AHL SERVICES INC, S-1/A, 1997-03-03

AHL SERVICES INC
S-1/A, 1997-03-03
BUSINESS SERVICES, NEC

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 3, 1997

REGISTRATION NO. 333-20315

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------

AMENDMENT NO. 1

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------

AHL SERVICES, INC.
(Exact Name of Registrant as Specified in Charter)

<TABLE>
<S> <C> <C>
GEORGIA 7389 58-2277249
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

3353 PEACHTREE ROAD, NE
SUITE 1120, NORTH TOWER
ATLANTA, GEORGIA 30326
(404)267-2222
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

FRANK A. ARGENBRIGHT, JR.
CHAIRMAN AND CO-CHIEF EXECUTIVE OFFICER
AHL SERVICES, INC.
3353 PEACHTREE ROAD, NE
SUITE 1120, NORTH TOWER
ATLANTA, GEORGIA 30326
(404)267-2222
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------
COPIES TO:

<TABLE>
<C> <C>
JEFFREY M. STEIN, ESQ. RICHARD C. TILGHMAN, JR., ESQ.
KING & SPALDING PIPER & MARBURY L.L.P.
191 PEACHTREE STREET 36 SOUTH CHARLES STREET
ATLANTA, GEORGIA 30303 BALTIMORE, MARYLAND 21201
(404) 572-4600 (410) 539-2530
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of the Registration Statement.

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
===============================================================================================================================
PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TITLE OF CLASS OF SECURITIES TO BE REGISTERED REGISTERED(1) PER UNIT PRICE(2) FEE
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share................. 2,875,000 $13.00 $37,375,000 $11,326(3)
==============================================================================================================================
</TABLE>

(1) Includes 375,000 shares which the Underwriters have the option to purchase
solely to cover over-allotments, if any.

(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(a).

(3) A filing fee of $11,370 has previously been paid.

------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
================================================================================
<PAGE> 2

AHL SERVICES, INC.

CROSS-REFERENCE SHEET SHOWING THE LOCATION IN THE
PROSPECTUS OF CERTAIN ITEMS OF FORM S-1

<TABLE>
<CAPTION>
ITEM NO. LOCATION IN PROSPECTUS
-------- ----------------------
<S> <C> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus... Outside Front Cover Page
2. Inside Front and Outside Back Cover Pages
of Prospectus............................ Inside Front Cover Page; Outside Back Cover
Page; Available Information
3. Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges............. Prospectus Summary; Risk Factors
4. Use of Proceeds............................ Prospectus Summary; Use of Proceeds
5. Determination of Offering Price............ Outside Front Cover Page; Underwriting
6. Dilution................................... Dilution
7. Selling Security Holders................... Principal and Selling Shareholders
8. Plan of Distribution....................... Outside Front Cover Page; Underwriting
9. Description of Securities to be
Registered............................... Outside Front Cover Page; Dividend Policy;
Capitalization; Prospectus Summary;
Description of Capital Stock; Shares
Eligible for Future Sale
10. Interests of Named Experts and Counsel..... Legal Matters; Experts
11. Information with Respect to the
Registrant............................... Outside Front Cover Page; Prospectus
Summary; Risk Factors; Use of Proceeds;
Dividend Policy; Capitalization; Selected
Financial and Operating Data;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Management;
Principal and Selling Shareholders;
Certain Transactions; Description of
Capital Stock; Shares Eligible for Future
Sale; Financial Statements
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.............................. *
</TABLE>

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

* Item is omitted because response is negative or item is inapplicable.
<PAGE> 3

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION

MARCH 3, 1997

LOGO

2,500,000 SHARES

AHL SERVICES, INC.

COMMON STOCK
------------------

All of the 2,500,000 shares of Common Stock offered hereby are being sold
by AHL Services, Inc. ("AHL" or the "Company"). Prior to this offering, there
has been no public market for the Common Stock of the Company. It is currently
estimated that the initial public offering price of the Common Stock will be
between $11.00 and $13.00 per share. See "Underwriting" for the factors to be
considered in determining the initial public offering price. The Company has
applied for quotation of the Common Stock on the Nasdaq National Market under
the symbol "AHLS."

Upon completion of this offering, the Company's principal shareholder will
beneficially own approximately 77.0% of the outstanding Common Stock.

------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 6 HEREOF.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
=============================================================================================================
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS COMPANY(1)
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share......................... $ $ $
- -------------------------------------------------------------------------------------------------------------
Total(2).......................... $ $ $
=============================================================================================================
</TABLE>

(1) Before deducting expenses of the offering estimated at $700,000.

(2) The Company's principal shareholder (the "Selling Shareholder") has granted
the Underwriters a 30-day option to purchase up to an additional 375,000
shares of Common Stock solely to cover over-allotments, if any. To the
extent that the option is exercised, the Underwriters will offer the
additional shares at the Price to Public shown above. If the option is
exercised in full, the total Price to Public, Underwriting Discounts and
Commissions and Proceeds to Selling Shareholder will be $ ,
$ and $ , respectively. See "Principal and Selling
Shareholders" and "Underwriting."

-----------------------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if delivered to and accepted by them, and subject to
the right of the Underwriters to reject any order in whole or in part. It is
expected that delivery of the shares of Common Stock will be made at the offices
of Alex. Brown & Sons Incorporated, Baltimore, Maryland, on or about
, 1997.

<TABLE>
<C> <C>
ALEX. BROWN & SONS THE ROBINSON-HUMPHREY
INCORPORATED COMPANY, INC.
</TABLE>

THE DATE OF THIS PROSPECTUS IS , 1997.
<PAGE> 4

[INSERT GRAPHICS]

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

The Company intends to furnish its shareholders with annual reports
containing audited financial statements and quarterly reports containing
unaudited financial statements for the first three quarters of each fiscal year.
------------------

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMPANY'S
COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

2
<PAGE> 5
APPENDIX I

The inside front cover contains maps which depict the Company's
operating locations in the United States, the Phillipines and Europe.
<PAGE> 6

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus.

THE COMPANY

AHL provides contract staffing and management of its clients'
labor-intensive, task-repetitive support functions on an outsourced basis
throughout the United States and Europe. The Company's core competencies include
recruiting, hiring, training, motivating and managing the large numbers of
personnel required to provide many of the support services needed by its clients
and incorporating quality systems and cost efficiency in its operations. Founded
in 1979, the Company is a leader in providing pre-departure screening, passenger
profiling and other passenger services to the aviation industry and,
increasingly, provides services to other large corporations, including Federal
Express, America Online, Georgia Power, BellSouth and Nike. Through its 60
offices in the United States and 23 offices in seven European countries, AHL is
able to service the multinational needs of its Fortune 1000 client base. The
Company currently has approximately 400 contracts to provide services and has
established long-term relationships with its largest clients, providing the
Company with a significant source of recurring revenues. In December 1994, AHL
made the strategic decision to strengthen its management team and develop a
corporate infrastructure to continue its growth strategy and improve
profitability. The Company intends to take advantage of market trends toward
contract staffing and become the preferred provider of outsourced labor
management solutions for its clients by leveraging its core competencies,
international scale, reputation for quality, performance-based quality
measurement systems, management depth and senior-level relationships with its
key clients.

Large corporations and other institutions are seeking to outsource a
variety of non-core functions to enable them to focus on their core
competencies. Many enterprises need to recruit, hire, train, motivate and manage
large numbers of personnel to handle non-core functions, in labor environments
often characterized by relatively low pay and high turnover rates. These
enterprises are increasingly contracting with specialized third party providers
to better ensure long-term labor availability for support functions. Outsourcing
these functions shifts employment costs and risks, such as workers'
compensation, recruitment and turnover costs and changes in labor regulations,
to outside vendors and allows enterprises to reduce the administrative overhead
and time necessary to properly manage non-core functions. Large enterprises are
increasingly seeking partnering opportunities whereby the third party provider,
in addition to providing on-site management of staff, assumes responsibility for
a particular function, including designing and implementing a solution for its
client, and may share in the economic benefits derived from improved execution
of the function.

The Company provides a variety of services to its clients, all of which are
focused on labor-intensive, task-repetitive functions. The Company's services to
its airline clients include pre-departure screening, passenger profiling, cargo
handling and a number of passenger services, such as baggage claim and check,
aircraft clean and search, lost baggage delivery and replacement, sky cap,
wheelchair assistance, escorting of unaccompanied minors, inter-gate cart
services and frequent flyer lounge operation. The Company is the largest
provider of pre-departure screening and passenger profiling services in the
United States and Europe combined. The Company also provides commercial security
and shuttle bus services to its aviation and non-aviation clients. The Company
believes that it is well-positioned to deliver additional services to its
clients, such as warehouse "pick and pack" and light assembly services. AHL is
actively pursuing partnership arrangements with its clients as a means of
providing new services. For example, AHL has recently entered into a joint
venture with British Airways, whereby the Company provides passenger and baggage
check-in and other passenger services for British Airways in Nice, France. The
Company expects to enter into similar arrangements with British Airways for
other European locations.

3
<PAGE> 7

The Company believes that its national and international scale provides it
with a significant advantage in competing for contracts from targeted clients,
given market trends toward outsourced solutions and vendor consolidation. To
demonstrate its ability to deliver quality services at lower cost, AHL is
developing performance-based quality measurement systems to further
differentiate it in the contract staffing industry in which quality measurement
has not been prevalent. The Company typically enters into multi-year agreements
with clients under which the client pays an hourly rate for services performed.

The Company has grown rapidly during the past five years as it has entered
new markets on behalf of its clients and expanded its range of services.
Revenues have grown from $82.6 million in 1992 to $210.2 million in 1996, a
compound annual growth rate of 26.3%. The Company follows a disciplined model
for growth, entering a new market only after it has signed a contract with a
client to provide specific services in that market. Once an initial contract is
awarded, the Company establishes an office and begins building management depth
in that market. After establishing operations in a new market and demonstrating
its ability to provide high quality services, the Company has successfully
leveraged its local infrastructure by marketing additional services to its
initial client and by providing services to additional clients in that region.
The Company's field management and direct sales force market AHL's services to
clients in their assigned regions, while senior executives concentrate on
senior-level relationships and national account management.

The key elements of the Company's growth strategy are to (i) continue to
penetrate existing accounts, (ii) expand service offerings, (iii) obtain new
clients and (iv) explore strategic acquisitions. The Company believes that
substantial opportunities exist in the United States as enterprises are
increasingly outsourcing support functions which have traditionally been
performed in-house, as well as in Europe, where the trends toward labor
management outsourcing are less developed than in the United States. In
addition, the Company believes that it is well-positioned to benefit if more
stringent aviation security measures are implemented by the Federal Aviation
Administration ("FAA").

As of February 1, 1997, all of the outstanding shares of common stock of
Argenbright Holdings Limited ("Argenbright"), a holding company for U.S.
operations, and The ADI Group Limited (together with its predecessors, "ADI"), a
holding company for European operations, were contributed to AHL by Mr. Frank A.
Argenbright, Jr., who founded both companies. As a result, Argenbright and ADI
became wholly-owned subsidiaries of the Company. The Company's executive offices
are located at 3353 Peachtree Road, NE, Atlanta, Georgia 30326 and its telephone
number is (404) 267-2222.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company.......... 2,500,000 shares
Common Stock to be outstanding after the
offering................................... 10,853,430 shares(1)
Use of proceeds.............................. To repay outstanding indebtedness, finance
enhancements to the Company's management in-
formation systems, redeem an outstanding
warrant and for general corporate purposes,
including working capital and possible
acquisitions.
Proposed Nasdaq National Market symbol....... AHLS
</TABLE>

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

(1) Excludes (i) 715,000 shares of Common Stock reserved for issuance upon
exercise of options outstanding prior to this offering with a weighted
average exercise price of $9.83 per share, (ii) 275,000 shares reserved for
issuance upon exercise of options to be granted to Company employees and
directors concurrently with this offering with an exercise price equal to
the initial public offering price and (iii) 110,000 shares of Common Stock
reserved for future option grants under the Company's Stock Option Plan.
See "Management -- Employee Benefit Plans -- Stock Option Plan."

4
<PAGE> 8

SUMMARY COMBINED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

<TABLE>
<CAPTION>
DECEMBER 31, 1996
------------------------------
PRO FORMA(5) AS ADJUSTED(6)
------------ --------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital........................................... $17,353 $24,825
Total assets.............................................. 53,684 60,452
Long-term debt, net of current portion.................... 21,663 3,748
Shareholders' equity...................................... 5,183 31,879
</TABLE>

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

(1) The Company's fiscal year ends on the last Friday in December. Each of the
fiscal years presented consists of 52 weeks, except that fiscal 1993
consists of 53 weeks.

(2) Includes the results of ADI from its acquisition in March 1992.

(3) Includes the results of Intersec from its acquisition in July 1996. For
1996, the Company derived $6.3 million of its revenues from Intersec. See
Note 4 of the Notes to the Company's Combined Financial Statements.

(4) See Note 2 of the Notes to the Company's Combined Financial Statements.

(5) Pro forma to give effect to the Reorganization.

(6) Adjusted to give effect to the sale of the 2,500,000 shares of Common Stock
offered hereby (at an assumed initial public offering price of $12.00 per
share) and application of the estimated net proceeds therefrom as described
in "Use of Proceeds."

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

Unless the context otherwise requires, (i) the "Company" or "AHL" refers to
AHL Services, Inc., including Argenbright and ADI and their predecessors and
subsidiaries, (ii) all information in this Prospectus gives effect to the
Reorganization (as hereinafter defined) and (iii) all information in this
Prospectus assumes no exercise of the Underwriters' over-allotment option. The
"Reorganization" refers to the transactions in which Mr. Argenbright contributed
to the Company (i) the outstanding common stock of Argenbright and ADI, (ii)
certain real estate, a portion of which was previously rented by the Company
(with the Company assuming the related mortgage debt) and (iii) a note with a
balance of $528,000 as of December 31, 1996 payable by the Company to Mr.
Argenbright. All of the above transactions in the Reorganization were brought
forward at historical values. See "Management -- Compensation Committee
Interlocks and Insider Participation."

5
<PAGE> 9

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating an investment in the shares
of the Common Stock offered by this Prospectus.

Reliance on Major Clients. The Company derives a significant portion of
its revenues from relatively few clients. During fiscal 1996, Delta Air Lines,
British Airways, United Airlines and Federal Express accounted for 23.1%, 12.6%,
11.3% and 4.2% of the Company's revenues, respectively, through an aggregate of
79 contracts and, together, represented 51.2% of the Company's revenues. During
fiscal 1996, the Company's ten largest clients accounted for an aggregate of
60.4% of the Company's revenues (excluding the terminated Florida transportation
operations). The Company's contracts with its clients are generally terminable
by either party upon 30 to 90 days notice, and these contracts expire at various
times over the next several years. Accordingly, although the Company currently
operates under multiple contracts with most of its major clients (including all
of its airline clients), there can be no assurance that one or more of the
Company's major clients will not terminate or decide not to renew one or more of
its contracts with the Company or that any of the Company's clients will not
seek to renegotiate its contracts at lower margins to the Company. The loss of
one or more of the Company's major clients would have a material adverse effect
on the Company. See "Business -- Services Provided -- Clients."

Dependence on Aviation Industry. The Company's continued success is
largely dependent on continuing demand for the Company's services from passenger
airlines and cargo carriers. In fiscal 1996, approximately 65% of the Company's
revenues were derived from services provided to clients in the aviation
industry. Additionally, the financial condition of the Company's airline clients
is likely to have a material impact upon the nature and extent of the services
which such airlines procure from the Company and other independent suppliers and
the prices which such airlines will be willing to pay for such services.
Consolidation in the airline industry may result in the Company losing
contracts. The financial difficulties of airlines may result in their being
forced to seek bankruptcy protection or cease operating, which could result in
material uncollectible accounts receivable and a reduction in the Company's
volume of business. The aviation industry historically has been highly cyclical,
and a significant downturn in the aviation industry could have a material
adverse effect on the Company's business. Although the volume of air travel
throughout the world has experienced significant growth in the past ten years,
there can be no assurance that such growth will continue. Because the Company's
typical billing arrangements are based on the number of hours of service
provided by the Company or flights serviced, a decrease in the level of air
travel would have an adverse effect on the Company's business, results of
operations and financial condition. See "Business -- Industry Overview."

The Company intends to lessen its reliance on the aviation industry by
seeking to expand its client base in other industries and strengthen developing
relationships with its non-aviation clients. However, there can be no assurance
that these efforts will be successful or that the Company's services will be
widely accepted outside the aviation industry. See "Business -- Services
Provided."

Risks Associated with Managing a Growing Business. The Company has rapidly
expanded its operations in the past several years, and this growth has placed
demands on its management, administrative, operating and financial resources.
The planned continued growth of the Company's client base, the types of services
offered and the geographic markets served can be expected to continue to place a
significant strain on the Company's resources. The Company's future performance
and profitability will depend in large part on its ability to attract and retain
additional management and other key personnel, its ability to successfully
implement enhancements to its management systems and its ability to adapt those
systems, as necessary, to respond to changes in its business. See
"Business -- Growth Strategy", "-- Management Information Systems" and
"Management."

6
<PAGE> 10

Dependence on Labor Force. The contract staffing industry is labor
intensive and is characterized by high rates of personnel turnover and periodic
shortages of sufficient personnel in some markets. The Company may from time to
time be required to increase the wages that it pays and the benefits that it
provides in order to attract and retain a sufficient number of qualified
employees. In addition, the Company may not be able to pass along to its clients
any additional costs associated with an increase in the minimum wage. Some of
the Company's security activities require highly trained employees. A higher
turnover rate among the Company's employees would increase the Company's
recruiting and training costs and may adversely affect productivity. If the
Company were unable to recruit and retain a sufficient number of employees, it
would be forced to limit its growth or possibly reduce the scope of its
operations. There is intense competition for qualified personnel among contract
staffing firms as well as other employers of large numbers of hourly workers
located in the markets where the Company operates. There can be no assurance
that the Company will be able to continue to hire and retain a sufficient number
of qualified personnel in its markets or elsewhere to support its planned growth
or existing operations. See "Business -- Workforce Management."

Risks of Conducting International Operations. Historically, a substantial
portion of the Company's revenues and earnings have come from its European
operations. International operations and the provision of services in foreign
markets are subject to a number of special risks, including currency exchange
rate fluctuations, trade barriers, exchange controls, national and regional
labor strikes, political risks and risks of increases in duties, taxes and
governmental royalties, as well as changes in laws and policies governing
operations of foreign-based companies. In addition, earnings of foreign
subsidiaries and intercompany payments are subject to foreign income tax rules
that may reduce cash flow available to meet required debt service and other
obligations of the Company.

A substantial amount of the Company's revenues are received, and operating
costs are incurred, in foreign currencies, with a significant amount of
operating income having been derived from operations in the United Kingdom.
Because the Company's financial statements are presented in U.S. dollars, any
significant fluctuations in the exchange rates between certain Western European
currencies and the U.S. dollar will affect the Company's results of operations
and financial condition. The Company does not currently engage in
currency-hedging transactions. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

Liabilities for Client and Employee Actions and Other Claims. The Company
is in the business of placing its employees in public facilities and the
workplaces of other businesses. Attendant risks include possible claims by its
clients' customers or employees of discrimination, harassment and negligence by
the Company's employees and other similar claims. The Company is exposed to
liability for the acts or negligence of its employees while on assignment that
cause personal injury or damages, as well as claims of misuse of client
proprietary information or theft of client property. As a provider of security
services, the Company faces potential liability claims in the event of any
terrorist attempt or other criminal activity which occurs on any airline or
premises subject to the Company's security services. The Company has policies
and guidelines in place to reduce its exposure to these risks, but a failure to
follow these policies and guidelines may result in the payment by the Company of
money damages or fines and adverse publicity. The Company maintains insurance
coverage against certain of these risks, but there can be no assurance that
insurance coverage will continue to be available on acceptable terms or that it
will be adequate to cover any such liability. Any of these situations would have
a material adverse effect on the Company's reputation, business, results of
operations and financial condition. See "Business -- Risk Management and
Safety."

Employee-Related Costs and Claims Exposure. The Company is required to pay
unemployment insurance premiums and workers' compensation benefits for its
employees in the United States. Any increase in the cost of unemployment
insurance or workers' compensation benefits could adversely affect the Company's
profitability. The Company is self-insured for the first $250,000 of each
workers' compensation and automobile or shuttle bus claim and, accordingly,
establishes reserves

7
<PAGE> 11

for future claims and payments. There can be no assurance that the Company's
actual future workers' compensation or liability claims will not exceed the
amount of the Company's reserves. Furthermore, there can be no assurance that
the Company will be able to pass along to its clients any increased costs
related to unemployment and workers' compensation insurance. See "Business --
Risk Management and Safety."

Risks Associated with Acquisition Strategy. An important element of the
Company's growth strategy is to pursue acquisitions that increase density in the
Company's existing markets, add geographic coverage to its existing business,
broaden the Company's service offerings or expand its client base. The Company
has limited experience in making acquisitions, having completed only the ADI
acquisition in March 1992, the Express Baggage Reclaim Services Limited
acquisition in August 1993 and the Intersec acquisition in July 1996. There can
be no assurance that the Company will be able to identify acceptable acquisition
candidates or complete the acquisition of any identified candidates on terms
favorable to the Company or in a timely manner. A substantial portion of the
Company's capital resources, including a portion of the proceeds from this
offering, could be used for these acquisitions. The Company may require
additional debt or equity financings for future acquisitions, which may not be
available on terms favorable to the Company, if at all. There is also no
assurance that the Company will be able to successfully integrate an acquisition
into the Company's business or that any acquired business will be able to be
profitably operated by the Company. See "Business -- Structure and Integration
of Acquisitions."

Impact of Trends Toward Outsourcing, Privatization and Preferred Vendor
Contracts. Outsourcing by U.S. airlines of an increasing number of services not
directly related to flight operations has increased significantly in the past
several years, and the privatization of airport security and other services by
Western European government agencies has recently begun. Although these trends
have increased the demand for the Company's services, there can be no assurance
that these trends will continue or not be reversed or that airlines will not
decide to bring previously outsourced functions back in-house. In addition, the
trend by airlines to select a limited number of preferred vendors to provide all
or a large part of their required pre-departure screening and other services may
not continue or, if it does continue, there can be no assurance that the Company
will be selected as a preferred vendor to provide such services. Adverse
developments with respect to any of these industry trends could have a material
adverse effect on the business, results of operation and financial condition of
the Company. See "Business -- Industry Overview."

A significant element of the Company's growth strategy is to take advantage
of the trends toward outsourcing by seeking contracts to provide
labor-intensive, task-repetitive services for companies outside the aviation
industry. To the extent these potential clients decide not to expand the range
of services they outsource or decide to select vendors other than the Company to
perform the outsourced services, the Company may be unsuccessful in executing
this element of its growth strategy. See "Business -- Industry Overview" and
"-- Growth Strategy."

Fluctuations in Demand for the Company's Services. Demand for the types of
security services provided by the Company is affected by the perceived threat of
terrorist and other criminal activity in the world generally and, specifically,
in the aviation industry. In addition, the Company's business is affected by
determinations of government agencies that regulate aviation security (e.g., the
FAA and the United Kingdom Department of Transport ("U.K. DOT")). Typically,
demand for the Company's aviation security services rises after events involving
or potentially involving terrorist activity and may thereafter decline as the
threat is perceived to diminish. There can be no assurance that the Company will
be able to manage fluctuations in the demand for its services successfully or
that a decline in demand for the Company's services will not have a material
adverse effect on the Company's business, results of operation or financial
condition. See "Business -- Government Regulation."

Failure to Meet Performance Requirements. The success of the Company will
be dependent upon its ability to continue to meet the performance requirements
set by its clients and the

8
<PAGE> 12

government agencies which regulate them. The Company is subject to random
periodic testing by the FAA with regard to adherence to regulations relating to
pre-departure screening and passenger profiling, hiring practices (including
background checks, drug testing, training and individual employee file
maintenance) and baggage handling, and by the U.K. DOT regarding regulations
relating to passenger and baggage handling, aircraft security, document
verification and employee background checks. Any failure to meet these
performance standards or to pass these tests may result in the loss of a
contract or the Company's license to perform services, either of which is likely
to have a material adverse effect on the Company's reputation, business, results
of operations and financial condition. See "Business -- Government Regulation."

Loss of Required Licenses. In many airports in which the Company operates
(including most of the major international airports in Western Europe), a
license is required from the airport authority in order to perform services at
the airport. Some airport authorities limit the number of licenses they issue.
Although the Company currently has licenses to operate in several of the major
international airports in Western Europe where licenses are required, the loss
of, or failure to obtain, a license to operate in one or more airports is likely
to result in the loss of, or the inability to compete for, a major contract. See
"Business -- Government Regulation."

Development of Alternative Services. The pre-departure screening services
and passenger profiling services currently offered by the Company utilize a
large number of personnel and, in certain markets, include the direct
interviewing of each passenger boarding an aircraft. The development of
technologies requiring less manpower or alternative passenger classification
methodologies which are more effective or less expensive than the Company's
current services would reduce demand for the Company's services. In particular,
the costs associated with the performance of passenger profiling and its impact
on passengers may serve as an incentive for airlines to seek the development of
technological alternatives which would be more effective in detecting weapons
and explosives and identifying terrorists. The Company is aware of ongoing
efforts by certain airlines and the FAA to develop such alternatives and of
various governmental authorities' endorsement of these initiatives. The
development and implementation of such alternative systems could have a material
adverse effect on the Company. See "Business -- Services Provided."

Government Regulation. Aviation security matters affecting airports and
passenger airlines are subject to extensive regulation by the FAA and foreign
government agencies. Demand for the Company's pre-departure screening, passenger
profiling, aviation security and various other services is significantly
affected by applicable regulatory requirements and security directives issued by
governmental authorities. There can be no assurance that applicable regulations
will not be changed in a manner that would adversely affect the demand for the
Company's services. For example, from time to time there have been proposals to
shift responsibility for certain aviation security functions from the airlines
to airport authorities or other governmental agencies and any such shift could
reduce demand for the Company's services. Additionally, major U.S. airlines have
considered the creation of a nationwide non-profit security corporation, funded
by the airlines, to handle airport security. Any shift in responsibility for
aviation security functions or any trend toward the relaxation of aviation
security measures could have a material adverse effect on the Company's
business, results of operations or financial condition. See
"Business -- Government Regulation."

Competition. The contract staffing industry is extremely competitive and
highly fragmented, with limited barriers to entry. Companies within the contract
staffing industry compete on the basis of the quality of service provided, their
ability to provide national and international services, the range of services
offered, as well as price. The Company competes in international, national,
regional and local markets with outsourcing companies, specialized contract
service providers and in-house organizations that provide services to potential
clients and third parties. AHL's principal competitors include, in the aviation
services industry, ICTS International N.V., Globe Aviation Securities
Corporation and International Total Services, Inc. and, in the commercial
security industry, Borg-Warner Security Corporation, Guardsmark, Inc. and The
Wackenhut Corporation. The Company's shuttle bus services compete primarily with
numerous local and regional companies.

9
<PAGE> 13

Certain of the Company's competitors and potential competitors have
significantly greater financial resources and larger operations than the
Company. The Company expects that the level of competition will remain high or
increase in the future, and there can be no assurance that the Company will
continue to compete successfully. See "Business -- Competition."

Fluctuations in Quarterly Operating Results. The Company has experienced
and expects to continue to experience quarterly variations in revenues and net
income as a result of various factors, including the timing of commencement of
new contracts, changes in its revenue mix, the timing of additional selling,
general and administrative expenses to support new business and the seasonality
of air travel. Since the Company's revenues are typically based on the number of
hours of service provided by the Company or the number of flights serviced,
decreases in air travel generally result in lower revenues for the Company.
While the effects on seasonality on AHL's business often are obscured by the
timing of the addition of new clients and the performance of new services for
existing clients, the demand for aviation services tends to decline in the first
and fourth fiscal quarters. Consequently, the Company's operating results may
experience significant quarterly fluctuations. The Company's planned operating
expenditures are based on revenue forecasts, and if revenues are below
expectations in any given quarter, operating results are likely to be materially
adversely affected. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Quarterly Results and Seasonality."

Dependence on Key Personnel. The Company is highly dependent on the
efforts of its senior management team, particularly Frank A. Argenbright, Jr.,
Chairman and Co-Chief Executive Officer; Edwin R. Mellett, Vice Chairman and
Co-Chief Executive Officer; Thomas J. Marano, President and Chief Operating
Officer - Argenbright Holdings Limited; A. Trevor Warburton, Managing Director -
The ADI Group Limited; and David L. Gamsey, Chief Financial Officer. The loss of
the services of any of these individuals could have a material adverse effect on
the Company. The Company has key-man life insurance only for Mr. Argenbright and
has employment agreements with Messrs. Mellett, Marano, Gamsey and Warburton.
Mr. Mellett's employment agreement expires in December 2000, and the remaining
U.S. employment agreements expire in December 2001. As the Company continues to
grow, it will need to recruit and retain additional qualified management
personnel, and there can be no assurance that it will be able to do so. See
"Management."

Control by Principal Shareholder. Immediately following this offering, Mr.
Argenbright will beneficially own approximately 77.0% of the outstanding Common
Stock (approximately 73.5% if the Underwriters' over-allotment option is
exercised in full). As a result, Mr. Argenbright will continue to be able to
elect the entire Board of Directors and to control the outcome of all other
matters requiring shareholder approval. Such voting concentration may have the
effect of delaying or preventing a change in control of the Company. See
"Management" and "Principal and Selling Shareholders."

No Prior Public Market for Common Stock; Potential Volatility of Stock
Price. Prior to this offering, there has been no public market for the Common
Stock, and there can be no assurance that an active trading market will develop
or be sustained after this offering. The initial public offering price will be
determined through negotiation between the Company and the Representatives of
the Underwriters and may bear no relationship to the price at which the Common
Stock will trade after the offering. See "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price. The
market price of the Common Stock may be volatile and be significantly affected
by factors such as actual or anticipated fluctuations in the Company's operating
results, announcements of new services by the Company or its competitors,
developments with respect to conditions and trends in the contract staffing
industry or in the industries served by the Company, governmental regulation,
changes in estimates by securities analysts of the Company's future financial
performance, general market conditions and other factors. In addition, the stock
markets have from time to time experienced significant price and volume
fluctuations that have adversely affected the market prices of securities of
companies for reasons often unrelated to their operating performance.

10
<PAGE> 14

Shares Eligible for Future Sale. Sales of substantial amounts of Common
Stock in the public market after this offering could adversely affect the market
price of the Common Stock. An aggregate of 8,353,430 shares of Common Stock, all
of which are beneficially owned by Mr. Argenbright, will be eligible for public
sale beginning 90 days after this offering pursuant to Rule 144 under the
Securities Act of 1933 (the "Securities Act"). Mr. Argenbright, as well as all
persons holding currently exercisable stock options, have agreed not to sell,
offer for sale, or otherwise dispose of any Common Stock for a period of 180
days from the date of this Prospectus without the prior written consent of Alex.
Brown & Sons Incorporated. Within 180 days after this offering, the Company
expects to file registration statements covering the issuance of shares
underlying outstanding stock options and the issuance of shares pursuant to an
employee stock purchase plan that the Company intends to adopt following
consummation of the offering. As of February 28, 1997, outstanding options to
purchase 240,125 shares were currently exercisable and options to purchase
474,875 shares become exercisable at various times between December 1997 and
December 2000. See "Shares Eligible for Future Sale."

Certain Anti-Takeover Provisions. The Company's Amended and Restated
Articles of Incorporation and Bylaws provide for a five member Board of
Directors to be elected to staggered one, two and three year terms and,
thereafter, for successive three year terms. Additionally, directors may only be
removed from office for cause upon a vote of 70% of the Common Stock
outstanding. The Articles and Bylaws also provide that they may not be amended
in certain respects except pursuant to the vote of 70% of the Common Stock
outstanding. These provisions of the Articles of Incorporation and Bylaws could
discourage potential acquisition proposals and could delay or prevent a change
in control of the Company. See "Description of Capital Stock."

Immediate and Substantial Dilution. The initial public offering price is
substantially higher than the net tangible book value per share of the Common
Stock. Purchasers of shares of Common Stock in this offering will incur
immediate and substantial dilution of $9.44 in the net tangible book value per
share of Common Stock (assuming an initial public offering price of $12.00 per
share). To the extent that currently outstanding options to purchase shares of
the Company's Common Stock are exercised, investors will experience further
dilution. While new investors will have paid 100.0% of the total cash
consideration for the outstanding shares of Common Stock, such new investors
will only control 23.0% of the outstanding shares of Common Stock. See
"Dilution."

11
<PAGE> 15

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the
2,500,000 shares of Common Stock offered by it hereby are estimated to be
approximately $27.2 million, after deducting underwriting discounts and
commissions and offering expenses (assuming an initial public offering price of
$12.00 per share).

The Company intends to use the net proceeds from the offering as follows:
(i) approximately $19.3 million to repay outstanding indebtedness, consisting of
(a) approximately $14.1 million outstanding under a revolving line of credit
with First Union Commercial Credit Corporation ("First Union"), which matures on
December 22, 1998 and bears interest, at the Company's option, at either the
prime rate or LIBOR plus 250 basis points (280 basis points for the European
operations) (with a weighted average interest rate during 1996 of 8.2%), (b)
$3.5 million of subordinated notes payable to Sirrom Capital Corporation
("Sirrom") with a carrying value of $3.1 million (reflecting approximately
$400,000 of debt discount), which mature on July 9, 2001 and bear interest at an
annual rate of 13.5%, (c) approximately $1.2 million outstanding under notes
payable to the sellers of Intersec, which mature between July 8, 1997 and April
8, 1998 and bear interest at an annual rate of 9.0% and (d) approximately
$500,000 outstanding under a term loan with First Union, which matures on
December 22, 1998 and bears interest, at the Company's option, at either the
prime rate plus 75 basis points or LIBOR plus 300 basis points (with a weighted
average interest rate during 1996 of approximately 8.6%); (ii) approximately
$1.0 million for enhancements to the Company's management information systems;
(iii) $750,000 to redeem a warrant held by Sirrom; and (iv) the balance for
general corporate purposes, including working capital purposes to support the
Company's growth and possible acquisitions. The notes to Sirrom were issued to
finance the Intersec acquisition in July 1996. Pending such uses, the Company
intends to invest the net proceeds of this offering in investment-grade,
short-term, interest-bearing securities. In the second quarter of 1997, the
Company expects to incur a non-recurring after-tax charge of approximately
$400,000 as a result of early extinguishment of debt.

Although the Company regularly evaluates possible acquisition
opportunities, it is not currently engaged in any negotiations and is not a
party to any letter of intent or other agreement or arrangement regarding any
material acquisition. See "Business -- Structure and Integration of
Acquisitions."

DIVIDEND POLICY

The Company has never paid any cash dividends on its Common Stock, and the
Board of Directors currently intends to retain all earnings for use in the
Company's business for the foreseeable future. The Company's credit facility
with First Union prohibits the payment of dividends. Any future payment of
dividends will depend upon the Company's results of operations, financial
condition, cash requirements and other factors deemed relevant by the Board of
Directors.

12
<PAGE> 16

DILUTION

The pro forma net tangible book value of the Company as of December 31,
1996, after giving effect to the Reorganization, would have been $1.0 million,
or $0.12 per share. The net tangible book value per share of Common Stock
represents the amount of the Company's shareholders' equity, less intangible
assets, divided by the 8,353,430 shares of Common Stock outstanding at that
date.

Net tangible book value dilution per share of Common Stock represents the
difference between the amount per share paid by purchasers of the 2,500,000
shares of Common Stock in this offering and the pro forma net tangible book
value per share of Common Stock immediately after completion of this offering.
After giving effect to the sale by the Company of the 2,500,000 shares of Common
Stock offered hereby (at an assumed initial public offering price of $12.00 per
share) and after deduction of underwriting discounts and commissions and
estimated offering expenses, the pro forma net tangible book value of the
Company as of December 31, 1996 would have been approximately $27.8 million, or
$2.56 per share. This represents an immediate increase in pro forma net tangible
book value of $2.44 per share to existing shareholders and an immediate dilution
in pro forma net tangible book value of $9.44 per share to purchasers of Common
Stock in this offering, as illustrated in the following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $12.00
Pro forma net tangible book value per share at December
31, 1996............................................... $0.12
Increase per share attributable to new investors.......... $2.44
Pro forma net tangible book value per share after
offering.................................................. 2.56
------
Net tangible book value dilution per share to new
investors................................................. $ 9.44
======
</TABLE>

The following table sets forth, as of December 31, 1996, the number of
shares of Common Stock purchased, the total cash consideration paid and the
average price per share paid by existing shareholders and by new investors
purchasing shares of Common Stock in this offering:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
----------------------- ------------------------ AVERAGE PRICE
NUMBER PERCENTAGE AMOUNT PERCENTAGE PER SHARE
---------- ---------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Existing shareholders(1)....... 8,353,430 77.0% $ 5,000 --% $ --
New investors.................. 2,500,000 23.0 30,000,000 100.0 12.00
---------- ----- ----------- -----
Total................ 10,853,430 100.0% $30,005,000 100.0%
========== ===== =========== =====
</TABLE>

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

(1) Excludes, as of February 28, 1997, 715,000 shares of Common Stock issuable
upon the exercise of outstanding options exercisable with a weighted
average price of $9.83 per share. To the extent that these options are
exercised, there will be further dilution to new investors. See
"Management -- Employee Benefit Plans -- Stock Option Plan."

13
<PAGE> 17

CAPITALIZATION

The following table sets forth the short-term debt and capitalization of
the Company as of December 31, 1996 (i) on a historical basis, (ii) on a pro
forma basis after giving effect to the Reorganization and (iii) on a pro forma
basis as adjusted to reflect receipt of the net proceeds from the sale of the
2,500,000 shares of Common Stock pursuant to this offering (assuming an initial
public offering price of $12.00 per share):

<TABLE>
<CAPTION>
DECEMBER 31, 1996
------------------------------------
PRO FORMA
ACTUAL PRO FORMA(1) AS ADJUSTED
------- ------------ -----------
(IN THOUSANDS)
<S> <C> <C> <C>
Current portion of long-term debt................. $ 1,617 $ 1,617 $ 617
======= ======= =======
Long-term debt, net of current portion:
Credit facility................................. $14,130 $14,130 $ --
Subordinated notes(2)........................... 4,313 3,785 --
Mortgage debt(3)................................ -- 2,485 2,485
Equipment financing and other................... 1,263 1,263 1,263
------- ------- -------
Total long-term debt.................... 19,706 21,663 3,748
Redeemable warrant(4)............................. 706 706 --
Shareholders' equity:
Preferred Stock: no par value; 5,000,000 shares
authorized; none issued or outstanding....... -- -- --
Common Stock: $.01 par value; 50,000,000 shares
authorized; 500 Argenbright and 296,868 ADI
shares issued and outstanding; 8,353,430 AHL
shares issued and outstanding pro forma;
10,853,430 AHL shares issued and outstanding
pro forma as adjusted........................ 1 84 109
Additional paid-in capital...................... -- -- 27,175
Cumulative translation adjustment............... 74 74 74
Retained earnings............................... 5,952 5,643 5,139(5)
Due from shareholder............................ (618) (618) (618)(6)
------- ------- -------
Total shareholders' equity.............. 5,409 5,183 31,879
------- ------- -------
Total capitalization............... $25,821 $27,552 $35,627
======= ======= =======
</TABLE>

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

(1) Pro forma to give effect to the Reorganization. In the Reorganization, Mr.
Argenbright contributed to the Company (i) the outstanding common stock of
Argenbright and ADI, (ii) certain real estate with a net carrying value of
approximately $1.7 million, a portion of which was previously rented by the
Company (with the Company assuming the related mortgage debt of
approximately $2.5 million, which is less than the appraised value) and
(iii) a note with a balance of $528,000 as of December 31, 1996 payable by
the Company to Mr. Argenbright. The net result of these transactions was a
reduction of shareholders' equity of approximately $226,000. See
"Management -- Compensation Committee Interlocks and Insider Participation."

(2) Consists of note payable to shareholder, subordinated notes payable to
Sirrom and seller notes related to the Intersec acquisition.

(3) Consists of mortgage debt on the real estate contributed to the Company by
Mr. Argenbright in the Reorganization. See "Management -- Compensation
Committee Interlocks and Insider Participation."

(4) In connection with financing the Intersec acquisition, the Company issued a
redeemable warrant, which will be redeemed for $750,000 from the net
proceeds of this offering.

(5) Includes the write-off of unamortized loan origination costs and debt
discount of $238,000 and $222,000, respectively, at December 31, 1996, net
of tax benefit.

(6) Mr. Argenbright intends to repay this indebtedness within 30 days of the
consummation of this offering. See "Management -- Compensation Committee
Interlocks and Insider Participation."

14
<PAGE> 18

SELECTED COMBINED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The following selected financial and operating data of the Company are
qualified by reference to and should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's Combined Financial Statements and Notes thereto included elsewhere
in this Prospectus. The selected financial data presented below as of and for
each of the fiscal years in the four-year period ended December 31, 1996 have
been derived from the Company's financial statements which have been audited by
Arthur Andersen LLP, independent accountants. The selected financial data for
the fiscal year ended December 31, 1992 are derived from the Company's unaudited
financial statements.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED DECEMBER 31,(1)
---------------------------------------------------
1992(2) 1993 1994 1995 1996(3)
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.............................................. $82,576 $104,143 $123,234 $168,601 $210,153
Operating expenses:
Cost of services.................................... 59,805 78,019 91,873 124,491 155,926
Field operating..................................... 13,552 18,284 20,931 30,328 37,492
Corporate general and administrative................ 6,809 6,796 8,797 10,938 11,692
------- -------- -------- -------- --------
Operating income............................... 2,410 1,044 1,633 2,844 5,043
Interest expense, net................................. 429 593 904 1,309 1,726
Other (income), net................................... (108) (89) (26) (820) (301)
------- -------- -------- -------- --------
Income before income taxes..................... 2,089 540 755 2,355 3,618
Income tax provision(4)............................... 645 700 627 917 1,447
------- -------- -------- -------- --------
Net income (loss).............................. $ 1,444 $ (160) $ 128 $ 1,438 $ 2,171
======= ======== ======== ======== ========
Pro forma net income per share(5)..................... $ 0.25
========
Pro forma weighted average common and common
equivalent shares(5)................................ 8,629
========
OPERATING DATA (AT PERIOD END):
Number of employees................................... 3,972 5,714 7,334 9,954 12,980
Number of offices..................................... 11 26 33 69 83
BALANCE SHEET DATA:
Working capital....................................... $ 1,898 $ 4,341 $ (763) $ 13,216 $ 17,353
Total assets.......................................... 11,426 21,036 29,094 40,687 51,953
Long-term debt, net of current portion(6)............. 2,446 7,281 1,437 14,609 19,706
Shareholder's equity.................................. 2,443 2,123 2,252 3,577 5,409
</TABLE>

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

(1) The Company's fiscal year ends on the last Friday in December. Each of the
fiscal years presented consists of 52 weeks except that fiscal 1993 consists
of 53 weeks.

(2) Includes the results of ADI from its acquisition in March 1992.

(4)The income tax provision for 1993 and 1994 was negatively impacted by the
significance of non-deductible expenses relative to income before income
taxes.

(5) Pro forma net income per share is computed by dividing net income available
to common shareholders by pro forma weighted average shares outstanding.
Supplementary pro forma net income per share (resulting from the anticipated
repayment of borrowings with a portion of the proceeds of this offering as
indicated in "Use of Proceeds") is $0.36 for the year ended December 31,
1996.

(6) Includes a note payable to shareholder in the amount of $650,000 and
$528,000 at December 31, 1995 and 1996, respectively.

15
<PAGE> 19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

AHL provides contract staffing and management of its clients'
labor-intensive, task-repetitive support functions on an outsourced basis
throughout the United States and Europe. Through its 60 offices in the United
States and 23 offices in seven European countries, AHL is able to service the
multinational needs of its Fortune 1000 client base. The Company currently has
approximately 400 contracts to provide services and has established long-term
relationships with its largest clients, providing the Company with a significant
source of recurring revenues. Revenues have grown from $82.6 million in 1992 to
$210.2 million in 1996, a compound annual growth rate of 26.3%. Frank A.
Argenbright, Jr., the Company's Chairman and Co-Chief Executive Officer, founded
the Company in 1979. As of February 1, 1997, all of the outstanding shares of
common stock of Argenbright, a holding company for U.S. operations, and ADI, a
holding company for European operations, were contributed to AHL by Mr.
Argenbright. As a result, Argenbright and ADI became wholly-owned subsidiaries
of the Company.

Since 1992, the Company has completed three acquisitions. In March 1992,
Mr. Argenbright acquired a portion of the passenger services operation of
British Airways at Heathrow Airport. This passenger services operation had
revenues in the first 12 months of operations of approximately $18.0 million.
The Company has used ADI as a platform to expand its operations in Europe. In
August 1993, ADI acquired Express Baggage Reclaim Services Limited, a provider
of lost baggage delivery and replacement services in the United Kingdom, with
revenues of approximately $1.8 million for the twelve months prior to the
acquisition. In July 1996, the Company acquired Intersec, a provider of
commercial and governmental security services in the mid-Atlantic region of the
United States, with revenues of approximately $10.0 million for the twelve
months prior to the acquisition. All of the Company's acquisitions to date have
been accounted for under the purchase method of accounting.

To finance the Intersec acquisition, the Company borrowed $3.5 million on a
subordinated basis and issued a warrant to purchase 1.75% of the outstanding
Common Stock of the Company. The Company has the right to redeem the warrant
through December 31, 1997 for a purchase price of $750,000. Upon consummation of
this offering, the Company will repay this debt and redeem this warrant. In the
second quarter of 1997, the Company expects to incur a non-recurring after-tax
charge of approximately $400,000 as a result of early extinguishment of debt. In
connection with the Intersec acquisition, the Company issued the sellers a
series of 9.0% notes aggregating approximately $1.2 million and payable at
various times through April 1998.

Historically, the Company focused primarily on increasing revenues and
expanding client relationships. In December 1994, AHL made the strategic
decision to strengthen its management team and develop a corporate
infrastructure to continue its growth strategy and improve profitability. The
new management team has dedicated itself to building the structure, systems and
processes throughout the Company to support significant growth and increase
profitability. The Company's current cost-reduction initiatives include an
improved risk management program, a management program for employee uniforms, a
shuttle bus maintenance program and a restructuring of the field staffing
organization.

16
<PAGE> 20

in the Federal minimum wage although most of the Company's employees are paid at
rates in excess of the Federal minimum wage.

The Company recognizes revenues as services are performed. A substantial
amount of the Company's revenues are received, and operating costs are incurred,
in foreign currencies (primarily the British Pound and the German Deutsche
Mark), with a significant amount of operating income having been derived from
operations in the United Kingdom. The denomination of foreign subsidiaries'
account balances in their local currency exposes the Company to certain foreign
exchange rate risks. The Company addresses the exposure by financing most
working capital needs in the applicable foreign currencies. The Company does not
engage in other purchased hedging transactions to reduce any remaining exposure
to fluctuations in foreign currency exchange rates. However, management does not
believe the remaining risks to be significant.

In the fall of 1996, the Company made the decision to terminate the
paratransit and municipal bus services offered by its transportation subsidiary
in Florida. The Company incurred nonrecurring pre-tax losses (including
termination costs) associated with these operations aggregating $665,000 in
1996. The Company believes that substantially all costs related to these
operations have been accrued as of December 31, 1996.

RESULTS OF OPERATIONS

The following table sets forth Statement of Operations data as a percentage
of revenues for the periods indicated:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
DECEMBER 31,(1)
------------------------
1994 1995 1996
------ ------ ------
<S> <C> <C> <C>
Revenues.............................................. 100.0% 100.0% 100.0%
Operating expenses:
Cost of services.................................... 74.6 73.8 74.2
Field operating..................................... 17.0 18.0 17.8
Corporate general and administrative................ 7.1 6.5 5.6
------ ------ ------
Operating income................................. 1.3 1.7 2.4
Interest expense, net................................. 0.7 0.8 0.8
Other (income), net................................... -- (0.5) (0.1)
------ ------ ------
Income before income taxes ...................... 0.6 1.4 1.7
Income tax provision (2).............................. 0.5 0.5 0.7
------ ------ ------
Net income....................................... 0.1% 0.9% 1.0%
====== ====== ======
</TABLE>

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

(1) The Company's fiscal year ends on the last Friday in December. Each of the
fiscal years presented consists of 52 weeks.

(2) The income tax provision for 1994 was negatively impacted by the
significance of non-deductible expenses relative to income before income
taxes.

17
<PAGE> 21

FISCAL 1996 COMPARED TO FISCAL 1995

Revenues. Revenues increased $41.6 million, or 24.6%, to $210.2 million in
fiscal 1996 from $168.6 million in fiscal 1995. Of this increase, $27.2 million
was attributable to higher revenues from existing clients, $8.1 million to
services initiated for new clients and $6.3 million to the Intersec acquisition.
Revenues from existing clients increased 16.1% in fiscal 1996 over fiscal 1995
primarily as a result of providing additional services and expanding into new
markets with these clients.

Cost of Services. Cost of services represents the direct costs
attributable to a specific contract, predominantly wages and related benefits,
as well as certain related expenses such as workers' compensation and other
direct labor related expenses. Cost of services increased $31.4 million, or
25.3%, to $155.9 million in fiscal 1996 from $124.5 million in fiscal 1995. As a
percentage of revenues, cost of services increased to 74.2% in fiscal 1996 from
73.8% in fiscal 1995. This percentage increase was primarily attributable to
operating losses in the terminated Florida transportation operations and
operating inefficiencies associated with a new contract in Detroit. The Company
believes based on subsequent operating results that it has corrected these
inefficiencies through a change in management at the Detroit location and
increases in rates paid to the Company with respect to this Detroit contract.

Field Operating Expenses. Field operating expenses represent expenses
which directly support field operations, such as each district's management,
facilities expenses (such as rent, communication costs and taxes), employee
uniforms, equipment leasing, depreciation and maintenance, local sales and
marketing activities and acquisition-related goodwill. These expenses increased
$7.2 million, or 23.6%, to $37.5 million in fiscal 1996 from $30.3 million in
fiscal 1995, primarily as a result of administrative staff, systems and
facilities expenses for new operations in Chicago, Cincinnati, San Francisco,
Los Angeles and Seattle opened during fiscal 1996. As a percentage of revenues,
these expenses decreased to 17.8% in fiscal 1996 from 18.0% in fiscal 1995.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses include the cost of services the Company provides to
support and manage its field activities. These expenses include corporate
management, accounting and payroll, general administration, human resources
management, professional fees, headquarters occupancy, marketing and management
information systems. These expenses increased $754,000, or 6.9%, to $11.7
million in fiscal 1996 from $10.9 million in fiscal 1995. As a percentage of
revenues, these expenses decreased to 5.6% in fiscal 1996 from 6.5% in fiscal
1995. This percentage decrease was primarily due to the Company's ability to
increase revenues without a commensurate increase in corporate expenses.

Operating Income. Operating income increased $2.2 million, or 77.3%, to
$5.0 million in fiscal 1996 from $2.8 million in fiscal 1995. As a percentage of
revenues, operating income improved to 2.4% in fiscal 1996 from 1.7% in fiscal
1995.

Interest Expense, Net. Net interest expense increased $417,000 to $1.7
million in fiscal 1996 from $1.3 million in fiscal 1995. This was the result of
approximately $4.7 million of additional indebtedness incurred in connection
with the Intersec acquisition in July 1996 and higher borrowings under the
Company's revolving line of credit.

Other Income, Net. Other income, net decreased $519,000 to $301,000 in
fiscal 1996 from $820,000 in fiscal 1995. This decrease was primarily due to the
non-recurring collection of notes received in the sale of the Company's drug
testing subsidiary in October 1995. See Note 3 of the Notes to the Company's
Combined Financial Statements.

Net Income. Net income increased $733,000, or 51.0%, to $2.2 million, or
1.0% of revenues, in fiscal 1996 from net income of $1.4 million, or 0.9% of
revenues, in fiscal 1995. The Company's effective income tax rate was
approximately 40.0% for fiscal 1996 compared to 38.9% in fiscal 1995.

18
<PAGE> 22

FISCAL 1995 COMPARED TO FISCAL 1994

Revenues. Revenues increased $45.4 million, or 36.8%, to $168.6 million in
fiscal 1995 from $123.2 million in fiscal 1994. Of this increase, $37.1 million
was attributable to higher revenues from existing clients and $8.3 million to
services initiated for new clients. Revenues from existing clients increased
30.1% in fiscal 1995 over fiscal 1994 primarily as a result of providing
additional services and expanding into new markets with these clients.

Cost of Services. Cost of services increased $32.6 million, or 35.5%, to
$124.5 million in fiscal 1995 from $91.9 million in fiscal 1994. As a percentage
of revenues, cost of services decreased to 73.8% in fiscal 1995 from 74.6% in
fiscal 1994. The percentage decrease was primarily attributable to improved
scheduling which reduced the amount of non-billable overtime and lower workers'
compensation claims.

Field Operating Expenses. Field operating expenses increased $9.4 million,
or 44.9%, to $30.3 million in fiscal 1995 from $20.9 million in fiscal 1994
primarily as a result of increased expenses attributable to expanded operations,
including entering the Denver and Frankfurt markets, and an increase in the size
of the field sales force from six to 11 people. As a percentage of revenues,
these expenses increased to 18.0% in fiscal 1995 from 17.0% in fiscal 1994. This
percentage increase was primarily attributable to significantly higher
maintenance cost associated with the paratransit and municipal bus services in
Florida (terminated in 1996), increased expenses attributable to expanded
operations and the increase in the size of the field sales force.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $2.1 million, or 24.3%, to $10.9 million in
fiscal 1995 from $8.8 million in fiscal 1994 primarily due to continuing
additions to the Company's senior management team. As a percentage of revenues,
these expenses decreased to 6.5% in fiscal 1995 from 7.1% in fiscal 1994. This
percentage decrease was attributable to the Company's ability to increase
revenues without a commensurate increase in corporate expenses.

Operating Income. Operating income increased $1.2 million, or 74.2%, to
$2.8 million in fiscal 1995 from $1.6 million in fiscal 1994. As a percentage of
revenues, operating income improved to 1.7% in fiscal 1995 from 1.3% in fiscal
1994.

Interest Expense, Net. Net interest expense increased to $1.3 million in
fiscal 1995 from $904,000 in fiscal 1994. This increase was attributable to
higher borrowings under the Company's credit facility.

Other Income, Net. Other income, net increased $794,000 to $820,000 in
fiscal 1995 from $26,000 in fiscal 1994. This increase was attributable to
receipt of the cash portion of the sale price for the Company's drug testing
subsidiary in October 1995, net of associated disposition costs.

Net Income. Net income increased $1.3 million to $1.4 million in fiscal
1995 from $128,000 in fiscal 1994. As a percentage of revenues, net income
increased to 0.9% in fiscal 1995 from 0.1% in fiscal 1994. The Company's
effective tax rate was approximately 38.9% in fiscal 1995 compared to 83.0% in
fiscal 1994, resulting from decreases in nondeductible expenses relative to
income before income taxes. The Company's effective tax rate subsequent to 1994
has more closely approximated statutory rates.

19
<PAGE> 23

QUARTERLY RESULTS AND SEASONALITY

The following table sets forth statement of operations data for each of the
four quarters of fiscal 1996 and each of the four quarters of fiscal 1995. This
quarterly information is unaudited but has been prepared on a basis consistent
with the Company's audited financial statements presented elsewhere herein and,
in the Company's opinion, includes all adjustments (consisting only of normal
recurring adjustments) necessary for a fair presentation of the information for
the quarters presented. The operating results for any quarter are not
necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1996 1996 1996 1996
--------- -------- ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues........................ $45,519 $47,643 $57,320 $59,671
Operating expenses:
Cost of services.............. 33,541 35,342 42,453 44,590
Field operating............... 8,253 8,427 10,193 10,619
Corporate general and
administrative............. 2,864 2,848 2,708 3,272
------- ------- ------- -------
Operating income........... 861 1,026 1,966 1,190
Interest expense, net........... 309 301 549 567
Other (income), net............. (57) (81) (81) (82)
------- ------- ------- -------
Income before income
taxes.................... 609 806 1,498 705
Income tax provision............ 244 322 599 282
------- ------- ------- -------
Net income................. $ 365 $ 484 $ 899 $ 423
======= ======= ======= =======
</TABLE>

<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------------
MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31,
1995 1995 1995 1995
--------- -------- ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues........................ $38,354 $41,140 $43,625 $45,482
Operating expenses:
Cost of services.............. 28,468 30,367 31,858 33,798
Field operating............... 6,642 7,360 8,131 8,195
Corporate general and
administrative............. 2,543 2,664 2,736 2,995
------- ------- ------- -------
Operating income........... 701 749 900 494
Interest expense, net........... 232 266 370 441
Other (income), net............. -- (25) (10) (785)
------- ------- ------- -------
Income before income
taxes.................... 469 508 540 838
Income tax provision............ 182 199 210 326
------- ------- ------- -------
Net income................. $ 287 $ 309 $ 330 $ 512
======= ======= ======= =======
</TABLE>

The Company's contracts at airports with large volumes of international
passengers (such as New York -- Kennedy and London -- Heathrow) result in an
increase in staffing for certain passenger services during periods of higher air
travel, typically in the summer. The Company's contracts at airports with fewer
international passengers generally require more constant staffing throughout the
year. Therefore, the Company has experienced, and expects to continue to
experience, quarterly variations in its results of operations principally as a
result of the seasonality of air travel primarily to and from Europe. While the
effects of seasonality on AHL's business often are obscured by the timing of the
addition of new clients and the commencement of new services for existing
clients, the Company's operating income tends to be lower in the first and
fourth quarters of the fiscal year and highest in the third quarter of the
fiscal year. Additionally, the Company's operating margin tends to be lower in
the fourth quarter because of the occurrence of holidays

20
<PAGE> 24

during which the Company pays overtime wages to employees. Under certain of the
Company's contracts, the Company is not entitled to recoup the cost of these
overtime wages.

LIQUIDITY AND CAPITAL RESOURCES

To support its rapid growth, AHL has historically relied on borrowings
under its bank revolving credit facility. In December 1995, the Company entered
into a three-year, $25.0 million revolving bank line of credit (of which $5.0
million is available to the Company's European operations) and $1.5 million term
debt facility (collectively, the "Credit Facility") to replace the Company's
prior $11.0 million revolving credit facility. The interest rate was reduced
from the prime rate plus 150 basis points to the prime rate or LIBOR plus 250
basis points (280 basis points for the European operations). The Credit Facility
is collateralized by substantially all of the Company's assets. In addition, the
Credit Facility is subject to certain restrictive covenants, including
maintaining minimum tangible net worth and a specified debt-to-net worth ratio,
and is personally guaranteed by the Company's chairman and sole shareholder. As
of December 31, 1996, there was approximately $14.4 million and $667,000
outstanding under the line of credit and term debt portions of the Credit
Facility, respectively, as well as letters of credit aggregating approximately
$3.3 million. The Company will repay all amounts outstanding under the Credit
Facility from the proceeds of this offering. The Company expects to increase the
amount of the Credit Facility following this offering.

The Company borrowed $3.5 million in July 1996 to fund the Intersec
acquisition. This non-amortizing subordinated debt bears interest at 13.5% per
annum, payable monthly. Sirrom received a warrant to purchase 1.75% of the
outstanding Common Stock of the Company, which the Company has the right to
repurchase through December 31, 1997 for a purchase price of $750,000. Upon
consummation of this offering, the Company will repay this subordinated debt and
repurchase the warrant. In connection with the Intersec acquisition, the Company
issued $1.2 million of notes to the sellers, which bear interest at 9.0% per
annum, payable quarterly, and mature at various times through April 1998. Upon
consummation of this offering, the Company will repay these notes.

Cash provided by operating activities was $1.2 million for the year ended
December 31, 1996. This was the result of $6.3 million of net income before
depreciation and amortization and other non-cash charges offset by $5.1 million
of changes in operating assets, primarily accounts receivable, offset by accrued
salaries and related benefits payable. These changes were consistent with the
Company's higher volume of business. Cash used in investing activities for the
year ended December 31, 1996 was $4.0 million, principally as a result of the
Intersec acquisition made in July 1996. Cash provided by financing activities
for the year ended December 31, 1996 was $3.3 million, principally representing
increases in borrowings under the Credit Facility and issuance of the
subordinated notes associated with the Intersec acquisition.

Cash used in operating activities was $3.5 million in fiscal 1995. This was
the result of $4.5 million of net income before depreciation and amortization
and other non-cash charges offset by $8.0 million of changes in operating assets
and liabilities. Cash used in investing activities for fiscal 1995 was $1.6
million, primarily related to the purchase of $2.6 million of management
information systems upgrades and shuttle buses offset by $1.0 million from the
proceeds from the sale of the Company's drug testing subsidiary. Cash provided
by financing activities for fiscal 1995 of $5.1 million resulted primarily from
the refinancing of, and net borrowings under, the previous bank line of credit
and term debt.

Cash provided by operating activities was $132,000 in fiscal 1994. This was
the result of $2.2 million of net income before depreciation and amortization
and other non-cash charges offset by $2.1 million of changes in operating assets
and liabilities. Cash used in investing activities for fiscal 1994 was $1.2
million, primarily related to the purchase of management information systems
upgrades and shuttle buses. Cash provided by financing activities of $1.1
million resulted primarily from borrowings under the Company's previous bank
line of credit.

21
<PAGE> 25

Capital expenditures were $2.0 million, $2.6 million and $1.3 million in
fiscal 1996, 1995 and 1994, respectively. Historically, capital expenditures
have been, and future expenditures are anticipated to be, primarily to support
expansion of the Company's operations and management information systems. The
Company's capital expenditures over the next several years, as a percentage of
its revenues, are expected to be generally consistent with those of the past
three fiscal years.

The Company believes that any funds generated from operations, together
with existing cash, the net proceeds of this offering and borrowings under the
Credit Facility, will be sufficient to finance its current operations, planned
capital expenditure requirements and internal growth for at least the next
several years. However, if the Company were to make any significant acquisitions
for cash, it may be necessary for the Company to obtain additional debt or
equity financing. Although the Company regularly evaluates possible acquisition
opportunities, it is not currently engaged in any negotiations and is not a
party to any letter of intent or other agreement or arrangement regarding any
material acquisition.

INFLATION

The Company does not believe that inflation has had a material effect on
its results of operations in recent years. However, there can be no assurance
that the Company's business will not be affected by inflation in the future.

22
<PAGE> 26

BUSINESS

AHL provides contract staffing and management of its clients'
labor-intensive, task-repetitive support functions on an outsourced basis
throughout the United States and Europe. The Company's core competencies are
recruiting, hiring, training, motivating and managing the large numbers of
personnel required to provide many of the support services needed by its clients
and incorporating quality systems and cost efficiency in its operations. Founded
in 1979, the Company is a leader in providing pre-departure screening, passenger
profiling and other passenger services to the aviation industry and,
increasingly, provides services to other large corporations, including Federal
Express, America Online, Georgia Power, BellSouth and Nike. Through its 60
offices in the United States and 23 offices in seven European countries, AHL is
able to service the multinational needs of its Fortune 1000 client base. The
Company currently has approximately 400 contracts to provide services and has
established long-term relationships with its largest clients, giving the Company
a source of significant recurring revenues. In December 1994, AHL made the
strategic decision to strengthen its management team and develop a corporate
infrastructure to continue its growth strategy and improve profitability. The
Company intends to take advantage of market trends toward contract staffing and
become the preferred provider of outsourced labor management solutions for its
clients by leveraging its core competencies, international scale, reputation for
quality, performance-based quality measurement systems, management depth and
senior-level relationships with its key clients.

INDUSTRY OVERVIEW

Many corporations and other institutions need to recruit, hire, train,
motivate and manage large numbers of personnel to handle non-core functions, in
labor environments often characterized by relatively low pay and high turnover
rates. Enterprises incur considerable expense and invest substantial amounts of
management time in managing this process. These enterprises are increasingly
contracting with specialized third party providers to better ensure long-term
labor availability for support functions. Contract staffing providers often are
able to provide higher quality services at a lower cost than these enterprises
are able to do themselves. Outsourcing these functions shifts employment costs
and risks, such as workers' compensation, recruitment and turnover costs and
changes in labor regulations, to outside vendors and allows enterprises to
reduce the administrative overhead and time necessary to properly manage
non-core functions.

The nature of the contract staffing industry is changing. As enterprises
centralize purchasing decisions and seek to reduce the number of vendors with
whom they do business, the ability of providers to offer national account
capability and national and international coverage is growing in importance.
Large enterprises are increasingly seeking partnering opportunities whereby the
third party provider, in addition to providing on-site management of staff,
assumes responsibility for a particular function, including designing and
implementing a solution for its client and shares in the economic benefits
derived from improved execution of the function. These trends, as well as the
increasing need for capital and management depth for growth, are creating
consolidation opportunities in the highly fragmented contract staffing industry.

While the aviation industry has historically outsourced certain functions,
such as food service, fueling and pre-departure screening, aviation companies
are increasingly outsourcing labor-intensive support functions not directly
related to flight operations. Functions which are increasingly being outsourced
include passenger profiling, baggage claim and check, sky cap, cargo and baggage
handling, aircraft clean and search, frequent flyer lounge operation, ramp
services, wheelchair assistance, shuttle bus, inter-gate cart, ticketing and
check-in services. Opportunities for outsourcing of security-related
labor-intensive, task-repetitive functions within the aviation industry have
increased in recent years and are expected to continue to increase if the FAA
approves more stringent security measures. Measures under consideration or
recently recommended by the FAA and the White House Commission on Aviation
Safety and Security (the "Gore Commission") in the United States include
certification of service providers, X-raying and matching all checked baggage,
implementation of a passenger profiling system and under-the-wing security
guards for parked aircraft.

23
<PAGE> 27

Growth in demand for contract staffing services in the United States and
Europe is expected to continue. Companies in numerous industries are seeking to
reduce costs and focus on their core competencies and, as a result, are
increasingly outsourcing support functions which have traditionally been
performed in-house. The trend toward outsourcing labor management in Europe is
not as developed as it is in the United States, due in part to historically more
restrictive labor regulations which are beginning to be liberalized. Two trends
are expected to increase demand for aviation-related contract staffing services
in Europe: (i) the privatization of major airlines, which should increase their
focus on improving operating performance, and (ii) the liberalization of airport
authority licensing, which currently restricts the number of vendors that may
provide aviation services at a particular airport. The European Union has
mandated that European airports be opened to increased competition to provide
various ground services beginning in January 1999.

BUSINESS STRATEGY

The Company intends to take advantage of market trends toward contract
staffing and become the preferred provider of outsourced labor management
solutions for its clients by leveraging its core competencies, international
scale, reputation for quality, increasing focus on performance-based quality
measurement systems, management depth and senior-level relationships with its
key clients. Key elements of the Company's business strategy include:

Exploit Core Competencies. The Company's core competencies include
recruiting, hiring, training, motivating and managing the large numbers of
personnel required to provide many of the support services needed by its clients
and incorporating quality systems and cost efficiency in its operations. In
1996, the Company recruited, hired and trained over 9,000 full-time employees to
provide services for its clients. The Company completed drug tests and
background checks for substantially all of these individuals. Since inception,
the Company has been able to provide quality service and expand its business
despite the high employee turnover that is inherent in low wage, task-repetitive
positions. The Company has been able to leverage its core competencies in labor
management to regularly expand the range of services it offers. Functions
currently performed by the Company include a variety of aviation passenger
services, commercial security, shuttle bus services and cargo handling.

Target Fortune 1000 Clients. AHL targets large corporations and
institutions that have significant contract staffing needs for labor-intensive,
task-repetitive functions. AHL's major clients include Delta Air Lines, British
Airways, United Airlines, Federal Express, America Online, The Coca-Cola
Company, Northwest Airlines, BellSouth, Nike, United Parcel Service, Georgia
Power, Emory University and several federal, state and local government
agencies. The Company has established long-term relationships with its largest
clients, providing the Company with a source of significant recurring revenues
and establishing the Company as a preferred outsourcing vendor for these
clients. The Company's high quality of services has enabled it to experience an
average retention rate of approximately 94% of contract billable hours over the
last three fiscal years. The Company's field management and direct sales force
market AHL's services to clients in their assigned regions, while senior
executives concentrate on senior-level relationships and national account
management. Building and maintaining relationships with its clients' senior
executives and local operating personnel has been, and will continue to be, an
important operating philosophy for the Company.

Leverage National and International Coverage. As companies centralize
purchasing decisions and seek to reduce the number of vendors with whom they do
business, the ability of contract staffing providers to offer national and
international coverage is growing in importance. Through its operations in 60
offices in the United States and 23 offices in seven European countries, AHL is
able to service the multinational needs of its Fortune 1000 client base. The
Company believes its ability to provide a consistently high level of service at
numerous locations worldwide provides it with a significant competitive
advantage. The Company's four largest clients use AHL's services in both their
North American and European operations.

24
<PAGE> 28

Utilize Performance-Based Measurement Systems. The Company's goal is to
assume a leadership position in the adoption of technology-driven,
performance-based measurement systems which will further differentiate AHL in
the contract staffing industry in which quality measurement has not been
prevalent. The Company believes its efforts will enable it to become a preferred
vendor for its clients and attract additional clients. AHL has been developing
and will continue to develop systems to measure performance in order to
demonstrate the quality of the Company's services and productivity gains
achievable by outsourcing labor-intensive functions to the Company. For example,
in conjunction with United Airlines, the Company will be reengineering the
pre-departure screening process at Chicago's O'Hare Airport by measuring
passenger and baggage throughput, employee retention and labor utilization
rates. The goal of this reengineering effort is to quantify cost savings which
would be shared by United Airlines and the Company.

Continue Investment in Management and Systems. Historically, the Company
focused primarily on increasing revenues and expanding client relationships. In
December 1994, AHL made the strategic decision to strengthen its management team
and develop a corporate infrastructure to continue its growth strategy and
improve profitability. The Company has recruited senior and regional managers
with operating experience in a variety of industries. The Company continues to
invest substantial resources to develop budgeting, financial reporting, contract
control and human resource tracking systems designed to provide quality service
to its clients and to manage and effectively control all aspects of its
business. These systems represent a competitive advantage and are designed to
enable the Company to improve its profitability.

GROWTH STRATEGY

AHL believes there are significant opportunities to expand its business as
large corporations and other institutions outsource labor-intensive,
task-repetitive functions in order to focus on their core competencies. The
Company follows a disciplined model for growth, entering a new market only after
it has signed a contract with a client to provide specific services in that
market. Once an initial contract is awarded, the Company establishes an office
and begins building management depth in that market. After establishing
operations in a new market and demonstrating its ability to provide high quality
services, the Company has successfully leveraged its local infrastructure by
marketing additional services to its initial client and by providing services to
additional clients in that region. Key elements of the Company's growth strategy
include:

Penetrate Existing Accounts. The Company believes there are substantial
opportunities to expand relationships with existing clients by increasing the
number of client locations served by AHL as well as by cross-selling the full
range of the Company's services. The Company seeks to capitalize on the services
provided in one location of a client by providing its services to other
locations or operations, including foreign operations, of its clients. For
example, in 1993 the Company provided pre-departure screening for United
Airlines in three of its domestic hubs. As a result of the quality of its
service and its ability to provide national and international coverage, AHL now
provides pre-departure screening and a range of other services at all of
United's domestic hubs and at four European locations. The Company has targeted
approximately five new domestic and international markets to enter in 1997, with
each of these expansions arising from a contract it expects to receive from an
existing customer.

Expand Service Offerings. The Company believes its core labor management
competencies can be leveraged across a wide range of labor-intensive,
task-repetitive functions. The Company seeks to provide new value-added
services, which can increase the average account size and, more importantly,
strengthen long-term relationships with its clients. The Company believes that
it is well-positioned to deliver additional services to its clients such as
warehouse "pick and pack" and light assembly services. AHL is actively pursuing
partnership arrangements with its clients as a means of providing new services.
For example, AHL has recently entered into a joint venture with British Airways,
whereby the Company provides passenger and baggage check-in and other passenger
services for British Airways in Nice, France. The Company expects to enter into
similar

25
<PAGE> 29

arrangements with British Airways for other European locations. The Company did
not previously provide passenger check-in or baggage services for any of its
airline clients.

Obtain New Clients. To take advantage of the trend towards outsourcing of
non-core functions, the Company intends to target new clients that are
increasing their focus on core competencies and seeking cost-effective solutions
for labor-intensive functions. The Company believes it has a competitive
advantage in competing for new clients because of its reputation for quality
service, management depth, ability to provide a broad range of services and
national and international coverage. The Company recently hired a Vice President
of Marketing and is developing a new marketing program that focuses on national
accounts. During 1997, the Company intends to add seven sales representatives in
the United States and Europe to its existing 12-person sales force and, for the
first time, hire a national salesperson for shuttle bus services.

Explore Strategic Acquisitions. AHL intends to take advantage of the
fragmented nature of the contract staffing industry by seeking domestic and
international acquisitions, thereby leveraging the Company's existing
infrastructure and enabling the Company to expand its geographic coverage or
service offerings. The Company believes it has developed the management team and
systems to enable it to identify acquisition candidates and to successfully
acquire and integrate businesses. For example, in July 1996, the Company
acquired Intersec, a provider of industrial and governmental security services
in the mid-Atlantic region of the United States. In March 1992, Mr. Argenbright
acquired a portion of the passenger services operation of British Airways at
Heathrow Airport.

SERVICES PROVIDED

The following table presents information with respect to the percentage of
the Company's revenues by major service category for the periods shown:

<TABLE>
<CAPTION>
FISCAL YEARS ENDED
DECEMBER 31,
----------------------------
SERVICES PROVIDED 1994 1995 1996(1)
----------------- ---- ---- -------------
<S> <C> <C> <C>
Passenger services:
Pre-departure screening and passenger profiling..... 56% 54% 51%
Other passenger services(2)......................... 4 4 5
Commercial security.................................... 22 22 26
Shuttle bus services................................... 8 8 9
Cargo handling......................................... 3 6 4
Other(3)............................................... 7 6 5
--- --- ---
Total.......................................... 100% 100% 100%
=== === ===
</TABLE>

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

(1) Includes revenues of Intersec, a provider of commercial security services
from the date of its acquisition in July 1996.
(2) Includes baggage claim and check, aircraft clean and search, lost baggage
delivery and replacement, sky cap, wheelchair assistance, escorting of
unaccompanied minors, inter-gate cart services and frequent flyer lounge
operation.
(3) Includes the terminated paratransit and municipal bus services in Florida.

Passenger Services.

Pre-Departure Screening and Passenger Profiling. The Company is the
largest provider of pre-departure screening and passenger profiling services in
the United States and Europe combined, with approximately 4,100 employees
currently providing services at 33 airports in the United States and 21 airports
in Europe. Pre-departure screening is a security approach maintained at all
commercial airports in the United States and the United Kingdom under mandates
of the FAA and the U.K. DOT and at many other airports throughout the world
under similar mandates of other regulatory authorities. At pre-departure
screening checkpoints, all passengers and other airport

26
<PAGE> 30

patrons must physically pass through a device called a magnetometer, designed to
reveal the presence of metal objects, and all carry-on baggage and other items
carried into the concourse or gate area must pass through an X-ray device to
determine whether certain suspicious materials are present. Major airports at
which the Company provides pre-departure screening services include Los Angeles
International, New York -- Kennedy, Washington -- National and Dulles, Denver
International, Chicago -- O'Hare, San Francisco, Orlando, Boston and Memphis in
the United States.

In Europe, the Company provides a sophisticated passenger profiling
procedure which has been used by certain major European airlines for several
years at high-risk international airports in Europe and was mandated in 1994 by
the FAA for U.S. airlines' international flights from those airports. Passenger
profiling seeks to identify a potential threat before it materializes by means
of interviewing, document verification and behavioral analysis. This procedure
results in the classification of the vast majority of passengers as low risk,
thereby enabling more scrutiny to be focused on higher risk passengers. The
Company has been providing profiling services in Europe since 1992, currently
has over 300 employees providing these services and believes that if the FAA
were to mandate profiling in the United States, the Company would be
well-positioned to quickly implement profiling procedures for its U.S. clients.
See "-- Government Regulation." The Company has developed TOPS2 and OSCARGO,
proprietary state-of-the-art computer-based profiling systems to meet expected
future profiling requirements. Major airports at which the Company provides
passenger profiling services include London -- Heathrow and Gatwick,
Paris -- Charles de Gaulle, Frankfurt, Berlin, Dublin, Vienna and Zurich.

Other Passenger Services. Historically, airlines have utilized their own
employees to provide most passenger services but are increasingly seeking to
outsource support functions. The Company provides a variety of other passenger
services to its airline clients, including baggage claim and check in 22
airports in the United States and Europe, aircraft clean and search in four
European airports and lost baggage delivery or replacement services in 11
European airports. At 16 airports in the United States and Europe, the Company
provides an assortment of services including sky cap, wheelchair assistance,
escorting of unaccompanied minors, inter-gate cart services and frequent flyer
lounge operation (front desk, bartending and cleaning).

Commercial Security.

The Company provides uniformed security officer services, business and
facility access control, security consulting, special event security and
security assessment to a broad range of commercial and governmental clients. The
Company's security officers are used at office and government buildings,
airports, hospitals, distribution centers, sports arenas, museums and other
facilities. For aviation clients, the Company provides guarding and control of
airport entrances, checking of employee identification cards and baggage,
guarding and control of employee parking lots and under-the-wing guarding of
parked aircraft in Europe.

Depending on the needs of the client, security officers are on premises,
often around-the-clock, to provide facility security, access control, personnel
security checks and traffic and parking control and to guard against fire,
theft, sabotage and safety hazards. The Company's security officers are trained
to respond appropriately to emergency situations and report fires, intrusions,
natural disasters, work accidents and medical crises to appropriate authorities.
Fewer than one percent of the Company's security personnel are armed. See "Risk
Factors -- Liabilities for Client and Employee Actions and Other Claims."

Shuttle Bus Services.

The Company provides dedicated, fixed route shuttle bus services in 10
locations within the United States and two locations in the United Kingdom
through its fleet of approximately 400 leased shuttle bus vehicles, which
generally seat between 15 and 50 passengers. Under all of its shuttle bus
contracts, the Company provides the shuttle bus and the driver. During fiscal
1996, AHL vehicles

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traveled more than seven million miles and operated for more than 700,000 hours.
For example, AHL currently provides (i) campus shuttle services at The Georgia
Institute of Technology, Emory University and The American School in London,
(ii) corporate shuttle services between various facilities of The Coca-Cola
Company, Delta Air Lines and the Federal Reserve Bank in Atlanta, (iii) public
parking shuttle services for the Memphis/Shelby County Airport Authority and the
Nashville Airport Authority, (iv) aviation employee transportation services from
employee parking lots for Delta Air Lines (Los Angeles, Cincinnati, Atlanta and
New York) and Federal Express (Memphis, Indianapolis and Newark) and (v) airside
crew and passenger transport at Heathrow Airport.

Cargo Handling.

The Company's cargo handling services include preparing cargo and mail for
flight through sorting and packaging, as well as transporting the cargo and mail
to and from airplanes in hub markets, such as Cincinnati and New York. In other
markets, such as Las Vegas and Washington, D.C., the Company provides the actual
staffing of customer counters and data input into the airline's cargo computer
system, in addition to handling the cargo. Cargo services are provided in these
other markets pursuant to outsourcing arrangements, under which the Company
manages the entire process for its clients. The Company processes air cargo for
several of its major aviation clients, including Delta Air Lines in New York,
Cincinnati, Washington D.C. and Seattle, and for United Airlines, Alaska
Airlines, America Trans Air, and Royal Airlines in Las Vegas. The Company also
provides cargo services to Air China and SwissAir in New York and Cathay Pacific
and Vanguard in Seattle pursuant to subcontracts from Delta Air Lines. In
addition to cargo handling, the Company provides U.S. Postal Service mail
handling for Delta Air Lines in Cincinnati and New York.

Other.

The Company provides polygraph training and testing services, conducts
investigations such as criminal and background checks, and provides facility
receptionists at commercial locations. The Company utilizes its polygraph
testing and background check services in its own hiring process. The Company has
provided paratransit and municipal bus services, but in 1996, made the decision
to terminate these services. The Company terminated its Tampa paratransit
business in the fall of 1996.

Contract Terms.

The Company's services are provided under contracts, typically having terms
of one to five years, which provide the Company with a source of significant
recurring revenues. Although the terms of the Company's contracts vary
significantly, clients generally agree that the Company will provide a stated
service level and agree to pay the Company an hourly rate for services provided.
Certain of the Company's clients, especially in the cargo services area, are
billed a fixed dollar amount per month for services performed. Under some
contracts, the Company is entitled to rate increases when there are increases in
the Federal minimum wage, although most of the Company's employees are paid at
rates in excess of the Federal minimum wage. Most contracts have multi-year
terms and are generally terminable by either party upon 30 to 90 days written
notice. Most of the contracts entered into by the Company have been renewed or
extended upon the expiration of their original terms, with the Company having
experienced an average retention rate of approximately 94% of contract billable
hours over the last three fiscal years. The Company's security officer services
are generally provided under contracts in which AHL assumes responsibility to
employ, schedule and pay all security officers and provide uniforms, equipment,
training, supervision, fringe benefits, bonding and workers' compensation
insurance. The Company's contracts typically provide that the Company will
indemnify the client from and against any claims for personal injury or death to
any person (other than an employee of the client) and for damage to any property
arising out of the acts or omissions of the Company unless the claim results
from any negligent act of the client.

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<PAGE> 32

Joint Venture with British Airways.

In 1996, the Company and British Airways created a joint venture to provide
passenger and baggage check-in and other passenger services for British Airways
in Nice, France. The Company and British Airways contributed 49% and 51%,
respectively, of the initial capital of the joint venture. The Company and
British Airways have the right to appoint two members and three members,
respectively, of the joint venture's Board of Directors. The joint venture
entered into a Services Agreement with British Airways and entered into a
management agreement with ADI. The management agreement provides that ADI
manages all of the services provided by the joint venture. The management
agreement terminates in June 2001.

Clients.

AHL's ten largest clients in fiscal 1996, which accounted for an aggregate
of 60.4% of the Company's revenues, were Delta Air Lines, British Airways,
United Airlines, Federal Express, the United States government, American
Airlines, Northwest Airlines, Georgia Power, The Coca-Cola Company and the
Nashville Airport Authority (excluding the terminated Florida transportation
operations). During fiscal 1996, Delta Air Lines, British Airways, United
Airlines and Federal Express accounted for 23.1%, 12.6%, 11.3% and 4.2% of the
Company's revenues, respectively, through an aggregate of 79 contracts and,
together, represented 51.2% of the Company's revenues. In fiscal 1995, these
four customers represented 53.5% of the Company's revenues. The Company has 14
contracts in the United States and seven contracts in Europe that provide annual
revenues in excess of $2 million each. See "Risk Factors -- Reliance on Major
Clients."

CASE STUDIES

The Company has built strong relationships with a number of Fortune 1000
and other large, multinational companies. The following case studies demonstrate
the Company's ability to effectively utilize its operating and growth strategies
to develop its relationships with its clients.

British Airways. The Company established its relationship with British
Airways when Mr. Argenbright acquired a portion of the airline's passenger
service operation at Heathrow Airport in March 1992. In the following year,
British Airways awarded AHL additional Heathrow service contracts to provide
under-the-wing guarding of parked aircraft as well as clean and search and
passenger profiling services. The Company subsequently was awarded similar
British Airways service contracts at Gatwick and 16 additional airports
throughout the United Kingdom and in France and Germany. Contemporaneously, AHL
began providing airport services to other international air carriers at these
locations. In 1995 and 1996, AHL was awarded contracts for pre-departure
screening services for British Airways in both Detroit and Philadelphia. Most
recently, British Airways and the Company formed a joint venture to provide
passenger and baggage check-in and other passenger services for British Airways
in Nice, France.

Federal Express. In August 1986, the Company began providing shuttle bus
services for Federal Express employees at the Memphis airport. The services
provided by the Company were expanded in August 1994 to include pre-departure
screening of Federal Express' crews. Currently, the Company provides shuttle bus
and/or pre-departure screening services for Federal Express in Atlanta,
Indianapolis, Cincinnati, Newark, Paris and Manila. In 1993, AHL was selected
from a pool of 3,500 vendors as Federal Express' Service Provider of the Year.

Delta Air Lines. The Company began its relationship with Delta Air Lines
in the early 1980s when it began providing shuttle bus services at Delta's
Atlanta headquarters complex. Over the past 15 years, AHL has significantly
expanded both the services it provides Delta as well as the number of locations
at which they are provided. In 1986, the Company began performing pre-departure
screening services for Delta in Orlando. Today, AHL provides pre-departure
screening for the airline in New York -- Kennedy, Los Angeles, Washington, D.C.,
Orlando, Boston, Little Rock and West Palm Beach. In Los Angeles, the Company
has expanded its services to include sky cap, wheelchair assistance, baggage
handling and inter-gate carts. Furthermore, the Company now provides passen-

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<PAGE> 33

ger services for Delta at seven airports in four European countries, including
Paris -- Charles de Gaulle, Vienna, London -- Gatwick and Warsaw. Similarly,
Delta awarded the Company a cargo handling contract for New York in 1992 and
thereafter for Washington, D.C., Cincinnati and Seattle.

America Online. AHL was initially hired by America Online to provide
commercial security services at its Northern Virginia headquarters in May 1996.
The Company now provides commercial security services at America Online's
Jacksonville, Tucson and Albuquerque locations. In February 1997, the Company is
scheduled to begin these services in Oklahoma City and Salt Lake City. The
America Online contracts demonstrate the success of the Company's new national
account sales program. America Online recently designated AHL as its preferred
national security provider.

SALES AND MARKETING

Building and maintaining relationships with personnel at various levels of
its clients' organizations, including relationships with both senior executives
and local operating personnel has been, and will continue to be, an important
operating philosophy for the Company. The Company uses these relationships to
market its services to potential clients through individuals having senior
management and local operating responsibilities. AHL targets large corporations
and institutions that have significant contract staffing needs for
labor-intensive, task-repetitive functions. The Company has a local sales force
of 12 representatives located in AHL's regional offices in New York, Atlanta,
Florida, Memphis, Washington, D.C. and Los Angeles, and in 1997 intends to add
five local sales representatives in the United States, two in Europe and, for
the first time, a national sales representative for shuttle bus services. The
Company's eight regional vice presidents are each responsible for two or three
districts. Regional and district managers also have sales responsibilities and a
portion of their incentive compensation is dependent on meeting sales goals.

In 1996, the Company began to develop a national sales and marketing
strategy, under which the Company focuses on improving the consistency of its
sales approach. Furthermore, the Company has designated certain senior managers
as responsible for specific national account relationships with specific large
clients and intends to add a Vice President of National Accounts during 1997.

The Company recently hired a Vice President of Marketing and Strategic
Planning to lead the Company's sales and marketing initiatives. These
initiatives include the development of branded services, strategic partnering
through national accounts, positioning AHL as a full service provider capable of
reducing a client's total costs by establishing performance-based quality
measurement systems, creating national, regional and local marketing plans, and
coordinating the Company's participation in trade shows. In 1996, the Company
began conducting in-house sales seminars, at which regional, district and
national account managers, along with the Company's local sales personnel, focus
on how to sell services to larger accounts.

WORKFORCE MANAGEMENT

The Company's core competencies include recruiting, hiring, training,
motivating and managing the large numbers of personnel required to provide many
of the support services needed by its clients. The Company's district managers
have ongoing responsibility for hiring, recruiting and training the Company's
local workforce.

Recruiting. The Company has developed innovative recruiting methods that
have been particularly effective in reaching targeted pools of prospective
employees, in addition to utilizing traditional recruiting methods such as job
fairs, trade journals, local advertising, and interviewing at vocational
schools. After analyzing the demographics of each market, the Company seeks to
establish relationships with community groups and leaders. For example, in a
number of markets, the Company has found that senior citizens are an excellent
source of potential employees for its pre-departure screening services and
recruiters frequently visit senior citizen centers. The Company leverages these
community relationships to provide a feeder into the Company's employment pool

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<PAGE> 34

and believes that current Company employees serve as effective recruiters for
the Company. The Company believes these methods are more cost-effective than
more traditional recruiting methods.

Hiring. In 1996, the Company recruited, hired and trained over 9,000
full-time employees to provide services for its clients. Within the United
States, every employee must complete a written application and provide proof of
citizenship or resident alien status and is subject to a ten-year background
check, which is conducted internally by the Company. Unlike many of its
competitors, the Company requires mandatory pre-employment drug testing for all
employees. Employees stationed at airport checkpoint screening monitors are
subject to psychological testing.

In Europe, the Company screens potential applicants through a telephone
interview, and each potential employee must complete a written application and
undergo an interview that includes vision, hearing and psychological testing. An
initial one-year background check is required for every new employee. Each
European employee is hired subject to a three month probationary period and
continuity of employment is subject to a 20-year background check. Where legally
permitted, employees in certain European countries are also subject to random
drug testing.

Training. The Company provides in-house classroom and on-the-job training
programs for its hourly personnel through videos, guest lecturers and full-time
trainers who are employed at the Company's major district locations. The Company
is in the process of establishing performance measures to improve job focus and
accountability, create a quality audit process and implement "best practices and
procedures" in the Company's field operations. The Company intends to gain ISO
9000 certification for all U.S. operations and is already ISO 9002-certified in
the United Kingdom. The Company is the only organization approved by the U.K.
DOT to provide aviation security training to personnel of the U.K. DOT, the
agency that regulates aviation security matters in the United Kingdom.

Retention. The Company believes that employee retention is critical to
lowering operating costs and providing high quality service to its clients.
Accordingly, the Company places significant emphasis on programs to motivate its
employees and reduce employee turnover. Since inception, the Company has been
able to provide quality service and expand its business despite the high
employee turnover that is inherent in low wage, task-repetitive positions. The
Company's "110% Club" recognizes employees for superior attendance, attitude,
appearance and performance. Members receive quarterly bonuses and other rewards,
and are recognized throughout the Company. The Company's pre-departure screening
employees receive bonuses for detecting weapons and other illegal objects at
airport security checkpoints, including those detected during FAA-mandated
tests.

Field Management. The Company has developed a management structure under
which significant workforce decisions are made at the local level, thereby
requiring field managers to assume responsibility for recruiting, hiring and
retention. The Company's bonus system for district managers is based upon
achievement of specific performance objectives, including revenue, gross margin
and net contribution, new business and client retention and losses and claims
incurred. District managers can earn bonuses of up to 35% of their base
compensation by achieving all of their objectives established annually by the
Company. As an added incentive, the Company intends to establish a stock option
plan for key corporate and field staff following this offering.

Employees. As of December 31, 1996, the Company had approximately 13,000
employees. A total of 1,285 of the Company's security employees working at New
York -- Kennedy, 789 working at Chicago -- O'Hare and 34 working at government
facilities in the Washington, D.C. area are covered by collective bargaining
agreements. Each of these agreements was assumed by the Company in connection
with an acquisition or an outsourcing contract previously held by another
vendor. In 1996, unions initiated three efforts to organize certain Company
employees, each of which failed to receive sufficient support to require an
election. The Company considers its relations with its employees to be good.

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STRUCTURE AND INTEGRATION OF ACQUISITIONS

Since 1992, the Company has completed three acquisitions. In March 1992,
Mr. Argenbright acquired a portion of the passenger services operation of
British Airways at Heathrow Airport. The Company has used ADI as a platform to
expand its operations in Europe. In August 1993, ADI acquired Express Baggage
Reclaim Services Limited, a provider of lost baggage delivery and replacement
services in the United Kingdom. In July 1996, the Company acquired Intersec, a
provider of commercial and governmental security services in the mid-Atlantic
region of the United States. The Intersec acquisition added employees in a
region where the Company had strong field management. Intersec's billing,
payroll, cash management and general ledger functions were fully integrated into
the Company's operations within 120 days after completion of the acquisition.

The Company's intends to seek acquisitions which will build density in the
Company's existing markets, add geographic coverage to the Company's existing
businesses, broaden the Company's service offerings and expand the Company's
client base. Through acquisitions of smaller operations providing the same type
of services already provided by the Company, AHL believes it can leverage its
existing management and systems infrastructure and increase its market share in
locations at which the Company already has an established presence. In most
instances, these operations can be integrated into the Company's existing
operations, resulting in elimination of duplicative overhead and operating
costs. The Company also intends to seek larger acquisitions that will enable it
to enter new markets, provide new services and complement its client base. The
Company will seek to efficiently implement AHL's operating strategies at larger
acquired companies while retaining talented existing management of those
companies.

MANAGEMENT INFORMATION SYSTEMS

The Company has invested, and intends to continue to invest, substantial
resources to develop systems that will enable it to deliver quality customer
service, centrally manage its operations and achieve substantial cost savings.
The Company recently completed installation of a management information system,
which integrates the Company's financial, human resources, general ledger,
payables, receivables and payroll functions. The system completes budgeting,
forecasting and monthly profit and loss statements on a contract-by-contract
basis. In 1996, the Company brought the payroll function in-house, resulting in
estimated annual savings of approximately $225,000. The Company has networked
its corporate offices and all regional and district offices in the United States
and has E-mail capability to all U.S. offices and its London headquarters. The
Company has also made significant investments to upgrade field computers and has
leased two HP9000 systems which are run parallel to prevent downtime and give
the Company the capacity needed to handle anticipated future growth.

The Company has designated $1.0 million of the proceeds of this offering
for enhancements to management information systems. Systems initiatives in 1997
include computerized timekeeping and payroll for hourly employees through a
"swipecard" system and real-time links with the Company's European operations.
The Company expects the swipecard system to enable AHL to develop performance
measurements for its customers and to allow the Company to prepare customer
bills from the data provided by the swipecards. This system should also enable
the Company to improve scheduling to reduce the amount of non-billable overtime.

COMPETITION

The contract staffing industry is extremely competitive and highly
fragmented, with limited barriers to entry. Companies within the contract
staffing industry compete on the basis of the quality of service provided, their
ability to provide national and international services, the range of services
offered, as well as price. The Company believes its competitive advantages
include its reputation for providing high quality service and its ability to
serve large clients in the United States and Europe.

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Most of the Company's competitors offer a more limited range of services and
focus on a few specific industries.

The Company competes in international, national, regional and local markets
with outsourcing companies, specialized contract service providers and in-house
organizations that provide services to potential clients and third parties.
AHL's principal competitors include, in the aviation services industry, ICTS
International N.V., Globe Aviation Securities Corporation and International
Total Services, Inc. and, in the commercial security industry, are Borg-Warner
Security Corporation, Guardsmark, Inc. and The Wackenhut Corporation. The
Company's shuttle bus services compete primarily with numerous local and
regional companies. Certain of the Company's competitors and potential
competitors have significantly greater financial resources and larger operations
than the Company.

GOVERNMENT REGULATION

Current Regulations Relating to Aviation Security. Aviation security in
the United States is subject to regulations and directives issued by the FAA.
Under current regulations, responsibility for aviation security is shared
between the FAA and various other federal, state and local agencies and industry
participants (which include air carriers and airport authorities as well as
independent contractors that perform services for or on behalf of these industry
participants.) The FAA conducts threat and vulnerability assessments and,
through its regulatory authority, directs the aviation industry to implement
measures that address existing and anticipated threat situations. The FAA also
tests security measures at airports to assess vulnerabilities in current airport
security systems.

Under FAA regulations, each air carrier and airport authority must adopt
and carry out an FAA-approved security program that provides for the safety of
persons and property traveling in air transportation against acts of criminal
violence and aircraft piracy. Air carriers are responsible for providing
security measures for all people and items connected with their aircraft,
including passengers, baggage, and maintenance and flight crews. Airport
authorities are responsible for maintaining a secure environment on airport
grounds and for providing law enforcement support and training.

Each security program adopted by an airline must include: (i) the screening
of passengers and their carry-on baggage, and other persons having access to
controlled areas, to prevent the carriage aboard aircraft of weapons or
explosive devices, (ii) controlling access to aircraft, checked baggage and
cargo, (iii) appropriate controls on shipping of cargo and (iv) security
inspection of any aircraft left unattended.

Airlines may utilize either their own employees or third-party contractors
to carry out their security programs. Effective January 31, 1996, pre-departure
screeners must undergo a 10-year criminal and employment background check and a
five-year employment verification, with the employer required to maintain
records of these investigations throughout the term of employment. Screeners
operating X-ray systems must receive initial and recurrent training in the
detection of weapons and other dangerous articles.

From time to time, the FAA issues directives requiring the implementation
of specific actions by air carriers and airport authorities. For example,
following the destruction of TWA flight 800 in July 1996, the FAA began to
require additional passenger profiling for specified types of flights, matching
of passengers and checked baggage, additional searching of aircraft cabins and
cargo areas, additional physical searches of carry-on items and other enhanced
security measures.

Generally, European standards for aviation security are more stringent than
those currently in effect in the United States. Passengers are subject to more
comprehensive "profiling" and review of documents; parked aircraft must be
guarded, searched and cleaned in accordance with applicable regulations;
passenger baggage is subject to match procedures as well as random X-ray and
hand searches; commercial cargo is guarded and subject to random X-ray searches;
and airline employees and other crews are subject to additional security
measures. The FAA requires that U.S. airlines utilize similar passenger
profiling programs in their European operations.

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Recent Developments Relating to Aviation Security. Several recent
initiatives by United States governmental authorities and industry participants
have considered or recommended significant changes in regulatory requirements
relating to aviation security. These recent initiatives have been undertaken by
the United States Congress, through provisions of the Federal Aviation
Reauthorization Act of 1996 (the "1996 Act"); the Gore Commission, which
published its final report on February 12, 1997; and the Aviation Security
Advisory Committee ("ASAC"), a committee of government and industry participants
that issued its recommendations on December 12, 1996. Each of these groups has
considered issues that have ranged from the fundamental structure of, and
sharing of responsibilities relating to, aviation security to specific near-term
measures that could be implemented to improve aviation security.

The Gore Commission, which was formed following the destruction of TWA
Flight 800 in July 1996, included the heads of various federal agencies and was
charged with making recommendations as to how the partnership between the U.S.
government and industry participants can achieve improved aviation security. The
Gore Commission issued its final report on February 12, 1997 and recommended:
(i) development of uniform performance standards for the selection, training and
certification of pre-departure screening companies; (ii) implementation of
procedures for matching of passengers and checked baggage on a nationwide basis
no later than December 31, 1997; (iii) the continued development and
implementation of an automated passenger profiling system; and (iv) utilization
of U.S. Customs Service personnel and computer systems to complement the efforts
of the FAA and other federal agencies. The FAA has initiated rulemaking
procedures that would implement certain of these recommendations.

The 1996 Act requires that the FAA conduct a study and report to Congress
on whether to transfer certain responsibilities of air carriers to either
airport authorities or to the federal government or whether to provide for some
other sharing of current responsibilities. This report has not yet been issued
by the FAA. However, the Company believes that the FAA is likely to follow the
final recommendation released by the Gore Commission, as described above. The
Act directs the FAA to "certify" companies that provide pre-departure screening,
continue to assist air carriers in developing computer-assisted passenger
profiling programs, assess programs for matching of passengers and checked
baggage that are currently being utilized in the industry on a test basis, and
report on changes to enhance and supplement the screening and inspection of
cargo and mail shipments.

ASAC was formed following the crash of Pan Am flight 103 in 1989 and is
charged with coordinating the flow of aviation security information and
countermeasures within the United States. ASAC includes representatives of
numerous federal agencies, associations of industry participants and public
interest groups and is chaired by the FAA's Director of Civil Aviation Security.
In July 1996, ASAC began to undertake an effort to strengthen the domestic
aviation security "baseline" and formed a working group to recommend specific
measures. In its report issued on December 12, 1996, ASAC recommended that no
change be made in the current structure or assignment of responsibilities for
aviation security. ASAC did recommend that the FAA initiate rulemaking
procedures for "certification" of security contractors and made numerous
recommendations with respect to specific aviation security measures, which are
generally consistent with those proposed by the Gore Commission.

Other Applicable Regulations. Airport authorities in many foreign
countries require that companies receive licenses in order to be able to perform
services at the airport and limit the number of licenses that are issued. The
Company is also required to maintain various licenses and permits from state and
local government authorities in order to provide commercial security, shuttle
bus and certain other services.

RISK MANAGEMENT AND SAFETY

Because the Company's business is labor intensive, workers' compensation is
a significant operating expense for the Company in the United States. In
addition, the Company is exposed to possible claims by its clients' customers or
employees, alleging discrimination or harassment by the

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Company's employees. The Company is also exposed to liability for the acts or
negligence of its employees who cause personal injury or damage while on
assignment, as well as claims of misuse of client proprietary information or
theft of client property. The Company has adopted policies and procedures
intended to reduce its exposure to these risks.

The Company maintains insurance against these risks with policy limits it
considers sufficient, subject to self insurance of $250,000 per incident and an
aggregate stop-loss. In addition, the Company maintains aviation liability
insurance of $500 million per incident. The Company establishes reserves in its
financial statements for the estimated costs of pending claims as well as the
estimated costs of incurred but not yet reported claims. The reserve for these
unreported claims is based on prior experience. The Company's reserves are
periodically revised, as necessary, based on developments related to pending
claims. As of December 31, 1996, the Company's reserve for workers' compensation
and automobile claims was $3.2 million.

The Company recently hired a professional risk management specialist. The
new risk manager, with the assistance of the Company's regional managers, is
responsible for claims management and the establishment of appropriate reserves
for the deductible portion of claims. Additionally, in the first quarter of
1997, the Company plans to implement a number of new risk control strategies.
These include establishing a risk allocation program which will provide local
managers with financial incentives to improve safety performance by decreasing
the number of workplace accidents. The Company also intends to implement
quarterly safety committee meetings with its local managers and field employees,
conduct defensive driving training sessions for its transportation employees,
conduct routine safety inspections of local work sites and instruct personnel in
proper lifting techniques in an effort to reduce the number of preventable
accidents.

EQUIPMENT AND FACILITIES

As of December 31, 1996, the Company operated a fleet of approximately 400
shuttle bus vehicles, which generally seat between 15 and 50 passengers. All of
these vehicles are leased, with lease terms that generally match the term of the
contract for which the vehicles are provided. In the event of early termination
of a contract, certain of the Company's clients are required to assume liability
for the vehicle leases.

The Company performs its own vehicle maintenance at each major location
through a separate maintenance division. Preventive maintenance is provided at
defined mileage intervals. Each maintenance shop has experience with all
maintenance and repair requirements for the Company's fleet, including air
conditioning and component maintenance. The Company has made reduction in bus
maintenance expense a corporate initiative for 1997. AHL intends to develop
national volume vendor accounts, reduce the number of mechanics, implement an
automated national maintenance and parts inventory system, and improve driver
and management training.

The Company maintains 83 offices in various metropolitan areas in the
United States and Europe. The Company's executive headquarters and corporate
operations are located in Atlanta, Georgia in leased facilities consisting of
approximately 3,700 and 15,200 square feet of office space, respectively. The
initial term of the executive headquarters lease expires in November 2001. In
February 1997, the Company acquired the corporate operations building from Mr.
Argenbright, along with its regional offices in Orlando and Memphis. See
"Management -- Compensation Committee Interlocks and Insider Participation." In
addition, the Company's regional offices each consist of between 150 and 6,350
square feet. The Company believes its facilities are adequate to meet its needs
for the foreseeable future.

LITIGATION

From time to time, the Company is involved in routine legal proceedings
incidental to the conduct of its business. In the opinion of management, the
litigation, individually or in the aggregate, to which the Company is currently
a party is not likely to have a material adverse effect on the Company's results
of operations or financial condition.

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MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

The Company's executive officers, directors and key employees are as
follows:

<TABLE>
<CAPTION>
EXECUTIVE OFFICERS AND DIRECTORS: AGE POSITION
--------------------------------- --- --------
<S> <C> <C>
Frank A. Argenbright, Jr. ......... 48 Chairman and Co-Chief Executive Officer
Edwin R. Mellett................... 58 Vice Chairman and Co-Chief Executive
Officer
David L. Gamsey.................... 39 Chief Financial Officer
Thomas J. Marano................... 46 President and Chief Operating Officer -
Argenbright Holdings Limited
A. Trevor Warburton................ 54 Managing Director - The ADI Group
Limited
Robert McCullough(1)............... 54 Director
Hamish Leslie Melville(1).......... 52 Director
KEY EMPLOYEES:
- ---------------
Henry F. Anthony................... 45 Vice President of Human Resources -
Argenbright Holdings Limited
Nicholas G. Bailey................. 46 Finance Director - The ADI Group Limited
L. Celeste Bottorff................ 43 Vice President of Marketing and
Strategic Planning - Argenbright
Holdings Limited
Nigel D.J. Cotton.................. 44 Human Resources Director - The ADI Group
Limited
Daniel E. DiGiusto................. 45 Senior Vice President of Field
Operations - Argenbright Holdings
Limited
</TABLE>

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

(1) To be added upon consummation of this offering.

Mr. Argenbright founded the Company in 1979 and has been its Chairman and
Chief Executive Officer since that time. Mr. Argenbright graduated from the
Owner/President Management Program at Harvard Business School in 1991.

Mr. Mellett has been Vice Chairman and Co-Chief Executive Officer of the
Company since December 1994 and served on the Company's Advisory Board during
1994. From 1993 to 1994, he was a consultant and private investor. From 1984 to
1992, Mr. Mellett was Senior Vice President of The Coca-Cola Company, serving
also as President of Coca-Cola Northern Europe from 1990 to 1992 and President
of Coca-Cola USA from 1986 to 1988. From 1972 to 1984, Mr. Mellett was President
of the Food Services Division of PepsiCo.

Mr. Gamsey has been Chief Financial Officer of the Company since September
1995. From 1988 to September 1995, Mr. Gamsey was a Managing Director of
Investment Banking of Price Waterhouse LLP. From 1987 to 1988, Mr. Gamsey was
Chief Financial Officer of Visiontech, Inc., and from 1979 to 1987, Mr. Gamsey
was a Senior Audit Manager for Arthur Andersen LLP. Mr. Gamsey is a certified
public accountant.

Mr. Marano has been President and Chief Operating Officer - Argenbright
Holdings Limited, the holding company for the Company's U.S. operations, since
July 1995. From 1990 to June 1995, Mr. Marano was Vice President and a Global
Customer Director for The Coca-Cola Company, and from 1986 to 1990, he was Vice
President of U.S. Sales, Fountain Division, of The Coca-Cola Company. From 1985
to 1986, Mr. Marano was Vice President of U.S. Sales of Apple Computer.

36
<PAGE> 40

Mr. Warburton has been Managing Director - The ADI Group Limited, the
holding company for the Company's European operations, since January 1993. From
1990 to 1992, Mr. Warburton was Senior Vice President of Ground Services for
Ogden Aviation Services. From 1989 to 1990, he was Operations Director for Ogden
Aviation Services at London-Gatwick. From 1987 to 1989, he was head of Ground
Operations for British Airways at London-Gatwick, and from 1961 to 1987, he held
a number of senior management positions with British Caledonian Airways.

Mr. McCullough will become a director of the Company upon the consummation
of this offering. Mr. McCullough has been Chief Financial Officer and member of
the Board of Directors of AMVESCO PLC (formerly INVESCO PLC) since April 1996.
He was a partner for Arthur Andersen LLP from 1974 until April 1996.

Mr. Melville will become a director of the Company upon the consummation of
this offering. Mr. Melville has been Chairman of Scottish Woodlands Limited
since 1992. He was Chairman of Dunedin Fund Managers Limited from 1992 to 1995,
Chairman and Chief Executive Officer of Capel Cure Myers Capital Management from
1988 to 1991 and Founder and Chief Executive of Enskilda Securities from 1982 to
1987. Mr. Melville is a director of Fleming Mercantile Investment Trust PLC,
Mithras Investment Trust PLC, Old Mutual South Africa Trust plc, Persimmon plc
and the Scottish Investment Trust PLC. He is also Chairman of the National Trust
for Scotland.

Mr. Anthony has been Vice President of Human Resources - Argenbright
Holdings Limited since January 1996. From 1993 to 1995, Mr. Anthony was Vice
President of Human Resources of National Linen Service. From 1989 to 1993, Mr.
Anthony was Vice President of Human Resources for BET Plant Services, Inc.

Mr. Bailey has been Finance Director - The ADI Group Limited since May
1995. From January 1994 to April 1995, he worked in Kazakhstan establishing the
financial operations for Tengizchevroil, a joint venture between the Government
of Kazakhstan and Chevron Petroleum. From 1992 to 1993, Mr. Bailey was an
independent consultant to the airline industry. Prior thereto, Mr. Bailey held a
number of positions in the airline industry. Mr. Bailey is a Chartered
Accountant.

Ms. Bottorff has been Vice President of Marketing and Strategic
Planning - Argenbright Holdings Limited since September 1996. From 1994 to 1996,
Ms. Bottorff was Marketing Director of The Atlanta Journal-Constitution. From
1990 to 1994, Ms. Bottorff was Director of Strategic Planning of Holiday Inn
Worldwide. From 1987 to 1990, she was Manager of Field Planning for The
Coca-Cola Company, and from 1983 to 1987, she was an Engagement Manager for
McKinsey & Co., Inc.

Mr. Cotton has been Human Resources Director - The ADI Group Limited since
August 1993. From 1989 to 1992, he was Head of Human Resources - United Kingdom
for Ericsson plc., and during 1988, he was a Personnel Manager with British
Airways. Prior thereto, he was employed by British Caledonian Airways.

Mr. DiGiusto has been Senior Vice President of Field
Operations - Argenbright Holdings Limited since 1989. From 1974 to 1989, Mr.
DiGiusto was employed by Burns International Security, most recently as its
Northeast Division Vice President.

Upon consummation of the offering, the Company will establish an Audit
Committee and Compensation Committee of the Board of Directors. A majority of
the members of the Audit and Compensation Committees will be independent
directors.

COMPENSATION OF DIRECTORS

To date, directors have not received compensation for their service as
directors. Following this offering, the Company intends to pay its independent
directors $10,000 annually plus $1,000 for each Board meeting attended and $500
for each committee meeting attended. In addition, directors will be reimbursed
for expenses incurred in connection with attendance at Board and committee
meetings. The Company intends to grant to each independent director options to
purchase 5,000

37
<PAGE> 41

shares of Common Stock at the initial offering price concurrently with the
consummation of this offering. See "--Employee Benefit Plans--Stock Option
Plan."

EMPLOYMENT AGREEMENTS

The Company has entered into employment agreements with Messrs. Mellett,
Marano and Gamsey. The agreement with Mr. Mellett expires on December 1, 2000,
and the agreements with Messrs. Marano and Gamsey expire on December 1, 2001
(the "Expiration Date"). Each agreement also may be terminated by the Company
with or without cause or upon the employee's death or inability to perform his
duties on account of a disability for a period of three months during any
consecutive twelve month period or by the employee. If any agreement is
terminated by the Company prior to the Expiration Date, except for cause or upon
the employee's death or disability, the Company must continue to pay the
employee's base salary and bonus for one year (six months with respect to Mr.
Gamsey) from the date of termination. The agreements provide for annual base
salaries of $200,000, $250,000 and $165,000 for Messrs. Mellett, Marano and
Gamsey, respectively, and for annual bonuses dependent upon the Company's
financial performance and achievement of personal objectives established for
each employee by the Board of Directors. Mr. Marano's salary will be increased
to $300,000 on July 1, 1997 or, if earlier, upon the achievement of a specified
revenue level by Argenbright. Each agreement also contains two-year
noncompetition and nonsolicitation provisions.

The Company also has an employment agreement with Mr. Warburton. The
agreement is indefinite in length but may be terminated (i) immediately by the
Company for cause, (ii) by the Company on December 31 of any year with or
without cause provided that the Company gives at least twelve months prior
written notice, (iii) automatically upon Mr. Warburton's sixtieth birthday or
(iv) by Mr. Warburton at any time provided that he gives at least six months
prior written notice. The agreement provides for an annual base salary of
$144,000 and for an annual bonus dependent upon the Company's financial
performance and achievement of personal objectives established for Mr. Warburton
by the Board of Directors. The agreement also contains one-year noncompetition
and nonsolicitation provisions.

Substantially all of the employees of ADI have also entered into employment
agreements. In addition, substantially all of the Company's officers and
managers sign a noncompetition agreement as a condition to their employment.

38
<PAGE> 42

EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth the aggregate
compensation earned by the Co-Chief Executive Officers and the other three
highest paid executive officers (collectively, the "Named Executive Officers")
for services rendered in all capacities to the Company during the fiscal year
ended December 31, 1996:

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION ------------
--------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
SALARY($) BONUS($) COMPENSATION($) OPTIONS(#) COMPENSATION($)
--------- --------- --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Frank A. Argenbright, Jr...... $600,000(1) $ -- $200,388(2) -- $12,000(3)
Chairman and Co-Chief
Executive Officer
Edwin R. Mellett.............. 160,577 100,000 -- 322,500 --
Vice-Chairman and Co-Chief
Executive Officer
Thomas J. Marano.............. 250,000 125,000 -- 268,750 --
President and Chief
Operating Officer --
Argenbright Holdings
Limited
David L. Gamsey............... 153,173 65,000 -- 107,500 --
Chief Financial Officer
A. Trevor Warburton........... 144,000 45,000 -- -- 27,176(4)
Managing Director --
The ADI Group
</TABLE>

- ---------------
(1) Effective January 1, 1997, Mr. Argenbright's annual salary was reduced to
$350,000.
(2) Includes approximately $55,000 relating to club dues and initiation fees.
Effective January 1, 1997, other annual compensation will be significantly
reduced as the Company has revised its expense reimbursement policies.
(3) Represents life insurance premiums paid by the Company.
(4) Represents medical and life insurance payments and contributions to Mr.
Warburton's pension plan.

OPTION GRANTS

The following table sets forth information regarding option grants during
fiscal 1996 to each of the Named Executive Officers:

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------
% OF TOTAL POTENTIAL REALIZABLE
OPTIONS VALUE AT ASSUMED ANNUAL
NUMBER OF GRANTED RATES OF STOCK PRICE
SECURITIES TO APPRECIATION FOR OPTION
UNDERLYING EMPLOYEES EXERCISE TERM
OPTIONS IN FISCAL PRICE EXPIRATION -----------------------
GRANTED(#)(1) 1996 ($/SH) DATE 5%($) 10%($)
------------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Frank A. Argenbright, -- -- -- -- -- --
Jr......................
Edwin R. Mellett.......... 107,500 15.4% $ 4.64 10/15/06 $ 313,693 $ 794,959
215,000 30.8 10.75(2) 12/01/06 1,453,533 3,683,537
Thomas J. Marano.......... 268,750 38.4 10.75(2) 12/01/06 1,816,916 4,604,422
David L. Gamsey........... 107,500 15.4 10.75(2) 12/01/06 726,766 1,841,769
A. Trevor Warburton....... -- -- -- -- -- --
</TABLE>

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

(1) Subsequent to December 31, 1996, the Company granted Messrs. Mellett, Marano
and Gamsey additional options to purchase 7,500, 6,250 and 2,500 shares of
Common Stock, respectively, with an exercise price of $10.75 per share.

39
<PAGE> 43

(2) The exercise price of these options was changed to $10.75 per share from
$11.76 per share on February 28, 1997.

The Company believes that the $4.64 per share exercise price of the first
option grant to Mr. Mellett approximated the fair market value of the Common
Stock at the October 15, 1996 grant date. Further, while the Company estimates
that the fair value of the Common Stock increased between the October 15 and
December 1 grant dates, the $10.75 per share exercise price of the remaining
option grants exceeds the estimated fair market value of the Common Stock at the
December 1, 1996 grant date, as there was no public market for the Company's
stock at that time. Events that contributed to the increase in the value of the
Common Stock between the dates of the grants included the award of new contracts
to the Company by certain major clients and commitments by these clients for
additional contract awards.

OPTION HOLDINGS

The following table sets forth certain information concerning the value of
unexercised options held by each of the Named Executive Officers as of December
31, 1996:

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT DECEMBER 31, 1996 AT DECEMBER 31, 1996(1)
---------------------------- ----------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Frank A. Argenbright, Jr................ -- -- -- --
Edwin R. Mellett........................ 161,250 161,250 $858,388 $201,563
Thomas J. Marano........................ 53,750 215,000 67,188 268,750
David L. Gamsey......................... 21,500 86,000 26,875 107,500
A. Trevor Warburton(2).................. -- -- -- --
</TABLE>

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

(1) Based on an assumed initial public offering price of $12.00 per share.

(2) Concurrently with the consummation of this offering, the Company intends to
grant to Mr. Warburton options to purchase Common Stock at the initial
public offering price.

EMPLOYEE BENEFIT PLANS

Stock Option Plan. The Company's stock option plan (the "Stock Option
Plan") provides for the award of incentive stock options to officers and
employees of the Company and non-qualified stock options to independent
directors of the Company. AHL has reserved 385,000 shares of Common Stock for
issuance under the Stock Option Plan and expects to issue to employees and
directors options to purchase 275,000 shares of Common Stock concurrently with
this offering. The Plan will be administered by the Compensation Committee of
the Board of Directors. The purchase price of Common Stock upon exercise of
incentive stock options must not be less than the fair market value of the
Common Stock on the date of grant or, in the case of incentive stock options
issued to holders of more than 10% or greater of the outstanding voting
securities of the Company, 110% of fair market value on the date of grant. The
maximum term of any incentive stock option is ten years, or five years in the
case of options granted to 10% or greater shareholders. The aggregate fair
market value on the date of the grant of the stock for which incentive stock
options are exercisable for the first time by an employee during any calendar
year may not exceed $100,000. Options are exercisable over a period of time in
accordance with the terms of option agreements entered into at the time of
grant. Options granted under the Stock Option Plan are generally nontransferable
by the optionee and, unless otherwise determined by the Committee, must be
exercised by the optionee during the period of the optionee's employment or
service with the Company.

Employee Stock Purchase Plan. Following consummation of this offering, the
Company intends to adopt an Employee Stock Purchase Plan, pursuant to which
employees will be able to purchase shares of Common Stock through a payroll
deduction program.

40
<PAGE> 44

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During fiscal year 1996, the Company did not have a compensation committee
of the Board of Directors. Executive officer compensation decisions were made by
Messrs. Argenbright and Mellett.

On February 1, 1997, pursuant to the Reorganization, Mr. Argenbright
contributed all of the outstanding shares of common stock of Argenbright and ADI
to the Company in exchange for 8,352,430 shares of Common Stock of the Company
and $5,000 in cash.

In March 1989, the Company borrowed $650,000 from Mr. Argenbright as
evidenced by a subordinated promissory note due January 12, 1999 at an interest
rate of 12% per annum. The Company used the proceeds of the loan for general
working capital purposes. The outstanding balance was approximately $528,000 at
December 31, 1996. The Company paid interest of $78,000, $78,000 and $75,000 for
the years ended December 31, 1994, 1995 and 1996, respectively. On February 1,
1997, Mr. Argenbright contributed this note to the Company as part of the
Reorganization, along with certain Company-occupied offices and facilities in
Atlanta, Orlando and Memphis and other assets. These properties were transferred
at their carrying values (which are less than their appraised values). In
connection with this transaction, the Company assumed the associated mortgage
debt of approximately $2.5 million, which is less than the appraised value. The
Company was a guarantor of certain of these mortgages.

Through the end of December 1996, the Company periodically made loans to
unrelated businesses which are solely owned by Mr. Argenbright in the aggregate
principal amount of $438,000. In addition, Mr. Argenbright has periodically
borrowed money from the Company which aggregated approximately $449,000. These
loans, which do not bear interest, were unsecured and are repayable on demand.
The Company has adopted a policy, effective upon the consummation of this
offering prohibiting loans (other than travel advances in the ordinary course of
business) to its executive officers, directors and principal shareholders unless
such loans first are approved by the Compensation Committee, which must
determine that such loans are in the best interests of the Company. Any loans
made will bear interest at a rate and be on such terms as determined by the
Compensation Committee to be fair to the Company. Mr. Argenbright intends to
repay all of such indebtedness within 30 days of the consummation of this
offering.

During fiscal years 1994, 1995 and 1996, the Company purchased uniforms for
approximately $1.3 million, $1.4 million and $1.8 million, respectively, from
ASAP Uniform Co., a company that is 20% owned by AHL. During the fiscal years
ended 1994, 1995 and 1996, the Company made rent payments of approximately
$461,000, $435,000 and $372,000, respectively, to Argenbright Office Park, a
company that is wholly-owned by Mr. Argenbright. The Company believes that the
terms of the lease were no less favorable than could be obtained from an
unaffiliated third party.

Amounts outstanding under the Credit Facility are personally guaranteed by
Mr. Argenbright. The Company expects this guarantee to be released following
consummation of the offering.

Any future transactions between the Company and its officers, directors or
principal shareholders will be approved by a majority of the disinterested
members of the Board of Directors.

CERTAIN TRANSACTIONS

See "Management -- Compensation Committee Interlocks and Insider
Participation" for a description of certain transactions between the Company and
its affiliates.

41
<PAGE> 45

PRINCIPAL AND SELLING SHAREHOLDERS

The following table sets forth information with respect to beneficial
ownership of the Common Stock as of the date of this Prospectus and as adjusted
for the sale of shares offered hereby by (i) each person who beneficially owns
more than 5% of the Common Stock; (ii) each of the Company's directors; (iii)
each Named Executive Officer and (iv) all executive officers and directors of
the Company as a group.

<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES OWNED
--------------------
NUMBER OF SHARES BEFORE AFTER
NAME AND ADDRESS BENEFICIALLY OWNED(1) OFFERING OFFERING
---------------- --------------------- -------- --------
<S> <C> <C> <C>
Frank A. Argenbright, Jr.(2).................... 8,353,430 100.0% 77.0%
Edwin R. Mellett(3)............................. 163,125 1.9 1.5
Thomas J. Marano(3)............................. 55,000 * *
David L. Gamsey(3).............................. 22,000 * *
A. Trevor Warburton............................. -- -- --
All directors and executive officers as a group
(7 persons)................................... 8,593,555 100.0 77.5
</TABLE>

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

* Less than 1.0%.
(1) Includes shares of Common Stock that may be acquired upon the exercise of
stock options exercisable within 60 days. Each person named above has sole
voting and dispositive power with respect to all shares listed opposite
such person's name, except as otherwise noted.

(2) Includes 522,090 shares beneficially owned by Argenbright Partners, L.P., of
which a limited liability company managed by Mr. Argenbright and his spouse
is the general partner. If the Underwriters exercise the over-allotment
option to purchase up to 375,000 shares from Mr. Argenbright in full, Mr.
Argenbright will beneficially own 7,978,430 shares of Common Stock, or
73.5% of the outstanding Common Stock of the Company. Mr. Argenbright's
address is c/o AHL Services, Inc., Atlanta Financial Center, 3353 Peachtree
Road, Northeast, Suite 1120, North Tower, Atlanta, Georgia 30026.

(3) Represents shares of Common Stock of the Company issuable pursuant to
currently exercisable options.

DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue 55,000,000 shares of capital stock
consisting of 50,000,000 shares of Common Stock, par value $.01 per share, and
5,000,000 shares of preferred stock, no par value. Immediately prior to the date
of this offering, 8,353,430 shares of Common Stock were outstanding, 715,000
shares of Common Stock were issuable pursuant to outstanding options to purchase
Common Stock granted to certain of the Company's Named Executive Officers and
146,185 shares of Common Stock were issuable pursuant to a redeemable warrant to
purchase Common Stock (which the Company intends to repurchase upon consummation
of this offering).

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on all matters
on which the holders of Common Stock are entitled to vote and do not have any
cumulative voting rights. Subject to the prior rights of any outstanding
preferred stock, each outstanding share of Common Stock is entitled to
participate equally in any distribution of net assets made to the shareholders
in liquidation of the Company and is entitled to participate equally in
dividends as and when declared by the Board of Directors. There are no
redemption, sinking fund, conversion, or preemptive rights with respect to

42
<PAGE> 46

the shares of Common Stock. All outstanding shares of Common Stock are fully
paid and non-assessable.

PREFERRED STOCK

The Board of Directors of the Company generally has the power to issue
shares of preferred stock without shareholder approval. The Board of Directors
is authorized to establish the rights, preferences and limitations of the
undesignated stock and to divide such shares into one or more classes, with or
without voting rights. The ability of the Board of Directors to issue additional
shares could impede or deter an unsolicited tender offer or takeover proposal
regarding the Company. Shares of undesignated stock could be issued with terms,
provisions and rights which would make more difficult and, therefore, less
likely, a takeover of the Company not approved by the Board of Directors. The
rights of the holders of the Common Stock could be adversely affected by the
future issuance of Preferred Stock. The Company has no current plans to issue
any Preferred Stock.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF ARTICLES OF INCORPORATION AND BYLAWS

The Company's Restated and Amended Articles of Incorporation and Bylaws
provide for a five member Board of Directors to be elected to staggered one, two
and three year terms and, thereafter, for successive three year terms. In
addition, directors may only be removed from office for cause upon a vote of 70%
of the Common Stock outstanding. The Articles of Incorporation and Bylaws also
provide that they may not be amended in certain respects except pursuant to the
vote of 70% of the Common Stock outstanding. These provisions of the Articles of
Incorporation and Bylaws could discourage potential acquisition proposals and
could delay or prevent a change in control of the Company.

GEORGIA ANTI-TAKEOVER STATUTES

The Georgia Business Combination Code restricts certain business
combinations with "interested shareholders" and contains fair price requirements
applicable to certain mergers with certain "interested shareholders" that are
summarized below. The restrictions imposed by these statutes will not apply to a
corporation unless it elects to be governed by these statutes. The Company has
elected to be covered by such restrictions.

The Georgia business combination statute regulates business combinations
such as mergers, consolidations, share exchanges and asset purchases where the
acquired business has at least 100 shareholders residing in Georgia and has its
principal office in Georgia, and where the acquiror became an "interested
shareholder" of the corporation, unless either (i) the transaction resulting in
such acquiror becoming an "interested shareholder" or the business combination
received the approval of the corporation's board of directors prior to the date
on which the acquiror became an "interested shareholder", or (ii) the acquiror
became the owner of at least 90% of the outstanding voting stock of the
corporation (excluding shares held by directors, officers and affiliates of the
corporation and shares held by certain other persons) in the same transaction in
which the acquiror became an "interested shareholder." For purposes of this
statute, an "interested shareholder" generally is any person who directly or
indirectly, alone or in concert with others, beneficially owns or controls 10%
or more of the voting power of the outstanding voting shares of the corporation.
The statute prohibits business combinations with an unapproved "interested
shareholder" for a period of five years after the date on which such person
became an "interested shareholder." The statute restricting business
combinations is broad in its scope and is designed to inhibit unfriendly
acquisitions.

The Georgia fair price statute prohibits certain business combinations
between a Georgia business corporation and an "interested shareholder" unless
(i) certain "fair price" criteria are satisfied, (ii) the business combination
is unanimously approved by the continuing directors, (iii) the business
combination is recommended by at least two-thirds of the continuing directors

43
<PAGE> 47

and approved by a majority of the votes entitled to be cast by holders of voting
shares, other than voting shares beneficially owned by the "interested
shareholder," or (iv) the interested shareholder has been such for at least
three years and has not increased his ownership position in such three-year
period by more than one percent in any twelve-month period. The fair price
statute is designed to inhibit unfriendly acquisitions that do not satisfy the
specified "fair price" requirements.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is First Union
Shareholder Services.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 10,853,430 shares
of Common Stock outstanding. Of these shares, the 2,500,000 shares sold in this
offering will be freely tradable without restriction or further registration
under the Securities Act, unless purchased by "affiliates" of the Company, as
defined under the Securities Act.

The remaining 8,353,430 shares of Common Stock are "restricted shares" and
are subject to restrictions under the Securities Act and lock-up agreements. Mr.
Argenbright, who beneficially owns all of the outstanding shares of Common
Stock, as well as all persons holding currently exercisable stock options, have
agreed not to sell, offer for sale, or otherwise dispose of any Common Stock for
a period of 180 days from the date of this prospectus without the prior written
consent of Alex. Brown & Sons Incorporated. Beginning 180 days after the date of
this Prospectus, all of these restricted shares will become available for sale
in the public market, subject to the volume and other limitations of Rule 144.

In general, under Rule 144 (as amended effective April 30, 1997), a person
(or person whose shares are aggregated) who has beneficially owned Restricted
Shares for at least one year, including a person who may be deemed an affiliate
of the Company, is entitled to sell within any three-month period a number of
shares of Common Stock that does not exceed the greater of 1% of the then-
outstanding shares of Common Stock (approximately 108,534 shares after giving
effect to this offering) or the average weekly trading volume of the Common
Stock on the Nasdaq Stock Market during the four calendar weeks preceding such
sale. Sale under Rule 144 are subject to certain restrictions relating to manner
of sale, notice and the availability of current public information about the
Company. A person who has not been an affiliate of the Company at any time
during the 90 days preceding a sale and who has beneficially owned shares for at
least two years would be entitled to sell such shares without regard to the
volume limitations, manner of sale provisions and other requirements of Rule
144.

Within 180 days from the consummation of the offering, the Company intends
to file one or more registration statements on Form S-8 under the Securities Act
to register all shares of Common Stock subject to outstanding options or future
grants under the Company's Stock Option Plan. These registration statements are
expected to become effective upon filing, and shares covered by these
registration statements will be eligible for sale after the lock-up agreements
with the Underwriters have expired.

Prior to this offering, there has been no public market for the Common
Stock and no prediction can be made of the effect that the sale or availability
for sale of shares of Common Stock will have on the market price of the Common
Stock. Nevertheless, sales of substantial amounts of such shares in the public
market, or the perception that such sales could occur, could adversely affect
the market price of the Common Stock and could impair the Company's future
ability to raise capital through an offering of its equity securities.

44
<PAGE> 48

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters"), through their representatives,
Alex. Brown & Sons Incorporated and The Robinson-Humphrey Company, Inc. (the
"Representatives"), have severally agreed to purchase from the Company the
following respective number of shares of Common Stock at the initial public
offering price less the underwriting discounts and commissions set forth on the
cover page of this Prospectus:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------ ---------
<S> <C>
Alex. Brown & Sons Incorporated.............................
The Robinson-Humphrey Company, Inc. ........................

---------
Total............................................. 2,500,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will purchase all of the shares of the Common Stock offered hereby
if any of such shares are purchased.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public at the initial public
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less a concession not in excess of $ per share.
The Underwriters may allow, and such dealers may reallow, a concession not in
excess of $ per share to certain other dealers. After commencement of
this offering, the offering price and other selling terms may be changed by the
Representatives.

The Selling Shareholder has granted to the Underwriters an option,
exercisable not later than 30 days after the date of this Prospectus, to
purchase up to 375,000 additional shares of Common Stock at the initial public
offering price less the underwriting discounts and commissions set forth on the
cover page of this Prospectus. To the extent that the Underwriters exercise such
option, each of the Underwriters will have a firm commitment to purchase
approximately the same percentage thereof that the number of shares of Common
Stock to be purchased by it shown in the above table bears to 2,500,000 and the
certain Selling Shareholder will be obligated, pursuant to the option, to sell
such shares to the Underwriters. The Underwriters may exercise such option only
to cover over-allotments made in connection with the sale of Common Stock
offered hereby. If purchased, the Underwriters will offer such additional shares
on the same terms as those on which the 2,500,000 shares are being offered.

The Underwriting Agreement contains covenants of indemnity and contribution
among the Underwriters, the Company and the Selling Shareholder regarding
certain liabilities, including liabilities under the Securities Act.

The Company has agreed not to sell or offer for sale any shares of Common
Stock or any options, rights or warrants with respect to any Common Stock for a
period of 180 days from the date of this Prospectus without the prior written
consent of Alex. Brown & Sons Incorporated. Mr. Argenbright, who beneficially
owns all of the outstanding shares of Common Stock, as well as all persons
holding

45
<PAGE> 49

currently exercisable stock options, have agreed not to sell, offer for sale or
otherwise dispose of any Common Stock for a period of 180 days from the date of
this Prospectus without the prior written consent of Alex. Brown & Sons
Incorporated.

The Representatives have advised the Company that the Underwriters do not
intend to confirm sales to any account over which they exercise discretionary
authority.

Prior to this offering, there has been no public market for the Common
Stock. Consequently, the initial public offering price for the Common Stock has
been determined by negotiations between the Company and the Representatives.
Among the factors considered in such negotiations were prevailing market
conditions, the results of operations of the Company in recent periods, the
market capitalizations and stages of development of other companies which the
Company and the Representatives believed to be comparable to the Company,
estimates of the business potential of the Company, the present state of the
Company's development and other factors deemed relevant by the Company and the
Representatives.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by King & Spalding, Atlanta, Georgia. Certain legal matters in
connection with this offering will be passed upon for the Underwriters by Piper
& Marbury L.L.P., Baltimore, Maryland.

EXPERTS

The financial statements included in this Prospectus and elsewhere in the
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission, (the
"Commission"), a Registration Statement on Form S-1 (together with all
Amendments, schedules and exhibits thereto, the "Registration Statement") under
the Securities Act with respect to the Common Stock offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock, reference is made to the Registration Statement. Statements contained in
this Prospectus as to the contents of any contract, agreement, or other document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract or other document filed as an exhibit to the
Registration Statement may be inspected without charge at the Commission's
principal offices in Washington, D.C., and copies of all or any part of the
Registration Statement, of which this Prospectus forms a part, each such
statement being qualified in all respects by such reference. The Registration
Statement may be inspected without charge at the public reference facilities
maintained by the Securities and Exchange Commission in Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and the following regional offices of the
Commission: 13th Floor, Seven World Trade Center, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission, Washington, D.C. at prescribed rates. The
Registration Statement may also be obtained through the Commission's Internet
address at "http://www.sec.gov".

46
<PAGE> 50

INDEX TO COMBINED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................... F-2
Combined Balance Sheets as of December 31, 1995 and 1996.... F-3
Combined Statements of Operations for the Years Ended
December 31, 1994,
1995 and 1996............................................. F-4
Combined Statements of Shareholder's Equity for the Years
Ended December 31, 1994, 1995 and 1996.................... F-5
Combined Statements of Cash Flows for the Years Ended
December 31, 1994,
1995 and 1996............................................. F-6
Notes to Combined Financial Statements...................... F-7
</TABLE>

F-1
<PAGE> 51

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To AHL Services:

We have audited the accompanying combined balance sheets of ARGENBRIGHT
HOLDINGS LIMITED (a Georgia corporation) AND THE ADI GROUP LIMITED (an English
corporation) (collectively "AHL SERVICES") as of December 31, 1995 and 1996 and
the related combined statements of operations, shareholder's equity, and cash
flows for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of AHL Services as of December
31, 1995 and 1996 and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 1996 in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP
Atlanta, Georgia

February 28, 1997

F-2
<PAGE> 52

AHL SERVICES

COMBINED BALANCE SHEETS

DECEMBER 31, 1995 AND 1996

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- PRO FORMA
1995 1996 DECEMBER 31, 1996
------- ------- -----------------
(IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash...................................................... $ 1,169 $ 1,842 $ 1,842
Restricted cash........................................... 2,287 0 0
Accounts receivable, less allowance for doubtful accounts
of $200 and $341 in 1995 and 1996, respectively ........ 27,452 34,692 34,692
Due from related parties.................................. 113 269 269
Uniforms in service, net.................................. 1,388 1,987 1,987
Prepaid expenses and other................................ 1,548 2,085 2,085
------- ------- -------
Total current assets............................... 33,957 40,875 40,875
------- ------- -------
PROPERTY AND EQUIPMENT, net of accumulated depreciation of
$6,846 and $8,308 in 1995 and 1996, respectively.......... 5,282 5,674 7,405
------- ------- -------
INTANGIBLES, net of accumulated amortization of $211 and
$497 in 1995 and 1996, respectively....................... 380 4,141 4,141
------- ------- -------
DEFERRED INCOME TAXES....................................... 595 708 708
------- ------- -------
OTHER ASSETS................................................ 473 555 555
------- ------- -------
$40,687 $51,953 $53,684
======= ======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable.......................................... $ 4,199 $ 4,667 $ 4,667
Accrued payroll and other liabilities..................... 11,260 15,413 15,413
Current portion of self-insurance reserves................ 440 640 640
Income taxes payable...................................... 3,580 1,018 1,018
Current portion of long-term debt......................... 1,089 1,617 1,617
Deferred income taxes..................................... 173 167 167
------- ------- -------
Total current liabilities.......................... 20,741 23,522 23,522
------- ------- -------
LONG-TERM DEBT, less current portion........................ 13,959 19,178 21,663
------- ------- -------
SELF-INSURANCE RESERVES, less current portion............... 1,760 2,560 2,560
------- ------- -------
DEFERRED INCOME TAXES....................................... 0 50 50
------- ------- -------
DEBT GUARANTEES, COMMITMENTS AND CONTINGENCIES (Notes 6, 7
and 10)
REDEEMABLE WARRANT.......................................... 0 706 706
------- ------- -------
NOTE PAYABLE TO SHAREHOLDER................................. 650 528 0
------- ------- -------
SHAREHOLDER'S EQUITY:
Common stock of Argenbright, $1 par value; 50,000 shares
authorized, 500 shares issued and outstanding in 1995
and 1996................................................ 1 1 0
Common stock of ADI, no par value; 5,000,000 shares
authorized, 296,868 shares issued and outstanding in
1995 and 1996........................................... 0 0 0
Pro forma preferred stock, no par value; 5,000,000 shares
authorized; no shares outstanding....................... 0 0 0
Pro forma common stock, $.01 par value; 50,000,000 shares
authorized; 8,353,430 shares issued and outstanding..... 0 0 84
Cumulative translation adjustment......................... 2 74 74
Retained earnings......................................... 3,869 5,952 5,643
Due from shareholder...................................... (295) (618) (618)
------- ------- -------
Shareholder's equity, net............................... 3,577 5,409 5,183
------- ------- -------
$40,687 $51,953 $53,684
======= ======= =======
</TABLE>

The accompanying notes are an integral part of these combined balance sheets.

F-3
<PAGE> 53

AHL SERVICES

COMBINED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------
1994 1995 1996
-------------------- ---------------------- ----------------------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C>
REVENUES................................................. $123,234 $168,601 $210,153
OPERATING EXPENSES:
Cost of services....................................... 91,873 124,491 155,926
Field operating........................................ 20,931 30,328 37,492
Corporate general and administrative................... 8,797 10,938 11,692
-------- -------- --------
Total operating expenses........................ 121,601 165,757 205,110
-------- -------- --------
OPERATING INCOME......................................... 1,633 2,844 5,043
INTEREST EXPENSE, net.................................... 904 1,309 1,726
OTHER (INCOME), net...................................... (26) (820) (301)
-------- -------- --------
INCOME BEFORE INCOME TAXES............................... 755 2,355 3,618
INCOME TAX PROVISION..................................... 627 917 1,447
-------- -------- --------
NET INCOME............................................... $ 128 $ 1,438 $ 2,171
======== ======== ========
PRO FORMA NET INCOME PER COMMON AND COMMON EQUIVALENT
SHARES................................................. $ 0.25
========
PRO FORMA WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT
SHARES................................................. 8,629
========
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-4
<PAGE> 54

AHL SERVICES

COMBINED STATEMENTS OF SHAREHOLDER'S EQUITY

YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
ARGENBRIGHT ADI
COMMON STOCK COMMON STOCK CUMULATIVE
--------------- ---------------- TRANSLATION RETAINED DUE FROM
SHARES AMOUNT SHARES AMOUNT ADJUSTMENT EARNINGS SHAREHOLDER TOTAL
------ ------ ------- ------ ----------- -------- ----------- ------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31,
1993...................... 500 $1 296,868 0 $ 17 $2,303 $(198) $2,123
Translation adjustment.... 0 0 0 0 1 0 0 1
Net income................ 0 0 0 0 0 128 0 128
--- -- ------- -- ---- ------ ----- ------
BALANCE, December 31,
1994...................... 500 1 296,868 0 18 2,431 (198) 2,252
(Increase) in due from
shareholder............. 0 0 0 0 0 0 (97) (97)
Translation adjustment.... 0 0 0 0 (16) 0 0 (16)
Net income................ 0 0 0 0 0 1,438 0 1,438
--- -- ------- -- ---- ------ ----- ------
BALANCE, December 31,
1995...................... 500 1 296,868 0 2 3,869 (295) 3,577
(Increase) in due from
shareholder............. 0 0 0 0 0 0 (323) (323)
Accretion of redeemable
warrant................. 0 0 0 0 0 (88) 0 (88)
Translation adjustment.... 0 0 0 0 72 0 0 72
Net income................ 0 0 0 0 0 2,171 0 2,171
--- -- ------- -- ---- ------ ----- ------
BALANCE, December 31,
1996...................... 500 $1 296,868 $0 $ 74 $5,952 $(618) $5,409
=== == ======= == ==== ====== ===== ======
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-5
<PAGE> 55

AHL SERVICES

COMBINED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1994 1995 1996
------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................................ $ 128 $ 1,438 $ 2,171
------- -------- ---------
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Depreciation and amortization........................... 2,060 3,897 4,158
Gain on sales of subsidiary............................. 0 (823) (325)
Loss on sales of assets................................. 6 0 133
Amortization of debt discount........................... 0 0 180
Minority interest in net income......................... (32) (26) 0
Changes in assets and liabilities, net of assets of
acquired businesses:
Accounts receivable, net.............................. (2,630) (12,511) (7,860)
Due from related parties.............................. (40) 305 (538)
Uniforms in service, net.............................. (1,006) (1,912) (2,575)
Prepaid expenses and other............................ (3,738) 1,343 3,304
Accounts payable...................................... 1,685 (343) 141
Accrued payroll and other liabilities................. 3,114 2,844 4,068
Self-insurance reserves............................... 773 1,427 1,000
Income taxes payable.................................. 118 1,769 (2,634)
Deferred income taxes................................. (306) (949) (42)
------- -------- ---------
Total adjustments................................... 4 (4,979) (990)
------- -------- ---------
Net cash provided by (used in) operating
activities....................................... 132 (3,541) 1,181
------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net.................. (1,254) (2,571) (1,974)
Proceeds from sale of property and equipment.............. 0 0 245
Proceeds from sale of subsidiary.......................... 0 975 325
Purchase of Intersec...................................... 0 0 (2,500)
Other activities, net..................................... 77 0 (102)
------- -------- ---------
Net cash (used in) investing activities............. (1,177) (1,596) (4,006)
------- -------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt............................... (1,550) (909) (1,609)
Repayments of line of credit.............................. (85,658) (115,617) (142,350)
Borrowings under line of credit........................... 88,623 107,938 144,094
Proceeds from refinancing of debt......................... 0 13,965 0
Proceeds from issuance of long-term debt.................. 0 0 4,000
(Increase) in due from shareholder........................ 0 (97) (323)
Repayment of note payable to shareholder.................. (200) 0 (122)
Payment of debt issuance costs............................ (149) (166) (340)
------- -------- ---------
Net cash provided by financing activities........... 1,066 5,114 3,350
------- -------- ---------
EFFECT OF EXCHANGE RATES ON CASH............................ 53 (18) 148
------- -------- ---------
NET CHANGE IN CASH.......................................... 74 (41) 673
CASH AT BEGINNING OF PERIOD................................. 1,136 1,210 1,169
------- -------- ---------
CASH AT END OF PERIOD....................................... $ 1,210 $ 1,169 $ 1,842
======= ======== =========
CASH PAID DURING THE PERIOD FOR:
Interest.................................................. $ 827 $ 1,381 $ 1,427
======= ======== =========
Income taxes.............................................. $ 791 $ 562 $ 2,538
======= ======== =========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Equipment purchases under capital lease obligations....... $ 413 $ 530 $ 546
======= ======== =========
Redeemable warrant issued in connection with Sirrom
Notes................................................... $ 0 $ 0 $ 618
======= ======== =========
Accretion of redeemable warrant........................... $ 0 $ 0 $ 88
======= ======== =========
Notes issued for Intersec acquisition..................... $ 0 $ 0 $ 1,155
======= ======== =========
</TABLE>

The accompanying notes are an integral part of these combined statements.

F-6
<PAGE> 56

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 1994, 1995 AND 1996

1. DESCRIPTION OF THE BUSINESS

The accompanying AHL Services financial statements represent the
combination of the consolidated financial statements of Argenbright Holdings
Limited ("Argenbright") and The ADI Group Limited and its predecessor entities
("ADI") (collectively, "AHL" or the "Company"). The Company provides
pre-departure screening, passenger profiling, commercial security, shuttle bus,
cargo handling and other services primarily throughout the United States, the
United Kingdom, France and Germany to various customers, including airlines,
governmental entities, corporations and other enterprises. Frank A. Argenbright,
Jr. (the "sole shareholder") beneficially owns all of the outstanding shares of
Common Stock of both Argenbright and ADI.

In the second quarter of 1997, the Company is planning an initial public
offering (the "Offering") of its Common Stock. In connection with the planned
Offering and effective February 1, 1997, Mr. Argenbright contributed all of the
outstanding shares of Common Stock of Argenbright and ADI to AHL. In addition to
the contribution of the shares of Argenbright and ADI to AHL, Mr. Argenbright
contributed certain real estate, a portion of which was previously rented by the
Company (with the Company assuming the related mortgage debt) and a note with a
balance of $528,000 as of December 31, 1996 payable by the Company to Mr.
Argenbright (collectively the "Reorganization"). All of these transactions were
brought forward at historical values. Effective with the Reorganization, the
capital structure of AHL consists of 50,000,000 shares authorized, 8,353,430
shares issued and outstanding of $.01 par value Common Stock and 5,000,000
shares authorized, 0 shares issued and outstanding of no par value preferred
stock. Pro forma shares outstanding and all other reference to pro forma shares
of Common Stock give effect to the revised capital structure.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF COMBINATION

The accompanying combined financial statements include the accounts of
Argenbright and its wholly-owned subsidiaries and ADI and its wholly-owned
subsidiaries. All significant intercompany accounts have been eliminated.

FISCAL YEAR-END

Argenbright maintains its books using a 52/53-week fiscal year ending on
the last Friday in December. Fiscal years 1994, 1995 and 1996 contain 52 weeks.
The end of Argenbright's 1996 fiscal year was December 27. ADI's fiscal year-end
is December 31. For purposes of the combined financial statements, the year-end
is stated as of December 31. The impact of the use of different year-ends is
immaterial.

PRESENTATION

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include highly liquid investments with original
purchase maturities of three months or less.

F-7
<PAGE> 57

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

RESTRICTED CASH

During 1995, the Company was required to maintain an insurance collateral
account. The cash, which was held in an interest-bearing trust account, was
restricted to offset any potential claims. In January 1996, the account was
closed, and the cash was returned to the Company and applied against the
outstanding line of credit. The collateral account was satisfied with letters of
credit.

UNIFORMS IN SERVICE

Uniforms in service are recorded at cost and are amortized over their
estimated useful life of 18 months.

START-UP COSTS

One-time, nonrecurring and incremental out-of-pocket expenditures directly
related to and incurred during the start-up phase of new major contracts,
typically 3 to 6 months, are deferred and amortized on a straight-line basis
over a period not to exceed 12 months. Amortization begins upon the conclusion
of the start-up period. There were no capitalized start-up costs at December 31,
1995 and 1996.

PROPERTY AND EQUIPMENT

Property and equipment are recorded at cost, less accumulated depreciation
and amortization. Depreciation and amortization are provided using the
straight-line method over estimated useful lives of 2 to 10 years for office
furniture and equipment and transportation equipment and 25 years for buildings.
Leasehold improvements are amortized over the lesser of their useful lives or
the lives of the related leases.

At December 31, 1995 and 1996, property and equipment was comprised of the
following items:

<TABLE>
<CAPTION>
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Buildings and leasehold improvements........................ $ 1,345 $ 1,493
Office furniture and equipment.............................. 5,313 6,223
Transportation equipment.................................... 5,470 6,266
------- -------
12,128 13,982
Less accumulated depreciation............................... 6,846 8,308
------- -------
$ 5,282 $ 5,674
======= =======
</TABLE>

OTHER INTANGIBLES

Goodwill and other intangibles are amortized using the straight-line method
over periods ranging up to 40 years. Amortization expense for goodwill and other
intangibles was $184,000, $153,000 and $236,000 for the years ended December 31,
1994, 1995 and 1996, respectively.

ACCOUNTS PAYABLE

Accounts payable include book overdrafts created by outstanding checks. At
December 31, 1995 and 1996, the book overdrafts totaled $1,564,000 and
$2,098,000, respectively.

F-8
<PAGE> 58

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

REVENUE RECOGNITION

The Company recognizes revenues as services are performed. At December 31,
1995 and 1996, the Company recorded $7,843,000 and $9,957,000, respectively, of
unbilled revenues, which is included in accounts receivable.

PRO FORMA NET INCOME PER SHARE

Pro forma net income per share is computed using the weighted average
number of shares of Common Stock and dilutive common stock equivalent shares
("CSEs") from stock options and warrants (using the treasury stock method).
Pursuant to the Securities and Exchange Commission Staff Accounting Bulletins,
common stock and CSEs issued at prices below the expected public offering price
during the 12-month period prior to the Company's planned Offering have been
included in the calculation as if they were outstanding for all periods prior to
the Offering, regardless of whether they are dilutive (using the treasury stock
method). Net income is not reduced by the $88,000 provision for accretion of the
redeemable warrant redemption value because the calculation assumes that the
related Common Stock was outstanding in lieu of the Redeemable Warrant (Notes 6
and 8). Supplementary pro forma net income per share (resulting from the
anticipated repayment of borrowings with a portion of the proceeds of the
Offering as if those transactions took place on January 1, 1996) is $0.36 for
the year ended December 31, 1996.

Historical net income per share has not been presented in view of the
change in the capital structure effective with the Reorganization.

LONG-LIVED ASSETS

In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of."
The Company's adoption of SFAS No. 121 in the first quarter of 1996 did not have
a material impact on the Company's financial statements.

FOREIGN CURRENCY TRANSLATION AND EXPOSURE

All asset and liability accounts of foreign subsidiaries are translated
into U.S. dollars at the rate of exchange in effect at the balance sheet date.
Shareholder's equity is translated at historical rates. All income statement
accounts of foreign subsidiaries are translated at average exchange rates during
the year. Resulting translation adjustments arising from these translations are
charged or credited directly to shareholder's equity. Gains or losses on foreign
currency transactions are included in income as incurred. The denomination of
foreign subsidiaries' account balances in their local currency exposes the
Company to certain foreign exchange rate risks. The Company addresses the
exposure by financing most working capital needs in the applicable foreign
currencies. The Company does not engage in other purchased hedging transactions
to reduce any remaining exposure to fluctuations in foreign currency exchange
rates. However, management does not believe the remaining risks to be
significant.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The book values of cash, trade accounts receivable and trade accounts
payable approximate their fair values principally because of the short-term
maturities of these instruments. The fair value of the Company's long-term debt
is estimated based on current rates offered to the Company for debt of similar
terms and maturities. Under this method, the Company's fair value of long-term
debt was not significantly different than the stated value at December 31, 1995
and 1996.

F-9
<PAGE> 59

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

SIGNIFICANT CUSTOMER CONCENTRATION

During the years ended December 31, 1994, 1995 and 1996, the following
clients individually accounted for more than 10% of the Company's revenues:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1995 1996
---- ---- ----
(PERCENT OF TOTAL
REVENUES)
<S> <C> <C> <C>
Customer A.................................................. 29.1% 23.6% 23.1%
Customer B.................................................. 16.6 15.7 12.6
Customer C.................................................. * 10.5 11.3
</TABLE>

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

* Accounted for less than 10% of total revenues for the period indicated.

In addition, a substantial portion of the Company's revenues is from
clients in the aviation industry. As of December 31, 1995 and 1996,
approximately 40.4% and 37.9%, respectively, of the Company's accounts
receivable were from three clients. The Company's policy does not require
significant collateral or other security to support such receivables.

3. SALE OF SUBSIDIARY

In October 1995, the Company sold substantially all of the assets of
Intergram, Inc., Argenbright's wholly-owned subsidiary which provided drug
testing, for $1,300,000, of which $975,000 was received in cash and the
remaining $325,000 was in the form of a note receivable. During fiscal 1995, the
cash portion of the sale resulted in a gain of $823,000, which is reflected in
the accompanying statements of operations as other income, net in 1995. The
balance of the gain reflected by the note receivable of $325,000 was recognized
during 1996 upon receipt of the proceeds.

4. ACQUISITION

In July 1996, the Company acquired Intersec, Inc. ("Intersec") for
$2,500,000 in cash and $1,155,000 in the form of notes payable. The transaction
was accounted for as a purchase. Intangibles of approximately $3,605,000 were
recognized in connection with the purchase, of which $250,000 was allocated to
purchased customer contracts and $75,000 to non-compete agreements that are
being amortized over 5 and 10 years, respectively, and which $3,280,000 was
allocated to goodwill that is being amortized over 40 years. The combined
financial statements include the operating results of Intersec from the date of
acquisition.

The Company's unaudited pro forma results of operations are presented
assuming that the Intersec acquisition had been consummated January 1 of each
year presented and are not necessarily indicative of the results of operations
which would have actually been obtained for the years ended December 31, 1995
and 1996:

<TABLE>
<CAPTION>
1995 1996
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Pro forma revenue........................................... $178,361 $216,540
======== ========
Pro forma net income........................................ 1,067 $ 2,131
======== ========
Pro forma earnings per share................................ $ 0.25
========
</TABLE>

Pro forma adjustments were recorded to include (i) increased net interest
expense to reflect interest expense on long-term debt that would have been
incurred to finance the purchase,

F-10
<PAGE> 60

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

(ii) increased depreciation and amortization expense as a result of the excess
of the purchase price over the book value, and (iii) provision for income taxes
for net income of the acquired company and for pro forma adjustments. No pro
forma adjustments have been made for rent and owners compensation, which were
eliminated upon purchase.

5. INCOME TAXES

The income tax provision (benefit) consists of the following as of December
31, 1994, 1995 and 1996:

<TABLE>
<CAPTION>
1994 1995 1996
---- ----- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal................................................... $265 $ 861 $ 517
State..................................................... 165 153 76
Foreign................................................... 181 852 785
---- ----- ------
611 1,866 1,378
---- ----- ------
Deferred:
United States............................................. (50) (630) 39
Foreign................................................... 66 (319) 30
---- ----- ------
16 (949) 69
---- ----- ------
Total............................................. $627 $ 917 $1,447
==== ===== ======
</TABLE>

The reconciliation of the federal statutory rate to the Company's effective
tax provision is as follows:

<TABLE>
<CAPTION>
1994 1995 1996
----- ---- ----
<S> <C> <C> <C>
Statutory federal tax rate.................................. 34.0% 34.0% 34.0%
State income taxes, net of federal benefit.................. 8.6 2.5 2.0
Effect of foreign losses and foreign taxes greater than U.S.
statutory federal rate.................................... 22.8 0.0 2.2
Other....................................................... 17.6 2.4 1.8
----- ---- ----
Total............................................. 83.0% 38.9% 40.0%
===== ==== ====
</TABLE>

F-11
<PAGE> 61

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Deferred income taxes reflect the tax consequences on future years of
differences between the tax bases of assets and liabilities and their financial
reporting amounts. The tax effect of significant temporary differences
representing deferred tax assets and liabilities is as follows as of December
31, 1995 and 1996:

<TABLE>
<CAPTION>
1995 1996
------- ------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts........................... $ 80 $ 115
Targeted jobs tax credit.................................. 141 0
Self-insurance reserves................................... 880 1,229
Accruals.................................................. 0 339
Other..................................................... 0 61
------- ------
1,101 1,744
------- ------
Deferred tax liabilities:
Tax depreciation in excess of book........................ (85) (351)
Prepaid expenses currently deductible..................... (429) (882)
Other..................................................... (165) (20)
------- ------
(679) (1,253)
------- ------
Net deferred tax asset............................ $ 422 $ 491
======= ======
</TABLE>

6. LONG-TERM DEBT

At December 31, 1995 and 1996, long-term debt consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1996
------- -------
(IN THOUSANDS)
<S> <C> <C>
Revolving lines of credit, interest at prime (8.25% at
December 31, 1996) with a LIBOR option at LIBOR plus 2.5%
(8.25% at December 31, 1996), due in full in December
1998...................................................... $12,166 $14,088
Term note, interest at prime plus .75% (9.0% at December 31,
1996) with a LIBOR option at LIBOR plus 3.0% (8.75% at
December 31, 1996), payable in 36 equal monthly
installments through December 1998........................ 1,500 542
Subordinated notes payable to Sirrom Capital Corporation
("Sirrom" or "Sirrom Notes"), interest at 13.5%, principal
of $3,500,000 due July 9, 2001, secured by a second
security interest in substantially all of the assets of
Argenbright............................................... 0 3,130
Subordinated notes payable to former owners of Intersec,
interest at 9%, payable in varying installments through
April 1998................................................ 0 1,155
Transportation and other equipment notes payable, interest
ranging from 7% to 15%, payable monthly through 2001,
secured by related equipment.............................. 1,357 1,780
Other....................................................... 25 100
------- -------
15,048 20,795
Less current portion........................................ 1,089 1,617
------- -------
$13,959 $19,178
======= =======
</TABLE>

F-12
<PAGE> 62

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Future aggregate annual maturities of long-term debt are as follows as of
December 31, 1996:

<TABLE>
<CAPTION>
(IN THOUSANDS)
<S> <C>
1997........................................................ $ 1,617
1998........................................................ 15,197
1999........................................................ 256
2000........................................................ 188
2001........................................................ 3,308
Thereafter.................................................. 229
-------
$20,795
=======
</TABLE>

In December 1995, the Company refinanced its revolving line of credit
("revolver"), raising the availability to $25,000,000, of which $20,000,000 is
denominated in U.S. dollars and $5,000,000 is denominated in either U.S. dollars
or pounds sterling, at the Company's option. Borrowings are based on a
percentage of accounts receivable, less amounts outstanding under letters of
credit. At December 31, 1996, $14,088,000 was outstanding and $7,527,000 was
available under the revolver. In January 1996, $3,320,000 of the availability
was utilized via the issuance of letters of credit in connection with the
Company's insurance program. Concurrent with the issuance of the letters of
credit, restricted cash of $2,287,000 was returned to the Company and applied
against the revolver. Any unpaid balance on the revolver is due upon expiration
of the agreement in December 1998. The revolver is secured by substantially all
of the Company's assets. In addition, the revolver is subject to certain
restrictive covenants, including maintaining minimum tangible net worth and a
specified debt-to-net worth ratio, and is personally guaranteed by the Company's
chairman and sole shareholder. In connection with the refinancing, the Company
entered into a term note agreement with financial covenants and other
restrictions similar to the revolver.

The Sirrom Notes were issued in July 1996 for $3,500,000. As discussed in
Note 8, a warrant ("Redeemable Warrant") to purchase 3.5% of Argenbright's
common shares for an exercise price of $18.00 was issued with the notes (before
adjustment associated with the Reorganization). The value of this warrant at
issuance was determined to be $618,000 based on the relative fair value of the
warrant to the notes. A corresponding amount of the proceeds that has been
allocated to the warrant, net of deferred tax effects, has been accounted for as
a debt discount and is being amortized over the expected life of the related
notes using the effective interest method. At December 31, 1996, the unamortized
debt discount amounted to $370,000.

Under the terms of a contract with a major airline customer, the customer
will buy all buses used by the Company to serve the customer if the customer
terminates the contract prior to the expiration date, which has been extended
through 1997. The purchase price paid by the customer for each bus would be
equal to the remaining balance owed by the Company on debt secured by the bus or
$500, whichever is greater. The related debt balance at December 31, 1995 and
1996 totaled $239,000 and $92,000, respectively, and is included in
transportation equipment notes payable.

See Note 7 regarding the Company's guarantee of outstanding debt of the
Company's chairman and sole shareholder.

7. RELATED PARTY TRANSACTIONS

The note payable to shareholder at December 31, 1995 and 1996 consists of a
$650,000 and $528,000, respectively subordinated note payable to the Company's
chairman and sole shareholder, due in full on March 23, 1999, including interest
at 12%. The Company incurred interest expense of $78,000 and $75,000 in 1995 and
1996 related to the aforementioned note.

F-13
<PAGE> 63

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

In addition to the note payable discussed above, the Company has other
transactions with the Company's chairman and sole shareholder and other
companies related by common ownership, including Argenbright Investments, Inc.,
Argenbright Leasing, Inc., and other affiliates. Significant related-party
transactions during 1994, 1995 and 1996 are as follows:

- Unsecured, noninterest-bearing advances were made to the Company's
chairman and sole shareholder totaling $295,000 and $449,000 at December
31, 1995 and 1996, respectively, which are included in due from
shareholder, a component of shareholder's equity, in the accompanying
balance sheets. Additionally, the Company's assets, as of December 31,
1996, included $77,000 of deposits paid on behalf of the sole shareholder.

- Unsecured, non-interest bearing advances were made to the sole
shareholder in connection with certain real estate holdings totaling
$169,000 at December 31, 1996. Effective February 1, 1997 the underlying
real estate was contributed to the Company (Note 12) and the amounts owed
became a liability of the sole shareholder. The amounts are included in
due from shareholder in the accompanying balance sheets.

- Unsecured, noninterest-bearing advances were made to an affiliate
totaling $105,000 and $269,000 at December 31, 1995 and 1996 and are
included in due from related parties in the accompanying balance sheets.

- Certain real estate is leased from the Company's chairman and sole
shareholder under informal agreements. Actual rental expense related to
these agreements was $461,000, $435,000 and $372,000 for the years ended
December 31, 1994, 1995, and 1996, respectively.

- The Company has an unsecured promissory note from Argenbright
Investments, Inc. with a balance of $8,000 and $0 as of December 31, 1995
and 1996, respectively, bearing interest at a rate of 10.5% per annum.

- The Company's chairman and sole shareholder has personally guaranteed the
revolver, the term note and the Sirrom Notes, as described in Note 6. The
Company has guaranteed the outstanding mortgage payable of $2,140,000 as
of December 31, 1996 for certain real estate leased by the Company from
the Company's chairman and sole shareholder. The real estate and related
mortgage notes were contributed to the Company in connection with the
Reorganization.

- During fiscal 1996, the Company bought a 20% and a 49% interest in ASAP
Uniform Company, Inc. ("ASAP") and Premium Services Management, Inc.
("PSM"), respectively. Both investments are accounted for using the equity
method of accounting and had an immaterial effect on the current year
financial statements. The Company made payments of $1,829,000 and $48,000
to ASAP and PSM, respectively, for uniforms and services performed.

8. REDEEMABLE WARRANT

In connection with issuance of the Sirrom Notes (Note 6), the Company
issued a Redeemable Warrant to purchase 3.5% of Argenbright's common shares
(146,185 pro forma shares of AHL at December 31, 1996, as adjusted for the
Reorganization), for an exercise price of $18.00. In the event that the notes
remain outstanding on December 31, 1997, Sirrom receives an additional warrant
to purchase 1% of Argenbright's shares. Beginning July 30, 1998, warrants to
purchase additional shares accrue at 1% per year until prepayment or maturity of
the notes. The Company has the right to repurchase the warrant through December
31, 1997 for a purchase price of $750,000.

Sirrom also has the option to require the Company to redeem the warrant
beginning in 2001 for fair value, as defined. The excess of the redemption value
over the carrying value is being accrued by

F-14
<PAGE> 64

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

periodic charges to retained earnings over the redemption period. This accretion
amounted to $88,000 for the year ended December 31, 1996.

9. STOCK BASED COMPENSATION

In October 1996, the Company issued nonqualified stock options to purchase
107,500 common shares at $4.64 per share. The options became exercisable upon
grant.

In December 1996, the Company issued nonqualified stock options to purchase
591,250 common shares at $11.76 per share. The options become exercisable in
varying percentages over four years.

The options above were granted at exercise prices which were not less than
estimated fair value of the Common Stock at the dates of grant as determined by
the Board of Directors. While the Company estimates that the fair value of the
common stock increased between the October and December grant dates, the Company
believes that the $11.76 per share exercise price exceeds the estimated fair
value of the Common Stock at December 1, 1996, as there was no public market for
the Company's stock at that time. Events that contributed to the increase in the
value of the common stock between the dates of the grants included the award of
new contracts to the Company by certain major clients and commitments by these
clients for additional contract awards.

The Company had 698,750 total options outstanding and 237,000 exercisable
at December 31, 1996 with a weighted-average exercise price of $10.66 and $5.85,
respectively.

The Company accounts for these stock option grants under Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees,"
under which no compensation cost has been recognized. Had compensation cost for
these plans been determined consistent with the SFAS No. 123, "Accounting for
Stock-Based Compensation," the Company's net income and earnings per share would
have been reduced to the following pro forma amounts:

<TABLE>
<CAPTION>
1996
----------
<S> <C>
Net income:
As reported............................................... $2,171,000
Pro forma................................................. $1,701,000
Primary EPS:
As reported............................................... $ 0.25
Pro forma................................................. $ 0.20
</TABLE>

The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following assumptions used for
the October and December grants, respectively: risk-free interest rates of 5.95%
and 5.80%; no expected dividends; expected lives of 2 and 4.5 years, and
expected volatility of 37%.

See Note 12 for a discussion of option activity subsequent to December 31,
1996.

10. COMMITMENTS AND CONTINGENCIES

LEASES

The Company leases office space, transportation equipment and office
equipment from unrelated parties under lease agreements expiring through
December 1999. Rental expense under these operating leases was $3,071,000,
$4,390,000 and $6,297,000 in 1994, 1995 and 1996, respectively.

F-15
<PAGE> 65

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

Future minimum lease payments for noncancelable leases, including leases
with the Company's chairman and sole shareholder discussed in Note 7, were as
follows at December 31, 1996:

<TABLE>
<CAPTION>
YEAR ENDING: (IN THOUSANDS)
<S> <C>
1997...................................................... $4,801
1998...................................................... 2,396
1999...................................................... 1,674
2000...................................................... 1,211
2001...................................................... 826
</TABLE>

PERFORMANCE BONDS

At December 31, 1996, the Company has outstanding performance bonds of
$4,502,000.

INSURANCE

In 1994, Argenbright began participating in partially self-insured,
large-deductible workers' compensation, auto and health insurance plans.
Argenbright's exposure is limited per occurrence ($250,000 for workers'
compensation and auto liability claims) and in the aggregate. Reserves are
estimated for both reported and unreported claims. Revisions to estimated
reserves are recorded in the periods in which they become known. Estimated
self-insurance reserves as of December 31, 1995 and 1996 totaling $2,200,000 and
$3,200,000, respectively, represent management's best estimate. While there can
be no assurance that actual future claims will not exceed the amount of the
Company's reserves, in the opinion of the Company's management, any future
adjustments to estimated reserves included in the accompanying balance sheets
will not have a material impact on the financial statements.

The Company is exposed to liability for the acts or negligence of its
employees while on assignment that cause personal injury or damages, as well as
claims of misuse of client proprietary information or theft of client property.
As a provider of security services, the Company faces potential liability claims
in the event of any terrorist attempt or other criminal activity which occurs on
any airline or premises subject to the Company's security services. The Company
has policies, guidelines and insurance to reduce its exposure to these risks.

EMPLOYMENT AGREEMENTS

In December 1996, the Company entered into employment agreements with three
officers which expire through December 1, 2001. If any agreement is terminated
by the Company prior to the expiration date, except for cause or upon the
employee's death or disability, the Company must continue to pay the employee's
base salary and bonus for up to one year. The agreements provide for annual-base
salaries of up to $300,000 per officer and bonuses up to 50% of salaries.

DEFERRED COMPENSATION

In September 1996, Argenbright entered into a non-qualified deferred
compensation arrangement with certain eligible employees by which they could
elect to defer a specified portion of their compensation. The participant may
choose among several investment options, but returns are not guaranteed. As of
December 31, 1996, the Company has an obligation of $10,000 under the plan.

BENEFIT PLAN

In April 1996, Argenbright began a 401(k) plan covering salaried employees,
excluding highly compensated employees, who were employed as of such date.
Employees who were not employed

F-16
<PAGE> 66

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

as of April 1, 1996 must complete one year of service to become eligible.
Participants may contribute up to 15% of their compensation to the plan. The
Company has the discretion to match these contributions. As of December 31,
1996, no company contributions have been made to the plan.

LITIGATION

The Company is involved in various routine litigation arising in the
ordinary course of business. Management is of the opinion that the resolution of
these matters will not have a material effect on the combined results of
operations or financial condition of the Company.

11. OPERATIONS BY GEOGRAPHICAL AREA

The following table presents information regarding the Company's different
geographical regions based on the historical operations of the Company as of
December 31, 1994, 1995 and 1996:

<TABLE>
<CAPTION>
DOLLARS
------------------------------
1994 1995 1996
-------- -------- --------
<S> <C> <C> <C>
Revenue:
United States..................................... $ 81,256 $107,388 $140,295
United Kingdom.................................... 26,313 41,013 47,028
Germany........................................... 13,767 15,638 17,617
Other European.................................... 1,898 4,562 5,213
-------- -------- --------
$123,234 $168,601 $210,153
======== ======== ========
Operating income:
United States..................................... $ 1,316 $ 1,208 $ 2,639
United Kingdom.................................... 686 1,809 2,182
Germany........................................... (127) 312 319
Other European.................................... (242) (485) (97)
-------- -------- --------
$ 1,633 $ 2,844 $ 5,043
======== ======== ========
Capital expenditures:
United States..................................... $ 683 $ 1,143 $ 1,556
United Kingdom.................................... 571 1,351 357
Germany........................................... -- 66 47
Other European.................................... -- 11 14
-------- -------- --------
$ 1,254 $ 2,571 $ 1,974
======== ======== ========
Identifiable assets:
United States..................................... $ 18,232 $ 27,681 $ 36,740
United Kingdom.................................... 7,230 8,994 10,487
Germany........................................... 2,905 2,792 3,715
Other European.................................... 727 1,220 1,011
-------- -------- --------
$ 29,094 $ 40,687 $ 51,953
======== ======== ========
</TABLE>

12. SUBSEQUENT EVENTS (UNAUDITED)

INITIAL PUBLIC OFFERING

In the second quarter of 1997, the Company is planning an initial public
offering of its Common Stock. The Company plans to issue 2,500,000 shares at an
estimated initial public offering price of

F-17
<PAGE> 67

AHL SERVICES

NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)

$11.00 to $13.00 per share. There can be, however, no assurance that the
Offering will be completed at a per share price within the estimated range, or
at all.

STOCK OPTIONS

Prior to the planned Offering, the Company will adopt a stock incentive
plan (the "Plan"), under which the Company may grant 385,000 incentive or
nonqualified common stock options to directors and full-time employees. Options
will be granted at an exercise price which is not less than fair market value as
estimated by the Board of Directors and will become exercisable as determined by
the Board of Directors, generally 4 to 5 years. Options granted under the Plan
will expire 10 years from the date of grant.

REORGANIZATION

Effective February 1, 1997, the Company's chairman and sole shareholder
contributed all of the outstanding shares of Common Stock of Argenbright and ADI
to AHL. In addition, the sole shareholder contributed certain real estate and
other properties, with a net carrying value of $1,731,000 as of December 31,
1996, and the related mortgage notes payable, with an outstanding balance of
$2,485,000 as of December 31, 1996, to the Company. Simultaneously, the
Company's chairman and sole shareholder contributed the note payable to
shareholder, which had a balance of $528,000 as of December 31, 1996. The net
result of these transactions will be a reduction of shareholders' equity of
approximately $226,000. Effective with the Reorganization, the capital structure
of AHL consists of 50,000,000 shares authorized, 8,353,430 shares issued and
outstanding of $.01 par value Common Stock and 5,000,000 shares authorized, 0
shares issued and outstanding of no par value preferred stock.

PRO FORMA BALANCE SHEET

The pro forma balance sheet at December 31, 1996 gives effect to the
Reorganization.

EMPLOYEE STOCK PURCHASE PLAN

Subsequent to the planned Offering, the Company intends to adopt an
employee stock purchase plan.

EMPLOYMENT AGREEMENTS

Effective February 28, 1997, the Company amended its employment agreements
with three officers. The amendment provides for 16,250 additional options to
purchase shares of Common Stock at $10.75 per share exercisable in varying
percentages over four years. The amendment also reduces the exercise price of
the December 1996 option grants (Note 9) from $11.76 per share to $10.75 per
share. Both the additional option grants and the amended option grants are
exercisable at prices which are not less than the fair value of the stock at the
date of amendment, as determined by the Board of Directors.

F-18
<PAGE> 68
APPENDIX II

CAPTIONS FOR PICTURES ON INSIDE BACK COVER

PICTURE A:

"AHL EMPLOYEES MONITOR ACTIVITY AT LONDON'S HEATHROW AIRPORT FROM A
CENTRAL CONTROL ROOM."

PICTURE B:

"AHL IS A LEADING PROVIDER OF PASSENGER "PROFILING" SERVICES IN EUROPE,
WHICH INCLUDES PRE-DEPARTURE INTERVIEWS."

PICTURE C:

"AN AHL EMPLOYEE UTILIZES THE LATEST EQUIPMENT TO SCREEN BAGS AT
WASHINGTON DULLES AIRPORT."

PICTURE D:

"AHL OPERATES SHUTTLE BUS SERVICES PRIMARILY FOR CORPORATIONS AND
UNIVERSITIES."

PICTURE E:

"AHL PROVIDES CARGO HANDLING SERVICES FOR DELTA AIR LINES AT CHICAGO
O'HARE, ONE OF MANY AIRPORTS WHERE AHL PROVIDES CARGO SERVICES."

PICTURE F:

"WHEELCHAIR AND SKY CAP SERVICES ARE AMONG THE MULTIPLE PASSENGER
SERVICES PERFORMED BY AHL FOR UNITED AIRLINES AND OTHER MAJOR AIRLINE
CUSTOMERS."

PICTURE G:

"AHL PROVIDES ACCESS CONTROL AND FACILITY SECURITY SERVICES FOR MANY
FORTUNE 1000 CLIENTS, INCLUDING NIKE'S DISTRIBUTION FACILITY IN
MEMPHIS."
<PAGE> 69

======================================================

NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN
ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 6
Use of Proceeds....................... 12
Dividend Policy....................... 12
Dilution.............................. 13
Capitalization........................ 14
Selected Combined Financial and
Operating Data...................... 15
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 16
Business.............................. 23
Management............................ 36
Certain Transactions.................. 41
Principal and Selling Shareholders.... 42
Description of Capital Stock.......... 42
Shares Eligible for Future Sale....... 44
Underwriting.......................... 45
Legal Matters......................... 46
Experts............................... 46
Additional Information................ 46
Index to Combined Financial
Statements.......................... F-1
</TABLE>

------------------
UNTIL , 1997, ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK
OFFERED HEREBY, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

======================================================
======================================================

2,500,000 SHARES

AHL SERVICES, INC.

COMMON STOCK
LOGO
-----------------------

PROSPECTUS
-----------------------
ALEX. BROWN & SONS
INCORPORATED

THE ROBINSON-HUMPHREY
COMPANY, INC.

, 1997
======================================================
<PAGE> 70

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered hereunder. Except
for the SEC registration fee and NASD filing fee, all amounts are estimates.

<TABLE>
<S> <C>
SEC registration fee........................................ $ 11,326
--------
NASD filing fee............................................. 4,252
--------
Nasdaq National Market Listing Fee.......................... 45,000
--------
Accounting fees and expenses................................ 225,000
--------
Legal fees and expenses..................................... 225,000
--------
Blue Sky fees and expenses (including counsel fees)......... 10,000
--------
Printing and Engraving expenses............................. 75,000
--------
Transfer Agent and Registrar fees and expenses.............. 10,000
--------
Miscellaneous Expenses...................................... 94,422
--------
Total............................................. $700,000
========
</TABLE>

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

* To be provided by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Georgia Business Corporation Code permits a corporation to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of duty of care or other duty as a
director, provided that no provision shall eliminate or limit the liability of a
director: (A) for any appropriation, in violation of his duties, of any business
opportunity of the corporation; (B) for acts or omissions which involve
intentional misconduct or a knowing violation of law; (C) for unlawful corporate
distributions; or (D) for any transaction from which the director received an
improper personal benefit. This provision pertains only to breaches of duty by
directors in their capacity as directors (and not in any other corporate
capacity, such as officers) and limits liability only for breaches of fiduciary
duties under Georgia corporate law (and not for violation of other laws, such as
the Federal securities laws). The Company's Restated and Amended Articles of
Incorporation (the "Restated Articles") exonerate the Company's directors from
monetary liability to the extent permitted by this statutory provision.

The Company's Bylaws (the "Bylaws") also provide that the Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including any action by or in
the right of the Company), by reason of the fact that such person is or was a
director or officer of the Company, or is or was serving at the request of the
Company as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including reasonable
attorneys' fees), judgments, fines, and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the Company
(and with respect to any criminal action or proceeding, if such person had no
reasonable cause to believe such person's conduct was unlawful), to the maximum
extent permitted by, and in the manner provided by, the Georgia Business
Corporation Code. In addition, the Bylaws provide that the Company will advance
to its directors or officers reasonable expenses of any such proceeding.

II-1
<PAGE> 71

Notwithstanding any provision of the Company's Restated Articles and Bylaws
to the contrary, the Georgia Business Corporation Code provides that the Company
shall not indemnify a director or officer for any liability incurred in a
proceeding in which the director is adjudged liable to the Company or is
subjected to injunctive relief in favor of the Company: (1) for any
appropriation, in violation of his duties, of any business opportunity of the
Company; (2) for acts or omissions which involve intentional misconduct or a
knowing violation of law; (3) for unlawful corporate distributions; (4) for any
transaction from which the director or officer received an improper personal
benefit.

Section 8 of the Underwriting Agreement filed as Exhibit 1.1 hereto also
contains certain provisions pursuant to which certain officers, directors and
controlling persons of the Company may be entitled to be indemnified by the
underwriters named therein.

The Company has purchased insurance with respect to, among other things,
any liabilities that may accrue under the statutory provisions referred to
above.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On January 31, 1997, the Company issued 999 shares of common stock to Mr.
Argenbright in connection with the Company's formation. This issuance was exempt
from registration pursuant to Section 4(2) of the Securities Act of 1933 (the
"Securities Act").

On February 1, 1997, the Company issued one share of common stock to Mr.
Argenbright in connection with the Reorganization. This issuance was exempt from
registration pursuant to Section 4(2) of the Securities Act.

On February 1, 1997, the Company issued 8,352,430 shares of common stock to
Mr. Argenbright and his affiliates in exchange for all of the outstanding shares
of Argenbright and ADI. This issuance was exempt from registration pursuant to
Section 4(2) of the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER NUMBER DESCRIPTION
- ------- ------------------
<S> <C> <C>
1.1 ** -- Form of Underwriting Agreement
3.1 ** -- Restated and Amended Articles of Incorporation of the
Company
3.2 ** -- Bylaws of the Company
4.1 -- Specimen Common Stock Certificate
4.2 -- 1997 Stock Incentive Plan
5.1 -- Opinion of King and Spalding as to the legality of the
Common Stock being registered
10.1 -- Restated Employment Agreement between the Company and Edwin
R. Mellett dated as of February 1, 1997, as amended on
February 28, 1997
10.2 -- Restated Employment Agreement between the Company and Thomas
J. Marano dated as of February 1, 1997, as amended on
February 28, 1997
10.3 -- Restated Employment Agreement between the Company and David
L. Gamsey dated as of February 1, 1997, as amended on
February 28, 1997
10.4 -- Director's Service Agreement between The ADI Group Limited
and Alan Trevor Warburton dated as of January 1, 1993
10.5 -- Loan and Security Agreement by and among the First Union
Commercial Corporation ("Lender"), Argenbright Security,
Inc., Argenbright, Inc., ADI U.K. Limited, Aviation Defence
International Germany Limited, Argenbright Holdings Limited
and The ADI Group Limited dated as of December 22, 1995 (the
"Loan and Security Agreement").
</TABLE>

II-2
<PAGE> 72

<TABLE>
<CAPTION>
EXHIBIT
NUMBER NUMBER DESCRIPTION
- ------- ------------------
<S> <C> <C>
10.6 -- Facility Letter between Lender, The ADI Group Limited, ADI
U.K. Limited and Aviation Defence International Germany
Limited dated as of December 22, 1995
10.7 -- Letter Agreement dated April 19, 1996 amending Loan and
Security Agreement
10.8 -- Second Amendment to Loan and Security Agreement and Facility
Letter dated as of June 14, 1996
10.9 -- Third Amendment to Loan and Security Agreement dated as of
July 8, 1996
10.10 -- Fourth Amendment to Loan and Security Agreement and Facility
Letter dated as of December 24, 1996
11.1 -- Computation of Pro Forma Earnings Per Share
21.1 -- List of subsidiaries
23.1 -- Consent of King and Spalding (contained in Exhibit 5.1)
23.2 -- Consent of Arthur Andersen LLP
24.1 * -- Powers of Attorney
27.1 -- Financial data schedule (for SEC filing purposes only)
99.1 * -- Consent of Robert McCullough to be named as a Director
99.2 * -- Consent of Hamish Leslie Melville to be named as a Director
</TABLE>

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

* Previously filed

** To be filed by amendment.

(b) Financial Statement Schedules.

Not Applicable

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act of 1933 (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer, or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered hereunder,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

The Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3
<PAGE> 73

SIGNATURES AND POWER OF ATTORNEY

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-1 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Atlanta, State of Georgia, on March 3, 1997.

AHL SERVICES, INC.

By: FRANK A. ARGENBRIGHT, JR.
------------------------------------
Frank A. Argenbright, Jr.

Chairman and Co-Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

FRANK A. ARGENBRIGHT, JR. Chairman and Co-Chief March 3, 1997
- ----------------------------------------------------- Executive Officer
Frank A. Argenbright, Jr. (Principal Executive
Officer)

* Vice Chairman and Co-Chief March 3, 1997
- ----------------------------------------------------- Executive Officer
Edwin R. Mellett

DAVID L. GAMSEY Chief Financial Officer March 3, 1997
- ----------------------------------------------------- (Principal Financial and
David L. Gamsey Principal Accounting
Officer)
</TABLE>

*By: DAVID L. GAMSEY

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

David L. Gamsey

Attorney-in-Fact

II-4
<PAGE> 74

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULES

To AHL Services:

We have audited, in accordance with generally accepted auditing standards,
the combined balance sheets of AHL SERVICES as of December 31, 1995 and 1996 and
the related combined statements of operations, shareholder's equity, and cash
flows for each of the three years in the period ended December 31, 1996, and
have issued our report thereon dated February 28, 1997. Our audits were made for
the purpose of forming an opinion on the basic financial statements taken as a
whole. The schedule listed in the index of financial statements is presented for
purposes of complying with the Securities and Exchange Commission rules and is
not part of the basic financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.

ARTHUR ANDERSEN LLP

Atlanta, Georgia

February 28, 1997

<PAGE> 75

SCHEDULE II

AHL SERVICES

VALUATION AND QUALIFYING ACCOUNTS

FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
ADDITIONS CHARGED TO
BALANCE AT ----------------------- BALANCE AT
BEGINNING COSTS AND OTHER END
DESCRIPTION OF PERIOD EXPENSES ACCOUNTS(1) DEDUCTIONS(2) OF PERIOD
- ----------- ---------- --------- ----------- ------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1994:
Deducted in the balance sheet
from the asset to which it
applies --Reserve for
doubtful accounts............. $175 $120 $0 $123 $172
==== ==== == ==== ====
YEAR ENDED DECEMBER 31, 1995:
Deducted in the balance sheet
from the asset to which it
applies --Reserve for
doubtful accounts............. $172 $103 $1 $ 76 $200
==== ==== == ==== ====
YEAR ENDED DECEMBER 31, 1996:
Deducted in the balance sheet
from the asset to which it
applies --Reserve for
doubtful accounts............. $200 $142 $6 $ 7 $341
==== ==== == ==== ====
</TABLE>

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

(1) Recoveries credited to reserve, reserves recorded in acquisitions, and
reserves removed in sale of businesses.

(2) Uncollectible accounts written off.

<PAGE> 1
EXHIBIT 4.1

AHL NUMBER SHARES
--------- ---------

[THE ARGENBRIGHT COMPANIES AHL SERVICES INC. THE ADI GROUP
LOGO]

AHL SERVICES, INC.

SEE REVERSE FOR
CERTAIN DEFINITIONS

INCORPORATED UNDER THE LAWS OF THE STATE OF GEORGIA
CUSIP 001296 10 2

THIS CERTIFIES THAT

is the owner of

FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $0.01 PAR VALUE EACH,
OF

AHL SERVICES, INC. transferable on the books of the Corporation by the holder
hereof in person or by duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar.

WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.

Dated:

COUNTERSIGNED AND REGISTERED:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
(CHARLOTTE, N.C.)
TRANSFER AGENT
AND REGISTRAR
BY

AUTHORIZED SIGNATURE

[AHL SERVICES, INC. CORPORATE SEAL 1997 GEORGIA
SEAL]

/s/ David L. Gansey
----------------------------
SECRETARY

/s/ Frank A. Argenbright Jr.
----------------------------
CHAIRMAN AND CO-CHIEF
EXECUTIVE OFFICER

<PAGE> 2
AHL SERVICES, INC.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulation:

<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- Custodian
TEN ENT -- as tenants by the entireties --------------- ---------------
JT TEN -- as joint tenants with right of (Cust) (Minor)
survivorship and not as tenants under Uniform Gift to Minors
in common Act
-------------------------------------
(State)
</TABLE>

Additional abbreviations may also be used though not in the above list.

For value received,______________________________________________herby sell,
assign and transfer unto

PLEASE INSERT SOCIAL OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

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

- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE OF ASSIGNEE)

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

- --------------------------------------------------------------------------------
shares
- -------------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

Attorney
- -----------------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated
------------------------------------

NOTICE:
---------------------------------------------
THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER.

SIGNATURE(S) GUARANTEED:
---------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION (BANK,
STOCKBROKERS, SAVING AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN
APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR
DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO
THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

<PAGE> 1
EXHIBIT 4.2

AHL SERVICES, INC.

1997 STOCK INCENTIVE PLAN

<PAGE> 2

AHL SERVICES, INC.

1997 STOCK INCENTIVE PLAN
TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
SECTION 1. Purpose...............................................................................................1

SECTION 2. Definitions...........................................................................................1
2.1 "AHL"...........................................................................................1
2.2 "BOARD".........................................................................................1
2.3 "CHANGE IN CONTROL" ............................................................................1
2.4 "CODE"..........................................................................................1
2.5 "COMMITTEE".....................................................................................1
2.6 "DIRECTOR"......................................................................................1
2.7 "DISABILITY"....................................................................................2
2.8 "FAIR MARKET VALUE".............................................................................2
2.9 "ISO"...........................................................................................2
2.10 "KEY EMPLOYEE"..................................................................................2
2.11 "1933 ACT"......................................................................................2
2.12 "NON-ISO".......................................................................................2
2.13 "OPTION"........................................................................................2
2.14 "OPTION CERTIFICATE"............................................................................2
2.15 "OPTION PRICE"..................................................................................2
2.16 "PARENT CORPORATION"............................................................................2
2.17 "PLAN"..........................................................................................2
2.18 "RULE 16B-3"....................................................................................3
2.19 "STOCK".........................................................................................3
2.20 "SUBSIDIARY"....................................................................................3
2.21 "TEN PERCENT SHAREHOLDER".......................................................................3

SECTION 3. Shares Subject to Options.............................................................................3

SECTION 4. Effective Date........................................................................................3

SECTION 5. Committee.............................................................................................3

SECTION 6. Eligibility...........................................................................................4
</TABLE>

<PAGE> 3

<TABLE>
<S> <C>
SECTION 7. Grant of Options......................................................................................4
7.1 Grant of Options to Key Employees.....................................................................4
7.2 Grant of Options to Directors.........................................................................4
7.3 $100,000 Limit........................................................................................5

SECTION 8. Option Price..........................................................................................5

SECTION 9. Exercise Period.......................................................................................5

SECTION 10. Nontransferability...................................................................................7

SECTION 11. Securities Registration and Restrictions.............................................................7

SECTION 12. Life of Plan.........................................................................................8

SECTION 13. Adjustment...........................................................................................8

SECTION 14. Sale or Merger of AHL; Change in Control.............................................................8
14.1 Sale or Merger.......................................................................................8
14.2 Change in Control....................................................................................9

SECTION 15. Amendment or Termination.............................................................................9

SECTION 16. Miscellaneous........................................................................................9
16.1 No Shareholder Rights................................................................................9
16.2 No Contract of Employment............................................................................9
16.3 Withholding.........................................................................................10
16.4 Construction........................................................................................10
16.5 Loans...............................................................................................10
</TABLE>

<PAGE> 4

SECTION 1. PURPOSE.

The purpose of this Plan is to promote the interests of AHL and its
Subsidiaries and affiliates by granting Options to purchase Stock to Key
Employees and Directors in order (a) to attract and retain Key Employees and
Directors, (b) to provide an additional incentive to each Key Employee and
Director to work to increase the value of the Stock and (c) to provide each Key
Employee and Director with a stake in the future of AHL that corresponds to the
stake of each of AHL's shareholders.

SECTION 2. DEFINITIONS.

Each term set forth in this Section 2 shall have the meaning set forth
opposite such term for purposes of this Plan and, for purposes of such
definitions, the singular shall include the plural and the plural shall include
the singular.

2.1 "AHL" means AHL Services, Inc., a Georgia corporation, and
any successor to such corporation.

2.2 "BOARD" means the board of directors of AHL.

2.3 "CHANGE IN CONTROL" means (a) the acquisition of the power
to direct, or cause the direction of, the management and policies of
AHL by a person (not previously possessing such power), acting alone or
in conjunction with others, whether through the ownership of Stock, by
contract or otherwise, or (b) the acquisition, directly or indirectly,
of the power to vote eighty percent (80%) or more of the outstanding
Stock by a person or persons (other than a person possessing such power
on the date this Plan becomes effective or an employee benefit plan
established and maintained by AHL). For purposes of this definition,
(i) the term "person" means a natural person, corporation, partnership,
joint venture, trust, government or instrumentality of a government,
and (ii) customary agreements with or between underwriters and selling
group members with respect to a bona fide public offering of Stock
shall be disregarded.

2.4 "CODE" means the Internal Revenue Code of 1986, as
amended.

2.5 "COMMITTEE" means a committee that, at the Board's
discretion, shall have at least two (2) members, each member of which
shall be appointed by and shall serve at the pleasure of the Board and
shall come within the definition of a "non-employee director" under
Rule 16b-3 and an "outside director" under Section 162(m) of the Code.

2.6 "DIRECTOR" means any member of the Board who is not an
employee of AHL or any Subsidiary of AHL.

2.7 "DISABILITY" means a condition which the Committee in its
discretion determines would be treated as a total and permanent
disability under Section 22(e)(3) of the Code.

<PAGE> 5

2.8 "FAIR MARKET VALUE" means (a) the closing price on any
date for a share of Stock as reported by The Wall Street Journal under
the NASDAQ quotation system or, if The Wall Street Journal does not
report such closing price, such closing price as reported by a
newspaper or trade journal selected by the Committee or, if no such
closing price is available on such date, (b) such closing price as so
reported in accordance with Section 2.8(a) for the immediately
preceding business day or, if no newspaper or trade journal reports
such closing price or if no such price quotation is available, (c) the
price that the Committee acting in good faith determines through any
reasonable valuation method that a share of Stock might change hands
between a willing buyer and a willing seller, neither being under any
compulsion to buy or to sell and both having reasonable knowledge of
the relevant facts.

2.9 "ISO" means an option granted under this Plan to purchase
Stock that is intended to satisfy the requirements of Section 422 of
the Code.

2.10 "KEY EMPLOYEE" means an employee of AHL or any Subsidiary
of AHL who, in the judgment of the Committee acting in its absolute
discretion, is a key to the success of AHL or a Subsidiary of AHL.

2.11 "1933 ACT" means the Securities Act of 1933, as amended.

2.12 "NON-ISO" means an option granted under this Plan to
purchase stock that is intended to fail to satisfy the requirements of
Section 422 of the Code.

2.13 "OPTION" means an ISO or a Non-ISO.

2.14 "OPTION CERTIFICATE" means the written agreement or
instrument that sets forth the terms of an Option granted to a Key
Employee or Director under this Plan.

2.15 "OPTION PRICE" means the price that shall be paid to
purchase one share of Stock upon the exercise of an Option granted
under this Plan.

2.16 "PARENT CORPORATION" means any corporation that is a
parent of AHL within the meaning of Section 424(e) of the Code.

2.17 "PLAN" means this AHL Services, Inc. 1997 Stock Incentive
Plan effective as of the date of the consummation of AHL's initial
public offering (the "IPO Date") and as amended from time to time
thereafter.

2.18 "RULE 16B-3" means the exemption under Rule 16b-3 to
Section 16(b) of the Securities Exchange Act of 1934, as amended, or
any successor to such rule.

2.19 "STOCK" means the $.01 par value common stock of AHL.

-2-

<PAGE> 6

2.20 "SUBSIDIARY" means any corporation that is a subsidiary
corporation (within the meaning of Section 424(f) of the Code) of
another corporation.

2.21 "TEN PERCENT SHAREHOLDER" means a person who owns (after
taking into account the attribution rules of Section 424(d) of the
Code) more than ten percent (10%) of the total combined voting power of
all classes of stock of either AHL, a Subsidiary of AHL or a Parent
Corporation.

SECTION 3. SHARES SUBJECT TO OPTIONS.

There shall be 376,250 shares of Stock reserved for use under this
Plan. Such shares of Stock shall be reserved to the extent that the Board deems
appropriate from authorized but unissued shares of Stock and from shares of
Stock that have been reacquired by AHL. Any shares of Stock subject to an Option
that remain unissued after the cancellation, expiration or exchange of such
Option for another Option shall again become available for use under this Plan,
but any shares of Stock used to satisfy a withholding obligation under Section
16.3 of this Plan shall not again be available for use under this Plan.

SECTION 4. EFFECTIVE DATE.

The effective date of this Plan shall be the IPO Date, provided AHL's
shareholders (acting at a duly called meeting of such shareholders) approve the
establishment of this Plan within twelve (12) months after the date the Board
adopts this Plan. Any Option granted after the IPO Date and before such
shareholder approval automatically shall be granted subject to such approval. If
there is no such approval by AHL's shareholders, the Plan shall not go into
effect.

SECTION 5. COMMITTEE.

This Plan shall be administered by the Committee. The Committee acting
in its absolute discretion shall exercise such powers and take such action as
expressly called for under this Plan and, further, the Committee shall have the
power to interpret this Plan and to take such other action in the administration
and operation of this Plan as the Committee deems equitable under the
circumstances, and not contrary to the terms of this Plan, which action shall be
binding on AHL, on each affected Key Employee or Director and on each other
person directly or indirectly affected by such action.

SECTION 6. ELIGIBILITY.

Key Employees and Directors shall be eligible for the grant of Non-ISOs
under this Plan. Only Key Employees shall be eligible for the grant of ISOs
under this Plan.

-3-

<PAGE> 7

SECTION 7. GRANT OF OPTIONS.

7.1 GRANT OF OPTIONS TO KEY EMPLOYEES. The Board, or at the Board's
discretion, the Committee, acting in its absolute discretion shall have the
right to grant Options to Key Employees under this Plan from time to time to
purchase shares of Stock and, further, shall have the right to grant new Options
in exchange for the cancellation of outstanding Options which have a higher or
lower Option Price; provided, however, no Option or Options, individually or
collectively, shall be granted in any calendar year to any Key Employee for more
than 100,000 shares of Stock. Each grant of an Option shall be evidenced by an
Option Certificate, and each Option Certificate shall:

(a) specify whether the Option is an ISO or Non-ISO,

(b) provide that the right to exercise the Option granted
by the Option Certificate shall accrue and become
exercisable for twenty-five percent (25%) of the
number of shares subject to the Option on each annual
anniversary of the date of grant of the Option (i.e.,
each Option granted shall vest in equal increments
over a four (4) year period from the date of grant of
the Option), or as otherwise determined by the Board,
or at the Board's discretion, the Committee, or

(c) incorporate such other terms and conditions as the
Board, or at the Board's discretion, the Committee,
acting in its absolute discretion deems consistent
with the terms of this Plan.

If the Board, or at the Board's discretion, the Committee, grants an ISO and a
Non-ISO to a Key Employee on the same date, the right of the Key Employee to
exercise the ISO shall not be conditioned on his or her failure to exercise the
Non-ISO.

7.2 GRANT OF OPTIONS TO DIRECTORS. The Board, or at the Board's
discretion, the Committee, acting in its absolute discretion shall have the
right to grant Non-ISOs to Directors under this Plan from time to time to
purchase shares of Stock and, further, shall have the right to grant new
Non-ISOs in exchange for the cancellation of outstanding Non-ISOs which have a
higher or lower Option Price. Each grant of a Non-ISO shall be evidenced by an
Option Certificate, and each Option Certificate shall:

(a) provide that the right to exercise the Option granted
by the Option Certificate shall accrue and become
exercisable for twenty-five percent (25%) of the
number of shares subject to the Option on each annual
anniversary of the date of grant of the Option (i.e.,
each Option granted shall vest in equal increments
over a four (4) year period from the date of grant of
the Option), or as otherwise determined by the Board,
or at the Board's discretion, the Committee, and

-4-

<PAGE> 8

(b) incorporate such other terms and conditions as the
Board, or at the Board's discretion, the Committee,
acting in its absolute discretion deems consistent
with the terms of this Plan.

7.3 $100,000 LIMIT. The aggregate Fair Market Value of the shares
of Stock subject to ISOs and other incentive stock options (that satisfy the
requirements under Section 422 of the Code) granted to a Key Employee under
this Plan and under any other stock option plan adopted by AHL, a Subsidiary of
AHL or a Parent Corporation that first become exercisable in any calendar year
shall not exceed $100,000. Such Fair Market Value figure shall be determined by
the Committee on the date the ISO or other incentive stock option is granted.
The Committee shall interpret and administer the limitation set forth in this
Section 7.3 in accordance with Section 422(d) of the Code, and the Committee
shall treat this Section 7.3 as in effect only for those periods for which
Section 422(d) of the Code is in effect.

SECTION 8. OPTION PRICE.

The Option Price for each share of Stock subject to an ISO shall be no
less than the Fair Market Value of a share of Stock on the date the ISO is
granted or, if the ISO is granted to a Key Employee who is a Ten Percent
Shareholder, the Option Price for each share of Stock subject to such ISO shall
be no less than one hundred ten percent (110%) of the Fair Market Value of a
share of Stock on the date the ISO is granted. In addition, the Option Price for
a Non-ISO shall be no less than the Fair Market Value of a share of Stock on the
date the Non-ISO is granted. The Option Price shall be payable in full and in
cash upon the exercise of any Option.

SECTION 9. EXERCISE PERIOD.

Each Option granted under this Plan shall be exercisable in whole or in
part at such time or times as set forth in the related Option Certificate, but
no Option Certificate shall:

(a) provide for the exercise of an Option other than as
provided pursuant to Section 7.1(b) or Section 7.2(a)
of this Plan, or

(b) make an Option exercisable on or after the earlier
of:

(1) the date that is the fifth anniversary of
the date such Option is granted, if such
Option is an ISO and the Key Employee is a
Ten Percent Shareholder on the date such
Option is granted, and

(2) the date that is the tenth anniversary of
the date such Option is granted, if such
Option is a Non-ISO or if such Option is an
ISO and is granted to a Key Employee who is
not a Ten Percent Shareholder on the date
the Option is granted.

-5-

<PAGE> 9

Subject to the exercise limits imposed under Section 9(b), an Opinion
Certificate may provide for the exercise of an Option after the employment of a
Key Employee or the service of a Director on the Board has terminated for any
reason whatsoever, including death or Disability; provided, however, that unless
otherwise provided in an Option Certificate,

(c) in the event that a Key Employee's employment by AHL
is terminated on any date, other than as a result of
death or Disability, the Option shall expire
immediately and automatically on the last day of the
three (3) consecutive month period which immediately
follows the last day of the Key Employee's current
continuous period of employment by AHL; provided,
however, that in the event a Key Employee's
employment by AHL is terminated on any date (1) by
AHL for good cause (as determined by the Committee in
its absolute discretion) or (2) by the Key Employee
without written consent of AHL, the Option shall
expire immediately and automatically on such date and
shall be of no further force and effect with respect
to any shares of Stock not purchased before such
date;

(d) in the event that a Director's service on the Board
is terminated on any date, other than as a result of
death or Disability, the Option shall expire
immediately and automatically on the last day of the
Director's current continuous period of service on
the Board; and

(e) in the event that a Key Employee or Director dies
while employed by AHL or while serving on the Board
of AHL, or in the event a Key Employee's employment
by AHL or a Director's service on the Board of AHL
terminates as a result of Disability, the Option may
be exercised in full, to the extent not previously
exercised, (notwithstanding that such Option may not
otherwise have fully vested pursuant to Section
7.1(b) or Section 7.2(a) of this Plan) at any time
during the twelve (12) consecutive month period
immediately following the date of death or
termination of employment or service on the Board, by
the person or persons to whom the rights of the Key
Employee or Director under the Option pass by will or
by the applicable laws of descent and distribution
(in the case of death) and by the Key Employee or
Director (in the case of termination as a result of
Disability) and the Option shall expire immediately
and automatically on the last day of such period and
shall be of no further force and effect with respect
to any shares of Stock not purchased before such
date.

For purposes of determining whether a Key Employee has terminated
employment with AHL, (i) employment by a Subsidiary of AHL shall be treated as
employment by AHL, (ii) a transfer of employment between or among AHL and
Subsidiaries of AHL shall not be treated as a termination of a Key Employee's
continuous employment with AHL, and (iii) if a Key Employee is

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<PAGE> 10

employed by a Subsidiary, the sale of such Subsidiary by AHL shall be treated as
a termination of the Key Employee's continuous employment with AHL.

SECTION 10. NONTRANSFERABILITY.

An Option granted under this Plan shall not be transferable by a Key
Employee or Director other than by will or by the laws of descent and
distribution, and any such Option shall be exercisable during the lifetime of a
Key Employee or Director only by such Key Employee or Director. The person or
persons to whom an Option is transferred by will or by the laws of descent and
distribution thereafter shall be treated as the Key Employee or Director under
this Plan.

SECTION 11. SECURITIES REGISTRATION AND RESTRICTIONS.

Each Option Certificate shall provide that, upon the receipt of shares
of Stock as a result of the exercise of an Option, the Key Employee or Director
shall, if so requested by AHL, agree to hold such shares of Stock for investment
and not with a view to resale or distribution to the public and, if so requested
by AHL, shall deliver to AHL a written statement satisfactory to AHL to that
effect. Each Option Certificate also shall provide that, if so requested by AHL,
the Key Employee or Director shall make a written representation to AHL that he
or she will not sell or offer for sale any of such Stock unless a registration
statement shall be in effect with respect to such Stock under the 1933 Act and
any applicable state securities law or he or she shall have furnished to AHL an
opinion in form and substance satisfactory to AHL of legal counsel satisfactory
to AHL that such registration is not required. Certificates representing the
Stock transferred upon the exercise of an Option may, at the discretion of AHL,
bear a legend to the effect that such Stock has not been registered under the
1933 Act or any applicable state securities law and that such Stock cannot be
sold or offered for sale in the absence of (a) an effective registration
statement as to such Stock under the 1933 Act and any applicable state
securities law or (b) an opinion in form and substance satisfactory to AHL of
legal counsel satisfactory to AHL that such registration is not required.

SECTION 12. LIFE OF PLAN.

No Option shall be granted under this Plan on or after the earlier of

(a) the tenth anniversary of the effective date of this
Plan (as determined under Section 4 of this Plan), in
which event this Plan shall continue in effect
thereafter until all outstanding Options have been
exercised in full or no longer are exercisable, and

(b) the date on which all of the Stock reserved under
Section 3 of this Plan has (as a result of the
exercise of Options) been issued or no longer is
available

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<PAGE> 11

for use under this Plan, in which event this Plan
also shall terminate on such date.

SECTION 13. ADJUSTMENT.

The number, kind or class (or any combination thereof) of shares of
Stock reserved under Section 3 of this Plan and the number, kind or class (or
any combination thereof) of shares of Stock subject to Options granted under
this Plan and the Option Price of such Options shall be adjusted by the Board in
an equitable manner to reflect any change in the capitalization of AHL,
including, but not limited to, such changes as stock dividends or stock splits.
Furthermore, the Board shall have the right to adjust (in a manner that
satisfies the requirements of Section 424(a) of the Code) the number, kind or
class (or any combination thereof) of shares of Stock reserved under Section 3
of this Plan and the number, kind or class (or any combination thereof) of
shares subject to Options granted under this Plan and the Option Price of such
Options in the event of any corporate transaction described in Section 424(a) of
the Code, which provides for the substitution or assumption of such Options in
order to take into account on an equitable basis the effect of such transaction.
If any adjustment under this Section 13 would create a fractional share of Stock
or a right to acquire a fractional share of Stock, such fractional share shall
be disregarded and the number of shares of Stock reserved under this Plan and
the number subject to any Options granted under this Plan shall be the next
lower number of shares of Stock, rounding all fractions downward. An adjustment
made under this Section 13 by the Board shall be conclusive and binding on all
affected persons and, further, shall not constitute an increase in "the number
of shares reserved under Section 3" within the meaning of Section 15(a) of this
Plan.

SECTION 14. SALE OR MERGER OF AHL; CHANGE IN CONTROL.

14.1 SALE OR MERGER. If AHL agrees to sell all or substantially all of
its assets for cash or property or for a combination of cash and property or
agrees to any merger, consolidation, reorganization, division or other corporate
transaction in which Stock is converted into another security or into the right
to receive securities or property and such agreement does not provide for the
assumption or substitution of the Options granted under this Plan in accordance
with Section 13 of this Plan on a basis that is fair and equitable to holders of
such Options as determined by the Board, each then outstanding Option, at the
direction and discretion of the Board, may be canceled unilaterally by AHL as of
any date before the effective date of such transaction if he or she then has the
right (for a reasonable period of time) to exercise his or her Option in full
(notwithstanding that such Option may not otherwise have fully vested pursuant
to Section 7.1(b) or Section 7.2(a) of this Plan) on any date before the date as
of which the Board unilaterally cancels such Option in full.

14.2 CHANGE IN CONTROL. If the Board determines that there has been a
Change in Control of AHL or a tender or exchange offer is made for Stock (other
than by an employee benefit plan established and maintained by AHL), the Board
thereafter shall have the right to take such action with respect to any or all
unexercised Options under this Plan as the Board deems

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<PAGE> 12

appropriate under the circumstances to protect the interest of AHL in
maintaining the integrity of such grants under this Plan, including following
the procedure set forth in Section 14.1 for a sale or merger of AHL with respect
to such Options. The Board shall have the right to take different action under
this Section 14.2 with respect to different Key Employees or Directors or
different groups of Key Employees or Directors, as the Board deems appropriate
under the circumstances.

SECTION 15. AMENDMENT OR TERMINATION.

This Plan may be amended by the Board from time to time to the extent
that the Board deems necessary or appropriate; provided, however, no such
amendment shall be made absent the proper approval of the shareholders of AHL
(a) to increase the number of shares reserved under Section 3 of this Plan, or
(b) to change the class of employees eligible for Options under Section 6 of
this Plan. The Board also may suspend the granting of Options under this Plan at
any time and may terminate this Plan at any time; provided, however, the Board
shall not have the right unilaterally to modify, amend or cancel any Option
granted before such suspension or termination unless (i) the Key Employee or
Director consents in writing to such modification, amendment or cancellation, or
(ii) there is a dissolution or liquidation of AHL or a transaction described in
Section 13 or Section 14 of this Plan.

SECTION 16. MISCELLANEOUS.

16.1 NO SHAREHOLDER RIGHTS. No Key Employee or Director shall have any
rights as a shareholder of AHL as a result of the grant of an Option to him or
to her under this Plan or his or her exercise of such Option pending the actual
delivery of Stock subject to such Option to such Key Employee or Director.

16.2 NO CONTRACT OF EMPLOYMENT. The grant of an Option to a Key
Employee or Director under this Plan shall not constitute a contract of
employment or a right to continue to serve on the Board and shall not confer on
a Key Employee or Director any rights upon his or her termination of employment
or services in addition to those rights, if any, expressly set forth in the
Option Certificate that evidences his or her Option.

16.3 WITHHOLDING. Each Option grant shall be made subject to the
condition that the Key Employee or Director consents to whatever action the
Board, or at the Board's discretion, the Committee, directs to satisfy the
federal and state tax withholding requirements, if any, that the Board (or the
Committee) in its discretion deems applicable to the exercise of such Option.
The Board, or at the Board's discretion, the Committee, also shall have the
right to provide, in an Option Certificate, that a Key Employee or Director may
elect to satisfy federal and state tax withholding requirements through a
reduction in the number of shares of Stock actually transferred to him or to her
under this Plan, and any such election and any such reduction shall be effected
so as to satisfy the conditions to an applicable exemption under Rule 16b-3.

16.4 CONSTRUCTION. This Plan shall be construed under the laws of the
State of Georgia.

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<PAGE> 13

16.5 LOANS. AHL shall not lend money or guarantee loans by third
parties to any Key Employee or Director to finance the exercise of any Option
granted under this Plan.

IN WITNESS WHEREOF, AHL Services, Inc. has caused its duly
authorized officer to execute this Plan this 27th day of February, 1997
to evidence its adoption of this Plan.

AHL SERVICES, INC.

By: /s/ FRANK A. ARGENBRIGHT, JR.
------------------------------

Title: Chairman and Co-Chief
Executive Officer

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<PAGE> 1
EXHIBIT 5.1

(404) 572-4600 (404) 572-5100

March 3, 1997

AHL Services, Inc.
3353 Peachtree Road, N.E.
Suite 1120, North Tower
Atlanta, Georgia 30326

Re: AHL Services, Inc. -- Registration Statement on
Form S-1 relating to 2,875,000 shares of Common Stock

Ladies and Gentlemen:

We have acted as counsel for AHL Services, Inc., a Georgia
corporation (the "Company"), in connection with the preparation of a
Registration Statement on Form S-1 (the "Registration Statement") filed with
the Securities and Exchange Commission under the Securities Act of 1933,
relating to the proposed public offering and sale of up to (i)
2,500,000 shares of the Company's Common Stock, par value $.01 per share (the
"Firm Shares"), by the Company, and (ii) 375,000 shares of the Company's Common
Stock, par value $.01 per share, subject to an overallotment option (the
"Option Shares") by a Selling Shareholder pursuant to the Underwriting
Agreement (the "Underwriting Agreement") to be entered into between the Company
and Alex. Brown & Sons Incorporated and The Robinson-Humphrey Company, Inc., as
representatives of the several underwriters.

In connection with this opinion, we have examined and relied upon such
records, documents, certificates and other instruments as in our judgment are
necessary or appropriate to form the basis for the opinions hereinafter set
forth. In all such examinations, we have assumed the genuineness of signatures
on original documents and the conformity to such original documents of all
copies submitted to us as certified, conformed or photographic copies, and as
to certificates of public officials, we have assumed the same to have been
properly given and to be accurate. As to matters of fact material to this
opinion, we have relied upon statements and representations of representatives
of the Company and of public officials.
<PAGE> 2

AHL Services, Inc.
March 3, 1997
Page 2

Based upon and subject to the foregoing, we are of the opinion that:

(i) Upon the issuance of the Firm Shares against payment therefor
as provided in the Underwriting Agreement, the Firm Shares will be duly
authorized, validly issued, fully paid and nonassessable.

(ii) The Option Shares are duly authorized, validly issued, fully
paid and nonassessable.

The opinions expressed herein are limited in all respects to the
laws of the State of Georgia, and no opinion is expressed with respect to
the laws of any other jurisdiction or any effect which such laws may have on
the opinions expressed herein. This opinion is limited to the matters stated
herein, and no opinion is implied or may be inferred beyond the matters
expressly stated herein.

This opinion is given as of the date hereof, and we assume no
obligation to advise you after the date hereof of facts or circumstances that
come to our attention or changes in law that occur which could affect the
opinions contained herein. This letter is being rendered solely for the
benefit of the Company in connection with the matters addressed herein. This
opinion may not be furnished to or relied upon by any person or entity for any
purpose without our prior written consent.

We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the Prospectus that is included in the Registration Statement.

Very truly yours,

KING & SPALDING

<PAGE> 1

EXHIBIT 10.1

AMENDMENT NO. 1 TO RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 TO RESTATED EMPLOYMENT AGREEMENT ("Amendment") is made
and entered into as of this 28th day of February, 1997, by and between EDWIN R.
MELLETT, an individual resident of the State of Georgia ("Employee") and AHL
SERVICES, INC., a Georgia corporation (the "Employer").

WITNESSETH:

WHEREAS, Employer and Employee executed a Restated Employment Agreement
dated as of February 1, 1997 (the "Employment Agreement");

WHEREAS, Employer and Employee desire to amend the Employment Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:

1. Section 4.1(b) of the Employment Agreement is hereby amended and
restated to read in its entirety as follows:

"(b) Second Option Grant. Effective as of December 1, 1996,
Employee is hereby granted options to purchase 215,000 shares of common
stock of Employer at an exercise price of $10.75 per share. In addition,
effective as of February 28, 1997, Employee is hereby granted options to
purchase 7,500 shares of common stock of Employer at an exercise price
of $10.75 per share. Twenty-five percent of the options will be
exercisable on the date of grant, and the balance will become
exercisable 25% per year on December 1, commencing December 1, 1997. The
options granted under this Section 4.1(b) will expire ten years from the
date of grant, except as otherwise provided in Section 4.2."

2. Binding Effect. This Amendment inures to the benefit of, and is
binding upon, Employer and its successors and assigns, and Employee,
together with Employee's executor, administrator, personal representative,
heirs, and legatees.

3. Entire Agreement. This Amendment is intended by the parties hereto
to amend and supplement the Employment Agreement and, except as otherwise
stated herein, the Employment Agreement shall remain in full force and
effect.

4. Governing Law. This Amendment shall be deemed to be made in, and
in all respects shall be interpreted, construed, and governed by and in
accordance with, the laws of the State of Georgia. No provision of this
Amendment shall be construed against or interpreted to the disadvantage of
any party hereto by any court or other governmental or judicial authority
or by any board of arbitrators by reason of such party or its counsel
having or being deemed to have structured or drafted such provision.

5. Headings. The section and paragraph headings contained in this
Amendment are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Amendment.

6. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
<PAGE> 2

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.

AHL SERVICES, INC.

By: /s/ FRANK A. ARGENBRIGHT, JR.
------------------------------------
Frank A. Argenbright, Jr.
Chairman and Co-Chief Executive
Officer

EMPLOYEE

/s/ EDWIN R. MELLETT
--------------------------------------
Edwin R. Mellett
<PAGE> 3

RESTATED EMPLOYMENT AGREEMENT

THIS RESTATED AGREEMENT ("Agreement") is made and
entered into as of this 1st day of February, 1997, by and between EDWIN R.
MELLETT, an individual resident of the State of Georgia ("Employee"), and AHL
SERVICES, INC., a Georgia corporation ("the "Employer").

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee, and Employee
desires to be employed by Employer, on the terms and conditions hereinafter set
forth;

NOW, THEREFORE, in consideration of the premises and the
mutual promises and agreements contained herein, the parties hereto, intending
to be legally bound, hereby agree as follows:

Section 1 Employment.

Subject to the terms hereof, the Employer hereby employs
Employee, and Employee hereby accepts such employment. Employee will serve as
Co-Chief Executive Officer of Employer or in such other executive capacity as
the Board of Directors of Employer (the "Board of Directors") may hereafter from
time to time determine. Employee agrees to devote his full business time and
best efforts to the performance of the duties that Employer may assign Employee
from time to time.

Section 2 Term of Employment.

The term of Employee's employment hereunder (the "Term") shall
be from October 15, 1996 until the earlier of (a) December 31, 2000 or (b) the
occurrence of any of the following events:

(i) The death or total disability of Employee (total disability
meaning the failure to fully perform his normal required
services hereunder for a period of three (3) months during any
consecutive twelve (12) month period during the term hereof,
as determined by the Board of Directors, by reason of mental
or physical disability);

(ii) The termination by Employer of Employee's employment
hereunder, upon prior written notice to Employee, for "good
cause", as determined by the Board of Directors. For purposes
of this Agreement, "good cause" for termination of Employee's
employment shall exist (A) if Employee is convicted of, pleads
guilty to, or confesses to any felony or any act of fraud,
misappropriation or embezzlement, (B) if Employee has engaged
in a dishonest act to the damage or

<PAGE> 4

prejudice of Employer or an affiliate of Employer, or in
conduct or activities materially damaging to the property,
business, or reputation of Employer or an affiliate of
Employer, (C) if Employee fails to comply with the terms of
this Agreement, and, within thirty (30) days after written
notice from Employer of such failure, Employee has not
corrected such failure or, having once received such notice of
failure and having so corrected such failure, Employee at any
time thereafter again so fails, or (D) if Employee violates
any of the provisions contained in Sections 5 of this
Agreement; or

(iii) The termination of this Agreement by either party upon at
least ninety (90) days prior written notice.

Section 3 Compensation.

3.1 Term of Employment. Employer will provide Employee
with the following salary, expense reimbursement and additional employee
benefits during the term of employment hereunder:

(a) Salary. Employee will be paid a salary (the "Salary")
of no less than Two Hundred Thousand Dollars
($200,000) per annum, less deductions and
withholdings required by applicable law. The Salary
shall be paid to Employee in equal monthly
installments (or on such more frequent basis as other
executives of Employer are compensated). The Salary
shall be reviewed by the Board of Directors of
Employer on at least an annual basis.

(b) Bonus. Employee will be entitled to an annual bonus
(the "Bonus") of up to 50% of Salary, which Bonus
shall be dependent upon Employer's financial
performance versus budget and achievement of personal
objectives established for Employee by Employer. The
Bonus shall be paid promptly upon the availability of
annual financial results (which is expected to occur
in early February of each year).

(d) Expenses. Employer shall reimburse Employee for all
reasonable and necessary expenses incurred by
Employee at the request of and on behalf of Employer.

(e) Benefit Plans. Employee may participate in such
medical, dental, disability, hospitalization, life
insurance and other benefit plans (such as pension
and profit sharing plans) as Employer maintains from
time to time for the

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<PAGE> 5

benefit of other senior executives of Employer, on
the terms and subject to the conditions set forth in
such plans.

3.2 Effect of Termination. Except as hereinafter
provided, upon the termination of the employment of Employee hereunder for any
reason, Employee shall be entitled to all compensation and benefits earned or
accrued under Section 3.1 as of the effective date of termination (the
"Termination Date"), but from and after the Termination Date no additional
compensation or benefits shall be earned by Employee hereunder. Employee shall
be deemed to have earned any Bonus payable with respect to the calendar year in
which the Termination Date occurs on a prorated basis (based on the number of
days in such calendar year through and including the Termination Date divided
by 365). Any such Bonus shall be payable on the date on which the Bonus would
have been paid had Employee continued his employment hereunder. If Employee's
employment hereunder is terminated by Employer pursuant to Section 2(b)(iii)
hereof, then, in addition to any other amount payable hereunder, Employer shall
continue to pay Employee his normal Salary pursuant to Section 3.1(a) for the
one year period immediately following the Termination Date (on the same basis
as if Employee continued to serve as an employee hereunder for such one year
period). All stock options granted to Employee pursuant to Section 4 hereof
shall be governed in accordance with Section 4.2 hereof upon termination of
Employee's employment.

Section 4 Stock Options.

4.1 Term of Employment. In recognition of Employee's
contributions to Employer to date, Employee will be granted stock options as
follows:

(a) Current Option Grant. Effective as of October 15,
1996, Employee is hereby granted stock options to
purchase 107,500 shares of common stock of Employer
at an exercise price of $4.64 per share. The options
granted under this Section 4.1(a) become fully
exercisable on December 31, 1996 and will expire
October 15, 2006, except as otherwise provided in
Section 4.2.

(b) Second Option Grant. Effective as of December 1,
1996, Employee is hereby granted options to purchase
215,000 shares of common stock of Employer at an
exercise price of $11.76 per share. Twenty-five
percent of the options will be exercisable
immediately, and the balance will become exercisable
25% per year on the first, second and third
anniversary of the date of grant. The options granted
under this Section 4.1(b) will expire ten years from
the date of grant, except as otherwise provided in
Section 4.2.

(c) Sale or Merger. All options granted to Employee
pursuant to this Agreement will become fully
exercisable if Employer is sold (or all or

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<PAGE> 6

substantially all of the assets of Employer are sold)
(by stock sale, merger or otherwise) to a third
party.

(d) Stock Splits and Recapitalization. The number of
shares of common stock issuable upon exercise of
options granted hereby and the exercise price of such
options shall be automatically adjusted to reflect
any change in the capitalization of Employer,
including, but not limited to, such changes as stock
dividends, stock splits or recapitalizations. If any
adjustment under this Section would create the right
of Employee to acquire a fractional share of stock,
such fractional share shall be disregarded and the
number of shares of common stock subject to the
options shall be the next lower number of whole
shares of common stock, rounding all fractions
downward.

4.2 Termination of Employment. The grant of stock
options to Employee under this Agreement shall not restrict or in any manner
affect Employer's right to terminate the employment of Employee at any time,
with or without cause, as herein provided. If Employee's employment is
terminated pursuant to Section 2(b)(i) hereof or if Employee's employment is
terminated by Employer pursuant to Section 2(b)(iii), all options granted to
Employee pursuant to Section 4.1(a) and 4.1(b) hereof shall immediately become
exercisable upon such termination. In the case of a termination pursuant to
Section 2(b)(i) hereof, the options will expire in accordance with their
respective scheduled expiration dates. In the case of a termination by Employer
pursuant to Section 2(b)(iii) hereof, the options will expire on the first
anniversary of the effective date of the termination of Employee's employment
hereunder. Upon the death of Employee, any options which Employee would
otherwise be entitled to exercise hereunder may be exercised by his personal
representatives or heirs, as applicable. If Employee's employment is terminated
by Employer pursuant to Section 2(b)(ii) or by Employee pursuant to Section
2(b)(iii), those options which are exercisable as of the date of such
termination shall be exercisable for a period of one year after such
termination (and all other options not then exercisable shall be forfeited as
of such date), and after such one year period, all unexercised options will
expire.

4.3 Exercise. The options granted under Section 4.1 may
be exercised by Employee upon five business days' written notice of exercise to
Employer, specifying the number of shares to be purchased and the total
purchase price, accompanied by a check to the order of Employer, in the payment
of such price. The exercise price of the options granted under Section 4.1
shall be payable in cash only. If Employer is required to withhold on account
of any present or future tax imposed as result of any option exercise, the
notice of exercise shall be accompanied by a check to the order of Employer for
payment of the amount of such withholding. Employee agrees to enter into any
agreement that Employer may request in connection with the exercise of any
options.

4.4 Nontransferable. No option granted under Section 4.1
shall be transferable by Employee other than by will or by the laws of descent
and distribution, and the options granted

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<PAGE> 7

under Section 4.1 shall be exercisable during Employee's lifetime only by
Employee. The options shall not be otherwise transferred, assigned, pledged,
hypothecated or disposed of in any way, whether by operation of law or
otherwise.

4.5 Securities Act. THE OPTIONS AND THE SHARES OF COMMON STOCK
(THE "SHARES") ISSUABLE UPON EXERCISE OF THE OPTIONS HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY APPLICABLE
STATE SECURITIES LAWS. THE OPTIONS AND SHARES ARE OFFERED PURSUANT TO EXEMPTIONS
PROVIDED BY SECTION 4(2) OF THE ACT AND CERTAIN RULES AND REGULATIONS
PROMULGATED PURSUANT THERETO. THE SHARES MAY NOT BE TRANSFERRED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO EMPLOYER AND ITS COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED.

4.6 Registration Statement on Form S-8. Following the
consummation of an initial public offering of the common stock of Employer (the
"IPO"), Employer undertakes to file a Registration Statement on Form S-8 (the
"Form S-8") to register the shares of common stock issuable upon exercise of the
options. Employer shall use its reasonable good faith efforts to file the Form
S-8 on or before the date that is six months after the consummation of the IPO.

4.7 Non-Incentive Options. The options granted under Section
4.1 are not intended to be, and shall not be treated as, incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended.

Section 5 Partial Restraint on Post-termination
Competition.

5.1 Definitions. For the purposes of this Section 5, the
following definitions shall apply:

(a) "Company Activities" means the business of
providing security services, including,
without limitation, contractual security
services, investigative services, polygraph
services and pre-employment testing and/or
screening or providing transportation,
including but not limited to guided bus
tours.

(b) "Competitor" means any business, individual,
partnership, joint venture, association,
firm, corporation or other entity, other
than the Employer or its affiliates or
subsidiaries, engaged, wholly or partly, in
Company Activities.

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<PAGE> 8

(c) "Competitive Position" means (i) the direct
or indirect ownership or control of all or
any portion of a Competitor; or (ii) any
employment or independent contractor
arrangement with any Competitor whereby
Employee will serve such Competitor in any
managerial capacity.

(d) "Confidential Information" means any
confidential, proprietary business
information or data belonging to or
pertaining to Employer that does not
constitute a "Trade Secret" (as hereinafter
defined) and that is not generally known by
or available through legal means to the
public, including, but not limited to,
information regarding Employer's customers
or actively sought prospective customers,
suppliers, manufacturers and distributors
gained by Employee as a result of his
employment with Employer.

(e) "Customer" means actual customers or
actively sought prospective customers of
Employer during the Term.

(f) "Noncompete Period" or "Nonsolicitation
Period" means the period beginning the date
hereof and ending on the second anniversary
of the termination of Employee's employment
with Employer.

(g) "Territory" means the area within a
thirty-five (35) mile radius of any
corporate office of Employer or any of its
subsidiaries, affiliates or divisions.

(h) "Trade Secrets" means information or data of
or about Employer, including but not limited
to technical or non-technical data,
formulas, patterns, compilations, programs,
devices, methods, techniques, drawings,
processes, financial data, financial plans,
products plans, or lists of actual or
potential customers, clients, distributees
or licensees, information concerning
Employer's finances, services, staff,
contemplated acquisitions, marketing
investigations and surveys, that (i) derive
economic value, actual or potential, from
not being generally known to, and not being
readily ascertainable by proper means by,
other persons who can obtain economic value
from their disclosure or use; and (ii) are
the subject of efforts that are reasonable
under the circumstances to maintain their
secrecy.

(i) "Work Product" means any and all work
product, property, data documentation or
information of any kind, prepared,
conceived,

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<PAGE> 9

discovered, developed or created by Employee
for Employer or its affiliates, or any of
Employer's or its affiliates' clients or
customers.

5.2 Trade Name and Confidential Information.

(a) Employee hereby agrees that (i) with regard
to each item constituting all or any portion
of the Trade Secrets, at all times during
the Term and all times during which such
item continues to constitute a Trade Secret
under applicable law; and (ii) with regard
to any Confidential Information, during the
Term and the Noncompete Period:

(i) Employee shall not, directly or by
assisting others, own, manage,
operate, join, control or
participate in the ownership,
management, operation or control of,
or be connected in any manner with,
any business conducted under any
corporate or trade name of Employer
or name similar thereto, without the
prior written consent of Employer;

(ii) Employee shall hold in confidence
all Trade Secrets and all
Confidential Information and will
not, either directly or indirectly,
use, sell, lend, lease, distribute,
license, give, transfer, assign,
show, disclose, disseminate,
reproduce, copy, appropriate or
otherwise communicate any Trade
Secrets or Confidential Information,
without the prior written consent of
Employer; and

(iii) Employee shall immediately notify
Employer of any unauthorized
disclosure or use of any Trade
Secrets or Confidential Information
of which Employee becomes aware.
Employee shall assist Employer, to
the extent necessary, in the
procurement or any protection of
Employer's rights to or in any of
the Trade Secrets or Confidential
Information.

(b) Upon the request of Employer and, in any
event, upon the termination of Employee's
employment with Employer, Employee shall
deliver to Employer all memoranda, notes,
records, manuals and other documents,
including all copies of such materials and
all documentation prepared or produced in
connection therewith, pertaining to the
performance of Employee's services hereunder
or Employer's business or containing Trade
Secrets or Confidential

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<PAGE> 10

Information, whether made or compiled by
Employee or furnished to Employee from
another source by virtue of Employee's
employment with Employer.

(c) To the greatest extent possible, all Work
Product shall be deemed to be "work made for
hire" (as defined in the Copyright Act, 17
U.S.C.A.ss.ss.101 et seq., as amended) and
owned exclusively by Employer. Employee
hereby unconditionally and irrevocably
transfers and assigns to Employer all
rights, title and interest Employee may have
in or to any and all Work Product,
including, without limitation, all patents,
copyrights, trademarks, service marks and
other intellectual property rights. Employee
agrees to execute and deliver to Employer
any transfers, assignments, documents or
other instruments which Employer may deem
necessary or appropriate to vest complete
title and ownership of any and all Work
Product, and all rights therein, exclusively
in Employer.

5.3 Noncompetition.

(a) The parties hereto acknowledge that Employee
is conducting Company Activities throughout
the Territory. Employee acknowledges that to
protect adequately the interest of Employer
in the business of Employer it is essential
that any noncompete covenant with respect
thereto cover all Company Activities and the
entire Territory.

(b) Employee hereby agrees that, during the Term
and the Noncompete Period, Employee will
not, in the Territory, either directly or
indirectly, alone or in conjunction with any
other party, accept, enter into or take any
action in conjunction with or in furtherance
of a Competitive Position. Employee shall
notify Employer promptly in writing if
Employee receives an offer of a Competitive
Position during the Noncompete Term, and
such notice shall describe all material
terms of such offer.

Nothing contained in this Section 5 shall prohibit Employee
from acquiring not more than five percent (5%) of any company whose common stock
is publicly traded on a national securities exchange or in the over-the-counter
market.

5.4 Nonsolicitation During Employment Term. Employee
hereby agrees that Employee will not, during the Term, either directly or
indirectly, alone or in conjunction with any other party:

-8-

<PAGE> 11

(b) solicit or attempt to solicit any employee,
consultant, contractor or other personnel of
Employer or any of its affiliates or
subsidiaries to terminate, alter or lessen
that party's affiliation with Employer or
such affiliate or subsidiary or to violate
the terms of any agreement or understanding
between such employee, consultant,
contractor or other person and Employer.

5.5 Nonsolicitation During Nonsolicitation Period.
Employee hereby agrees that Employee will not, during the Nonsolicitation
Period, either directly or indirectly, alone or in conjunction with any other
party:

(a) solicit, divert or appropriate or attempt to
solicit, divert or appropriate, any Customer
for the purpose of providing the Customer
with services or products competitive with
those offered by Employer during the Term;
provided, however, that the covenant in this
clause shall limit Employee's conduct only
with respect to those Customers with whom
Employee had substantial contact (through
direct or supervisory interaction with the
Customer or the Customer's account) during a
period of time up to but no greater than two
(2) years prior to the last day of the Term;
or

(b) solicit or attempt to solicit any "key"
employee, consultant, contractor or other
personnel of Employer or any of its
affiliates or subsidiaries residing at the
time of the solicitation in the Territory to
terminate, alter or lessen that party's
affiliation with Employer or such affiliate
or subsidiary or to violate the terms of any
agreement or understanding between such
employee, consultant, contractor or other
person and Employer. For purposes of this
clause (b), "key" employees, consultants,
contractors, or other personnel are those
with knowledge of or access to Trade Secrets
and Confidential Information.

Section 6 Miscellaneous.

6.1 Severability. The covenants in this Agreement shall
be construed as covenants independent of one another and as obligations
distinct from any other contract between

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<PAGE> 12

Employee and Employer. Any claim that Employee may have against Employer shall
not constitute a defense to enforcement by Employer of this Agreement.

6.2 Survival of Obligations. The covenants in Section 5
of this Agreement shall survive termination of Employee's employment,
regardless of who causes the termination and under what circumstances.

6.3 Notices. Any notice or other document to be given
hereunder by any party hereto to any other party hereto shall be in writing and
delivered in person or by courier, by telecopy transmission or sent by any
express mail service, postage or fees prepaid at the following addresses:

EMPLOYER

AHL Services, Inc.
Atlanta Financial Center
3353 Peachtree Road, NE
Suite 1120, North Tower
Atlanta, Georgia 30326
Attention: Mr. F.A. Argenbright, Jr.
Chairman
Telecopy No.: (404) 267-2222

EMPLOYEE

Mr. Edwin R. Mellett
c/o AHL Services, Inc.
Atlanta Financial Center
3353 Peachtree Road, NE
Suite 1120, North Tower
Atlanta, Georgia 30326
Telecopy No.: (404) 267-2222

or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.

6.4 Binding Effect. This Agreement inures to the benefit
of, and is binding upon, Employer and their respective successors and assigns,
and Employee, together with Employee's executor, administrator, personal
representative, heirs, and legatees.

6.5 Entire Agreement This Agreement is intended by the
parties hereto to be the final expression of their agreement with respect to
the subject matter hereof and is the

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<PAGE> 13

complete and exclusive statement of the terms thereof, notwithstanding any
representations, statements or agreements to the contrary heretofore made. This
Agreement supersedes and terminates all prior employment and compensation
agreements, arrangements and understandings between or among Employer and
Employee (including, without limitation, the Employment Agreement, dated
December 1, 1996, between Argenbright Holdings Limited, The ADI Group and
Employee and the Long Term Incentive Agreement, dated February 15, 1995, between
Argenbright Holdings Limited and Employee). This Agreement may be modified only
by a written instrument signed by all of the parties hereto.

6.6 Governing Law. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed, and governed by and in
accordance with, the laws of the State of Georgia. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority or by any
board of arbitrators by reason of such party or its counsel having or being
deemed to have structured or drafted such provision.

6.7 Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

6.8 Specific Performance. Each party hereto hereby agrees that
any remedy at law for any breach of the provisions contained in this Agreement
shall be inadequate and that the other parties hereto shall be entitled to
specific performance and any other appropriate injunctive relief in addition to
any other remedy such party might have under this Agreement or at law or in
equity.

6.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

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<PAGE> 14

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

AHL SERVICES, INC.

By: /s/ F.A. Argenbright, Jr.
--------------------------------
F.A. Argenbright, Jr.
Chairman

EMPLOYEE

/s/ Edwin R. Mellett
--------------------------------
Edwin R. Mellett

-12-

<PAGE> 1

EXHIBIT 10.2

AMENDMENT NO. 1 TO RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 TO RESTATED EMPLOYMENT AGREEMENT ("Amendment") is made
and entered into as of this 28th day of February, 1997, by and between THOMAS H.
MARANO, an individual resident of the State of Georgia ("Employee") and AHL
SERVICES, INC., a Georgia corporation (the "Employer").

WITNESSETH:

WHEREAS, Employer and Employee executed a Restated Employment Agreement
dated as of February 1, 1997 (the "Employment Agreement");

WHEREAS, Employer and Employee desire to amend the Employment Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:

1. Section 4.1(a) of the Employment Agreement is hereby amended and
restated to read in its entirety as follows:

"(a) Option Grant. Effective as of December 1, 1996, Employee is
hereby granted options to purchase 268,750 shares of common stock of
Employer at an exercise price of $10.75 per share. In addition,
effective as of February 28, 1997, Employee is hereby granted options to
purchase 6,250 shares of common stock of Employer at an exercise price
of $10.75 per share. Twenty percent of the options will be exercisable
on the date of grant and the balance will become exercisable 20% per
year on December 1, commencing December 1, 1997. The options granted
under this Section 4.1(a) will expire ten years from the date of grant,
except as otherwise provided in Section 4.2."

3. Entire Agreement This Amendment is intended by the parties hereto
to amend and supplement the Employment Agreement and, except as otherwise
stated herein, the Employment Agreement shall remain in full force and
effect.

5. Headings. The section and paragraph headings contained in this
Amendment are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Amendment.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.

AHL SERVICES, INC.

By: /s/ FRANK A. ARGENBRIGHT, JR.
------------------------------------
Frank A. Argenbright, Jr.
Chairman and Co-Chief Executive
Officer

EMPLOYEE

/s/ THOMAS J. MARANO
--------------------------------------
Thomas J. Marano
<PAGE> 3

RESTATED EMPLOYMENT AGREEMENT

THIS RESTATED AGREEMENT ("Agreement") is made and
entered into as of this 1st day of February, 1997, by and between THOMAS J.
MARANO, an individual resident of the State of Georgia ("Employee") and AHL
SERVICES, INC., a Georgia corporation (the "Employer").

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee, and Employee
desires to be employed by Employer, on the terms and conditions hereinafter set
forth;

NOW, THEREFORE, in consideration of the premises and the
mutual promises and agreements contained herein, the parties hereto, intending
to be legally bound, hereby agree as follows:

Section 1 Employment.

Subject to the terms hereof, the Employer hereby employs
Employee, and Employee hereby accepts such employment. Employee will serve as
President and Chief Operating Officer of Argenbright Holdings Limited or in such
other executive capacity as the Board of Directors of Employer (the "Board of
Directors") may hereafter from time to time determine. Employee agrees to devote
his full business time and best efforts to the performance of the duties that
Employer may assign Employee from time to time.

Section 2 Term of Employment.

The term of Employee's employment hereunder (the "Term") shall
be from October 15, 1996 until the earlier of (a) December 31, 2001 or (b) the
occurrence of any of the following events:

<PAGE> 4

embezzlement, (B) if Employee has engaged in a dishonest act
to the damage or prejudice of Employer or an affiliate of
Employer, or in conduct or activities materially damaging to
the property, business, or reputation of Employer or an
affiliate of Employer, (C) if Employee fails to comply with
the terms of this Agreement, and, within thirty (30) days
after written notice from Employer of such failure, Employee
has not corrected such failure or, having once received such
notice of failure and having so corrected such failure,
Employee at any time thereafter again so fails, or (D) if
Employee violates any of the provisions contained in Sections
5 of this Agreement; or

(iii) The termination of this Agreement by either party upon at
least ninety (90) days prior written notice.

Section 3 Compensation.

3.1 Term of Employment. Employer will provide Employee
with the following salary, expense reimbursement and additional employee
benefits during the term of employment hereunder:

(a) Salary. Employee will be paid a salary (the "Salary")
of no less than Two Hundred Fifty Thousand Dollars
($250,000) per annum, less deductions and
withholdings required by applicable law. The Salary
will be increased to Three Hundred Thousand Dollars
($300,000) per annum upon the earlier to occur of (i)
the date that annual revenues of Argenbright Holdings
Limited reach $150 million and pre-tax margins are at
least 3% of revenue, or (ii) July 1, 1997. The Salary
shall be paid to Employee in equal monthly
installments (or on such more frequent basis as other
executives of Employer are compensated). The Salary
shall be reviewed by the Board of Directors of
Employer on at least an annual basis.

(d) Club Dues. Employee shall be reimbursed for monthly
dues of The Atlanta Country Club so that this
facility may be used for client entertainment.

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<PAGE> 5

(e) Vacation. Employee shall receive three (3) weeks
vacation time per calendar year during the term of
this Agreement. Any unused vacation days in any
calendar year may not be carried over to subsequent
years.

(f) Expenses. Employer shall reimburse Employee for all
reasonable and necessary expenses incurred by
Employee at the request of and on behalf of Employer.

(g) Benefit Plans. Employee may participate in such
medical, dental, disability, hospitalization, life
insurance and other benefit plans (such as pension
and profit sharing plans) as Employer maintains from
time to time for the benefit of other senior
executives of Employer, on the terms and subject to
the conditions set forth in such plans.

Section 4 Stock Options.

4.1 Term of Employment. So that Employee can share in the
increase in value of the business of Employer over time, Employee will be
granted stock options as follows:

(a) Option Grant. Effective as of December 1, 1996,
Employee is hereby granted stock options to purchase
268,750 shares of common stock of Employer at an
exercise price of $11.76 per share. Twenty percent of
the options will be exercisable immediately, and the
balance will become exercisable 20% per year on the
first, second, third and fourth anniversary of the
date of grant. The options granted under this Section
4.1(a) will

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<PAGE> 6

expire ten years from the date of grant, except as
otherwise provided in Section 4.2.

(b) Sale or Merger. All options granted to Employee
pursuant to this Agreement will become fully
exercisable if Employer is sold (or all or
substantially all of the assets of Employer are sold)
(by stock sale, merger or otherwise) to a third
party.

(c) Stock Splits and Recapitalization. The number of
shares of common stock issuable upon exercise of
options granted hereby and the exercise price of such
options shall be automatically adjusted to reflect
any change in the capitalization of Employer,
including, but not limited to, such changes as stock
dividends, stock splits or recapitalizations. If any
adjustment under this Section would create the right
of Employee to acquire a fractional share of stock,
such fractional share shall be disregarded and the
number of shares of common stock subject to the
options shall be the next lower number of whole
shares of common stock, rounding all fractions
downward.

4.2 Termination of Employment. The grant of stock
options to Employee under this Agreement shall not restrict or in any manner
affect Employer's right to terminate the employment of Employee at any time,
with or without cause, as herein provided. If Employee's employment is
terminated pursuant to Section 2(b)(i) hereof or if Employee's employment is
terminated by Employer pursuant to Section 2(b)(iii), all options granted to
Employee pursuant to Section 4.1(a) hereof shall immediately become exercisable
upon such termination. In the case of a termination pursuant to Section 2(b)(i)
hereof, the options will expire in accordance with their respective scheduled
expiration dates. In the case of a termination by Employer pursuant to Section
2(b)(iii) hereof, the options will expire on the first anniversary of the
effective date of the termination of Employee's employment hereunder. Upon the
death of Employee, any options which Employee would otherwise be entitled to
exercise hereunder may be exercised by his personal representatives or heirs,
as applicable. If Employee's employment is terminated by Employer pursuant to
Section 2(b)(ii) or by Employee pursuant to Section 2(b)(iii), those options
which are exercisable as of the date of such termination shall be exercisable
for a period of one year after such termination (and all other options not then
exercisable shall be forfeited as of such date), and after such one year
period, all unexercised options will expire.

-4-

<PAGE> 7

agrees to enter into any agreement that Employer may request in connection with
the exercise of any options.

4.4 Nontransferable. No option granted under Section 4.1 shall
be transferable by Employee other than by will or by the laws of descent and
distribution, and the options granted under Section 4.1 shall be exercisable
during Employee's lifetime only by Employee. The options shall not be otherwise
transferred, assigned, pledged, hypothecated or disposed of in any way, whether
by operation of law or otherwise.

4.6 Non-Incentive Options. The options granted under Section
4.1 are not intended to be, and shall not be treated as, incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended.

4.7 Registration Statement on Form S-8. Following the
consummation of an initial public offering of the common stock of Employer (the
"IPO"), Employer undertakes to file a Registration Statement on Form S-8 (the
"Form S-8") to register the shares of common stock issuable upon exercise of the
options. Employer shall use its reasonable good faith efforts to file the Form
S-8 on or before the date that is six months after the consummation of the IPO.

Section 5 Partial Restraint on Post-termination
Competition.

5.1 Definitions. For the purposes of this Section 5, the
following definitions shall apply:

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<PAGE> 8

(e) "Customer" means actual customers or
actively sought prospective customers of
Employer during the Term.

(f) "Noncompete Period" or "Nonsolicitation
Period" means the period beginning the date
hereof and ending on the second anniversary
of the termination of Employee's employment
with Employer.

(g) "Territory" means the area within a
thirty-five (35) mile radius of any
corporate office of Employer or any of its
subsidiaries, affiliates or divisions.

-6-

<PAGE> 9

of efforts that are reasonable under the
circumstances to maintain their secrecy.

(i) "Work Product" means any and all work
product, property, data documentation or
information of any kind, prepared,
conceived, discovered, developed or created
by Employee for Employer or its affiliates,
or any of Employer's or its affiliates'
clients or customers.

5.2 Trade Name and Confidential Information.

(b) Upon the request of Employer and, in any
event, upon the termination of Employee's
employment with Employer, Employee

-7-

<PAGE> 10

shall deliver to Employer all memoranda,
notes, records, manuals and other documents,
including all copies of such materials and
all documentation prepared or produced in
connection therewith, pertaining to the
performance of Employee's services hereunder
or Employer's business or containing Trade
Secrets or Confidential Information, whether
made or compiled by Employee or furnished to
Employee from another source by virtue of
Employee's employment with Employer.

5.3 Noncompetition.

-8-

<PAGE> 11

5.4 Nonsolicitation During Employment Term. Employee
hereby agrees that Employee will not, during the Term, either directly or
indirectly, alone or in conjunction with any other party:

-9-

<PAGE> 12

with knowledge of or access to Trade Secrets
and Confidential Information.

Section 6 Miscellaneous.

6.1 Severability. The covenants in this Agreement shall
be construed as covenants independent of one another and as obligations distinct
from any other contract between Employee and Employer. Any claim that Employee
may have against Employer shall not constitute a defense to enforcement by
Employer of this Agreement.

6.2 Survival of Obligations. The covenants in Section 5
of this Agreement shall survive termination of Employee's employment,
regardless of who causes the termination and under what circumstances.

EMPLOYER

AHL Services, Inc.
Atlanta Financial Center
3353 Peachtree Road, NE
Suite 1120, North Tower
Atlanta, Georgia 30326
Attention: Mr. F.A. Argenbright, Jr.
Chairman
Telecopy No.: (404) 267-2222

EMPLOYEE

Mr. Thomas J. Marano
40 Old Stratton Chase
Atlanta, Georgia 30328
Telecopy No.: (404) 559-1522

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<PAGE> 13

6.4 Binding Effect. This Agreement inures to the benefit of,
and is binding upon, Employer and their respective successors and assigns, and
Employee, together with Employee's executor, administrator, personal
representative, heirs, and legatees.

6.5 Entire Agreement This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the subject
matter hereof and is the complete and exclusive statement of the terms thereof,
notwithstanding any representations, statements or agreements to the contrary
heretofore made. This Agreement supersedes and terminates all prior employment
and compensation agreements, arrangements and understandings between or among
Employer and Employee (including, without limitation, the Employment Agreement,
dated December 1, 1996, between Argenbright Holdings Limited, The ADI Group and
Employee and the Long Term Incentive Agreement, dated May 23, 1995, between
Argenbright Holdings Limited and Employee). This Agreement may be modified only
by a written instrument signed by all of the parties hereto.

6.7 Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

6.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

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<PAGE> 14

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

AHL SERVICES, INC.

By: /s/ F.A. Argenbright
------------------------------------
F.A. Argenbright, Jr.
Chairman

EMPLOYEE

/s/ Thomas J. Marano
------------------------------------
Thomas J. Marano

-12-

<PAGE> 1

EXHIBIT 10.3

AMENDMENT NO. 1 TO RESTATED EMPLOYMENT AGREEMENT

THIS AMENDMENT NO. 1 TO RESTATED EMPLOYMENT AGREEMENT ("Amendment") is made
and entered into as of this 28th day of February, 1997, by and between DAVID L.
GAMSEY, an individual resident of the State of Georgia ("Employee") and AHL
SERVICES, INC., a Georgia corporation (the "Employer").

WITNESSETH:

WHEREAS, Employer and Employee executed a Restated Employment Agreement
dated as of February 1, 1997 (the "Employment Agreement");

WHEREAS, Employer and Employee desire to amend the Employment Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements contained herein, the parties hereto, intending to be legally
bound, hereby agree as follows:

1. Section 4.1(a) of the Employment Agreement is hereby amended and
restated to read in its entirety as follows:

"(a) Option Grant. Effective as of December 1, 1996, Employee is
hereby granted options to purchase 107,500 shares of common stock of
Employer at an exercise price of $10.75 per share. In addition,
effective as of February 28, 1997, Employee is hereby granted options to
purchase 2,500 shares of common stock of Employer at an exercise price
of $10.75 per share. Twenty percent of the options will be exercisable
on the date of grant and the balance will become exercisable 20% per
year on December 1, commencing December 1, 1997. The options granted
under this Section 4.1(a) will expire ten years from the date of grant,
except as otherwise provided in Section 4.2."

5. Headings. The section and paragraph headings contained in this
Amendment are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Amendment.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.

AHL SERVICES, INC.

By: /s/ FRANK A. ARGENBRIGHT, JR.
------------------------------------
Frank A. Argenbright, Jr.
Chairman and Co-Chief Executive
Officer

EMPLOYEE

/s/ DAVID L. GAMSEY
--------------------------------------
David L. Gamsey
<PAGE> 3

RESTATED EMPLOYMENT AGREEMENT

THIS RESTATED AGREEMENT ("Agreement") is made and
entered into as of this 1st day of February, 1997, by and between DAVID L.
GAMSEY, an individual resident of the State of Georgia ("Employee"), and AHL
SERVICES, INC., a Georgia corporation (the "Employer").

W I T N E S S E T H:

WHEREAS, Employer desires to employ Employee, and Employee
desires to be employed by Employer, on the terms and conditions hereinafter set
forth;

NOW, THEREFORE, in consideration of the premises and the
mutual promises and agreements contained herein, the parties hereto, intending
to be legally bound, hereby agree as follows:

Section 1 Employment.

Subject to the terms hereof, the Employer hereby employs
Employee, and Employee hereby accepts such employment. Employee will serve as
Chief Financial Officer of Employer or in such other executive capacity as the
Board of Directors of Employer (the "Board of Directors") may hereafter from
time to time determine. Employee agrees to devote his full business time and
best efforts to the performance of the duties that Employer may assign Employee
from time to time.

Section 2 Term of Employment.

The term of Employee's employment hereunder (the "Term") shall
be from October 15, 1996 until the earlier of (a) December 31, 2001 or (b) the
occurrence of any of the following events:

<PAGE> 4

(iii) The termination of this Agreement by either party upon at
least ninety (90) days prior written notice.

Section 3 Compensation.

3.1 Term of Employment. Employer will provide Employee
with the following salary, expense reimbursement and additional employee
benefits during the term of employment hereunder:

(a) Salary. Employee will be paid a salary (the "Salary")
of no less than One Hundred Sixty-Five Thousand
Dollars ($165,000) per annum, less deductions and
withholdings required by applicable law. The Salary
shall be paid to Employee in equal monthly
installments (or on such more frequent basis as the
other executives of Employer are compensated). The
Salary shall be reviewed by the Board of Directors of
Employer on at least an annual basis.

(b) Bonus. Employee will be entitled to an annual bonus
(the "Bonus") of up to 30% of Salary, which Bonus
shall be dependent upon Employer's financial
performance versus budget and achievement of personal
objectives established for Employee by Employer. The
Bonus shall be paid promptly upon the availability of
annual financial results (which is expected to occur
in early February of each year).

(d) Club Dues. Employee shall be reimbursed for monthly
dues of The One- Ninety- One Club so that this
facility may be used for client entertainment.

-2-

<PAGE> 5

(f) Expenses. Employer shall reimburse Employee for all
reasonable and necessary expenses incurred by
Employee at the request of and on behalf of Employer.

3.2 Effect of Termination. Except as hereinafter
provided, upon the termination of the employment of Employee hereunder for any
reason, Employee shall be entitled to all compensation and benefits earned or
accrued under Section 3.1 as of the effective date of termination (the
"Termination Date"), but from and after the Termination Date no additional
compensation or benefits shall be earned by Employee hereunder. Employee shall
be deemed to have earned any Bonus payable with respect to the calendar year in
which the Termination Date occurs on a prorated basis (based on the number of
days in such calendar year through and including the Termination Date divided
by 365). Any such Bonus shall be payable on the date on which the Bonus would
have been paid had Employee continued his employment hereunder. If Employee's
employment hereunder is terminated by Employer pursuant to Section 2(b)(iii)
hereof, then, in addition to any other amount payable hereunder, Employer shall
continue to pay Employee his normal Salary pursuant to Section 3.1(a) for the
six-month period immediately following the Termination Date (on the same basis
as if Employee continued to serve as an employee hereunder for such six-month
period). All stock options granted to Employee pursuant to Section 4 hereof
shall be governed in accordance with Section 4.2 hereof upon termination of
Employee's employment.

Section 4 Stock Options.

4.1 Term of Employment. So that Employee can share in the
increase in value of the business of Employer over time, Employee will be
granted stock options as follows:

(a) Option Grant. Effective as of December 1, 1996,
Employee is hereby granted stock options to purchase
107,500 shares of common stock of Employer at an
exercise price of $11.76 per share. Twenty percent of
each option grant will be exercisable immediately,
and the balance will become exercisable 20% per year
on the first, second, third and fourth anniversary of
the date of grant. The options granted under this
Section 4.1(a) will expire ten years from the date of
grant, except as otherwise provided in Section 4.2.

(b) Sale or Merger. All options granted to Employee
pursuant to this Agreement will become fully
exercisable if Employer is sold (or all or

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<PAGE> 6

substantially all of the assets of Employer are sold)
(by stock sale, merger or otherwise) to a third
party.

4.2 Termination of Employment. The grant of stock
options to Employee under this Agreement shall not restrict or in any manner
affect Employer's right to terminate the employment of Employee at any time,
with or without cause, as herein provided. If Employee's employment is
terminated pursuant to Section 2(b)(i) hereof or if Employee's employment is
terminated by Employer pursuant to Section 2(b)(iii), all options granted to
Employee pursuant to Section 4.1(a) hereof shall immediately become exercisable
upon such termination. In the case of a termination pursuant to Section 2(b)(i)
hereof, the options will expire in accordance with their respective scheduled
expiration dates. In the case of a termination by Employer pursuant to Section
2(b)(iii) hereof, the options will expire on the first anniversary of the
effective date of the termination of Employee's employment hereunder. Upon the
death of Employee, any options which Employee would otherwise be entitled to
exercise hereunder may be exercised by his personal representatives or heirs,
as applicable. If Employee's employment is terminated by Employer pursuant to
Section 2(b)(ii) or by Employee pursuant to Section 2(b)(iii), those options
which are exercisable as of the date of such termination shall be exercisable
for a period of one year after such termination (and all other options not then
exercisable shall be forfeited as of such date), and after such one year
period, all unexercised options will expire.

4.4 Nontransferable. No option granted under Section 4.1
shall be transferable by Employee other than by will or by the laws of descent
and distribution, and the options granted

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<PAGE> 7

Section 5 Partial Restraint on Post-termination
Competition.

5.1 Definitions. For the purposes of this Section 5, the
following definitions shall apply:

(c) "Competitive Position" means (i) the direct
or indirect ownership or control of all or
any portion of a Competitor; or (ii) any

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<PAGE> 8

employment or independent contractor
arrangement with any Competitor whereby
Employee will serve such Competitor in any
managerial capacity.

(e) "Customer" means actual customers or
actively sought prospective customers of
Employer during the Term.

(f) "Noncompete Period" or "Nonsolicitation
Period" means the period beginning the date
hereof and ending on the second anniversary
of the termination of Employee's employment
with Employer.

(g) "Territory" means the area within a
thirty-five (35) mile radius of any
corporate office of Employer or any of its
subsidiaries, affiliates or divisions.

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<PAGE> 9

5.2 Trade Name and Confidential Information.

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<PAGE> 10

5.3 Noncompetition.

5.4 Nonsolicitation During Employment Term. Employee
hereby agrees that Employee will not, during the Term, either directly or
indirectly, alone or in conjunction with any other party:

(a) solicit, divert or appropriate or attempt to
solicit, divert or appropriate, any Customer
for the purpose of providing the

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<PAGE> 11

Customer with services or products
competitive with those offered by Employer
during the Term; or

Section 6 Miscellaneous.

6.1 Severability. The covenants in this Agreement shall
be construed as covenants independent of one another and as obligations
distinct from any other contract between Employee and Employer. Any claim that
Employee may have against Employer shall not constitute a defense to
enforcement by Employer of this Agreement.

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<PAGE> 12

6.2 Survival of Obligations. The covenants in Section 5
of this Agreement shall survive termination of Employee's employment,
regardless of who causes the termination and under what circumstances.

EMPLOYER

AHL Services, Inc.
Atlanta Financial Center
3353 Peachtree Road, NE
Suite 1120, North Tower
Atlanta, Georgia 30326
Attention: Mr. F.A. Argenbright, Jr.
Chairman
Telecopy No.: (404) 267-2222

EMPLOYEE

Mr. David L. Gamsey
115 Marsh Glen Point
Atlanta, Georgia 30328

6.5 Entire Agreement This Agreement is intended by the
parties hereto to be the final expression of their agreement with respect to
the subject matter hereof and is the complete and exclusive statement of the
terms thereof, notwithstanding any representations, statements or agreements to
the contrary heretofore made. This Agreement supersedes and terminates all
prior employment and compensation agreements, arrangements and understandings
between or among Employer and Employee (including, without limitation, the
Employment Agreement, dated December 1, 1996, between Argenbright Holdings
Limited, The ADI Group and Employee and the Long Term Incentive Agreement,
dated August 9, 1995, between

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<PAGE> 13

Argenbright Holdings Limited and Employee). This Agreement may be modified only
by a written instrument signed by all of the parties hereto.

6.7 Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

6.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

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<PAGE> 14

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.

AHL SERVICES, INC.

By: /s/ F.A. Argenbright, Jr.
------------------------------------
F.A. Argenbright, Jr.
Chairman

EMPLOYEE

/s/ David L. Gamsey
---------------------------------------
David L. Gamsey

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<PAGE> 1
EXHIBIT 10.4

DIRECTOR'S SERVICE AGREEMENT

DATE: 1 JANUARY, 1993

PARTIES:

(1) THE ADI GROUP LIMITED WHOSE REGISTERED OFFICE IS AT CAPITAL PLACE, 120
BATH ROAD, HAYES, MIDDLESEX UB3 5AN ("THE COMPANY") AND

(2) ALAN TREVOR WARBURTON, OF GLENN COTTAGE, RUFWOOD, CRAWLEY DOWN, WEST
SUSSEX ("THE EXECUTIVE")

IT IS AGREED AS FOLLOWS:

1 INTERPRETATION

1.1 DEFINITIONS:

In this Agreement the following words and phrases shall have the
meanings given below:

"Appointment" the employment of the Executive on the terms
of this Agreement;

"Associated Company" any company which for the time being is:

(i) a holding company (as defined by
Section 736 of the Companies Act
1985) of the Company;

(ii) a subsidiary (as defined by Section
736 of the Companies Act 1985) of
the Company or of any holding
company of the Company;

(iii) a company over which the Company
has control within the meaning of
Section 840 of the Income and
Corporation Taxes Act of 1988; or

<PAGE> 2
(iv) a subsidiary undertaking as defined
by Section 258 of the Companies Act
1985;

(v) in substantially the same ownership
as the Company;

"Board" the Board of Directors of the Company
including any duly appointed committee or
nominee of the Board;

"day's salary" 1/260th of the Executive's salary;

"Effective Date" 1 January 1993

"Group" the Company and/or any Associated Company;

"holiday year" the period of twelve months commencing on
1 April;

"remuneration" the salary and payments under Clause 6.;

"salary" the salary payable from time to time under
Clause 6.1;

"termination" the ending of the Appointment however it
arises and irrespective of its cause or
manner, including the wrongful termination
of the Appointment by the Company or the
Executive.

1.2 CONSTRUCTION:

(a) References to acting directly or indirectly shall include
acting alone or jointly with or on behalf of or by means of
another person and/or giving advice or providing services with
a view to assisting another person.

(b) References to a person shall include an individual, firm,
corporation and any other organization however it is
constituted and words denoting the singular shall include the
plural and vice versa.

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<PAGE> 3
(c) References to statutory provisions shall be construed as
references to those provisions as amended or re-enacted from
time to time (whether before or after the date of this
Agreement).

(d) The clause headings have been added for convenience only and
shall not affect the construction of this Agreement.

2 APPOINTMENT

Upon and subject to the terms of the Appointment the Company shall from
the Effective Date employ the Executive under the title of Group
Managing Director and the Executive shall serve the Company in that
capacity, or in such other capacity of similar status as may reasonably
be required of him from time to time by the Board subject to the terms
and conditions of this Agreement. The Appointment is for a minimum
period of 24 (twenty four) months.

3 DUTIES DURING THE APPOINTMENT

3.1 The Executive shall (unless prevented by ill health or injury) devote
the whole of his time, attention and abilities during the Appointment
to the business of the Group and shall not, without the prior written
consent of the Board

(a) accept any other appointment or be directly or
indirectly engaged in or concerned with the conduct
of any other business; or

(b) be directly or indirectly financially interested in
any such business, save through his holding or being
interested in investments (whether or not they are
listed or dealt in on any recognized stock exchange)
not representing more than 10% (ten percent) of any
class of shares or securities in any one company.

3.2 The Executive shall during the Appointment:

(a) loyally and diligently perform such duties and
exercise such powers for the Group as the Board may
from time to time assign to or vest in him, accepting
without further remuneration other offices within the
Group;

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<PAGE> 4
(b) keep the Board properly informed about the business
of the Group and promptly give it such explanations
and information regarding his activities an the
affairs of the Group as it shall from time to time
require;

(d) comply with any written codes of conduct for
employees of the Group, and any amendments thereto,
which may be issued to him from time to time; and

(e) promote and protect the interests of the Group,
giving at all times the full benefit of his
knowledge, expertise, skill and ingenuity, and not
doing anything which is to the detriment of any such
company.

3.3 The Executive shall not, without the prior written consent of the
Board, directly or indirectly receive or retain any payment or benefit
in respect of any business transacted (whether or not by him) by or on
behalf of the Group or with a view to any such business being
transacted.

3.4 During the Appointment or while he is a director of the Group the
Executive shall comply (and shall procure, so far as he is able, that
his wife and infant children comply) with any code of conduct relating
to securities transactions by directors and specified employees issued
by the Group from time to time, provided that the Company shall keep
the Executive advised of any changes to such code.

4. CONFIDENTIALITY

4.1 The Executive acknowledges that during his employment with the Company
he will have access to and be entrusted with trade secrets and
confidential information relating to the business of the Group. This
will include information and secrets relating to corporate strategy,
business development and plans, business methods and processes,
business contacts, names of customers and suppliers, terms of business,
stock levels, sales, expenditure levels, pricing policies, management
accounts and other financial information concerning the business of the
Group.

4.2 The Executive shall not during the Appointment (otherwise than in the
proper performance of his duties and then only to those who need to
know such

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<PAGE> 5
secrets or information) or thereafter (except with the prior written
consent of the Board or as required by law):

(a) divulge or communicate to any person (including any
representative of the press or broadcasting or other
media);

(b) cause or facilitate any unauthorized disclosure
through any failure by him to exercise all due care
and diligence; or

any trade secrets or confidential information relating to the business
of the Group, which may have come to his knowledge during his
employment with the Company or in respect of which the Group may be
bound by an obligation of confidence to any third party. The Executive
shall also during the Appointment use his best endeavors to prevent the
publication or disclosure of any such secrets or information. These
restrictions shall not apply after the Appointment has terminated to
information which has become available to the public generally,
otherwise than through unauthorized disclosure.

4.3 All notes, memoranda, and other records (including those stored on
computer software) made by the Executive during his employment with the
Company and which relate to the business of the Group shall belong to
the Group and shall promptly be handed over to the Company (or as the
Company shall direct) from time to time.

5 LOCATION

The Executive shall be based at the Company's head offices, but may be
required to work at other locations within the United Kingdom whether
on a temporary or permanent basis and overseas on a temporary basis in
the performance of his duties.

6 REMUNERATION

6.1 The Company shall pay to the Executive a salary at the rate of L.
77,000 (seventy seven thousand pounds) per annum, including any
director's fees from the Group. The Company shall review this salary at
appropriate periods agreed between the Company and the Executive. This
salary shall accrue from day to day and shall normally be payable by
equal instalments into a bank account in the United Kingdom nominated
by the Executive and shall be subject to such deductions as may be
required by law or under the terms of the Appointment.

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<PAGE> 6

6.2 The Executive shall, in addition to his salary, be eligible for a bonus
which shall be calculated as follows:

6.2.1 There shall be a profit threshold for bonus purposes
in each calendar year of this Agreement of L. 750,000
(the "Profit Threshold") which shall then be divided
into segments of L. 168,750 for the first quarter of
the calendar year, L. 187,500 each for the second and
third quarters of the calendar year, and L. 206,250
for the fourth quarter of the calendar year.

6.2.2 At the end of each quarter of the calendar year, the
actual profits of the Company before tax but after
interest and other non-operating charges (the "Bonus
Profits") for that quarter (as derived from the
management accounts of the Company) shall be compared
to the segment of the Profit Threshold specified for
that quarter in accordance with Clause 6.2.1 above.

6.2.3 To the extent that the Bonus Profits for that quarter
exceed the segment of the Profit Threshold for such
quarter, the Executive shall be entitled to a bonus
of a sum equal to 3% of the excess.

6.2.4 Payment of any Bonus (net of such deductions as are
required by law) by the Company to the Executive
shall be made within 30 days after the end of the
relevant quarter or within 10 days of the
certification by the Company's Auditors of the Bonus
Profits for that quarter in accordance with clause
6.2.5 below, whichever is the later.

6.2.5 The Board may on its own initiative or at the request
of the Executive and in either case within 28 days
after the end of any quarter, request in writing the
Company's Auditors to certify the Bonus Profits for
that quarter. The Auditor's certificate of the Bonus
Profits shall be final and binding. For the purpose
of this clause the Auditors shall be acting as
experts and not arbitrators.

6.2.6 For the avoidance of doubt, to the extent that the
Bonus Profits for any quarter are less than the
segment of the Profit Threshold for that quarter, the
Company shall not be entitled to recover from the
Executive, or to set off such deficiency

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<PAGE> 7
against any past or future entitlement of the
Executive to payment of a Bonus in accordance with
this Clause 6.

6.2.7 In the event that the Appointment is terminated at
any time other than at the end of any quarter
specified in Clause 6.2.1 above, the Executive shall
not be entitled to any Bonus in respect of the
quarter during which the Appointment is terminated
nor shall the Executive be entitled to any Bonus in
respect of any period of notice in respect of which
the Company elects to pay him in lieu pursuant to
clause 13.5 below.

6.3 The Company may withhold the payment of any monies due to the Executive
if his is in breach of Clauses 4.2, 4.3, 12, 14 or 16, and may withhold
or deduct from his remuneration or expenses any monies due to the Group
under the Appointment or otherwise.

7 EXPENSES

The Executive shall be entitled, upon production of satisfactory
evidence of payment or expenditure, to be reimbursed all reasonable
out-of-pocket expenses, properly and wholly incurred by him in the
performance of his duties. Any credit card supplied to the Executive by
the Company shall be used solely for expenses incurred by him in the
performance of his duties.

8 ILL HEALTH AND INJURY

8.1 If at any time during the Appointment the Executive shall be unable to
perform his duties for the Group as a result of ill health or injury,
he shall nevertheless, for so long as the Appointment remains in
effect, be entitled to his salary during any period of incapacity of
not more than 3 months (whether consecutive or not) in any period of
fifty two consecutive weeks. Thereafter, for so long as the Appointment
remains in effect, any further payments shall be limited to such salary
as may be made in the sole discretion of the Board and, as a condition
of any such payment, the Executive may be required to comply with
Clause 14 as if the Appointment had been terminated.

8.2 The payment of any such salary shall be:

(a) subject to the production of satisfactory evidence
from a registered medical practitioner in respect of
any period of absence in excess of seven consecutive
days; and

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<PAGE> 8
(b) inclusive of any statutory sick pay to which the
Executive is entitled, and the Company may deduct
from his salary the amount of any social security
benefits he may receive or be entitled to receive.

8.3 The Executive shall promptly inform the Company if he is unable to
perform his duties as a result of ill health or injury caused by a
third party and in respect of which compensation is or may be
recoverable. In consideration of the Company continuing to pay his
salary and to provide other benefits during the Appointment, he shall
take such action as the Company may reasonably request in connection
with pursuing a claim against such third party, in order to recover for
the benefit of the Company the costs of continuing the Appointment. He
shall keep the Company regularly informed of the progress of any claim
and provide such information about it as the Company may from time to
time reasonably require. In any event he shall immediately notify the
Company in writing of any compromise, settlement, award or judgement in
connection with the claim. He hereby assigns to the Company and shall,
upon be requested so to do, refund to the Company such sum as it shall
determine but which shall not exceed the lesser of the amount recovered
by him, less any related costs borne by him, and the aggregate cost of
the salary and other benefits paid to him during his ill health or
injury.

8.4 The Executive shall submit himself to a medical examination at the
request and expense of the Company whether or not he is unable to
perform his duties for the Group as a result of ill health or injury,
and shall co-operate in ensuring the prompt delivery of all relevant
medical reports to the Company.

9 HOLIDAYS

9.1 The Executive shall (in addition to normal public holidays) be
entitled without loss of salary to 25 days' holiday in each complete
holiday year during the Appointment, such holiday to be taken at such
times as shall be convenient to the Company. The Company may require
the Executive to take any outstanding holiday during any period of
notice under Clause 13 or for which he is required not to attend for
work under Clause 13.5.

9.2 The entitlement to holiday accrues pro rata throughout each holiday
year. Any entitlement to holiday remaining at the end of any holiday
year shall lapse and no salary in lieu of such entitlement shall be
paid.

9.3 On the termination of the Appointment (otherwise than pursuant to
Clause 13.1) the Executive shall be entitled to a day's salary in lieu
of holiday accrued due but not taken. If the Executive has taken
holiday in excess of his accrued entitlement, the Company shall be
entitled to deduct a day's salary for each excess day taken from any
monies owed to him by the Company.

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<PAGE> 9
10 BENEFITS DURING THE APPOINTMENT

10.1 The Executive shall be eligible during the Appointment for Private
Health Insurance for himself and his wife and Permanent Health
Insurance for himself up to the rate of L. 2,500 per annum.

11 COMPANY CAR

11.1 The Company shall provide the Executive with a car for which the
monthly lease payment shall not exceed L. 770 and a car telephone for
use in the performance of his duties for the Group and the Executive
shall be obliged to use it as may be necessary. The Executive shall
also be entitled to reasonable use of such car for his private
purposes, subject to such restrictions and upon such conditions as the
Company may from time to time impose.

11.2 The Company shall bear the costs of insuring and taxing that car and
shall reimburse the Executive, upon the production of satisfactory
evidence of payment or expenditure, for all reasonable running expenses
(including petrol, lubrication, maintenance and repairs) in connection
with such use.

11.3 As an alternative to the car to be provided by the Company pursuant to
Clause 11.1 above, the Executive may, at his sole discretion, elect to
accept instead a car allowance, at a rate of L. 600 per month. In the
event that the Executive elects for the car allowance, the Company will
reimburse to the Executive the cost of insurance, petrol, and
lubrication. The amount of the car allowance will be reviewed from time
to time, as agreed between the Company and the Executive.

11.4 The Executive shall comply with all directions which may from time to
time be given by the Company concerning the use of its cars.

12 INTELLECTUAL PROPERTY RIGHTS

Any trade mark, design or other copyright work created by the Executive
during his employment (and whether or not in conjunction with a third
party) in connection with, affecting or relating to the business of the
Group or capable of being used or adapted for use therein shall
forthwith be disclosed to the Company and shall belong to and be the
absolute property of the relevant company in the Group. The Executive
hereby waives any moral rights which he may have in such works. The
Executive shall at the Company's expense and upon request (whether
during or after the termination of the Appointment) execute all such
documents as may be necessary to effect the same and to vest all
rights, title and interest thereto in such company absolutely.

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<PAGE> 10
13 TERMINATION

13.1 The Company may, notwithstanding any other provisions of the
Appointment and irrespective of whether the grounds for termination
arose before or after its commencement, at any time by notice in
writing to the Executive terminate the Appointment with immediate
effect:

(a) if the Executive is incapacitated by ill health or
injury from performing his duties and has been so
incapacitated for a period of 3 (three) months
(whether consecutive or not in any period of
fifty-two consecutive weeks;

(b) if the Executive becomes of unsound mind or a patient
within the meaning of the Mental Health Act 1983,
become bankrupt or makes any composition or enters
into any deed of arrangement with his creditors
generally;

(c) if the Executive is prohibited by law or by any
decision of a regulatory body from being a director
or taking part in the management of the Group;

(d) if the Executive is convicted of

(i) a criminal offense other than one which in
the opinion of the Board does not affect his
position as an employee of the Company,
bearing in mind that nature of his duties
and the capacity in which he is employed; or

(ii) an offense relating to insider detailing;

(e) if the Executive is guilty of any serious default or
misconduct in connection with or affecting the
business of the Group;

(f) if the Executive commits any serious or repeated
breach of his obligations of the Appointment or is
guilty of serious neglect or negligence in the
performance of his duties;

(g) if the Executive behaves in a manner (whether on or
off duty) which is likely to bring the Group into
disrepute or prejudice its interests or which
seriously impairs the Executive's ability to perform
his duties.

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<PAGE> 11
13.2 The Company may, notwithstanding any other provisions of the
Appointment, terminate the Appointment by not less than 12 (twelve)
months written notice to expire on 31 December 1995 or any succeeding
31 December.

13.3 Notwithstanding anything provided in this Agreement, the Appointment
shall automatically cease without any notice being given on the day the
Executive attains his 60th birthday.

13.4 The Appointment may be terminated by the Executive by not less than 6
(six) months' written notice to the Company to expire at any time.

13.5 Instead of requiring the Executive to continue performing duties and of
the Company providing him with duties during his period of notice, the
Company shall be entitled, at its sole discretion, to give him payment
in lieu of any such period.

13.6 If the Company wishes to terminate the employment of the Executive or
if the Executive wishes to leave the employment of the Company before
the expiry of the period of notice specified in Clause 13.2 or Clause
13.4 above and whether or not either party has given notice to the
other under that Clause, the Company may require the Executive to
perform duties not within his normal duties or special projects or,
whilst continuing to provide him with his contractual entitlements, may
require him not to attend for work for a period of no more than three
months from the date of notice being given under Clause 13.2 or Clause
13.4 above or (if no such notice has been given) from the date on which
he is requested by the Company not to attend for work. If the Executive
is not to attend for work under this Clause, he shall not be entitled
to be compensated for any bonus or profit share which, because it is
determined directly by reference to his own personal performance, he
may thereby be prevented from earning.

14 OBLIGATIONS RELATING TO TERMINATION

14.1 Upon the termination of the Appointment the Executive shall:

(a) return to the Company the car and car telephone
provided to him pursuant to Clause 11.1 and all keys
and shall not retain them in connection with any
claim for compensation which he may have;

(b) return to the Company any credit card supplied to him
by it;

(c) hand over to the Company all property belonging to
the Group or its customers, or suppliers which may be
in his possession or under his control, and neither
he nor anyone on his behalf shall keep copies of any
reproducible items. The Executive shall, on being
requested to

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<PAGE> 12
do so, send to the Company Secretary a signed
statement that he has complied with this subclause;

14.2 Upon the termination of the Appointment or upon either party giving
notice under Clause 13 and the Executive not being required to work, or
the Company exercising its rights under Clause 13.4 or 13.5, the
Executive shall at the request of the Company resign without claim for
compensation from all offices held by him in the Group and from all
trusteeships held by him of any pension scheme or other trusts
established by the Company or an Associated Company. Should he fail to
do so the Board is hereby irrevocably authorized to appoint some person
in his name and on his behalf to sign any documents and take such other
steps as are necessary to give effect thereto. Such resignations shall
be given and accepted without prejudice to any claims which the Company
and the Executive may have arising out of or in connection with the
Appointment and its termination.

15 STATEMENTS AND FURTHER ASSISTANCE

After the termination of the Appointment the Executive:

(a) shall not at any time make any untrue or misleading
statement about any company in the Group or its
officials or employees or represent himself as being
employed by or connected with any such company; and

(b) agrees to co-operate with any company in the Group
for whom he performed duties by providing such
reasonable assistance as may be required in
connection with any claim made by or against any such
company, where it considers that the Executive has
knowledge or information which is relevant to such
claim. The provision of such assistance shall include
attending meetings, giving and signing statements and
attending hearings. The Company shall reimburse the
Executive for his reasonable out of pocket expenses
incurred in the providing of such assistance.

16 RESTRICTIVE COVENANTS

16.1 The Executive agrees that during the Appointment and for the periods
set out below after the termination of the Appointment, he will not
(except with prior written consent of the Board) directly or indirectly
do or attempt to do any of the following:

(a) for 12 (twelve) months undertake, carry on or be
employed, engaged or interested in any capacity in
any other business competitive with or similar to a
Relevant Business within the Territory and whether

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<PAGE> 13
any such business in which the Executive is to be
involved is either located or to be located within
the Territory or conducted or to be conducted wholly
or partly within the Territory;

(b) for 12 (twelve) months entice, induce or encourage a
Customer to transfer or remove custom from the
Company or any Associated Company;

(d) for 12 (twelve) months entice, induce or encourage an
Employee to leave or seek to leave his or her
position with the Company or any Associated Company
for the purpose of being involved in or concerned
with either the supply of Relevant Services or a
business which competes with or is similar to a
Relevant Business regardless of whether or not that
Employee acts in breach of his contract of employment
with the Company or any Associated Company by so
doing; or

(e) for 12 (twelve) months employ, engage or work with an
Employee of the Company or any Associated Company for
the purpose of the supply of Relevant Services or a
business which competes with or is similar to a
Relevant Business.

16.2 For the purpose of this Clause:

(a) "Customer" means a person:

(i) who was at any time during the Relevant
Period a customer of the Company or any
Associated Company (whether or not Relevant
Services were actually provided during such
period) or to whom during such period the
Company or any Associated Company was
actively and directly seeking to supply
goods or services for the purpose of a
Relevant Business; and

(ii) with whom the Executive or an Employee in a
Relevant Business reporting directly to the
Executive had dealings at any time during
the Relevant Period in pursuance of duties
to the Company or any Associated Company.

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<PAGE> 14
(b) "Related Services" means goods or services identical
or similar to or competitive with those which
(i) the Company or any Associated Company was
supplying or actively and directly seeking
to supply to a Customer for the purpose of a
Relevant Business;

(ii) the Supplier was supplying or had agreed to
supply or was actively and directly
negotiating to supply to the Company or any
Associated Company for the purpose of a
Relevant Business.

(c) "Relevant Business" means a business of the Company
or any Associated Company in which, pursuant to his
duties, the Executive was materially involved at any
time during the Relevant Period.

(d) "Territory" means a radius of 30 miles of any airport
or other location at which the Company or Relevant
Business is operating or planned to operate as at the
date of termination;

(e) "Employee" means a person who is employed by or who
renders services to the Company or any Associated
Company in a Relevant Business in a managerial
capacity and who in either case was so employed or so
rendered services at any time during the Relevant
Period and had dealings with the Executive during
that period.

(f) "Relevant Period" means the period of 12 (twelve)
months ending on the last day of the Appointment or
the period of the Executive's employment if shorter.

16.3 Each sub-clause and part of such sub-clause of this Clause constitutes
an entirely separate and independent restriction. If any restriction is
held to be invalid or unenforceable by a court of competent
jurisdiction, it is intended and understood by the parties that such
invalidity or unenforceability shall not affect the remaining
restrictions.

16.4 The Executive agrees that before entering into this Agreement he had
the opportunity to obtain legal advice and that each of the
restrictions in this Clause goes no further than is necessary for the
protection of the Company's and each Associated Company's legitimate
business interests.

16.5 The Executive agrees that, before accepting any offer of employment
either during the Appointment or during the continuance of the
restrictions in this Clause, he shall

- 14 -
<PAGE> 15
immediately provide to the person making such offer a complete signed
copy of this Agreement.

17 CONTINUING OBLIGATIONS

The termination of the Appointment shall be without prejudice to the
rights or remedies of either party against the other in respect of any
antecedent breach of any of its provisions and shall be without
prejudice to the continuing obligations of the Executive or the Company
(as the case may be) under any provision of the Appointment expressed
to have effect after it has terminated.

18 CORPORATE RECONSTRUCTION

18.1 If the Appointment shall terminate

(a) by reason of the liquidation of the Company for the
purpose of amalgamation or reconstruction; or

(b) as part of any arrangement for the amalgamation of
the undertaking of the Company not involving
liquidation; or

(c) as part of any arrangement for the transfer of the
whole or part of the undertaking of the Company to an
Associated Company and the Executive shall be offered
employment of a similar nature with any person
resulting from such amalgamation or reconstruction or
with which the undertaking of the Company is
amalgamated or such Associated Company on terms which
when taken as a whole are not less favorable to the
Executive than the terms of the Appointment, the
Executive shall have no claim against the Company or
any Associated Company in respect of the termination
of the Appointment by reason of the events described
in (a), (b) or (c) of this paragraph.

18.2 The Executive agrees that the Company may at any time during the
Appointment by written notice substitute an Associated Company as his
employer, whereupon the Appointment shall remain in full force and
effect except that the obligations and benefits previously owed to or
enjoyed by the Company shall be owed to or enjoyed by that Associated
Company and accordingly references to the Company shall thereafter be
deemed to be references to that Associated Company. More than one such
transfer may be made. No damages or other compensation shall be payable
by reason of such a transfer.

- 15 -
<PAGE> 16
19 DIRECTORSHIPS

The duties of the Executive as a director of the Group shall be subject
to the relevant Articles of Association for the time being. The
Appointment shall terminate automatically if the Executive ceases to be
a director of the Company or any Associated Company by reason of his
resignation other than at the prior request of the Company or that
Associated Company and such termination shall constitute a wrongful
termination by him of the Appointment. This termination shall be
without prejudice to any claims or rights of action by the Company or
any Associated Company against the Executive for compensation, damages
or otherwise, save that the Company may in its sole discretion elect in
writing to the Executive, within thirty days after the Executive ceases
to be a Director, that this Agreement will have effect as if the
Executive was employed as a manager and the Executive shall have no
claim against the Company or any Associated Company for damages or
otherwise by reason only of the loss of his directorship(s).

20 AGREEMENTS WITH OTHER COMPANIES IN THE GROUP

This Agreement is entered into by the Company for itself and in trust
for each Associated Company with the intention that each company shall
be entitled to enforce the terms of Clauses 4 and 16 of this Agreement
directly against the Executive.

21 ADDITIONAL TERMS

The terms set out in Schedule 1 are added in compliance with the
requirements of the Employment Protection (Consolidation) Act 1978.

22 NOTICES

All notices and other communications relating to the Appointment shall
take effect if delivered, upon delivery; if posted, at the earlier of
the time of delivery and (if posted in the United Kingdom by first
class post) 10:00 a.m. on the second business day after posting; if
sent by telex, when the appropriate recipient machine's answerback code
is received by the transmitting machine following the transmission of
the whole telex; or if sent by facsimile, when a complete and legible
copy of the communication has been received.

23 MISCELLANEOUS

23.1 The Appointment shall operate in substitution for and wholly replaces
with effect from the date of this Agreement all terms previously agreed
between the Company and the Executive which shall be deemed to have
been terminated by mutual consent.

- 16 -
<PAGE> 17
23.2 The Appointment constitutes the entire agreement and understanding
between the parties and no variation or addition to it and no waiver of
any provision shall be valid unless in writing and signed by or on
behalf of both parties.

23.3 This Agreement shall be construed in accordance with English law and
the parties irrevocably submit to the non-exclusive jurisdiction of the
English Courts to settle any disputes which may arise in connection
with this Agreement.

EXECUTION

The parties have shown their acceptance of the terms of this Agreement by
executing it below at the end of the Schedules.

- 17 -
<PAGE> 18
SCHEDULE 1

1 The following terms of this Appointment apply on the date of the
Agreement to which this is a Schedule.

(a) The Executive's period of continuous employment began
on 1 January 1993.

(b) The Executive has no normal working hours but shall
be required to work during normal business hours and
such other hours as may be reasonably necessary for
the proper performance of his duties for the Group.

2 The following information is supplied pursuant to the Employment
Protection (Consolidation) Act 1978 and reflects the Company's current
practice.

(a) There is no formal disciplinary procedure applicable
to this employment. The Executive shall be expected
to exhibit a high standard of propriety, integrity
and efficiency in all his dealings with and in the
name of the Company and the Group and may be
suspended (with pay) or required to take an accrued
holiday entitlement during any investigation which it
may be necessary for the Company to undertake.

(b) If the Executive is dissatisfied with any
disciplinary decision, he should refer such decision
to the Chairman of the Company, whose decision shall
be final and binding.

(c) If the Executive has any grievance relating to the
Appointment, he should refer such grievance to the
Chairman of the Company and the reference will be
dealt with by him.

(d) The Appointment is contracted out of the State
Earnings Related Pension Scheme if and so long as the
Executive is a member who is accruing pension under
the Company's pension scheme.

- 18 -
<PAGE> 19
EXECUTION

SIGNED as a deed by Frank A. Argenbright Jnr )
Director and Chairman )
duly authorized for and on behalf of ) /s/ Frank A. Argenbright, Jr.
THE ADI GROUP LIMITED ) -----------------------------

SIGNED as a deed by Alan Trevor Warburton

in the presence of:

Witness's Signature:
Name (in capitals):
Address:

Occupation:

- 19 -
<PAGE> 20

January 1, 1996

Mr. A.T. Warburton
7 St. Andrews Court
Cardwell Crescent
Sunninghill
Berkshire SL 5 9BY

Dear Mr. Warburton:

I refer to your Director's Service Agreement dated 1 January 1993, and our
recent conversation that took place in Atlanta. During the conversation we
reviewed your overall package of compensation and agreed a number of significant
changes.

Your Service Agreement referred to above will be amended by the following
paragraphs, which become effective from 01 January 1996.

a) RE PARA 6.1
Your salary will be increased from L. 77,000 to L. 90,000 p.a.
effective 01 January 1996.

b) RE PARA 6.2
The entire paragraph, including 6.2.1 to 6.2.7 inclusive, is revoked,
and substituted with the following paragraph:

An annual bonus, with a maximum payment of 40% of the annual
salary, will be paid to the Executive, subject to the
satisfactory achievement of objectives set on a periodic basis
by the Board. The bonus will be paid annually, as soon as is
practicable after the year end management accounts have been
approved by the Board.

c) RE PARA 11.1-11.3
These paragraphs are revoked. In their place is substituted the ADI
Group Limited Company car and allowance policy. The current policy was
approved by the Board in May 1995. Future policy changes are hereby
included in this Agreement.

In addition, the previous verbally approved clothing allowance is terminated.

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<PAGE> 21
Please sign and return to me a duplicate original of this letter to confirm your
acceptance of these changes.

Sincerely,

/s/ Edwin R. Mellett
- -----------------------------------
Edwin R. Mellett
Co-Chairman - The ADI Group Limited

Accepted and Agreed to:

/s/ A. Trevor Warburton
----------------------------------------
A. Trevor Warburton

Date: 9/1/96
--------------

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<PAGE> 1
EXHIBIT 10.5

LOAN AND SECURITY AGREEMENT

December 22, 1995

ARGENBRIGHT SECURITY, INC., ARGENBRIGHT, INC., ADI U.K.
LIMITED AND AVIATION DEFENCE INTERNATIONAL GERMANY LIMITED

ARGENBRIGHT HOLDINGS LIMITED AND
THE ADI GROUP LIMITED

FIRST UNION COMMERCIAL CORPORATION

<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<S> <C>
SECTION 1. GENERAL DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
1.3. Other Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
1.4. Certain Matters of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

SECTION 2. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.1. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.3. Modification of Agreement; Sale of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.4. Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.5. Indulgences Not Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.8. Cumulative Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.9. Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.10. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.11. Lender's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.12. Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.13. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.14. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.15. Marshalling; Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.16. Governing Law; Consent to Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.17. General Waivers by Obligated Borrowers and Corporate Guarantors . . . . . . . . . . . . . . . . . . 26
2.18. Jury Trial Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.19. Arbitration and Preservation of Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

SECTION 3. CREDIT FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.1. U.S. Revolver Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.2. Termination of U.S. Revolver Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.3. Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.4. European Revolver Facility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.5. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.6. Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.7. All U.S. Loans to Constitute One Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

SECTION 4. INTEREST, FEES AND REPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.1. Interest, Fees and Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.2. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.3. Application of Payments and Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.4. Loan Account; Statements of Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>

i
<PAGE> 3

<TABLE>
<S> <C>
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.1. General Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.2. Reaffirmation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.3. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.4. Additional Closing Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . 41

SECTION 6. COVENANTS AND CONTINUING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.1. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.2. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.3. Specific Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

SECTION 7. COLLATERAL: GENERAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.1. Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
7.2. Representations, Warranties and Covenants -- Collateral . . . . . . . . . . . . . . . . . . . . . . 49
7.3. Lien Perfection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.4. Location of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.5. Insurance of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.6. Protection of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

SECTION 8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.2. Acceleration of the Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.3. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.4. Remedies Cumulative; No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

SECTION 9. SPECIAL PROVISIONS RELATING TO ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.1. Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.2. Assignments, Records and Schedules of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.3. Administration of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.4. Collection of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

SECTION 10. SPECIAL PROVISIONS RELATING TO EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
10.1. Dispositions of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>

ii
<PAGE> 4

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (the "Agreement") is made this 22nd
day of December, 1995, by and among FIRST UNION COMMERCIAL CORPORATION
("Lender"), a North Carolina corporation with an office at the address
specified in the signature page to this Agreement; and ARGENBRIGHT SECURITY,
INC. ("Argenbright Security"), ARGENBRIGHT, INC. ("Argenbright
Transportation") (Argenbright Security and Argenbright Transportation,
collectively, "U.S. Borrowers"), ADI U.K. LIMITED ("ADI U.K.") and AVIATION
DEFENCE INTERNATIONAL GERMANY LIMITED ("ADI Germany") (ADI U.K. and ADI
Germany, collectively, "European Borrowers") (U.S. Borrowers and European
Borrowers, collectively, "Obligated Borrowers"), ARGENBRIGHT HOLDINGS LIMITED
("U.S. Holdings Guarantor") and THE ADI GROUP LIMITED ("European Guarantor")
(U.S. Holdings Guarantor and European Guarantor, collectively, "Corporate
Guarantors") and each a corporation with its chief executive office and
principal place of business at the address specified in the signature page to
this Agreement.

In consideration of the premises and the agreements, provisions and
covenants herein contained and for TEN U.S. DOLLARS (U.S. $10.00) and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Obligated Borrowers, Corporate Guarantors and Lender agree
as follows:

SECTION 1. GENERAL DEFINITIONS

1.1. Defined Terms. When used in this Agreement, the following
terms are to have the following meanings (terms defined in the singular to have
the same meaning when used in the plural and vice versa):

Account Debtor - any Person who is or may become obligated on
or under an Account.

Account Dispute Amount - the amount of U.S. $25,000, a dispute
in excess of which obligates an Obligated Borrower to notify Lender
thereof pursuant to Section 9 hereof.

Accounts - all of the following: (a) accounts receivable,
contract rights, book debts, notes, drafts and other obligations and
indebtedness arising from the sale, lease or exchange of goods or
other property and/or the performance of services; (b) rights in, to
and under all purchase orders for goods, services or other property;
(c) rights to any goods, services or other property represented by any
of the foregoing (including returned or repossessed goods and unpaid
sellers' rights of rescission, replevin, reclamation and rights to
stoppage in transit); (d) monies due or to become due under all
contracts for the sale, lease or exchange of goods or other property
and/or the performance of services (whether or not yet earned by
performance); (e) uncertificated securities; and (f) proceeds of any
of the foregoing and all

<PAGE> 5

collateral security and guaranties of any kind given by any Person
with respect to any of the foregoing.

Adjusted Tangible Assets - at any date, all assets reflected
on a balance sheet at such date for a Person, except: (i) any surplus
resulting from any write-up of assets; (ii) any deferred assets other
than prepaid expenses according to GAAP; (iii) any patents,
copyrights, trademarks, trade names, non-compete agreements,
franchises and other intellectual property; (iv) any goodwill and any
other amounts, representing the excess of the purchase price paid for
assets or stock over the value assigned thereto on the books of the
Person; (v) any Restricted Investments; (vi) any unamortized debt
discount and expense; and (vii) any assets located outside the United
States of America and notes and receivables due from obligors outside
of the United States and not maintaining a place of business in the
United States.

Adjusted Tangible Net Worth - at any date, a sum equal to:
(i) the amount of the Adjusted Tangible Assets of a Person
plus the amount described in Item 13 of the Financial and
Contingency Schedule, less (ii) the amount of such Person's liabilities
(other than capital stock and surplus) as shown on a balance sheet at
such date, and including as liabilities all reserves shown on the
balance sheet for contingencies and other potential liabilities, plus
the amount of such Person's liabilities that represent Subordinated
Debt on such date.

Administration Fee - the amount of U.S. $25,000 per annum,
which the U.S. Borrowers are jointly and severally obligated to pay
pursuant to Section 4 hereof.

Affiliate - a Person: (i) that directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or
is under common control with, Obligated Borrowers or Guarantors; (ii)
that beneficially owns or holds 5% or more of any class of Voting
Stock or other equity interest of Obligated Borrowers or Guarantors;
or (iii) 5% or more of whose Voting Stock (or in the case of a Person
which is not a corporation, 5% or more of whose equity interest) is
beneficially owned or held by Obligated Borrowers or a Subsidiary of
Obligated Borrowers or Guarantors. For purposes hereof, "control"
means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock or other equity
interests, by contract, or otherwise.

Agreement - this Loan and Security Agreement, including the
Facility Letter, as it or the Facility Letter may be amended or
supplemented pursuant to the terms hereof.

Applicable Law - all laws, rules and regulations applicable to
the Person, conduct, transaction, covenant or Loan Documents in
question, including, but not limited to, all applicable common law and
equitable principles; all provisions of all applicable federal, state,
and local constitutions, statutes, rules, regulations and orders of
governmental bodies; and all orders, judgments and decrees of all
courts and arbitrators.

Assignment of Accounts - has the meaning given that term in
the Facility Letter.

2
<PAGE> 6

Bank - First Union National Bank of Georgia, a national bank.

Base Rate - the rate of interest announced or quoted by Bank
from time to time at its office in Atlanta, Georgia as its prime rate,
whether or not Bank actually charges such rate and whether or not such
rate is the lowest rate charged by Bank; and if the prime rate is
discontinued by Bank as a standard, a comparable reference rate
designated by Bank as a substitute therefor shall be the Base Rate.

Base Rate Loans - Loans bearing interest at rates determined
by reference to the Base Rate.

Business Day - any day that is not a Saturday, Sunday or a
legal holiday on which banks are authorized or required to be closed
in Atlanta, Georgia, and, with respect to all notices, determinations,
fundings and payments in connection with Loans bearing interest at the
LIBOR Rate, any day that is a Business Day described above and that is
also a day for trading by and between banks in Dollar deposits in the
applicable interbank LIBOR market.

Capital Expenditures - expenditures made or liabilities
incurred for the acquisition of any fixed assets or improvements,
replacements, substitutions or additions thereto which have a useful
life of more than one year, including the direct or indirect
acquisition of such assets by way of increased product or service
charges, offset items or otherwise and the principal portion of
payments with respect to Capitalized Lease Obligations, but excluding
obligations under operating leases.

Capital Lease - any lease of Property which would be
capitalized on the lessee's balance sheet in accordance with GAAP.

Capitalized Lease Obligation - any Indebtedness represented by
obligations under a Capital Lease, and the amount of such Indebtedness
is to be the capitalized amount of such obligations.

Charges - all federal, state, county, municipal, foreign or
other taxes, assessments, levies, claims or charges upon any Obligated
Borrower, its income or sales, or any of its properties.

Chattel Paper - is to have the meaning ascribed to "chattel
paper" under the Code.

Closing Date - the date on which this Agreement is signed.

Code - the Uniform Commercial Code as adopted and in force in
the State of Georgia.

Collateral - the U.S. Collateral and the European Collateral.

3
<PAGE> 7

Consolidated - the consolidation of the accounts or other
items as to which such term applies.

Controlled Disbursement Account - The lockbox account(s) of
U.S. Borrowers at Bank and of European Borrowers at National
Westminster Bank.

Current Assets - at any date, the amount at which all of the
current assets of a Person would be properly classified as current
assets on a balance sheet at such date in accordance with GAAP.

Debt Service Coverage - for any period, a Person's Net
Operating Cash Flow for such period divided by the sum of current
maturities of long-term Funded Indebtedness plus Interest Expense of
the Person during such period.

Default - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an
Event of Default.

Default Rate - a fluctuating rate per annum of two percent
(2%) above the Base Rate, calculated daily (computed on the actual
days elapsed over a year of 360 days).

Distribution - as applied to any Person, means, (a) any
dividend or other distribution, direct or indirect, on account of any
shares of any class of stock of such Person or any of its Subsidiaries
now or hereafter outstanding, except a dividend payable solely in
shares of that

4
<PAGE> 8

class of stock to the holders of that class; (b) any redemption,
conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock of such Person or any of its Subsidiaries
now or hereafter outstanding; (c) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of stock of such Person or any
of its Subsidiaries now or hereafter outstanding; and (d) any payment
by such Person or any of its Subsidiaries of any management fees or
similar fees whether pursuant to a management agreement or otherwise.

Document - is to have the meaning ascribed to "document" under
the Code.

Dollars - and the sign "U.S. $" refer to currency of the
United States of America.

EBIDAT - as applied to any Person, means, for any period, such
Person's net income (but without deduction of income and franchise
taxes that have been accrued), plus (a) Interest Expense paid or
accrued, and (b) amortization and depreciation deducted in determining
Net Income, provided that in calculating net income
for the purpose of calculating EBIDAT there shall be excluded
therefrom (i) any gain or loss arising from the sale of capital assets
other than the Intergram transaction described in the Financial and
Contingency Schedule; (ii) any gain arising from any write-up of
assets; (iii) all earnings of any Subsidiary accrued prior to the date
it became a Subsidiary; (iv) all earnings of any entity (other than a
Subsidiary) substantially all the assets of which have been acquired
in any manner by such Person, realized by such entity prior to the
date of such acquisition; (v) all net earnings of any entity (other
than a Subsidiary) in which such Person has an ownership interest
unless such net earnings have actually been received by such Person in
the form of cash distributions; (vi) any portion of the net earnings
of any Subsidiary which for any reason is unavailable for payment of
dividends to such Person; (vii) all earnings of any Person to which
any assets of such Person have been sold, transferred or disposed of,
or into which such Person has merged, or with which such Person has
been a party to any consolidation or other form of reorganization,
prior to the date of such transaction; (viii) any gain arising from
the acquisition of any Securities of such Person; and (ix) any gain
arising from extraordinary or nonrecurring items.

Eligible U.S. Account - an Account arising in the ordinary
course of the U.S. Borrowers' business which Lender, in its sole
credit judgment, deems to be an Eligible U.S. Account. Without
limiting the generality of the foregoing, no Account is to be an
Eligible U.S. Account if: (i) it represents unearned Accounts that
have been invoiced but as to which the U.S. Borrower has not rendered
the invoiced services as of the date of the invoice; or (ii) it does
not constitute a complete bona fide transaction which requires no
further act under any circumstances on the part of a U.S. Borrower,
except the sending of an invoice to the applicable Account Debtor, to
make such Account payable by such Account Debtor; or (iii) it is owed
by a Subsidiary or an Affiliate of an Obligated Borrower or Guarantor;
or (iv) it is due for payment more than thirty (30) days after the
original invoice date or it is unpaid more than ninety (90) days after
the original invoice date; or (v) thirty percent (30%) or more

5
<PAGE> 9

of the Accounts from the Account Debtor are not deemed Eligible U.S.
Accounts hereunder; or (vi) any covenant, representation or warranty
contained in this Agreement with respect to such Account has been
breached; or (vii) the Account Debtor is also creditor or supplier of
any Obligated Borrower or Guarantor, or has disputed liability with
respect to such Account, or the Account otherwise is or may become
subject to any right of setoff by the Account Debtor, to the extent of
the amount of any offset, dispute or claim; or (viii) the Account
Debtor has commenced a voluntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or made an assignment
for the benefit of creditors, or a decree or order for relief has been
entered by a court having jurisdiction in the premises in respect of
the Account Debtor in an involuntary case under the federal bankruptcy
laws, as now constituted or hereafter amended, or any other petition
or other application for relief under the federal bankruptcy laws has
been filed against the Account Debtor, or if the Account Debtor has
failed, suspended business, ceased to be Solvent, or consented to or
suffered a receiver, trustee, liquidator or custodian to be appointed
for it or for all or a significant portion of its assets or affairs;
or (ix) it arises from a sale to an Account Debtor outside the United
States, unless the sale is on letter of credit, guaranty or acceptance
terms, in each case acceptable to Lender in its sole discretion; or
(x) Lender believes, in its sole judgment, that collection of such
Account is insecure or that payment thereof is doubtful or will be
delayed by reason of the Account Debtor's financial condition; or (xi)
the Account Debtor is the United States of America or any department,
agency or instrumentality thereof, unless U.S. Borrowers assign their
right to payment of such Account to Lender, in form and substance
satisfactory to Lender, so as to comply with the Assignment of Claims
Act of 1940, as amended; or (xii) the Account Debtor is located in the
State of New Jersey, the State of Minnesota, or the State of Indiana,
unless U.S. Borrowers have filed a Notice of Business Activities
Report with the appropriate officials or duly qualifies to transact
business in those states for the then current year; or (xiii) the
Account Debtor is located in a state in which U.S. Borrowers are
deemed to be doing business under the laws of such state and which
denies creditors access to its courts in the absence of qualification
to transact business in such state or of the filing of any reports
with such state, unless U.S. Borrowers have qualified as a foreign
corporation authorized to transact business in such state or has filed
all required reports; or (xiv) the Account is subject to a Lien other
than a Permitted Lien; or (xv) the total unpaid Accounts of the
Account Debtor exceed a credit limit determined by Lender, in its sole
discretion, to the extent such Account exceeds such limit; or (xvi)
the Account is evidenced by Chattel Paper or an Instrument of any
kind, or has been reduced to judgment; or (xvii) U.S. Borrowers have
made any agreement with the Account Debtor for any deduction
therefrom, except for discounts or allowances which are made in the
ordinary course of business for prompt payment and which discounts or
allowances are reflected in the calculation of the face value of each
invoice related to such Account; or (xviii) U.S. Borrowers have made
an agreement with the Account Debtor to extend the time of payment
thereof; or (xix) the Account has not been invoiced to the Account
Debtor for a period of greater than 35 days from the date of rendition
of services. Notwithstanding anything herein to the contrary, prior
to the effectiveness of the Reorganization U.S. Eligible Accounts also
include Accounts otherwise constituting U.S. Eligible Accounts but
arising in the ordinary course of the business of the Reorganization
Companies.

6
<PAGE> 10

Eligible Unbilled Account - Any Eligible U.S. Account that has
not been invoiced to the Account Debtor representing services rendered
by the U.S. Borrowers within the preceding thirty (30) days.

Environmental Laws - all federal, state and local laws, rules,
regulations, ordinances, programs, permits, guidances, orders and
consent decrees relating to pollution, toxic waste or other
environmental matters, including, but not limited to, the Resource
Conservation and Recovery Act; the Comprehensive Environmental
Response, Compensation and Liability Act of 1980; the Toxic Substances
Control Act; the Clean Water Act; the Clean Air Act; the River and
Harbor Act; the Water Pollution Control Act; the Marine Protection
Research and Sanctuaries Act; the Deep-Water Port Act; the Safe
Drinking Water Act; the Superfund Amendments and Reauthorization Act
of 1986; the Solid Waste Disposal Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Mineral Lands and Leasing Act; the
Surface Mining Control and Reclamation Act; the Oil Pollution Act of
1990; the Emergency Planning and Community Right-to-Know Act of 1986;
state and federal superlien and environmental cleanup programs and
laws; and U.S. Department of Transportation regulations.

Environmental Liens - Liens in favor of a governmental entity
arising under or in connection with any Environmental Law.

Equipment - as applied to any Person, means, machinery,
apparatus, equipment, fittings, furniture, fixtures, motor vehicles
and other tangible personal Property (other than Inventory) of every
kind and description used in such Person's operations or owned by such
Person or in which such Person has an interest, whether now owned or
hereafter acquired by such Person and wherever located, and all parts,
accessories and special tools and all increases and accessions thereto
and substitutions and replacements therefor.

ERISA - the Employee Retirement Income Security Act of 1974
and all rules and regulations promulgated thereunder.

European Collateral - has the meaning given that term in the
Facility Letter.

European Revolver Facility - the credit facility established
by Lender in favor of the European Borrowers pursuant to the Facility
Letter.

European Revolver Loan - a Loan made by Lender under the
European Revolver Facility.

European Revolver Notes - the notes defined in the Facility
Letter.

Event of Default - as defined in Section 8 of this Agreement.

7
<PAGE> 11

Facility Letter - the letter attached to this Agreement
setting forth, among other things, certain terms and provisions of the
European Revolver Facility. The Facility Letter shall constitute a
part of this Agreement.

Financial Statements - the financial statements described in
and attached to the Financial and Contingency Schedule.

Fiscal Period - as applied to any Person, means, the fiscal
period used by such Person on the date of this Agreement and disclosed
on the Financial and Contingency Schedule.

Forfeiture Law - any state or federal law, rule or regulation
under which any Property of a Person may be seized by a governmental
agency or title thereto forfeited by reason of such Person's
commission of a crime, including, without limitation, The Controlled
Substances Act, Motor Vehicle Theft Law Enforcement Act of 1984, Money
Laundering Control Act of 1986 and Illegal Exportation of War
Materials Act.

Funded Indebtedness - All Indebtedness for money borrowed,
Purchase Money Indebtedness, the face amount of the Letters of Credit
then outstanding and Capitalized Lease Obligations that by their terms
mature more than one year from the date of any calculation thereof or
that are renewable or extendable at the option of the obligor to a
date beyond one year from such date of calculation.

GAAP - as applied to the U.S. Borrowers and U.S. Holdings
Guarantor, shall mean generally accepted accounting principles in the
United States of America in effect from time to time and, as applied to
the European Borrowers and the European Guarantor, shall mean generally
accepted accounting principles in the United Kingdom in effect from
time to time.

General Debenture - has the meaning given that term in the
Facility Letter.

General Intangibles - as applied to any Person, means, all
general intangibles of the such Person, whether now owned or hereafter
created or acquired by the such Person, including, without limitation,
all choses in action, causes of action, corporate or other business
records, deposit accounts, inventions, blueprints, designs, patents,
patent applications, trademarks, trademark applications, trade names,
trade secrets, service marks, goodwill, brand names, copyrights,
registrations, licenses, franchises, customer lists, tax refund
claims, computer programs, operational manuals, all claims under
guaranties, security interests or other security held by or granted to
such Person to secure payment of any of the Accounts by an Account
Debtor, all rights to indemnification and all other intangible
property of every kind and nature (other than Accounts).

Guarantors - the Corporate Guarantors, the Owner and each of
the other Persons who may hereafter guarantee payment or performance
of the whole or any part of the Obligations.

8
<PAGE> 12

Guaranty Agreements - the Guaranty agreements which are to be
executed by Guarantors in favor of Lender.

Hours Analysis Report - the report to be prepared by the U.S.
Borrowers jointly on or before Wednesday of each week for the
preceding week, setting forth the contract value of services rendered
during the preceding week.

Indebtedness - as applied to any Person, means, without
duplication (i) all items which would be included in determining total
liabilities as shown on the liability side of a balance sheet of such
Person as at the date as of which Indebtedness is to be determined,
including, without limitation, Capitalized Lease Obligations, (ii) all
obligations of other Persons which such Person has guaranteed and
(iii) in the case of any Obligated Borrower (without duplication), the
Obligations; but excluding (other than for purposes of Section 8.1(E))
the guaranty of U.S. Holdings Guarantor guaranteeing obligations of
Owner and described in Item 7 of the Financial and Contingency
Schedule.

Instrument - is to have the meaning ascribed to "instrument"
under the Code.

Interest Expense - the aggregate of all interest paid or
accrued by a Person in accordance with GAAP.

Interest Margin -

(a) with respect to U.S. Revolver Facility, the rate set forth
below opposite the relevant ratio of Funded Indebtedness to EBIDAT for
Argenbright Holdings on a consolidated basis (computed as described
below):

<TABLE>
<CAPTION>
Funded Indebtedness/ Libor Rate Base Rate
EBIDAT Loans Loans
---------------------- ---------- ---------
<S> <C> <C>
Greater than 4.0 to 1 2.75% 0.25%

Greater than 3.0 to 1
and less than or equal
to 4.0 to 1 2.50% 0.00%

Less than or equal to
3.0 to 1 2.25% 0.00%

</TABLE>

(b) with respect to the Term Loan Facility, the rate set forth
below opposite the relevant ratio of Funded Indebtedness to EBIDAT for
Argenbright Holdings on a consolidated basis (computed as described
below):

9
<PAGE> 13
<TABLE>
<CAPTION>

Funded Indebtedness/ Libor Rate Base Rate
EBIDAT Loans Loans
--------------------- ---------- ---------
<S> <C> <C>
Greater than 4.0 to 1 3.25% 1.00%

Greater than 3.0 to 1
and less than or equal
to 4.0 to 1 3.00% 0.75%

Less than or equal to
3.0 to 1 2.75% 0.50%

</TABLE>

Notwithstanding the foregoing, as of the Closing Date and to
and through June 30, 1996, the Interest Margin for U.S. Revolver Loans
shall be 2.5% for LIBOR Rate Loans and 0% for Base Rate Loans; and
3.00% for portions of the Term Loan consisting of LIBOR Rate Loans and
0.750% for portions of the Term Loan consisting of Base Rate Loans.
Thereafter, adjustments to the Interest Margin for the U.S. Revolver
Loans and the Term Loan shall be adjusted on the fifth (5th) Business
Day after receipt by Lender of the financial statements and other
reports necessary to calculate the ratio of Funded Indebtedness to
EBIDAT as of the last day of the third (3rd), sixth (6th), ninth (9th)
and thirteenth (13th) Fiscal Periods of U.S. Holdings Guarantor each
calendar year, based on the ratio of (i) average Funded Indebtedness
of U.S. Holdings Guarantor on a consolidated basis as of each of the
immediately preceding thirteen (13) Fiscal Period-ends to (ii) the
EBIDAT for U.S. Holdings Guarantor on a consolidated basis for the
immediately preceding thirteen (13) Fiscal Periods. In the event that
as of any such adjustment period, U.S. Borrowers shall have failed to
deliver to Lender financial statements and other reports necessary for
calculation of the Interest Margin, the Interest Margin for the U.S.
Revolving Loan and the Term Loan shall be adjusted forty-five (45)
days following such Fiscal Period-ends to 2.75% for LIBOR Rate Loans
and 0.25% for Base Rate Loans under the U.S. Revolver Facility and
3.25% for LIBOR Rate Loans and 1.00% for Base Rate Loans under the
Term Loan Facility.

Interest Period - any interest period applicable to a LIBOR
Rate Loan or a Foreign Currency Loan (as defined in the Facility
Letter); provided, that there shall be outstanding at any time
no more than five (5) Interest Periods for LIBOR Rate Loans under the
U.S. Revolver Facility and Term Loan and no more than two (2) Interest
Periods for Loans under the European Revolver Facility.

Interest Rate Determination Date - the date on which Lender
determines the interest rate applicable to any LIBOR Rate Loan
pursuant to Section 4, which shall be the second Business Day prior to
the first day of the Interest Period applicable to such LIBOR Rate
Loan.

Inventory - as applied to any Person, means, all of such
Person's inventory, whether now owned or hereafter acquired by such
Person and wherever located, including, but not

10
<PAGE> 14

limited to, all goods intended for sale or lease by such Person, or to
be furnished under contracts of service; all work in process; and all
raw materials and other materials and supplies of every nature and
description used or which might be used in connection with the
manufacture, printing, packing, shipping, advertising, selling,
leasing or furnishing of such goods or otherwise used or consumed in
such Person's business.

Lender Guaranty Liability - as to each Letter of Credit, all
liabilities of Obligated Borrowers or any of their Subsidiaries
thereunder, whether contingent or otherwise, including with respect to
a Letter of Credit: (a) the amount available to be drawn or which may
become available to be drawn; (b) all amounts that have been paid or
made available by Lender or the issuing bank to the extent not
reimbursed; and (c) all unpaid interest, fees and expenses.

Letter of Credit - a letter of credit at any time issued for
the account of Obligated Borrowers.

Letter of Credit Fee - the amount equal to the average daily
amount of Lender Guaranty Liability multiplied by one and twenty-five
one hundredths percent (1.25%) per annum, calculated on the basis of a
360- day year for the number of days the applicable Letter of Credit
is to remain outstanding.

Liabilities - all liabilities of a Person includable on a
balance sheet of such Person.

LIBOR Rate - for each Interest Period, a rate of interest
determined by Lender equal to:

(a) the rate of interest determined by Lender at
which deposits in Dollars for the relevant Interest Period are
offered based on information presented on the Reuters Screen
LIBO Page as of 11:00 a.m. (London time) on the day which is
two (2) Business Days prior to the first day of such Interest
Period; provided, that if at least two such offered rates
appear on the Reuters Screen LIBO Page in respect of such
Interest Period, the arithmetic mean of all such rates will be
the rate used; provided, further that if fewer than two
offered rates appear or if Reuters ceases to provide LIBOR
quotations, such rate shall be the rate of interest at which
deposits in Dollars are offered for the relevant Interest
Period by any of Bankers Trust Company, Bank of America
National Trust and Savings Association or Chemical Bank (or
any successor institution thereto) to first class banks in the
London interbank market as of 11:00 a.m. (London time) on the
applicable Interest Rate Determination Date, divided by

11
<PAGE> 15

other governmental authority having jurisdiction with respect
thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) which are required
to be maintained by a member bank of the Federal Reserve
System; (such rate to be rounded upward to the next whole
multiple of one-sixteenth of one percent (1/16 of 1%).

LIBOR Rate Loans - Loans bearing interest at rates determined
by reference to the LIBOR Rate as provided in subsection 4.1(A).

Lien - any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute or contract,
and including, but not limited to, the security interest, security
title or lien arising from a security agreement, mortgage, deed of
trust, deed to secure debt, encumbrance, pledge, conditional sale or
trust receipt or a lease, consignment or bailment for security
purposes. The term "Lien" includes reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances
affecting Property. For the purpose of this Agreement, Obligated
Borrowers are deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement or other
arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.

Loan Account - the loan account established on the books of
Lender.

Loan Documents - this Agreement, the Other Agreements and
the Security Documents.

Loan LIBOR Rate - with respect to the Loans, a fluctuating
rate equal to the LIBOR Rate plus the Interest Margin applicable to
such Loan, calculated daily (computed on the actual days elapsed over
a year of 360 days).

Loans - all loans and advances made by Lender pursuant to this
Agreement, including, without limitation, all U.S. Revolver Loans, the
Term Loan, all European Revolver Loans, each payment made pursuant to
a Letter of Credit.

Master Security Agreement - the Master Security Agreement of
even date herewith among the Reorganization Companies, IPS Training
Institute, Inc., Argenbright Motor Coach, Inc., Argenbright Substance
Testing, Inc., and Lender.

Material Adverse Effect - the effect of any event or condition
which, alone or when taken together with other events or conditions
occurring or existing concurrently therewith, (a) has or may be
reasonably expected to have a material adverse effect upon the
business, operations, Properties, condition (financial or otherwise)
or business prospects of any or all Obligated Borrowers, any or all
Guarantors, or any or all Subsidiaries, determined in the case

12
<PAGE> 16

of any of the U.S. Borrowers or the U.S. Holdings Guarantor, with
respect to the U.S. Borrowers and the U.S. Holdings Guarantor as a
whole and, in the case of any of the European Borrowers or the
European Guarantor, with respect to the European Borrowers and the
European Guarantor as a whole; (b) has or may be reasonably expected
to have any material adverse effect whatsoever upon the validity or
enforceability of this Agreement or any of the other Loan Documents;
(c) has or may be reasonably expected to have any material adverse
effect upon any of the Collateral, the Liens of Lender with respect to
any of the Collateral or the priority of such Liens; or (d) materially
impairs the ability of any or all Obligated Borrowers or any or all
Guarantors to perform their obligations under this Agreement, any
Guaranty Agreement or any of the other Loan Documents or of Lender to
enforce or collect the obligations or realize upon any of the
Collateral or the European Collateral in accordance with the Loan
Documents and Applicable Law.

Material Agreement - those contracts set forth on the Material
Agreement Schedule and all future contracts the annual revenues of
which constitute in excess of the dollar amounts or percentages of
such Person's annual revenues specified on the Material Agreement
Schedule.

Maximum Rate - the maximum non-usurious rate of interest
permitted by Applicable Law that at any time, or from time to time,
may be contracted for, taken, reserved, charged or received on the
Indebtedness in question or, to the extent permitted by Applicable
Law, under such Applicable Law that may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than
Applicable Law now allow. Notwithstanding any other provision hereof,
the Maximum Rate is to be calculated on a daily basis (computed on the
actual number of days elapsed over a year of 365 or 366 days, as the
case may be).

Money Borrowed - as applied to Indebtedness, means (i)
Indebtedness for borrowed money; (ii) Indebtedness, whether or not in
any such case the same was for borrowed money, (A) which is
represented by notes payable or drafts accepted that evidence
extensions of credit, (B) which constitutes obligations evidenced by
bonds, debentures, notes or similar instruments, or (C) upon which
interest charges are customarily paid (other than accounts payable) or
that was issued or assumed as full or partial payment for Property;
(iii) Indebtedness that constitutes a Capitalized Lease Obligation;
(iv) Indebtedness under any agreement or obligation to reimburse the
issuer of any letter of credit for amounts paid by the issuer on
account of such letter of credit; and (v) Indebtedness under any
guaranty of obligations that would constitute Indebtedness for Money
Borrowed under clauses (i) through (iii) hereof.

Mortgage - the security deed to be executed by Frank
Argenbright on or about the Closing Date in favor of Lender and by
which Frank Argenbright is to grant and convey to Lender, as security
for the Obligations, a Lien upon the real Property of Frank
Argenbright identified in the Location and Real Property Schedule.

Multiemployer Plan - has the meaning set forth in Section
4001(a) (3) of ERISA.

13
<PAGE> 17

Net Operating Cash Flow - with respect to any period, a
Person's EBIDAT, minus (i) all Unfinanced Capital Expenditures and
(ii) all income and franchise taxes paid in cash during the period.

Net Proceeds - cash proceeds (including cash receivable (when
received) by way of deferred payment) received by any Obligated
Borrower from the sale, lease, transfer or other disposition of any
Property (other than sales of transportation equipment as described on
the Financial and Contingency Schedule), including, without
limitation, insurance proceeds and awards of compensation received
with respect to the destruction or condemnation of all or part of such
Property, net of: (i) the costs incurred in connection with such sale,
lease, transfer or other disposition; (ii) any tax liability arising
from such transaction; and (iii) amounts applied to repayment of
Funded Indebtedness (other than the Obligations) secured by a
Permitted Lien on the Property disposed.

Notes - the U.S. Revolver Note, the Term Note and the
European Revolver Note.

Obligations - all indebtedness, liabilities and obligations
owing, arising, due or payable from each and every Obligated Borrower
to Lender, Bank, or any other Lender Affiliate of every kind or
nature, whether absolute or contingent, due or to become due, joint or
several, liquidated or unliquidated, matured or unmatured, primary or
secondary, now existing or hereafter incurred, purchase money or
nonpurchase money, or arising under any of the Loan Documents or
otherwise, and regardless of the form or purpose of such indebtedness,
liabilities or obligations, including, without limitation, all of the
Loans, all liabilities of each and every Obligated Borrower to Lender,
Bank, or any other Lender Affiliate under any indemnity,
reimbursement, letter of credit, banker's acceptance, guaranty,
deposit or other agreement heretofore or hereafter executed by any
Obligated Borrower with or in favor of Lender, Bank, or any other
Lender Affiliate (whether or not any Obligated Borrower is the account
party or drawer) and all overdrafts. The term includes, without
limitation, all interest, charges, expenses, attorneys' fees and other
sums chargeable to any Obligated Borrower under any of the Loan
Documents and all obligations any Obligated Borrower may have (under
contract or Applicable Law) to reimburse Lender, Bank, or any other
Lender Affiliate in connection with any letter of credit, banker's
acceptance or guaranty issued by Lender, Bank, or any other Lender
Affiliate for any Obligated Borrower's benefit.

Original Term - the period of time beginning on the Closing
Date and ending on the Termination Date.

Origination Fee - the amount of U.S. $66,250.00, which U.S.
Borrowers are obligated to pay Lender pursuant to Section 4 of this
Agreement.

OSHA - the Federal Occupational Safety and Health Act and all
rules and regulations from time to time promulgated thereunder.

14
<PAGE> 18

Other Agreements - any and all agreements, instruments and
documents (other than this Agreement and the Security Documents),
heretofore, now or hereafter executed by any or all Obligated
Borrowers and delivered to Lender with respect to the transactions
contemplated by this Agreement.

Overadvance - a Revolver Loan made by Lender when an
Overadvance Condition exists or would result from the making of such
Revolver Loan.

Overadvance Condition - at any date, a condition such that the
principal amount of either the U.S. Revolver Loans or the European
Revolver Loans outstanding on such date exceeds the U.S. Revolver
Borrowing Base or the European Revolver Borrowing Base, respectively,
on such date.

Owner - Frank A. Argenbright, Jr., who owns the Voting Stock
of Argenbright Holdings and ADI Holdings on the Closing Date.

Participating Lender - each Person who is to be granted the
right by Lender to participate in any of the Loans described in this
Agreement.

Permanent Advance - the one million Dollar (U.S. $1,000,000)
cash advance from ADI U.K. to Argenbright Security to be made on the
last day of the second (2nd) Fiscal Period of 1996 of Argenbright
Security, or on such earlier day following January 2, 1996 as Lender
shall require.

Permitted Capital Expenditures - Capital Expenditures
(including, without limitation, by way of Capital Leases) which, in
the aggregate, as to Obligated Borrowers and their Subsidiaries, do
not exceed the amount set forth in the Financial and Contingency
Schedule during any fiscal year of Obligated Borrowers.

Permitted Indebtedness - any of the following: (i) the
Permanent Advance; (ii) obligations owing to Lender; (iii)
Subordinated Debt; (iv) Indebtedness of any Subsidiary to Obligated
Borrowers; (v) current operating expenses (other than for Money
Borrowed) which are not more than ninety (90) days past due, in each
case incurred in the ordinary course of business and paid within such
time period, unless the same are actively being contested in good
faith and Obligated Borrowers are to have set aside such reserves, if
any, with respect thereto as are required by GAAP and deemed adequate
by Obligated Borrowers and their independent public accountants; (vi)
obligations to pay Rentals permitted herein; (vii) Permitted Purchase
Money Indebtedness; (viii) contingent liabilities arising out of
endorsements of checks and other negotiable instruments for deposit or
collection in the ordinary course of business; (ix) taxes not yet past
due or payable; and (x) Indebtedness not included in clauses (i)
through (ix) above which does not exceed at any time, in the
aggregate, the amount set forth in the Financial and Contingency
Schedule or which is otherwise described as Permitted Indebtedness on
the Financial and Contingency Schedule.

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<PAGE> 19

Permitted Liens - any of the following: (i) Liens at any time
granted in favor of Lender; (ii) Liens securing the claims or demands
of materialmen, mechanics, carriers, warehousemen, landlords, lessors
and other like Persons for labor, materials, supplies or rentals
incurred in the ordinary course of any Obligated Borrower's business,
but only if the payment thereof is not at the time required; (iii)
Liens resulting from deposits made in the ordinary course of business
in connection with workmen's compensation, unemployment insurance,
social security and other like laws; (iv) attachment, judgment and
other similar non-tax Liens (excluding Environmental Liens) arising in
connection with court proceedings, but only if and for so long as the
execution or other enforcement of such Liens is and continues to be
effectively stayed and bonded on appeal in a manner satisfactory to
Lender for the full amount thereof, the validity and amount of the
claims secured thereby are being actively contested in good faith and
by appropriate lawful proceedings, such Liens do not, in the
aggregate, materially detract from the value of the Property of any
Obligated Borrower or materially impair the use thereof in the
operation of any Obligated Borrower's business; (v) Liens securing
Indebtedness of a Subsidiary to any Obligated Borrower or another
Subsidiary; (vi) Liens of a bank or other financial institution with
respect to funds on deposit with such institution; (vii) such other
Liens as appear on the Lien Schedule; and (viii) such other Liens as
Lender may hereafter approve in writing; (ix) Purchase Money Liens
securing Permitted Purchase Money Indebtedness which is not incurred
in violation of this Agreement; and (x) Liens constituting easements,
reservations, exceptions and other restrictions and conditions (other
than to secure the payment of money) and such Liens do not, in the
aggregate, materially detract from the value of the Property of any
Obligated Borrower or materially impair the use thereof in the
operation of any Obligated Borrower's business.

Permitted Proceeds Uses - The satisfaction of existing
Indebtedness of Obligated Borrowers to SouthTrust Bank of Georgia,
N.A. and National Westminster Bank, the issuance of one or more
Letters of Credit to secure insurance obligations, and Obligated
Borrowers' general operating needs to the extent not inconsistent with
the provisions of this Agreement, for which purposes the Loans are to
be used, pursuant to Section 3 hereof.

Permitted Purchase Money Indebtedness - Purchase Money
Indebtedness of any Obligated Borrower incurred after the date hereof
which is secured by a Purchase Money Lien and which, when aggregated
with the principal amount of all other Purchase Money Indebtedness and
Capitalized Lease Obligations of Obligated Borrowers at the time
outstanding.

Person - an individual, partnership, corporation, joint
venture, joint stock company, limited liability company, land trust,
business trust, unincorporated organization, a government or agency or
political subdivision thereof, or any other form of entity.

Plan - an employee benefit plan now or hereafter maintained
for employees of Obligated Borrowers that are covered by Title IV of
ERISA.

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<PAGE> 20

Prohibited Transaction - any transaction set forth in Section
406 of ERISA or Section 4975 of the Internal Revenue Code of 1986.

Projections - Obligated Borrowers' (i) annual budget prepared
on a consolidated and division by division basis and (ii) forecasted
consolidated: (a) balance sheets; (b) profit and loss statements; (c)
cash flow statements; and (d) capitalization statements consistent
with Obligated Borrowers' historical financial statements, together
with appropriate supporting details and a statement of underlying
assumptions.

Property - any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.

Purchase Money Indebtedness - means and includes (i) any
Funded Indebtedness (other than the Obligations) for the payment of
all or any part of the purchase price of any fixed assets, (ii) any
Funded Indebtedness (other than the Obligations) incurred at the time
of or within ten (10) days prior to or after the acquisition of any
fixed assets for the purpose of financing all or any part of the
purchase price thereof, and (iii) any renewals, extensions or
refinancings thereof, but not any increases in the principal amounts
thereof outstanding at the time.

Purchase Money Lien - a Lien upon fixed assets which secures
Purchase Money Indebtedness incurred by any Obligated Borrower in
connection with its acquisition of such fixed assets, but only if such
Lien is at all times to be confined solely to the fixed assets the
purchase price of which was financed through the incurrence of the
Purchase Money Indebtedness secured by such Lien and such Lien
constitutes a purchase money security interest under the Code.

Regular Rate - with respect to each Loan, a fluctuating rate
per annum equal to the Base Rate, plus the Interest Margin applicable
to such Loan, calculated daily (computed on the actual days elapsed
over a year of 360 days).

Renewal Terms - as defined in Section 3 of this Agreement.

Rentals - as to any lease, as of the date of determination,
all payments which the lessee is required to make by the terms
thereof.

Reorganization - as defined in Section 5 of this Agreement.

Reorganization Companies - Argenbright Associates, Inc.,
Argenbright Polygraph, Inc., Argenbright West, Inc., Argenbright
Security West, Inc., Argenbright Transportation West, Inc., Deltic,
Inc., and Argenbright Maritime Services, Inc., all of which will be
merged or dissolved into U.S. Borrowers or U.S. Holdings Guarantor
pursuant to the Reorganization.

Reportable Event - any of the events set forth in Section
4043(b) of ERISA.

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<PAGE> 21

Restricted Investment - any investment in cash or by delivery
of Property to any Person, whether by acquisition of stock, Funded
Indebtedness or other obligation or Security, or by loan, advance or
capital contribution, or otherwise, in any Property except the
following: (i) Property to be used in the ordinary course of business;
(ii) Current Assets arising from the sale of goods and services in the
ordinary course of business of Obligated Borrowers and their
Subsidiaries; (iii) investments in direct obligations of the United
States of America, or any agency thereof or obligations guaranteed by
the United States of America, provided that such obligations mature
within one year from the date of acquisition thereof; (iv) investments
in time deposits, demand deposits and certificates of deposit maturing
within one year from the date of acquisition issued by a bank or trust
company organized under the laws of the United States or any state
thereof having capital surplus and undivided profits aggregating at
least U.S. $500,000,000; (v) investments in commercial paper given the
highest rating by a national credit rating agency and maturing not
more than two hundred seventy (270) days from the date of creation
thereof; and (vi) investments as set forth in the Financial and
Contingency Schedule.

Revolver Loan - a Loan made by Lender under either the U.S.
Revolver Facility or the European Revolver Facility.

Schedule of Accounts - the detailed aged trial balance of all
Accounts of each Obligated Borrower existing as of the last day of the
preceding Fiscal Period, specifying the names, addresses, face value,
dates of invoices and due dates for each Account Debtor obligated on
an Account so listed and any other information Lender reasonably
requests.

Scheduled Installments - the payments of the aggregate
principal balance of the Term Loan which the U.S. Borrowers are
obligated to pay pursuant to Section 3 hereof, which are to be paid in
thirty-five (35) equal monthly payments, each in the amount of U.S.
$41,667.00, payable on the first day of each month beginning February
1, 1996, with the balance due on the Termination Date.

Schedules - the full Schedules, together with all attachments
thereto, provided by the Obligated Borrowers and the U.S. Holdings
Guarantor and attached to this Agreement and made a part hereof.

Security - is to have the same meaning as in Section 2(1) of
the Securities Act of 1933, as amended.

Security Documents - the Guaranty Agreements, the Mortgage,
the Stock Pledge Agreements, the Master Security Agreement, the
General Debenture, the Assignment of Accounts and all other
instruments and agreements now or at any time hereafter securing the
whole or any part of the Obligations.

Solvent - as to any Person, means that such Person (i) owns
Property the fair value of which is greater than the amount required
to pay all of such Person's Indebtedness

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<PAGE> 22

(including contingent debts), (ii) owns Property the present fair
salable value of which is greater than the amount that will be
required to pay the probable liability of such Person on its existing
Indebtedness as such becomes absolute and matured, (iii) is able to
pay all of its Indebtedness as such Indebtedness matures, and (iv) has
capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage.

Subordinated Debt - Indebtedness of any Obligated Borrower
that is expressly subordinated to the Obligations pursuant to an
agreement or provisions approved by Lender.

Subsidiary - as to any Person, any corporation, association or
other business entity of which more than 50% of the total voting power
of shares of stock (or equivalent ownership or controlling interest)
entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by the Person or one
or more of the other Subsidiaries of the Person or a combination
thereof, except that for purposes of this Agreement, Superior Services
Company shall not be considered a Subsidiary.

Subsidiary Pledge Agreement - the Stock Pledge Agreement to be
executed and delivered by Obligated Borrowers with respect to the
capital stock of each of Obligated Borrowers' Subsidiaries, as such
agreement may hereafter be amended, supplemented or otherwise modified
from time to time.

Term Loan - the Loan in the principal amount of ONE MILLION
FIVE HUNDRED THOUSAND AND NO/100 U.S. DOLLARS (U.S. $1,500,000.00),
which is to be repayable in accordance with the terms of the Term
Note.

Term Note - the Term Note to be executed by U.S. Borrowers on
or about the Closing Date in favor of Lender to evidence the Term
Loan.

Termination Date - the third anniversary of the Closing Date.

Unfinanced Capital Expenditure - any Capital Expenditure not
constituting a Capital Lease Obligation or Purchase Money
Indebtedness.

Unused Line Fee - an amount equal to (i) U.S. $20,000,000 less
the average daily balance of the aggregate of the U.S. Revolver Loans
and the average face amount of any Letters of Credit issued for the
account of the U.S. Borrowers, during the preceding month, multiplied
by (ii) three-eighths of one percent (0.375%) per annum (calculated on
the basis of a 360-day year for the actual number of days elapsed),
which the U.S. Borrowers are obligated to pay pursuant to Section 4
hereof.

U.S. Borrowing Base Certificate - the borrowing base
certificate to be submitted with such frequency as Lender may require
from time to time and in any event no less frequently

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<PAGE> 23

than by the tenth (10th) Business Day of each Fiscal Period for and as
of the last Business Day for the preceding Fiscal Period.

U.S. Collateral - all of the property constituting Collateral
under the Master Security Agreement and all of the following described
types of Property and interests in Property of U.S. Borrowers and U.S.
Holdings Guarantor, whether now owned or existing or hereafter
created, acquired or arising and wheresoever located: (A) all
Accounts; (B) all Chattel Paper; (C) all Documents; (D) all
Instruments; (E) all Inventory; (F) all Equipment; (G) all General
Intangibles; (H) all capital stock of their Subsidiaries; (I) all
monies and other Property of any kind, now or at any time or times
hereafter, in the possession or under the control of Lender or a
bailee of Lender; (J) all accessions to, substitutions for and all
replacements, products and cash and noncash Proceeds of the Property
described in (A) through (I) above, including, without limitation,
Proceeds of and unearned premiums with respect to insurance policies
insuring any of the Collateral and claims against any Person for loss
of, damage to, or destruction of any or all of the Collateral; and (K)
all books and records (including, without limitation, customer lists,
credit files, computer programs, print-outs, and other computer
materials and records) of U.S. Borrowers pertaining to any of the
Property described in (A) through (J) above and all other Property of
U.S. Borrowers and U.S. Holdings Guarantor and interests of U.S.
Borrowers and U.S. Holdings Guarantor in Property that now or
hereafter secure the payment and performance of any of the Obligations
pursuant to any of the Security Documents or otherwise.

U.S. Revolver Borrowing Base - at any date of determination
thereof, an amount equal to the lesser of:

(a) an amount equal to (i) U.S. $20,000,000;
minus (ii) all reductions in availability pursuant to Section
3.6; and minus (iii) the face amount of any Letters of Credit
issued for the account of the U.S. Borrowers outstanding at
such date; or

(b) an amount equal to (i) eighty-five percent
(85%) (or such lesser percentage as Lender may in its sole and
absolute discretion determine from time to time) of the net
amount of Eligible U.S. Accounts outstanding and reflected in
the most current U.S. Borrowing Base Certificate at such date
that do not constitute Eligible Unbilled Accounts; plus (ii)
the lesser of (A) sixty percent (60%) (or such lesser
percentage as Lender may in its sole and absolute discretion
determine from time to time) of the net amount of Eligible
U.S. Accounts constituting Eligible Unbilled Accounts
outstanding and reflected in the most current U.S. Borrowing
Base Certificate on such date, or (B) U.S. $3,000,000 minus;
(iii) an amount equal to the sum of (A) any amounts which
Obligated Borrowers are obligated to pay but do not pay when
due and which Lender pays pursuant to any of the Loan
Documents for the account of Obligated Borrowers, (B) the face
amount of any Letters of Credit issued for the account of the
U.S. Borrowers outstanding at such date, and (C) such
reserves as Lender in its sole discretion elects to establish
from time to time; and minus (iv) the Dollar amount in excess
of one million Dollars (U.S. $1,000,000) of

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<PAGE> 24

those Accounts otherwise constituting Eligible U.S. Accounts
that are subject to any Lien (whether choate or inchoate)
having priority over the security interest of Lender and
arising under a performance or other surety bond; provided,
that in calculating the Dollar amount of an Account subject to
this clause (iv) there shall be included with respect to such
Account only an amount equal to the lesser of (i) the maximum
obligation or performance expense amount whose reimbursement
or payment is secured by the Lien on the Account, and (ii) the
amount of such Account.

For purposes hereof, the net amount of Eligible U.S. Accounts at any
time shall be the face amount of such Eligible U.S. Accounts less any
and all returns, rebates, discounts (which may, at Lender's option, be
calculated on shortest terms), credits, allowances, sales or excise
taxes of any nature at any time issued, owing, claimed by Account
Debtors, granted, outstanding or payable in connection with such
Accounts at such time.

U.S. Revolver Facility - the credit facility established by
Lender in favor of U.S. Borrowers pursuant to Section 3 hereof.

U.S. Revolver Loan - a Loan made by Lender under the U.S.
Revolver Facility.

U.S. Revolver Note - the note defined in Section 3 of this
Agreement.

Voting Stock - Securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors
(or Persons performing similar functions).

1.2. Accounting Terms. Except as defined or otherwise expressly
provided for herein, all accounting terms are to be construed in accordance
with GAAP, including any applicable statements, bulletins, opinions,
interpretations, or other changes issued by the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants or their
committees, and all financial data pursuant to this Agreement are to be
prepared in accordance with such principles consistently applied.

1.3. Other Terms. All terms contained in this Agreement and not
otherwise specifically defined herein are to have the meanings provided for by
the Code to the extent the same are used or defined therein.

1.4. Certain Matters of Construction. The terms "herein," "hereof"
and "hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used is deemed to cover all genders. The section titles, table of contents and
list of schedules appear as a matter of convenience only and are not to affect
the interpretation of this Agreement. All references to statutes and related
regulations are to include any amendments of same and any successor statutes
and regulations. All references to any instruments

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<PAGE> 25

or agreements, including, without limitation, references to this Agreement and
any of the other Loan Documents, are to include any and all modifications or
amendments thereto and any and all extensions or renewals thereof.

SECTION 2. MISCELLANEOUS

2.1. Power of Attorney. Each Obligated Borrower and Corporate
Guarantor hereby irrevocably designates, makes, constitutes and appoints Lender
(and all Persons designated by Lender) as such Obligated Borrower's or
Corporate Guarantor's true and lawful attorney (and agent-in-fact) and Lender,
or Lender's agent, may, without notice to such Obligated Borrower or Corporate
Guarantor and in either Such Obligated Borrower's or Corporate Guarantor's or
Lender's name, but at the cost and expense of such Obligated Borrower or
Corporate Guarantor:

(A) At any time, endorse such Obligated Borrower's or
Corporate Guarantor's name on any checks, notes, acceptances, drafts, money
orders or any other evidence of payment or proceeds of the Collateral which
come into the possession of Lender or under Lender's control; and

(B) At such time or times upon or after the occurrence of
an Event of Default and during the continuation thereof: (i) settle, adjust,
compromise, discharge or release any of the Accounts or other Collateral or any
legal proceedings brought to collect any of the Accounts or other Collateral;
(ii) sell or assign any of the Accounts and other Collateral upon such terms,
for such amounts and at such time or times as Lender deems advisable; (iii)
take control, in any manner, of any item of payment or proceeds relating to any
Collateral; (iv) prepare, file and sign such Obligated Borrower's or Corporate
Guarantor's name to a proof of claim in bankruptcy or similar document against
any Account Debtor or to any notice of Lien, assignment or satisfaction of Lien
or similar document in connection with any of the Collateral; (v) receive, open
and dispose of all mail addressed to such Obligated Borrowers or Corporate
Guarantor and notify postal authorities to change the address for delivery
thereof to such address as Lender may designate; (vi) endorse the name of any
or all Obligated Borrowers or Corporate Guarantors upon any of the items of
payment or proceeds relating to any Collateral and deposit the same to the
account of Lender for application to the obligations; (vii) endorse the name of
any or all Obligated Borrowers or Corporate Guarantors upon any chattel paper,
document, instrument, invoice, freight bill, bill of lading or similar document
or agreement relating to the Accounts, Inventory and any other Collateral;
(viii) use any Obligated Borrower's or Corporate Guarantor's stationery and
sign the name of any or all Obligated Borrowers or Corporate Guarantors to
verifications of the Accounts and notices thereof to Account Debtors; (ix) use
the information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Accounts, Inventory, Equipment
and any other Collateral and to which any Obligated Borrower or Guarantor has
access; (x) make and adjust claims under policies of insurance; and (xi) do all
other acts and things necessary, in Lender's reasonable determination, to
fulfill any or all Obligated Borrowers' or Guarantor's obligations under this
Agreement or any of the other Loan Documents.

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<PAGE> 26

2.2. Indemnity. Each Obligated Borrower and Corporate Guarantor
does hereby indemnify Lender and hold Lender harmless from and against any
liability, loss, damage, suit, action or proceeding ever suffered or incurred
by Lender as the result of any Obligated Borrower's or Corporate Guarantor's
failure to observe, perform or discharge such Obligated Borrower's or Corporate
Guarantor's duties hereunder, except that the Obligated Borrowers and the
Corporate Guarantors shall not be required to indemnify Lender for any loss,
damage, suit,a action or proceeding to the extent, but only to the extent,
caused by Lender's willful misconduct or gross negligence. Without limiting
the generality of the foregoing, this indemnity is to extend to any claims
asserted against Lender by any Person under any Environmental Laws.
Additionally, if any taxes (excluding taxes imposed upon or measured by the net
income of Lender, but including, without limitation, any intangibles tax, stamp
tax, recording tax or franchise tax) are to be payable by Lender, any Obligated
Borrower or any Corporate Guarantor on account of the execution or delivery of
this Agreement, or the execution, delivery, issuance or recording of any of the
other Loan Documents, or the creation of any of the Obligations hereunder, by
reason of any existing or hereafter enacted federal, state, foreign or local
statute, rule or regulation, any or all Obligated Borrowers and any or all
Corporate Guarantors will pay (or will promptly reimburse Lender for the
payment of) all such taxes, including, but not limited to, any interest and
penalties thereon, and will indemnify and hold Lender harmless from and against
liability in connection therewith. Notwithstanding any contrary provision of
this Agreement, any obligation of any or all Obligated Borrowers or any or all
Corporate Guarantors under this Agreement to indemnify Lender for any expense
or liability incurred by Lender is to survive the payment in full of the
Obligations.

2.3. Modification of Agreement; Sale of Interest. This Agreement
may not be modified, altered or amended, except by an agreement in writing
signed by all of the Obligated Borrowers, Corporate Guarantors and Lender. The
Obligated Borrowers and the Corporate Guarantors may not sell, assign or
transfer any interest in this Agreement or any of the other Loan Documents, or
any portion thereof, including, without limitation, Obligated Borrowers' and
Corporate Guarantors' rights, title, interests, remedies, powers, and duties
hereunder or thereunder. Obligated Borrowers and Corporate Guarantors hereby
consent to Lender's participation, sale, assignment, transfer or other
disposition, at any time or times hereafter, of this Agreement, any of the
other Loan Documents or any of the Obligations, or of any portion hereof or
thereof, including, without limitation, Lender's rights, title, interests,
remedies, powers, and duties hereunder or thereunder. In the event of any such
participation, sale, assignment, transfer or other disposition, Lender is
authorized to provide to each Participating Lender, assignee or transferee all
information in Lender's possession regarding the Obligated Borrowers, Corporate
Guarantors and the Collateral, provided such Participating Lender, assignee or
transferee agrees to keep such information confidential consistent with the
requirements of this Agreement.

2.4. Reimbursement of Expenses. If, at any time or times prior or
subsequent to the date hereof, regardless of whether or not an Event of Default
then exists or any of the transactions contemplated hereunder are concluded,
Lender employs counsel for advice or other representation, or incurs legal
expenses or other costs or out-of-pocket expenses in connection with: (A) the
negotiation and preparation of this Agreement or any of the other Loan
Documents, any amendment of or modification of this Agreement or any of the
other Loan Documents; (B) the administration of

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<PAGE> 27

this Agreement or any of the other Loan Documents and the transactions
contemplated hereby and thereby; (C) periodic audits performed by Lender; (D)
any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Lender, Obligated Borrowers, Corporate Guarantors or any other
Person) in any way relating to the Collateral, this Agreement or any of the
other Loan Documents or any Obligated Borrower or Guarantor's affairs; (E) any
attempt to enforce any rights or remedies of Lender or any Participating Lender
against any Obligated Borrower, Corporate Guarantors or any other Person which
may be obligated to Lender by virtue of this Agreement or any of the other Loan
Documents, including, without limitation, the Account Debtors; or (F) any
attempt to inspect, verify, protect, preserve, restore, collect, sell,
liquidate or otherwise dispose of or realize upon the Collateral; then, in any
such event, the attorneys' fees arising from such services and all expenses,
costs, charges and other fees of such counsel or of Lender or relating to any
of the events or actions described in this Section are to be payable two (2)
Business Days after demand therefor, by any or all Obligated Borrowers or
Corporate Guarantors to Lender or to such Participating Lender, as the case may
be and are to be additional obligations hereunder secured by the Collateral.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include accountants' fees, costs and expenses; costs and expenses
incurred by Lender's loan administration staff, audit staff and appraisal
staff; court costs and expenses; photocopying and duplicating expenses; court
reporter fees, costs and expenses; long distance telephone charges; air express
charges; telegram charges; secretarial over-time charges; and expenses for
travel, lodging and food paid or incurred in connection with the performance of
such legal services. Each Obligated Borrower and Guarantor acknowledges and
agrees that legal counsel to Lender does not represent such Obligated Borrowers
and Guarantors as such Obligated Borrowers' and Guarantors' attorney, that such
Obligated Borrowers and Guarantors have retained counsel of their own choice
and have not and will not rely upon any advice from Lender's counsel and that
such Obligated Borrowers' and Guarantors' reimbursement of expenses pursuant to
this Agreement (even if effected by payment directly by such Obligated
Borrowers and Guarantors to Lender's counsel) is not to be deemed to establish
any attorney- client relationship between such Obligated Borrowers and
Guarantors and Lender's counsel.

2.5. Indulgences Not Waivers. Lender's failure, at any time or
times hereafter, to require strict performance by any or all Obligated
Borrowers or Corporate Guarantors of any provision of this Agreement is not to
waive, affect or diminish any right of Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by Lender of an
Event of Default by any Obligated Borrower or Guarantor under this Agreement or
any of the other Loan Documents is not to suspend, waive or affect any other
Event of Default by Obligated Borrowers under this Agreement or any of the
other Loan Documents, whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Obligated Borrowers or
Corporate Guarantors contained in this Agreement or any of the other Loan
Documents and no Event of Default by Obligated Borrowers or Corporate
Guarantors under this Agreement or any of the other Loan Documents are to be
deemed to have been suspended or waived by Lender, unless such suspension or
waiver is by an instrument in writing specifying such suspension or waiver and
is signed by a duly authorized representative of Lender and directed to the
Obligated Borrowers. Lender may, by written notice to Obligated Borrowers or
Corporate Guarantors, at any time and from time to time, waive any Default or
any

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<PAGE> 28

Event of Default and its consequences, but any such waivers are to be for such
period and subject to such conditions as are to be specified in any such
notice. In the case of any such waiver, the Obligated Borrowers and Lender are
to be restored to their former positions and rights hereunder and under the
other Loan Documents and any Default or Event of Default so waived is to be
deemed to be cured and not continuing during the period specified in such
written notice. No such waiver is to extend to any subsequent or other Default
or Event of Default or impair any right or remedy consequent thereon.

2.6. Severability. Wherever possible, each provision of this
Agreement is to be interpreted in such manner as to be effective and valid
under Applicable Law, but if any provision of this Agreement is to be
prohibited by or invalid under Applicable Law, such provision is to be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

2.7. Successors and Assigns. This Agreement, the Other Agreements
and the Security Documents are to be binding upon and inure to the benefit of
the successors and assigns of Obligated Borrowers, Corporate Guarantors and
Lender. This provision, however, is not to be deemed to permit the Obligated
Borrowers or Corporate Guarantors to sell, assign or transfer this Agreement or
any of the other Loan Documents.

2.8. Cumulative Effect. The provisions of the Other Agreements and
the Security Documents are cumulative with the provisions of this Agreement.

2.9. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered are to be deemed to
be an original and all of which counterparts taken together are to constitute
but one and the same instrument. In proving this Agreement in any judicial
proceeding, it is not to be necessary to produce or account for more than one
such counterpart signed by the party against whom such enforcement is sought.

2.10. Notice. Except as otherwise expressly provided in this
Agreement, all notices, requests and demands to or upon a party hereto are to
be in writing and are to be sent by certified or registered mail, return
receipt requested, personal delivery against receipt or by telecopier or other
facsimile transmission to Obligated Borrowers or Lender, as the case may be, at
the address specified in the signature page to this Agreement, or to such other
address as each party may designate for itself by notice given in accordance
with this Section; provided, however, that any notice, request or demand to or
upon Lender pursuant to the provisions of Section 3 is not to be effective
until received by Lender. Any written notice or demand is effective on the
date that such notice is actually received by the noticed party and is deemed
to have been validly served, given or delivered when received.

2.11. Lender's Consent. Whenever Lender's consent is required to be
obtained under this Agreement, any of the Other Agreements or any of the
Security Documents as a condition to any action, inaction, condition or event,
Lender is authorized to give or withhold such consent in its sole

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and absolute discretion and to condition its consent upon the giving of
additional collateral security for the Obligations, the payment of money or any
other matter.

2.12. Time of Essence. Time is of the essence of this Agreement,
the Other Agreements and the Security Documents.

2.13. Entire Agreement. This Agreement and the other Loan
Documents, together with all other instruments, agreements and certificates
executed by the parties in connection therewith or with reference thereto,
embody the entire understanding and agreement between the parties hereto and
thereto with respect to the subject matter hereof and thereof and supersede all
prior agreements, understandings and inducements, whether express or implied,
oral or written.

2.14. Interpretation. No provision of this Agreement or any of the
other Loan Documents is to be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.

2.15. Marshalling; Payments Set Aside. Lender is to be under no
obligation to marshall any assets or securities in favor of any Obligated
Borrower, Corporate Guarantor or any other Person or against or in payment of
any or all of the Obligations. To the extent that any Obligated Borrower or
Corporate Guarantors makes a payment or payments to Lender, or Lender enforces
its security interest or exercises its rights of setoff, and such payment or
payments for the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to
the extent of such recovery, the Obligations or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, are to
be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred.

2.16. Governing Law; Consent to Forum. This Agreement has been
negotiated, executed and delivered at and is to be deemed to have been made in
Atlanta, Georgia. This Agreement is to be governed by and construed in
accordance with the internal laws of the State of Georgia; provided, however,
that if any of the Collateral is located in any other jurisdiction, the laws of
such other jurisdiction are to govern the method, manner and procedure for
foreclosure of Lender's lien upon such Collateral and the enforcement of
Lender's other remedies in respect of such Collateral to the extent that the
laws of such other jurisdiction are different from or inconsistent with the
laws of Georgia. As part of the consideration for new value received, and
regardless of any present or future domicile or principal place of business of
Obligated Borrowers, Corporate Guarantors or Lender, the Obligated Borrowers
and Corporate Guarantors hereby consent and agree that the Superior Court of
Fulton County, Georgia, or, at Lender's option, the United States District
Court for the Northern District of Georgia, Atlanta Division, is to have
jurisdiction to hear and determine any claims or disputes between such
Obligated Borrowers, Corporate Guarantors and Lender pertaining to this
Agreement or to any matter arising out of or related to this Agreement;
provided, however, Lender may, at its option, commence any action, suit or
proceeding in any other appropriate forum or

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<PAGE> 30

jurisdiction to obtain possession of or foreclosure upon any Collateral, to
obtain other legal or equitable relief or to enforce any judgment or order
obtained by Lender against any Obligated Borrower or Corporate Guarantor or
with respect to any Collateral, to enforce any other right or remedy under this
Agreement or to obtain any other relief deemed appropriate by Lender. The
Obligated Borrowers and Corporate Guarantors expressly submit and consent in
advance to such jurisdiction in any action or suit commenced in any such court,
and such Obligated Borrowers and Corporate Guarantors hereby waive any
objection which such Obligated Borrowers or Corporate Guarantors may have based
upon lack of personal jurisdiction, improper venue or forum non conveniens and
hereby consent to the granting of such legal or equitable relief as is deemed
appropriate by such court.

2.17. General Waivers by Obligated Borrowers and Corporate
Guarantors. To the fullest extent permitted by Applicable Law, the Obligated
Borrowers and Corporate Guarantors waive (i) presentment, demand and protest
and notice of presentment, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Lender on which the Obligated Borrowers and Corporate
Guarantors may in any way be liable and hereby ratifies and confirms whatever
Lender may do in this regard; (ii) notice prior to Lender's taking possession
or control of any of the Collateral or any bond or security which might be
required by any court prior to allowing Lender to exercise any of Lender's
remedies, including the issuance of an immediate writ of possession; (iii) the
benefit of all valuation, appraisement and exemption laws; (iv) any right any
Obligated Borrower or Corporate Guarantor may have upon payment in full of the
obligations to require Lender to terminate its security interest in the
Collateral or in any other property of any Obligated Borrower or Corporate
Guarantor until the execution by any Obligated Borrower or Guarantor, and by
any person whose loans to any Obligated Borrowers or Corporate Guarantors are
used in whole or in part to satisfy the obligations, of an agreement
indemnifying Lender from any loss or damage Lender may incur as the result of
dishonored checks or other items of payment received by Lender from any
Obligated Borrowers or Corporate Guarantors or any Account Debtor and applied
to the Obligations; and (v) notice of Lender's acceptance hereof.

2.18. Jury Trial Waiver. Each Obligated Borrower, Corporate
Guarantor and Lender waive the right to trial by jury in any action, suit,
proceeding or counterclaim of any kind arising out of or related to any of the
Loan Documents, the Obligations or the Collateral.

2.19. Arbitration and Preservation of Remedies. Upon demand of any
party hereto, whether made before or after institution of any judicial action,
any dispute, claim or controversy ("Disputes") arising out of or connected with
this Agreement or any other documents executed in connection herewith (the
"Loan Documents") shall be resolved by binding arbitration as provided herein.
Disputes may include, without limitation, tort claims, counterclaims, claims
brought as class actions, and claims arising from Loan Documents executed in
the future. Arbitration shall be conducted under the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Atlanta, Georgia or any place agreed to in writing by the
parties. The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less

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<PAGE> 31

than $1,000,000. All applicable statutes of limitation shall apply to any
Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. The arbitrators shall be appointed as provided in the Arbitration
Rules.

Notwithstanding the preceding binding arbitration provision, each
party hereto hereby preserves certain remedies that any party hereto may
exercise freely, either alone or during a Dispute. Any party hereto shall have
the right to proceed in any court of proper jurisdiction or by self help to
exercise or prosecute the following remedies, as applicable: (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale granted in the Loan Documents or under applicable law, (ii) all
rights of self help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property, and
(iii) obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, and appointment of receiver.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute. Each
party hereto agrees that it shall not have a remedy of punitive or exemplary
damages against the other in any Dispute and hereby waive any right or claim to
punitive or exemplary damages they may have now or which may arise in the
future in connection with any Dispute, whether the Dispute is resolved by
arbitration or judicially. Notwithstanding the foregoing, this arbitration
provision does not apply to Disputes under or related to swap agreements.

SECTION 3. CREDIT FACILITIES

Subject to all of the terms and conditions of this Agreement, in
reliance upon the representations and warranties made herein and in the other
Loan Documents and the representations contained in the Schedules, and so long
as no Default or Event of Default then exists, Lender will provide credit to
the Obligated Borrowers as follows:

3.1. U.S. Revolver Facility.

(A) During the period from the date hereof through the
day before the last day of the Original Term or the last Renewal Term, Lender
is to make U.S. Revolver Loans to the U.S. Borrowers from time to time, as
requested by the U.S. Borrowers in accordance with the terms herein, up to a
maximum principal amount at any time outstanding under the U.S. Revolver
Facility equal to the U.S. Borrowing Base at such time. If any of the unpaid
U.S. Revolver Loans are Overadvances or exceed any other limitation set forth
in this Agreement, such U.S. Revolver Loans are nevertheless to constitute
Obligations that are secured by the U.S. Collateral and entitled to all of the
benefits thereof.

(B) The U.S. Revolver Loans, which are to be evidenced by
a Revolving Line of Credit Note (the "U.S. Revolver Note"), are to be used
solely for Permitted Proceeds Uses.

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<PAGE> 32

(i) Each Revolver Loan is to be made, or is to be
deemed to be made, in the following manner: (a) the U.S. Borrower
shall give Lender written, telephonic or electronic notice (provided
that telephonic notice shall be promptly, and in any event within one
Business Day, confirmed in writing by delivery of a written notice to
Lender that conforms to the requirements of this paragraph), or notice
in such other manner as may be agreed upon from time to time by Lender
and U.S. Borrowers, of its intention to borrow (which notice is to be
irrevocable) before 11:30 a.m. (Atlanta, Georgia time), specifying the
amount of the proposed borrowing and the proposed borrowing date; (b)
unless payment is otherwise timely made by the U.S. Borrowers, the
becoming due of any amount required to be paid under this Agreement or
the Notes as principal or accrued interest is to be deemed irrevocably
to be a request by U.S. Borrowers for a U.S. Revolver Loan on the due
date of, and in the amount required to pay, such principal and accrued
interest; (c) unless payment is otherwise timely made by Obligated
Borrowers, the becoming due of any other Obligations is to be deemed
irrevocably to be a request for a U.S. Revolver Loan on the due date
thereof in the amount then so due; and (d) the presentation by U.S.
Borrowers for payment by Bank of any check or other item of payment
drawn on a Controlled Disbursement Account is to be deemed irrevocably
to be a request for a U.S. Revolver Loan in the amount of such check
or other item of payment.

(ii) The proceeds of each U.S. Revolver Loan
requested as described above are to be disbursed by Lender in lawful
money of the United States of America in immediately available funds,
in the case of the initial borrowing, in accordance with the terms of
the written disbursement letter or other instructions from U.S.
Borrowers, and in the case of each subsequent borrowing, by wire
transfer to such bank account as may be agreed upon by U.S. Borrowers
and Lender from time to time; and the proceeds of each U.S. Revolver
Loan requested to satisfy an Obligation as described above are to be
disbursed by Lender by way of direct payment of the relevant
Obligation.

(iii) Each request, including specifically, but
without limitation, a telephonic request, for a U.S. Revolver Loan is
to be conclusively presumed to be made by a Person authorized by U.S.
Borrowers to do so; and the making of the requested U.S. Revolver Loan
will conclusively establish U.S. Borrowers' obligation to repay such
U.S. Revolver Loan in accordance with this Agreement.

3.2. Termination of U.S. Revolver Facility.

(A) The U.S. Revolver Facility will be in effect for a
period commencing on the date hereof and ending on the last day of the Original
Term and will automatically renew itself for one (1) year periods thereafter
(each a "Renewal Term"), unless terminated as hereinafter provided.

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<PAGE> 33

(B) Lender or U.S. Borrowers may terminate the U.S.
Revolver Facility at the end of either the Original Term or any Renewal Term
upon not less than one hundred twenty (120) days prior written notice; but
Lender may immediately terminate the U.S. Revolver Facility, without notice,
upon or after the occurrence of an Event of Default and during the continuation
thereof.

(C) Upon at least ninety (90) days prior written notice
to Lender, U.S. Borrowers may terminate the U.S. Revolver Facility on a day
other than the last day of the Original Term; provided that U.S. Borrowers may,
at any time prior to ten (10) days before the noticed termination date, give
Lender written notice extending the termination date up to an additional ten
(10) days.

(D) Upon the effective date of any termination of the
U.S. Revolver Facility, all of the Obligations, including, without limitation,
the Term Loan and the European Revolver, will become due and payable and
Lender may discontinue making further Loans to Obligated Borrowers. No
termination (regardless of cause or procedure) of the U.S. Revolver Facility is
to in any way affect or impair the rights, powers or privileges of Lender or
the obligations, duties or liabilities of U.S. Borrowers in any way relating to
(i) any transaction or event occurring prior to the effective date of such
termination or (ii) any of the undertakings, agreements, covenants, warranties
or representations of U.S. Borrowers contained in this Agreement or any of the
other Loan Documents.

3.3. Term Loan. Provided no Default or Event of Default exists,
Lender is to make the Term Loan to U.S. Borrowers. The Term Loan is to be
funded concurrently with Lender's initial U.S. Revolver Loan. U.S. Borrowers
are to make principal payments in the aggregate amounts of the applicable
Scheduled Installments.

3.4. European Revolver Facility. The Lender is to make the
European Revolver Loans to the European Borrowers, from time to time, as
requested by the European Borrowers on the terms, in such amounts and subject
to such conditions as set forth in the Facility Letter attached hereto.

3.5. Letters of Credit.

(A) Lender shall from time to time itself or arrange for
the Bank or an Affiliate of Lender to issue, extend or renew Letters of Credit
for the account of U.S. Borrowers upon such terms and conditions as Lender may
then require, provided that the face amount of any such Letter of Credit, when
added to the outstanding amount of U.S. Revolver Loans, does not exceed the
U.S. Borrowing Base; and provided, further, that at no time shall the maximum
liability of Lender under outstanding Letters of Credit issued for account of
U.S. Borrowers exceed U.S. $5,700,000. Lender may charge its customary fees or
commissions for issuance, renewal or extension of a Letter of Credit. If an
Event of Default occurs or exists, Obligated Borrowers (with respect to any
Letter of Credit for the account of European Borrowers) or U.S. Borrowers (with
respect to any Letter of Credit for the account of U.S. Borrowers), on demand,
are to deliver to Lender good funds equal to 100% of Lender's maximum liability
under all outstanding Letters of Credit, to be held as cash collateral for
reimbursement obligations and other Indebtedness.

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<PAGE> 34

(B) Neither Lender nor its correspondents or agents are
to be liable or responsible for, and Obligated Borrowers' (with respect to any
Letter of Credit for the account of European Borrowers) or U.S. Borrowers (with
respect to any Letter of Credit for the account of U.S. Borrowers)
unconditional obligation to reimburse Lender for the obligations will not be
affected by, any event or circumstance, including without limitation: (i) the
validity, enforceability, genuineness or sufficiency of documents or of any
endorsement thereon existing in connection with any Letter of Credit, even if
such documents should in fact prove in any or all respects to be invalid,
enforceable, insufficient, fraudulent or forged; (ii) any breach of contract or
other dispute between such Obligated Borrowers and any beneficiary of a Letter
of Credit; (iii) payment by Lender upon presentation of a draft or documents
which do not comply in any respect with the terms of such Letter of Credit;
(iv) loss of or damage to any Collateral; (v) delay in giving or failure to
give notice of arrival or any other notice; (vi) failure of any instrument to
bear any reference or adequate reference to the Letter of Credit; or (vii)
failure of any person to note the amount of any payment on the reverse of the
Letter of Credit or to surrender to or take up the Letter of Credit or to
forward documents in the manner required by the Letter of Credit; or (viii) any
other matter whatsoever, excepting only with respect to each of the foregoing
items the gross negligence (or negligence as to (iii) above) or willful
misconduct of Lender or its agent. Any action taken or permitted to be taken
by Lender or its agent under or in connection with any Letter of Credit,
including related documents, or property, unless constituting gross negligence
or willful misconduct (or negligence as to (iii) above) on the part of Lender
or its agent, is to be binding on Obligated Borrowers and is not to create any
resulting liability to Obligated Borrowers on the part of Lender or its agent.
Obligated Borrowers will immediately examine any copy of the Letter of Credit
(and any amendments thereof) sent to them by Lender or its agent, and Obligated
Borrowers will immediately notify Lender in writing of any claim or
irregularity.

(C) Any Letter of Credit issued hereunder is to be
governed by the Uniform Customs of Practice for Documentary Credit,
International Chamber of Commerce Publication No. 500, as revised from time to
time, except to the extent that the terms of such publication would limit or
diminish rights granted Lender hereunder or in any other Loan Document.

3.6. Mandatory Prepayments. If any of the Property is sold by U.S.
Borrowers, or if any of the Collateral pledged by U.S. Borrowers is taken by
condemnation or if any insurance proceeds are to be payable to U.S. Borrowers
or Lender as a consequence of any loss, theft or damage of any of the
Collateral pledged by U.S. Borrowers, then Lender is entitled to receive, as a
mandatory prepayment of the Term Loan (or, at Lender's option, such of the
other Obligations as Lender may elect), the Net Proceeds received by U.S.
Borrowers or Lender from such sale or condemnation or on account of such loss,
theft or damage if such Net Proceeds exceed in the aggregate during any
12-month period U.S. $500,000. Each such prepayment is to be applied to the
installments of principal due under the Term Loan in the inverse order of their
maturities until payment thereof in full. Nothing in this Section is to be
deemed to authorize U.S. Borrowers to sell any Property, except as expressly
authorized herein.

3.7. All U.S. Loans to Constitute One Obligation. The U.S.
Revolver Loan and the Term Loan are to constitute one general obligation of the
U.S. Borrowers, and are to be secured by

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Lender's security interest in and Lien upon all of the U. S. Collateral, and by
all other security interests and Liens heretofore, now or at any time or times
hereafter granted by U.S. Borrowers of the Guarantors to Lender to the extent
provided in the Security Documents under which any such Lien arises.

SECTION 4. INTEREST, FEES AND REPAYMENT

4.1. Interest, Fees and Charges.

(A) Interest.

(i) Rate of Interest. The U.S. Revolver Loans and
the Term Loan shall bear interest from the date such Loans are
made to the date paid at the Regular Rate or the Loan LIBOR
Rate. The applicable basis for determining the rate of
interest shall be selected by U.S. Borrowers initially at the
time a notice of borrowing is given. The basis for
determining the interest rate with respect to any Loan may be
changed from time to time pursuant to subparagraph (iv)
hereinafter. If on any day a Loan is outstanding with respect
to which notice has not been delivered to Lender in accordance
with the terms of this Agreement specifying the basis for
determining the rate of interest, then for that day that Loan
shall bear interest at the Regular Rate.

(ii) Interest Periods. In connection with each LIBOR
Rate Loan, U.S. Borrowers shall elect an interest period (each
an "Interest Period") to be applicable to such Loan, which
Interest Period shall be either a one, two, three or six month
period provided that:

(1) the initial Interest Period for any Loan
shall commence on the funding date of such Loan;

(2) in the case of immediately successive
Interest Periods, each successive Interest Period
shall commence on the day on which the next preceding
Interest Period expires;

(3) if an Interest Period would otherwise
expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period
would otherwise expire on a day that is not a
Business Day but is a day of the month after
which no further Business Day occurs in such month,
such Interest Period shall expire on the next
preceding Business Day;

(4) any Interest Period that begins on the
last Business Day of a calendar month (or on a day
for which there is no numerically corresponding

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<PAGE> 36

day in the calendar month at the end of such Interest
Period) shall, subject to part (5) below, end on the
last Business Day of a calendar month;

(5) no Interest Period shall extend beyond
the Original Term or any Renewal Term;

(6) no Interest Period with respect to any of
the Loans may extend beyond a date on which U.S.
Borrowers are required to make a scheduled payment of
principal (other than a monthly payment of principal
of the Term Loan) with respect to such Loan;

(7) the Interest Period for a Loan that is
converted pursuant to subparagraph (iv) shall
commence on the date of such conversion and shall
expire on the date on which the Interest Period for
the Loans so converted expires; and

(8) there shall be no more Interest Periods
relating to LIBOR Rate Loans outstanding at any time
than permitted by the definition of Interest Period
contained in this Agreement.

(iii) Computation and Payment of Interest. In
computing interest on any Loan, the date of funding of the
Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from
a LIBOR Rate Loan, the date of conversion of such LIBOR Rate
Loan to such Base Rate Loan shall be included and the date of
payment of such Loan or the expiration date of an Interest
Period applicable to such Loan, or with respect to a Base Rate
Loan being converted to a LIBOR Rate Loan, the date of
conversion of such Base Rate Loan to such LIBOR Rate Loan,
shall be excluded; provided, that if a Loan is repaid on the
same day on which it is made, one day's interest shall be paid
on that Loan.

(iv) Conversion or Continuation. Subject to the
provisions of this subparagraph (iv) and the limitation on the
number of Interest Periods, U.S. Borrowers shall have the
option to (1) convert at any time all or any part of
outstanding Loans equal to U.S. $500,000 and integral
multiples of U.S. $250,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to
one basis to Loans bearing interest at a rate determined by
reference to an alternative basis, or (2) upon the expiration
of any Interest Period applicable to a LIBOR Rate Loan, to
continue all or any portion of such Loan equal to U.S.
$500,000 and integral multiples of U.S. $250,000 in excess of
that amount as a LIBOR Rate Loan and the succeeding Interest
Period(s) of such continued Loan shall commence on the last
day of the Interest Period of the Loan to be continued;
provided, that LIBOR Rate Loans may only be converted into
Loans bearing interest determined by reference to an
alternative basis on the expiration date of an Interest Period
applicable thereto; and provided, further, that no outstanding
Loan may be

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<PAGE> 37

continued as, or be converted into, a LIBOR Rate Loan when any
Event of Default or Default has occurred and is continuing;
and provided, further, that no Loan may be converted into a
LIBOR Rate Loan until five (5) days after the Closing Date.

U.S. Borrowers shall deliver a fully and properly
completed notice of conversion/continuation to Lender no later
than 11:00 a.m. (Atlanta time) at least three (3) Business
Days in advance of the proposed conversion/continuation date.
In lieu of delivering the above-described notice of
conversion/continuation, U.S. Borrowers may give Lender
telephonic notice by the required time of any proposed
conversion/continuation under this subparagraph (iv);
provided, that such notice shall be promptly confirmed in
writing by delivery of a notice of conversion/continuation to
Lender on or before the proposed conversion/continuation date.

Lender shall not incur any liability to U.S.
Borrowers in acting upon any telephonic notice referred to
above that Lender believes in good faith to have been given by
a duly authorized officer or other person authorized to act on
behalf of Obligated Borrowers or for otherwise acting in good
faith under this subparagraph (iv).

Except as provided in this subsection 4.1(A)(iv), a
notice of conversion/continuation for conversion to, or
continuation of, a LIBOR Rate Loan (or telephonic notice in
lieu thereof) shall be irrevocable once given, U.S. Borrowers
shall be bound to convert or continue in accordance therewith
and Lender shall have no liability for acting in accordance
with U.S. Borrowers' instructions contained therein.

Interest is to be calculated on a daily basis (computed on the actual
number of days elapsed over a year of 360 days unless reference to a 365 or
366-day year is necessary in order not to exceed the Maximum Rate), commencing
on the date hereof, and is to be payable monthly, in arrears, on the first day
of each month.

(B) Default Rate of Interest. Upon the occurrence of an
Event of Default, at Lender's sole discretion, the principal amount of the
Obligations will bear interest at the Default Rate.

The provisions herein relating to the Default Rate represent a fair
and reasonable estimate by U.S. Borrowers and Lender of a fair average
compensation for the loss that may be sustained by Lender due to the failure of
Obligated Borrowers to make timely payments with respect to the Obligations and
for the cost and expenses that may be incurred by Lender by reason of the
occurrence of an Event of Default, the parties recognizing that the damages
caused by such extra administrative expenses and loss of the use of funds is
impracticable or extremely difficult to ascertain or estimate. Interest at the
Default Rate shall be paid without prejudice to the rights of Lender to collect
any other amounts provided to be paid hereunder or under any of the other Loan
Documents or to declare a default under this Agreement or any of the other Loan
Documents.

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<PAGE> 38

(C) Unused Line Fee. From and after the Closing Date,
U.S. Borrowers will pay to Lender the Unused Line Fee monthly in arrears on the
first day of the month following the Closing Date and the first day of each
month thereafter.

(D) Letter of Credit Fees. U.S. Borrowers will pay to
Lender, for each Letter of Credit for the period from and including the date of
issuance of such Letter of Credit to and excluding the date of expiration or
termination of such Letter of Credit, the Letter of Credit Fee.

(E) Origination Fee. Concurrently with the initial Loan
hereunder, U.S. Borrowers will pay to Lender the Origination Fee, which is to
be deemed fully earned at the closing of the transactions contemplated hereby
and is not to be subject to rebate except as may be required by Applicable Law.
Such fee is to compensate Lender for the costs associated with the origination,
structuring, processing, approving and closing of the transactions contemplated
by this Agreement, including, but not limited to, administrative,
out-of-pocket, general overhead and lost opportunity costs, but not including
any expenses for which Obligated Borrowers have agreed to reimburse Lender
pursuant to any other provisions of this Agreement or any of the other Loan
Documents, such as, by way of example, legal fees and expenses.

(F) Capital Adequacy Charge. If after the date hereof
Lender determines that (a) the adoption of any Applicable Law, rule or
regulation regarding capital requirements for banks or bank holding companies
or the subsidiaries thereof, (b) any change in the interpretation or
administration of any such law, rule or regulation by any governmental
authority, central bank, or comparable agency charged with the interpretation
or administration thereof, or (c) compliance by Lender or its holding company
with any request or directive of any such governmental authority, central bank
or comparable agency regarding capital adequacy (whether or not having the
force of law), has the effect of reducing the return on Lender's capital to a
level below that which Lender could have achieved (taking into consideration
Lender's and its holding company's policies with respect to capital adequacy
immediately before such adoption, change or compliance and assuming that
Lender's capital was fully utilized prior to such adoption, change or
compliance) but for such adoption, change or compliance as a consequence of
Lender's commitment to make the Loans pursuant hereto by any amount deemed by
Lender to be material: (i) Lender is promptly, after Lender's determination
of such occurrence, to give notice thereof to Obligated Borrowers, and (ii)
Obligated Borrowers are to pay to Lender as an additional fee from time to
time, on demand, such amount as Lender certifies to be the amount that will
compensate Lender for such reduction.

A certificate of Lender claiming entitlement to such compensation,
setting forth the nature of the occurrence giving rise to such compensation,
the additional amount or amounts to be paid to Lender, and the method by which
such amounts were determined will be conclusive in the absence of manifest
error. In determining such amount, Lender may use any reasonable averaging and
attribution method.

(G) Maximum Interest. Regardless of any provision
contained in this Agreement or any of the other Loan Documents, the aggregate
of all amounts that are contracted for, charged or collected pursuant to the
terms of this Agreement or any of the other Loan Documents and that

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are deemed interest is not to exceed the Maximum Rate under Applicable Law. No
agreement, condition, provision or stipulation contained in this Agreement or
any of the other Loan Documents or the exercise by Lender of any right or
option whatsoever contained therein, or the prepayment by Obligated Borrowers
of any of the Obligations, or the occurrence of any contingency whatsoever, is
to entitle Lender to charge or receive or to obligate Obligated Borrowers to
pay, interest or any charges, amounts, premiums or fees deemed interest by
Applicable Law (referred to herein collectively as "Interest") in excess of the
Maximum Rate. Obligated Borrowers acknowledge and stipulate that any Interest
charged or received in excess of the Maximum Rate ("Excess") is to be the
result of an accident and bona fide error and that, with fluctuations in the
rates of interest set forth in this Agreement, or in the Term Note, and the
Maximum Rate, such an unintentional result could inadvertently occur. To the
extent received, any Excess is to be applied first to reduce the principal
Obligations and the balance, if any, returned to Obligated Borrowers, it being
the intent of the parties hereto not to enter into a usurious or otherwise
illegal relationship. The right to accelerate the maturity of any of the
Obligations does not include the right to accelerate any interest that has not
otherwise accrued on the date of such acceleration, and Lender does not intend
to collect any unearned interest in the event of any such acceleration. The
credit or return of any Excess is to constitute the acceptance by Obligated
Borrowers of such Excess, and Obligated Borrowers are not to seek or pursue any
other remedy, legal or equitable, against Lender, based in whole or in part
upon contracting for, charging or receiving any Interest in excess of the
Maximum Rate. For the purpose of determining whether or not any Excess has
been contracted for, charged or received by Lender, all interest at any time
contracted for, charged or received from Obligated Borrowers in connection with
any of the Loan Documents, to the extent permitted by Applicable Law, is to be
amortized, prorated, allocated and spread in equal parts throughout the full
term of the Obligations. Obligated Borrowers and Lender, to the maximum extent
permitted under Applicable Law, will (i) characterize any non-principal payment
as an expense, fee or premium rather than as Interest and (ii) exclude
voluntary prepayments and the effects thereof. The provisions of this Section
are to be deemed to be incorporated into every Loan Document, whether or not
any provision of this Section is referred to therein.

(H) Administration Fee. For services performed by the
Lender in connection with its continuing administration hereof, Obligated
Borrowers will pay to Lender the Administration Fee in advance on the Closing
Date and on each anniversary of the Closing Date and continuing so long as any
Obligation remains outstanding or the Revolver Facilities have not been
terminated.

(I) Costs Relating to LIBOR Rate Loans. U.S. Borrowers
may repay a LIBOR Rate Loan on a day other than the last day of the applicable
Interest Period, but only if U.S. Borrowers shall compensate Lender, for each
such repayment, by the payment of the greater of (i) two thousand dollars
($2000) or (ii) all losses, expenses and liabilities (including, without
limitation, any loss (including interest paid) sustained by Lender in
connection with the reemployment of such funds) which Lender may incur because
of such prepayment, upon Lender's written request (which request shall set
forth in reasonable detail the basis for requesting any amounts pursuant to
subsection (ii) and which shall, absent manifest error, be conclusive and
binding upon all parties hereto).

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<PAGE> 40

4.2. Payments. All payments by U.S. Borrowers are to be made in
U.S. Dollars and without any defense, offset or counterclaim of any kind.
Except where evidenced by notes or other instruments issued or made by
Obligated Borrowers to Lender specifically containing payment provisions which
are in conflict with this Section (in which event the conflicting provisions of
said notes or other instruments are to govern and control), that portion of the
Obligations consisting of:

(A) Principal payable on account of Revolver Loans is to
be paid by Obligated Borrowers (with respect to European Revolver Loans) or
U.S. Borrowers (with respect to U.S. Revolver Loans) to Lender immediately upon
the earliest of: (i) the acceleration of the maturity and payment of such
Loans after the occurrence of an Event of Default, or (ii) termination of the
Revolver Facility; provided, however, that if an Overadvance Condition exists,
Obligated Borrowers (with respect to European Revolver Loans) or U.S. Borrowers
(with respect to U.S. Revolver Loans) will repay the Revolver Loans in an
amount sufficient to eliminate such Overadvance Condition;

(B) Interest accrued on the principal amount of the
Revolver Loans is to be paid on the earliest of (i) the first day of each month
(for the immediately preceding month), computed through the last calendar day
of the preceding month, (ii) the acceleration of the maturity and payment of
such Loans after the occurrence of an Event of Default or (iii) termination of
the Revolver Facility; provided, however, that Obligated Borrowers (with
respect to European Revolver Loans) or U.S. Borrowers (with respect to U.S.
Revolver Loans) hereby irrevocably request Lender, in Lender's sole discretion,
to advance to U.S. Borrowers, and to charge to U.S. Borrowers' Loan Account
hereunder as a U.S. Revolver Loan, a sum sufficient each month to pay all
interest accrued on the obligations during the immediately preceding month;

(C) Costs, fees and expenses payable pursuant to this
Agreement are to be paid by U.S. Borrowers, within two (2) Business Days of
demand therefor, to Lender or to any other Person designated by Lender in
writing; and

(D) The balance of the Obligations requiring the payment
of money, if any, is to be paid by Obligated Borrowers to Lender as and when
provided in this Agreement, the Other Agreements or the Security Documents.

4.3. Application of Payments and Collections. After the occurrence
and during the continuation of an Event of Default, each Obligated Borrower
irrevocably waives the right to direct the application of any and all payments
and collections at any time or times hereafter received by Lender from or on
behalf of Obligated Borrowers or from any of the Collateral. Lender is to have
the continuing exclusive right to apply and reapply any and all such payments
and collections received at any time or times hereafter by Lender or its agent
against the obligations, in such manner as Lender may deem advisable,
notwithstanding any entry by Lender upon any of its books and records;
provided that payments by the European Borrowers may only be applied against
Obligations of the European Borrowers. If as the result of collections of
Accounts authorized hereunder a credit balance exists in the Loan Account, such
credit balance is not to accrue interest in favor of Obligated Borrowers, but
is to be available to Obligated Borrowers at any time or times

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<PAGE> 41

for so long as no Default or Event of Default exists. Lender may, in its sole
discretion, offset such credit balance against the Obligations upon or after
the occurrence of an Event of Default.

4.4. Loan Account; Statements of Account. Lender is to enter all
Revolver Loans as debits to the Loan Account and is also to record in the Loan
Account all payments made by Obligated Borrowers on Revolver Loans and all
proceeds of Collateral which are finally paid to Lender, and may record
therein, in accordance with customary accounting practice, all charges and
expenses properly chargeable to Obligated Borrowers hereunder. Lender will
account to Obligated Borrowers monthly with a statement of Loans, charges and
payments made pursuant to this Agreement, and such account rendered by Lender
is to be deemed final, binding and conclusive upon Obligated Borrowers unless
Lender is notified by a Obligated Borrowers in writing to the contrary within
thirty (30) days after the date each account is mailed to the Obligated
Borrowers. Such notice is only to be deemed an objection to those items
specifically objected to therein.

SECTION 5. REPRESENTATIONS AND WARRANTIES

5.1. General Representations and Warranties. To induce Lender to
enter into this Agreement and to make advances hereunder, each Obligated
Borrower and Corporate Guarantor warrants, represents and covenants to Lender
that:

(A) Each Obligated Borrower, Corporate Guarantor and any
Subsidiary are entities duly organized, validly existing and in good standing
as provided in the Corporate Information Schedule and have duly qualified and
are authorized to do business and are in good standing as foreign corporations
in all states and jurisdictions where the character of their Properties or the
nature of their activities make such qualification necessary and the failure to
qualify would have a Material Adverse Effect.

(B) During the preceding five (5) years, none of U.S.
Borrowers or U.S. Holdings Guarantor has and none of the European Borrowers or
European Guarantor has, during the preceding two (2) years, been known as or
used any corporate, fictitious or trade names, and has had no office, place of
business or agent for service of process located in any state or county except
as disclosed in the Corporate Information Schedule.

(C) Each Obligated Borrower and Corporate Guarantor has
the right and power and is duly authorized and empowered to enter into,
execute, deliver and perform this Agreement and each of the other Loan
Documents to which it is a party. Such execution, delivery and performance
have been duly authorized by all necessary corporate action and do not and will
not (i) require any consent or approval of the shareholders of any Obligated
Borrower or Corporate Guarantor; (ii) contravene any Obligated Borrower or
Corporate Guarantor's charter, articles of incorporation or by- laws; (iii)
violate, or cause any Obligated Borrower or Guarantor to be in default under,
any provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award in effect having applicability to any Obligated
Borrower or Corporate Guarantor; (iv) result in a breach of or constitute a
default under any indenture or loan or credit

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<PAGE> 42

agreement or Material Agreement to which any Obligated Borrower, Corporate
Guarantor or any other signatory to the Loan Documents is a party or by which
it or its Properties may be bound or affected; or (v) result in, or require,
the creation or imposition of any Lien (other than Permitted Liens) upon or
with respect to any of the Properties now owned or hereafter acquired by any
Obligated Borrower or Corporate Guarantor.

(D) This Agreement is, and each of the other Loan
Documents when delivered under this Agreement will be, a legal, valid and
binding obligation of each Obligated Borrower and Corporate Guarantor
enforceable against them in accordance with its terms, except to the extent
that such enforcement may be limited by applicable bankruptcy, insolvency and
other similar laws affecting creditors' rights generally or by principles of
equity pertaining to the availability of equitable remedies.

(E) Each Obligated Borrower, Corporate Guarantor and any
Subsidiary has, and is in good standing with respect to, all governmental
consents, approvals, authorizations, permits, certificates, inspections, and
franchises necessary to continue to conduct its business as heretofore or
proposed to be conducted by it and to own or lease and operate its Properties
as now owned or leased by it, the failure of which to obtain would have a
Material Adverse Effect.

(F) Each Obligated Borrower, Corporate Guarantor and
Subsidiary owns or possesses all the patents, trademarks, service marks, trade
names, copyrights and licenses necessary for the present and planned future
conduct of its business without any known conflict with the rights of others,
all of which are listed in the Intellectual Property Schedule attached hereto
and made a part hereof.

(G) The Corporate Information Schedule attached hereto
and made a part hereof is true and correct. Each Obligated Borrower and
Corporate Guarantor has good title to all of the shares it purports to own of
the stock of each Subsidiary, free and clear in each case of any Lien other
than Permitted Liens. All such shares have been duly issued and are fully paid
and non-assessable. Other than as set forth in the Corporate Information
Schedule, there are not outstanding any options to purchase, or any rights or
warrants to subscribe for, or any commitments or agreements to issue or sell,
or any Securities or obligations convertible into, or any powers of attorney
relating to, shares of the capital stock of Obligated Borrowers or Corporate
Guarantors, or any agreements or instruments binding upon any of Obligated
Borrowers' or Corporate Guarantors' shareholders relating to the ownership of
its shares of capital stock.

(H) Except for those entities excluded from the
representations as set forth on the Corporate Information Schedule, each
Obligated Borrower, Corporate Guarantor and any Subsidiary is now and, after
giving effect to all Loans to be made hereunder, at all times will be, Solvent.

(I) Except as set forth on the Corporate Information
Schedule, none of the Obligated Borrowers, Corporate Guarantors or any
Subsidiary is a party or subject to any contract, agreement, or charter or
other corporate restriction, which materially and adversely affects its
business or the use or ownership of any of its Properties. No Obligated
Borrowers or Corporate

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Guarantors are a party or subject to any contract or agreement that restricts
their right or ability to incur Indebtedness, other than as set forth in the
Material Agreement Schedule. None of the Obligated Borrowers, Corporate
Guarantors or any of their Subsidiaries has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
its Property, whether now owned or hereafter acquired, to be subject to a Lien
that is not a Permitted Lien.

(J) Except as set forth in the Financial and Contingency
Schedule, there are no actions, suits, proceedings or investigations pending,
or to the knowledge of any Obligated Borrower or Corporate Guarantors,
threatened, against or affecting any Obligated Borrower, Corporate Guarantor or
any of their Subsidiaries, or the business, operations, Properties, prospects,
profits or condition of any Obligated Borrower, Corporate Guarantor or any of
their Subsidiaries, in any court or before any governmental authority or
arbitration board or tribunal, and no action, suit, proceeding or investigation
shown in the Financial and Contingency Schedule will have a Material Adverse
Effect. None of the Obligated Borrowers, Corporate Guarantors or any of their
Subsidiaries is in default with respect to any order, writ, injunction,
judgement, decree or rule of any court, governmental authority or arbitration
board or tribunal which would have a Material Adverse Effect.

(K) Each Obligated Borrower, Corporate Guarantor and any
Subsidiary has good, indefeasible and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its real
Property, and good title to all of its other Property, in each case, free and
clear of all Liens, charges or claims (including infringement claims with
respect to patents, trademarks, copyrights and the like) except Permitted
Liens.

(L) The Financial Statements have been prepared in
accordance with GAAP and present fairly the financial position and the results
of operations as of the date and for the periods set forth in the Financial
Statements. Since the date of the Financial Statements, there has been no
material change in the condition, financial or otherwise, of any Obligated
Borrower, Corporate Guarantor or any of their Subsidiaries except changes in
the ordinary course of business, none of which individually or in the aggregate
has been materially adverse. The Financial Statements, this Agreement or any
other written statement of any Obligated Borrower or Corporate Guarantor to
Lender (including, without limitation, any Obligated Borrower or Corporate
Guarantor's filings, if any, with the Securities and Exchange Commission) do
not contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not misleading.
There is no fact which any Obligated Borrower or Corporate Guarantor has failed
to disclose to Lender in writing which has had, or foreseeably will have, a
Material Adverse Effect, other than facts which are generally available to the
public and not particular to any Obligated Borrower or Related party, such as
general economic and industry trends. The fiscal year of each Obligated
Borrower, Corporate Guarantor and any Subsidiary ends as provided in the
Financial and Contingency Schedule.

(M) Except as disclosed in the Employee Benefit Schedule,
none of the Obligated Borrowers, Corporate Guarantors or any of their
Subsidiaries has any Plan. None of the Obligated Borrowers, Corporate
Guarantors or any of their Subsidiaries has received any notice to the effect
that it is not in full compliance with any of the requirements of ERISA and the
regulations

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<PAGE> 44

promulgated thereunder. No fact or situation that could result in a Material
Adverse Effect, including, but not limited to, any Reportable Event or
Prohibited Transaction, exists in connection with any Plan. None of the
Obligated Borrowers, Corporate Guarantors or any of their Subsidiaries has any
withdrawal liability in connection with a Multiemployer Plan.

(N) Each Obligated Borrower, Corporate Guarantor and any
Subsidiary has filed all federal and all material state and local tax returns
and other reports it is required by law to file and has paid, or made provision
for the payment of, all Charges that are due and payable. The provision for
taxes on the books of each Obligated Borrower, Corporate Guarantor and their
Subsidiaries are adequate for all years not closed by applicable statutes, and
for its current fiscal year.

(O) Except as disclosed in the Material Agreement
Schedule, none of the Obligated Borrowers, Corporate Guarantors or any of their
Subsidiaries is a party to any collective bargaining agreement and there are no
grievances, disputes or controversies with any union or any other organization
of any Obligated Borrower's or Corporate Guarantor's employees, or threats of
strikes, work stoppages or any asserted pending demands for collective
bargaining by any union or organization which would have a Material Adverse
Effect.

(P) Each Obligated Borrower and Corporate Guarantor has
duly complied with, and their Properties, business operations and leaseholds
are in compliance in all material respects with, the provisions of all
Applicable Law, and there have been no citations, notices or orders of
noncompliance issued to any Obligated Borrower, Corporate Guarantor or any of
their Subsidiaries under any such Applicable Law which would have a Material
Adverse Effect.

(Q) Except as provided in the Financial and Contingency
Schedule, no Obligated Borrower or Corporate Guarantor is obligated as surety
or indemnitor under any surety or similar bond or other contract, and no
Obligated Borrower or Corporate Guarantor has issued or entered into any
agreement to assure payment, performance or completion of performance of any
undertaking or obligation of any Person.

(R) No event has occurred and no condition exists which
would, upon the execution and delivery of this Agreement or any Obligated
Borrower or Corporate Guarantor's performance hereunder, constitute a Default
or an Event of Default. None of the Obligated Borrowers, Corporate Guarantors
or any of their Subsidiaries is in default, and no event has occurred and no
condition exists which constitutes, or which with the passage of time or the
giving of notice or both would constitute, a default in the payment of any
Indebtedness to any Person for Money Borrowed.

(S) Except as provided in the Financial and Contingency
Schedule, there are no claims for brokerage commissions, finder's fees or
investment banking fees in connection with the transactions contemplated by
this Agreement.

(T) Except in the ordinary course of business, there
exists no actual or threatened termination, cancellation or limitation of, or
any modification or change in, the business relationship

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between any Obligated Borrower or Corporate Guarantor and any material supplier
or any customer or group of customers whose purchases individually or in the
aggregate are material to the business of any Obligated Borrowers or Corporate
Guarantor. No present condition or state of facts or circumstances will, after
the consummation of the transaction contemplated herein, have a Material
Adverse Effect or prevent any Obligated Borrower or Corporate Guarantor from
conducting such business in substantially the same manner in which it has
heretofore been conducted.

(U) The Location and Real Property Schedule includes a
complete listing of all Capital Leases and all operating leases of all
Obligated Borrowers and Corporate Guarantors.

(V) None of the Obligated Borrowers or Corporate
Guarantors is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.

5.2. Reaffirmation. Each request for a Loan made by Obligated
Borrowers pursuant to this Agreement or any of the other Loan Documents is to
constitute (i) an automatic representation and warranty by all Obligated
Borrowers and Corporate Guarantors to Lender that there does not then exist any
Default or Event of Default and (ii) except for these representations and
warranties that relate to a specific date, a reaffirmation as of the date of
said request that all of the representations and warranties (subject to
scheduling) of each of the Obligated Borrowers and the Corporate Guarantors
contained in this Agreement and the other Loan Documents are true in all
material respects, except for any changes in the nature of any Obligated
Borrowers or Corporate Guarantor's business or operations consented to by
Lender or not expressly prohibited by this Agreement.

5.3. Survival of Representations and Warranties. Each Obligated
Borrower and Corporate Guarantors covenant, warrant and represent to Lender
that all representations and warranties of each Obligated Borrower and
Guarantor contained in this Agreement, the Schedules or any of the other Loan
Documents are to be true at the time of each Obligated Borrower and Guarantor's
execution of this Agreement and the other Loan Documents, and are to survive
the execution, delivery and acceptance hereof by Lender and the closing of the
transactions described herein or related hereto.

5.4. Additional Closing Representations and Warranties. To induce
Lender to enter into this Agreement and make the initial advance hereunder,
each Obligated Borrower warrants, represents and covenants that as of the
Closing Date:

(A) The U.S. Borrowing Base exceeds the amount of the
initial advance made under the U.S. Revolver Facility by at least U.S. $
1,500,000, and the European Borrowing Base exceeds the amount of the initial
advance made under the European Revolver Facility by at least Dollar Equivalent
(as defined in the Facility Letter) $1,500,000.

(B) All corporate actions necessary to accomplish the
restructuring of the U.S. Borrowers, the U.S. Holdings Guarantor and their
Affiliates, as described in the Reorganization Schedule attached hereto and
made a part hereof (the "Reorganization"), have been duly taken and

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<PAGE> 46

authorized, are final and irrevocable, and will be fully effective as December
30, 1995, and such entities shall take no action to interfere with the
effectiveness of the Reorganization.

SECTION 6. COVENANTS AND CONTINUING AGREEMENTS

6.1. Affirmative Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Lender, each Obligated
Borrower and Corporate Guarantors is to:

(A) Cause the Obligated Borrowers and the Corporate
Guarantors to comply with the Reporting Schedule.

(B) Pay and discharge, and cause each Subsidiary to pay
and discharge, all Charges prior to the date on which such Charges become
delinquent or penalties attach thereto, except and to the extent only that such
Charges are being actively contested in good faith and by appropriate
proceedings, such Obligated Borrower or Corporate Guarantor promptly notifies
Lender in writing of such contest involving a charge in excess of $50,000, such
Obligated Borrower or Corporate Guarantor maintains adequate reserves on its
books therefor, the nonpayment of such Charges does not result in a Lien upon
any Properties of such Obligated Borrower or Corporate Guarantor other than a
Permitted Lien and will not result in a forfeiture of such Properties, the
non-payment of such Charges will not have a Material Adverse Effect, and, if
such contest is abandoned or determined adversely to such Obligated Borrower or
Corporate Guarantor, such Obligated Borrower or Corporate Guarantor promptly
pays all such Charges and any penalties and interest payable in connection
therewith. Each Obligated Borrower and Corporate Guarantor is also to pay and
discharge any lawful claims which, if unpaid, might become a Lien against any
of Obligated Borrower or Corporate Guarantor's Properties except for Permitted
Liens.

(C) Timely file, and cause each Subsidiary to timely
file, all federal, state and local tax returns and other reports such Obligated
Borrower, Corporate Guarantors or Subsidiary is required by law to file and
maintain adequate reserves for the payment of all taxes, assessments,
governmental charges, and levies imposed upon it, its income, or its profits,
or upon any Property belonging to it.

(D) Pay to Lender, two (2) Business Days following demand
therefor, any and all fees, costs or expenses which Lender or any Participating
Lender pays to a bank or other similar institution (including, without
limitation, any fees paid by the Lender to any Participating Lender) arising
out of or in connection with (i) the forwarding to any Obligated Borrower or
any other Person on behalf of Obligated Borrowers, by Lender or any
Participating Lender, proceeds of loans made by Lender to Obligated Borrowers
pursuant to this Agreement and (ii) the depositing for collection, by Lender or
any Participating Lender, of any check or item of payment received or delivered
to Lender or any Participating Lender on account of the obligations.

(E) Except for the Reorganization, preserve and maintain,
and cause each Subsidiary to preserve and maintain, its separate corporate
existence and all rights, privileges, and

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franchises in connection therewith, and maintain, and cause each Subsidiary to
maintain, its qualification and good standing in all states in which such
qualification is necessary and in which failure to maintain such qualification
and good standing would have a Material Adverse Effect.

(F) Maintain, and cause each Subsidiary to maintain, its
Properties in good condition and make, subject to normal wear and tear, and
cause each Subsidiary to make, all necessary renewals, repairs, replacements,
additions and improvements thereto.

(G) Comply, and cause each Subsidiary to comply, with all
Applicable Laws, and obtain and keep in force any and all licenses, permits,
franchises, or other governmental authorizations necessary to the ownership of
its Properties or to the conduct of its business, which violation or failure to
obtain might have a Material Adverse Effect.

(H) (i) At all times make prompt payment of contributions
required to meet the minimum funding standards set forth in ERISA with respect
to each Plan; (ii) promptly after the filing thereof, furnish to Lender copies
of any annual report required to be filed pursuant to ERISA in connection with
each Plan and any other employee benefit plan of it and its Affiliates subject
to said Section; (iii) notify Lender as soon as practicable of any Reportable
Event and of any additional act or condition arising in connection with any
Plan which any Obligated Borrower or Corporate Guarantor believes might
constitute grounds for the termination thereof by the Pension Benefit Guaranty
Corporation or for the appointment by the appropriate United States district
court of a trustee to administer the Plan; and (iv) furnish to Lender, promptly
upon Lender's request therefor, such additional information concerning any Plan
or any other such employee benefit plan as may be reasonably requested.

(I) Keep, and cause each Subsidiary to keep, adequate
records and books of account with respect to its business activities in which
proper entries are made in accordance with GAAP reflecting all its financial
transactions; and permit representatives of Lender, from time to time, as often
as may be reasonably requested, but only during normal business hours, to visit
and inspect the Properties of any Obligated Borrower or Corporate Guarantor,
inspect and make extracts from its books and records, and discuss with its
officers, its employees and its independent accountants, any Obligated Borrower
or Corporate Guarantor's business, assets, liabilities, financial condition,
business prospects and results of operations.

(J) Notify Lender in writing: (i) promptly after any
Obligated Borrower or Corporate Guarantors learning thereof, of the
commencement of any litigation affecting any Obligated Borrower or Corporate
Guarantor or any of their Properties, and of the institution of any
administrative proceeding which may have a Material Adverse Effect; (ii)
promptly after any Obligated Borrower or Corporate Guarantors learning thereof,
of any labor dispute to which any Obligated Borrower or Corporate Guarantor may
become a party, any strikes or walkouts relating to any of their plants or
other facilities which may have a Material Adverse Effect; (iii) promptly after
the occurrence thereof, of any Default or Event of Default; (iv) promptly after
any Obligated Borrower or Corporate Guarantors learning thereof, of any
material default by any Obligated Borrower or Corporate Guarantor under any
note, indenture, loan agreement, mortgage, lease, deed,

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<PAGE> 48

guaranty or other similar agreement relating to any Indebtedness of any
Obligated Borrower or Corporate Guarantor; and (vii) promptly after the
occurrence thereof, of any default by any obligor under a note or other
evidence of Funded Indebtedness payable to any Obligated Borrower or Corporate
Guarantor.

(K) Provide Lender with a debt subordination agreement,
in form and substance satisfactory to Lender, executed by each Obligated
Borrower, Corporate Guarantor and any Person who is an officer, director or
Affiliate of any Obligated Borrower or Corporate Guarantor to whom any
Obligated Borrower or Corporate Guarantor is or hereafter becomes indebted for
Money Borrowed, subordinating in right of payment and claim for all of such
Indebtedness and any future advances thereon to the full and final payment and
performance of the Obligations.

(L) At Lender's request, promptly execute or cause to be
executed and deliver to Lender any and all documents, instruments and
agreements reasonably deemed necessary by Lender to give effect to or carry out
the terms or intent of this Agreement or any of the other Loan Documents.
Without limiting the generality of the foregoing, if any of the Accounts, the
face value of which exceeds U.S. $1,000, arises out of a contract with the
United States of America, or any department, agency, subdivision or
instrumentality thereof, such Obligated Borrower is to promptly notify Lender
thereof in writing and is to execute any instruments and take any other action
required or requested by Lender to comply with the provisions of the Federal
Assignment of Claims Act or any other Applicable Law.

(M) Permit Lender to communicate directly with any of the
following Persons concerning each Obligated Borrower and Corporate Guarantor,
their business, the Collateral and the Loans (and Lender is irrevocably
authorized to communicate with such Persons): (a) any service bureau,
warehousing service, freight forwarder, trade creditor, consignee, bailee, or
landlord; (b) any Person employed by any Obligated Borrower or Corporate
Guarantor; and (c) each Obligated Borrower's and Corporate Guarantor's present
and future independent public accountants, each of whom is authorized by each
Obligated Borrower and Corporate Guarantor to communicate with Lender and to
disclose to Lender any and all matters relating to each Obligated Borrower and
Corporate Guarantor, their financial condition and prospects, and the
Collateral.

(N) Cause ADI U.K. to make the Permanent Advance in
strict accordance with the terms of the definition of Permanent Advance.

6.2. Negative Covenants. During the term of this Agreement, and
thereafter for so long as there are any obligations to Lender, each Obligated
Borrower and Corporate Guarantor is not to:

(A) Other than for the Reorganization, merge or
consolidate, or permit any Subsidiary to merge or consolidate, with any Person;
nor acquire, or permit any Subsidiary to acquire, all or any substantial part
of the Properties of any Person.

(B) Except as set forth on the Financial and Contingency
Schedule, make, or permit any Subsidiary to make, any loans or other advances
of money (other than for salary, travel

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<PAGE> 49

advances, advances against commissions and other similar advances in the
ordinary course of business) to any Person, including, without limitation, any
of Obligated Borrowers or Corporate Guarantor's Affiliates, officers or
employees.

(C) Except as set forth on the Financial and Contingency
Schedule, create, incur, assume, or suffer to exist, or permit any Subsidiary
to create, incur, assume or suffer to exist, any Indebtedness, except Permitted
Indebtedness, or guarantee, assume, endorse or otherwise, in any way, become
directly or contingently liable, or permit any Subsidiary to guarantee, assume,
endorse or otherwise, in any way, become directly or contingently liable, with
respect to the Indebtedness of any Person except by endorsement of instruments
or items of payment for deposit or collection.

(D) Enter into, or be a party to, or permit any
Subsidiary to enter into or be a party to, any transaction with any Affiliate
or stockholder, except in the ordinary course of and pursuant to the reasonable
requirements of each Obligated Borrower, Corporate Guarantors or such
Subsidiary's business and upon fair and reasonable terms which are fully
disclosed to Lender and are no less favorable to such Obligated Borrower or
Corporate Guarantor than would obtain in a comparable arm's length transaction
with a Person not an Affiliate or stockholder of such Obligated Borrower,
Corporate Guarantor or Subsidiary.

(E) Become or agree to become, or permit any Subsidiary
to become or agree to become, a general or limited partner in any general or
limited partnership or a joint venturer in any joint venture.

(F) Enter into any transaction, or permit any Subsidiary
to enter into any transaction, which materially and adversely affects the
Collateral or any Obligated Borrower or Corporate Guarantor's ability to repay
the Obligations or permit or agree to, or permit any Subsidiary to permit or
agree to, any material extension, compromise or settlement or make any change
or modification of any kind or nature with respect to any Account, including
any of the terms relating thereto, other than in the ordinary course of
business, all of which is to be reflected in the Schedules of Accounts
submitted to Lender as required herein.

(G) Create or suffer to exist, or permit any Subsidiary
to create or suffer to exist, any Lien upon any of their Property, income or
profits, whether now owned or hereafter acquired, except Permitted Liens.

(H) Make, or permit any Subsidiary to make, any
prepayment of any part or all of any Subordinated Debt; or otherwise
repurchase, redeem or retire, or permit any Subsidiary to repurchase, redeem or
retire, any instrument evidencing any such Subordinated Debt prior to maturity;
or enter into or permit any Subsidiary to enter into any agreement (oral or
written) which could in any way be construed to amend, modify, alter or
terminate any one or more instruments or agreements evidencing or relating to
any Subordinated Debt.

(I) Except as set forth on the Financial and Contingency
Schedule, declare or make, or permit any Subsidiary to declare or make, any
Distributions, other than (i) Distributions by

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<PAGE> 50

any U.S. Borrower or any Subsidiary of any U.S. Borrower to any of the U.S.
Holdings Guarantor and the U.S. Borrowers, (ii) Distributions by any European
Borrower or any Subsidiary of any European Borrower to the European Guarantor
and the European Borrowers, (iii) Distributions by any Subsidiary of the U.S.
Holdings Guarantor that is not a U.S. Borrower or a Subsidiary of a U.S.
Borrower to any of the U.S. Holdings Guarantor or the U.S. Borrowers, and (iv)
Distributions by any Subsidiary of the European Guarantor that is not a
European Borrower to any of the European Guarantor or the European Borrowers;
provided that in the case of any such permitted Distribution, the Person making
such Distribution would remain Solvent after taking such Distribution into
account.

(J) Hereafter create any Subsidiary or divest themselves
of any material assets by transferring them to any Subsidiary, or permit any
Subsidiary to create any Subsidiary or divest itself of any material assets by
transferring them to any Subsidiary.

(K) Other than Permitted Capital Expenditures, make any
Capital Expenditures or permit any Subsidiary to make any Capital Expenditures.

(L) Transfer or permit any Subsidiaries to transfer their
principal place of business or chief executive office to any locations other
than those at which the same are presently kept or maintained, as set forth on
the Location and Real Property Schedule, except upon at least sixty (60) days
prior written notice to Lender and after the delivery to Lender of financing
statements, if required by Lender, in form satisfactory to Lender to perfect or
continue the perfection of Lender's Lien and security interest hereunder.

(M) Enter into or permit any Subsidiaries to enter into
any new business or make or permit any of their Subsidiaries to make any
material change in their business objectives, purposes or operations.

(N) Except as disclosed on the Financial and Contingency
Schedule, sell, lease or otherwise dispose, or permit any Subsidiary to sell,
lease or otherwise dispose, of any of their Properties, including any
disposition of Property as part of a sale and leaseback transaction, to or in
favor of any Person, except for dispositions expressly authorized by this
Agreement.

(O) Use or permit any Subsidiary to use any corporate
name (other than their own) or any fictitious name, trade style or "d/b/a"
except for the names disclosed on the Corporate Information Schedule.

(P) Own, purchase or acquire or permit any Subsidiary to
own, purchase or acquire (or enter into any contract to purchase or acquire)
any "margin security" as defined by any regulation of the Board of Governors of
the Federal Reserve System as now in effect or as the same may hereafter be in
effect unless, prior to any such purchase or acquisition or entering into any
such contract, Lender is to have received an opinion of counsel satisfactory to
Lender to the effect that such purchase or acquisition will not cause this
Agreement to violate Regulations G or U or any other regulation of the Board of
Governors then in effect.

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<PAGE> 51

(Q) Make or have, or permit any Subsidiary to make or
have, any Restricted Investment.

(R) Change, or permit any Subsidiary to change, its
fiscal year, or permit any Subsidiary to have a fiscal year different from that
of Obligated Borrowers, except a change to a calendar year fiscal year.

(S) Except as disclosed on the Financial and Contingency
Schedule, sell or otherwise dispose of any shares of capital stock of any
Subsidiary, or permit any Subsidiary to issue any additional shares of their
capital stock except director's qualifying shares.

(T) File or consent to the filing of any consolidated
income tax return with any Person other than a Subsidiary.

(U) Except as set forth on the Financial and Contingency
Schedule, become or permit any Subsidiary to become a party as "lessee" or
"owner" under any Capital Lease.

(V) Permit or cause Superior Services Company to acquire
any assets not owned, or expand its business activities existing, on the
Closing Date.

Obligated Borrowers have informed Lender, and Lender acknowledges, that
Obligated Borrowers, Corporate Guarantors and their Subsidiaries are currently
considering acquisitions of additional companies or businesses, strategic
alliances with customers, partnerships and other similar transactions,
relationships and investments. Although Lender reserves all rights it has
pursuant to this Agreement to consent to any such transaction, relationship or
investment, and to refuse to give such consent in Lender's sole discretion,
Lender will consider in good faith all requests for its consent to such
transactions, relationships and investments.

6.3. Specific Financial Covenants. During the term of this
Agreement, and thereafter for so long as there are any obligations to Lender,
the U.S. Borrowers and U.S. Holdings Guarantor shall, or shall cause:

(A) U.S. Holdings Guarantor (on a consolidated basis) to
maintain at all times Adjusted Tangible Net Worth during the fiscal year ending
December 31, 1996 of not less than $3,500,000 and, during each fiscal year
thereafter, of not less than the sum of (i) $3,500,000 plus (ii) the greater of
(a) $1,000,000 or (b) seventy-five percent (75%) of the preceding fiscal year's
net income after tax (computed in accordance with GAAP) plus (iii) the
aggregate of the amounts added pursuant to clause (ii) above for all previous
fiscal years occurring after the fiscal year ending December 31, 1996.

(B) U.S. Holdings Guarantor (on a consolidated basis) to
maintain at each Fiscal Period-end a ratio of (i) average Funded Indebtedness
for the immediately preceding thirteen (13) Fiscal Periods (provided that
during the fiscal year ending December 31, 1996, such calculation shall be
based upon the cumulative monthly average for such fiscal year) to (ii) EBIDAT
for the

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<PAGE> 52

immediately preceding thirteen (13) Fiscal Periods (provided that during the
fiscal year ending December 31, 1996, such calculation shall be based upon the
cumulative monthly average annualized for such fiscal year), of not less than
the ratio shown below for the period corresponding thereto:

<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date through
December 31, 1996 4.75 to 1

January 1, 1997 through
December 31, 1997 4.50 to 1

January 1, 1998 and
thereafter 4.25 to 1
</TABLE>

(C) U.S. Holdings Guarantor (on a consolidated basis) to
maintain at each Fiscal Period-end a Debt Service Coverage for the immediately
preceding thirteen (13) Fiscal Periods (provided that during the fiscal year
ending December 31, 1996, such calculation shall be based upon the cumulative
monthly average annualized for such fiscal year and provided further that
during the fiscal year ending December 31, 1996 and such calculation shall
exclude a U.S. $350,000 payment made with respect to taxes due for the fiscal
year ended December 31, 1995) of not less than the ratio shown below for the
period corresponding thereto:

<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Closing Date through
December 31, 1996 1.30 to 1

January 1, 1997 and
thereafter 1.35 to 1
</TABLE>

(D) U.S. Borrowers (on a combined basis) to maintain at
all times excess availability under the U.S. Revolver Facility (the excess of
the amount of the U.S. Borrowing Base on such date over the then outstanding
amount of the U.S. Revolver Loans and face amount of the Letters of Credit
issued for the account of U.S. Borrowers) of not less than U.S. $500,000.

(E) Each of the Subsidiaries of U.S. Holdings Guarantor
to maintain at all times an Adjusted Tangible Net Worth of not less than its
Adjusted Tangible Net Worth as of January 1, 1996.

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<PAGE> 53

SECTION 7. COLLATERAL: GENERAL TERMS

7.1. Grant of Security Interest. To secure the prompt payment and
performance to Lender of the U.S. Obligations, each U.S. Borrower and the U.S.
Holdings Guarantor hereby grants to Lender a continuing security interest in,
security title to and Lien upon all the U.S. Collateral.

7.2. Representations, Warranties and Covenants -- Collateral. To
induce Lender to enter into this Agreement, each Obligated Borrower and U.S.
Holdings Guarantor represents and warrants to, and covenants with, Lender as
follows:

(A) The Collateral is now and will continue to be owned
solely by U.S. Borrowers and U.S. Holdings Guarantor. No other Person has or
will have any right, title, interest, claim, or Lien therein, thereon or
thereto other than a Permitted Lien.

(B) The Liens granted to Lender are to be first and prior
on the Collateral. No further action need be taken to perfect the Liens
granted to Lender, other than the filing of continuation statements under the
Code or other Applicable Law and continued possession by Lender of that portion
of the Collateral constituting Instruments or Documents; provided, Obligated
Borrowers acknowledge that Lender may request the processing of Lien notations
on motor vehicle title certificates.

(C) All goods evidenced by the Collateral constituting
Chattel Paper, Documents or Instruments, the possession of which has been given
to Lender, are owned by U.S. Borrower and or U.S. Holdings Guarantor and the
same are free and clear of any prior Lien. U.S. Borrowers and U.S. Holdings
Guarantor further warrant and guarantee the value, quantities, sound condition,
grades and qualities of the goods and services described therein.

7.3. Lien Perfection. Each Obligated Borrower and U.S. Holdings
Guarantor agrees to execute the UCC-1 financing statements provided for by the
Code or other Applicable Law together with any and all other instruments,
assignments or documents and are to take such other action as may be required
to perfect or to continue the perfection of Lender's security interest in the
Collateral including, without limitation, the execution at Lender's request of
all documents deemed necessary by Lender to cause Lender's Lien to be noted on
any motor vehicle title certificates for motor vehicles forming a part of the
Collateral. Unless prohibited by Applicable Law, each Obligated Borrower and
U.S. Holdings Guarantor hereby authorizes Lender to execute and file any such
financing statement on such Obligated Borrower or U.S. Holdings Guarantor's
behalf. The parties agree that a carbon, photographic or other reproduction of
this Agreement is to be sufficient as a financing statement and may be filed in
any appropriate office in lieu thereof.

7.4. Location of Collateral. All Collateral will at all times be
kept by Obligated Borrower and Corporate Guarantors at one or more of the
business locations set forth in the Location and Real Property Schedule or at
customer sites and is not to be moved therefrom.

7.5. Insurance of Collateral. The Obligated Borrowers and
Corporate Guarantors are to maintain and pay for insurance upon all Collateral
wherever located, in storage or in transit in vehicles, including goods
evidenced by documents, covering casualty, hazard, public liability and

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<PAGE> 54

such other risks and in such amounts and with such insurance companies as is to
be reasonably satisfactory to Lender to insure Lender's interest in the
Collateral. Each Obligated Borrower and Corporate Guarantor is to deliver to
Lender an original certificate as to the issuance of each policy of insurance
together with satisfactory lender's loss payable endorsements naming Lender
loss payee. Each policy of insurance or endorsement is to contain a clause
requiring the insurer to give not less than thirty (30) days prior written
notice to Lender in the event of cancellation of the policy for any reason
whatsoever and a clause that the interest of Lender is to not be impaired or
invalidated by any act or neglect of any Obligated Borrower, Corporate
Guarantor or owner of the Property nor by the occupation of the premises for
purposes more hazardous than are permitted by said policy. If any Obligated
Borrower or U.S. Holdings Guarantor fails to provide and pay for such
insurance, Lender may, at any Obligated Borrower or U.S. Holdings Guarantor's
expense, procure the same, but is not to be required to do so. Each Obligated
Borrower and U.S. Holdings Guarantor agrees to deliver to Lender, promptly as
rendered, true copies of all material reports made in any reporting forms to
insurance companies. In addition to the insurance required herein with respect
to the Collateral, each Obligated Borrower and U.S. Holdings Guarantor to
maintain, with financially sound and reputable insurers, insurance with respect
to their Properties and business against such casualties and contingencies of
such type (including professional liability, larceny, embezzlement, or other
criminal misappropriation insurance) and in such amounts as is customary in the
business or as otherwise required by Lender. The Obligated Borrowers and the
Corporate Guarantors shall deliver to Lender annually reports detailing all
such insurance coverages.

7.6. Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping the
Collateral (including, without limitation, all rent payable by each Obligated
Borrower and Corporate Guarantor to any landlord of any premises where any of
the Collateral may be located), and any and all Charges are to be borne and
paid by any or all Obligated Borrowers or Corporate Guarantors. All sums paid
or incurred by Lender in enforcing or protecting its Lien on or rights and
interest in the Collateral or any of its rights or remedies under this or any
other agreement between the parties hereto or in respect of any of the
transactions to be had hereunder until paid by Obligated Borrowers and
Corporate Guarantors to Lender with interest at the Default Rate, are to be
considered Obligations, secured by all Collateral and by any and all other
collateral, security, assets, reserves, or funds of Obligated Borrowers or
Corporate Guarantors in or coming into the hands or inuring to the benefit of
Lender. Lender is not to be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in Lender's
actual possession) or for any diminution in the value thereof, or for any act
or default of any warehouseman, carrier, forwarding agency, or other Person
whomsoever, but the same is to be at Obligated Borrowers' and Corporate
Guarantor's sole risk.

SECTION 8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

8.1. Events of Default. The occurrence of any one or more of the
following conditions or events is to constitute an "Event of Default," whatever
the reason for such event or condition and whether it be voluntary or
involuntary, or within or without the control of Obligated Borrowers, U.S.

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<PAGE> 55

Holdings Guarantor, any Guarantor or any Subsidiary, or be effected by
operation of law or pursuant to any order or judgment of a court or otherwise:

(A) Any Obligated Borrower fails to pay any of the
Obligations, including, without limitation, any principal or interest owing on
the Revolver Note, the Term Note, or the European Revolver Note, on the due
date thereof (whether due at stated maturity, on demand, upon acceleration or
otherwise).

(B) Any warranty, representation, or other statement made
or furnished to Lender by or on behalf of any Obligated Borrower or any
Guarantor or in any instrument, certificate or financial statement furnished in
compliance with or in reference to this Agreement or the Schedules or any of
the other Loan Documents proves to have been false or misleading in any
material respect when made or furnished.

(C) Any Obligated Borrower or Guarantor fails or neglects
to perform, keep or observe (i) any term in the Special Provisions Relating to
Equipment, any covenant to comply with Applicable Law or furnish financial
information as provided herein, or any of the Negative Covenants or Specific
Financial Covenants or (ii) any other covenant contained in this Agreement (not
dealt with specifically elsewhere in this Section) and the breach of such other
covenant is not cured to Lender's satisfaction within fifteen (15) days after
the sooner to occur of any Obligated Borrower or Corporate Guarantor's receipt
of notice of such breach from Lender or the date on which such failure or
neglect first becomes known to any officer of any Obligated Borrowers or
Guarantor.

(D) Any event of default occurs under, or default by any
Obligated Borrower or Corporate Guarantor in the performance or observance of
any term, condition or agreement contained in, any of the Security Documents or
the Other Agreements and such default continues beyond any applicable period of
grace.

(E) Any default or event of default on the part of any
Obligated Borrower or Guarantor (including specifically, but without
limitation, due to non-payment) under any agreement, document or instrument to
which any Obligated Borrower or Guarantor is a party or by which any Obligated
Borrower or Guarantor or any of their Property is bound, creating or relating
to any Funded Indebtedness (other than the Obligations) if the payment or
maturity of such Funded Indebtedness is accelerated in consequence of such
event of default or demand for payment of such Indebtedness is made.

(F) Any material loss, theft, damage or destruction not
fully covered by insurance, or sale, lease or encumbrance of any of the
Collateral or the making of any levy, seizure, or attachment thereof or thereon
except in all cases as may be specifically permitted by other provisions of
this Agreement.

(G) Any Obligated Borrower or Guarantor ceases to be
Solvent or suffers the appointment of a receiver, trustee, custodian or similar
fiduciary, or makes an assignment for the benefit of creditors, or any petition
for an order for relief is filed by or against any Obligated

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<PAGE> 56

Borrower or Guarantor under the Bankruptcy Code (if against any Obligated
Borrower or Guarantor, the continuation of such proceeding for more than sixty
(60) days), or any Obligated Borrower or Guarantor makes any offer of
settlement, extension or composition to their respective unsecured creditors
generally, or any motion, complaint or other pleading is filed in any
bankruptcy case of any Person other than any Obligated Borrower or Guarantor
and such motion, complaint or pleading seeks the consolidation of any Obligated
Borrower or Guarantor's assets and liabilities with the assets and liabilities
of such Persons.

(H) A cessation of a substantial part of the business of
any Obligated Borrower or Guarantor for a period which significantly affects
any Obligated Borrower or Guarantor's capacity to continue its business on a
profitable basis; or any Obligated Borrower or Guarantor suffers the loss or
revocation of any license or permit now held or hereafter acquired by any
Obligated Borrower or Guarantor which is necessary to the continued or lawful
operation of their business; or any Obligated Borrower or Guarantor is
enjoined, restrained or in any way prevented by court, governmental or
administrative order from conducting all or any material part of their business
affairs; or any material lease or agreement pursuant to which any Obligated
Borrower or Guarantor leases, uses or occupies any Property is cancelled or
terminated prior to the expiration of its stated term; or any part of the
Collateral is taken through condemnation or the value of such Property is
impaired through condemnation.

(I) Owner ceases to own and control, beneficially and of
record, directly or indirectly at least fifty-one percent (51%) all of the
issued and outstanding capital stock of any Obligated Borrower or any Corporate
Guarantor.

(J) A Reportable Event occurs which Lender, in its sole
discretion, determines in good faith constitutes grounds for the termination by
the Pension Benefit Guaranty Corporation of any Plan or for the appointment by
the appropriate United States district court of a trustee for any Plan, or if
any Plan is terminated or any such trustee is requested or appointed, or if any
Obligated Borrower or Corporate Guarantor is in "default" (as defined in
Section 4219(c) (5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from any Obligated Borrower or Corporate Guarantors complete or
partial withdrawal from such Plan.

(K) Any Obligated Borrower, or any Guarantor, or any
Affiliate, challenge or contest in any action, suit or proceeding the validity
or enforceability of this Agreement or any of the other Loan Documents, the
legality or enforceability of any of the Obligations or the perfection or
priority of any Lien granted to Lender.

(L) Any Guarantor revokes or attempts to revoke the
Guaranty Agreement signed by such Guarantor, or repudiates such Guarantor's
liability thereunder or becomes in default under the terms thereof.

(M) Any Obligated Borrower or any Guarantor are
criminally indicted or convicted under any law that could lead to a forfeiture
of any Property of any Obligated Borrower, Corporate

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<PAGE> 57

Guarantor or any Guarantor or any Obligated Borrower or any Guarantor suffers a
forfeiture of any of their Property under any Forfeiture Law.

(N) Any money judgment, writ of attachment or similar
process involving an amount individually or in the aggregate with other such
judgments, writs of attachment or similar process entered or filed in the
preceding 12- month period, in excess of $100,000 is entered or filed against
any Obligated Borrower, Guarantor or any of their Property and remain
unsatisfied and in effect for a period of sixty (60) consecutive days without
being vacated, discharged, satisfied or stayed or bonded pending appeal.

8.2. Acceleration of the Obligations. Upon or at any time after
the occurrence of an Event of Default all of the Obligations then outstanding,
at the option of Lender and without notice or demand by Lender, are to become
at once due and payable. Each Obligated Borrower is to pay forthwith to
Lender, in addition to any and all sums and charges due, the entire principal
amount of and accrued and unpaid interest on the Obligations plus reasonable
attorneys' fees, not to exceed fifteen percent (15%) of the Obligations, if the
same are collected by or through an attorney at law. From and after the date
of such acceleration, the unpaid principal amount of the Obligations is to bear
interest at the Default Rate until paid in full. Nothing herein is to be
construed to permit Lender to charge or collect any unmatured or unearned
interest.

8.3. Remedies. Upon or at any time after the occurrence of an
Event of Default, Lender may exercise from time to time the following rights
and remedies:

(A) The right to terminate the U.S. Revolver Facility and
the European Revolver Facility without further notice to Obligated Borrowers.

(B) All of the rights and remedies of a secured party
under the Code or under other Applicable Law and all other legal and equitable
rights to which Lender may be entitled.

(C) The right to notify all Persons in any way liable on
any Accounts, Instruments or Chattel Paper to make remittances to Lender of all
sums due or to become due thereon and to collect and enforce payment of all
Accounts, Instruments and Chattel Paper directly from the Persons liable
thereon, by legal proceedings or otherwise, and generally exercise all of
Obligated Borrowers' and Guarantor's rights and remedies with respect to the
collection of the Accounts.

(D) The right (i) to take immediate possession of the
Inventory and Equipment, or alternatively to require Obligated Borrowers and
Guarantors to assemble the Inventory and Equipment, at each Obligated Borrower
or Guarantor's expense, and make it available to Lender at a place designated
by Lender that is reasonably convenient to both parties, and (ii) to enter any
of the premises of any Obligated Borrower or Guarantor or wherever any of the
Inventory or Equipment is located, and to keep and store the same on said
premises until sold (and if said premises be the Property of any Obligated
Borrower or Guarantor such Obligated Borrower or Guarantor agrees not to charge
Lender for storage thereof).

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<PAGE> 58

(E) With respect to any or all of the Collateral (other
than any real Property), the right to sell or otherwise dispose of all or any
of such Collateral in its then condition, at public or private sale or sales,
with such notice as may be required by applicable law, in lots or in bulk, for
cash or on credit, all as Lender, in its sole discretion, may deem advisable.
Ten (10) days written notice to any Obligated Borrower or Guarantor of any
public or private sale or other disposition of any such Collateral is to be
reasonable notice thereof; provided, however, that no notice of Lender's
intended disposition of such Collateral is to be required if not otherwise
required under Applicable Law. Lender is to have the right to conduct such
sales on any Obligated Borrower or Guarantor's premises, without charge
therefor, and such sales may be adjourned from time to time in accordance with
Applicable Law. Lender is to have the right to sell, lease or otherwise
dispose of any such Collateral, or any part thereof, for cash, credit or any
combination thereof, and Lender may purchase all or any part of any such
Collateral at public or, if permitted by applicable law, private sale and, in
lieu of actual payment of such purchase price, may set off the amount of such
price against the Obligations.

(F) The right at any time or times, to the fullest extent
permitted by Applicable Law and without notice to any Obligated Borrower or
Guarantor, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other Indebtedness at any
time owing by Lender to or for the credit or the account of Obligated
Borrowers, or Guarantor against any and all of the Obligations, irrespective of
whether or not Lender has made any demand under any Loan Document and whether
or not any of the Obligations (other than interest) may be unmatured.

(G) The right to foreclose or otherwise realize upon any
of the real property of any Obligated Borrower or Guarantor encumbered by a
Mortgage to Lender, in accordance with the terms of the Mortgage with respect
to such real Property or Applicable Law.

Lender is hereby granted a license or other right to use, without charge, any
Obligated Borrower or Guarantor's labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks and advertising matter, or any
Property of a similar nature, as it pertains to the Collateral, in advertising
for sale and selling any Collateral, and any Obligated Borrower or Guarantor's
rights under all licenses and all franchise agreements are to inure to Lender's
benefit. The proceeds realized from the sale or other disposition of any
Collateral may be applied, first to the costs, expenses and attorneys' fees
incurred by Lender in collecting the Obligations, in enforcing the rights of
Lender under the Loan Documents and in collecting, retaking, completing,
protecting, removing, storing, advertising for sale, selling and delivering any
of the Collateral; secondly, to interest due upon any of the Obligations; and
thirdly, to the principal amount of the Obligations. If any deficiency arises,
each Obligated Borrower and each Guarantor will remain jointly and severally
liable to Lender therefor.

8.4. Remedies Cumulative; No Waiver. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings of each
Obligated Borrower and Guarantor contained in this Agreement and the other Loan
Documents, or in any other agreement between Lender and any Obligated Borrower
or Guarantor, heretofore, concurrently, or hereafter entered into, are to be

55
<PAGE> 59

deemed cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions, or agreements of any Obligated Borrower or Guarantor
herein contained.

SECTION 9. SPECIAL PROVISIONS RELATING TO ACCOUNTS

9.1. Representations, Warranties and Covenants. With respect to
all Accounts, Lender may rely, in determining which Accounts are Eligible
Accounts, on all statements and representations made by any Obligated Borrower
or Corporate Guarantor with respect to any Account or Accounts. With respect
to each Account, each Obligated Borrower and Corporate Guarantor represents and
warrants, except as otherwise described to Lender:

(A) It is genuine and in all respects what it purports to
be, and it is not evidenced by a judgment;

(B) It arises out of a completed, bona fide sale and
delivery of goods or rendition of services by an Obligated Borrower or
Corporate Guarantor (or predecessor companies) in the ordinary course of its
business and in accordance with the terms and conditions of all purchase
orders, contracts or other documents relating thereto and forming a part of the
contract between such Obligated Borrower or Corporate Guarantor and the Account
Debtor and, to the best of such Obligated Borrower or Corporate Guarantor's
knowledge, the Account Debtor thereunder (i) had the capacity to contract at
the time any contract or other document giving rise to the Account was
executed, (ii) such Account Debtor is Solvent and (iii) there are no
proceedings or actions which are to the knowledge of such Obligated Borrower or
Corporate Guarantor threatened or pending against any Account Debtor thereunder
which could reasonably be expected to result in any material adverse change in
such Account Debtor's financial condition or the collectibility of such
Account;

(C) With respect to Accounts not constituting Eligible
Unbilled Accounts, it is for a liquidated amount maturing as stated in the
duplicate invoice covering the Account, a copy of which has been furnished or
is available to Lender;

(D) To the best of such Obligated Borrower or Corporate
Guarantor's knowledge, at the time of sale, such Account, and Lender's security
interest therein, was not subject to any offset, Lien, deduction, defense,
dispute, counterclaim or any other adverse condition, and each such Account is
absolutely owing to such Obligated Borrower or Corporate Guarantor and was not
contingent in any respect or for any reason, and there are no facts, events or
occurrences which in any way impair the validity or enforceability thereof or
tend to reduce the amount payable thereunder from the face amount of the
invoice and statements delivered to Lender with respect thereto; and

(E) Such Obligated Borrower or Corporate Guarantor has
made no agreement with any Account Debtor for any deduction therefrom, except
discounts or allowances which are granted by Such Obligated Borrower or
Corporate Guarantor in the ordinary course of its business for prompt payment
and which are reflected in the calculation of the net amount of each respective
invoice related thereto.

56
<PAGE> 60

9.2. Assignments, Records and Schedules of Accounts. Each
Obligated Borrower and Corporate Guarantor is to execute and deliver to Lender
formal written assignments of all of such Obligated Borrower or Corporate
Guarantor's Accounts monthly or more frequently if requested by Lender, which
are to include all Accounts that have been created since the date of the last
assignment, together with copies of invoices or invoice registers related
thereto. Each Obligated Borrower and Corporate Guarantor is to keep accurate
and complete records of its Accounts and all payments and collections thereon.

9.3. Administration of Accounts.

(A) Each Obligated Borrower and Corporate Guarantor is
promptly to report any discounts, allowances or credits, as the case may be, to
Lender and in no event later than the time of its submission to Lender of the
next Schedule of Accounts. Each Obligated Borrower and Corporate Guarantor is
to provide Lender with written notice of any amounts in excess of the Accounts
Dispute Amount in dispute, explaining in detail the reason for such dispute,
all claims related thereto and the amount in controversy.

(B) If an Account includes a charge for any tax payable
to any governmental taxing authority, Lender may pay the amount thereof to the
proper taxing authority for the account of any Obligated Borrower or Corporate
Guarantor and charge the Loan Account therefor. Each Obligated Borrower and
Corporate Guarantor is to notify Lender if any Account includes any tax due to
any governmental taxing authority and, in the absence of such notice, Lender is
to have the right to retain the full proceeds of the Account and is not to be
liable for any taxes to any governmental taxing authority that may be due by
Obligated Borrowers or Corporate Guarantors by reason of the sale and delivery
creating the Account.

(C) Any of Lender's officers, employees or agents are to
have the right, at any time, in the name of Lender or any designee of Lender or
any Obligated Borrowers or Corporate Guarantor, to verify the validity, amount
or any other matter relating to any Accounts by mail, telephone or otherwise.
All Obligated Borrowers and Corporate Guarantors are to cooperate fully with
Lender to facilitate any such verification process.

9.4. Collection of Accounts. U.S. Borrowers and U.S. Holdings
Guarantor are to deposit all proceeds of the U.S. Collateral, including,
without limitation, all remittances received by any U.S. Borrower or U.S.
Holdings Guarantor on account of Accounts, or cause the same to be deposited in
kind, in the Controlled Disbursement Account. Each U.S. Borrower and U.S.
Holdings Guarantor is to issue to any such bank an irrevocable letter of
instruction directing such banks to deposit all payments or other remittances
received in the lockbox to the Controlled Disbursement Account for application
on account of the Obligations. All funds deposited in the Controlled
Disbursement Account are immediately to become the property of Lender and each
U.S. Borrower and U.S. Holdings Guarantor is to obtain the agreement by such
banks to waive any offset rights against the funds so deposited. Lender
assumes no responsibility for such lockbox arrangement, including, without
limitation, any claim of accord and satisfaction or release with respect to
deposits accepted by any bank thereunder.

57
<PAGE> 61

SECTION 10. SPECIAL PROVISIONS RELATING TO EQUIPMENT

10.1. Dispositions of Equipment. Except as described on the
Financial and Contingency Schedule, Obligated Borrowers and Corporate
Guarantors will not sell, lease or otherwise dispose of or transfer any of the
Equipment or any part thereof without the prior written consent of Lender;
provided, however, that the foregoing restriction is not to apply, for so long
as no Default or Event of Default exists, to (i) dispositions of Equipment
which, in the aggregate during the consecutive twelve-month period, have a fair
market value or book value, whichever is greater, of U.S. $500,000 or less,
provided that all Net Proceeds thereof are turned over to Lender for
application to the U.S. Revolver Facility, (ii) dispositions of obsolete
Equipment, provided that all Net Proceeds thereof are turned over to Lender for
application to the U.S. Revolver Facility, or (iii) replacement of Equipment
that is substantially worn or damaged with Equipment of like kind, function and
value, provided that the replacement Equipment is to be acquired prior to or
concurrently with any disposition of the Equipment that is to be replaced, the
replacement Equipment is to be free and clear of Liens (except for Permitted
Liens), each Obligated Borrower and Corporate Guarantor is to give Lender at
least five (5) days prior written notice of such disposition and Borrowers are
to turn over to Lender all Net Proceeds realized from any such disposition.

58
<PAGE> 62

IN WITNESS WHEREOF, this Agreement has been duly executed under seal
in Atlanta, Georgia, on the day and year specified at the beginning hereof.

<TABLE>
<S> <C>
ARGENBRIGHT SECURITY, INC.
Signed, sealed, and ("OBLIGATED BORROWER")
delivered in the presence of:
/s/
- ---------------------------- By: /s/
Notary Public ------------------------------------
Title:
/s/ ---------------------------------
- ----------------------------
Unofficial Witness

/s/
- ---------------------------- Attest: /s/
Notary Public --------------------------------
Title:
/s/ ---------------------------------
- ---------------------------- [CORPORATE SEAL]
Unofficial Witness
Address: 3465 North Desert Drive
Atlanta, Georgia 30344

Telecopier:
----------------------------

ARGENBRIGHT, INC.
Signed, sealed, and ("OBLIGATED BORROWER")
delivered in the presence of:
/s/
- ---------------------------- By: /s/
Notary Public ------------------------------------
Title:
/s/ ---------------------------------
- ----------------------------
Unofficial Witness

Telecopier:
----------------------------
</TABLE>

59
<PAGE> 63

<TABLE>
<S> <C>
ADI U.K. LIMITED
Signed, sealed, and ("OBLIGATED BORROWER")
delivered in the presence of:

/s/ By: /s/
- ---------------------------- ------------------------------------
Notary Public Title:
---------------------------------
/s/
- ----------------------------
Unofficial Witness

/s/ Attest: /s/
- ---------------------------- --------------------------------
Notary Public Title:
---------------------------------
/s/ [CORPORATE SEAL]
- ----------------------------
Unofficial Witness Address:
-------------------------------
-------------------------------
Telecopier:
----------------------------

GERMANY AVIATION DEFENCE INTERNATIONAL GERMANY
Signed, sealed, and LIMITED
delivered in the presence of: ("OBLIGATED BORROWER")

/s/
- ---------------------------- By: /s/
Notary Public ------------------------------------
Title:
/s/ ---------------------------------
- ----------------------------
Unofficial Witness

60
<PAGE> 64

<TABLE>
<S> <C>
ARGENBRIGHT HOLDINGS LIMITED
Signed, sealed, and ("U.S. HOLDINGS GUARANTOR")
delivered in the presence of:

/s/ By: /s/
- ---------------------------- -----------------------------------
Notary Public Title:
---------------------------------
/s/
- ----------------------------
Unofficial Witness

Telecopier:____________________________

THE ADI GROUP LIMITED
Signed, sealed, and ("EUROPEAN GUARANTOR")
delivered in the presence of:

/s/ By: /s/
- ---------------------------- ------------------------------------
Notary Public Title:
---------------------------------
/s/
- ----------------------------
Unofficial Witness

61
<PAGE> 65

<TABLE>
<S> <C>
FIRST UNION COMMERCIAL CORPORATION
Signed, sealed, and ("LENDER")
delivered in the presence of:
/s/
- ---------------------------- By: /s/
Notary Public ------------------------------------
Title
/s/ ---------------------------------
- ----------------------------
Unofficial Witness

</TABLE>

62
<PAGE> 66

LOAN AND SECURITY AGREEMENT

FIRST UNION COMMERCIAL CORPORATION

Schedules to Loan and Security Agreement with
First Union Commercial Corporation

The following Schedules (the "Schedules") are provided by the
Obligated Borrowers and Corporate Guarantor for inclusion in, and are hereby
made a part of the referenced Loan and Security Agreement (the "Agreement").
All capitalized terms not defined in the Schedules are to have the meanings
provided the terms in the Agreement.

Obligated Borrowers and Corporate Guarantor hereby represent and
warrant that, as of the Closing Date and after consummation of the transactions
contemplated by the Agreement, all information provided in the Schedule is true
and correct in all respects and that all attachments to the Schedule are true,
correct and complete copies.

The representations and warranties provided in these Schedules are to
survive the Closing.

Obligated Borrowers and Corporate Guarantor covenant to notify Lender
as promptly as practicable of any changes or contemplated changes in the
information reflected in the Schedules. Such notification, however, will not
affect in any way the contractual significance of such changes, including,
without limitation, whether any such change constitutes a Default or Event of
Default.

<TABLE>
<S> <C>
ARGENBRIGHT SECURITY, INC.
Signed, sealed, and ("OBLIGATED BORROWER")
delivered in the presence of:

/s/ By: /s/
- ---------------------------- ------------------------------------
Notary Public Title:
---------------------------------
/s/
- ----------------------------
Unofficial Witness

/s/ Attest: /s/
- ---------------------------- --------------------------------
Notary Public Title
---------------------------------
/s/ [CORPORATE SEAL]
- ----------------------------
Unofficial Witness

</TABLE>

<PAGE> 67

<TABLE>
<S> <C>
Address:
--------------------------------
--------------------------------
--------------------------------
Telecopier:
------------------------------
ARGENBRIGHT, INC.
Signed, sealed, and ("OBLIGATED BORROWER")
delivered in the presence of:

/s/ By: /s/
- ---------------------------- ------------------------------------
Notary Public Title:
---------------------------------
/s/
- ----------------------------
Unofficial Witness

<PAGE> 68

<TABLE>
<S> <C>
ADI U.K. LIMITED
Signed, sealed, and ("OBLIGATED BORROWER")
delivered in the presence of:
/s/ By: /s/
- ---------------------------- ------------------------------------
Notary Public Title:
---------------------------------

/s/
- ----------------------------
Unofficial Witness

/s/ Attest: /s/
- ---------------------------- --------------------------------
Notary Public Title:
---------------------------------
[CORPORATE SEAL]
/s/
- ----------------------------
Unofficial Witness
Address:
-------------------------------
-------------------------------
-------------------------------
Telecopier:
----------------------------

GERMANY AVIATION DEFENCE INTERNATIONAL GERMANY
Signed, sealed, and
delivered in the presence of: LIMITED
/s/ ("OBLIGATED BORROWER")
- ----------------------------
Notary Public
By: /s/
------------------------------------
/s/ Title:
- ---------------------------- ---------------------------------
Unofficial Witness

/s/
- ----------------------------
Notary Public Attest: /s/
--------------------------------
Title:
/s/ ---------------------------------
- ----------------------------
Unofficial Witness

Address:
-------------------------------
-------------------------------
-------------------------------
Telecopier:
----------------------------

</TABLE>

<PAGE> 69

<TABLE>
<S> <C>
ARGENBRIGHT HOLDINGS LIMITED
Signed, sealed, and ("U.S. HOLDINGS GUARANTOR")
delivered in the presence of
/s/ By: /s/
- ---------------------------- ------------------------------------
Notary Public Title:
---------------------------------
/s/
- ----------------------------
Unofficial Witness

/s/ Attest: /s/
- ---------------------------- -------------------------------
Notary Public Title:
--------------------------------
[CORPORATE SEAL]
/s/
- ----------------------------
Unofficial Witness
Address:
-------------------------------
---------------------------
Telecopier:
----------------------------

THE ADI GROUP LIMITED
Signed, sealed, and ("EUROPEAN GUARANTOR")
delivered in the presence of:
/s/ By: /s/
- ---------------------------- -------------------------------------
Notary Public Title:
--------------------------------

/s/
- ----------------------------
Unofficial Witness

/s/ Attest: /s/
- ---------------------------- --------------------------------
Notary Public Title:
--------------------------------
[CORPORATE SEAL]
/s/
- ----------------------------
Unofficial Witness Address:
-------------------------------
-------------------------------
-------------------------------
Telecopier:
----------------------------

</TABLE>

<PAGE> 70

<TABLE>
<S> <C>
FIRST UNION COMMERCIAL CORPORATION
Signed, sealed, and ("LENDER")
delivered in the presence of:
/s/ By: /s/
- ---------------------------- ------------------------------------
Notary Public Title:
---------------------------------

/s/
- ----------------------------
Unofficial Witness

/s/ Attest: /s/
- ---------------------------- ---------------------------------
Notary Public Title:
---------------------------------
[CORPORATE SEAL]
/s/
- ----------------------------
Unofficial Witness
Address:
-------------------------------
-------------------------------
-------------------------------
Telecopier:
----------------------------
</TABLE>

<PAGE> 1

EXHIBIT 10.6

December 22, 1995

The ADI Group Limited.
ADI U.K. Limited
Aviation Defence International Germany Limited

Re: Facility Letter

Gentlemen:

This letter (the "Letter") is the Facility Letter contemplated by that
certain Loan and Security Agreement (the "Agreement") of even date by and among
us, you, and certain corporations and companies associated with you and
provides the terms and conditions on which we will extend to you jointly and
severally the European Revolver Facility. This Letter is subject to, and will
have the benefit of, all of the terms and conditions of the Agreement, unless
the specific terms of this Letter conflict with terms of the Agreement, in
which case, the terms of this Letter will control. All capitalized terms not
defined in this Letter are to have the meanings provided in the Agreement. In
addition, certain terms are to have the meanings specified in the Glossary
attached hereto.

In consideration of the premises and the agreements, provisions and
covenants herein contained and for TEN U.S. DOLLARS ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the European Borrowers and Lender agree as follows:

1. Credit Facility

(a) Subject to all of the terms and conditions of this Letter
and the Agreement, in reliance upon the representations and warranties
made herein and in the other Loan Documents and the representations
contained in the

<PAGE> 2

Schedules, and so long as no Default or Event of Default then exists,
Lender, during the Interim Period, and, if the Withholding Ruling is
provided to Lender during the Interim Period, during the period from
the date hereof through the day before the last day of the Original
Term or the last Renewal Term, will make the European Revolver Loans
to the European Borrowers jointly and severally, as requested by the
European Borrowers in accordance with the terms herein, up to a
maximum principal amount at any time outstanding under the European
Revolver Facility whose Dollar Equivalent is equal to the European
Borrowing Base at such time. If any of the unpaid European Loans are
Overadvances or exceed any other limitation set forth in this Letter
or the Agreement, such European Revolver Loans are nevertheless to
constitute Obligations that are secured by the European Collateral and
the U.S. Collateral and entitled to all of the benefits thereof.

(b) The European Revolver Loans, which are to be evidenced by
the European Revolver Notes (the "European Revolver Notes"), are to be
made by Lender as Foreign Currency Loans in the Foreign Currency from
time to time designated by European Borrowers, if such Foreign
Currency is available to Lender, or as Dollar Loans; are to be repaid
in the same currency as which the Loans were made by Lender; and are
to be used solely for Permitted Proceeds Uses. Each Foreign Currency
Loan shall be in a minimum Dollar Equivalent amount of five hundred
thousand Dollars ($500,000) and upward increments of two hundred fifty
thousand Dollars ($250,000).

<PAGE> 3

amount required to be paid by the European Borrowers under this Letter
or under the Agreement as principal or accrued interest is to be
deemed irrevocably to be a request by European Borrowers for a
European Revolver Loan on the due date of, and in the currency due,
with respect to such principal and accrued interest; (c) unless
payment is otherwise timely made by the European Borrowers, the
becoming due of any other Obligations due from the European Borrowers
is to be deemed irrevocably to be a request for a European Revolver
Loan on the due date of, and in the currency due, with respect to such
Obligation; and (d) the presentation by European Borrowers for payment
by Bank of any check or other item of payment drawn on a Controlled
Disbursement Account is to be deemed irrevocably to be a request for a
Dollar Loan in the Dollar Equivalent amount of such check or other
item of payment.

(ii) The proceeds of each European Revolver Loan
requested as described above are to be disbursed by Lender in the
requested Dollars or Foreign Currency by wire transfer to such bank
account as may be agreed upon by European Borrowers and Lender from
time to time; and the proceeds of each European Revolver Loan
requested to satisfy an Obligation as described above are to be
disbursed by Lender by way of direct payment of the relevant
Obligation.

(iii) Each request, including specifically, but
without limitation, a telephonic request, for a European Revolver Loan
is to be conclusively presumed to be made by a Person authorized by
European Borrowers to do so; and the making of the requested European
Revolver Loan will conclusively establish European Borrowers'
obligation to repay such European Revolver Loan in accordance with
this Letter and the Agreement.

(d) The European Revolver Facility will be in effect for a
period commencing on the date hereof and ending on the last day of the
Interim Term, or, if the Withholding Ruling is provided to Lender
during the Interim Period, the Original Term and, should the Original
Term come into effect, will automatically renew itself for one (1)
year periods thereafter (each a "Renewal Term"), unless terminated as
hereinafter provided.

(e) Lender or European Borrowers may terminate the European
Revolver Facility at the end of either the Original Term or any
Renewal Term upon not less than one hundred twenty (120) days prior
written notice; but Lender may immediately terminate the European
Revolver Facility, without notice, upon or after the occurrence of an
Event of Default and during the continuation thereof.

<PAGE> 4

(f) Upon at least ninety (90) days prior written notice to
Lender, European Borrowers may terminate the European Revolver
Facility on a day other than the last day of the Original Term;
provided that European Borrowers may, at any time prior to ten (10)
days before the noticed termination date, give Lender written notice
extending the termination date up to an additional ten (10) days.

(g) Upon the effective date of any termination of the
European Revolver Facility, all of the Obligations will become due and
payable and Lender may discontinue making further Loans to European
Borrowers. No termination (regardless of cause or procedure) of the
European Revolver Facility is to in any way affect or impair the
rights, powers or privileges of Lender or the obligations, duties or
liabilities of European Borrowers in any way relating to (i) any
transaction or event occurring prior to the effective date of such
termination or (ii) any of the undertakings, agreements, covenants,
warranties or representations of European Borrowers contained in this
Letter or the Agreement or any of the other Loan Documents.

(h) The European Revolver Loans are to constitute general
obligations of the European Borrowers, and are to be secured by
Lender's security interest in and Lien upon all of the European
Collateral and the U.S. Collateral, and by all other security
interests and Liens heretofore, now or at any time or times hereafter
granted by Obligated Borrowers to Lender to the extent provided in the
Security Documents under which any such Lien arises.

(i) European Revolver Loans constituting Dollar Loans shall
bear interest from the date such European Revolver Loans are made to
the date paid at the Regular Rate or the Loan LIBOR Rate. European
Revolver Loans constituting Foreign Currency Loans shall bear interest
from the date such European Revolver Loans are made to the date paid
at the Foreign Currency Rate. The applicable basis for determining
the rate of interest shall be selected by European Borrowers initially
at the time a notice of borrowing is given. The basis for determining
the interest rate with respect to any European Revolver Loan may be
changed from time to time pursuant to paragraph (4) hereinafter. If
on any day a European Revolver Loan constituting a Dollar Loan is
outstanding with respect to which notice has not been delivered to
Lender in accordance with the terms of this Letter and the Agreement
specifying the basis for determining the rate of interest, then for
that day that Dollar Loan shall bear interest at the Regular Rate.

2. Interest Periods

In connection with each Foreign Currency Loan and LIBOR Rate
Loan, European Borrowers shall elect an Interest Period to be
applicable to such Loan, which Interest Period shall be a one month
period, if such Loan

4
<PAGE> 5

is a Foreign Currency Loan, and either a one, two, three or six month
period, if such Loan is a Dollar Loan; provided that:

(a) the initial Interest Period for any European
Revolver Loan shall commence on the funding date of such
European Revolver Loan;

(b) in the case of immediately successive Interest
Periods, each successive Interest Period shall commence on the
day on which the next preceding Interest Period expires;

(c) if an Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided, that if
any Interest Period would otherwise expire on a day that is
not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;

(d) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to part (e)
below, end on the last Business Day of a calendar month;

(e) no Interest Period shall extend beyond the
Interim Term, or, if the Withholding Ruling is provided to
Lender during the Interim Period, the Original Term, or any
Renewal Term;

(f) the Interest Period for a European Revolver Loan
that is converted pursuant to paragraph (4) shall commence on
the date of such conversion and shall expire on the date on
which the Interest Period for the European Revolver Loans so
converted expires; and

(g) there shall be no more than two (2) Interest
Periods relating to European Revolver Loans at any time.

3. Payments

All payments of principal, interest and fees and all other
amounts to be made by any party pursuant to this Letter and the
Agreement with respect to any Loan or fee relating thereto shall be
paid without deduction for, and free from, any tax, imposts, levies,
duties, deductions, or withholdings of any nature now or at anytime
hereafter imposed by any governmental authority or by any taxing
authority thereof or therein excluding (i) in the case of Lender,
taxes imposed on or measured by its net income, and franchise taxes

5
<PAGE> 6

imposed on it, by the jurisdiction under the laws of which such Bank
(as the case may be) is organized or any political subdivision thereof
and (ii) in the case of European Revolver Loans, any applicable
withholding taxes pertaining thereto (all such non-excluded taxes,
imposts, levies, duties, deductions or withholdings of any nature
being "Taxes"). In the event that any party is required by applicable
law to make any such withholding or deduction of Taxes with respect to
any Loan or fee or other amount, such party shall pay such deduction
or withholding to the applicable taxing authority, shall promptly
furnish to Lender in respect of which such deduction or withholding is
made all receipts and other documents evidencing such payment and
shall pay to the Lender additional amounts as may be necessary in
order that the amount received by the Lender after the required
withholding or other Tax is the full amount due to Lender under this
Letter and the Agreement. In computing interest on any European
Revolver Loan, the date of funding of the European Revolver Loan or
the first day of an Interest Period applicable to such European
Revolver Loan or, with respect to a Base Rate Loan being converted
from a LIBOR Rate Loan or a Dollar Loan being converted from a
Foreign Currency Loan, the date of conversion shall be included and
the date of payment of such European Revolver Loan or the expiration
date of an Interest Period applicable to such European Revolver Loan,
or with respect to a Base Rate Loan being converted to a LIBOR Rate
Loan or a Dollar Loan being converted to a Foreign Currency Loan, the
date of conversion shall be excluded; provided, that if a European
Revolver Loan is repaid on the same day on which it is made, one day's
interest shall be paid on that European Revolver Loan.

European Borrowers may repay a Foreign Currency Loan on a day
other than the last day of the applicable Interest Period, but only if
European Borrowers shall compensate Lender for each such repayment, by
the payment in Dollars of the greater of (i) two thousand Dollars
(U.S. $2,000) or (ii) all losses, expenses and liabilities (including,
without limitation, any loss (including interest paid) sustained by
Lender in connection with the reemployment of such funds) which Lender
may incur because of such prepayment, upon Lender's written request
(which request shall set forth in reasonable detail the basis for
requesting any amounts pursuant to subsection (ii) and which shall,
absent manifest error, be conclusive and binding upon all parties
hereto).

4. Conversion or Continuation

Subject to the provisions of this paragraph (4) and the
limitation on the number of Interest Periods, European Borrowers shall
have the option to (1) convert at any time all or any part of
outstanding Loans equal to Dollar Equivalent $500,000 and integral
multiples of Dollar Equivalent $250,000 in excess of that amount from
Dollar Loans to Foreign Currency Loans or from

6
<PAGE> 7

Regular Rate Loans to LIBOR Rate Loans, or (2) upon the expiration of
any Interest Period applicable to a Foreign Currency Loan or LIBOR
Rate Loan, to continue all or any portion of such Loan equal to Dollar
Equivalent $500,000 and integral multiples of Dollar Equivalent
$250,000 in excess of that amount as a Foreign Currency Loan or LIBOR
Rate Loan and the succeeding Interest Period(s) of such continued Loan
shall commence on the last day of the Interest Period of the European
Revolver Loan to be continued; provided, that any such conversion of a
Loan may only take place on the expiration date of an Interest Period
applicable thereto; and provided, further, that no outstanding
European Revolver Loan may be continued as, or be converted into, a
Foreign Currency Loan or LIBOR Rate Loan when any Event of Default or
Default has occurred and is continuing; and provided, further, that no
European Revolver Loan may be converted into a LIBOR Rate Loan or a
Foreign Currency Loan until five (5) days after the Closing Date.

European Borrowers shall deliver a fully and properly
completed notice of conversion/continuation to Lender no later than
11:00 a.m. (Atlanta time) at least three (3) Business Days in advance
of the proposed conversion/continuation date. In lieu of delivering
the above-described notice of conversion/continuation, European
Borrowers may give Lender telephonic notice by the required time of
any proposed conversion/continuation under this paragraph (4);
provided, that such notice shall be promptly confirmed in
writing by delivery of a notice of conversion/continuation to Lender
on or before the proposed conversion/continuation date.

Lender shall not incur any liability to European Borrowers in
acting upon any telephonic notice referred to above that Lender
believes in good faith to have been given by a duly authorized officer
or other person authorized to act on behalf of Obligated Borrowers or
for otherwise acting in good faith under this paragraph (4).

Except as provided in this subsection, a notice of
conversion/continuation for conversion to, or continuation of, a LIBOR
Rate Loan or a Foreign Currency Loan (or telephonic notice in lieu
thereof) shall be irrevocable once given, European Borrowers shall be
bound to convert or continue in accordance therewith and Lender shall
have no liability for acting in accordance with European Borrowers'
instructions contained therein.

Interest is to be calculated on a daily basis (computed on the
actual number of days elapsed over a year of 360 days unless reference
to a 365 or 366-day year is necessary in order not to exceed the
Maximum Rate), commencing on the date hereof, and is to be payable
monthly, in arrears, on the first day of each month.

7
<PAGE> 8

5. Default Interest

Upon the occurrence of an Event of Default, at Lender's sole
discretion, the principal amount of the Obligations will bear interest
at the Default Rate.

The provisions herein relating to the Default Rate represent a
fair and reasonable estimate by European Borrowers and Lender of a
fair average compensation for the loss that may be sustained by Lender
due to the failure of Obligated Borrowers to make timely payments with
respect to the Obligations and for the cost and expenses that may be
incurred by Lender by reason of the occurrence of an Event of Default,
the parties recognizing that the damages caused by such extra
administrative expenses and loss of the use of funds is impracticable
or extremely difficult to ascertain or estimate. Interest at the
Default Rate shall be paid without prejudice to the rights of Lender
to collect any other amounts provided to be paid hereunder, under the
Agreement or under any of the other Loan Documents or to declare a
default under this Letter, the Agreement or any of the other Loan
Documents.

6. Financial Covenants

During the term of the Agreement, and thereafter for so long
as there are any Obligations to Lender, European Guarantor and
European Borrowers shall:

(i) Maintain at all times for the European
Guarantor (computed on a consolidated basis) an Adjusted Tangible Net
Worth during the fiscal year ending December 31, 1996 of not less than
Dollar Equivalent $800,000 and, during each fiscal year thereafter, of
not less than the sum of (i) Dollar Equivalent L.516,000 British
pounds sterling plus (ii) the greater of (a) Dollar Equivalent
L.320,000 British pounds sterling or (b) seventy-five percent (75%) of
the preceding fiscal year's net income after tax (computed in
accordance with GAAP) plus (iii) the aggregate of the amounts added
pursuant to clause (ii) above for all previous fiscal years occurring
after the fiscal year ending December 31, 1996.

(ii) Maintain at each month-end for the European
Guarantor (computed on a consolidated basis) a ratio of (i) average
Funded Indebtedness over the immediately preceding twelve (12) months
to (ii) EBIDAT for the immediately preceding twelve (12) months, of
not less than 3.0 to 1 (provided that for the fiscal year ending
December 31, 1996, such calculations shall be based upon the
cumulative monthly average annualized for such fiscal year).

8
<PAGE> 9

(iii) Maintain at each month-end for the European
Guarantor (on a consolidated basis) an aggregate Debt Service Coverage
for such month for the immediately preceding twelve (12) months of not
less than 2.0 to 1 (provided that for the fiscal year ending December
31, 1996, such calculations shall be based upon the cumulative monthly
average annualized for such fiscal year).

(iv) Maintain at all times for the European
Borrowers (computed without regard to Subsidiaries) an aggregate
excess availability under the European Revolver Facility (the excess
of the amount of the European Borrowing Base on such date in Dollar
Equivalent over the then outstanding Dollar Equivalent amount of the
European Revolver Loans and face amount in Dollar Equivalent of the
Letters of Credit issued for the account of European Borrowers) of not
less than the amount shown below for the period corresponding thereto:

<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>

Closing Date through Dollar Equivalent
December 31, 1997 $500,000

January 1, 1998 and Dollar Equivalent
thereafter $-0-

</TABLE>

(v) Maintain at all times for all Subsidiaries of
European Guarantor an Adjusted Tangible Net Worth of not less than its
Adjusted Tangible Net Worth as of January 1, 1996.

Sincerely,

FIRST UNION COMMERCIAL
CORPORATION

By: /s/
-------------------------------

The undersigned, by and through their duly authorized officers,
evidence their acceptance of and agreement to this Letter by executing below:

9
<PAGE> 10

THE ADI GROUP LIMITED

By: /s/
----------------------------
Its:
---------------------------

ADI U.K. LIMITED

By: /s/
----------------------------
Its:
---------------------------

AVIATION DEFENCE INTERNATIONAL GERMANY LIMITED

By: /s/
----------------------------
Its:
---------------------------

10
<PAGE> 11

Glossary of Defined Terms to the Facility Letter

Dollar Equivalent - means the exact equivalent, in the case of
Dollars, and the Dollar equivalent of Foreign Currency, as determined by Lender
with respect to any determination date on the basis of Bank's or other Lender
Affiliate's (as chosen by Lender) spot rate for the purchase of the appropriate
Foreign Currency in U.S. Dollars.

Dollar Loan - means a European Revolver Loan made and repayable in U.S.
Dollars.

Eligible European Account - an Account arising in the ordinary course
of the business of European Borrowers, which Lender, in its sole credit
judgment, deems to be an Eligible European Account. Without limiting the
generality of the foregoing, no Account is to be an Eligible European Account
if: (i) it represents unearned Accounts that have been invoiced but as to which
the European Borrower has not rendered the invoiced services as of the date of
the invoice; or (ii) it does not constitute a complete bona fide transaction
which requires no further act under any circumstances to make such Account
payable by such Account Debtor; or (iii) it is owed by a Subsidiary or an
Affiliate of an Obligated Borrower or Guarantor; or (iv) it is due for payment
more than thirty (30) days after the original invoice date or it is unpaid more
than ninety (90) days after the original invoice date; or (v) thirty percent
(30%) or more of the Accounts from the Account Debtor are not deemed Eligible
European Accounts hereunder; or (vi) any covenant, representation or warranty
contained in the Agreement or this Letter with respect to such Account has been
breached; or (vii) the Account Debtor is also a creditor or supplier of any
Obligated Borrower or Guarantor, or has disputed liability with respect to such
Account, or the Account otherwise is or may become subject to any right of
setoff by the Account Debtor, to the extent of the amount of any offset,
dispute or claim; or (viii) the Account Debtor has commenced a voluntary case
under any insolvency or receivership law, as now constituted or hereafter
amended, or made an assignment for the benefit of creditors, or a decree or
order for relief has been entered by a court having jurisdiction in the
premises in respect of the Account Debtor in an involuntary case under any
insolvency or receivership law, as now constituted or hereafter amended, or any
other creditors rights petition or other application for relief has been filed
against the Account Debtor, or if the Account Debtor has failed, suspended
business, ceased to be Solvent, or consented to or suffered a receiver,
trustee, liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; or (ix) if Lender believes, in
its sole judgment, that collection of such Account is insecure or that payment
thereof is doubtful or will be delayed by reason of the Account Debtor's
financial condition; or (x) the Account Debtor is the United States of America
or any department, agency or instrumentality thereof, unless the Account owner
assigns its right to payment of such Account to Lender, in form and substance
satisfactory to Lender, so as to comply with the Assignment of Claims Act of
1940, as amended; or (xi) the Account is subject to a Lien other than a
Permitted Lien; or (xii) the total unpaid Accounts of the Account Debtor exceed
a credit limit determined by Lender, in its sole discretion, to the extent such
Account exceeds such limit; or (xiii) the Account is not an open

11
<PAGE> 12

Account and is evidenced by an instrument of any kind, or has been reduced to
judgment; or (xiv) any European Borrower has made any agreement with the
Account Debtor for any deduction therefrom, except for discounts or allowances
which are made in the ordinary course of business for prompt payment and which
discounts or allowances are reflected in the calculation of the face value of
each invoice related to such Account; or (xv) any European Borrower has made an
agreement with the Account Debtor to extend the time of payment thereof; or
(xvi) the Account has not been invoiced to the Account Debtor for a period of
greater than 35 days from the date of rendition of services.

European Borrowing Base Certificate - the borrowing base certificate
to be submitted by the European Borrowers with such frequency as Lender may
require from time to time and in any event no less frequently by the tenth
(10th) Business Day of each month for and as of the last Business Day of the
preceding month.

European Collateral - has the meaning given that term in the General
Debenture executed by ADI U.K. and the Assignment of Accounts executed by ADI
Germany in favor of Lender.

European Revolver Borrowing Base - at any date of determination
thereof, an amount determined by reference to the latest timely-filed European
Borrowing Base Certificate and equal to the lesser of:

(a) the Dollar Equivalent of (i) $5,000,000; minus (ii) the
face amount of any Letters of Credit issued for the account of the
European Borrowers and outstanding at such date; or

(b) the Dollar Equivalent of (i) seventy-five percent
(75%) (or such lesser percentage as Lender may in its sole and
absolute discretion determine from time to time) of the net amount of
Eligible European Accounts outstanding and reflected in the most
current European Borrowing Base Certificate; minus (ii) $500,000
(minus the Dollar amount of any Account excluded from the U.S.
Revolver Borrowing Base pursuant to clause (iv) of paragraph (b) of
the definition of U.S. Revolver Borrowing Base, in the amount so
excluded up to an aggregate of $500,000); minus (iii) an amount equal
to fifteen percent (15%) of the face amount of all Accounts
owed to ADI Germany; and minus (iv) an amount equal to the sum of (A)
any amounts which European Borrowers are obligated to pay but do not
pay when due and which Lender pays pursuant to any of the Loan
Documents for the account of European Borrowers, (B) the face amount
of any Letters of Credit issued for the account of the European
Borrowers outstanding at such date, and (C) such reserves as Lender in
its sole discretion elects to establish from time to time.

12
<PAGE> 13

For purposes hereof, the net amount of Eligible European
Accounts at any time shall be the face amount of such Eligible
European Accounts less any and all returns, rebates, discounts (which
may, at Lender's option, be calculated on shortest terms), credits,
allowances, sales or excise taxes of any nature at any time issued,
owing, claimed by Account Debtors, granted, outstanding or payable in
connection with such Accounts at such time.

Foreign Currency - means, if offered and subject to availability,
either British pounds sterling or German deutsche marks.

Foreign Currency Business Day - means any Business Day, excluding one
on which trading is not carried on by and between banks in deposits of the
applicable Foreign Currency in the applicable interbank market for such Foreign
Currency.

Foreign Currency Loan - means a European Revolver Loan made and
repayable in Foreign Currency.

Foreign Currency Margin - with respect to Foreign Currency Loans,
means the rate set forth below opposite the relevant ratio of Funded
Indebtedness to EBIDAT for the European Borrowers (computed without regard to
Subsidiaries):

Funded Indebtedness/ Foreign Currency
EBIDAT Margin
-------------------- ----------------
<S> <C>
Greater than 2 to 1 3.05%

Greater than 1 to 1
and less than or equal
to 2 to 1 2.8%

Less than or equal to
1 to 1 2.55%

</TABLE>

Notwithstanding the foregoing, as of the Closing Date and to and
through June 30, 1996, the Foreign Currency Margin for Dollar Loans
constituting European Revolver Loans shall be 2.8%. Thereafter, adjustments to
the Foreign Currency Margin for Foreign Currency Loans the European Revolver
Loans shall be adjusted on the fifth Business Day after receipt by Lender of
the monthly financial statement due for June, September, December and March,
based on the ratio of (i) average Funded Indebtedness as of the end of each
month during the immediately preceding four fiscal quarters ending on the first
day of the adjustment month to (ii) EBIDAT for the immediately preceding four
fiscal quarters ending on such first day of the adjustment month. In the event
that during an adjustment month, a European Borrower shall have failed to
deliver to Lender when required under the Agreement financial statements and
other reports necessary for calculation of the Foreign

13
<PAGE> 14

Currency Margin, the Foreign Currency Margin for all Foreign Currency Loans
shall be adjusted forty-five (45) days following such adjustment month to
3.05%.

Foreign Currency Rate - with respect to Foreign Currency Loans, means
the IBOR for the Interest Period applicable to such Loan, plus the Foreign
Currency Margin.

IBOR - means, with respect to each Foreign Currency Loan and for each
Interest Period, a rate of interest determined by Lender equal to

(a) the rate of interest at which deposits in the applicable
Foreign Currency, for a period comparable to the Interest Period and
in an amount comparable to the amount of such Foreign Currency Loan,
are offered, based on relevant information available to Lender from
Telerate (or, if it is unavailable to Lender from Telerate for any
reason, by reference to relevant information on the Reuters Screen) as
of 11:00 a.m. (London time) on the day which is two (2) Business Days
prior to the first day of such Interest Period; divided by

(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) Business Days prior
to the beginning of such Interest Period (including, without
limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve
System or other governmental authority having jurisdiction with
respect thereto, as now and from time to time in effect) for
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) which are required to be
maintained by a member bank of the Federal Reserve System (such rate
to be rounded upward to the next whole multiple of one-sixteenth of
one percent (1/16 of 1%).

Interest Margin - with respect to Dollar Loans made under the European
Revolver Facility, the rate set forth below opposite the relevant ratio of
Funded Indebtedness to EBIDAT for the European Borrowers (computed without
regard to Subsidiaries):

14
<PAGE> 15

<TABLE>
<CAPTION>
Funded Indebtedness/ Libor Rate Base Rate
EBIDAT Loans Loans
-------------------- ----------- ---------
<S> <C> <C>
Greater than 2 to 1 3.05% 0.55%

Greater than 1 to 1
and less than or equal
to 2 to 1 2.8% 0.3%

Less than or equal to
1 to 1 2.55% 3%
</TABLE>

Notwithstanding the foregoing, as of the Closing Date and to and
through June 30, 1996, the Interest Margin for Dollar Loans constituting
European Revolver Loans shall be 2.8% for LIBOR Rate Loans and 0.3% for Base
Rate Loans. Thereafter, adjustments to the Interest Margin for the European
Revolver Loans shall be adjusted on the fifth Business Day after receipt by
Lender of the monthly financial statement due for June, September, December and
March, based on the ratio of (i) average Funded Indebtedness as of the end of
each month during the immediately preceding four fiscal quarters ending on the
first day of the adjustment month to (ii) EBIDAT for the immediately preceding
four fiscal quarters ending on such first day of the adjustment month. In the
event that during an adjustment month, a European Borrower shall have failed to
deliver to Lender when required under the Agreement financial statements and
other reports necessary for calculation of the Interest Margin, the Interest
Margin for the Dollar Loan shall be adjusted forty-five (45) days following
such adjustment month to 3.05% for LIBOR Rate Loans and .55% for Base Rate
Loans.

Interim Term - the period beginning at the Closing Date and ending on
the 330th day after the Closing Date.

Withholding Ruling - a ruling from the Inland Revenue Department of
the United Kingdom that the interest paid on the European Revolver Loan may be
paid to Lender without withholding or other deduction, said ruling to be
satisfactory in form and substance to Lender.

<PAGE> 1
EXHIBIT 10.7

April 19, 1996

To the Signatories of
This Letter Agreement

Letter Agreement Amending December 22, 1995 Loan and
Security Agreement and Facility Letter Issued Pursuant
Thereto
------------------------

The purpose of this letter agreement is to amend that certain Loan and
Security Agreement, dated December 22, 1995 (the "Loan Agreement"), and the
Facility Letter issued pursuant thereto in order to change the definition of
those non-U.S. accounts that cannot qualify as eligible collateral under the
Facility Letter, to extend to the Facility Letter the unused line fee charged
in connection with U.S. commitments under the Loan Agreement, to modify the
terms on which a permanent cash advance will be made by ADI U.K. to Argenbright
Security, and to provide for reserves against the European Borrowing Base
pending the making of the permanent cash advance. For convenience, capitalized
terms used in this letter agreement and not defined herein are to have the
meanings provided in the Loan Agreement.

For TEN DOLLARS ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each of the
parties signing this letter agreement hereby agrees as follows:

1. As of the Closing Date, the Facility Letter shall be deemed to
have been amended to include the following new section 7:

7. Unused Line Fee. From and after the Closing
Date, European Borrowers will pay to Lender the
Unused Line Fee monthly in arrears on the first day
of the month following the Closing Date and on the
first day of each month thereafter. For the purposes
of this Section 7, the Unused Line Fee shall be an
amount equal to (i) U.S. $5,000,000 less the Dollar
Equivalent of the average daily balance of the
aggregate of the European Revolver Loans and the
average face amount of any Letters of Credit issued
for the account of the European Borrowers, during the
preceding month, multiplied by (ii)
<PAGE> 2

three-eights of one percent (0.375%) per annum
(calculated on the basis of a 360-day year for the
actual number of days elapsed).

2. As of the Closing Date, the Facility Letter shall be deemed to
have been amended to modify the definition of "Eligible European
Account" to delete in its entirety subsection (iv) thereof and to
insert therefor the following subsection (iv), reading as follows:
"(iv) it is due for payment more than thirty (30) days after the
original invoice date or it is unpaid more than sixty (60) days after
the original invoice date."

3. As of the Closing Date, the Facility Letter shall be deemed to
have been amended to delete in its entirety the definition of
"European Revolver Borrowing Base" and to insert therefor the
following definition, reading as follows:

"European Revolver Borrowing Base - at any date of
determination thereof, an amount determined by reference to
the latest timely-filed European Borrowing Base Certificate
and equal to:

(1) the lesser of:

(a) the Dollar Equivalent of (i) $5,000,000;
minus (ii) the face amount of any Letters of Credit issued for
the account of the European Borrowers and outstanding at such
date; or

(b) the Dollar Equivalent of (i) seventy-five
percent (75%) (or such lesser percentage as Lender may in its
sole and absolute discretion determine from time to time) of
the net amount of Eligible European Accounts outstanding and
reflected in the most current European Borrowing Base
Certificate; minus (ii) $500,000 (minus the Dollar amount of
any Account excluded from the U.S. Revolver Borrowing Base
pursuant to clause (iv) of paragraph (b) of the definition of
U.S. Revolver Borrowing Base, in the amount so excluded up to
an aggregate of $500,000); minus (iii) an amount equal to
fifteen percent (15%) of the face amount of all Accounts owed
to ADI Germany; and minus (iv) an amount equal to the sum of
(A) any amounts which European Borrowers are obligated to pay
but do not pay when due and which Lender pays pursuant to any
of the Loan Documents for the account of European Borrowers,
(B) the face amount of any Letters of Credit issued for the
account of the European Borrowers outstanding at such date,
and (C) such reserves as Lender in its sole discretion elects
to establish from time to time; minus
<PAGE> 3

(2) for so long as the Permanent Advance shall not have been
made, the Dollar Equivalent of $1,000,000.

For purposes hereof, the net amount of Eligible European
Accounts at any time shall be the face amount of such Eligible
European Accounts less any and all returns, rebates, discounts
(which may, at Lender's option, be calculated on shortest
terms), credits, allowances, sales or excise taxes of any
nature at any time issued, owing, claimed by Account Debtors,
granted, outstanding or payable in connection with such
Accounts at such time."

4. As of the Closing Date, the Facility Letter shall be deemed to
have been amended to modify section 6 to delete in its entirety the
introductory clause of subsection (i) thereof and to insert therefor
the following introductory clause, reading as follows: "Maintain at
all times for European Guarantor and European Borrowers (consolidated
only as to such parties) Adjusted Tangible Net worth during the
fiscal year ending December 31, 1996 of not less than Dollar
Equivalent $800,000 and, during each fiscal year thereafter, of not
less than the sum of...."

5. As of the Closing Date, the Facility Letter shall be deemed to
have been amended to modify section 6 to delete in its entirety
subsection (iv) thereof.

6. As of the Closing Date, the Facility Letter shall be deemed to
have been amended to modify section 6 to delete in its entirety
subsection (v) thereof and to insert therefor the following subsection
(v), reading as follows: "(v) Maintain at all times for European
Guarantor and Subsidiaries an Adjusted Tangible Net Worth (computed on
a consolidated basis) of not less than its Adjusted Tangible Net Worth
as of January 1, 1996."

7. As of the Closing Date, the Loan Agreement shall be deemed to
have been amended to delete in its entirety the definition of
"Permanent Advance" contained in Section 1.1 thereof and to insert
therefor the following definition, reading as follows:

"Permanent Advance - the one million Dollar (U.S.
$1,000,000) cash advance from ADI U.K. to Argenbright Security
to be made immediately upon the request of Lender or prior to
such request by Lender, at the discretion of European
Borrowers."

8. As of the Closing Date, the Loan Agreement shall be deemed to
have been amended to modify Section 6.3(B) to delete the first clause
thereof and to insert therefor the following clause, reading as
follows:
<PAGE> 4

"(B) U.S. Holdings Guarantor (on a consolidated basis) to
maintain at each Fiscal Period-end a ratio of (i) average
Funded Indebtedness for the immediately preceding thirteen
(13) Fiscal Periods (provided that during the fiscal year
ending December 31, 1996, such calculation shall be based upon
the cumulative monthly average for such fiscal year) to (ii)
EBIDAT for the immediately preceding thirteen (13) Fiscal
Periods (provided that during the fiscal year ending December
31, 1996, such calculation shall be based upon the cumulative
monthly average annualized for such fiscal year), of not
greater than the ratio shown below for the period
corresponding thereto:"

9. As of the Closing Date, the Loan Agreement shall be deemed to
have been amended to modify paragraph 5 of the Financial and
Contingency Schedule thereto to delete subparagraph (e) thereof in its
entirety and to insert therefor the following subparagraph (e),
reading as follows: "(e) Outstanding Loan to Argenbright Investments,
Inc., having an outstanding principal balance of $7,740."

10. Except for the changes specifically made by this letter
agreement, all of the terms of the Loan Agreement, the Facility Letter
and the Loan Documents shall remain in full force and effect. Without
limiting the generality of the foregoing, Lender hereby confirms that
throughout the term of the Loan Agreement that its customary practice
for applying checks or items deposited in a Controlled Disbursement
Account at Bank shall continue to be that such checks or items, upon
deposit in the Controlled Disbursement Account, shall work an
immediate reduction in the Obligations in the amount of such checks or
items (subject to reversal if returned or not finally collected) and
such checks or items shall be deemed for the purpose of interest
calculation only to have been received (subject to reversal if
returned or not finally collected) on the first Business Day after
deposit of such checks or items in the Controlled Disbursement
Account.

This letter agreement, together with the Loan Agreement (as modified
by this letter agreement), the Loan Documents and the agreements related
thereto, reflects the entire understanding of the parties with respect to the
subject matter contained herein and supersedes any prior agreements, whether
written or oral.

This letter agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which, when
so executed
<PAGE> 5

and delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument.

Yours very truly,

FIRST UNION COMMERCIAL
CORPORATION

By: /s/
-------------------------------------
<PAGE> 6

IN WITNESS WHEREOF, the parties hereto, by and through their duly
authorized officers, have executed this Agreement under seal as of the day and
year first above written.

ARGENBRIGHT SECURITY, INC.

By: /s/
----------------------------------

Its:
---------------------------------

ARGENBRIGHT, INC.

By: /s/
----------------------------------

Its:
---------------------------------

ADI U.K. LIMITED

By: /s/
----------------------------------

Its:
---------------------------------

AVIATION DEFENCE INTERNATIONAL
GERMANY LIMITED

By: /s/
----------------------------------

Its:
---------------------------------

ARGENBRIGHT HOLDINGS LIMITED

By: /s/
----------------------------------

Its:
---------------------------------

<PAGE> 7

THE ADI GROUP LIMITED

By: /s/
----------------------------------

Its:
---------------------------------

<PAGE> 1

EXHIBIT 10.8

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND FACILITY LETTER

THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY
LETTER (this "Amendment") is made this 14th day of June, 1996, by and among
FIRST UNION COMMERCIAL CORPORATION ("Lender"), a North Carolina corporation;
and ARGENBRIGHT SECURITY, INC. ("Argenbright Security"), ARGENBRIGHT, INC.
("Argenbright Transportation") (Argenbright Security and Argenbright
Transportation, collectively, "U.S. Borrowers"), ADI U.K. LIMITED ("ADI U.K."),
AVIATION DEFENCE INTERNATIONAL GERMANY LIMITED ("ADI Germany") (ADI U.K. and
ADI Germany, collectively, "European Borrowers") (U.S. Borrowers and European
Borrowers, collectively, "Obligated Borrowers"), ARGENBRIGHT HOLDINGS LIMITED
("U.S. Holdings Guarantor"), and ADI GROUP LIMITED ("European Guarantor")
(U.S. Holdings Guarantor and European Guarantor, collectively, "Corporate
Guarantors"), each a corporation with its chief executive office and principal
place of business at the address specified in the Loan and Security Agreement
referred to below.

WHEREAS, Obligated Borrowers, Corporate Guarantors and Lender have
entered into that certain Loan and Security Agreement, dated as of December 22,
1995 (the "Loan Agreement"), pursuant to which Lender has extended to U.S.
Borrowers the U.S. Revolver Facility (as defined in the Loan Agreement) in the
amount of up to twenty million dollars ($20,000,000); and

WHEREAS, pursuant to the Loan Agreement, Lender, European Borrowers
and European Guarantor have entered into that certain Facility Letter, dated
December 22, 1995, pursuant to which Lender has extended to European Borrowers
the European Revolver Facility (as defined in the Facility Letter) in the
amount of up to the Dollar Equivalent of five million dollars ($5,000,000); and

WHEREAS, under the Facility Letter, European Revolver Loans are
advanced by Lender and repaid to Lender by European Borrowers in the applicable
currency in which such loans were made; and

WHEREAS, FUCC and First Union National Bank, London Branch ("FUNB
London") will enter into a Participation Agreement (the "Participation
Agreement"), pursuant to which FUNB London will purchase up to a 100%
participation interest in European Revolver Loans under the European Revolver
Facility; and

WHEREAS, so long as the Participation Agreement is in effect, FUNB
London will fund advances and receive repayments under the European Revolver
Facility; and

<PAGE> 2

WHEREAS, pursuant to Section 2.3 of the Loan Agreement, Obligated
Borrowers and Corporate Guarantors have consented to the sale or transfer by
FUCC of all or any part of the Loan Agreement, the Facility Letter and the
credit facilities thereunder; and

WHEREAS, Section 2.3 of the Loan Agreement provides that the Loan
Agreement may be amended by agreement of all Obligated Borrowers, Corporate
Guarantors and Lender;

NOW, THEREFORE, for and in consideration of the foregoing, and for ten
dollars ($10.00) and other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

SECTION 1. DEFINED TERMS

Capitalized terms used herein and not defined herein are to have the
meanings accorded such terms in the Loan Agreement or the Facility Letter, as
applicable.

SECTION 2. AMENDMENTS TO THE LOAN AGREEMENT

Effective on the Amendment Effective Date (as defined herein), the
Loan Agreement is amended in accordance with this Amendment. Except as
specifically amended by this Amendment, all of the original terms and
provisions of the Loan Agreement shall continue in full force and effect.

Section 2.1. The Loan Agreement is hereby amended to delete in its
entirety the definition of "Facility Letter" contained therein and to
substitute therefor the following definition, reading as follows:

"Facility Letter - the letter attached to this Agreement
setting forth, among other things, certain terms and
provisions of the European Revolver Facility, as amended by
that certain letter agreement, dated as of April 19, 1996, and
by that certain Second Amendment to Loan and Security
Agreement and Facility Letter, dated as of June 14, 1996.
The Facility Letter shall constitute a part of this
Agreement."

SECTION 3. AMENDMENTS TO THE FACILITY LETTER

Effective on the Amendment Effective Date, the Facility Letter is
amended in accordance with this Amendment. Except as specifically amended by
this Amendment, all of the original terms and provisions of the Facility Letter
shall continue in full force and effect.

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<PAGE> 3

Section 3.1. The Facility Letter is hereby amended to add the
following definitions to the Glossary thereto:

"FUNB London - First Union National Bank, London Branch, a
United States banking association doing business through its
London Branch."

"Overdraft Facility Rate - means (a) as determined by FUNB
London in its sole discretion, either (i) the U.K. Base Rate
plus the Foreign Currency Margin or (ii) the U.K. LIBOR Rate
plus the Foreign Currency Margin, in either case plus (b) the
rate reflecting the cost to FUNB London (as determined by FUNB
London) of complying with the existing requirements of the
Bank of England or other regulatory authority affecting
mandatory liquid assets, special deposits, reserve, capital
adequacy or other requirements of whatever nature and
attributable to the European Revolver Facility, including any
reduction in the rate of return on capital resources. A
certificate by FUNB London as to the amount of such cost shall
be conclusive in the absence of manifest error."

"Overdraft Loan - a European Revolver Loan disbursed by FUNB
London and repayable at FUNB London."

"Participation Agreement - the Participation Agreement, dated
June 14, 1996, between FUCC and FUNB London, as the same may
be amended, modified or supplemented."

"U.K. LIBOR Rate - means the rate (as conclusively determined
by FUNB London in accordance with its normal procedures) at
which FUNB London is offered deposits in the Foreign Currency
at or about 11 a.m. London time on the relevant dealing day
on or before the commencement of the relevant Interest Period
(as determined by FUNB London) by banks in the London
interbank market for deposits in the Foreign Currency of
similar amount and for a similar interest period as the
relevant Interest Period."

"U.K. Base Rate - means the base rate of FUNB London from time
to time as conclusively certified by FUNB London."

Section 3.2. The Facility Letter is hereby amended to delete in its
entirety subsection (b) of Section 1 thereof and to substitute therefor the
following subsection (b), reading as follows:

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<PAGE> 4

"(b) The European Revolver Loans, which are to be
evidenced by the European Revolver Notes (the "European
Revolver Notes"), are to be made by Lender as Foreign Currency
Loans in the Foreign Currency from time to time designated by
European Borrowers, if such Foreign Currency is available to
Lender, or as Dollar Loans; are to be repaid in the same
currency as which the Loans were made by Lender; and are to be
used solely for Permitted Proceeds Uses. Each Foreign Currency
Loan (other than Overdraft Loans) shall be in a minimum Dollar
Equivalent amount of five hundred thousand Dollars ($500,000)
and upward increments of two hundred fifty thousand Dollars
($250,000)."

Section 3.3.
The Facility Letter is hereby amended to delete in its
entirety subsection (c) of Section 1 thereof and to substitute therefor the
following subsection (c), reading as follows:

"(c) Borrowings under the European Revolver Facility
are to be as follows:

(i) Each European Revolver Loan is to be
made, or is to be deemed to be made, in the following
manner: (a) the European Borrower shall give Lender
written, telephonic or electronic notice (provided
that telephonic notice shall be promptly, and in any
event within one Business Day, confirmed in writing
by delivery of a written notice to Lender that
conforms to the requirements of this paragraph), or
notice in such other manner as may be agreed upon
from time to time by Lender and European Borrowers,
of its intention to borrow (which notice is to be
irrevocable) before 11:30 a.m. (Atlanta, Georgia
time), specifying the amount of the proposed
borrowing; whether the requested Loan is to be a
Dollar Loan or a Foreign Currency Loan, and, if the
latter, the Foreign Currency in which the borrowing
is to be made, with no more than two Foreign Currency
Loans to be requested each calendar month; and the
proposed borrowing date for the Loan, which must be
no earlier than the third Business Day after the date
of receipt of the request by Lender in Atlanta,
Georgia (with the date of request not to count as the
first of such three Business Days); (b) unless
payment is otherwise timely made by the European
Borrowers, the becoming due of any amount required to
be paid by the European Borrowers under this Letter
or under the Agreement as principal or accrued
interest is to be deemed irrevocably to be a request
by European Borrowers for a European Revolver Loan on
the due date of, and in the currency due, with
respect to such principal and accrued interest; (c)
unless payment is otherwise timely made by the
European Borrowers, the becoming due of any other
Obligation due from the European Borrowers is to be
deemed irrevocably to be a request for a European
Revolver Loan on the due date of, and in the currency
due, with respect to such Obligation; and (d) so long
as the Participation Agreement is in effect, the
presentation for payment by FUNB London of any check,
draft or other item of

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<PAGE> 5

payment drawn by a European Borrower shall be deemed
irrevocably to be a request by European Borrowers for
an Overdraft Loan in the amount of such check, draft
or other item of payment.

(ii) The proceeds of each European Revolver
Loan requested as described in (a) above are to be
disbursed by Lender in the requested Dollars or
Foreign Currency by wire transfer to such bank
account as may be agreed upon by European Borrowers
and Lender from time to time; the proceeds of each
European Revolver Loan requested to satisfy an
Obligation as described above are to be disbursed by
way of direct payment of the relevant Obligation; and
the proceeds of each Overdraft Loan requested as
described in (d) above are to be disbursed by FUNB
London by payment of such check, draft or other item
of payment.

(iii) Each request, including specifically,
but without limitation, a telephonic request, for a
European Revolver Loan is to be conclusively presumed
to be made by a Person authorized by European
Borrowers to do so; and the making of the requested
European Revolver Loan will conclusively establish
European Borrowers' obligation to repay such European
Revolver Loan in accordance with this Letter and the
Agreement."

Section 3.4. The Facility Letter is hereby amended to delete in its
entirety subsection (i) of Section 1 thereof and to substitute therefor the
following subsection (i), reading as follows:

"(i) European Revolver Loans constituting Dollar
Loans shall bear interest from the date such European Revolver
Loans are made to the date paid at the Regular Rate or the
Loan LIBOR Rate. European Revolver Loans constituting Foreign
Currency Loans (other than Overdraft Loans) shall bear
interest from the date such European Revolver Loans are made
to the date paid at the Foreign Currency Rate. European
Revolver Loans constituting Overdraft Loans shall bear
interest from the date such European Revolver Loans are made
to the date paid at the Overdraft Facility Rate. The
applicable basis for determining the rate of interest shall be
selected by European Borrowers initially at the time a notice
of borrowing is given. The basis for determining the interest
rate with respect to any European Revolver Loan may be changed
from time to time pursuant to paragraph (4) hereinafter. If
on any day a European Revolver Loan constituting a Dollar Loan
is outstanding with respect to which notice has not been
delivered to Lender in accordance with the terms of this
Letter and the Agreement specifying the basis for determining
the rate of interest, then for that day that Dollar Loan shall
bear interest at the Regular Rate."

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<PAGE> 6

Section 3.5. The Facility Letter is hereby amended to add at
the end of Section 1 thereof the following subsection (j), reading as
follows:

"(j) Notwithstanding anything to the contrary
contained herein, so long as the Participation Agreement is in
effect, European Borrowers shall not have the option to
request Dollar Loans or Foreign Currency Loans by written,
telephonic or electronic notice, or to change the basis for
determining the interest rate on Overdraft Loans, but shall be
limited to requesting such Loans as Overdraft Loans as
provided in subparagraph (c)(i) of this paragraph (3)."

Section 3.6. The Facility Letter is hereby amended to delete in its
entirety the introductory clause to Section 2 thereof and to substitute
therefor the following clause, reading as follows:

"2. Interest Periods

(a) In connection with each Foreign Currency Loan
(other than Overdraft Loans) and LIBOR Rate Loan, European
Borrowers shall elect an Interest Period to be applicable to
such Loan, which Interest Period shall be a one month period,
if such Loan is a Foreign Currency Loan, and either a one,
two, three or six month period, if such Loan is a Dollar Loan;
provided that:"

Section 3.7. The Facility Letter is hereby amended to delete in its
entirety the last paragraph of Section 3 thereof and to substitute therefor the
following paragraph, reading as follows:

"European Borrowers may repay an Overdraft Loan on
any Business Day. European Borrowers may repay a Foreign
Currency Loan that is not an Overdraft Loan on a day other
than the last day of the applicable Interest Period, but only
if European Borrowers shall compensate Lender for each such
repayment, by the payment in Dollars of the greater of (i) two
thousand Dollars (U.S. $2,000) or (ii) all losses, expenses
and liabilities (including, without limitation, any loss
(including interest paid) sustained by Lender in connection
with the reemployment of such funds) which Lender may incur
because of such prepayment, upon Lender's written request
(which request shall set forth in reasonable detail the basis
for requesting any amounts pursuant to subsection (ii) and
which shall, absent manifest error, be conclusive and binding
upon all parties hereto)."

Section 3.8. The Facility Letter is hereby amended by inserting at the
end of the final paragraph of Section 4 thereof the following sentences,
reading as follows:

"Interest on Overdraft Loans shall accrue from day to day and
shall be calculated on the basis of a 360 day year (except for
British pounds sterling, in which case a 365 day year) for the
actual number of days elapsed. Interest on Overdraft Loans

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<PAGE> 7

shall be due and payable and debited to the account of
European Borrowers on a monthly basis."

SECTION 4. CONDITIONS TO EFFECTIVENESS

Section 4.1. Effective Date. The amendments to the Loan Agreement and
the Facility Letter set forth in Sections 2 and 3 of this Amendment are to
become effective only as of the first date (the "Amendment Effective Date") on
which this Amendment has been executed by Corporate Guarantors and Obligated
Borrowers and all of the conditions to effectiveness of this Amendment set
forth in Sections 4.2 and 4.3 of this Amendment have been satisfied.

Section 4.2. Execution. Lender shall have received (i) two original
counterparts of this Amendment, duly executed by Corporate Guarantors and
Obligated Borrowers, and (ii) two original consents to this Amendment, duly
executed by Frank A. Argenbright, Jr.

Section 4.3. Compliance with Warranty; No Default, etc.

1. As of the Amendment Effective Date, the representations and
warranties set forth in Section 5 of the Loan Agreement, and
the representations and warranties set forth in each of the
other Loan Documents, are to be true and correct in all
material respects.

2. As of the Amendment Effective Date, no Default or Event of
Default shall have occurred and be continuing.

SECTION 5. DOCUMENT PURSUANT TO LOAN AGREEMENT.

This Amendment is a Loan Document executed pursuant to the Loan
Agreement and, unless otherwise expressly indicated herein, is to be construed,
administered and applied in accordance with all of the terms and provisions of
the Loan Agreement. Except as otherwise expressly provided for herein, all
representations, warranties, terms, covenants and conditions of the Loan
Agreement, the Facility Letter and each of the other Loan Documents are to
remain unamended and unwaived.

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<PAGE> 8

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers hereunder duly authorized as of the
day and year first written above.

ARGENBRIGHT SECURITY, INC.
("OBLIGATED BORROWER")

By: /s/
------------------------------

Its:
-----------------------------

ARGENBRIGHT, INC.
("OBLIGATED BORROWER")

By: /s/
------------------------------

Its:
-----------------------------

ADI U.K. LIMITED
("OBLIGATED BORROWER")

By: /s/
------------------------------

Its:
-----------------------------

AVIATION DEFENCE INTERNATIONAL
GERMANY LIMITED
("OBLIGATED BORROWER")

By: /s/
------------------------------

Its:
-----------------------------

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<PAGE> 9

ARGENBRIGHT HOLDINGS LIMITED
("U.S. HOLDINGS GUARANTOR")

By: /s/
-------------------------------------

Title:
-------------------------------------

THE ADI GROUP LIMITED
("EUROPEAN GUARANTOR")

By: /s/
-------------------------------------

Title:
-------------------------------------

-9-
<PAGE> 10

FIRST UNION COMMERCIAL
CORPORATION
("LENDER")

By: /s/
-------------------------------

Title:
----------------------------

-10-
<PAGE> 11

CONSENT AND CONFIRMATION

The undersigned, a guarantor of the Obligations of Obligated
Borrowers to Lender, hereby consents to the terms and conditions of the SECOND
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY LETTER by and among the
Corporate Guarantors and European Borrowers party thereto and FIRST UNION
COMMERCIAL CORPORATION, and the undersigned hereby confirms and agrees that the
Guaranty by the undersigned in favor of Lender continues to be in full force
and effect and is hereby ratified and confirmed.

/s/ FRANK A. ARGENBRIGHT, JR.
-----------------------------
FRANK A. ARGENBRIGHT, JR.

-11-

<PAGE> 1

EXHIBIT 10.9

THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT

THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is made this 8th day of July, 1996, by and among FIRST UNION COMMERCIAL
CORPORATION ("Lender"), a North Carolina corporation; and ARGENBRIGHT SECURITY,
INC. ("Argenbright Security"), ARGENBRIGHT, INC. ("Argenbright
Transportation") (Argenbright Security and Argenbright Transportation,
collectively, "U.S. Borrowers"), ADI U.K. LIMITED ("ADI U.K."), AVIATION
DEFENCE INTERNATIONAL GERMANY LIMITED ("ADI Germany") (ADI U.K. and ADI
Germany, collectively, "European Borrowers") (U.S. Borrowers and European
Borrowers, collectively, "Obligated Borrowers"), ARGENBRIGHT HOLDINGS LIMITED
("U.S. Holdings Guarantor"), ADI GROUP LIMITED ("European Guarantor") (U.S.
Holdings Guarantor and European Guarantor, collectively, "Corporate
Guarantors"), each a corporation with its chief executive office and principal
place of business at the address specified in the Loan and Security Agreement
referred to below, and INTERSEC, INC. ("Intersec"), a District of Columbia
corporation.

WHEREAS, Obligated Borrowers, Corporate Guarantors and Lender have
entered into that certain Loan and Security Agreement, dated as of December 22,
1995 (as amended, the "Loan Agreement"), pursuant to which Lender has extended
to Obligated Borrowers certain credit facilities in the maximum aggregate
amount of up to twenty-six million five hundred thousand dollars ($26,500,000);
and

WHEREAS, as security for the obligations owing to Lender under the
Loan Agreement, U.S. Borrowers and U.S. Holdings Guarantor have granted a
first-priority security interest to Lender in the U.S. Collateral (as defined
in the Loan Agreement); and

WHEREAS, the obligations of U.S. Borrowers and U.S. Holdings Guarantor
to Lender are guaranteed by Frank A. Argenbright, Jr. ("Individual Guarantor")
pursuant to a Guaranty, dated as of December 22, 1995 (the "Individual
Guaranty") by Individual Guarantor in favor of Lender; and

WHEREAS, as security for the obligations of Individual Guarantor to
Lender under the Individual Guaranty, Individual Guarantor has granted a
first-priority

<PAGE> 2

security interest to Lender in all of the issued and outstanding capital stock
of U.S. Holdings Guarantor (the "Individual Guarantor Collateral"); and

WHEREAS, Argenbright Security has acquired or will acquire all of the
issued and outstanding capital stock of Intersec pursuant to a Stock Purchase
Agreement, dated as of June 13, 1996 (the "Intersec Purchase Agreement"), among
Argenbright Security, Theodore Manousakis and John English (Theodore Manousakis
and John English, collectively, "Sellers"); and

WHEREAS, to finance in part the acquisition of Intersec, U.S. Holdings
Guarantor will incur subordinated indebtedness to Sirrom Capital Corporation
("Sirrom") in the aggregate principal amount not to exceed $3,500,000 pursuant
to a Loan Agreement between Sirrom and U.S. Holdings Guarantor (the "Sirrom
Loan Agreement"); and

WHEREAS, as security for the obligations of U.S. Holdings Guarantor to
Sirrom, U.S. Borrowers, U.S. Holdings Guarantor and Individual Guarantor will
grant a second-priority security interest to Sirrom in certain of the U.S.
Collateral and the Individual Guarantor Collateral; and

WHEREAS, to finance in part the acquisition of Intersec, Argenbright
Security will execute and deliver to Sellers certain Promissory Notes (the
"Sellers Notes") identified on Schedule 1 to Exhibit N of the Intersec Purchase
Agreement, in the aggregate principal amount of $1,155,000; and

WHEREAS, as security for the obligations of Individual Guarantor and
Argenbright Security to Sellers, Individual Guarantor will grant a
third-priority security interest to Sellers in the Individual Guarantor
Collateral pursuant to a Stock Pledge Agreement among Individual Guarantor and
Sellers; and

WHEREAS, Obligated Borrowers and Corporate Guarantors have requested
the consent of Lender to the execution of the Sirrom Loan Agreement, the
borrowings thereunder and the second-priority security interest in favor of
Sirrom, and to the execution of the Sellers Notes and the third-priority
security interest in favor of Sellers; and

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<PAGE> 3

WHEREAS, the parties wish to amend the Loan Agreement to add Intersec
as an Obligated Borrower thereunder on the terms set forth in this Amendment.

NOW, THEREFORE, for good and valuable consideration, the parties
hereto agree as follows:

SECTION 1. DEFINITIONS.

Capitalized terms used herein and not otherwise defined herein are to
have the meanings assigned to such terms in the Loan Agreement.

SECTION 2. AMENDMENTS.

Effective on the Amendment Effective Date, the Loan Agreement is
amended in accordance with this Amendment. Except as specifically amended by
this Amendment, all of the original terms and provisions of the Loan Agreement
shall continue in full force and effect.

Section 2.1 Effective on the Amendment Effective Date, all
references to the Loan Agreement in that document or in any other Loan Document
shall mean the Loan Agreement, as heretofore amended and as amended hereby.
Except as expressly provided herein, the execution and delivery of this
Amendment does not and will not amend, modify or supplement any provision of,
or constitute a consent to or a waiver of any noncompliance with the provisions
of, the Loan Agreement, and, except as specifically provided in this Amendment,
the Loan Agreement shall remain in full force and effect and is hereby ratified
and confirmed.

Section 2.2 Effective on the Amendment Effective Date, Intersec
shall become a party to and bound by the Loan Agreement as an Obligated
Borrower. All references in the Loan Agreement and in the other Loan Documents
to "U.S. Borrowers" shall be deemed to include Argenbright Security,
Argenbright Transportation, and Intersec, and all references in the Loan
Agreement and in the other Loan Documents to "Obligated Borrowers" shall be
deemed to include each of ADI U.K., ADI Germany, Argenbright Security,
Argenbright Transportation and Intersec.

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<PAGE> 4

Section 2.3 The Loan Agreement is hereby amended to add the
following definitions to Section 1.1 thereof:

"Intercreditor Agreement - that certain Intercreditor
Agreement, dated as of July 8, 1996, among Lender, Sirrom and
Sellers."

"Intersec - Intersec, Inc., a District of Columbia
corporation."

"Intersec Purchase Agreement - that certain Stock
Purchase Agreement, among Argenbright Security and Sellers."

"Put Note - the promissory note to be issued by U.S.
Holdings Guarantor to Sirrom pursuant to Section 9(b) of the
Sirrom Warrant upon the exercise of certain rights granted to
Sirrom under Section 9 of the Sirrom Warrant."

"Sellers - Theodore Manousakis and John A. English."

"Sellers Notes - the promissory notes of Argenbright
Security to Sellers in the aggregate principal amount of
$1,155,000, made pursuant to the Intersec Purchase Agreement."

"Sirrom - Sirrom Capital Corporation, a Tennessee
corporation."

"Sirrom Indebtedness - the indebtedness of U.S.
Holdings Guarantor to Sirrom under the Sirrom Loan Agreement."

"Sirrom Loan Agreement - that certain Loan Agreement,
dated as of July 9, 1996, between U.S. Holdings Guarantor and
Sirrom."

"Sirrom Warrant - that certain Stock Purchase Warrant
dated July 9, 1996, by U.S. Holdings Guarantor in favor of
Sirrom."

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<PAGE> 5

Section 2.4 The Loan Agreement is hereby amended to
delete in its entirety the definition of "Adjusted Tangible Net Worth"
contained in Section 1.1 thereof and to substitute therefor the
following definition, reading as follows:

"Adjusted Tangible Net Worth - at any date, a sum
equal to: (i) the amount of the Adjusted Tangible Assets of
such Person plus the amount described in Item 13 of the
Financial and Contingency Schedule, less (ii) the amount of
such Person's liabilities (other than capital stock and
surplus) as shown on a balance sheet at such date, and
including as liabilities all reserves shown on the balance
sheet for contingencies and other potential liabilities, plus
(iii) the amount of such Person's liabilities that represent
Subordinated Debt on such date, including, without limitation,
but with respect only to U.S. Holdings Guarantor, the
aggregate outstanding principal amount of the Sirrom
Indebtedness at such date."

Section 2.5 The Loan Agreement is hereby amended to delete in its
entirety the final sentence of the definition of the definition of "Eligible
U.S. Account" contained in Section 1.1 thereof and to substitute therefor the
following sentence, reading as follows:

"Notwithstanding anything herein to the contrary, without
limiting the discretion of Lender to apply its sole credit
judgment in determining Eligible U.S. Accounts, Accounts of
Intersec shall not be considered Eligible U.S. Accounts (i) if
they have been billed prior to the effective time of the
closing of the purchase of Intersec pursuant to the Intersec
Purchase Agreement, (ii) if they are Accounts for services
rendered prior to the effective time of such closing but not
yet billed or (iii) if Lender in its sole and absolute
discretion shall have determined that such Accounts are not
billed pursuant to practices and terms that are in accordance
with the then-current practices, as approved by Lender, of
Argenbright Security."

Section 2.6 The Loan Agreement is hereby amended to add as a new
second sentence of Section 1.2 thereof, regarding Accounting Terms, the
following sentence, reading as follows:

"Notwithstanding the foregoing, no accounting term,
definition, or financial covenant contained in this Agreement
shall incorporate or reflect non-cash accruals, charges or
other items associated with the

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<PAGE> 6

required by GAAP to be recorded with respect to the financial statements of
such Person."

Section 2.7 The Loan Agreement is hereby amended to add as a new
subsection (W) of Section 5.1 thereof the following subsection (W), reading as
follows:

"(W) U.S. Holdings Guarantor owns no assets,
including without limitation, Accounts, rights under contracts
and operating assets, other than (i) capital stock of its
Subsidiaries and (ii) assets used in the administration or
management of the business of U.S. Holdings Guarantor or its
affiliates."

Section 2.8 The Loan Agreement is hereby amended to delete in its
entirety subsection (C) of Section 6.2 thereof and to substitute therefor the
following subsection (C), reading as follows:

"(C) Except as set forth on the Financial and
Contingency Schedule, create, incur, assume, or suffer to
exist, or permit any Subsidiary to create, incur, assume or
suffer to exist, any Indebtedness, except Permitted
Indebtedness, or guarantee, assume, endorse or otherwise, in
any way, become directly or contingently liable, or permit any
Subsidiary to guarantee, assume, endorse or otherwise, in any
way, become directly or contingently liable, with respect to
the Indebtedness of any Person except by endorsement of
instruments or items of payment for deposit or collection;
provided, however, but subject in all respects to the terms
and limitations contained in the Intercreditor Agreement, U.S.
Holdings Guarantor may issue the Put Note if and when required
by Section 9 of the Sirrom Warrant and permitted under the
Intercreditor Agreement."

Section 2.9 The Loan Agreement is hereby amended to delete in its
entirety subsection (D) of Section 6.2 thereof and to substitute therefor the
following subsection (D), reading as follows:

"(D) Enter into, or be a party to, or permit any
Subsidiary to enter into or be a party to, any transaction
with any affiliate or

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<PAGE> 7

stockholder, except (i) transactions with Affiliates or stockholders
entered into in the ordinary course of and pursuant to the reasonable
requirements of each Obligated Borrower, Corporate Guarantor or such
Subsidiary's business and upon fair and reasonable terms which are
fully disclosed to Lender and are no less favorable to such Obligated
Borrower or Corporate Guarantor than would obtain in a comparable
arm's length transaction with a Person not an Affiliate or stockholder
of such Obligated Borrower, Corporate Guarantor or Subsidiary, (ii)
loans and advances to Individual Guarantor in an aggregate principal
amount outstanding at any time not to exceed four hundred fifty
thousand dollars ($450,000), and (iii) the promissory note of U.S.
Holdings Guarantor to Individual Guarantor in the maximum principal
amount of six hundred fifty thousand dollars ($650,000), which note
from time to time pursuant to the agreement of Individual Guarantor or
any of its Affiliates and U.S. Guarantor may be subject to offset
with respect to the payment obligations of Individual Guarantor to
repay U.S. Holdings Guarantor or any of its Consolidated Subsidiaries
for advances and loans to Individual Guarantor pursuant to clause (ii)
above."

Section 2.10 The Loan Agreement is hereby amended to add as a new
subsection (W) of Section 6.2 thereof the following subsection (W), reading as
follows:

"(W) Permit or cause U.S. Holdings Guarantor to acquire, and
U.S. Holdings Guarantor is not to acquire, any assets, including
without limitation, any Accounts, rights under contracts or operating
assets, other than the (i) capital stock of its Subsidiaries and (ii)
assets used in the administration or management of the business of
U.S. Holdings Guarantor or its affiliates."

Section 2.11 The Loan Agreement is hereby amended to delete in its
entirety subsection (A) of Section 6.3 thereof and to substitute therefor the
following subsection (A), reading as follows:

"(A) U.S. Holdings Guarantor (on a consolidated basis) to
maintain at all times during the fiscal year ending December 31, 1996
of not less than $2,850,000 and, during each fiscal year thereafter,
of not less than the sum of (i) $2,850,000 plus (ii) the greater of (a)

-7-
<PAGE> 8

$1,000,000 or (b) seventy-five percent (75%) of the preceding fiscal
year's net income after tax (computed in accordance with GAAP) plus
(iii) the aggregate of the amounts added pursuant to clause (ii) above
for all previous fiscal years occurring after the fiscal year ending
December 31, 1996."

Section 2.12 The Loan Agreement is hereby amended to add as a new
subsection (O) of Section 8.1 thereof, regarding Events of Default, the
following subsection (O), reading as follows:

"(O) An "Event of Default" (as defined in the
Sellers Notes) occurs under the Sellers Notes or an "Event of
Default" (as defined in the Sirrom Loan Agreement) occurs
under the Sirrom Loan Agreement, whether or not the occurrence
of such event results in the acceleration of the indebtedness
of any U.S. Borrower or U.S. Holdings Guarantor thereunder."

Section 2.13 The Loan Agreement is hereby amended to include the
amendments to the Schedules thereto set forth in the Amendment to Schedules
attached hereto.

SECTION 3. GRANT OF SECURITY INTEREST.

To secure the prompt payment and performance to Lender of the U.S.
Obligations, Intersec hereby grants to Lender a continuing security interest
in, security title to and Lien upon all the U.S. Collateral. Each of
Argenbright Security, Argenbright Transportation and U.S. Holdings Guarantor
hereby confirms its continuing grant to Lender under the Loan Agreement of
security interests in the U.S. Collateral as security for the U.S. Obligations.

SECTION 4. CONSENT.

Effective as of the Amendment Effective Date, and only after the
strict satisfaction of the conditions set forth in Section 6, Lender hereby
consents to (i) the

-8-
<PAGE> 9

acquisition by Argenbright Security of all of the issued and outstanding stock
of Intersec pursuant to and on the terms set forth in the Intersec Purchase
Agreement, (ii) the execution and delivery of the Sellers Notes and the grant
to Sellers of a third-priority security interest in the Individual Guarantor
Collateral pursuant to the Intersec Purchase Documents (as defined in Section
6.4 below), and (iii) the indebtedness of U.S. Holdings Guarantor to Sirrom,
the grant to Sirrom of a second-priority security interest in the Individual
Guarantor Collateral and certain of the U.S. Collateral, and the issuance by
U.S. Holdings Guarantor of the Sirrom Warrant and capital stock upon exercise
of the Sirrom Warrant, in each case pursuant to and on the terms set forth in
the Sirrom Documents (as defined in Section 6.4 below).

SECTION 5. REPRESENTATIONS AND WARRANTIES.

Intersec, each Obligated Borrower, and each Corporate Guarantor
hereby jointly and severally represent and warrant to Lender as follows:

5.1 Due Formation, etc. Intersec is a corporation duly organized,
validly existed and in good standing under the laws of the District of Columbia
and has the power and authority to incur the U.S. Obligations.

5.2 Authorization of Amendment, Etc. Intersec, each Obligated
Borrower and each Corporate Guarantor has the right and power and is duly
authorized and empowered to enter into, execute, deliver and perform this
Amendment in accordance with its terms. This Amendment has been duly executed
and delivered by Intersec, each Obligated Borrower and each Corporate Guarantor
and is a legal, valid and binding obligation of Intersec, each Obligated
Borrower and each Corporate Guarantor, enforceable against Intersec, each
Obligated Borrower and each Corporate Guarantor in accordance with its terms.

5.3 Compliance of Amendment with Laws, Etc. The execution,
delivery and performance of this Amendment in accordance with its terms do not
and will not, by the passage of time, the giving of notice or otherwise,

5.3.1 require any governmental approval or violate any
applicable law relating to Intersec, any Obligated
Borrower or any Corporate Guarantor,

-9-
<PAGE> 10

5.3.2 conflict with, result in a breach of or
constitute a default under the articles or
certificate of incorporation or bylaws of Intersec,
any Obligated Borrower or any Corporate Guarantor, any
material provisions of any indenture, agreement or
other instrument to which Intersec, any Obligated
Borrower or any Corporate Guarantor is a party or by
which Intersec, any Obligated Borrower or any
Corporate Guarantor or any of its properties may be
bound or any governmental approval relating to
Intersec, any Obligated Borrower or any Corporate
Guarantor, or

5.3.3 subject to Section 4 hereof, result in or require the
creation or imposition of any Lien upon or with
respect to any property now owned or hereafter
acquired by any Obligated Borrower or any Corporate
Guarantor other than in favor of Lender.

Section 5.4 Solvency. Intersec is Solvent.

Section 5.5 Representations in the Loan Agreement. Each
Obligated Borrower and each Corporate Guarantor hereby jointly and severally
represent and warrant to Lender that after giving effect to Argenbright
Security's acquisition of Intersec (i) no Default or Event of Default is in
existence and (ii) all of the representations and warranties of Obligated
Borrowers and Corporate Guarantors contained in this Amendment, the Loan
Agreement and the other Loan Documents are true in all material respects;
provided that, from and after the Amendment Effective Date, all representations
and warranties made or deemed made by an Obligated Borrower or Corporate
Guarantor shall be deemed supplemented to include the transactions consummated
pursuant to the Sirrom Documents and the Intersec Purchase Agreement, including
without limitation the transactions referred to in Section 4 hereof.

SECTION 6. CONDITIONS TO EFFECTIVENESS.

The amendments to the Loan Agreement set forth in Section 2 of this
Amendment are to become effective only as of the first date (the "Amendment
Effective Date") on which this Amendment has been executed by Intersec,
Corporate Guarantors and Obligated Borrowers and all of the conditions to
effectiveness of this Amendment set forth in Sections 6.1 to 6.5 of this
Amendment have been satisfied.

-10-
<PAGE> 11

Section 6.1 Execution. Lender shall have received (i) two
original counterparts of this Amendment, duly executed by Corporate Guarantors,
Obligated Borrowers and Intersec, and (ii) two original consents to this
Amendment, duly executed by Frank A. Argenbright, Jr.

Section 6.2 Sirrom Transaction. The Sirrom Loan Agreement, and
the borrowings thereunder, shall have been consummated on terms and pursuant to
documentation satisfactory to Lender in its discretion.

Section 6.3 Term Loan. U.S. Borrowers shall prepay the Term Loan
to Lender in the amount of five hundred thousand dollars ($500,000), which
amount shall be in addition to the Scheduled Installments of the Term Loan
which U.S. Borrowers are obligated to repay pursuant to Section 3.3 of the
Loan Agreement. Such prepayment, which is a voluntary prepayment made pursuant
to Section 3.3, shall be applied towards satisfaction of the Scheduled
Installments at the Termination Date and the other dates for payments that are
closest to the Termination Date, being applied first to the Termination Date
and then to the latest payments due under the Term Loan in reverse order of
maturity. Notwithstanding anything to the contrary set forth in the Loan
Agreement, with respect to the $500,000 prepayment of the Term Loan pursuant to
this Section 6.3, U.S. Borrowers shall not be obligated to pay the costs and
charges that otherwise would be due under the Loan Agreement in connection with
voluntary prepayment of the Term Loan, including costs and charges imposed
under Section 4.1(I) of the Loan Agreement relating to LIBOR Rate Loans.

Section 6.4 Closing Documents. Lender shall have received each
of the following, in number, form, scope and substance satisfactory to Lender
and its counsel:

6.4.1 An intercreditor agreement in form and substance satisfactory
to Lender with respect to (i) the subordination of the Sellers
Notes and the indebtedness of U.S. Holdings Guarantor under
the Sirrom Loan Agreement to the Obligations of Obligated
Borrowers and Corporate Guarantors to Lender, and (ii) the
relative priorities of the security interests of Lender,
Sirrom and Sellers in the U.S. Collateral and the Individual
Guarantor Collateral;

6.4.2 A stock pledge agreement duly executed by Argenbright
Security, pursuant to which Argenbright Security pledges to
Lender all of the

-11-
<PAGE> 12

capital stock of Intersec, together with the original stock
certificates for such stock and related stock transfer powers
and proxy;

6.4.3 A collateral assignment in favor of Lender of all of
Argenbright Security's right, title and interest in, and
rights to indemnification under, the Intersec Purchase
Agreement;

6.4.4 Financing statements under the Code, duly executed by
Intersec, and in appropriate form for filing in all
jurisdictions necessary to perfect Lender's security interest
in the U.S. Collateral granted pursuant to Section 3 above (to
the extent that such security interest may be perfected by
filing);

6.4.5 An original promissory note, duly executed by Intersec in
favor of Lender evidencing Intersec's obligations under the
Loan Agreement, as amended hereby;

6.4.6 An opinion of counsel to Obligated Borrowers, Corporate
Guarantors and Intersec, in form and substance satisfactory to
Lender and its counsel, as to such matters as Lender shall
reasonably request;

6.4.7 A secretarial and incumbency certificate of Intersec, with
copies of the corresponding corporate resolutions attached
thereto;

6.4.8 The officer's certificate described in Section 6.5 below;

6.4.9 Good standing certificates of Intersec from its jurisdiction
of incorporation and each jurisdiction in which it is
qualified to transact business as a foreign corporation;

6.4.10 Certified copies of the Intersec Purchase Agreement and each
of the other agreements, documents, instruments and
certificates executed or delivered in connection therewith
(collectively, the "Intersec Purchase Documents");

6.4.11 Certified copies of the Sirrom Loan Agreement and each of the
other agreements, documents, instruments and certificates
executed or delivered in connection therewith (collectively,
the "Sirrom Documents");

-12-
<PAGE> 13

6.4.12 A certificate to the effect that as of the Amendment Effective
Date and after giving effect to the transactions contemplated
hereby, Intersec, each Obligated Borrower and each Corporate
Guarantor is Solvent, together with such supporting evidence
as Lender shall reasonably request;

6.4.13 Evidence of the termination and release of all Liens on the
assets of Intersec other than Permitted Liens;

6.4.14 Such other documents, instruments, agreements and certificates
as Lender shall reasonably request.

Section 6.5 Compliance with Warranty; No Default, etc.

6.5.1 As of the Amendment Effective Date, after giving effect to
Argenbright Security's acquisition of Intersec and borrowings
by U.S. Holdings Guarantor under the Sirrom Documents, the
representations and warranties set forth in Section 5 of the
Loan Agreement, and the representations and warranties set
forth in each of the other Loan Documents, are to be true and
correct in all material respects.

6.5.2 As of the Amendment Effective Date, after giving effect to
Argenbright Security's acquisition of Intersec and borrowings
by U.S. Holdings Guarantor under the Sirrom Loan Agreement, no
Default or Event of Default shall have occurred and be
continuing.

6.5.3 Lender shall have received from an authorized officer of each
Obligated Borrower and Corporate Guarantor a certificate,
dated the Amendment Effective Date, certifying the matters set
forth in subsections 1 and 2 of this Section 6.5.

SECTION 7 MISCELLANEOUS

Section 7.1 Document Pursuant to Loan Agreement. This Amendment
is a Loan Document executed pursuant to the Loan Agreement and, unless
otherwise expressly indicated herein, is to be construed, administered and
applied in accordance with all of the terms and provisions of the Loan
Agreement. Except as otherwise expressly provided for herein, all
representations, warranties, terms, covenants and conditions of the Loan
Agreement are to remain unamended and unwaived.

-13-
<PAGE> 14

Section 7.2 Fees. As additional consideration for the Amendment,
Obligated Borrowers are to pay Lender, in addition to interest and other
amounts due Lender under the Loan Agreement, an amendment fee of thirty-seven
thousand five hundred dollars ($37,500), payable in full in advance on the
Amendment Effective Date. The amendment fee is to be fully earned by Lender at
the time of payment thereof and is not to be subject to rebate upon repayment
of the Obligations or the termination of the Loan Agreement.

Section 7.3 Expenses. Obligated Borrowers are to pay to Lender
its attorneys fees and expenses incurred in connection with the preparation of
this Amendment and the other documents, instruments and agreements executed or
delivered in connection herewith and the consummation of the transactions
contemplated hereby promptly upon receipt of billing therefor.

Section 7.4 Counterparts. This Amendment may be executed by each
party to this Amendment upon a separate copy, and in such case one counterpart
of this Amendment shall consist of enough of such copies to reflect the
signature of all of the parties to this Amendment. This Amendment may be
executed in two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this Amendment or
its terms to produce or account for more than one of such counterparts.

Section 7.5 Governing Law. This Amendment shall be governed by,
and construed in accordance with, the internal laws of the State of Georgia.

-14-
<PAGE> 15

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers hereunder duly authorized as of the
day and year first written above.

ARGENBRIGHT SECURITY, INC.
("OBLIGATED BORROWER")

By: /s/
----------------------------------

Title:
-------------------------------

ARGENBRIGHT, INC.
("OBLIGATED BORROWER")

By: /s/
----------------------------------

Title:
-------------------------------

ADI U.K. LIMITED
("OBLIGATED BORROWER")

By: /s/
----------------------------------

Title:
-------------------------------

-15-
<PAGE> 16

AVIATION DEFENCE
INTERNATIONAL GERMANY LIMITED
("OBLIGATED BORROWER")

By: /s/
----------------------------------

Title:
-------------------------------

INTERSEC, INC.
("INTERSEC")

By: /s/
----------------------------------

Title:
-------------------------------

ARGENBRIGHT HOLDINGS LIMITED
("U.S. HOLDINGS GUARANTOR")

By: /s/
----------------------------------

Title:
-------------------------------

THE ADI GROUP LIMITED
("EUROPEAN GUARANTOR")

By: /s/
----------------------------------

Title:
-------------------------------

-16-
<PAGE> 17

FIRST UNION COMMERCIAL
CORPORATION
("LENDER")

By: /s/
----------------------------------

Title:
-------------------------------

-17-
<PAGE> 18

CONSENT AND CONFIRMATION

The undersigned, a guarantor of the Obligations of Obligated
Borrowers to Lender, hereby consents to the terms and conditions of the THIRD
AMENDMENT TO LOAN AND SECURITY AGREEMENT by and among the Corporate Guarantors
and Obligated Borrowers party thereto and FIRST UNION COMMERCIAL CORPORATION,
and the undersigned hereby confirms and agrees that the Guaranty by the
undersigned in favor of Lender continues to be in full force and effect and is
hereby ratified and confirmed.

/s/ FRANK A. ARGENBRIGHT, JR.
-----------------------------
FRANK A. ARGENBRIGHT, JR.

-18-

<PAGE> 1
EXHIBIT 10.10

FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND FACILITY LETTER

THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY
LETTER (this "Amendment") is made this 24th day of December, 1996, by and among
FIRST UNION COMMERCIAL CORPORATION ("Lender"), a North Carolina corporation;
and ARGENBRIGHT SECURITY, INC. ("Argenbright Security"), ARGENBRIGHT, INC.
("Argenbright Transportation") and INTERSEC, INC. ("Intersec"), (Argenbright
Security, Argenbright Transportation and Intersec, collectively, "U.S.
Borrowers"), ADI U.K. LIMITED ("ADI U.K."), AVIATION DEFENCE INTERNATIONAL
GERMANY LIMITED ("ADI Germany") (ADI U.K. and ADI Germany, collectively,
"European Borrowers") (U.S. Borrowers and European Borrowers, collectively,
"Obligated Borrowers"), ARGENBRIGHT HOLDINGS LIMITED ("U.S. Holdings
Guarantor"), and ADI GROUP LIMITED ("European Guarantor") (U.S. Holdings
Guarantor and European Guarantor, collectively, "Corporate Guarantors"), each a
corporation with its chief executive office and principal place of business at
the address specified in the Loan and Security Agreement referred to below.

WHEREAS, Obligated Borrowers, Corporate Guarantors and Lender have
entered into that certain Loan and Security Agreement, dated as of December 22,
1995, as amended (the "Loan Agreement"), pursuant to which Lender has extended
to U.S. Borrowers the U.S. Revolver Facility (as defined in the Loan Agreement)
in the amount of up to twenty million dollars ($20,000,000); and

WHEREAS, pursuant to the Loan Agreement, Lender, European Borrowers
and European Guarantor have entered into that certain Facility Letter, dated
December 22, 1995, as amended, pursuant to which Lender has extended to
European Borrowers the European Revolver Facility (as defined in the Facility
Letter) in the amount of up to the Dollar Equivalent of five million dollars
($5,000,000); and

WHEREAS, Obligated Borrowers, Corporate Guarantors and Lender wish to
amend the Loan Agreement and the Facility Letter on the terms and subject to
the conditions provided herein; and

WHEREAS, Section 2.3 of the Loan Agreement provides that the Loan
Agreement may be amended by agreement of all Obligated Borrowers, Corporate
Guarantors and Lender;

<PAGE> 2

SECTION 1. DEFINED TERMS

Capitalized terms used herein and not defined herein are to have the
meanings assigned to such terms in the Loan Agreement or the Facility Letter,
as applicable.

SECTION 2. AMENDMENTS TO THE LOAN AGREEMENT

Section 2.1. The Loan Agreement is hereby amended to delete in its
entirety the definition of "Net Operating Cash Flow" contained therein and to
substitute therefor the following definition, reading as follows:

"Net Operating Cash Flow - with respect to any period, a
Person's EBIDAT, plus (i) the amount, if any, by which the reserve for
insurance claims on the last day of such period exceeds the reserve
for insurance claims on the first day of such period, to the extent
such excess resulted in a charge to net income for such period, minus
(ii) all Unfinanced Capital Expenditures, minus (iii) all income and
franchise taxes paid in cash during such period, minus (iv) the
amount, if any, by which the reserve for insurance claims on the first
day of such period exceeds the reserve for insurance claims on the
last day of such period."

Section 2.2. The Loan Agreement is hereby amended to delete in its
entirety the lead-in clause of Section 6(C) thereof and to substitute therefor
the following clause, reading as follows:

"(C) U.S. Holdings Guarantor (on a consolidated basis) to
maintain at each Fiscal Period-end a Debt Service Coverage for the
immediately preceding thirteen (13) Fiscal Periods (provided that
during the fiscal year ending December 31, 1996, such calculation
shall be based upon the cumulative monthly average annualized for such
fiscal year and provided further that such calculation shall exclude
U.S. tax payments made with respect to the fiscal year ended December
31, 1995) of not less than the ratio shown below for the period
corresponding thereto:"

Section 2.3. The Loan Agreement is hereby amended to amend the
Financial and Contingency Schedule thereto to delete in their entirety
subparagraphs (a) and (b) of paragraph 9 thereof and to substitute therefor the
following subparagraphs (a) and (b), reading as follows:

"(a) The U.S. Borrowers, the U.S. Holdings Guarantor and
their Subsidiaries may make Capital Expenditures and may incur
Capitalized Lease Obligations in an amount which, in the aggregate for
all such Capital Expenditures and Capitalized Lease

-2-
<PAGE> 3

Obligations, does not exceed $1,900,000 during their 1996 fiscal
years, $2,100,000 during their 1997 fiscal years and $2,300,000 during
their 1998 fiscal years.

(b) The European Borrowers, the European Guarantor and their
Subsidiaries may make Capital Expenditures and may incur Capitalized
Lease Obligations in an amount which, in the aggregate for all such
Capital Expenditures and Capitalized Lease Obligations, does not
exceed $2,000,000 during their 1996 fiscal years, $2,200,000 during
their 1997 fiscal years and $2,400,000 during their 1998 fiscal
years."

SECTION 3. AMENDMENTS TO THE FACILITY LETTER

Section 3.1. The Facility Letter is hereby amended to delete in its
entirety the definition of "Interim Term" from the Glossary thereto.

Section 3.2. The Facility Letter is hereby amended to delete in its
entirety subsection (d) of Section 2 thereof and to substitute therefor the
following subsection (d), reading as follows:

"(d) The European Revolver Facility will be in effect for
a period commencing on the date hereof and ending on the last day of
the Original Term and will automatically renew itself for one (1) year
periods thereafter (each a "Renewal Term"), unless terminated as
hereinafter provided."

SECTION 4. CONDITIONS TO EFFECTIVENESS

Section 4.1. Effective Date. The amendments to the Loan Agreement and
the Facility Letter set forth in Sections 2 and 3 of this Amendment are to
become effective as of November 1, 1996 on the first date (such first date, the
"Amendment Effective Date") on which this Amendment has been executed by
Corporate Guarantors and Obligated Borrowers and all of the conditions to
effectiveness of this Amendment set forth in Sections 4.2, 4.3 and 4.4 of this
Amendment have been satisfied.

Section 4.3. Incumbency Certificate. Lender shall have received a
secretarial and incumbency certificate of each Obligated Borrower and Corporate
Guarantor, with copies of the corresponding corporate resolutions attached
thereto.

-3-
<PAGE> 4

Section 4.4. Compliance with Warranty; No Default, etc.

2. As of the Amendment Effective Date, no Default or Event of
Default shall have occurred and be continuing.

3. Lender shall have received from an authorized officer of each
Obligated Borrower and Corporate Guarantor a certificate,
dated the Amendment Effective Date, certifying the matters set
forth in subsections 1 and 2 of this Section 4.4.

SECTION 5. DOCUMENT PURSUANT TO LOAN AGREEMENT.

-4-
<PAGE> 5

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers hereunder duly authorized as of the
day and year first written above.

ARGENBRIGHT SECURITY, INC.
("OBLIGATED BORROWER")

By: /s/ David L. Gamsey
----------------------------------

Title: Vice President
and Chief
Financial Officer
-------------------------------

ARGENBRIGHT, INC.
("OBLIGATED BORROWER")

By: /s/ David L. Gamsey
----------------------------------

Title: Vice President
and Chief
Financial Officer
-------------------------------

INTERSEC, INC.
("OBLIGATED BORROWER")

By: /s/ David L. Gamsey
----------------------------------

Title: Vice President
and Chief
Financial Officer
-------------------------------

ADI U.K. LIMITED
("OBLIGATED BORROWER")

By: /s/ David L. Gamsey
----------------------------------

Title: Director
-------------------------------

-5-
<PAGE> 6
AVIATION DEFENCE INTERNATIONAL
GERMANY LIMITED
("OBLIGATED BORROWER")

By: /s/ David L. Gamsey
------------------------------------

Title: Director
--------------------------------

ARGENBRIGHT HOLDINGS LIMITED
("U.S. HOLDINGS GUARANTOR")

By: /s/ David L. Gamsey
------------------------------------

Title: Vice President and
Chief Financial Officer
--------------------------------

THE ADI GROUP LIMITED
("EUROPEAN GUARANTOR")

By: /s/ David L. Gamsey
------------------------------------

Title: Director
--------------------------------

-6-
<PAGE> 7

FIRST UNION COMMERCIAL
CORPORATION
("LENDER")

By: /s/
------------------------------------

Title:
---------------------------------

-7-
<PAGE> 8

CONSENT AND CONFIRMATION

The undersigned, a guarantor of the Obligations of Obligated
Borrowers to Lender, hereby consents to the terms and conditions of the FOURTH
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND FACILITY LETTER by and among the
Corporate Guarantors and Obligated Borrowers party thereto and FIRST UNION
COMMERCIAL CORPORATION, and the undersigned hereby confirms and agrees that the
Guaranty by the undersigned in favor of Lender continues to be in full force
and effect and is hereby ratified and confirmed.

/s/ FRANK A. ARGENBRIGHT, JR.
------------------------------
FRANK A. ARGENBRIGHT, JR.

-8-

<PAGE> 1
EXHIBIT 11.1

AHL SERVICES

COMPUTATION OF PRO FORMA EARNINGS PER SHARE

YEAR ENDED
DECEMBER 31,
1996
------------
<S> <C>
PRIMARY AND FULLY DILUTED

Pro forma net income......................................... $2,171
======
Weighted average Common Stock outstanding
during the period.......................................... 8,353

Cheap Stock (1).............................................. 276
Dilutive effect of common stock equivalents.................. 0
------
Total....................................................... 8,629
======
Per share amount............................................. $ 0.25
======
</TABLE>

- --------------------
(1) Pursuant to Securities and Exchange Commission Accounting Bulletin No.
83, common stock and common stock equivalents issued at prices below the
assumed initial public offering price per share ("cheap stock") during
the twelve months immediately preceding the initial filing date of the
Company's Registration Statement for its public offering have been
included as outstanding for all periods presented, regardless of whether
they are antidilutive.

<PAGE> 1
EXHIBIT 21.1

LIST OF SUBSIDIARIES OF AHL SERVICES, INC.

<TABLE>
<CAPTION>
State of Names Under Which
Name Incorporation it Does Business
- ---- ------------- ----------------
<S> <C> <C>

DIRECT SUBSIDIARIES OF AHL SERVICES, INC.

Argenbright Holdings Limited Georgia Argenbright

The ADI Group Limited United Kingdom ADI

SUBSIDIARIES OF ARGENBRIGHT HOLDINGS
LIMITED:

Argenbright, Inc. Georgia Argenbright

Argenbright Security, Inc. Georgia Argenbright

IPS Training Georgia IPS

Argenbright Substance Abuse, Inc. Georgia Argenbright

Argenbright Motor Coach, Inc. Georgia Argenbright

SUBSIDIARIES OF THE ADI GROUP LIMITED:

Aviation Defence International France Limited United Kingdom ADI

ADI Overseas Limited United Kingdom ADI

Subsidiaries of ADI Overseas Limited:

ADI Poland United Kingdom ADI

ADI Switzerland United Kingdom ADi

ADI Italy United Kingdom ADI

ADI Austria United Kingdom ADI

ADI UK Limited United kingdom ADI, Silverwing
Security, Silverwing
Transportation

Aviation Defense International Germany United Kingdom ADI
Limited

ADI Ground Services Limited United Kingdom ADI
</TABLE>

<PAGE> 1

EXHIBIT 23.2

As independent public accountants, we hereby consent to the use of our
reports (and to all references to our Firm) included in or made a part of this
registration statement.

ARTHUR ANDERSEN LLP

Atlanta, Georgia
February 28, 1997

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AHL SERVICES, INC. FOR THE YEAR ENDED DECEMBER 31,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,842
<SECURITIES> 0
<RECEIVABLES> 35,033
<ALLOWANCES> 341
<INVENTORY> 0
<CURRENT-ASSETS> 40,875
<PP&E> 13,982
<DEPRECIATION> 8,308
<TOTAL-ASSETS> 51,953
<CURRENT-LIABILITIES> 23,522
<BONDS> 0
0
0
<COMMON> 1
<OTHER-SE> 5,408
<TOTAL-LIABILITY-AND-EQUITY> 51,953
<SALES> 210,153
<TOTAL-REVENUES> 210,153
<CGS> 155,926
<TOTAL-COSTS> 155,926
<OTHER-EXPENSES> 49,184
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,726
<INCOME-PRETAX> 3,618
<INCOME-TAX> 1,447
<INCOME-CONTINUING> 2,171
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,171
<EPS-PRIMARY> .25
<EPS-DILUTED> .25

</TABLE>