AHL SERVICES INC, S-1/A, 1997-03-19

AHL SERVICES INC
S-1/A, 1997-03-19
BUSINESS SERVICES, NEC

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 19, 1997

REGISTRATION NO. 333-20315
================================================================================

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

AMENDMENT NO. 2

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 19, 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.

ALEX. BROWN & SONS THE ROBINSON-HUMPHREY
INCORPORATED COMPANY, INC.

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. Management believes, based on its
knowledge of the industry, that 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.

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
3
<PAGE> 7

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
78 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
61.2% 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 63% 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.
(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) 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, approximately
$26.2 million was attributable to higher revenues from existing clients,
approximately $9.1 million to services initiated for new clients and $6.3
million to the Intersec acquisition. Revenues from existing clients increased
15.5% 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, approximately
$37.1 million was attributable to higher revenues from existing clients and
approximately $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 material terms of the Credit
Facility are described herein. 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 $14.1 million and $542,000 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% 50%
Other passenger services(2)......................... 4 4 5
Commercial security.................................... 22 22 28
Shuttle bus services................................... 8 8 9
Cargo handling......................................... 3 6 4
Other(3)............................................... 7 6 4
--- --- ---
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. Management believes,
based on its knowledge of the industry, that 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-

26
<PAGE> 30

departure screening checkpoints, all passengers and other airport 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 shuttle bus vehicles, which generally
seat between 15 and 50 passengers. Under all of its shuttle bus

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contracts, the Company provides the shuttle bus and the driver. During fiscal
1996, AHL vehicles 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 61.2% 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 78 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 passenger
services for Delta at seven airports in four European countries, including
Paris -- Charles de

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<PAGE> 33

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
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.

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<PAGE> 34

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.

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

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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. 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

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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.

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
Reauthoriza-

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tion 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 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.

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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. A
majority 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 (incorporated by reference to the Registration
Statement on Form 8-A dated March 4, 1997)
3.2 -- Bylaws of the Company (incorporated by reference to the
Registration Statement on Form 8-A dated March 4, 1997)
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

(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 18, 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 18, 1997
- ----------------------------------------------------- Executive Officer
Frank A. Argenbright, Jr. (Principal Executive
Officer)

* Vice Chairman and Co-Chief March 18, 1997
- ----------------------------------------------------- Executive Officer
Edwin R. Mellett

DAVID L. GAMSEY Chief Financial Officer March 18, 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 1.1

2,500,000 Shares

AHL SERVICES, INC.

Common Stock

UNDERWRITING AGREEMENT
----------------------

March __, 1997

ALEX. BROWN & SONS INCORPORATED
THE ROBINSON-HUMPHREY COMPANY, INC.
As Representatives of the Several Underwriters
c/o Alex. Brown & Sons Incorporated
One South Street
Baltimore, Maryland 21202

Ladies and Gentlemen:

AHL Services, Inc., a Georgia corporation (the "Company"), proposes to
sell to the several underwriters (the "Underwriters") named in Schedule I hereto
for whom you are acting as representatives (the "Representatives") an aggregate
of 2,500,000 shares of the Company's Common Stock, $.01 par value (the "Firm
Shares"). The respective amounts of the Firm Shares to be so purchased by the
several Underwriters are set forth opposite their names in Schedule I hereto. A
shareholder of the Company (the "Selling Shareholder) also proposes to sell at
the Underwriters' option an aggregate of up to 375,000 additional shares of the
Company's Common

- 1 -
<PAGE> 2

Stock (the "Option Shares") as set forth below. The Company and the Selling
Shareholder are sometimes referred to herein collectively as the "Sellers."

As the Representatives, you have advised the Company and the Selling
Shareholder (a) that you are authorized to enter into this Agreement on behalf
of the several Underwriters, and (b) that the several Underwriters are willing,
acting severally and not jointly, to purchase the numbers of Firm Shares set
forth opposite their respective names in Schedule I, plus their pro rata portion
of the Option Shares if you elect to exercise the over-allotment option in whole
or in part for the accounts of the several Underwriters. The Firm Shares and the
Option Shares (to the extent the aforementioned option is exercised) are herein
collectively called the "Shares."

In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:

1. Representations and Warranties of the Company and the Selling
Shareholder.

(a) The Company represents and warrants as follows:

(i) A registration statement on Form S-1 (File No. 333-20315) with
respect to the Shares has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended, (the "Act") and the
Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission under the Act. Copies of such registration statement, including any
amendments thereto, the preliminary prospectuses (meeting the requirements of
Rule 430A of the Rules and Regulations) contained therein and the exhibits,
financial statements and schedules, as finally amended and revised, have
heretofore been delivered by the Company to you. Such registration statement,
herein referred to as the "Registration Statement," which shall be deemed to
include all information omitted therefrom in reliance upon Rule 430A and
contained in the Prospectus referred to below, has been declared effective by
the Commission under the Act and no post-effective amendment to the Registration
Statement has been filed as of the date of this Agreement. The form of
prospectus first filed by the Company with the Commission pursuant to Rule
424(b) and Rule 430A is herein referred to as the "Prospectus." Each preliminary
prospectus included in the Registration Statement prior to the time it becomes
effective is herein referred to as a "Preliminary Prospectus."

(ii) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Georgia, with
corporate power and authority to own its properties and conduct its business as
described in the Registration Statement; each of the subsidiaries of the Company
that conduct business and hold assets (collectively, the "Subsidiaries") has
been duly organized and is validly existing as a corporation in good standing
(to the extent that good standing is a concept recognized by such jurisdiction)
under the laws of the jurisdiction of its incorporation, with corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement; the

- 2 -
<PAGE> 3

Company and each of the Subsidiaries are duly qualified to transact business in
all jurisdictions in which the conduct of their business requires such
qualification, except to the extent that the failure to be so qualified would
not have a material adverse effect on the Company and the Subsidiaries taken as
a whole; the outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by the Company or another Subsidiary free and clear of all liens,
encumbrances and security interests; and no options, warrants or other rights to
purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.

(iii) The outstanding shares of Common Stock of the Company, including
all shares to be sold by the Selling Shareholder, have been duly authorized and
validly issued and are fully paid and non-assessable; the portion of the Shares
to be issued and sold by the Company have been duly authorized and when issued
and paid for as contemplated herein will be validly issued, fully-paid and
non-assessable; and no preemptive rights of shareholders exist with respect to
any of the Shares or the issue and sale thereof.

(iv) The Shares conform with the description thereof contained in the
Registration Statement.

(v) The Commission has not issued an order preventing or suspending
the use of any Preliminary Prospectus relating to the proposed offering of the
Shares nor instituted proceedings for that purpose. The Registration Statement
contains and the Prospectus and any amendments or supplements thereto in all
respects conform or will conform, as the case may be, to the requirements of,
the Act and the Rules and Regulations. Neither the Registration Statement nor
any amendment thereto, and neither the Prospectus nor any supplement thereto,
contains or will contain, as the case may be, any untrue statement of a material
fact or omits or will omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company makes no representations or warranties as to information
contained in or omitted from the Registration Statement or the Prospectus, or
any such amendment or supplement, in reliance upon, and in conformity with,
written information furnished to the Company by or on behalf of any Underwriter
through the Representatives, specifically for use in the preparation thereof.

(vi) The combined financial statements of the Company and each of its
subsidiaries, together with related notes and schedules as set forth in the
Registration Statement, present fairly in all material respects the financial
position and the results of operations of the Company and each of its
subsidiaries, taken as a whole, at the indicated dates and for the indicated
periods. Such financial statements have been prepared in accordance with
generally accepted principles of accounting and all adjustments necessary for a
fair presentation of results for such periods have been made. The selected and
summary financial, operating and statistical

- 3 -
<PAGE> 4

data included in the Registration Statement presents fairly in all material
respects the information shown therein and have been compiled on a basis
consistent with the financial statements presented therein.

(vii) There is no action or proceeding pending or, to the knowledge
of the Company, threatened against the Company or any of the Subsidiaries before
any court or administrative agency which might reasonably be expected to result
in any material adverse change in the business or financial condition of the
Company and of the Subsidiaries taken as a whole, except as set forth in the
Registration Statement.

(viii) The Company and the Subsidiaries have good and marketable
title to all of the properties and assets reflected in the financial statements
hereinabove described (or as described in the Registration Statement), subject
to no lien, mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements (or as described in the Registration
Statement) or which are not material. The Company and the Subsidiaries occupy
their leased properties under valid and binding leases with such exceptions as
are not material to the Company and the Subsidiaries taken as a whole. Such
leases conform to the descriptions thereof set forth in the Registration
Statement.

(ix) The Company and the Subsidiaries have filed all Federal, State
and foreign income tax returns which have been required to be filed and have
paid all taxes indicated by said returns and all assessments received by them or
any of them to the extent that such taxes have become due and are not being
contested in good faith.

(x) Since the respective dates as of which information is given in
the Registration Statement, as it may be amended or supplemented, there has not
been any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or otherwise,
of the Company and its Subsidiaries taken as a whole or the earnings, business
affairs, management, or business prospects of the Company and its Subsidiaries
taken as a whole, whether or not occurring in the ordinary course of business,
and there has not been any material transaction entered into by the Company or
the Subsidiaries, other than transactions in the ordinary course of business and
changes and transactions contemplated by the Registration Statement, as it may
be amended or supplemented. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the Registration Statement, as
it may be amended or supplemented.

(xi) Neither the Company nor any of the Subsidiaries is in default
under any agreement, lease, contract, indenture or other instrument or
obligation to which it is a party or by which it or any of its properties is
bound and which default is of material significance in respect of the business
or financial condition of the Company and the Subsidiaries taken as a whole. The
consummation of the transactions herein contemplated and the fulfillment of the
terms hereof will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a

- 4 -
<PAGE> 5

default under, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party, or of the Charter
or by-laws of the Company or any order, rule or regulation applicable to the
Company or any Subsidiary of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Company or any Subsidiary, except for such breaches that would not result in a
material adverse effect.

(xii) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") or may be necessary to
qualify the Shares for public offering by the Underwriters under State
securities or Blue Sky laws) has been obtained or made and is in full force and
effect.

(xiii) The Company and each of the Subsidiaries holds all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses, except where the failure to
possess such licenses, certificates and permits would not have a material
adverse effect; and, to the knowledge of the Company, neither the Company nor
any of the Subsidiaries has received notice of infringement of any patents,
patent rights, trade names, trademarks or copyrights, which infringement is
material to the business of the Company and the Subsidiaries taken as a whole.

(xiv) Arthur Andersen LLP, the firm that has certified certain of the
financial statements filed with the Commission as part of the Registration
Statement, are independent public accountants as required by the Act and the
Rules and Regulations.

(xv) The Company's application for designation of the Shares on the
Nasdaq Stock Market (National Market) (the "Nasdaq National Market") has been
approved.

(xvi) To the best of the Company's knowledge, there are no
affiliations or associations between any member of the National Association of
Securities Dealers, Inc. and any of the Company's officers, directors or 5% or
greater security holders, except as set forth in the Registration Statement or
as otherwise disclosed in writing to the Representatives.

(b) The Selling Shareholder represents and warrants as follows:

(i) The Selling Shareholder has and at the Closing Date and the
Option Closing Date, as the case may be (as such dates are hereinafter
defined) will have good and marketable title to the Option Shares to be
sold by the Selling Shareholder, free of any liens, encumbrances,
equities and claims, and full right, power and authority to effect the
sale and delivery of such Option Shares; and upon the delivery of and
payment for such Option Shares pursuant to this Agreement, good and
marketable title thereto, free of

- 5 -
<PAGE> 6

any liens, encumbrances, equities and claims, will be transferred to the
several Underwriters.

(ii) The consummation by the Selling Shareholder of the
transactions herein contemplated and the fulfillment by the Selling
Shareholder of the terms hereof will not result in a breach of any of the
terms and provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Selling Shareholder is a party, or of any order, rule or regulation
applicable to the Selling Shareholder of any court or of any regulatory
body or administrative agency or other governmental body having
jurisdiction over the Selling Shareholder.

(iii) The Selling Shareholder has not taken and will not take,
directly or indirectly, any action designed to, or which has constituted,
or which might reasonably be expected to cause or result in stabilization
or manipulation of the price of the Common Stock of the Company.

(iv) No offering, sale or other disposition of any Common Stock
of the Company, any options or warrants to purchase shares of Common
Stock or any securities convertible into or exchangeable for shares of
Common Stock will be made for a period of 180 days after the date of this
Agreement, directly or indirectly, by such Selling Shareholder otherwise
than hereunder or with the prior written consent of Alex. Brown & Sons
Incorporated.

(v) Without having undertaken to determine independently the
accuracy or completeness of either the representations and warranties of
the Company contained herein or the information contained in the
Registration Statement, the Selling Shareholder has no reason to believe
that the representations and warranties of the Company contained in this
Section 1 are not true and correct, has read the Registration Statement
and has no knowledge of any material fact, condition or information not
disclosed in the Registration Statement which has adversely affected or
may be reasonably likely to adversely affect the business of the Company
or any of the Subsidiaries; and the sale of the Option Shares by the
Selling Shareholder pursuant hereto is not prompted by any information
concerning the Company or any of the Subsidiaries which is not set forth
in the Registration Statement.

In order to document the Underwriters' compliance with the reporting and
withholding provisions of the Tax Equity and Fiscal Responsibility Act of 1982
and the Interest and Dividend Tax Compliance Act of 1983 with respect to the
transactions herein contemplated, the Selling Shareholder agrees to deliver to
you prior to or at the Closing Date a properly completed and executed United
States Treasury Department Form W-9 (or other applicable form or statement
specified by Treasury Department regulations in lieu thereof).

- 6 -
<PAGE> 7

2. Purchase, Sale and Delivery of the Firm Shares. On the basis of the
representations, warranties and covenants herein contained, and subject to the
conditions herein set forth, the Company agrees to sell to the Underwriters and
each Underwriter agrees, severally and not jointly, to purchase, at a price of
$_______ per share, the number of Firm Shares set forth opposite the name of
each Underwriter in Schedule I hereof, subject to adjustments in accordance with
Section 9 hereof.

Payment for the Firm Shares to be sold hereunder is to be made by wire
transfer of immediately available funds to a bank account designated by the
Company against delivery of certificates therefor to the Representatives for the
several accounts of the Underwriters. Such payment and delivery are to be made
at the offices of Alex. Brown & Sons Incorporated, One South Street, Baltimore,
Maryland, at 10:00 A.M., Baltimore time, on the third business day after the
date of this Agreement or at such other time and date not later than three
business days thereafter as you and the Company shall agree upon, such time and
date being herein referred to as the "Closing Date." (As used herein, "business
day" means a day on which the New York Stock Exchange is open for trading and on
which banks in New York are open for business and are not permitted by law or
executive order to be closed.) The certificates for the Firm Shares will be
delivered in such denominations and in such registrations as the Representatives
request in writing not later than the third full business day prior to the
Closing Date and will be made available for inspection by the Representatives at
least one business day prior to the Closing Date.

In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Selling
Shareholder hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in the first paragraph of this
Section 2. The option granted hereby may be exercised in whole or in part but
only once and at any time upon written notice given within 30 days after the
date of this Agreement, by you, as Representatives of the several Underwriters,
to the Selling Shareholder setting forth the number of Option Shares as to which
the several Underwriters are exercising the option, the names and denominations
in which the Option Shares are to be registered and the time and date at which
such certificates are to be delivered. The time and date at which certificates
for Option Shares are to be delivered shall be determined by the Representatives
but shall not be earlier than three nor later than 10 full business days after
the exercise of such option, nor in any event prior to the Closing Date (such
time and date being herein referred to as the "Option Closing Date"). If the
date of exercise of the option is three or more days before the Closing Date,
the notice of exercise shall set the Closing Date as the Option Closing Date.
The option with respect to the Option Shares granted hereunder may be exercised
only to cover over-allotments in the sale of the Firm Shares by the
Underwriters. You, as Representatives of the several Underwriters, may cancel
such option at any time prior to its expiration by giving written notice of such
cancellation to the Company. To the extent, if any, that the option is
exercised, payment for the Option Shares shall be made on the Option Closing
Date by wire transfer of immediately available funds to a bank account
designated by the Selling

- 7 -
<PAGE> 8

Shareholder against delivery of certificates therefor at the offices of Alex.
Brown & Sons Incorporated, One South Street, Baltimore, Maryland.

3. Offering by the Underwriters. It is understood that the several
Underwriters are to make a public offering of the Firm Shares as soon as the
Representatives deem it advisable to do so. The Firm Shares are to be initially
offered to the public at the initial public offering price set forth in the
Prospectus. The Representatives may from time to time thereafter change the
public offering price and other selling terms. To the extent, if at all, that
any Option Shares are purchased pursuant to Section 2 hereof, the Underwriters
will offer them to the public on the foregoing terms.

It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.

4. Covenants of the Company. The Company covenants and agrees with the
several Underwriters and the Selling Shareholder that:

(a) The Company will (i) prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a Prospectus containing
information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rule 430A of the Rules and Regulations, and (ii) not
file any amendment to the Registration Statement or supplement to the Prospectus
of which the Representatives shall not previously have been advised and
furnished with a copy or to which the Representatives shall have reasonably
objected in writing or which is not in compliance with the Rules and Regulations
and (iii) file on a timely basis all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
subsequent to the date of the Prospectus and prior to the termination of the
offering of the Shares by the Underwriters.

(b) The Company will advise the Representatives promptly of any request
of the Commission for amendment of the Registration Statement or for supplement
to the Prospectus or for any additional information, or of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the use of the Prospectus or of the institution of any proceedings
for that purpose, and the Company will use its best efforts to prevent the
issuance of any such stop order preventing or suspending the use of the
Prospectus and to obtain as soon as possible the lifting thereof, if issued.

(c) The Company will cooperate with the Representatives in endeavoring to
qualify the Shares for sale under the securities laws of such jurisdictions as
the Representatives may reasonably have designated in writing and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided the Company shall not be required
to qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The

- 8 -
<PAGE> 9

Company will, from time to time, prepare and file such statements, reports, and
other documents, as are or may be required to continue such qualifications in
effect for so long a period as the Representatives may reasonably request for
distribution of the Shares.

(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary Prospectus
as the Representatives may reasonably request. The Company will deliver to, or
upon the order of, the Representatives during the period when delivery of a
Prospectus is required under the Act, as many copies of the Prospectus in final
form, or as thereafter amended or supplemented, as the Representatives may
reasonably request. The Company will deliver to the Representatives at or before
the Closing Date, two signed copies of the Registration Statement and all
amendments thereto including all exhibits filed therewith, and will deliver to
the Representatives such number of copies of the Registration Statement, but
without exhibits, and of all amendments thereto, as the Representatives may
reasonably request.

(e) If during the period in which a prospectus is required by law to be
delivered by an Underwriter or dealer any event shall occur as a result of
which, in the judgment of the Company or in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances existing
at the time the Prospectus is delivered to a purchaser, not misleading, or, if
it is necessary at any time to amend or supplement the Prospectus to comply with
any law, the Company promptly will prepare and file with the Commission an
appropriate amendment to the Registration Statement or supplement to the
Prospectus so that the Prospectus as so amended or supplemented will not, in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with law.

(f) The Company will make generally available to its security holders, as
soon as it is practicable to do so, but in any event not later than 15 months
after the effective date of the Registration Statement, an earnings statement
(which need not be audited) in reasonable detail, covering a period of at least
12 consecutive months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 of the Rules and Regulations and will advise you
in writing when such statement has been so made available.

(g) The Company will, for a period of five years from the Closing Date,
deliver to the Representatives copies of annual reports and copies of all other
documents, reports and information furnished by the Company to its stockholders
or filed with any securities exchange pursuant to the requirements of such
exchange or with the Commission pursuant to the Act or the Securities Exchange
Act of 1934, as amended. The Company will deliver to the Representatives similar
reports with respect to significant subsidiaries, as that term is defined in the
Rules and Regulations, which are not consolidated in the Company's financial
statements.

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<PAGE> 10

(h) No offering, sale or other disposition of any Common Stock of the
Company, any options or warrants to purchase shares of Common Stock or any
securities convertible into or exchangeable for shares of Comon Stock will be
made for a period of 180 days after the date of this Agreement, directly or
indirectly, by the Company otherwise than hereunder or with the prior written
consent of the Representatives except that the Company may, without such
consent, (i) issue stock options and shares of Common Stock pursuant to the
Stock Option Plan and the Employee Stock Purchase Plan which are described in
the Registration Statement and (ii) issue shares of Common Stock as
consideration for future acquisitions, provided that each recipient of such
shares in any such acquisition agrees in writing to be subject to the transfer
restrictions imposed pursuant to this Section 4(h) to the extent the 180 day
period following the date of this Agreement has not expired.

5. Costs and Expenses. The Company will pay all costs, expenses and fees
incident to the performance of the obligations of the Sellers under this
Agreement, including, without limiting the generality of the foregoing, the
following: accounting fees of the Company; the fees and disbursements of counsel
for the Company and the Selling Shareholder; the cost of printing and delivering
to, or as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, and any supplements or amendments
thereto; the filing fees of the Commission; the filing fees of the NASD; and the
expenses, including the fees and disbursements of counsel for the Underwriters,
incurred in connection with the qualification of the Shares under State
securities or Blue Sky laws. To the extent, if at all, that the Selling
Shareholder engages special legal counsel to represent him in connection with
this offering, the fees and expenses of such counsel shall be borne by the
Selling Shareholder. Any transfer taxes imposed on the sale of the Shares to the
several Underwriters will be paid by the Sellers pro rata. The Sellers shall
not, however, be required to pay for any of the Underwriters' expenses (other
than those related to qualification under State securities or Blue Sky laws)
except that, if this Agreement shall not be consummated because the conditions
in Section 7 hereof are not satisfied, or because this Agreement is terminated
by the Representatives pursuant to Section 6 hereof, or by reason of any
failure, refusal or inability on the part of the Company or the Selling
Shareholder to perform any undertaking or satisfy any condition of this
Agreement or to comply with any of the terms hereof on their part to be
performed, unless such failure to satisfy said condition or to comply with said
terms be due to the default or omission of any Underwriter, then the Company
shall reimburse the several Underwriters for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Shares or in
contemplation of performing their obligations hereunder; but the Company and the
Selling Shareholder shall not in any event be liable to any of the several
Underwriters for damages on account of loss of anticipated profits from the sale
by them of the Shares.

6. Conditions of Obligations of the Underwriters. The several obligations
of the Underwriters to purchase the Firm Shares on the Closing Date and the
Option Shares, if any, on the Option Closing Date are subject to the accuracy,
as of the Closing Date or the Option Closing

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<PAGE> 11

Date, as the case may be, of the representations and warranties of the Company
and the Selling Shareholder contained herein, and to the performance by the
Company and the Selling Shareholder of their covenants and obligations hereunder
and to the following additional conditions:

(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and no
proceedings for that purpose shall have been taken or, to the knowledge of the
Company or the Selling Shareholder, shall be contemplated by the Commission.

(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of King & Spalding, counsel
for the Company and the Selling Shareholder, dated the Closing Date or the
Option Closing Date, as the case may be, addressed to the Underwriters to the
effect that:

(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of Georgia,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; each of the Subsidiaries has
been duly organized and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation (to the
extent "good standing" is a concept recognized by such jurisdiction),
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus; the Company and each of the
Subsidiaries are duly qualified to transact business in all jurisdictions
in which the conduct of their business requires such qualification,
except where the failure to be so qualified would not have a material
adverse effect upon the business of the Company and the Subsidiaries
taken as a whole; and the outstanding shares of capital stock of each of
the Subsidiaries have been duly authorized and validly issued, are fully
paid and non-assessable and are owned by the Company or a Subsidiary;
and, to the best of such counsel's knowledge, the outstanding shares of
capital stock of each of the Subsidiaries is owned free and clear of all
liens, encumbrances and security interests, and no options, warrants or
other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into any shares of capital stock
or of ownership interests in the Subsidiaries are outstanding.

(ii) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus; the
authorized shares of its Common Stock have been duly authorized; the
outstanding shares of its Common Stock, including the Shares to be sold
by the Selling Shareholder, have been duly authorized and validly issued
and are fully paid and non-assessable; all of the Shares conform to the
description thereof contained in the Prospectus; the certificates for the
Shares comply with the requirements of Georgia law; the shares of Common
Stock, including the Option Shares, if any, to be sold by the Company
pursuant to this Agreement have been duly authorized

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<PAGE> 12

and will be validly issued, fully paid and non-assessable when issued and
paid for as contemplated by this Agreement; and no preemptive rights of
shareholders exist with respect to any of the Shares or the issue and
sale thereof.

(iii) The Registration Statement has become effective under the
Act and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending or
threatened under the Act.

(iv) The Registration Statement, all Preliminary Prospectuses,
the Prospectus and each amendment or supplement thereto comply as to form
in all material respects with the requirements of the Act and the
applicable rules and regulations thereunder (except that such counsel
need express no opinion as to the financial statements, schedules and
other financial and statistical information included therein).

(v) The statements under the captions "Business - Government
Regulation," "Management Employment Agreements," "Management - Employee
Benefits Plans," "Description of Capital Stock" and "Shares Eligible for
Future Sale" in the Prospectus, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present the information called for
with respect to such documents and matters.

(vi) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus which are not
so filed or described as required, and such contracts and documents as
are summarized in the Registration Statement or the Prospectus are fairly
summarized in all material respects.

(vii) Such counsel knows of no material legal proceedings pending
or threatened against the Company or any of the Subsidiaries except as
set forth in the Prospectus.

(viii) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will not
conflict with or result in a breach of any of the terms or provisions of,
or constitute a default under, the Charter or by-laws of the Company, or
any agreement or instrument known to such counsel to which the Company or
any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries may be bound.

(ix) This Agreement has been duly executed and delivered by the
Company.

(x) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body is necessary in connection with the execution and
delivery of this Agreement and the consummation of the transactions
herein contemplated (other than as may be required by the National

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<PAGE> 13

Association of Securities Dealers, Inc. or as required by State
securities and Blue Sky laws as to which such counsel need express no
opinion) except such as have been obtained or made, specifying the same.

(xi) This Agreement has been duly authorized, executed and
delivered on behalf of the Selling Shareholder.

(xii) The Selling Shareholder has full legal right, power and
authority, and any approval required by law (other than as required by
State securities and Blue Sky laws as to which such counsel need express
no opinion), to sell, assign, transfer and deliver the portion of the
Shares to be sold by the Selling Shareholder.

(xiii) The Underwriters (assuming that they are bona fide
purchasers within the meaning of the Uniform Commercial Code) have
acquired good and marketable title to the Shares being sold by the
Selling Shareholder on the Closing Date, free and clear of any adverse
claim.

In rendering such opinion, King & Spalding may rely as to matters
governed by the laws of states other than Georgia or Federal laws, and as to
matters governed by the laws of the United Kingdom or other foreign
jurisdictions, on local counsel in such jurisdictions, provided that in each
case King & Spalding shall state that they believe that they and the
Underwriters are justified in relying on such other counsel. In addition to the
matters set forth above, such opinion shall also include a statement to the
effect that nothing has come to the attention of such counsel which leads them
to believe that the Registration Statement, as of the time it became effective
under the Act, the Prospectus or any amendment or supplement thereto, on the
date it was filed pursuant to Rule 424(b) and the Registration Statement and the
Prospectus, or any amendment or supplement thereto, as of the Closing Date or
the Option Closing Date, as the case may be, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading (except that such
counsel need express no view as to financial statements, schedules and other
financial or statistical information included therein). With respect to such
statement, King & Spalding may state that their belief is based upon the
procedures set forth therein, but is without independent check and verification.

(c) The Representatives shall have received from Piper & Marbury L.L.P.,
counsel for the Underwriters, an opinion dated the Closing Date or the Option
Closing Date, as the case may be, substantially to the effect specified in
subparagraphs (ii), (iii), (iv), (ix) and (xi) of Paragraph (b) of this Section
6, and that the Company is a validly organized and existing corporation under
the laws of the State of Georgia. In rendering such opinion Piper & Marbury
L.L.P. may rely as to all matters governed other than by the laws of the State
of Maryland or Federal laws on the opinion of counsel referred to in paragraph
(b) of this Section 6. In addition to the matters set forth above, such opinion
shall also include a statement to the effect that nothing has come to the
attention of such counsel which leads them to believe that the

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<PAGE> 14

Registration Statement, as of the time it became effective under the Act, and
the Prospectus or any amendment or supplement thereto, on the date it was filed
pursuant to Rule 424(b) and the Registration Statement and the Prospectus, or
any amendment or supplement thereto, as of the Closing Date or the Option
Closing Date, as the case may be, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading (except that such counsel need
express no view as to financial statements, schedules and other financial or
statistical information included therein). With respect to such statement, Piper
& Marbury L.L.P. may state that their belief is based upon the procedures set
forth therein, but is without independent check and verification.

(d) The Representatives shall have received at or prior to the Closing
Date from Piper & Marbury L.L.P. a memorandum or summary, in form and substance
satisfactory to the Representatives, with respect to the qualification for
offering and sale by the Underwriters of the Shares under the State securities
or Blue Sky laws of such jurisdictions as the Representatives may reasonably
have designated to the Company.

(e) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a signed letter from Arthur Andersen
LLP, dated the Closing Date or the Option Closing Date, as the case may be,
which shall confirm, on the basis of a review in accordance with the procedures
set forth in the letter signed by such firm and dated and delivered to the
Representatives on the date hereof that nothing has come to their attention
during the period from the date five days prior to the date hereof, to a date
not more than five days prior to the Closing Date or the Option Closing Date, as
the case may be, which would require any change in their letter dated the date
hereof if it were required to be dated and delivered on the Closing Date or the
Option Closing Date, as the case may be. All such letters shall be in form and
substance satisfactory to the Representatives.

(f) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of the
Co-Chief Executive Officers and the Chief Financial Officer of the Company to
the effect that, as of the Closing Date or the Option Closing Date, as the case
may be, each of them severally represents as follows:

(i) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have been
taken or are, to his knowledge, contemplated by the Commission.

(ii) He does not know of any litigation instituted or threatened
against the Company of a character required to be disclosed in the
Registration Statement which is not so disclosed; he does not know of any
material contract required to be filed as an exhibit to the Registration
Statement which is not so filed; and the representations and

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<PAGE> 15

warranties of the Company contained in Section 1 hereof are true and
correct as of the Closing Date or the Option Closing Date, as the case
may be.

(iii) He has carefully examined the Registration Statement and the
Prospectus and, in his opinion, as of the effective date of the
Registration Statement, the statements contained in the Registration
Statement did not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading and, in his opinion, since the effective date of the
Registration Statement, no event has occurred which should have been set
forth in a supplement to or an amendment of the Prospectus which has not
been so set forth in such supplement or amendment.

(g) The Company and the Selling Shareholder shall have furnished to the
Representatives such further certificates and documents confirming the
representations and warranties contained herein and related matters as the
Representatives may reasonably have requested.

(h) The Firm Shares, and Option Shares, if any, have been approved for
listing upon official notice of issuance on the Nasdaq National Market.

The opinions and certificates mentioned in this Agreement shall be deemed
to be in compliance with the provisions hereof only if they are in all material
respects reasonably satisfactory to the Representatives and to Piper & Marbury
L.L.P., counsel for the Underwriters.

If any of the conditions hereinabove provided for in this Section 6 shall
not have been fulfilled when and as required by this Agreement to be fulfilled,
the obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company and the Selling Shareholder of such
termination in writing or by telegram at or prior to the Closing Date or the
Option Closing Date, as the case may be.

In such event, the Selling Shareholder, the Company and the Underwriters
shall not be under any obligation to each other (except to the extent provided
in Sections 5 and 8 hereof).

7. Conditions of the Obligations of the Sellers. The obligations of the
Sellers to sell and deliver the portion of the Shares required to be delivered
as and when specified in this Agreement are subject to the conditions that at
the Closing Date or the Option Closing Date, as the case may be, no stop order
suspending the effectiveness of the Registration Statement shall have been
issued and be in effect or proceedings therefor initiated or threatened.

8. Indemnification

(a) The Company and the Selling Shareholder, jointly and severally, agree
to indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages or liabilities to

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<PAGE> 16

which such Underwriter or such controlling person may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto, or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter and
each such controlling person for any legal or other expenses reasonably incurred
by such Underwriter or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that the Company and the Selling Shareholder will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission made in the Registration Statement,
any Preliminary Prospectus, the Prospectus, or such amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by or through the Representatives specifically for use in the
preparation thereof. In no event, however, shall the liability of the Selling
Shareholder for indemnification under this Section 8(a) exceed the net proceeds
received by the Selling Shareholder from the Underwriters pursuant to this
Agreement. This indemnity agreement will be in addition to any liability which
the Company or the Selling Shareholder may otherwise have.

(b) Each Underwriter will indemnify and hold harmless the Company, each
of its directors, each of its officers who have signed the Registration
Statement, the Selling Shareholder, and each person, if any, who controls the
Company or the Selling Shareholder within the meaning of the Act, against any
losses, claims, damages or liabilities to which the Company or any such
director, officer, Selling Shareholder or controlling person may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made; and
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, Selling Shareholder or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability, action or proceeding; provided, however, that each Underwriter will
be liable in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission has been
made in the Registration Statement, any Preliminary Prospectus, the Prospectus
or such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which such Underwriter may otherwise have.

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<PAGE> 17

(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to this Section 8, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing. No indemnification provided for in Section
8(a) or (b) shall be available to any party who shall fail to give notice as
provided in this Section 8(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice, but the failure to give such
notice shall not relieve the indemnifying party or parties from any liability
which it or they may have to the indemnified party for contribution or otherwise
than on account of the provisions of Section 8(a) or (b). In case any such
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party and shall
pay as incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel at its own expense. Notwithstanding the foregoing, the
indemnifying party shall pay as incurred the fees and expenses of the counsel
retained by the indemnified party in the event (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the indemnifying party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees
and expenses of more than one separate firm for all such indemnified parties.
Such firm shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) and by the Company and the Selling
Shareholder in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under Section 8(a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Selling Shareholder on the
one hand and the Underwriters on the other from the offering of the Shares. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under Section 8(c) above, then each indemnifying party shall

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<PAGE> 18

contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and the Selling Shareholder on the one hand
and the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholder on the one hand and the Underwriters on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholder bear to
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Selling Shareholder on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), (i) no Underwriter shall
be required to contribute any amount in excess of the underwriting discounts and
commissions applicable to the Shares purchased by such Underwriter, (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation and (iii) Selling Shareholder shall
not be required to contribute any amount in excess of the net proceeds received
by the Selling Shareholder from the Underwriters in the offering. The
Underwriters' obligations in this Section 8(d) to contribute are several in
proportion to their respective underwriting obligations and not joint.

(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment thereto,
each party against whom contribution may be sought under this Section 8 hereby
consents to the jurisdiction of any court having jurisdiction over any other
contributing party, agrees that process issuing from such court may be served
upon him or it by any other contributing party and consents to the service of
such process and agrees that any other contributing party may join him or it as
an additional defendant in any such proceeding in which such other contributing
party is a party.

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<PAGE> 19

9. Default by Underwriters. If on the Closing Date or the Option Closing
Date, as the case may be, any Underwriter shall fail to purchase and pay for the
portion of the Shares which such Underwriter has agreed to purchase and pay for
on such date (otherwise than by reason of any default on the part of the Company
or the Selling Shareholder), you, as Representatives of the Underwriters, shall
use your best efforts to procure within 24 hours thereafter one or more of the
other Underwriters, or any others, to purchase from the Company and the Selling
Shareholder such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter or Underwriters failed to purchase. If during such 24
hours you, as such Representatives, shall not have procured such other
Underwriters, or any others, to purchase the Firm Shares or Option Shares, as
the case may be, agreed to be purchased by the defaulting Underwriter or
Underwriters, then (a) if the aggregate number of shares with respect to which
such default shall occur does not equal or exceed 10% of the Firm Shares or
Option Shares, as the case may be, covered hereby, the other Underwriters shall
be obligated, severally, in proportion to the respective numbers of Firm Shares
or Option Shares, as the case may be, which they are obligated to purchase
hereunder, to purchase the Firm Shares or Option Shares, as the case may be,
which such defaulting Underwriter or Underwriters failed to purchase, or (b) if
the aggregate number of shares of Firm Shares or Option Shares, as the case may
be, with respect to which such default shall occur exceeds 10% of the Firm
Shares or Option Shares, as the case may be, covered hereby, the Company and the
Selling Shareholder or you as the Representatives of the Underwriters will have
the right, by written notice given within the next 24-hour period to the parties
to this Agreement, to terminate this Agreement without liability on the part of
the non-defaulting Underwriters or of the Company or of the Selling Shareholder
except to the extent provided in Section 8 hereof. In the event of a default by
any Underwriter or Underwriters, as set forth in this Section 9, the Closing
Date or Option Closing Date, as the case may be, may be postponed for such
period, not exceeding seven days, as you, as Representatives, may determine in
order that the required changes in the Registration Statement or in the
Prospectus or in any other documents or arrangements may be effected. The term
"Underwriter" includes any person substituted for a defaulting Underwriter. Any
action taken under this Section 9 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.

10. Notices. All communications hereunder shall be in writing and, except
as otherwise provided herein, will be mailed, delivered or telegraphed and
confirmed as follows: if to the Underwriters, to Alex. Brown & Sons
Incorporated, One South Street, Baltimore, Maryland 21202, Attention: Mark A.
Goodman; if to the Company or the Selling Shareholder, to AHL Services, Inc.,
3353 Peachtree Road, NE, Suite 1120, North Tower, Atlanta Georgia 30326,
Attention: Frank A. Argenbright, Jr., Chairman and Co-Chief Executive Officer.

11. Termination. This Agreement may be terminated by you by notice to the
Sellers as follows:

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<PAGE> 20

(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters, or (ii) 11:30 A.M. on
the first business day following the date of this Agreement;

(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or any
development involving a prospective material adverse change in or affecting the
condition, financial or otherwise, of the Company and its Subsidiaries taken as
a whole or the earnings, business affairs, management or business prospects of
the Company and its Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, (ii) any outbreak of hostilities or other national
or international calamity or crisis or change in economic or political
conditions if the effect of such outbreak, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment, make
the offering or delivery of the Shares impracticable, (iii) suspension of
trading in securities on the New York Stock Exchange or the American Stock
Exchange or limitation on prices (other than limitations on hours or numbers of
days of trading) for securities on either such Exchange, (iv) the enactment,
publication, decree or other promulgation of any federal or state statute,
regulation, rule or order of any court or other governmental authority which in
your reasonable opinion materially and adversely affects or will materially or
adversely affect the business or operations of the Company, (v) declaration of a
banking moratorium by either federal or New York State authorities, or (vi) the
taking of any action by any federal, state or local government or agency in
respect of its monetary or fiscal affairs which in your reasonable opinion has a
material adverse effect on the securities markets in the United States; or

This Agreement also may be terminated by you, by notice to the Seller, as
to any obligation of the Underwriters to purchase the Option Shares, upon the
occurrence at any time prior to the Option Closing Date of any of the events
described in subparagraph (b) above or as provided in Sections 6 and 9 of this
Agreement.

12. Successors. This Agreement has been and is made solely for the
benefit of the Underwriters, the Company and the Selling Shareholder and their
respective successors, executors, administrators, heirs and assigns, and the
officers, directors and controlling persons referred to herein, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Shares merely because of such purchase.

13. Miscellaneous. The reimbursement, indemnification and contribution
agreements contained in this Agreement and the representations, warranties and
covenants in this Agreement shall remain in full force and effect regardless of
(a) any termination of this Agreement, (b) any investigation made by or on
behalf of any Underwriter or controlling person thereof, or by or on

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<PAGE> 21

behalf of the Company or its directors or officers and (c) delivery of and
payment for the Shares under this Agreement.

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

This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Maryland.

If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Selling Shareholder, the
Company and the several Underwriters in accordance with its terms.

Very truly yours,

AHL SERVICES, INC.

By:
------------------------------------
Frank A. Argenbright, Jr.
Chaiman and Co-Chief Executive Officer

SELLING SHAREHOLDER

------------------------------
Frank A. Argenbright, Jr.

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<PAGE> 22

The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.

ALEX. BROWN & SONS INCORPORATED
THE ROBINSON-HUMPHREY COMPANY, INC.
As Representatives of the several Underwriters
listed on Schedule I

By ALEX. BROWN & SONS INCORPORATED

By:
---------------------------------------
Mark A. Goodman
Authorized Officer

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<PAGE> 23

SCHEDULE I

Schedule of Underwriters

<TABLE>
<CAPTION>
Number of Firm Shares
Underwriter to be Purchased
----------- ----------------------
<S> <C>
Alex. Brown & Sons Incorporated....................
The Robinson-Humphrey Company, Inc.................

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

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

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<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
March 17, 1997