and -

                              Dated 16 April 1997
                              -------------------





                              ARMOR HOLDINGS, INC

                                    - and -

                            ARMOR HOLDINGS LIMITED

                                    - and -

                 NATWEST VENTURES NOMINEES LIMITED AND OTHERS

                                    - and -

                                XXXXXX XXXXXXXX

                              -------------------

                                   AGREEMENT

                    for the sale and purchase of the whole
                        of the issued share capital of
                               DSL Group Limited

                              -------------------

                             ASHURST XXXXXX XXXXX
                                Xxxxxxxxx Xxxxx
                                0 Xxxxxx Xxxxxx
                                Xxxxxx XX0X 0XX









                              Tel: 0000-000-0000
                              Fax: 0000-000-0000
                            CSG/X00000000/CY445881








THIS AGREEMENT is made on 16 April 1997

BETWEEN:-

(1)       ARMOR HOLDINGS, INC whose principal place of business is at 00000
          Xxxxxxxxxxxxx Xxxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 XXX ("AHI");

(2)       ARMOR HOLDINGS LIMITED whose registered office is at 00 Xxxx Xxxx,
          Xxxxxx XX0X 0XX ("AHL");

(3)       THOSE PERSONS whose names and addresses are set out in column 1 of
          schedule 1 (together the "VENDORS"); and

(4)       XXXXXX XXXXXXXX of Redhall, 00 Xxxx Xxxxxx, Xxxxxxxxxx, Xx
          Xxxxxxxxx, Xxxxxxx XX00 0XX.

RECITALS

(A)       DSL Group Limited is a private company limited by shares
          incorporated in England and Wales under the Companies Xxx 0000 under
          number 3206563. Further details relating to the Company are set out
          in schedule 2.

(B)       The Company has the interests in bodies corporate details of which
          are set out in schedule 3.

(C)       The Vendors are the registered holders and beneficial owners of the
          whole of the issued share capital of the Company, the numbers and
          classes of such shares of which each of the Vendors will be the
          owner as at Completion being set out opposite his name in schedule 1
          (and being the numbers and classes of shares in the Company
          following the operation of the special resolution of the Company to
          be passed as envisaged pursuant to clause 2).

(D)       The Vendors have agreed to sell the whole of the issued ordinary and
          deferred share capital of the Company to AHI and the whole of the
          issued preference share capital of the Company to AHL on the terms
          and subject to the conditions set out in this agreement free from
          Encumbrances.

(E)       The Warrantors have made representations to each of AHI and AHL in
          the terms of the Warranties to the intent that AHI and AHL should
          rely on such representations in entering into this agreement and
          consumating the transactions contemplated hereby.

THE PARTIES AGREE AS FOLLOWS:-


                                     - 1 -








1.        INTERPRETATION

1.1       The following provisions shall have effect for the interpretation of
          this agreement.

1.2       The following words and expressions and abbreviations shall, unless
          the context otherwise requires, have the following meanings:-

          "ACCOUNTS" means the audited financial statements of the Company and
          each of the Subsidiaries (save for US Defence Systems Incorporated
          in respect of which "ACCOUNTS" shall mean the unaudited accounts in
          the form attached to the Disclosure Letter and identified as such
          accounts), comprising the balance sheet of the Company, the
          consolidated balance sheet, profit and loss account and cash flow
          statement of the Group and the balance sheet and profit and loss
          account of each of the Subsidiaries, together in each case with the
          notes thereon, directors' report and auditors' certificate, as at
          and for the financial period, in the case of the Company, from 3
          June 1996 and, in the case of each other member of the Group, from
          31 March 1996 (save for Defence Systems Colombia SA whose financial
          period shall be from 31 December 1995) and, in each case, ended on
          the Accounts Date;

          "ACCOUNTS DATE" means 31 December 1996;

          "AMERICAN STOCK EXCHANGE" means American Stock Exchange, Inc.;

          "ASSOCIATED COMPANY" has the meaning given to it in sections 416 et
          seq. of the T.A.;

          "CLAIM" means a claim in respect of a breach of Warranty;

          "COMPANY" means the company described in recital (A) and also, for
          the purposes of but subject to the express provisions of, clause 6
          and schedule 4, means those of the company described in recital (A)
          and the Subsidiaries in respect of which the relevant Warrantor
          gives Warranties in accordance with clause 5;

          "COMPLETION" means the completion of the sale and purchase of the
          Shares in accordance with clause 4;

          "COMPLETION DATE" means the date on which Completion occurs;

          "CONSIDERATION SHARES" means 1,274,217 shares of common stock of par
          value $0.01 each in the capital of AHI to be allotted and issued
          pursuant to clause 4.4 (being such number of shares of common stock
          of par value $0.01 each in the capital of AHI, rounded down to the
          nearest whole number, as has an aggregate value equal to
          (pound)6,725,656, and for this purpose, each share of common stock
          of par value $0.01 in the capital of AHI shall be valued at the
          average of the closing price of a share of common stock of par value
          $0.01 in the capital of AHI for the 20 consecutive trading days
          ended five consecutive trading days prior to 1 April 1997 (that is,
          ended on (and including) 24 March 1997) as quoted in the

                                     - 2 -








          composite/close/price table on Bloomberg for the relevant 20 days
          (such average being $8.56875 per share) and such aggregate value (in
          US dollars) shall be converted into pounds sterling at (pound)1
          equals $1.6234);

          "COVENANTORS" means Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx
          Xxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxx Xxxxx and Xxxxx
          Xxxxx;

          "Deferred Shares" means the issued deferred shares of (pound)1 each
          in the capital of the Company as at Completion;

          "DISCLOSURE LETTER" means a letter of today's date together with the
          attachments thereto addressed by the Warrantors to AHI and AHL
          disclosing exceptions to the Warranties and acknowledged by or on
          behalf of AHI and AHL;

          "DISTRIBUTION" means a distribution as defined by sections 209 to
          211 (inclusive) of the T.A. and section 418 of the T.A.;

          "$" means the lawful dollar currency of the United States of America;

          "ENCUMBRANCE" means any mortgage, charge (whether fixed or
          floating), pledge, lien, security interest or other third party
          right or interest (legal or equitable) over or in respect of the
          relevant asset, security or right;

          "GROUP" means the Company and the Subsidiaries;

          "HAMBRO DEBT" means the sum of (pound)400,000 which is owed by the
          Company to Hambro Group Investment Limited at the date hereof
          pursuant to the terms of the Share Acquisition Agreement between,
          inter alios, the Company and Hambro Group Investments Limited dated
          31 July 1996;

          "HOLDING COMPANY" has the meaning given to it in section 736 of the
          Companies Xxx 0000;

          "INSTITUTIONAL VENDORS" means NatWest Ventures Nominees Limited,
          Phoenix General Partner Limited and Compass Representatives Limited;

          "INSTITUTIONAL VENDORS' SOLICITORS" means Xxxxxxx Xxxxx Xxxxxxxxxxx
          of 00 Xxxx Xxxx, Xxxxxx, XX0X 0XX;

          "MANAGEMENT VENDORS" means Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxx
          Xxxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Golovatov, Xxxx Xxxxx, Xxxxx
          Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxx Xxxxxx, Xxxx Beat, Xxxxx xx
          Xxxxxxxxx and Xxxxx Xxxxx;

          "MANAGEMENT VENDORS' SOLICITORS" means Xxxxx & Co. of 00 Xxxxxxxxx,
          Xxxxxx, XX0X 0XX;

                                     - 3 -









          "ORDINARY SHARES" means the issued ordinary shares of (pound)1 each
          in the capital of the Company as at Completion;

          "PREFERENCE SHARES" means the issued preference shares of 1p each in
          the capital of the Company as at Completion;

          "PROPERTIES" means the properties described in schedule 5 or any
          part or parts thereof and "PROPERTY" means any one of them;

          "PURCHASERS' SOLICITORS" means Ashurst Xxxxxx Xxxxx of Xxxxxxxxx
          Xxxxx, 0 Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX;

          "ROTHSCHILD LOAN" means the outstanding principal and interest which
          is owed by the Company to NM Rothschild & Co. pursuant to the terms
          of a loan agreement dated 31 July 1996;

          "SHARES" means the whole of the issued share capital of the Company;

          "SUBSIDIARY" means those bodies corporate details of which are set
          out in schedule 3;

          "SUBSIDIARY" has the meaning given to it in section 736 of the
          Companies Xxx 0000;

          "SUBSIDIARY UNDERTAKING" has the meaning given to it in section 258
          of the Companies Xxx 0000 as amended by the Companies Xxx 0000;

          "T.A." means the Income and Corporation Taxes Xxx 0000;

          "TAX" means any tax, and any duty, impost, levy or charge in the
          nature of tax and any fine, penalty or interest connected therewith;

          "TAXATION STATUTES" means all statutes, decrees, orders and
          regulations providing for or imposing any Tax;

          "VENDORS" means the Management Vendors and the Institutional
          Vendors;

          "WARRANTIES" means the representations and warranties set out in
          schedule 4;

          "WARRANTORS" means Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx
          Xxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Golovatov, Xxxx
          Xxxxx and Xxxxx Xxxxx.

1.3       References to documents IN THE AGREED FORM are to the relevant
          document in the form agreed between the parties on or prior to the
          date of this agreement and for the purposes of identification only
          initialled by the Purchasers' Solicitors and the Management Vendors'
          Solicitors.

                                     - 4 -









1.4       References to the parties hereto include their respective permitted
          assignees and/or the respective successors in title to substantially
          the whole of their respective undertakings and, in the case of
          individuals, to their respective estates and personal
          representatives.

1.5       References to persons shall include bodies corporate and
          unincorporated, associations, partnerships and individuals. Words
          denoting the singular shall include the plural and words denoting
          any gender shall include all genders.

1.6       References to statutes or statutory provisions include references to
          any orders or regulations made thereunder and references to any
          statute, provision, order or regulation include references to that
          statute, provision, order or regulation as amended, modified,
          re-enacted or replaced from time to time whether before or after the
          date hereof (subject as otherwise expressly provided herein) and to
          any previous statute, statutory provision, order or regulation
          amended, modified, re-enacted or replaced by such statute,
          provision, order or regulation.

1.7       Headings to clauses, paragraphs and descriptive notes in brackets
          relating to provisions of taxation statutes are for information only
          and shall not form part of the operative provisions of this
          agreement and shall be ignored in construing the same.

1.8       References to recitals, clauses or schedules are to recitals to,
          clauses of and schedules to this agreement. The recitals and
          schedules form part of the operative provisions of this agreement
          and references to this agreement shall, unless the context otherwise
          requires, include references to the recitals and the schedules.

1.9       Each of the Warranties expressed to be given "to the best of the
          Warrantors' knowledge and belief" or "so far as the Warrantors are
          aware" or otherwise qualified by reference to the knowledge of the
          relevant Warrantor (other than Warranty 7.6) shall be deemed to
          incorporate a further warranty that the relevant Warrantors have
          made all reasonable enquiries as to the subject matter of the
          relevant Warranty, and each Warrantor shall be deemed to have made
          all reasonable enquiries with regard to the subject matter of the
          relevant Warranty if he has diligently and in good faith sought
          detailed responses to the Information Request IN THE AGREED FORM
          from the appropriate employees of the Group.

1.10      Warranty 7.6 shall be deemed to incorporate a further warranty that
          the relevant Warrantor has made all reasonable enquiries as to the
          subject matter of the Warranty.

1.11      The obligations and liabilities of the Vendors under this agreement
          shall be several, save as otherwise expressly provided.

1.12      Where any provision of this agreement applies to a jurisdiction
          other than England then terms of art used herein shall bear the
          meaning most closely analogous thereto in such jurisdiction.


                                     - 5 -








2.        SALE AND PURCHASE

2.1       Upon the terms and subject to the conditions of this agreement, each
          of the Vendors shall sell to AHI and AHI shall purchase the numbers
          of Ordinary Shares and Deferred Shares of which such Vendor is the
          registered holder being set out opposite his name in column 2 of
          part 1 or 2 of schedule 1 (as appropriate) free from any and all
          Encumbrances and together with all accrued benefits and rights now
          or hereafter attaching thereto, including the right to all dividends
          and other distributions (if any) declared, made or paid in respect
          of such shares after the Accounts Date.

2.2       Upon the terms and subject to the conditions of this agreement, each
          of the Institutional Vendors shall sell to AHL and AHL shall
          purchase the number of Preference Shares of which such Institutional
          Vendor is the registered holder being set out opposite his name in
          column 2 of part 1 of schedule 1 free from any Encumbrance and
          together with all accrued benefits and rights now or hereafter
          attaching thereto, including the right to all dividends and other
          distributions accruing in respect of such shares after the Accounts
          Date.

2.3       Each of the Vendors hereby represents and warrants to each of AHI
          and AHL (so as to bind that Vendor's personal representatives,
          successors and assigns) that he:-

          (a)      has the right to dispose of the Ordinary Shares and the
                   Deferred Shares which he purports to sell; and

          (b)      is disposing of the Ordinary Shares and Deferred Shares
                   free from any and all Encumbrances and together with all
                   benefits and rights now or hereafter attaching thereto,
                   including the right to all dividends and other
                   distributions (if any) declared, made or paid in respect of
                   such shares after the Accounts Date.

2.4       Each of the Institutional Vendors hereby represents and warrants to
          AHL (so as to bind that Institutional Vendor's personal
          representatives, successors and assigns) that it:-

          (a)      has the right to dispose of the Preference Shares which it
                   purports to sell; and

          (b)      is disposing of the Preference Shares free from any
                   Encumbrance and together with all benefits and rights now
                   or hereafter attaching thereto, including the right to all
                   dividends and other distributions accruing in respect of
                   such shares after the Accounts Date.

2.5       With effect from Completion, Xxxxxx Xxxxxxxx hereby waives all
          rights which he has to acquire shares in the capital of the Company,
          whether from Xxxxxxxx Xxxxxxxx or otherwise.

3.        CONSIDERATION

3.1       The consideration for the sale of the Ordinary Shares and Deferred
          Shares shall be:-

                                     - 6 -









          (a)      in respect of the Ordinary Shares, the Consideration Shares
                   credited as fully paid, to be apportioned between the
                   Vendors in proportion to the numbers of Ordinary Shares
                   respectively held by them at Completion; and

          (b)      in respect of the Deferred Shares, the sum of (pound)1 in
                   aggregate (which sum the Vendors hereby request and
                   authorise AHI to retain and apply for the benefit of the
                   Company).

3.2       The consideration for the sale of the Preference Shares shall be the
          sum of (pound)4,635,000, to be apportioned between the Institutional
          Vendors in proportion to the numbers of Preference Shares
          respectively held by them at Completion.

4.        COMPLETION

4.1       Completion shall take place at the offices of the Purchasers'
          Solicitors immediately following the passing of the special
          resolution and extraordinary resolutions referred to in clause 2.

4.2       On Completion, the Vendors shall deliver to AHI:-

          (a)      transfers in common form relating to the Ordinary Shares
                   and the Deferred Shares, duly executed in favour of AHI,
                   together with the share certificates relating thereto;

          (b)      resignations IN THE AGREED FORM of Xxxxxxx Xxxxxx, Xxxx
                   Hustler and Xxxx Xxxxx from their offices as director
                   and/or secretary and any office or employment of or by the
                   Company or the Subsidiaries;

          (c)      the common seals, certificates of incorporation and
                   statutory books of the Company and DSL Holdings Limited;

          (d)      transfers relating to each share in the Subsidiaries not
                   registered in the name of the Company or a Subsidiary,
                   duly executed in favour of AHI or as it may direct;

          (e)      share certificates (or the equivalent evidence of title to
                   the relevant shares in each jurisdiction) relating to all
                   of the issued shares of each of the Subsidiaries;

          (f)      a deed of release IN THE AGREED FORM (releasing the Company
                   and the Subsidiaries from any liability whatsoever (actual
                   or contingent) which may be owing to the Institutional
                   Vendors by the Company or any of the Subsidiaries), duly
                   executed by each of the Institutional Vendors;

          (g)      a Registration Rights Agreement IN THE AGREED FORM, duly
                   executed by each of the Vendors;

          (h)      Investment Letters IN THE AGREED FORM, duly executed by
                   each of the Vendors;

                                     - 7 -









          (i)      a Termination Agreement IN THE AGREED FORM, duly executed
                   by each of the Vendors and the other parties to the
                   agreements to which it relates;

          (j)      forms of proxy IN THE AGREED FORM, duly executed by each of
                   the Vendors, appointing any director for the time being of
                   AHI as the Vendors' proxy for the purposes of exercising
                   the voting rights attaching to the Shares, with power to
                   consent to short notice of any general meeting of the
                   shareholders or any class thereof;

          (k)      an Escrow Agreement IN THE AGREED FORM, duly executed by
                   each of the Warrantors;

          (l)      service agreements IN THE AGREED FORM, duly executed by
                   each of Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and Xxxxxx
                   Xxxxxxxx;

          (m)      letters IN THE AGREED FORM (amending their respective
                   service agreements), duly executed by each of Xxxx Xxxxx,
                   Xxxxx Xxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxxx
                   Xxxxxxx, Xxxxxxxxxxx Xxxxxx, Xxxx Beat, Xxxxx xx Xxxxxxxxx
                   and Xxxxx Xxxxx; and

          (n)      a copy of the option agreement referred to at clause 4.5,
                   duly certified as a true copy by the Management Vendors'
                   Solicitors,

          and the Institutional Vendors shall deliver to AHL transfers in
          common form relating to the Preference Shares, duly executed in
          favour of AHL, together with the share certificates relating
          thereto.

4.3       On or prior to Completion (and in any event prior to the taking
          effect of the resignations of the directors referred to in paragraph
          (b) of clause 4.2), the Vendors shall procure the passing of board
          resolutions of the Company and each of the Subsidiaries:-

          (a)      sanctioning for registration (subject where necessary to
                   due stamping) the transfers in respect of any shares
                   referred to in clause 4.2;

          (b)      appointing Xxxxxx Xxxxxxx, Xxxxxxxx Xxxxxxx and Xxxx
                   Xxxxxxx to be additional directors of the Company and Xxx
                   Xxxxxxxx to be an additional director of DSL Holdings
                   Limited; and

          (c)      appointing Xxxxxx Xxxxxxxx to be secretary of each of the
                   Subsidiaries incorporated in England and Wales.

4.4       On Completion, immediately upon compliance by the Vendors with the
          provisions of clauses 4.2 and 4.3:-

          (a)      AHI shall:-

                                     - 8 -









                   (i)    allot the Consideration Shares to the Vendors, in
                          the respective proportions which the number of
                          Ordinary Shares held by them bears to the total
                          number of Ordinary Shares;

                   (ii)   enter the names of the Vendors in the register of 
                          members of AHI as the holders of the Consideration 
                          Shares;

                   (iii)  deliver to Xxxxxx & Xxxxxxx in New York (on behalf
                          of the Vendors) duly executed stock certificates in
                          respect of the Consideration Shares, save as
                          envisaged pursuant to the Escrow Agreement IN THE
                          AGREED FORM;

                   (iv)   effect the listing of the Consideration Shares on the 
                          American Stock Exchange;

                   (v)    deliver to the Management Vendors' Solicitors and the 
                          Institutional Vendors' Solicitors (on behalf of,
                          respectively, the Management Vendors and the
                          Institutional Vendors):-

                          (A)     a counterpart of the Registration Rights 
                                  Agreement IN THE AGREED FORM, duly executed 
                                  by AHI;

                          (B)     a counterpart of the Escrow Agreement IN THE 
                                  AGREED FORM, duly executed by AHI;

                          (C)     a certified copy of a duly executed 
                                  Certificate of Good Standing in respect of 
                                  AHI IN THE AGREED FORM;

                          (D)     a certificate (which certificate shall in the
                                  absence of manifest error be conclusive):-

                                  (I)    stating the number of the 
                                         Consideration Shares; and

                                  (II)   attaching a print-out of Bloomberg
                                         showing the closing price of a share
                                         of common stock of par value $0.01 in
                                         the capital of AHI for the 20
                                         consecutive trading days ended five
                                         consecutive trading days prior to 1
                                         April 1997 (that is, ended on (and
                                         including) 24 March 1997); and

                          (E)     a copy of the lock-up letter agreement made
                                  by way of letter dated 18 January 1996 from
                                  Xxxxxxxx Xxxxxxx to Kanders Florida
                                  Holdings, Inc; and

                   (vi)   procure that the Company forthwith repays the 
                          Rothschild Loan; and


                                     - 9 -








          (b)      AHL shall pay to the Institutional Vendors Solicitors the
                   sum of (pound)4,635,000, in full and final settlement of
                   the consideration due by AHL to the Institutional Vendors
                   for the Preference Shares, which sum shall be paid by
                   telegraphic transfer to National Westminster Bank plc, City
                   of London office, XX Xxx 00000, 0 Xxxxxxx Xxxxxx, Xxxxxx
                   XX0X 0XX, sort code: 60-00-01, account no: 00000000.


5.        WARRANTIES GIVEN BY THE WARRANTORS

5.1.1     Xxxxxxxx Xxxxxxxx and Xxxxxxx Xxxxxxx jointly and severally
          represent and warrant to each of AHI and AHL in respect of the
          Company, DSL Holdings Limited, Brooksight Limited, Defence Systems
          International Limited, DSL Security Systems (South Africa) (Pty)
          Limited, DSL Security (PNG) Limited, Societe Africaine de Personnel
          de Logistique et de Liason SARL and Defence Systems Limited in the
          terms of the Warranties and so that the remedies of each of AHI and
          AHL in respect of any breach of any of the Warranties shall continue
          to subsist notwithstanding Completion.

5.1.2     Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and Xxxx Xxxxxxxxxx jointly and
          severally represent and warrant to each of AHI and AHL in respect of
          US Defense Systems Incorporated, US DS Zaire SARL and Defensetse
          Systems Equador USDSE SA in the terms of the Warranties and so that
          the remedies of each of AHI and AHL in respect of any breach of any
          of the Warranties shall continue to subsist notwithstanding
          Completion.

5.1.3     Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx jointly and
          severally represent and warrant to each of AHI and AHL in respect of
          Defense Systems Columbia SA in the terms of the Warranties and so
          that the remedies of each of AHI and AHL in respect of any breach of
          any of the Warranties shall continue to subsist notwithstanding
          Completion.

5.1.4     Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and Xxxx Xxxxx jointly and
          severally represent and warrant to each of AHI and AHL in respect of
          Defence Systems (Jersey) Limited, DSL Security (Asia) Pte Limited
          and Far East Defence Systems Limited in the terms of the Warranties
          and so that the remedies of each of AHI and AHL in respect of any
          breach of any of the Warranties shall continue to subsist
          notwithstanding Completion.

5.1.5     Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Golovatov and Xxxxx
          Xxxxx jointly and severally represent and warrant to each of AHI and
          AHL in respect of Gorandel Trading Limited in the terms of the
          Warranties and so that the remedies of each of AHI and AHL in
          respect of any breach of any of the Warranties shall continue to
          subsist notwithstanding Completion.

5.1.6     Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and Xxxxx Xxxxx jointly and
          severally represent and warrant to each of AHI and AHL in respect of
          DSL (Overseas) Limited in the terms of the Warranties and so that
          the remedies of each of AHI and AHL in respect of any breach of any
          of the Warranties shall continue to subsist notwithstanding
          Completion.

                                    - 10 -









5.1.7     Xxxxxx Xxxxxxxx represents and warrants to each of AHI and AHL in
          respect of the Company and each of the Subsidiaries (other than
          Jardine Securicor Gurkha Services Limited and DSL-Sesegeur) in the
          terms of the Warranties and so that the remedies of each of AHI and
          AHL in respect of any breach of any of the Warranties shall continue
          to subsist notwithstanding Completion.

5.1.8     Xxxxxxxx Xxxxxxxx represents and warrants to each of AHI and AHL in
          respect of Jardine Securicor Gurkha Services Limited, USDS (Med)
          Limited and Maximum Security Indochina Limited in the terms of the
          Warranties (as if the same were all qualified by reference to
          Xxxxxxxx Xxxxxxxx'x knowledge) and so that the remedies of each of
          AHI and AHL in respect of any breach of any of the Warranties shall
          continue to subsist notwithstanding Completion. For the purposes of
          this clause 5.1.8, the provisions of clause 1.9 shall not apply.

5.1.9     Xxxxxxxx Xxxxxxxx and Xxxxxxx Xxxxxxx jointly and severally
          represent and warrant to each of AHI and AHL in respect of
          DSL-Sesegeur in the terms of the Warranties (as if the same were all
          qualified by reference to the Warrantors' knowledge) and so that the
          remedies of each of AHI and AHL in respect of any breach of any of
          the Warranties shall continue to subsist notwithstanding Completion.
          For the purposes of this clause 5.1.9, the provisions of clause 1.9
          shall not apply.

5.1.10    Notwithstanding the above provisions of this clause 5.1, the
          Warranties set out in paragraphs 7.4 and 7.5 of schedule 4 are given
          only by Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and Xxxxxx Xxxxxxxx, on a
          joint and several basis in the case of Xxxxxxxx Xxxxxxxx and Xxxxxxx
          Xxxxxxx and on a several basis in the case of Xxxxxx Xxxxxxxx, in
          each case in respect of all of the Company and the Subsidiaries. For
          the purposes of the Warranties set out in paragraphs 7.4 and 7.5 of
          schedule 4, the references to the Warrantors shall be deemed to be
          references only to Xxxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and Xxxxxx
          Xxxxxxxx.

5.2       Any information supplied by or on behalf of the Company or the
          Subsidiaries to the Warrantors or their agents or accountants,
          solicitors or other advisers in connection with the Warranties, the
          Disclosure Letter or otherwise in relation to the business and
          affairs of the Company or the Subsidiaries shall not constitute a
          representation or warranty or guarantee as to the accuracy thereof
          by the Company or any of the Subsidiaries and each of the Warrantors
          undertakes to AHI that:-

          (a)      he will not bring any claim against the Company or the 
                   Subsidiaries in respect thereof; and

          (b)      he will not bring any claim against any of the respective
                   agents or employees of the Company or the Subsidiaries in
                   respect thereof, save in the case of fraud or fraudulent
                   misrepresentation.

          For the avoidance of doubt, where any of the Warranties are given on
          a joint and several basis, the above provisions of this clause 5.2
          shall not prevent a Warrantor from bringing

                                    - 11 -








          a claim in respect of a right of contribution against any other of
          the Warrantors with whom he is jointly liable.

5.3       If a Warrantor is in breach of any of the Warranties, the relevant
          Warrantor shall pay to AHI or AHL on demand the amount necessary to
          put the Company and the Subsidiaries into the position which would
          have existed if the said Warranty had been true and not been
          breached together with all costs and expenses incurred by AHI, AHL,
          the Company or the Subsidiaries as a result of such breach. Where
          AHI or AHL has made a demand against a Warrantor pursuant to this
          clause 5.3, and that Warrantor has either agreed that he is liable
          to satisfy that demand and has satisfied that demand or a court of
          competent jurisdiction has held that Warrantor to be liable to
          satisfy that demand and in either case the Warrantor has satisfied
          the demand, neither AHI nor AHL shall be entitled to bring a further
          claim for damages for breach of Warranty against that Warrantor in
          respect of the same facts or circumstances as gave rise to the
          demand made pursuant to this clause 5.3.

5.4       Each of the Warranties shall be construed as a separate
          representation or warranty (as the case may be) and (save as
          expressly provided to the contrary) shall not be limited by the
          terms of any of the other Warranties or by any other term of this
          agreement.

5.5       The Warrantors acknowledge that each of AHI and AHL has entered into
          this agreement in reliance upon the Warranties.

6.        LIMITATION ON LIABILITY IN RESPECT OF THE WARRANTIES GIVEN BY
          THE WARRANTORS

6.1       The Warrantors shall not be liable for any Claim to the extent that
          the facts or circumstances giving rise thereto are fairly disclosed
          in the Disclosure Letter or expressly provided for or stated to be
          exceptions under the terms of this agreement. No letter, document or
          other communication shall be deemed to constitute a disclosure for
          the purposes of the Warranties unless the same is expressly referred
          to in the Disclosure Letter.

6.2       The maximum liability of each Warrantor in respect of any breaches by
          him of Warranties shall be:-

          (a)      in the case of each of the Warrantors (other than Xxxxxxxx
                   Xxxxxxxx and Xxxxxx Xxxxxxxx), an amount equal to the lower
                   of the aggregate value of the Consideration Shares allotted
                   to him at Completion and the aggregate value of the
                   Consideration Shares allotted to him at the date of
                   determination of the liability, and for this purpose:-

                   (i)    the aggregate value of the Consideration Shares
                          allotted to him at Completion shall be deemed to be
                          an amount equal to the number of Consideration
                          Shares allotted to him at Completion multiplied by
                          $8.56875; and


                                    - 12 -








                   (ii)   the aggregate value of the Consideration Shares
                          allotted to him at the date of determination of the
                          liability shall be deemed to be an amount equal to
                          the number of Consideration Shares allotted to him
                          at Completion multiplied by the closing price of a
                          share of common stock of par value $0.01 in the
                          capital of AHI on the American Stock Exchange on the
                          trading day prior to such determination;

          (b)      in the case of Xxxxxxxx Xxxxxxxx, an amount equal to the
                   lower of $1,050,902 and the aggregate value of 122,644
                   shares of common stock of par value $0.01 each in the
                   capital of AHI at the date of determination of the
                   liability, and for this purpose the aggregate value of
                   122,644 shares of common stock of par value $0.01 each in
                   the capital of AHI at the date of determination of the
                   liability shall be deemed to be an amount equal to the
                   closing price of a share of common stock of par value
                   $0.01 in the capital of AHI on the American Stock Exchange
                   on the trading day prior to such determination multiplied
                   by 122,644; and

          (c)      in the case of Xxxxxx Xxxxxxxx, an amount equal to the
                   lower of $750,735 and the aggregate value of 87,613 shares
                   of common stock of par value $0.01 each in the capital of
                   AHI at the date of determination of the liability, and for
                   this purpose the aggregate value of 87,613 shares of
                   common stock of par value $0.01 each in the capital of AHI
                   at the date of determination of the liability shall be
                   deemed to be an amount equal to the closing price of a
                   share of common stock of par value $0.01 in the capital of
                   AHI on the American Stock Exchange on the trading day
                   prior to such determination multiplied by 87,613.

6.3.1     Subject as provided in clause 6.3.2, the Warrantors shall not be 
          liable for any Claim:-

          (a)      where the liability of the relevant Warrantor in respect
                   of that Claim would but for this paragraph (a) have been
                   less than (pound)1,000; and

          (b)      unless and until the aggregate liability of the Warrantors
                   in respect of that Claim (not being a Claim for which
                   liability is excluded under paragraph (a) above) when
                   aggregated with the liability of the Warrantors in respect
                   of all other Claims (not being a Claim for which liability
                   is excluded under paragraph (a) above) exceeds
                   (pound)500,000 and in the event that the aggregate
                   liability of the Warrantors in respect of all Claims
                   exceeds (pound)500,000 the Warrantors shall be liable to
                   AHI for the whole amount of such Claims and not merely the
                   excess over (pound)500,000.

6.3.2     Paragraph (b) of clause 6.3.1 shall not prevent AHI or AHL from
          claiming and shall not limit the liability of the Warrantors for any
          breach of Warranty where the liability of the Warrantors in respect
          of that Claim would equal or exceed (pound)250,000.

6.4       The Warrantors shall not be liable for any Claim to the extent that:-


                                    - 13 -








          (a)      an express provision or reserve in respect of the matter
                   giving rise to the Claim is made in the Accounts; or

          (b)      the Claim arises as a result of or is increased by the
                   passing of, or any change in, any legislation (primary or
                   subordinate) after the date of this agreement or any
                   change of law or administrative practice of any
                   governmental department or regulatory body (including,
                   without limitation, any change of practice in relation to
                   extra statutory concessions or any decision of the Courts
                   or any jurisdiction altering the accepted interpretation
                   of any law, statute, case law or legislation) after the
                   date of this agreement, or any increase in the rates or
                   any imposition of Tax or any withdrawal of relief from Tax
                   or any other change in the scope of Tax in force at the
                   date of this agreement (in either case whether
                   retrospective or otherwise) PROVIDED THAT this paragraph
                   (b) shall not apply to the extent that the relevant
                   Warrantor against whom the Claim is being brought actually
                   knew, as at the date of this agreement, that such event
                   would occur (and for the avoidance of doubt, for the
                   purposes of this proviso, a Warrantor shall not be deemed
                   to know that such event would occur if he would only have
                   known that such event would occur if he had made further
                   enquiries); or

          (c)      the Claim arises as a result of or is increased by AHI
                   making any claim, election, surrender or disclaimer (or
                   revoking or waiving of any claim, election, surrender or
                   disclaimer already made) for any Tax purpose after the
                   date of this agreement where AHI ought reasonably to have
                   known (having made all reasonable enquiries) that the
                   making of the claim, election, surrender or disclaimer (or
                   the revoking or waiving of any claim, election, surrender
                   or disclaimer already made) would give rise to the breach
                   of the Warranties in respect of which the Claim is made or
                   would increase the damage suffered as a result of the
                   breach (as the case may be); or

          (d)      the Claim arises as a result of or is increased by any
                   change after the date of this agreement in the accounting
                   reference date of the Company or in the accounting policies
                   adopted by the Company or in the accounting bases on which
                   the Company values its assets (unless the same is to comply
                   with applicable statements of Standard Accounting
                   Practice); or

          (e)      the Claim arises as a result of or is increased by any
                   change in the nature of the business or trade of the
                   Company or any sale or disposal of any share or interest in
                   the Company or any cessation of the business or trade of
                   any part of the Company in any such case after the date of
                   this agreement; or

          (f)      the Claim arises as a result of or is increased by any
                   voluntary act or omission of AHI or AHL or their respective
                   agents or successors in title after Completion (other than
                   in the ordinary course of business of the Company) where
                   AHI or AHL ought reasonably to have known (having made all
                   reasonable enquiries) that the act or omission would give
                   rise to the breach of the Warranties in respect of which
                   the

                                    - 14 -








                   Claim is made or would increase the damage suffered as a 
                   result of the breach (as the case may be); or

          (g)      the loss or damage giving rise to the Claim would have been
                   reduced but for the failure or omission of AHI or AHL to
                   make any claim, election, surrender or disclaimer or to
                   give any notice or consent under the provisions of any
                   taxation statute after the date of this agreement where AHI
                   or AHL ought reasonably to have known (having made all
                   reasonable enquiries) that the making of the claim,
                   election, surrender or disclaimer or the giving of the
                   notice or consent would result in the loss or damage being
                   reduced; or

          (h)      as regards any Claim for Tax, such Claim arises or is
                   increased by virtue of (i) any disclaimer of capital
                   allowances made by the Company after the date of this
                   agreement or (ii) any disallowance of any relief,
                   allowance, deduction or credit in respect of trading losses
                   or advance corporation tax arising from a change in the
                   nature of conduct of any trade or business carried on by
                   the Company occurring after the date of this agreement.

6.5       The Warrantors shall not be required to make any payment in respect
          of any Claim to the extent that the Claim arises as a result of a
          contingent liability unless and until such contingent liability
          becomes an actual liability provided that in such event the periods
          for giving notice of such Claim and pursuing such Claim referred to
          in clause 6.6 shall only begin to run once such contingent liability
          becomes an actual liability.

6.6       A Warrantor shall not be liable for any Claim unless AHI or AHL has
          given written notice to that Warrantor setting out so far as
          reasonably available to AHI or AHL (as the case may be) reasonable
          details of the Claim on or before the earlier of the first
          anniversary of Completion and the issuance of the audited accounts
          of AHI for the year ending 31 December 1997 and the amount payable
          in respect of the Claim is agreed by the relevant Warrantor or legal
          proceedings are instituted in respect of the Claim by the due
          service of process in accordance with clause 17.3 on the relevant
          Warrantor in either case within seven months of the date of such
          written notice.

6.7       In assessing any liabilities, damages or other amounts recoverable
          by AHI or AHL as a result of any Claim there shall be taken into
          account any benefit accruing to the Company from any amount of any
          relief from Tax obtained or obtainable by the Company and any amount
          by which any Tax for which the Company is or may be liable to be
          assessed or accountable is reduced or extinguished, arising directly
          or indirectly in each case in consequence of the matter which gives
          rise to such Claim.

6.8.1     Clause 6.8.2 shall apply in circumstances where:-

          (a)      any claim is made against the Company which AHI or AHL
                   ought reasonably to expect will give rise to a Claim; or

                                    - 15 -









          (b)      the Company is entitled to make recovery from some other
                   person (including any insurance company and the Inland
                   Revenue) any sum in respect of any facts or circumstances
                   by reference to which a Warrantor has admitted liability
                   under the Warranties; or

          (c)      a Warrantor has paid to AHI or AHL an amount in respect of
                   a Claim and subsequent to the making of such payment the
                   Company becomes entitled to recover from some other person
                   (including any insurance company and the Inland Revenue) a
                   sum which is referable to that payment.

6.8.2     Without prejudice to the rights of AHI and AHL to make any Claim,
          each of AHI and AHL undertakes to the Warrantors that:-

          (a)      provided that the relevant Warrantor has admitted
                   liability (but not necessarily the quantum of that
                   liability) to AHI or AHL (as the case may be), at the
                   relevant Warrantor's expense and subject to the relevant
                   Warrantor having first secured AHI and AHL to their
                   reasonable satisfaction in respect of such expense and any
                   further liabilities that may be incurred by AHI, AHL or
                   the Company as a result of AHI or AHL (as the case may be)
                   complying with the provisions of this paragraph (a), it
                   will procure that the Company promptly and diligently take
                   all such action as that Warrantor may reasonably request
                   (including the institution of proceedings and the
                   instruction of professional advisers approved by that
                   Warrantor to act on behalf of the Company) to avoid,
                   dispute, resist, compromise, defend or appeal against any
                   such claim against the Company as is referred to in
                   paragraph (a) of clause 6.8.1 or to make such recovery by
                   the Company as is referred to in paragraph (b) or (c) of
                   clause 6.8.1, as the case may be, in accordance with the
                   instructions of the relevant Warrantor to the intent that
                   such action shall be delegated entirely to that Warrantor;

          (b)      provided that the relevant Warrantor has admitted
                   liability (but not necessarily the quantum of that
                   liability) to AHI or AHL (as the case may be) and subject
                   to the relevant Warrantor having first secured AHI and AHL
                   to their reasonable satisfaction in respect of any further
                   liabilities that may be incurred by AHI, AHL or the
                   Company as a result of AHI or AHL (as the case may be)
                   complying with the provisions of this paragraph (b), it
                   will procure that the Company does not settle or
                   compromise any liability or claim to which any such action
                   is referable without the prior written consent of the
                   relevant Warrantor, which consent shall not be
                   unreasonably withheld or delayed;

          (c)      it will provide all such information and documentation as
                   the relevant Warrantor may reasonably request in connection
                   therewith, subject to the Warrantor entering into a
                   confidentiality undertaking in respect thereof in such form
                   as AHI and AHL may reasonably require and subject further
                   to the provision of such information and documentation not
                   resulting in the loss by AHI, AHL or the Company of any
                   claim to legal privelege which it might otherwise be
                   entitled to bring; and

                                    - 16 -









          (d)      in the circumstances mentioned in paragraph (c) of clause
                   6.8.1, it will promptly repay to the relevant Warrantor an
                   amount equal to the amount so recovered or, if lower, the
                   amount paid by the relevant Warrantor to AHI or AHL (as the
                   case may be), less any Tax payable by AHI or AHL (as the
                   case may be) in respect thereof.

6.9       Without prejudice and in addition to any duty imposed on them by law
          so to do, AHI and AHL will, and will procure that the Company will,
          use their respective reasonable endeavours to mitigate any loss or
          damage in respect of which AHI or AHL makes a Claim.

6.10      None of the limitations on the liability of the Warrantors in this
          clause 6 shall apply in the case of fraud, fraudulent
          misrepresentation or deliberate concealment.

7.        WARRANTIES GIVEN BY AHI AND AHL

7.1       AHI and AHL jointly and severally represent and warrant to each of
          the Vendors that:-

          (a)      AHI is a company duly incorporated, validly existing and
                   in good standing under the laws of the State of Delaware,
                   USA; has all material licences and qualifications legally
                   required to do business and is in good standing as a
                   foreign corporation in each jurisdiction where the nature
                   of the properties owned, leased or operated by it and the
                   business transacted by it require such licensing or
                   qualification except where the failure to be so licensed
                   or qualified would not have a material adverse affect on
                   AHI and its subsidiaries taken as a whole; has full
                   corporate power and authority to conduct its business and
                   own its properties as now conducted and owned and to make,
                   execute, deliver and perform this agreement, the
                   Registration Rights Agreement IN THE AGREED FORM and the
                   Escrow Agreement IN THE AGREED FORM and the transactions
                   contemplated thereby; and has taken such corporate action
                   as is necessary to enable it to perform its obligations
                   hereunder and under the agreements contemplated hereby;

          (b)      this agreement has been duly executed and delivered by AHI
                   and AHL and, if duly executed and delivered by all other
                   parties, constitutes legal, valid and binding obligations
                   of each of AHI and AHL enforceable in accordance with its
                   terms, subject, as to enforcement, to bankruptcy,
                   reorganisation and other laws affecting the enforcement of
                   creditors' rights generally from time to time in effect and
                   to the exercise of judicial discretion in accordance with
                   general equitable principles;

          (c)      the execution and delivery of this agreement, together with
                   all documents and instruments contemplated herein, the
                   consummation of the transactions contemplated thereby and
                   the compliance with the terms, conditions and provisions
                   thereof by AHI do not (i) contravene any provision of AHI's
                   articles of incorporation or by-laws; (ii) conflict with or
                   result in a breach of or constitute a default (or an event
                   which would, with the passage of time or the giving of
                   notice or both, constitute a default) under any of the
                   terms, conditions or provisions of any indenture, mortgage,
                   loan

                                    - 17 -








                   or credit agreement or any other agreement or instrument to
                   which AHI or any of its subsidiaries is a party or by which
                   it or its assets are bound or affected and which is
                   material to AHI and its subsidiaries (taken as a whole);
                   (iii) violate or constitute a breach of any decision,
                   judgment or order of any court or arbitration board, or of
                   any governmental department, commission, board, agency or
                   instrumentality, domestic or foreign by which AHI is bound
                   or to which it is subject where the violation or breach is
                   material to AHI and its subsidiaries (taken as a whole); or
                   (iv) violate any applicable law, rule or regulation by
                   which AHI or any of its subsidiaries or any of their
                   respective property is bound where the violation is
                   material to AHI and its subsidiaries (taken as a whole);

          (d)      save for the approval by the SEC of the registration
                   statement in respect of the Consideration Shares, no
                   consent or approval of, or filing and expiration of a
                   period for disapproval by, any US federal or state
                   governmental authority is required for AHI or AHL to
                   consummate the transactions contemplated by this agreement;

          (e)      there are no actions, suits, causes of action, claims,
                   litigation, arbitration, administrative hearings or other
                   form of proceedings or disputes pending, or to the best of
                   the knowledge of AHI threatened against, involving or
                   affecting AHI or any of its subsidiaries, in any court, at
                   law or in equity, or before any arbitration board or any
                   governmental department, commission, board, bureau, agency
                   or instrumentality, which would have a material adverse
                   effect on the business of AHI and its subsidiaries taken as
                   a whole;

          (f)      the only issued and outstanding capital stock of AHI (as
                   at immediately prior to the issue of the Consideration
                   Shares) is as disclosed pursuant to public filings in the
                   US;

          (g)      save as disclosed pursuant to public filings in the US,
                   there are no options, warrants, pre-emption rights,
                   conversion rights, agreements or other rights outstanding
                   which could require the issue by AHI of shares of common
                   stock in the capital of AHI or other ownership interests in
                   AHI;

          (h)      the Consideration Shares will not be subject to any
                   restriction on transfer, other than those restrictions
                   required by the United States Securities Act of 1933, as
                   amended; and

          (i)      upon compliance by AHI of its obligations pursuant to
                   paragraphs (a)(i), (a)(ii) and (a)(iii)(A) of clause 4.4,
                   each of the Vendors will receive full title to the
                   Consideration Shares allotted to him, which Consideration
                   Shares will be validly issued and delivered fully paid and
                   non-assessable, free and clear of all Encumbrances (save as
                   envisaged pursuant to the Escrow Agreement referred to at
                   paragraph (l) of clause 4.2).

7.2       Neither AHI nor AHL shall be liable for any claim in respect of a
          breach of clause 7.1:-

                                    - 18 -









          (a)      where the liability of AHI or AHL in respect of that claim
                   would but for this paragraph (a) have been less than
                   (pound)1,000; and

          (b)      unless and until the aggregate liability of AHI and AHL in
                   respect of that claim (not being a claim for which
                   liability is excluded under paragraph (a) above) when
                   aggregated with the liability of AHI and AHL in respect of
                   all other claims in respect of a breach of clause 7.1 (not
                   being a claim for which liability is excluded under
                   paragraph (a) above) exceeds(pound)500,000 and in the
                   event that the aggregate liability of AHI and AHL in
                   respect of all claims in respect of a breach of clause 7.1
                   exceeds (pound)500,000 AHI and AHL shall be liable to the
                   Vendors for the whole amount of such claims and not merely
                   the excess over(pound)500,000.

7.3       Neither AHI nor AHL shall be liable for any claim in respect of a
          breach of clause 7.1 unless the Vendors have given written notice to
          AHI or AHL setting out so far as reasonably available to the Vendors
          reasonable details of the claim on or before the earlier of the
          first anniversary of Completion and the publication of the audited
          accounts of AHI for the year ending 31 December 1997 and the amount
          payable in respect of the claim is agreed by AHI or AHL or legal
          proceedings are instituted in respect of the claim by the due
          service of process on AHI or AHL in either case within seven months
          of the date of such written notice.

8.        RESTRICTIONS

8.1.1     Each of the Covenantors hereby undertakes to each of AHI and AHL
          (for themselves and as trustees for each of their subsidiaries) that
          he will not (except as otherwise agreed in writing with AHI or AHL)
          either solely or jointly with any other person:-

          (a)      during the three years following the Completion Date carry
                   on or be engaged or concerned or (save as the holder of
                   Shares or debentures in a listed company which confer not
                   more than five per cent. of the votes which could be cast
                   at a general meeting of the company) interested directly or
                   indirectly in any business which provides, within the
                   Restricted Territory, services similar to those services
                   provided by the Company and/or the Subsidiaries at
                   Completion;

          (b)      during the three years following the Completion Date
                   solicit or accept (either on his own account or as the
                   agent of any other person), within the Restricted
                   Territory, the custom of any person in respect of services
                   competitive with those services provided by the Company or
                   the Subsidiaries during the period of 12 months prior to
                   Completion, such person having been a customer of the
                   Company or the Subsidiaries in respect of such goods or
                   services during such period;

          (c)      during the three years following the Completion Date
                   induce, solicit or endeavour to entice any person who
                   during the period of 12 months prior to Completion was

                                    - 19 -








                   an employee of the Company or the Subsidiaries occupying a
                   senior or managerial position, to leave the service or
                   employment of the Company or the Subsidiaries; or

          (d)      at any time use any trade name used by the Company or any
                   Subsidiary at any time during the five years immediately
                   preceding the date of this agreement or any other name
                   intended or likely to be confused with any such trade name.

8.1.2     For the purposes of clause 8.1.1, "RESTRICTED TERRITORY" means, in
          respect of each of the Covenantors, the territory or territories set
          out opposite his name in the following table:-

==============================================================================
NAME                              RESTRICTED TERRITORY
------------------------------------------------------------------------------
Xxxxxxxx Xxxxxxxx                 each country in which the Company or any
                                  of the Subsidiaries provides services at
                   Completion
------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx                   each country in which the Company or any
                                  of the Subsidiaries provides services at
                   Completion
------------------------------------------------------------------------------
Xxxxxx Xxxxxxxx                   each country in which the Company or any
                                  of the Subsidiaries provides services at
                   Completion
------------------------------------------------------------------------------
Xxxxx Xxxxx                       Russia and Central Asia
------------------------------------------------------------------------------
Xxxx Xxxxx                        Algeria, Saudi Arabia, Singapore and
                    Indonesia
------------------------------------------------------------------------------
Xxxx Xxxxxxxxxx                   Zaire
------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx                   Colombia and Peru
==============================================================================

8.2       Xxxx Xxxxxxxxxx hereby further undertakes to each of AHI and AHL
          (for themselves and as trustees for each of their subsidiaries) that
          he will not (except as otherwise agreed in writing with AHI or AHL)
          either solely or jointly with any other person:-

          (a)      during the three years following the Completion Date carry
                   on or be engaged or concerned or (save as the holder of
                   Shares or debentures in a listed company which confer not
                   more than five per cent. of the votes which could be cast
                   at a general meeting of the company) interested directly or
                   indirectly in any business which provides services similar
                   to those services provided by the Company and/or the
                   Subsidiaries at Completion to any US embassy; or

          (b)      during the three years following the Completion Date
                   solicit or accept (either on his own account or as the
                   agent of any other person) the custom of any US embassy in

                                    - 20 -








                   respect of services competitive with those services
                   provided by the Company or the Subsidiaries to any US
                   embassy during the period of 12 months prior to Completion.

8.3       Each of the Covenantors hereby further undertakes to each of AHI and
          AHL that he will not at any time divulge to any third party
          whatsoever or use for his own or another's advantage any of the
          confidential information, intellectual property, designs, formulae,
          inventions or improvements relating to products or prospective
          products designed, manufactured or sold by the Company or any of the
          Subsidiaries before the date of this agreement or any other trade
          secrets or confidential know-how or confidential financial or
          trading information as to customers or suppliers or in relation to
          the business, finances, dealings or affairs of the Company or any of
          the Subsidiaries save only (a) insofar as the relevant Covenantor
          may prove the same has become a matter of public knowledge
          (otherwise than by reason of a breach by him of this clause 8.3) or
          (b) insofar as may be required by law.

8.4       The Covenantors agree that the undertakings contained in this clause
          8 are reasonable and are entered into for the purpose of protecting
          the goodwill of the business of the Company and the Subsidiaries and
          that accordingly the benefit of the undertakings may be assigned by
          AHI or AHL and their successors in title without the consent of the
          Covenantors.

8.5       Each undertaking contained in this clause 8 shall be construed as a
          separate undertaking and if one or more of such undertakings is held
          to be against the public interest or unlawful or in any way an
          unreasonable restraint of trade the remaining undertakings shall
          continue to bind the Covenantors.

8.6       If any undertaking contained in this clause 8 would be void as drawn
          but would be valid if the period of application were reduced or if
          some part of the undertaking were deleted the undertaking in
          question shall apply with such modification as may be necessary to
          make it valid and effective.

8.7       No provision of this agreement, by virtue of which this agreement is
          subject to registration (if such be the case) under the Restrictive
          Trade Practices Xxx 0000, shall take effect until the day after
          particulars of this agreement have been furnished to the Director
          General of Fair Trading pursuant to section 24 of that Act. For this
          purpose the expression this "AGREEMENT" includes any agreement or
          arrangement of which this agreement forms part and which is
          registrable or by virtue of which this agreement is registrable.

9.        ANNOUNCEMENTS, ETC

9.1       Neither the making of this agreement nor its terms shall be
          disclosed by any party hereto without the prior consent of the other
          parties unless disclosure is required by law or the rules of the
          American Stock Exchange.

9.2       For the purpose of this clause 9 each party hereby consents to the
          issue of a press release in respect of the transactions contemplated
          hereby IN THE AGREED FORM.

                                    - 21 -









10.       COSTS

          Save as expressly otherwise provided in this agreement each of the
          parties hereto shall bear its own legal, accountancy and other
          costs, charges and expenses connected with the negotiation,
          preparation and implementation of this agreement and any other
          agreement incidental to or referred to in this agreement.

11.       EFFECT OF COMPLETION

          The terms of this agreement shall insofar as not performed at
          Completion and subject as specifically otherwise provided in this
          agreement continue in force after and notwithstanding Completion.

12.       ENTIRE AGREEMENT

          This agreement (together with any documents referred to herein)
          constitutes the entire agreement between the parties hereto in
          connection with the subject matter of this agreement. No party has
          relied upon any representation save for any representation expressly
          set out in this agreement (or any document referred to herein).

13.       WAIVER, AMENDMENT

13.1      No waiver of any term, provision or condition of this agreement
          shall be effective unless such waiver is evidenced in writing and
          signed by the waiving party.

13.2      No omission or delay on the part of any party hereto in exercising
          any right, power or privilege hereunder shall operate as a waiver
          thereof, nor shall any single or partial exercise of any such right,
          power or privilege preclude any other or further exercise thereof or
          of any other right, power or privilege. The rights and remedies
          herein provided are cumulative with and not exclusive of any rights
          or remedies provided by law.

13.3      No variation to this agreement shall be effective unless made in
          writing and signed by all the parties.

14.       FURTHER ASSURANCES

          At any time after Completion the parties shall at their own expense
          execute all such documents and do such acts and things as may
          reasonably be required for the purpose of giving full effect to this
          agreement.


                                    - 22 -








15.       NOTICES

15.1      Save as specifically otherwise provided in this agreement any
          notice, demand or other communication to be served under this
          agreement may be served upon any party hereto only by posting by
          first class post or delivering the same or sending the same by
          facsimile transmission to the party to be served at its address
          above or in schedule 1, or facsimile number given below or at such
          other address or number as he or it may from time to time notify in
          writing to the other parties hereto:-

          Natwest Nominees Ventures
          Limited                          -   Fax no: 0000 000 0000
                                               Marked for the attention of: 
                                                 Xxxxxxx Xxxxxxx/Xxxxxx
                                                 Xxxx

          Phoenix General Partner Limited  -   Fax no: 0000 000 0000
                                               Marked for the attention of: 
                                                 Xxxx Xxxxx

          Compass Representatives Limited  -   Fax no: 0000 000 0000
                                               Marked for the attention of:
                                                 Xxxx Xxxxx

          AHI                              -   Fax number: 00 0 000 000 0000
                                               Marked for the attention of:
                                                 Xxxxxxxx Xxxxxxx

          AHL                              -   c/o  Armor Holdings, Inc
                                               Fax number: 00 0 000 000 0000
                                               Marked for the attention of:
                                                 Xxxxxxxx Xxxxxxx

15.2      A notice or demand served by first class post shall be deemed duly
          served 48 hours after posting, if posted from and to addresses in
          the same country and 10 days after posting, if posted from and to
          addresses in different countries, and a notice or demand sent by
          facsimile transmission shall be deemed to have been served at the
          time of transmission and in proving service of the same it will be
          sufficient to prove, in the case of a letter, that such letter was
          properly stamped or franked first class or air mail, addressed and
          placed in the post and, in the case of a facsimile transmission,
          that such facsimile was duly transmitted to the current facsimile
          number of the addressee as provided in clause 15.1.

16.       COUNTERPARTS

          This agreement may be executed in any number of counterparts and by
          the several parties hereto on separate counterparts, each of which
          when so executed and delivered shall be an original, but all the
          counterparts shall together constitute one and the same instrument.


                                    - 23 -








17.       GOVERNING LAW AND SUBMISSION TO JURISDICTION

17.1      This agreement shall be governed by and construed in accordance with
          English law.

17.2      The parties hereto hereby irrevocably submit to the non-exclusive
          jurisdiction of the High Court of Justice in London for the purpose
          of hearing and determining any dispute arising out of this agreement
          and for the purpose of enforcement of any judgment against their
          respective assets.

17.3      Each of the Management Vendors agrees that service of any writ,
          notice or other document for the purpose of any proceedings in such
          court shall be duly served upon him if delivered or sent by
          registered post to the Management Vendors' Solicitors (marked for
          the attention of Xxx Xxxxxx, reference "Project Cabernet").

18.       INVALIDITY

          If at any time any one or more of the provisions hereof is or
          becomes invalid, illegal or unenforceable in any respect under any
          law, the validity, legality and enforceability of the remaining
          provisions hereof shall not be in any way affected or impaired
          thereby.

19.       NO RIGHTS OF TERMINATION

          No party shall have any right to rescind or otherwise terminate this
          agreement for any reason whatsoever.

20.       POOLING

          The parties hereto acknowledge that AHI has indicated that it is an
          integral part of the transactions contemplated hereby that such
          transactions be treated for accounting purposes as a pooling of
          interests under the Internal Revenue Code of 1986 of the US, as
          amended. AHI confirms to the Vendors that it has received the
          written advice of Deloitte & Touche LLP, its accountants, to the
          effect that the transactions will be so treated.

IN WITNESS whereof this agreement has been executed on the date first above
written.

                                    - 24 -








                                  SCHEDULE 1
                                  THE VENDORS

      (1)                                                            (2)
NAME AND ADDRESS         NO. OF ORDINARY    NO. OF DEFERRED   NO. OF PREFERENCE
                         SHARES             SHARES            SHARES

NatWest Nominees         23,181             32,376            2,444,444
Ventures Limited
000 Xxxxxxxxxxx
Xxxxxx XX0X 0XX

Phoenix General          18,302             25,559            1,929,899
Partner Limited
One Xxxxxxxx Xxxxxxx
Xxxx
Xxxxxx XX0X 0XX

Compass                     242                341               25,657
Representatives
Limited
Xxx Xxxxxxxx Xxxxxxx
Xxxx
Xxxxxx XX0X 0XX

Xxxxxxxx Xxxxxxxx        11,380              5,173             -
Xxxx 0
00 Xxxxxxxxxx
Xxxxxxx
Xxxxxx XX0 0XX

Xxxxxxx Xxxxxxx           7,586              3,447             -
00 Xxxxxxxxx Xxxx
Xxxxxx XX0 0XX

Xxxxx Xxxxx                 689                689             -
0 Xxx Xxxx Xxxxxxx
Xxxxxx
Xxxxxx XX0 0XX

Xxxx Xxxxx                2,068              1,033             -
00 Xxxxxx Xxxx
Xxxxxx XX0X 0XX


                                    - 25 -






      (1)                                                            (2)
NAME AND ADDRESS         NO. OF ORDINARY    NO. OF DEFERRED   NO. OF PREFERENCE
                         SHARES             SHARES            SHARES

Xxxxxxx Xxxxxxx           2,069              -                 -
Xxxxxxx 000X
Xx. 0-00
Xxxxxx
Xxxxxxxx

Xxxx Xxxxxxxxxx           2,069              -                 -
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx
Xxxxxxxx 00000
XXX

Xxxxxxx Golovatov         1,035              -                 -
00-00 Xxxxxxxx
Xxxxxxxxxx Xxxxxx
Xxxxxx 000000
Xxxxxx

Xxxx Beat                    69                 69             -
Green Valley
Gemini Way
Constantia
Xxxx Xxxx 0000
Xxxxx Xxxxxx

Xxxxx Xxxxx                  69                 69             -
80 Chipchase Court
New Xxxxxxx
Xxxxxxx Xxx
Xxxx & Xxxx
XX00 0XX

Xxxxxxxxxxx Xxxxxx           69                 69             -
000 Xxxxxxx Xxxxx
Xxxxx Xxxx
Xxxxxxxx
Xxxxxxxx 0000
XXX

Xxxxxxxx Xxxxxxx             69                 69             -
Wistaston
Kings Xxxx
Hereford HR4 8PZ


                                    - 26 -






      (1)                                                            (2)
NAME AND ADDRESS         NO. OF ORDINARY    NO. OF DEFERRED   NO. OF PREFERENCE
                         SHARES             SHARES            SHARES

Xxxxx xx Xxxxxxxxx           69                 69             -
Westgate Old Rectory
Xxxxxxx Market
Kings Xxxx
Norfolk PE31 8JR




                                    - 27 -






                                  SCHEDULE 2
                      PARTICULARS RELATING TO THE COMPANY

Name:                                   DSL GROUP LIMITED

Jurisdiction of incorporation:          England and Wales

Registered no:                          03206563

Date of incorporation:                  [                     ]

Registered office:                      Xxxxxxxx Xxxxx
                                        00-00 Xxxxxxxxxx Xxxx
                                        Xxxxxx XX0X 0XX

Authorised                              share capital: (pound)181,929
                                        divided into 4,400,000 Preference
                                        Shares of 1p each, 100,000 Preferred
                                        Ordinary Shares of (pound)1 each,
                                        27,585 Ordinary "A" Shares of
                                        (pound)1 each, 6,207 Xxxxxxxx "X"
                                        Xxxxxx xx (xxxxx)0 each and 4,137
                                        Ordinary "C" Shares of (pound)1 each

Issued share capital:                   (pound)181,929 divided into 4,400,000
                                        Preference Shares of 1p each, 100,000
                                        Preferred Ordinary Shares of (pound)1
                                        each, 27,585 Ordinary "A" Shares of
                                        (pound)1 each, 6,207 Xxxxxxxx "X"
                                        Xxxxxx xx (xxxxx)0 each and 4,137
                                        Ordinary "C" Shares of (pound)1 each




INVESTORS                       1P              (POUND)1 "A"    (XXXXX)0 "X"    (XXXXX)0 "X"    (XXXXX)0
                                PREFERENCE      ORDINARY        ORDINARY        ORDINARY        PREFERRED
                                                                                 
NatWest Ventures
Nominees Limited                2,444,444         -               -               -               55,556
Phoenix General Partner
Limited                         1,929,899         -               -               -               43,861
Compass Representatives
Limited                         25,657            -               -               -               583
Xxxxxxxx Xxxxxxxx               -                 16,551          -               -               -
Xxxxxxx Xxxxxxx                 -                 11,034          -               -               -
Xxxxx Xxxxx                     -                 -               -               1,379           -
Xxxx Xxxxx                      -                 -               1,034           2,068           -
Xxxxxxx Xxxxxxx                 -                 -               2,069           -               -
Xxxx Xxxxxxxxxx                 -                 -               2,069           -               -
Xxxxxxx Golovatov               -                 -               1,035           -               -
Xxxx Beat                       -                 -               -               138             -
Xxxxx Xxxxx                     -                 -               -               138             -
Xxxxx Xxxxxx                    -                 -               -               138             -
Xxxxxxxx Xxxxxxx                -                 -               -               138             -
Xxxxx xx Xxxxxxxxx              -                 -               -               138             -

TOTALS                          4,400,000         27,585          6,207           4,137           100,000



Directors:                              Xxxxxxxx Xxxxxxxx
                                        Xxxxxxx Xxxxxxx
                                        Xxxxxx Xxxxxxxx
                                        Xxxxxxx Xxxxxx
                                        Xxxx Xxxxx
                                        Xxxx Hustler
                                        D Ramsbotham

Secretary:                              Xxxxxx Xxxxxxxx

Auditors:                               KPMG

                                    - 28 -









Accounting reference date:              31 December

                                    - 29 -








                                  SCHEDULE 3
                   PARTICULARS RELATING TO THE SUBSIDIARIES

Name:                                  DSL HOLDINGS LIMITED

Jurisdiction of incorporation:         England and Wales

Registered no:                         2488312

Date of incorporation:                 3 April 1990

Registered office:                     Xxxxxxxx Xxxxx
                                       00-00 Xxxxxxxxxx Xxxx
                                       Xxxxxx XX0X 0XX

Authorised share capital:              (pound)1,000,000 divided into 1,000,000 
                                       deferred shares of (pound)1 each and
                                       $4,666.68 divided into 466,668
                                       ordinary shares of $0.01 each

Issued                                 share capital:
                                       
(pound)466,668 divided
                                       into divided into
                                       466,668 ordinary
                                       shares of (pound)1
                                       each and $4,666.68
                                       divided into 466,668
                                       ordinary shares of
                                       $0.01 each

Registered in the name of:             DSL Group Limited (deferred only;
                                       ordinary shares are bearer shares)

Beneficially owned by:                 DSL Group Limited

Directors:                             Xxxxxxx Xxxxxxx
                                       Xxxxxxxx Xxxxxxxx
                                       Xxxxxx Xxxxxxxx
                                       Xxxxx Xxxxx
                                       Xxxx Xxxxx
                                       Xxxxxxx Xxxxxxx
                                       Xxxx Xxxxxxxxxx
                                       Xxxxxxx Golovatov

Secretary:                             Xxxx Hustler

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 30 -








Name:                                  BROOKSIGHT LIMITED

Jurisdiction of incorporation:         England and Wales

Registered no:                         1269266

Date of incorporation:                 16 July 1976

Registered office:                     Xxxxxxxx Xxxxx
                                       00-00 Xxxxxxxxxx Xxxx
                                       Xxxxxx XX0X 0XX

Authorised share capital:              (pound)10,000 divided into 10,000 
                                       ordinary shares of(pound)1 each

Issued share capital:                  (pound)10,000 divided into 10,000 
                                       ordinary shares of(pound)1 each

Registered in the names of:            Name                              Number

                                       DSL Holdings Limited               9,999
                                       Xxxxxxxx Xxxxxxxx                      1

Beneficially owned by:                 DSL Holdings Limited

Directors:                             Xxxxxxxx Xxxxxxxx
                                       Xxxxx Xxxxxx

Secretary:                             Xxxx Hustler

Auditors:                              KPMG

Accounting reference date:             31 December


                                    - 31 -








Name:                                  DEFENCE SYSTEMS INTERNATIONAL LIMITED

Jurisdiction of incorporation:         England and Wales

Registered under no:                   1541457

Date of incorporation:                 26 January 1981

Registered office:                     Xxxxxxxx Xxxxx
                                       00-00 Xxxxxxxxxx Xxxx
                                       Xxxxxx XX0X 0XX

Authorised                             share capital:
                                       (pound)530,000 divided
                                       into 60,000 A ordinary
                                       shares of (pound)1
                                       each, 420,000 B
                                       ordinary shares of
                                       (pound)1 each and
                                       50,000 5% cumulative
                                       redeemable preference
                                       shares of (pound)0.10
                                       each

Issued                                 share capital:
                                       (pound)470,882 divided
                                       into 5,000 A ordinary
                                       shares of (pound)1
                                       each, 415,882 B
                                       ordinary shares of
                                       (pound)1 each and
                                       50,000 5% cumulative
                                       redeemable preference
                                       shares of (pound)0.10
                                       each

Registered in the names of:                  Name                  No and class

                                       DSL Holdings Limited               4,999
                                                              A ordinary shares
                                                                        415,882
                                                              B ordinary shares
                                                                         50,000
                                                              preference shares
                                       Xxxxxxxx Xxxxxxxx                      1
                                                               A ordinary share

Beneficially owned by:                 DSL Holdings Limited

Directors:                             Xxxxxxxx Xxxxxxxx
                                       Xxxxxxx Xxxxxxx

Secretary:                             Xxxx Hustler

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 32 -








Name:                                  DEFENCE SYSTEMS LIMITED

Jurisdiction of incorporation:         England and Wales

Registered no:                         1540857

Date of incorporation:                 16 July 1981

Registered office:                     Xxxxxxxx Xxxxx
                                       00-00 Xxxxxxxxxx Xxxx
                                       Xxxxxx XX0X 0XX

Authorised share capital:              (pound)1,000,000 divided into 1,000,000
                                       ordinary shares of(pound)1 each

Issued share capital:                  (pound)1,000,000  divided into 1,000,000
                                       ordinary shares of(pound)1 each

Registered in the names of:            Name                              Number

                                       Defence Systems International
                                       Limited                          999,999
                                       Xxxxxxxx Xxxxxxxx                      1

Beneficially owned by:                 Defence Systems International Limited

Directors:                             Xxxxx Xxxxx
                                       Xxxxxxxx Xxxxxxxx
                                       Xxxxxxx Xxxxxxx
                                       Xxxx Xxxxx

Secretary:                             Xxxx Hustler

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 33 -








Name:                                  DEFENSE SYSTEMS (JERSEY) LIMITED

Jurisdiction of incorporation:         Jersey

Registered no:                         62148

Date of incorporation:                 9 June 1995

Registered office:                     XX Xxx 000
                                       0 Xxxxxxxxx
                                       Xx Xxxxxx
                                       Xxxxxx XX0 0XX

Authorised share capital:              (pound)10,000 divided into 10,000 shares
                                       of(pound)1 each

Issued share capital:                  (pound)2 divided into 2 shares of (pound)
                                       1 each


Registered in the name of:             Name                              Number

                                       Hanon I Limited                        1
                                       Hanon II Limited                       1

Beneficially owned by:                 Defence Systems Limited

Directors:                             Xxxx Xxxxx
                                       Xxxxxxx X'Xxxxx
                                       Xxxxxxx Xxxxxxx

Secretary:                             Hambros Channel Islands Trust 
                                       Corporation Limited

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 34 -








Name:                                  US DEFENSE SYSTEMS INCORPORATED

Jurisdiction of incorporation:         Delaware, USA

Employer identification no:            00-0000000

Date of incorporation:                 1 November 1985

Registered office:                     0000 X Xxxxxx
                                       X.X.
                                       Xxxxx 000
                                       Xxxxxxxxxx X.X. 00000-0000

Authorised share capital:              $1,010 divided into 1,000 shares of 
                                       preferred stock of $1 par value each
                                       and 1,000 shares of common stock of
                                       $0.01 par value each

Issued share capital:                  $3 divided into 300 shares of common 
                                       stock of $0.01 par value each

Registered in the name of:             Defence Systems International Limited

Beneficially owned by:                 Defence Systems International Limited

Directors:                             Xxxxxxxx Xxxxxxxx
                                       Xxxx Xxxxxxxxxx
                                       Xxxxxx Xxxxxxx

Secretary:                             Xxxxxxxxxxx Xxxxxx

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 35 -








Name:                                  DSL SECURITY (ASIA) PTE LIMITED

Jurisdiction of incorporation:         Singapore

Registered no:                         19880275817

Date of incorporation:                 8 August 1988

Registered office:                     Xxxxx 000 #00-000
                                       Xxx Xxxxxx 0
                                       Xxxxxxxxx 000000

Authorised share capital:              S$100,000 divided into 100,000 shares of 
                                       $1 each

Issued share capital:                  S$100,000 divided into 100,000 shares of
                                       $1 each

Registered in the name of:             DSL Holdings Limited

Beneficially owned by:                 DSL Holdings Limited

Directors:                             Xxxxxxx X'Xxxx
                                       Xxxx Xxxxx
                                       Xxxxxxxx Xxxxxxxx

Secretary:                             Chor Pee (solicitors)

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 36 -








Name:                                  DSL SECURITY SYSTEMS (SOUTH AFRICA)
                                       (PTY) LIMITED

Jurisdiction of incorporation:         South Africa

Registered no:                         95/09168/07

Date of incorporation:                 30 August 1995

Registered office:                     c/o Syfret Xxxxxxxxx-Xxxxxx Xxxxx 
                                       Incorporated
                                       11th Floor
                                       NBS Waldorf
                                       00 Xx Xxxxxx'x Xxxx
                                       Xxxx Xxxx 0000
                                       Xxxxx Xxxxxx

Authorised share capital:              Rand 1,000 divided into 1,000 ordinary 
                                       shares of Rand 1 each

Issued share capital:                  Rand 60 divided into 60 ordinary shares 
                                       of Rand 1 each

Registered in the names of:            [                                ]

Beneficially owned by:                 DSL Security (Asia) Pte Limited

Directors:                             Xxxxxxxx Xxxxxxxx
                                       Xxxxxxx Xxxxxxx

Public officer:                        Xxxxxxx Xxxxx

Auditors:                              KPMG Aiken & Peat

Accounting reference date:             31 December


                                    - 37 -






Name:                                  US DS ZAIRE SARL

Jurisdiction of incorporation:         Zaire

National ID no:                        K28145C

Commercial registration no:            34758

Date of incorporation:                 November 1992

Registered office:                     000 Xxxxxx xx X'Xxxxxxxx
                                       Xxxxxxxx
                                       Xxxxx
                                       Xxxxx

Authorised share capital:              10,000,000,000 Old Zaires divided into
                                       [          ]

Issued share capital:                  10,000,000,000 Old Zaires divided into 
                                       [          ]

Registered in the names of:            Name                          Percentage

                                       US Defense Systems Inc                99
                                       Risasi Msimbwa                         1

Beneficially owned by:                 US Defense Systems Inc.

Directors:                             Risasi Msimbwa (power of attorney has 
                                       been granted to Xx Xxxxxxx which
                                       enables him to sign on behalf of the
                                       board and on behalf of shareholders)

Secretary:                             Sofikin (unofficially because no 
                                       requirement for a secretary)

Auditors:                              Audited through US Defense Systems Inc

Accounting reference date:             31 December




                                    - 38 -








Name:                                  SOCIETE AFRICAINE DE PERSONNEL DE 
                                       LOGISTIQUE ET DE LIASON SARL

Jurisdiction of incorporation:         Zaire

National ID no:                        A48686U

Commercial registration no:            27067

Date of incorporation:                 September 1992

Registered office:                     000 Xxxxxx x'Xxxxxxxx
                                       Xxxxxxxx
                                       Xxxxx
                                       Xxxxx

Authorised share capital:              5,000,000,000 Old Zaires divided into 
                                       [            ]

Issued share capital:                  5,000,000,000 Old Zaires divided into
                                       [            ]

Registered in the names of:            Name                          Percentage

                                       Defence Systems Limited               99
                                       Risasi Msimbwa                         1

Beneficially owned by:                 Defence Systems Limited

Directors:                             Xx Xxxxxx Shoubma

Secretary:                             Sofikin (unofficially because no 
                                       requirement for a secretary)

Auditors:                              through DSL/KPMG

Accounting reference date:             31 December



                                    - 39 -








Name:                                  DEFENCE SYSTEMS COLUMBIA SA

Jurisdiction of incorporation:         Columbia

Registered no:                         304160

Date of incorporation:                 23 July 1987

Registered office:                     Xxxxxxx 00 Xx. 00-00
                                       Xxxxxxx xx Xxxxxx
                                       Columbia

Authorised share capital:              Columbian Pesos 300,000,000 divided into
                                       300,000 shares of 1,000 Columbian Pesos 
                                       each

Issued share capital:                  Columbian Pesos 190,000,000 divided into
                                       190,000 shares of 1,000 Columbian Pesos 
                                       each

Registered in the names of:            Name                              Number

                                       DSL Holdings Limited             179,550
                                       Xxxxxxxx Xxxxxxxx                  1,900
                                       Xxxxxxx Xxxxxxx                    1,900
                                       Xxxxxxx Xxxxxxx                    1,900
                                       Xxxxxx Xxxxxx                      4,750

Beneficially owned by:                 DSL Holdings Limited

Directors:                             Xxxxxxx Xxxxxxx
                                       Harnando Xxxxxxx
                                       Xxxxxx Weston
                                       Xxxxxxx Xxxxxxx
                                       Xxxxx Xxxxx

Secretary:                             Xxxxxxxx Xxxxx

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 40 -








Name:                                  DSL (OVERSEAS) LIMITED

Jurisdiction of incorporation:         Cyprus

Registered no:                         56708

Date of incorporation:                 4 August 1993

Registered office:                     Xxxx Xxxxx
                                       00 Xxxxxxxxx Xxxxxx
                                       Xxxxxxx
                                       Xxxxxx

Authorised share capital:              C(pound)1,000 divided into 1,000 
                                       ordinary shares of C(pound)1 each

Issued share capital:                  C(pound)1,000 divided into 1,000 
                                       ordinary shares of C(pound)1 each

Registered in the name of:             Name                              Number

                                       Xxxxx Xxxxxxxx                         1
                                       Defence Systems Limited              999

Beneficially owned by:                 Defence Systems Limited

Directors:                             Xxxxxxx Xxxxxxx
                                       Xxxxx Xxxxx

Secretary:                             Kypros Charalambides

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 41 -








Name:                                  GORANDEL TRADING LIMITED

Jurisdiction of incorporation:         Cyprus

Registered no:                         56442

Date of incorporation:                 21 July 1993

Registered office:                     Xxxx Xxxxxxxx
                                       00 Xxxxxxxxx Xxxxxx
                                       Xxxxxxx
                                       Xxxxxx

Authorised share capital:              C(pound)1,000 divided into 1,000 shares 
                                       of C(pound)1 each

Issued share capital:                  C(pound)1,000 divided into 1,000 shares 
                                       of C(pound)1 each

Registered in the names of:            Name                              Number

                                       DSL Overseas Limited                 500
                                       Strontian Holdings Limited           500

Beneficially owned by:                 Name                              Number

                                       DSL Overseas Limited                 500
                                       Strontian Holdings Limited           500

Directors:                             Xxxxx Xxxxx
                                       Xxxxxxx Xxxxxxx
                                       Xxxx Xxxxxxx
                                       Xxxxxxx Golovatov

Secretary:                             Kypros Charalambides

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 42 -








Name:                                  JARDINE SECURICOR GURKHA SERVICES LIMITED

Jurisdiction of incorporation:         Hong Kong

Registered under no:                   401004

Date of incorporation:                 2 February 1993

Registered office:                     The Security Centre
                                       481-483 Castle Peak Road
                                       Xxxxxx Sha Wan
                                       Kowloon

Authorised share capital:              HK$10,000 divided into 10,000 shares of
                                       HK$1 each

Issued share capital:                  HK$10,000 divided into 10,000 shares of 
                                       HK$1 each

Registered in the names of:            Name                              Number

                                       Jardine Securicor Limited          6,200
                                       Maximum Security Asia Limited      2,000
                                       Defence Systems Limited            2,000

Beneficially owned by:                 Name                              Number

                                       Jardine Securicor Limited          6,200
                                       Maximum Security Asia Limited      2,000
                                       Defence Systems Limited            2,000

Directors:                             Xxxxxxxx Xxxxxxxx
                                       [3 appointed by Jardine Securicor 
                                       Limited]
                                       [2 appointed by Maximum Security Asia 
                                       Limited]

Secretary:                             N/A

Auditors:                              Price Waterhouse

Accounting reference date:             30 September



                                    - 43 -








Name:                                  DSL SECURITY (PNG) PTE

Jurisdiction of incorporation:         Papua New Guinea

Registered no:                         C8303

Date of incorporation:                 1 August 1981

Registered office:                     Second Floor
                                       Mogoru
                                       Moto Building
                                       Champion Parade
                                       Port Moresby NCD

Authorised share capital:              K10,000 divided into 10,000 ordinary 
                                       shares of K1 each

Issued share capital:                  K1,000 divided into 1,000 ordinary 
                                       shares of K1 each

Registered in the names of:            Name                              Number

                                       Defence Systems Limited              500
                                       Xxxxxx Consultants Pty Limited       500

Beneficially owned by:                 Name                              Number

                                       Defence Systems Limited              500
                                       Xxxxxx Consultants Pty Limited       500

Directors:                             Xxxxx Xxxxxx
                                       Xxxx Xxxxx
                                       Xxxxxxxx Xxxxxxxx

Secretaries:                           Xxxxx Xxxxxx
                                       Xxxxx Xxxxxxx (KPMG)

Auditors:                              KPMG

Accounting reference date:             31 December



                                    - 44 -








Name:                                  DSL - SESEGEUR PERU SA

Jurisdiction of incorporation:         Peru

Registered no:                         119996

Date of incorporation:                 20 February 1995

Registered office:                     Mercantile Registry
                                       Lima
                                       Peru

Authorised share capital:              S/.4,000 divided into 20 'A' class
                                       shares of S/.100 each and 20 'B' class
                                       shares of S/.100 each

Issued share capital:                  S/.4,000 divided into 20 'A' class 
                                       shares of S/.100 each and 20 'B' class
                                       shares of S/.100 each

Registered in the name of:             Defence Systems Peru - SESEGUR SA

Beneficially owned by:                 Name                        No and class

                                       Xxxxxxx Xxxxxxxxx   
                                         Fort                6 'A' class shares 
                                       Xxxxxxx Xxxxxxxxx                        
                                         Xxxxxx              7 'A' class shares 
                                       Xxxxxxxx Xxxxxxxxx                       
                                         Xxxxxx              7 'A' class shares 
                                       Defence Systems                          
                                         Limited            20 'B' class shares 
                                                               
Directors:                             Xxxxxxx Xxxxxxx
                                       Xxxxxxx Xxxxxxx
                                       Xxxxxxx Xxxxxxxxx Xxxxxx
                                       Xxxxxxxx Xxxxxxxxx Xxxxxx

Secretary and general manager:         Xxxxxxx Xxxxxxxxx Xxxxxx

Auditors:                              [               ]

Accounting reference date:             31 December



                                    - 45 -








Name:                                  DEFENSETSE SYSTEMS EQUADOR USDSE SA

Jurisdiction of incorporation:         Equador

Registered no:                         0544

Date of incorporation:                 [                       ]

Registered office:                     Xxxxxxxx Xxxxxxxxx, 000
                                       Xxxxx Xxxxxxx y Xxxxx Xxxx
                                       Quito
                                       Equador

Authorised share capital:              $10,000,000 divided into 10,000 shares 
                                       of $1,000 each

Issued share capital:                  $10,000,000 divided into 10,000 shares
                                       of $1,000 each

Registered in the names of:            Name                        No of shares
 
                                       US Defense Systems Inc             9,999
                                       Xxxxx Xxxxxxx                          1

Beneficially owned by:                 US Defense Systems Inc

Directors:                             Xxxx Xxxxxxxxxx
                                       Xxxxxxxx Xxxxxxxx

Secretary:                             Xxxxxxxxxxx Xxxxxx

Auditors:                              Xxxx Xxxxxx (accountant)

Accounting reference date:             31 December

                                    - 46 -








Name:                                  FAR EAST DEFENCE SYSTEMS LIMITED
                                       (in creditors voluntary liquidation)

Jurisdiction of incorporation:         Hong Kong

Registered no:                         1269266

Date of incorporation:                 24 May 1988

Registered office:                     Prince's Xxxxxxxx
                                       0xx Xxxxx
                                       XXX Xxx 00
                                       Xxxx Xxxx

Authorised share capital:              S$250,000

Issued share capital:                  [                       ]

Registered in the names of:            Name                        No of shares

                                       DSL Holdings Limited
                                       Xxxx Xxxxxxx Xxxxxx

Beneficially owned by:                 DSL Holdings Limited

Director:                              Xxxxxxxx Xxxxxxxx

Secretary:                             [               ](Solicitors)

Liquidator:                            Xxxx Xxxx, KPMG

Auditors:                              KPMG

Accounting reference date:             31 December

Note: Final meeting of members and creditors has been convened for 15 April
1997. The company will be struck off three months from that date.

                                    - 47 -








Name:                                  USDS (MED) LIMITED

Jurisdiction of incorporation:         Cyprus

Registered no:                         32826

Date of incorporation:                 2 August 1988

Registered office:                     Xxxxx Xxxxx
                                       0 Xx Xxxxxx Xxxxxx
                                       XX Xxx 0000 Xxxxxxx
                                       Xxxxxx

Authorised share capital:              C(pound)10,000 divided into 10,000
                                       shares of C(pound)1 each

Issued share capital:                  C(pound)1,000 divided into 1,000 shares 
                                       of C(pound)1 each

Registered in the names of:            Name                        No of shares

                                       Defence Systems 
                                       International Limited                400
                                       Magenta Holdings Limited             300
                                       Xxxxxxxx X Xxxxxx Limited            300

Beneficially owned by:                 Defence Systems International Limited

Directors:                             Xxxxxxxx Xxxxxxxx
                                       Xxxxxxx Xxxxxxx
                                       A Xxxxxxxx
                                       A Xxxxxx

Secretary:                             Coly Secretarial Limited

Liquidator:

Auditors:                              Coopers & Xxxxxxx

Accounting reference date:             31 December

Note: Registrars of Companies (Cyprus) requested to strike the company off in
November 1996, with such strike-off expected in July 1997.

                                    - 48 -








Name:                                  MAXIMUM SECURITY INDOCHINA LIMITED

Jurisdiction of incorporation:         Hong Kong

Registered no:

Date of incorporation:

Registered office:

Authorised share capital:

Issued share capital:

Registered in the names of:            Name                        No of shares




Beneficially owned by:                 DSL Security (Asia) Pte Limited (20% 
                                       only)

Director:

Secretary:

Auditors:

Accounting reference date:



                                    - 49 -








                                  SCHEDULE 4
                                  WARRANTIES

1.        Constitution

2.        Accounts

3.        Business

4.        Directors and Employees

5.        Properties

6.        The Group and its Bankers

7.        Accuracy of Information/Reports


                                    - 50 -








                                1. CONSTITUTION

1.1       CONSTITUTIONAL DOCUMENTS

          The memorandum and articles of association or other constitutional
          documents of the Company in the form attached to the Disclosure
          Letter are complete and accurate and have embodied therein or
          annexed thereto copies of all resolutions and agreements as are
          required by law to be embodied therein or annexed thereto and all
          amendments thereto (if any) were duly and properly made.

1.2       REGISTER OF MEMBERS

          The register of members of the Company contains true and accurate
          records of the members from time to time of the Company and the
          Company has not been subject to any application under any relevant
          legislation for rectification of such register.

1.3       RETURNS

          All such resolutions returns and other documents required by law to
          be delivered to the Registrar of Companies have been duly delivered
          and are true and accurate.

1.4       POWERS OF ATTORNEY

          The Company has not executed any power of attorney or conferred on
          any person other than its directors, officers and employees any
          authority to enter into any transaction on behalf of or to bind the
          Company in any way.

1.5       SUBSIDIARIES

1.5.1     The Company does not have any subsidiary undertakings other than as
          noted in schedule 3 nor does the Company own any shares or stock in
          the capital of nor have any beneficial interest in any other company
          or business organisation nor does the Company control or take part
          in the management of any other company or business organisation.

1.5.2     Each of the Subsidiaries is a wholly-owned subsidiary of the
          Company, save as otherwise indicated in schedule 3.



                                    - 51 -








                                  2. ACCOUNTS

2.1       ACCOUNTS WARRANTY

          The Accounts comply with the relevant legislation of the
          jurisdiction of incorporation of the Company as applicable and have
          been prepared in accordance with generally accepted accounting
          principles and practices of such jurisdiction and give a true and
          fair view of all the assets and liabilities and of the financial
          position and results of the Company as at and up to the Accounts
          Date and, without prejudice to the generality of the foregoing, the
          Accounts:-

          (a)      either make adequate provision or reserve for or make fair
                   disclosure in notes of all contingent, postponed or
                   deferred liabilities;

          (b)      have not (save as disclosed in the Accounts) been affected
                   by any extraordinary, exceptional or non-recurring item or
                   by any other fact or circumstance rendering the profits or
                   losses for the relevant period unusually high or low.

2.2       ACCOUNTING POLICY

          The Accounts have been prepared in accordance with the accounting
          policies adopted by the Company as at 31 March 1996.

2.3       DEBT FINANCING

          None of the debts owed to the Company has been the subject of any
          factoring by the Company.

2.4       MANAGEMENT ACCOUNTS

          The monthly management accounts of the Company for the period since
          31 December 1996 up to and including 28 February 1997 in the form
          attached to the Disclosure Letter and indentified by means of
          cross-reference:-

          (a)      show a fair view of the affairs of the Company for periods
                   to which they relate it being acknowledged by AHI that the
                   management accounts are not audited;

          (b)      do not overstate assets or profits or understate
                   liabilities or losses to a material extent; and

          (c)      are not misleading in any material respect.

2.5       FIXED ASSETS

          The value of all of the fixed assets of the Company as shown in the
          Accounts is at cost thereof less depreciation deducted from time to
          time in a consistent manner and there has been no revaluation of
          such fixed assets since their acquisition.


                                    - 52 -








2.6       OFF BALANCE SHEET FINANCING

          Neither the Company nor any associated company has engaged in any
          financing (including without prejudice to the generality of the
          foregoing the incurring of any borrowing or any indebtedness in the
          nature of borrowing including without limitation liabilities in the
          nature of acceptances or acceptance credits) of a type which would
          not be required to be shown or reflected in the Accounts.

2.7       ACCOUNTING REFERENCE DATE

          The Company has notified to the Registrar of Companies the date
          specified against "Accounting reference date" in the relative
          section of Schedule 2 or 3 (as appropriate) as being its accounting
          reference date pursuant to the relevant legislation in the
          jurisdiction of incorporation of the Company.

2.8       BOOKS OF ACCOUNT AND CORPORATE RECORDS

2.8.1     The Company has properly kept and maintained all necessary books of
          account all minute books, records, register of members and other
          statutory books.

2.8.2     All material deeds and documents (properly stamped where stamping is
          necessary for enforcement thereof) belonging to the Company or which
          ought to be in the possession of the Company and which are material
          to the conduct of its business, including, without limitation:-

          (a)      all certificates of incorporation, statutory books and
                   share certificate books relating to the Company;

          (b)      all material land certificates, charge certificates,
                   leases, title deeds and other documents relating to the
                   Properties;

          (c)      all material insurance policies in any way relating to or
                   concerning the businesses of the Company; and

          (d)      all material licences, consents, permits and
                   authorisations obtained by or issued to the Company or any
                   officer or employee thereof in connection with the
                   business carried on by it

          are in the possession of the Company.

                                    - 53 -








                                  3. BUSINESS

3.1       BUSINESS SINCE THE ACCOUNTS DATE

          Since the Accounts Date the business of the Company has been
          conducted in the ordinary course of trading, there has been no
          material adverse change in the financial or trading position of the
          Company and the business of the Company has been conducted on a
          normal basis and the Company has not disposed of any of its assets
          to any Vendor or any person connected (within the meaning of section
          839 T.A.) with a Vendor or otherwise than in the normal course of
          business or declared or paid any dividend on any of its Shares or
          effected any distribution of its assets or made any loan or other
          payment other than in the normal course of business.

3.2       CHARGES AND TITLE TO ASSETS

3.2.1     The Company has not created or agreed to create or suffered to arise
          any Encumbrance over any part of its undertaking or assets and the
          Company has a good and marketable title to all the assets included
          in the Accounts and to all other assets (tangible or intangible)
          used for the purpose of the Company's business at the date hereof
          and to all assets acquired since the Accounts Date and prior to
          Completion.

3.2.2     No person other than the Company has any right, title or interest
          (present or future) in any asset of the Company.

3.3       CONTRACTS

3.3.1     Full and accurate details of any xxxx of sale or any hiring or
          leasing agreement, hire purchase agreement, credit or conditional
          sale agreement, agreement for payment on deferred terms or any other
          similar agreement to which the Company is a party are contained in
          the Disclosure Letter.

3.3.2     The Disclosure letter contains reasonable details of all subsisting
          contracts to which the Company is a party and which:-

          (a)      is expected to generate aggregate revenue to the Company
                   of more than (pound)250,000:

          (b)      are outside the ordinary course of business of the
                   Company;

          (c)      are incapable of termination in accordance with their
                   terms, by the Company, on six months' notice or less;

          (d)      are of a loss-making nature (that is, a contract with a
                   direct contract contribution of less than 10 per cent
                   excluding any local overhead allocation);

          (e)      cannot readily be fulfilled or performed by the Company on
                   time without undue, or unusual, expenditure of money,
                   effort or personnel in the context of the business of the
                   Company or which could give rise to monetary penalties;


                                    - 54 -








          (f)      involve an aggregate capital expenditure by the Company
                   during any twelve month period of more than $100,000;

          (g)      restrict its freedom to engage in any activity or business
                   or confine its activity or business to a particular place;
                   or

          (h)      are capable of termination (without liability for
                   compensation) by any other person on a change in the
                   management control or shareholding of the Company or by
                   reason of the sale of the Shares under this agreement

          and the Disclosure Letter specifically identifies which of such
          contracts are disclosed against which of the above paragraphs of
          this Warranty.

3.3.3     Each of the contracts referred to in Warranty 3.3.2 is in full force
          and effect and not voidable.

3.3.4     The Company has not been notified of, and the Warrantors are not
          aware of, any breach by the Company of any of its obligations under
          any contract to which it is a party or by which it is bound.

3.3.5     Subsequent to Completion the Company will not have any contractual
          or other arrangements of any sort with any of the Vendors or any
          body corporate or person connected or associated with any of the
          Vendors.

3.4       EVENTS OF DEFAULT

          So far as the Warrantors are aware, no event has occurred or is
          subsisting which constitutes or results in or would with the giving
          of notice and/or lapse of time constitute or result in a default or
          the acceleration of any obligation under any agreement or
          arrangement to which the Company is a party or by which it or any of
          its properties, revenues or assets are bound.

3.5       CHANGE OF CONTROL

          To the best of the Warrantors' knowledge, information and belief,
          after Completion as a result of the proposed acquisition of the
          Company by AHI:-

          (a)      no customer of the Company will cease, or be entitled to
                   cease, to deal with the Company or may substantially
                   reduce its existing level of business with the Company;

          (b)      no officer or senior employee of the Company will leave.

3.6       MATERIAL CUSTOMERS

          The Disclosure Letter contains full details of all former customers
          who accounted for annual xxxxxxxx of more than $500,000 of the
          Company who have ceased to be customers of the Company or have
          materially reduced their business with the Company in each case in
          the 12 months prior to Completion.

                                    - 55 -









3.7       GUARANTEES ETC.

          The Company has not given any guarantee, indemnity, warranty or bond
          or incurred any other similar obligation or created any security for
          or in respect of liabilities, actual or contingent, of any other
          person.

3.8       OPTIONS OVER SHARES ETC.

          Since the Accounts Date no share or loan capital has been created or
          issued or agreed to be created or issued and there are not any
          options or other agreements outstanding which call or give any
          person the right to call (whether or not subject to conditions) for
          the issue of any share or loan capital of the Company and none of
          the Vendors is under any obligation of any kind whatsoever whether
          actual or contingent to sell, charge or otherwise dispose of any of
          the Shares or any interest therein to any other person.

3.9       LITIGATION

3.9.1     The Company is not engaged in any litigation, arbitration,
          prosecution or other legal proceedings (whether as plaintiff,
          defendant or third party), the Company has not been notified that
          any such proceedings are pending or threatened and so far as the
          Warrantors are aware there are no claims, facts or events which
          should reasonably be expected to give rise to any such proceedings.

3.9.2     The Company is not engaged in and has not in the last three years
          been engaged in and so far as the Warrantors are aware no facts or
          events exist or have occurred which are likely to cause the Company
          to be involved in proceedings or enquiries before any governmental
          or municipal board of enquiry or commission or any other
          administrative body (whether judicial quasi-judicial or otherwise)
          in which any unfavourable judgment or decision would or should
          reasonably be expected to affect materially and adversely the
          business of the Company.

3.10      TRADE MARKS ETC.

3.10.1    The Company has sufficient right, title and ownership of all its
          intangible property, including all patents, trade marks, service
          marks, trade names, copyrights, licences, information and
          proprietary rights ("PROPRIETARY RIGHTS"), or adequate licences,
          rights or purchase options with respect to the foregoing, necessary
          for its business as now conducted, and the Company has not received
          any notice of infringement upon or conflict with the asserted rights
          of others.

3.10.2    The trade marks, service marks, patents, registered designs and
          copyrights and other intellectual property rights (and applications
          for registration of the same) particulars of which are set out in
          the Disclosure Letter are beneficially owned by, and where
          registrable, are registered in the name of the Company listed as the
          owner of such right or assets free from any Encumbrance and there
          are no registered user agreements, know-how agreements, licences or
          other rights whatsoever granted in respect thereof and, so far as
          the Warrantors are aware, no event has occurred whereby any of them
          have or might cease to be valid and subsisting.

                                    - 56 -









3.10.3    So far as the Warrantors are aware the Company has conducted its
          business without infringing the Proprietary Rights of any person.

3.11      PROPERTY IN OTHER COMPANIES

          The Company is not liable to offer for sale transfer or otherwise
          dispose of or purchase or otherwise acquire any assets, including
          shares held by it in other bodies corporate under their articles of
          association or any agreement or arrangement or to take or suffer any
          action upon the happening of any such event specified in warranty
          3.8.

3.12      INSURANCE

3.12.1    The Company has produced to AHI copies of all insurance policies in
          effect in relation to its business and assets and all such policies
          are in full force and effect and not voidable.

3.12.2    So far as the Warrantors are aware there are no circumstances which
          might reasonably be expected to lead to any liability under such
          insurance being avoided by the insurers and the Company has not
          received notice that there is any claim outstanding under any such
          policy nor are the Warrantors aware of any circumstances likely to
          give rise to a claim.

3.12.3    The Disclosure Letter includes a summary with reasonable details of
          all claims made under the insurance policies of the Company in the
          three years prior to Completion.

3.13      COMPLIANCE WITH LEGISLATION

3.13.1    The Company has not received notice that it or any of its officers,
          agents or employees (during the course of their duties in relation
          to the Company) have committed, or omitted to do, any act or thing
          the commission or omission of which is, or could be, in
          contravention of any Act, order, regulation or the like which is
          punishable by fine or other penalty or which may impose any other
          liabilities on the Company or affect the validity or enforceability
          of any agreement or arrangement to which it is a party and which
          would be material to the Company.

3.13.2    Without prejudice to the generality of the foregoing, the Company
          has received no notice that it has done or omitted to do any act or
          thing in contravention of the provisions of the Restrictive Trade
          Practices Acts 1976 and 1977, the Fair Trading Xxx 0000, the
          Competition Xxx 0000, Articles 85 and 86 of the Treaty of Rome, the
          Resale Prices Xxx 0000, the Trade Descriptions Xxx 0000, the
          Consumer Credit Xxx 0000, the Consumer Protection Xxx 0000, the
          Companies Xxx 0000, the Financial Services Xxx 0000, the Banking Xxx
          0000, the Food Safety Xxx 0000 and the United States Foreign Corrupt
          Practices Act and so far as the Warrantors are aware all statutory,
          municipal and other like requirements (including orders and
          regulations affecting businesses carried on in member states of the
          European Economic Community) applicable to the business of the
          Company have been complied with in all material respects.

3.13.3    The Warrantors are not aware of any proposed or pending changes in
          law or regulation which would have a material adverse effect on the
          business of the Company.


                                    - 57 -








3.14      LICENCES

          So far as the Warrantors are aware, the Company has all licences,
          permissions, permits, consents and authorisations required for the
          carrying on of its business and which the failure to have would have
          a material adverse effect on the Company, the Company has not
          received notice that it is in breach of the terms or conditions of
          such licences, permissions, permits, consents and authorisations and
          so far as the Warrantors are aware, there are no pending or
          threatened proceedings which should reasonably be expected to affect
          in any way such licences, permissions, permits, consents and
          authorisations and the Warrantors are not aware of any other reason
          why any of them should be suspended, threatened or revoked or be
          invalid.

3.15      GRANTS

          The Company has not received any financial assistance from any
          supranational, national or local agency, body or authority which
          will become repayable as a result of the purchase by AHI of the
          Ordinary Shares.

3.16      INSOLVENCY

          The Company is able to pay its debts as they fall due, is not
          insolvent and no steps have been taken nor are the Warrantors aware
          of any grounds on which any steps could be taken to appoint any
          receiver, administrator or liquidator in respect of the Company or
          any of its assets.

3.17      TAX

3.17.1    So far as the Warrantors are aware, the Company will not suffer any
          liability to Tax other than:-

          (a)      Tax the liability for which was provided for or expressly
                   taken into account in the preparation of the Accounts; or

          (b)      Tax arising in the ordinary course of the Company's trade
                   since the Accounts Date

          in consequence of any act or omission occurring or any profits
          arising (or deemed for Tax purposes to arise) on or before
          Completion.

3.17.2    So far as the Warrantors are aware, the Company has made all returns
          and supplied all information and given all notices to all relevant
          authorities having competence in relation to Tax as reasonably
          requested or required by law within any requisite period and all
          such returns and information and notices are correct and accurate in
          all material respects and are not the subject of any dispute and
          there are no facts or circumstances likely to give rise to or be the
          subject of any such dispute.



                                    - 58 -








                          4. DIRECTORS AND EMPLOYEES

In this section 4, "SENIOR EMPLOYEE" means an employee of the Company whose
total annual remuneration at the date hereof exceeds (pound)40,000.

4.1       The names and addresses of Directors and Secretaries shown in
          schedules 1, 2 and 3 are true and complete and no person not named
          therein as such is a director of the Company.

4.2       The particulars of all employees annexed to the Disclosure Letter
          show all remuneration and other benefits:-

          (a)      actually provided; and

          (b)      which the Company is bound to provide (whether now or in
                   the future)

          to each officer and senior employee of the Company and are true and
          complete and include particulars of and details of participation in
          all profit sharing, incentive, bonus, commission, share option,
          medical, permanent health insurance, directors and officers
          insurance, travel, car, redundancy and other benefit schemes,
          arrangements and understandings (the "SCHEMES") operated for all or
          any employees or former employees of the Company or their dependants
          whether legally binding on the Company or not.

4.3       The Schemes have at all times been operated in accordance with their
          governing rules or terms and all applicable laws and all documents
          which are required to be filed with any regulatory authority have
          been so filed and, so far as the Warrantors are aware, all tax
          clearances and approvals necessary to obtain favourable tax
          treatment for the Company and/or the participants in the Schemes
          have been obtained and not withdrawn and no act or omission has
          occurred which has or could prejudice any such tax clearance and/or
          approval.

4.4       The terms of employment or engagement of all employees, agents,
          consultants and professional advisers of the Company are such that
          their employment or engagement may be terminated by not more than 12
          months' notice given at any time without liability for any payment
          including by way of compensation or damages (except for unfair
          dismissal or a statutory redundancy payment).

4.5       Since the Accounts Date the Company has not made, announced or
          proposed any changes to the emoluments or benefits of or any bonus
          to any of its directors, officers or senior employees and the
          Company is under no obligation to make any such changes with or
          without retrospective operation.

4.6       The Disclosure Letter contains copies of and full details of all
          rights and liabilities relating pursuant to any collective
          agreements (whether with a trade union, staff association or any
          other body representing workers and whether legally binding or not)
          concerning the Company.

4.7       There are no amounts owing or agreed to be loaned or advanced by any
          of the Vendors or by the Company to any directors, officers and
          employees of the Company (other than amounts representing
          remuneration accrued due for the current pay period, accrued holiday

                                    - 59 -








          pay for the current holiday year, for reimbursement of expenses or 
          bona fide travel advances).

4.8       No director, officer or senior employee of the Company is at present
          under notice to terminate his employment (either given or received).

4.9       There are no terms or conditions under which any director, officer
          or expatriate employee of the Company is employed, nor has anything
          occurred that should reasonably be expected to give rise to any
          material claim against the Company for sex, race or other unlawful
          discrimination.

4.10      The salaries and wages and other benefits of all senior employees of
          the Company have been paid or discharged in full in respect of the
          period up to Completion.

4.11      The only schemes or arrangements to which the Company is a party
          whose purpose is the provision of "relevant benefits" (as defined in
          section 612 Income and Corporation Taxes Act 1988) are the DSL
          (1995) Group Pension Scheme, the DSL Offshore Pension Scheme, the
          DSL Directors Special Pension Scheme and the USDS Retirement Plan
          (the "PENSION SCHEMES").

4.12      Other than benefits payable on death which are fully insured the
          Pension Schemes provide only money purchase benefits (as defined in
          section 181 Pension Schemes Act 1993) and no promise or assurance
          has been given to any beneficiary of the Pension Schemes that his
          benefits other than insured death benefits will be calculated by
          reference to any person's remuneration or equate (approximately or
          exactly) to any particular amount.

4.13      The Pension Schemes comply with all applicable legal and regulatory
          requirements, and have all appropriate governmental and fiscal
          approvals, in the appropriate jurisdiction and the Vendors are not
          aware of any outstanding claims or litigation (including complaints
          to the Pensions Ombudsman) in respect of the Pension Scheme, nor of
          any circumstances likely to give rise to any such claims or
          litigation, or likely to prejudice such approval.

4.14      The Company is under no obligation to contribute to any personal
          pension scheme.



                                    - 60 -








                                 5. PROPERTIES

5.1       The Properties comprise all the freehold and leasehold land owned
          used or occupied by the Company and all the rights vested in and all
          agreements whereby the Company has any financial entitlement or
          obligation (whether actual or contingent) relating to any land at
          the date hereof.

5.2       The Company has under its control all title deeds and documents
          necessary to prove its title to the Properties and the same are
          original documents or properly examined abstracts.

5.3       There are no agreements, covenants, restrictions, exceptions,
          reservations, conditions, rights, privileges or stipulations
          affecting the Properties which are financially onerous to a material
          extent.

5.4       The Company has duly performed observed and complied with all
          covenants, restrictions, exceptions, reservations, conditions,
          agreements, statutory and common law requirements, by-laws, orders,
          building regulations and other stipulations and regulations
          affecting the Properties and where appropriate the Company has
          obtained a fire certificate for all the Properties.

5.5       Each of the Properties which is leasehold is held under the lease
          brief details of which are set out in the Disclosure Letter and no
          licences or collateral arrangements or concessions have been entered
          into or granted and there are no rent reviews which are in the
          course of being determined.

5.6       The Company is in exclusive occupation of each and every part of the
          Properties.

5.7       The existing use of each of the Properties is the lawful permitted
          use under the relevant planning legislation and in the case of
          leasehold property under the terms of the lease or tenancy agreement
          under which such property is held or otherwise and are not temporary
          uses.

5.8       There are no outstanding enforcement or other notices or proceedings
          issued in respect of any of the Properties and there is no
          resolution or proposal for compulsory acquisition by the local or
          any other authority.


                                    - 61 -








                         6. THE GROUP AND ITS BANKERS

6.1       BANK ACCOUNTS

          The most recent statement of each bank account of the Company is
          attached to the Disclosure Letter. The Company does not have any
          other bank or deposit accounts (whether in credit or overdrawn) not
          included in such statements. Since the date to which each such
          statement was prepared there have been no payments out of the
          relative account except for routine payments.

6.2       EVENTS OF DEFAULT - INDEBTEDNESS

          The Company has complied with the original payment schedules in
          respect of all and any indebtedness remaining outstanding at
          Completion.


                                    - 62 -








                          7. ACCURACY OF INFORMATION

7.1       All information contained in schedules 1, 2, 3 and 5 to this
          agreement is true and correct in all material respects.

7.2       All information contained in the Disclosure Letter is true and
          correct in all material respects and is not misleading.

7.3       Each answer given to AHI in response to to the Information Request
          IN THE AGREED FORM was when given and is now true and correct in all
          material respects and so far as the Warrantors are aware no matter
          or fact has not been disclosed in response thereto the omission of
          which renders any of the answers given misleading in any material
          respect.

7.4       So far as the Warrantors are aware, the statements of fact contained
          in the schedule IN THE AGREED FORM headed "Exhibit 'A'" are true and
          accurate in all material respects and are not misleading in any
          material respect.

7.5       The forecasts and projections of the Company for the periods ending
          31 December 1997, 1998 and 1999 contained in the schedule IN THE
          AGREED FORM headed "Exhibit 'A'" are reasonably believed by the
          Warrantors to be reasonable and to be based on reasonable
          assumptions all of which are expressed therein.

7.6       So far as the Warrantors are aware, each of the "appropriate
          employees" referred to in clause 1.9 has made all reasonable
          enquiries as to the subject matter of the enquiries made of him as
          to the accuracy of the Warranties and the responses to the
          Information Request IN THE AGREED FORM.

                                    - 63 -








                                  SCHEDULE 5
                                THE PROPERTIES

1.        ANGOLA

          Offices in Luanda



2.        BOSNIA

          Tranpina Street, No 4
          Sarajevo

          o        Contract in respect of property in dated 21 March 1997
                   Lessor - Tvornica Carapa "KLJUC" Sarajevo Lessee - Defence
                   Systems Limited Premises - Offices
                   Rent - 30 DM per m(2) (1350 DM per month) payable in
                   advance. Rent subject to review Term - 21 March 1997
                   onwards effective as long as lessee needs the offices and
                   the lessor can continue the Lease. The lessor may not
                   determine the Lease for at least
                   six months.



3.        COLUMBIA



4.        ENGLAND

(a)       Xxxxxxxx Xxxxx
          00-00 Xxxxxxxxxx Xxxx
          Xxxxxx XX0X 0XX

          o        Lease of 7th floor Egginton House Landlord - MEPC plc
                   Tenant - Advent Limited Term - 26 January 1984 until 24
                   March 2002
                   Annual rent - (pound)41,000 payable quaterly in advance on
                   the usual quater days, subject to review

          o        Licence for Assignment of Lease dated 13 July 1984 of 7th
                   floor Egginton House

          o        Deposit of rent dated 16 October 1990 relating to Lease
                   dated 13 July 1984 of 7th floor Egginton House


                                    - 64 -








          o        Certificate of registration of Charge created by DSL
                   Holdings Limited in respect of Lease dated 13 July 1984 of
                   7th floor Egginton House

          o        Lease dated 30 July 1984 of 7th floor Egginton House

          o        Lease dated 23 March 1994 of 5th Floor Egginton House
                   Landlord - MEPC plc Tenant - DSL Holdings Limited Term - 23
                   March 1994 until 24 March 2002
                   Annual rent - Peppercorn rent until 22 February 1995 and
                   thereafter (pound)30,000 payable quaterly in advance on the
                   usual quater days, subject to review

          o        Lease dated 7 June 1996 of Lower Ground Floor Egginton
                   House Landlord - MEPC plc Tenant - Defence Systems Limited
                   Term - 7 June 1996 until 24 March 2002 Annual rent -
                   Peppercorn rent until 6 December 1996 and thereafter
                   (pound)25,000 payable quaterly in advance on the usual
                   quater days, not subject to review

          o        Further documentation (in Portuguese) relating to 7th
                   floor Egginton House


(b)       00 Xxxxxx Xxxxxx
          Xxxxxx XX0

          o        Licence dated 12 June 1995 re car parking spaces
                   Grantor - Land Securities plc
                   Licensee - Defence Systems Limited
                   Car parking space - 2 car parking spaces at quarterly
                   licence fee of (pound)1,000 Term - 25 March 1995 to 23 June
                   1995 may be revoked on any quarter period after the
                   expiration of this period by not less than one quarters
                   notice in writing as by either of the parties


(c)       Office Studio 2
          Horwich Business Centre

          o         Informal tenancy arrangement



5.        JERSEY

          Xxxx 0
          Xxxxx Xxxxxx
          Xxxx Xxxxxx
          Xxxxxxxxx du Haut de la Ville
          St Helier

                                    - 65 -






          Jersey

          o        Lease
                   Landlord - Numerical Limited
                   Tenant - Defence Systems Limited
                   Term - 1 September 1988 until 23 June 2000
                   Annual rent - (pound)4,335 payable quaterly in advance on
                   the usual quater days, subject to review

          o        Transfer of Lease from Hadrian Management Limited to
                   Defence Systems Limited dated 19 January 1996.



6.        KAZAKHSTAN

          o         Freehold of a flat



7.        KWENHA



8.        MOZAMBIQUE

          o        Informal tenancy arrangement, made by way of letter
                   Rent - US$388 per month.



9.        SINGAPORE

          Xxx 000 Xxx Xxxxxx
          0#00-000
          Xxxxxxxxx 000000

          o        Lease
                   Landlord - Trend Interior Design & Construction Pte Ltd
                   Tenant - DSL Security (Asia) Pte Ltd Term - 1 May 1996
                   until 30 April 1998 Monthly rent - S$1,200 payable in
                   advance on the first day of each month, not subject to
                   review



10.       UNITED STATES


                                    - 66 -








          o        Lease amendment dated 10 April 1994
                   Landlord - IPP (Nevada) Inc
                   Tenant - US Defence Systems Inc
                   Term - due to end on May 31 1996 with an option to extend
                   for an additional period of 18 months exercisable by the
                   tenant by delivering a written notice to the landlord not
                   more than 12 months nor less than 120 days prior to the
                   expiration of the term.
                   Annual rent - $24,354.00


                                    - 67 -








SIGNED by                                                      )
for and on behalf of                                           )
ARMOR HOLDINGS, INC                                            )


SIGNED by                                                      )
for and on behalf of                                           )
ARMOR HOLDINGS LIMITED                                         )


SIGNED by                                                      )
for and on behalf of                                           )
NATWEST VENTURES NOMINEES LIMITED                              )


SIGNED by                                                      )
for and on behalf of                                           )
PHOENIX GENERAL PARTNER LIMITED                                )


SIGNED by                                                      )
for and on behalf of                                           )
COMPASS REPRESENTATIVES LIMITED                                )


SIGNED by XXXXXXXX XXXXXXXX                                    )


SIGNED by XXXXXXX XXXXXXX                                      )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXX XXXXXXXXXX                                                )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXXXXX XXXXXXX                                                )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXXXXX GOLOVATOV                                              )


                                    - 68 -








SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXX XXXXX                                                     )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXXX XXXXX                                                    )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXXXXXX XXXXXXX                                               )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXXXXXXXXX XXXXXX                                             )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXX BEAT                                                      )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXXX XX XXXXXXXXX                                             )


SIGNED by                                                      )
as duly authorised attorney                                    )
for and on behalf of                                           )
XXXXX XXXXX                                                    )


SIGNED as a DEED and DELIVERED                                 )
by XXXXXX XXXXXXXX                                             )
in the presence of:-                                           )


                                    - 69 -







                                   CONTENTS


CLAUSE                                                                 PAGE

1.            INTERPRETATION...........................................  1
2.            SALE AND PURCHASE .......................................  5
3.            CONSIDERATION............................................  6
4.            COMPLETION...............................................  7
5.            WARRANTIES GIVEN BY THE WARRANTORS.......................  9
6.            LIMITATION ON LIABILITY IN RESPECT OF THE
              WARRANTIES GIVEN BY THE WARRANTORS....................... 12
7.            WARRANTIES GIVEN BY AHI AND AHL.......................... 16
8.            RESTRICTIONS............................................. 19
9.            ANNOUNCEMENTS, ETC....................................... 21
10.           COSTS.................................................... 21
11.           EFFECT OF COMPLETION..................................... 21
12.           ENTIRE AGREEMENT......................................... 21
13.           WAIVER, AMENDMENT........................................ 21
14.           FURTHER ASSURANCES....................................... 22
15.           NOTICES.................................................. 22
16.           COUNTERPARTS............................................. 23
17.           GOVERNING LAW AND SUBMISSION TO
              JURISDICTION............................................. 23
18.           INVALIDITY............................................... 23
19.           NO RIGHTS OF TERMINATION................................. 23
SCHEDULE 1
The Vendors............................................................ 25
SCHEDULE 2
Particulars relating to the Company.................................... 27
SCHEDULE 3
Particulars relating to the Subsidiaries............................... 28
SCHEDULE 4
Warranties............................................................. 48
SCHEDULE 5
The Properties......................................................... 62



                                    - 70 -