; 13. if the Placing Shares were offered to it in the United States pursuantto Rule 144A under the Securities Act or another available exemption fromregistration, represents and warrants that in making its investment decision,(i) it has relied on its own examination of the Company and the terms of thePlacing, including the merits and risks involved, (ii) it has made its ownassessment of the Company, the Placing Shares and the terms of the Placing basedon such information as is publicly available, (iii) it has consulted its ownindependent advisors or otherwise has satisfied itself concerning, withoutlimitation, the effects of United States federal, state and local income taxlaws and foreign tax laws generally and the US Employee Retirement IncomeSecurity Act of 1974, the US Investment Company Act of 1940 and the SecuritiesAct and (iv) it has received all information that it believes is necessary orappropriate in order to make an investment decision in respect of the Companyand the Placing Shares; 14. represents and warrants that it is either (i) a QIB, or the beneficialowner of the Placing Shares is a QIB, and it or the beneficial owner has dulyexecuted an investment letter in the form provided to it by either of theManagers (or their respective Affiliates), or (ii) is purchasing the PlacingShares in an 'offshore transaction' in accordance with Rule 903 or Rule 904 ofRegulation S under the Securities Act; and it, and any such beneficial owner ofPlacing Shares for which it is acting, have such knowledge and experience infinancial and business matters as to be capable of evaluating the merits andrisks of an investment in the Placing Shares, are able to bear the economic riskof an investment in the Placing Shares, are able to sustain a complete loss ofthe investment in the Placing Shares, will not look to the Company or theManagers for all or any part of any such loss or losses it or they may suffer,have no need for liquidity with respect to its or their investment in thePlacing Shares, and have no reason to anticipate any change in its or theircircumstances, financial or otherwise, which may cause or require any sale ordistribution by it or them of all or part of the Placing Shares; 15. acknowledges that the Placing Shares offered and sold in the UnitedStates are "restricted securities" within the meaning of Rule 144(a)(3) underthe Securities Act and represents and warrants that, so long as the PlacingShares are 'restricted securities', it will not deposit the Placing Shares intoany unrestricted depositary receipt facility in the United States established ormaintained by any depositary bank in respect of the Company's ordinary sharesand will only transfer the Placing Shares in accordance with paragraph 16 belowand acknowledges that, until two years after the latest date on which thePlacing Shares are delivered in the Placing (which date is currently expected tobe 11 May 2007), The Bank of New York, as Depositary, will not accept depositsof shares in the ADR facility, or permit pre-releases of the Company's AmericanDepositary Shares from the ADR facility, unless it (or a broker on behalf of it)certifies, among other things, that the shares to be deposited were notpurchased pursuant to the Placing, and that it has not borrowed the shares to bedeposited with the intention of replacing them with shares purchased pursuant tothe Placing; 16. acknowledges that the Placing Shares have not been and will not beregistered under the Securities Act or with any State or other jurisdiction ofthe United States, nor approved or disapproved by the US Securities and ExchangeCommission, any state securities commission in the United States or any otherUnited States regulatory authority, and agrees that for so long as the PlacingShares are 'restricted securities' it will not reoffer, resell, pledge orotherwise transfer the Placing Shares except (i) outside the United States inoffshore transactions in accordance with Regulation S under the Securities Act,(ii) pursuant to an exemption from registration under the Securities Act or(iii) pursuant to an effective registration statement under the Securities Act,and in each case in compliance with all applicable laws; 17. acknowledges that where it is acquiring the Placing Shares for one ormore managed accounts, it represents and warrants that it is authorised inwriting by each managed account (i) to acquire the Placing Shares for eachmanaged account, and (ii) to execute and deliver an investment letter in theform provided to it by either of the Managers (or their respective Affiliates)on behalf of each managed account. Each Placee agrees to indemnify and hold theCompany and the Managers harmless from any and all costs, claims, liabilitiesand expenses (including legal fees and expenses) arising out of or in connectionwith any breach of the representations and warranties in this paragraph 17. EachPlacee agrees that the provisions of this paragraph 17 shall survive the resaleof the Placing Shares by or on behalf of the managed accounts; 18. represents and warrants that, if it is a pension fund or investmentcompany, its purchase of Placing Shares is in full compliance with applicablelaws and regulations; 19. acknowledges that no representation has been made as to theavailability of any other exemption under the Securities Act for the reoffer,resale, pledge or transfer of the Placing Shares; 20. acknowledges and agrees that the Placing Shares will, to the extentthey are delivered in certificated form, bear a legend to the following effectunless agreed otherwise with the Company: "THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THEUNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), OR WITH ANY OTHERREGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES ANDMAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN AN OFFSHORETRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, PURSUANTTO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) ORPURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND INEACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THEUNITED STATES. THIS SECURITY MAY NOT BE DEPOSITED INTO ANY UNRESTRICTEDDEPOSITARY FACILITY MAINTAINED BY ANY DEPOSITARY BANK UNLESS AND UNTIL SUCH TIMEAS THIS SECURITY IS NO LONGER A "RESTRICTED SECURITY" WITHIN THE MEANING OF RULE144(A)(3) UNDER THE SECURITIES ACT."; 21. acknowledges that the Company is subject to ongoing reportingobligations in the United Kingdom and is therefore required to publish certainbusiness and financial information in accordance with the rules and practices ofthe United Kingdom and relevant regulatory authorities in such jurisdiction (the"Exchange Information"), which includes a description of the nature of theCompany's business and the Company's most recent balance sheet and profit andloss account, and similar statements for preceding years, and that it hasreviewed such Exchange Information as it has deemed necessary and that it isable to obtain or access the Exchange Information without undue difficulty andnone of Hoare Govett or any of its Affiliates (including ABN AMRO Incorporated),UBS Limited, any of its Affiliates (including UBS Securities LLC) nor theCompany nor any of its Affiliates has made any representations to it, express orimplied, with respect to the Company, the Placing and the Placing Shares or theaccuracy, completeness or adequacy of the Exchange Information. It acknowledgesand agrees that it will not hold Hoare Govett or any of its Affiliates(including ABN AMRO Incorporated) or UBS Limited or any of its Affiliates(including UBS Securities LLC) responsible for any misstatements in or omissionsfrom any publicly available information concerning the Company including(without limitation) the Exchange Information. Nothing in this paragraph shallexclude the liability of any person for fraudulent misrepresentation; 22. represents and warrants that the allocation, allotment, issue anddelivery to it, or the person specified by it for registration as holder, ofPlacing Shares will not give rise to a liability under any of sections 67, 70,93 or 96 of the Finance Act 1986 (depositary receipts and clearance services)and that it is not participating in the Placing as nominee or agent for anyperson or persons to whom the allocation, allotment, issue or delivery ofPlacing Shares would give rise to such a liability; 23. represents and warrants that it has complied with its obligations inconnection with money laundering and terrorist financing under the Proceeds ofCrime Act 2002, the Terrorism Act 2000, and the Money Laundering Regulations(2003) (the "Regulations") and, if making payment on behalf of a third party,that satisfactory evidence has been obtained and recorded by it to verify theidentity of the third party as required by the Regulations; 24. represents and warrants that it and any person acting on its behalffalls within Article 19(5) and/or 49(2) of the Financial Services and MarketsAct 2000 (Financial Promotion) Order 2005, as amended, and undertakes that itwill acquire, hold, manage and (if applicable) dispose of any Placing Sharesthat are allocated to it for the purposes of its business only; 25. represents and warrants that it has not offered or sold and will notoffer or sell any Placing Shares to persons in the United Kingdom prior toAdmission except to persons whose ordinary activities involve them in acquiring,holding, managing or disposing of investments (as principal or agent) for thepurposes of their business or otherwise in circumstances which have not resultedand which will not result in an offer to the public in the United Kingdom withinthe meaning of section 85(1) of FSMA; 26. represents and warrants that it has not offered or sold and will notoffer or sell any Placing Shares to persons in the European Economic Area priorto Admission except to persons whose ordinary activities involve them inacquiring, holding, managing or disposing of investments (as principal or agent)for the purposes of their business or otherwise in circumstances which have notresulted and which will not result in an offer to the public in any member stateof the European Economic Area within the meaning of the Prospectus Directive(which means Directive 2003/71/EC and includes any relevant implementing measurein any member state); 27. represents and warrants that it is a qualified investor as defined insection 86(7) of FSMA, being a person falling within Article 2.1(e)(i), (ii) or(iii) of the Prospectus Directive; 28. represents and warrants that it has only communicated or caused to becommunicated and will only communicate or cause to be communicated anyinvitation or inducement to engage in investment activity (within the meaning ofsection 21 of FSMA) relating to the Placing Shares in circumstances in whichsection 21(1) of FSMA does not require approval of the communication by anauthorised person; 29. represents and warrants that it has complied and will comply with allapplicable provisions of FSMA with respect to anything done by it in relation tothe Placing Shares in, from or otherwise involving the United Kingdom; 30. represents and warrants that it and any person acting on its behalf isentitled to acquire the Placing Shares under the laws of all relevantjurisdictions and that it has all necessary capacity and has obtained allnecessary consents and authorities to enable it to commit to this participationand to perform its obligations in relation thereto (including, withoutlimitation, in the case of any person on whose behalf it is acting, allnecessary consents and authorities to agree to the terms set out or referred toin this announcement) and will honour such obligations; 31. undertakes that it (and any person acting on its behalf) will makepayment for the Placing Shares allocated to it in accordance with thisannouncement (including this appendix) and the conditional advice note on thedue time and date set out therein, failing which the relevant Placing Sharesmay, without liability to such Placee, be placed with other acquirers or sold atsuch price as the Managers may, in their sole discretion, determine. Each Placeefurther acknowledges that any such Placee will remain liable for any amount bywhich the net proceeds of such sale falls short of the product of the PlacingPrice and the number of Placing Shares allocated to it and may be required tobear any stamp duty for stamp duty reserve tax (together with any interest orpenalties due pursuant to the terms set out or referred to in this Announcement)which may arise upon the sale of such Placee's Placing Shares on its behalf; 32. acknowledges that participation in the Placing is on the basis that itis not and will not be a client of Hoare Govett or UBS and that neither HoareGovett nor UBS has any duties or responsibilities to it for providing theprotections afforded to its clients or for providing advice in relation to thePlacing or in respect of any representations, warranties, undertakings orindemnities contained in the Placing Agreement or for the exercise orperformance of any of the Managers' rights and obligations thereunder includingany rights to waive or vary any conditions; 33. undertakes that the person whom it specifies for registration asholder of the Placing Shares will be (i) itself or (ii) its nominee, as the casemay be. Neither of the Managers nor the Company will be responsible for anyliability to stamp duty or stamp duty reserve tax resulting from a failure toobserve this requirement. Each Placee and any person acting on behalf of suchPlacee agrees to participate in the Placing and it agrees to indemnify theCompany and each Manager in respect of the same on the basis that the PlacingShares will be credited to the CREST stock account of ABN Amro N.V. (LondonBranch) (CREST Participant ID: 521) as nominee for the Placee who will hold themas nominee on behalf of such Placee until settlement in accordance with itsstanding settlement instructions; 34. acknowledges that any agreements entered into by it pursuant to theseterms and conditions shall be governed by and construed in accordance with thelaws of England and it submits (on behalf of itself and on behalf of any Placeeon whose behalf it is acting) to the exclusive jurisdiction of the Englishcourts as regards any claim, dispute or matter arising out of any such contract,except that enforcement proceedings in respect of the obligation to make paymentfor the Placing Shares (together with any interest chargeable thereon) may betaken by the Company or each of the Managers in any jurisdiction in which therelevant Placee is incorporated or in which any of its securities have aquotation on a recognised stock exchange; 35. represents and warrants that it is aware of the requirements under theCompany's Articles of Association that every person seeking to purchase or beallotted Ordinary Shares must have made a nationality declaration before thedirectors of the Company are entitled to register such person as a holder ofsuch Ordinary Shares; 36. represents and warrants that (i) it either has made or will make therequired nationality declaration through CREST on behalf of itself or anymanaged account for which it is acquiring Placing Shares; or (ii) if it does notpropose to take delivery of Placing Shares through CREST, it will (a) apply tothe Managers for a nationality declaration form; (b) complete such form onbehalf of itself or any managed account for which it is acquiring PlacingShares; and (c) return it to the Managers no later than noon on the day beforeAdmission; 37. acknowledges that (i) if it has not made or does not make the requirednationality declaration; or (ii) if the allocation of Placing Shares to it wouldbe in breach of the individual foreign shareholding restriction set out inArticle 43 of the Company's Articles of Association, no allocation of PlacingShares will be made to it on behalf of itself or any managed account for whichit is acquiring Placing Shares; 38. acknowledges that the Managers may (in their absolute discretion)satisfy their obligations to procure Placees by themselves agreeing to become aPlacee in respect of some or all of the Placing Shares or by nominating anyconnected or associated person to do so; 39. agrees that the Company, the Managers and others will rely upon thetruth and accuracy of the foregoing representations, warranties,acknowledgements and undertakings which are given to the Managers on their ownbehalf and on behalf of the Company and are irrevocable; and 40. agrees to indemnify and hold the Company and each of the Managersharmless from any and all costs, claims, liabilities and expenses (includinglegal fees and expenses) arising out of or in connection with any breach of therepresentations, warranties, acknowledgements, agreements and undertakings inthis appendix and further agrees that the provisions of this appendix shallsurvive after completion of the Placing. Except in circumstances where a Placee is in breach of the warranty given inparagraph 22 above, no UK stamp duty or stamp duty reserve tax should be payableto the extent that the Placing Shares are issued into CREST to, or to thenominee of, a Placee who holds those shares beneficially (and not as agent ornominee for any other person) within the CREST system and registered in the nameof such Placee or such Placee's nominee. Any arrangements to issue or transfer the Placing Shares into a depositaryreceipts system or a clearance service or to hold the Placing Shares as agent ornominee of a person to whom a depositary receipt may be issued or who will holdthe Placing Shares in a clearance service, or any arrangements subsequently totransfer the Placing Shares, may give rise to UK stamp duty and/or stamp dutyreserve tax, for which neither the Company nor the Managers will be responsibleand the Placee to whom (or on behalf of whom, or in respect of the person forwhom it is participating in the Placing as an agent or nominee) the allocation,allotment, issue or delivery of Placing Shares has given rise to such UK stampduty or stamp duty reserve tax undertakes to pay such UK stamp duty or stampduty reserve tax forthwith and to indemnify on an after-tax basis and to holdharmless the Company and the Managers in the event that any of the Company,Hoare Govett and/or UBS has incurred any such liability to UK stamp duty orstamp duty reserve tax. Stamp, registration, documentary, transfer and similar taxes or duties payableoutside the UK will be the responsibility of the relevant Placee and the Placee,or the Placee's nominee, in respect of whom (or in respect of the person forwhom it is participating in the Placing as an agent or nominee) the allocation,allotment, issue or delivery of Placing Shares has given rise to such non-UKstamp, registration, documentary, transfer or similar taxes or duties undertakesto pay such taxes and duties forthwith and to indemnify on an after-tax basisand to hold harmless the Company and each of the Managers in the event that anyof the Company, Hoare Govett and/or UBS has incurred any such liability to suchtaxes or duties This announcement has been issued by the Company and is the sole responsibilityof the Company. Hoare Govett and UBS are each acting for the Company and no-one else inconnection with the Placing and other matters referred to in this announcement,and will not be responsible to anyone other than the Company for providing theprotections afforded to its clients nor for providing advice in relation to thePlacing or any other matter referred to in this announcement. When a Placee or person acting on behalf of the Placee is dealing with either ofthe Managers, any money held in an account with either Manager on behalf of thePlacee and/or any person acting on behalf of the Placee will not be treated asclient money (within the meaning of the rules and regulations of the FinancialServices Authority made under FSMA) which, therefore, will not require therelevant Manager to segregate such money, as that money will be held by themunder a banking relationship and not as a trustee. Past performance is no guide to future performance and persons needing adviceshould consult an independent financial adviser. All times and dates in this announcement may be subject to amendment. TheManagers shall notify the Placees and any person acting on behalf of the Placeesof any changes. Appendix 2 Investigation at ArmorProducts International (API), a subsidiary of ArmorHoldings. In January 2007, Armor Holdings received a written request for information fromthe Office of Internal Oversight Services of the United Nations (UN) regarding avendor-intermediary. In February 2007, Armor Holdings began an internalinvestigation primarily relating to improper payments received by certainemployees, agents and distributors of its Products Group relating tointernational sales and related accounting issues at a UK subsidiary, ArmorProducts International, Ltd. (API). In response, Armor Holdings' Board ofDirectors established a Special Committee of independent directors to oversee aninvestigation into the circumstances surrounding the award of a UN contract andArmor Holdings' compliance with US and foreign laws relating to sales to foreigngovernments and international organizations, including the US Foreign CorruptPractices Act. Counsel for the Special Committee has met with representativesfrom the US Department of Justice and US Securities and Exchange Commission(SEC) and disclosed the circumstances leading to the formation of the SpecialCommittee. The turnover of API in the year ended 31 December 2006 was $30m and the size ofthe contract which API was awarded by the UN was $5m. The contract, which wasfor the supply of body armour to UN personnel and peacekeeping forces, runsuntil July 2007. Further details can be found in the Form 10Q filed by Armor Holdings with theSEC on 2 May 2007. 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