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                    ALARMGUARD HOLDINGS, INC.




               PREFERRED STOCK PURCHASE AGREEMENT



                  Dated as of February 2, 1998

                       TABLE OF CONTENTS

                                                             Page

Article IDEFINITIONS                                            1
1.1  Definitions; Interpretation                                1

Article IIISSUANCE AND SALE OF PREFERRED STOCK                  6
2.1  Number of Shares and Price                                 6

Article IIICLOSING; CLOSING DELIVERIES                          6
3.1  Closing                                                    6
3.2  Payment for and Delivery of Preferred Shares               6

Article IVREPRESENTATIONS AND WARRANTIES OF THE COMPANY         7
4.1  Existence; Qualification; Subsidiaries                     7
4.2  Authorization and Enforceability; Issuance of Shares       7
4.3  Capitalization                                             8
4.4  Private Sale; Voting Agreements                            8
4.5  Financial Statements; Disclosure                           8
4.6  Absence of Certain Changes                                 9
4.7  Litigation                                                10
4.8  Licenses, Compliance with Law, Other Agreements, Etc.     11
4.9  Third-Party Approvals                                     11
4.10 No Undisclosed Liabilities                                11
4.11 Tangible Assets                                           11
4.12 Inventory                                                 11
4.13 Owned Real Property                                       11
4.14 Real Property Leases                                      12
4.15 Agreements                                                12
4.16 Intellectual Property                                     12
4.17 Employees                                                 12
4.18 ERISA; Employee Benefits                                  13
4.19 Environment, Health and Safety                            13
4.20 Transactions With Affiliates                              14
4.21 Taxes                                                     14
4.22 Other Investors                                           14
4.23 Year 2000 Representations                                 14
4.24                                                    Seniority     15
4.25                                           Investment Company     15
4.26                                                 Certain Fees     15
4.27                                       Solicitation Materials     15
4.28                                         Form S-3 Eligibility     16
4.29              Listing and Maintenance Requirements Compliance     16
4.30                 Registration Rights; Rights of Participation     16
4.31 Recent Results of Operations                              16
4.32                                       Small Business Matters     16

Article VREPRESENTATIONS AND WARRANTIES OF THE PURCHASERS      17
5.1  Authorization and Enforceability                          17
5.2  Government Approvals                                      17

Article VICOMPLIANCE WITH SECURITIES LAWS                      17
6.1  Investment Intent of Purchaser                            17
6.2  Status of Preferred Shares                                17
6.3  Sophistication and Financial Condition of Purchaser       17
6.4  Transfer of Preferred Shares and Conversion Shares        17
6.5  Exculpation Among Purchasers.                             19

Article VIICONDITIONS PRECEDENT                                19
7.1  Closing Deliveries to the Purchasers                      19
7.2  Closing Deliveries to the Company                         20

Article VIIICOVENANTS OF THE COMPANY                           20
8.1  Restricted Actions                                        20
8.2  Required Actions                                          21
8.3  Reservation of Common Stock                               23
8.4  Purchasers' Rights if Trading in Common Stock is Suspended
or Delisted.                                                   23
8.5                                               Use of Proceeds     23

Article IXSURVIVAL                                             24
9.1  Survival                                                  24

Article XINDEMNIFICATION                                       24
10.1 Indemnification                                           24

Article XIGENERAL PROVISIONS                                   25
11.1 Successors and Assigns                                    25
11.2 Entire Agreement                                          25
11.3 Notices                                                   25
11.4 Purchasers Fees and Expenses                              26
11.5 Amendment and Waiver                                      26
11.7 Counterparts                                              27
11.8 Headings                                                  27
11.9 Specific Performance                                      27
11.10                                         Remedies Cumulative     27
11.11                                               GOVERNING LAW     27
11.12                                No Third Party Beneficiaries     27
11.13                                                Severability     27




Schedule I     Purchasers
Exhibit A Amendment to the Certificate of Designations.
Exhibit B Financial Statements
Exhibit C Registration Rights Agreement
Exhibit D Opinion of Counsel
               PREFERRED STOCK PURCHASE AGREEMENT


     PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement")  dated
as  of  February  2,  1998 between Alarmguard Holdings,  Inc.,  a
Delaware  corporation (the "Company"), Advance Capital  Partners,
L.P.,  a  Delaware limited partnership, Advance Capital  Offshore
Partners,    L.P.,   a   Cayman   Islands   limited   partnership
(collectively,  "Advance"), and each of the other purchasers  set
forth on Schedule I hereto (with Advance, each a "Purchaser"  and
collectively the "Purchasers").

     The  Purchasers desire to purchase from the Company, and the
Company  desires to issue to the Purchasers, shares of  Series  A
Convertible  Preferred Stock $.0001 par value per  share  of  the
Company  (the  "Series  A Preferred") and  Series  B  Convertible
Preferred  Stock $.0001 par value per share of the  Company  (the
"Series B Preferred").

     In  consideration  of the mutual promises,  representations,
warranties, covenants and conditions set forth in this Agreement,
the parties hereto agree as follows:


                           Article I

                          DEFINITIONS

          I.1  Definitions; Interpretation.

          (a)  For purposes of this Agreement, the following
     terms have the indicated meanings:

          "Advance" has the meaning set forth in the recitals
hereof.

          "Advance Closing" has the meaning set forth in Section
3.1.

          "Advance Closing Date" has the meaning set forth in
Section 3.1.

          "Affiliate"  of  a person means any other  person  that
directly,  or  indirectly  through one  or  more  intermediaries,
controls, is controlled by, or is under common control with  such
person.

          "Certificate of Designations" means the Certificate  of
Designations designating the rights and preferences of the Series
A  Preferred  and  Series B Preferred adopted  by  the  Board  of
Directors of the Company and set forth as Exhibit A hereto.

          "Closing" has the meaning set forth in Section 3.1.

          "Closing  Date"  has the meaning set forth  in  Section
3.1.
          "Code"  means  the Internal Revenue Code  of  1986,  as
amended.

          "Common  Stock" means the common stock of the  Company,
par value $.0001 per share.

          "Company"  has  the meaning set forth in  the  recitals
hereof.

          "Confidential   Information"  means   any   information
concerning the Company's business other than information that (i)
was   already  known  to  the  Person  having  a  duty  to   keep
confidential such information on a nonconfidential basis prior to
the time of disclosure, (ii) is or becomes generally available to
the  public  through no act or omission of such Person  or  (iii)
becomes available to such Person on a nonconfidential basis  from
a   source  other  than  any  party  hereto  (or  any  agent   or
representative  thereof)  if  such  source  was   not   under   a
prohibition against disclosing the information to such Person.

          "Conversion  Shares"  means   shares  of  Common  Stock
issued or issuable upon conversion of Preferred Shares.

          "Credit  Agreement"  means that certain  Third  Amended
and  Restated Acquisition Credit and Term Loan Agreement  by  and
among   the   Company,  certain  Subsidiaries  of  the   Company,
BankBoston,  N.A.  as  Administrative  Agent,  General   Electric
Capital Corporation as Documentation Agent and the lenders  party
thereto,  as  the  same  may be amended,  restated,  modified  or
supplemented from time to time.

          "Current  Balance  Sheet" means the  unaudited  balance
sheet of the Company dated September 30, 1997.

          "Environmental  and  Safety  Requirements"  means   all
federal,   state,   local  and  foreign  statutes,   regulations,
ordinances  and other provisions having the force  or  effect  of
law,  all  judicial and administrative orders and determinations,
all  contractual obligations and all common law concerning public
health  and  safety, worker health and safety, and  pollution  or
protection  of the environment, including without limitation  all
those  relating  to  the  presence, use, production,  generation,
handling,    transportation,   treatment,   storage,    disposal,
distribution, labeling, testing, processing, discharge,  release,
threatened   release,  control,  or  cleanup  of  any   hazardous
materials, substances or wastes, chemical substances or mixtures,
pesticides, pollutants, contaminants, toxic chemicals,  petroleum
products  or  by-products,  asbestos, polychlorinated  biphenyls,
noise or radiation.

          "ERISA"  means the Employee Retirement Income  Security
Act of 1974, as amended.

          "Exchange  Act"  means the Securities Exchange  Act  of
1934, as amended.

          "Financial Statements" means (i) the unaudited  balance
sheets  of the Company for the quarterly periods ended  June  30,
1997  and  September 30, 1997, each as included  in  a  quarterly
report of the Company on Form 10-Q as filed with the SEC pursuant
to the Exchange Act and the audited balance sheet of Triton Group
Ltd.  dated  March 31, 1997 as included in the annual  report  of
Triton Group Ltd. (a predecessor to the Company) on Form 10-K  as
filed  with the SEC pursuant to the Exchange Act and the  related
unaudited  and audited, as applicable, statements of  income  and
consolidated  cash flow for the quarterly and fiscal year-to-date
periods  then ended, each as included in the Company's applicable
quarterly report or annual report on Form 10-Q and Form 10-K,  as
applicable,  as filed with the SEC pursuant to the Exchange  Act,
and   (ii)  the  unaudited  balance  sheet  of  Security  Systems
Holdings, Inc. for the quarterly period ended March 31, 1997  and
the  audited   balance sheet of Security Systems  Holdings,  Inc.
dated December 31, 1996 and the related unaudited and audited, as
applicable, statements of income and consolidated cash  flow  for
the quarterly and fiscal year-to-date periods then ended, all  of
which are attached as Exhibit B hereto.

          "Financing" means the purchase of Preferred  Shares  by
the SBIC Holders hereunder.

          "GAAP"   means   United   States   generally   accepted
accounting   principles  as  in  effect  from   time   to   time,
consistently applied.

          "Governmental Agency" means any federal, state,  local,
foreign    or   other   governmental   agency,   instrumentality,
commission,  authority,  board or body  and  the  American  Stock
Exchange.

          "includes" and "including" mean includes and including,
without limitation.

          "Intellectual  Property"  means  all  patents,   patent
applications and inventions; all trademarks, service marks, trade
dress,   trade  names  and  corporate  names  and  all   goodwill
associated   therewith;   all  copyrights;   all   registrations,
applications  and  renewals for any of the foregoing;  all  trade
secrets,   Confidential  Information,  know-how,  technical   and
computer  data,  documentation and software, financial,  business
and  marketing plans, customer and supplier lists and  all  other
intellectual  property  rights;  and  all  copies  and   tangible
embodiments of the foregoing.

          "IRS" means the Internal Revenue Service.

          "knowledge"  or  "know" when used with respect  to  the
Company  means  the  knowledge of the senior  management  of  the
Company,  or  any  other  management  personnel  that   has   had
significant  involvement  in  the business  and  affairs  of  the
Company.

          "Liability" means any liability or obligation  (whether
absolute or contingent, liquidated or unliquidated or due  or  to
become due).

          "Lien"  means  any  lien,  mortgage,  pledge,  security
interest, restriction, charge or other encumbrance.

          "Material  Adverse Change" means any  material  adverse
change  in  the  business,  condition (financial  or  otherwise),
prospects  or  results  of operations  of  the  Company  and  its
Subsidiaries taken as a whole.

          "Material  Adverse Effect" means any  material  adverse
effect  on  (i) the business, condition (financial or otherwise),
prospects  or  results  of operations  of  the  Company  and  its
Subsidiaries   taken  as  a  whole,  or  (ii)  the   transactions
contemplated hereby or by the Related Documents.

          "Ordinary Course of Business" means the ordinary course
of business consistent with past practice (including with respect
to quantity, quality and frequency).

          "Permitted Liens" means (i) liens for taxes not yet due
and  taxes  for which adequate provision is made in  the  Current
Balance Sheet, (ii) purchase money security interests in supplies
and  equipment, (iii) precautionary liens filed by  lessors  with
respect  to  leased equipment, (iv) encumbrances  which  are  not
substantial in amount, do not materially detract from  the  value
of  the property subject thereto and do not materially impair the
use  of  the  property subject thereto or the  operation  of  the
Company's business, and (v) liens securing the obligations  under
the  Credit  Agreement  and the other documents,  agreements  and
instruments executed in connection therewith.

          "Person"  means  any  individual,  partnership,   joint
venture, corporation, trust, unincorporated organization or other
entity.

          "Plan"  means any employee benefit plan (as defined  in
Section  3(3)  of  ERISA), subject to Title IV of  ERISA  or  the
minimum  funding  requirements  of  Section  412  of  the   Code,
maintained  or contributed to by the Company, its predecessor  or
any   Subsidiary   at  any  time  during  the  5-calendar   years
immediately preceding the date of this Agreement.

          "Preferred Shares" has the meaning set forth in Section
2.1.

          "Registration Rights Agreement" means the  Registration
Rights  Agreement between the Company and the Purchasers  in  the
form of Exhibit C hereto.

          "Related Documents" means all documents and instruments
to  be executed or adopted by the Company in connection herewith,
including  the Certificate of Designations, the Preferred  Shares
and the Registration Rights Agreement.

          "SBA"   means   the   United  States   Small   Business
Administration, and any successor agency performing the functions
thereof.

          "SBIC"   means  a  Small  Business  Investment  Company
licensed by the SBA under the SBIC Act.

          "SBIC  Act" means the Small Business Investment Act  of
1958, as amended.

          "SBIC  Holders"  means  IBJS  Capital  Corporation  and
Exeter Capital Partners IV, L.P.

          "SBIC   Regulations"  means  the  SBIC  Act   and   the
regulations issued by the SBA thereunder, codified at Title 13 of
the Code of Federal Regulations ("13 CFR"), Parts 107 and 121.

          "SEC" means the Securities and Exchange Commission.

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

          "Series A Preferred" has the meaning set forth  in  the
recitals hereof.

          "Series B Preferred" has the meaning set forth  in  the
recitals hereof.

          "Subsidiary"   means   any  corporation,   partnership,
association  or  other  business  entity  of  which  (i)   if   a
corporation,  a majority of the total voting power of  shares  of
stock   entitled  (without  regard  to  the  occurrence  of   any
contingency)  to vote in the election of directors,  managers  or
trustees thereof is at the time owned or controlled, directly  or
indirectly,  by the Company or (ii) if a partnership, association
or  other business entity, a majority of the partnership or other
similar  ownership  interest thereof is  at  the  time  owned  or
controlled, directly or indirectly, by the Company.  For purposes
hereof,  the Company shall be deemed to have a majority ownership
interest  in a partnership, association or other business  entity
if  the  Company, directly or indirectly, is allocated a majority
of  partnership,  association or other business entity  gains  or
losses,  or  is  or  controls the managing  director  or  general
partner  of  such  partnership,  association  or  other  business
entity.

          "Tax"  means  any  federal, state,  local,  or  foreign
income,  gross  receipts, license, payroll,  employment,  excise,
severance,   stamp,   occupation,  premium,   windfall   profits,
environmental  (including taxes under Code 59A), customs  duties,
capital  stock, franchise, profits, withholding, social  security
(or  similar), unemployment, disability, real property,  personal
property,  sales,  use,  transfer,  registration,  value   added,
alternative  or add-on minimum, estimated, or other  tax  of  any
kind  whatsoever,  including any interest, penalty,  or  addition
thereto, whether disputed or not.

          "Tax  Returns"  means any return, declaration,  report,
claim for refund, or information return or statement relating  to
Taxes,   including  any  schedule  or  attachment  thereto,   and
including any amendment thereof.


          (b)  The words "herein", "hereof" and "hereunder" refer
     to  this  Agreement  as a whole and not  to  any  particular
     article, section or other subdivision of this Agreement.


                           Article II

              ISSUANCE AND SALE OF PREFERRED STOCK

          II.1  Number  of Shares and Price.  On  the  terms  and
subject to the conditions of this Agreement, at the Closing,  the
Company shall issue to the Purchasers, 27,750 shares of Series  A
Preferred  and  5,000 shares of Series B Preferred (collectively,
with the Shares of Series A Preferred to be issued to Advance  at
the Advance Closing, the "Preferred Shares") for a purchase price
of  $1,000 per share.  On the terms and subject to the conditions
of  this  Agreement, at the Advance Closing,  the  Company  shall
issue  to  Advance,  7,250 shares of Series  A  Preferred  for  a
purchase  price of $1,000 per share.  Each Purchaser's obligation
to   purchase  the  number  of  Preferred  Shares  opposite  such
Purchaser's  name on Schedule I hereto shall be  subject  to  the
prior  or  simultaneous purchase by each other  Purchaser  (other
than  Advance)  of the number of Preferred Shares  opposite  such
Purchaser's name on Schedule I hereto.


                          Article III

                  CLOSING; CLOSING DELIVERIES

          III.1      Closing.   The closing of  the  transactions
contemplated  hereby (the "Closing") shall take  place  at  10:00
a.m. on February 2, 1998, at the offices of Kirkland & Ellis, New
York,  New York or at such other time, place and/or date as shall
be  agreed upon by the parties hereto except that the closing  of
the  issuance  and  sale  of Preferred  Shares  to  Advance  (the
"Advance Closing") shall take place at 10:00 a.m. on February 13,
1998 or on such other date as shall be agreed upon by the Company
and  Advance.  The date upon which the Closing occurs is referred
to  herein  as  the "Closing Date" and the date  upon  which  the
Advance  Closing  occurs is referred to herein  as  the  "Advance
Closing Date".

          III.2     Payment for and Delivery of Preferred Shares.
At  the  Closing,  the Company shall issue  and  deliver  to  the
Purchasers,  stock  certificates for the  Preferred  Shares  duly
registered in the name of each Purchaser, against payment by such
Purchaser, by wire transfer of immediately-available funds to the
account designated by the Company, of the purchase price therefor
set  forth  in Section 2.1.  At the Advance Closing, the  Company
shall  issue  and deliver to Advance stock certificates  for  the
Preferred Shares duly registered in the name of Advance,  against
payment  by  Advance,  by wire transfer of  immediately-available
funds  to  the account designated by the Company, of the purchase
price therefor set forth in Section 2.1.


                           Article IV

         REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          The  Company  hereby represents and  warrants  to  each
Purchaser as follows:

          IV.1   Existence;  Qualification;  Subsidiaries.    The
Company  and  each  Subsidiary is a corporation  duly  organized,
validly existing and in good standing under the laws of the state
of  its  incorporation and has full corporate power and authority
to conduct its business and own and operate its properties as now
conducted,  owned  and  operated.  The  copies  of  the  Restated
Certificate of Incorporation and By-Laws of the Company  and  all
amendments  thereto  previously delivered to the  Purchasers  are
true, correct and complete copies of such documents.  The Company
and  each  Subsidiary  is  licensed or  qualified  as  a  foreign
corporation  and  is in good standing in all jurisdictions  where
such  person  is required to be so licensed or qualified,  except
where  the  failure  to  be so licensed,  qualified  or  in  good
standing would not have a Material Adverse Effect.  Except as set
forth  on Schedule 4.1, the Company has no Subsidiaries and  owns
no  capital  stock or other securities of, and has not  made  any
other  investment in, any other entity.  All of the issued shares
of  capital  stock of each Subsidiary have been duly and  validly
authorized and issued, are fully paid and non-assessable and  are
owned  directly or indirectly by the Company, free and  clear  of
all  liens,  encumbrances, equities or adverse claims other  than
liens securing the obligations under the Credit Agreement.

          IV.2  Authorization  and  Enforceability;  Issuance  of
Shares.

          (a)   The Company has full power and authority and  has
taken all required corporate and other action necessary to permit
it  to  execute  and  deliver  this  Agreement  and  the  Related
Documents  and to carry out the terms hereof and thereof  and  to
issue  and deliver the Preferred Shares and the Conversion Shares
(including adoption of the Certificate of Designations), and none
of  such  actions  will  violate any provision  of  the  Restated
Certificate of Incorporation of the Company, the By-Laws  of  the
Company or of any applicable law, regulation, order, judgment  or
decree  or rule of the stock exchange where the Company's  Common
Stock  is  listed,  or result in the breach of  or  constitute  a
default (or an event which, with notice or lapse of time or  both
would   constitute  a  default)  under  any  material  agreement,
instrument or understanding to which the Company is a party or by
which it is bound or by which it will become bound as a result of
the  transaction contemplated by this Agreement.  This  Agreement
and  each of the Related Documents constitutes a legal, valid and
binding  obligation  of  the  Company,  enforceable  against  the
Company  in  accordance  with its terms,  except  to  the  extent
limited by (i) applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws of general application related to the
enforcement  of  creditor's  rights generally  and  (ii)  general
principles of equity.

          (b)   The  Preferred Shares have been  duly  authorized
and, when issued and delivered in accordance with this Agreement,
will  be  validly  issued and outstanding.  The Preferred  Shares
and,  when issued, the Conversion Shares, will be fully paid  and
nonassessable.  The Conversion Shares have been duly reserved for
issuance  upon conversion of the Preferred Shares  and,  when  so
issued,  will be duly authorized, validly issued and outstanding,
fully paid and nonassessable shares of Series A Preferred, Series
B  Preferred  or Common Stock, as the case may be.   Neither  the
issuance  and  delivery of the Preferred Shares nor the  issuance
and  delivery  of  any Conversion Shares upon conversion  of  any
Preferred  Shares  is  subject to any  preemptive  right  of  any
stockholder  of the Company or to any right of first  refusal  or
other  similar right in favor of any Person which  has  not  been
waived.

          IV.3 Capitalization.  As of the Closing, the authorized
capital  stock  of  the Company shall consist of  (i)  25,000,000
shares  of  Common Stock, par value $.0001 per  share,  of  which
5,592,476  shares are outstanding, 4,972,434 shares are  reserved
for  issuance  upon  conversion of Preferred Shares  and  770,000
shares  are  reserved for issuance upon the exercise  of  certain
stock options, and (ii) 5,000,000 shares of Preferred Stock,  par
value  $.0001  per  share,  of  which  35,700  shares  have  been
designated  Series  A  Preferred  and  5,000  shares  have   been
designated  Series B Preferred, of which 40,000  shares  will  be
sold  to the Purchasers pursuant to this Agreement.  At the  time
of  the  Closing, all of the outstanding capital  stock  will  be
validly  issued, fully paid and nonassessable and will have  been
issued   in  compliance  with  all  applicable  securities   laws
(including the provisions of the Securities Act and the rules and
regulations  promulgated thereunder).  Except  as  set  forth  on
Schedule  4.3, as of the Closing, the Company has not granted  or
issued  any  options,  convertible securities,  warrants,  calls,
pledges,  transfer restrictions (except restrictions  imposed  by
federal and state securities laws), liens, rights of first offer,
rights  of  first refusal, antidilution provisions or commitments
of  any  character relating to any issued or unissued  shares  of
capital  stock of the Company other than as contemplated  in  the
Related Documents.  Except as contemplated by this Agreement  and
the  Related Documents or as set forth in Schedule 4.3, there are
no  preemptive  or  other preferential rights applicable  to  the
issuance  and  sale of securities of the Company,  including  the
Preferred Shares.

          IV.4  Private  Sale; Voting Agreements.   Assuming  the
accuracy of the representations and warranties made by recipients
of  the  Company's  capital stock made  in  connection  with  the
acquisition  of such capital stock, the Company has not  violated
any  applicable  federal or state securities laws  in  connection
with  the  offer, sale and issuance of any of its capital  stock.
Subject  to  the  accuracy  of  the  Purchaser's  representations
contained  herein, neither the offer, sale and  issuance  of  the
Preferred Shares hereunder nor the issuance and delivery  of  any
Preferred  Shares  or Conversion Shares upon  conversion  of  any
Preferred  Shares requires registration under the Securities  Act
or any state securities laws.

          IV.5 Financial Statements; Disclosure.

          (a)   The Financial Statements (together with the notes
     thereto, as applicable), (i)  are true, correct and complete
     in  all  material respects, (ii) are in accordance with  the
     books  and  records of the Company and (iii) fairly  present
     the  financial  condition and results of operations  of  the
     Company  as  of the dates and for the periods indicated,  in
     accordance  with  GAAP  except that  the  unaudited  balance
     sheets  and  related financial statements do not contain  an
     auditors'  opinion  and  do not contain  footnotes  and  are
     subject to normal year-end audit adjustments.
          (b)    This  Agreement  together  with  the  schedules,
     attachments,  exhibits, written statements and  certificates
     supplied  to  the Purchasers by or on behalf of the  Company
     with  respect to the transactions contemplated  hereby  does
     not  contain any untrue statement of a material fact or omit
     to  state  a  material fact necessary to make the statements
     contained  herein or therein, in light of the  circumstances
     in  which they were made, not misleading.  There is no  fact
     which has not been disclosed to the Purchasers in writing of
     which  the Company has knowledge, and which has had or would
     reasonably be anticipated to have a Material Adverse Effect.

          (c)   As  of its filing date, each document filed  with
     the SEC by the Company, as amended or supplemented prior  to
     the  Closing Date, if applicable, pursuant to the Securities
     Act  and/or  the Exchange Act (i) complied in  all  material
     respects  with the applicable requirements of the Securities
     Act  and/or Exchange Act and (ii) did not contain any untrue
     statement  of a material fact or omit to state any  material
     fact necessary in order to make the statements made therein,
     in  the  light  of the circumstances under which  they  were
     made,  not  misleading.   Each final registration  statement
     filed with the SEC by the Company pursuant to the Securities
     Act,  as  of  the date such statement became  effective  (i)
     complied  in  all  material  respects  with  the  applicable
     requirements of the Securities Act and (ii) did not  contain
     any untrue statement of a material fact or omit to state any
     material fact required to be stated therein or necessary  to
     make  the statements therein not misleading (in the case  of
     any  prospectus, in light of the circumstances  under  which
     they were made).

          IV.6 Absence of Certain Changes.

          (a)  Except as set forth on Schedule 4.6 since the date
          of  the Current Balance   Sheet,    neither the Company
          nor any Subsidiary has:

            (i)  incurred  any  Liabilities  other  than  current
        Liabilities  incurred,  or  obligations  under  contracts
        entered into, in the Ordinary Course of Business and  for
        individual amounts not greater than $250,000;

           (ii) paid, discharged or satisfied any claim, Lien  or
        Liability,  other than any claim, Lien or  Liability  (A)
        reflected  or  reserved against on  the  Current  Balance
        Sheet  and paid, discharged or satisfied in the  Ordinary
        Course  of Business since the date of the Current Balance
        Sheet  or  (B) incurred and paid, discharged or satisfied
        since the date of the Current Balance Sheet, in each case
        in the Ordinary Course of Business;

          (iii)  sold, leased, assigned or otherwise  transferred
        any  of  its  assets, tangible or intangible (other  than
        sales of inventory in the Ordinary Course of Business and
        use of supplies in the Ordinary Course of Business);

            (iv)  permitted  any  of  its  assets,  tangible   or
        intangible, to become subject to any Lien (other than any
        Permitted Lien);

             (v)   written  off  as  uncollectible  any  accounts
        receivable  other  than  (1) in the  Ordinary  Course  of
        Business, or (2) for amounts not greater than $100,000;

           (vi) terminated or amended or suffered the termination
        or  amendment  of, other than in the Ordinary  Course  of
        Business, failed to perform in all material respects  all
        of  its obligations or suffered or permitted any material
        default  to exist under, any material agreement,  license
        or permit;

          (vii)  suffered  any  damage, destruction  or  loss  of
        tangible  property (whether or not covered by  insurance)
        which in the aggregate exceeds $100,000;

        (viii)  made any loan (other than intercompany  advances)
        to  any other Person (other than advances to employees in
        the  Ordinary  Course  of Business which  do  not  exceed
        $5,000 individually or $25,000 in the aggregate);

           (ix)  canceled, waived or released any debt, claim  or
        right in an amount or having a value exceeding $100,000;

            (x) paid any amount to or entered into any agreement,
        arrangement or transaction with any Affiliate  (including
        its   officers,  directors  and  employees)  outside  the
        Ordinary Course of Business and which was not approved by
        a majority of the Company's disinterested directors;

           (xi)  declared,  set aside, or paid  any  dividend  or
        distribution  with  respect  to  its  capital  stock   or
        redeemed,  purchased  or otherwise acquired  any  of  its
        capital stock;

          (xii)  other  than in the Ordinary Course of  Business,
        granted  any increase in the compensation of any  officer
        or  employee or made any other change in employment terms
        of any officer or employee;

        (xiii)  made  any change in any method of  accounting  or
        accounting practice;

          (xiv) suffered or caused any other occurrence, event or
        transaction outside the Ordinary Course of Business which
        could have a Material Adverse Effect; or

           (xv)  agreed, in writing or otherwise, to any  of  the
        foregoing.

        (b) Since the date of the Current Balance Sheet there has
    been no Material Adverse Change.

        IV.7     Litigation.   As of the date  hereof  no  claim,
suit, proceeding or investigation is pending or, to the knowledge
of  the  Company, threatened against or affecting the Company  or
any  Subsidiary  or  any  officer  or  director  thereof  or  the
Company's  and  the  Subsidiaries'  business  which  if   decided
adversely  to  any  such  person could have  a  Material  Adverse
Effect.
        IV.8     Licenses, Compliance with Law, Other Agreements,
Etc.    The   Company  and  each  Subsidiary  have  all  material
franchises,  permits, licenses and other rights to  allow  it  to
conduct  its  business and is not in violation, in  any  material
respects  of  any order or decree of any court, or  of  any  law,
order  or  regulation  of  any Governmental  Agency,  or  of  the
provisions of any material contract or agreement to which it is a
party or by which it is bound, and neither this Agreement nor the
Related  Documents  nor the transactions contemplated  hereby  or
thereby  will  result  in  any such violation  except  where  the
failure to have any such franchise permit or license or any  such
violation  could  not  be  expected to have  a  Material  Adverse
Effect.   The Company's and the Subsidiaries' business  has  been
conducted  in  all  material  respects  in  compliance  with  all
federal, state and local laws, ordinances, rules and regulations,
except where such violations, defaults or noncompliance would not
have a Material Adverse Effect.

        IV.9    Third-Party Approvals.  Assuming the accuracy  of
the representations and warranties of the Purchasers contained in
this  Agreement, the Company is not required to obtain any order,
consent, approval or authorization of, or to make any declaration
or  filing  with,  any Governmental Agency or other  third  party
(including  under  any state securities or "blue  sky"  laws)  in
connection  with the execution and delivery of this Agreement  or
the  Related  Documents, or the consummation of the  transactions
contemplated  hereby or thereby to occur on the Closing  Date  or
the  Advance Closing Date, except for any consents, approvals  or
authorizations  the  failure to obtain which  could  not  have  a
Material Adverse Effect.

        IV.10    No Undisclosed Liabilities.  Neither the Company
nor any of its Subsidiaries has any Liabilities except (i) as and
to the extent of the amounts reflected or reserved against on the
Current  Balance  Sheet (excluding the footnotes  thereto),  (ii)
liabilities  and obligations incurred in the Ordinary  Course  of
Business  since  the date thereof, (iii) such  other  liabilities
that  in  the  aggregate will not result in  a  Material  Adverse
Effect,  and  (iv)   Liabilities under the Credit  Agreement  (as
defined therein).

        IV.11     Tangible   Assets.    The   Company   and   its
Subsidiaries own or lease all tangible assets used or  reasonably
necessary  in  connection with the conduct of its business.   All
material  tangible  assets are free from any  Liens  (other  than
Permitted  Liens), are free from any material defects, have  been
maintained  in accordance with normal industry practice  and  any
regulatory  standard  or  procedure  to  which  such  assets  are
subject,  are in good operating condition and repair (subject  to
normal wear and tear) and are suitable for the purposes for which
such  assets  are used or proposed to be used, other than  liens,
defects  and  wear and tear which in the aggregate could  not  be
expected to have a Material Adverse Effect.

        IV.12   Inventory.  All inventory of the Company and  its
Subsidiaries, whether reflected on the Current Balance  Sheet  or
otherwise,  consists of a quality and quantity usable or  salable
in  the  Ordinary Course of Business, subject to normal rates  of
defect  or  obsolescence  not  inconsistent  with  the  Company's
historical experience.

        IV.13    Owned  Real  Property.   The  Company  and   its
Subsidiaries own no real property.

        IV.14    Real Property Leases.  There exists no event  of
default  (nor any event which with notice or lapse of time  would
constitute an event of default) with respect to the Company,  any
Subsidiary and, to the Company's knowledge, with respect  to  any
other  party  thereto under any agreement pursuant to  which  the
Company is the lessee or lessor of any real property, except  for
such  defaults and defects in enforceability as could not in  the
aggregate be expected to have a Material Adverse Effect, and  all
such  agreements  are  in full force and effect  and  enforceable
against  the  lessor  or lessee in accordance  with  their  terms
except  for such defaults and defects in enforceability as  could
not  in  the  aggregate be expected to have  a  Material  Adverse
Effect.

        IV.15     Agreements.   Neither  the  Company   nor   any
Subsidiary is in default, nor to the knowledge of the Company  is
there  any  basis  for  a  valid claim of  default,  and  to  the
Company's  knowledge no event has occurred which, with notice  or
lapse  of  time, would constitute a default, under any agreement,
arrangement  or  understanding  to  which  the  Company  or   any
Subsidiary  is  a party, and to the knowledge of the  Company  no
other Person is in default under any such agreement, in each case
other  than defaults which in the aggregate could not be expected
to  have  a  Material Adverse Effect.  Additionally, neither  the
Company  nor  any  Subsidiary  is  party  to  any  agreement  the
performance of which in accordance with its terms (including  any
termination  provision  thereof) could  be  expected  to  have  a
Material Adverse Effect.

        IV.16    Intellectual Property.  Schedule 4.16 sets forth
a  complete  list of (i) all patented, registered or applied  for
Intellectual Property owned or filed by the Company; and (ii) all
trade  names  and material unregistered trademarks  used  by  the
Company  in connection with its business.  The Company  owns  and
possesses all right, title and interest in and to, or has a valid
and   enforceable  license  to  use,  the  Intellectual  Property
necessary   for  the  operation  of  its  business  as  currently
conducted and as currently proposed to be conducted, and no claim
by  any third party contesting the validity, enforceability,  use
or  ownership of such Intellectual Property has been made or,  to
the knowledge of the Company, is threatened.  The Company has not
infringed  or  misappropriated the Intellectual Property  of  any
third party.

        IV.17   Employees.  Except as set forth on Schedule 4.17,
since the date of the Current Balance Sheet, no key employees and
no  group of employees has terminated, or to the knowledge of the
Company  plans to terminate, employment with the Company  or  any
Subsidiary, as applicable.  Except as set forth on Schedule 4.17,
the  Company  is  not  a  party to or  bound  by  any  collective
bargaining agreement, nor has it experienced any strike, material
grievance,  material  claim of unfair  labor  practice  or  other
collective  bargaining dispute.  Except as set forth on  Schedule
4.17,  to the knowledge of the Company there is no organizational
effort  being  made or threatened by or on behalf  of  any  labor
union  with  respect  to  its employees.   The  Company  has  not
committed  any unfair labor practice or materially  violated  any
federal, state or local law or regulation regulating employers or
the  terms and conditions of its employees' employment, including
laws    regulating   employee   wages   and   hours,   employment
discrimination,   employee   civil   rights,   equal   employment
opportunity and employment of foreign nationals, except for  such
violations  as  could not be expected to have a Material  Adverse
Effect.

        IV.18   ERISA; Employee Benefits.  Each Plan (other  than
a  Plan  which  is a "multiemployer plan" within the  meaning  of
Section  4001(a)(3) of ERISA) that is intended  to  be  qualified
under  Section  401(a)  of  the Code  has  received  a  favorable
determination  letter from the Internal Revenue  Service  or  has
timely  filed  for  a  favorable determination  letter  from  the
Internal Revenue Service and no event has occurred since the date
of  the  last  determination  letter  that  could  reasonably  be
expected  to materially adversely affect the qualified status  of
such   Plan.    Each  Plan  (other  than  a  Plan  which   is   a
"multiemployer plan" within the meaning of Section 4001(a)(3)  of
ERISA)  is in full force and effect and has been administered  in
all material respects in accordance with its terms and is and has
been,  and  each plan administrator and fiduciary of  a  Plan  is
acting  and  has  been  acting, in  compliance  in  all  material
respects  with all applicable requirements of the Code and  ERISA
(including  the funding, reporting and disclosure and  prohibited
transaction  provisions  thereof)  and  other  applicable   laws,
regulations  and rulings in connection with each such  Plan.   No
Plan  has been terminated or partially terminated.  With  respect
to  each  Plan which is a "multiemployer plan" within the meaning
of Section 4001(a)(3) of ERISA, no complete or partial withdrawal
(within  the  meaning of Sections 4203 and  4205  of  ERISA)  has
occurred,  no  such  Plan   is  in reorganization  or  insolvency
(within  the  meaning  of  Title IV of  ERISA)  and  no  material
withdrawal liability has been assessed against the Company.   The
Company  or one of its Subsidiaries has made, accrued or provided
for all contributions required under each Plan.  To the knowledge
of  the  Company, no event has occurred or is reasonably expected
to occur with respect to any employee pension benefit plan of the
Company  or any member of the Company's controlled group  (within
the  meaning of Section 414 of the Code), which could  reasonably
be  expected  to  directly or indirectly result in  any  material
liability  (other than liability arising in the ordinary  course)
to  the Company or any member of its controlled group pursuant to
Title  IV  of  ERISA or Section 412 of the Code.  No Plan  (other
than a Plan which is a "multiemployer plan" within the meaning of
Section 4001(a)(3) of ERISA) has incurred an "accumulated funding
deficiency"  within the meaning of Section 412  of  the  Code  or
Section 302 of ERISA.

        IV.19   Environment, Health and Safety.

        (a)  The  Company (as used in this Section 4.19,  Company
    shall include the Company's Subsidiaries and its predecessor)
    has  complied  and is in compliance in all material  respects
    with  all  Environmental  and Safety  Requirements  that  are
    applicable to the Company's business.

        (b)  The  Company  has not received any  written  notice,
    report or other information     regarding any liabilities  or
    potential liabilities (whether accrued, absolute, contingent,
    unliquidated  or  otherwise),  including  any  investigatory,
    remedial  or corrective obligations, relating to the  Company
    or  its facilities and arising under Environmental and Safety
    Requirements.

        (c) The Company has not, either expressly or by operation
    of  law,  assumed  or  undertaken  any  liability,  including
    without  limitation any obligation for corrective or remedial
    action,  of  any  other person relating to Environmental  and
    Safety Requirements.

        IV.20     Transactions   With  Affiliates.    Except   as
disclosed in filings made by the Company with the SEC pursuant to
the  Securities Act and the Exchange Act, neither the Company nor
any  Subsidiary  is  party  to  any  agreement,  arrangement   or
transaction with any Affiliate which is material to the Company's
and its Subsidiaries business, taken as a whole.

        IV.21   Taxes.

        (a)   Each  of  the  Company,  its  predecessor  and  its
    Subsidiaries  has filed all Tax Returns that it was  required
    to  file,  and  has  paid all Taxes shown thereon  as  owing,
    except where the failure to file Tax Returns or to pay  Taxes
    would  not  have a Material Adverse Effect on  the  financial
    condition  of  the Company and its Subsidiaries  taken  as  a
    whole.

        (b) None of the Company and its Subsidiaries (A) has been
    a member of an affiliated group filing a consolidated federal
    Tax Return (other than a group the common parent of which was
    the  Company) or (B) has any Liability for the Taxes  of  any
    Person  (other  than any of the Company and its Subsidiaries)
    under  Treas.  Reg.  1.1502-6 (or any  similar  provision  of
    state,  local, or foreign law), as a transferee or successor,
    by contract, or otherwise.

        (c)   Each  of  the  Company,  its  predecessor  and  its
    Subsidiaries has withheld and paid all taxes required to have
    been  withheld  and paid in connection with amounts  paid  or
    owing  to  any  employee, independent  contractor,  creditor,
    stockholder, or other third party.

        (d)  There  is  no  dispute or claim concerning  any  Tax
    Liability  of any of the Company and its Subsidiaries  either
    (A)  claimed or raised by any authority in writing or (B)  as
    to  which  any  of the directors and officers (and  employees
    responsible  for  Tax  matters)  of  the  Company   and   its
    Subsidiaries  has knowledge based upon personal contact  with
    any  agent  of  such authority and which is material  to  the
    Company and its Subsidiaries taken as a whole.

        IV.22   Other Investors.  Set forth on Schedule 4.22 is a
list  of  all  shareholders of the Company who  as  of  the  date
hereof,  based  upon  Schedule  I  hereto  and  SEC  filings   of
shareholders, after giving effect to the terms hereof,  own  more
than  5%  of  the fully diluted common equity of the Company  and
sets forth such percentage ownership.

        IV.23   Year 2000 Representations.

        (a)  None  of  the computer software, computer  firmware,
    computer  hardware  (whether general or special  purpose)  or
    other similar or related items of automated, computerized  or
    software systems that are used or relied on by Company or  by
    any  of  its  Subsidiaries in the conduct of their respective
    businesses  will  malfunction, will cease to  function,  will
    generate  incorrect  data or will produce  incorrect  results
    when processing, providing or receiving (i) date-related data
    from,   into  and  between  the  twentieth  and  twenty-first
    centuries  or (ii) date-related data in connection  with  any
    valid date in the twentieth and twenty-first centuries.

        (b)  None  of  the products and services sold,  licensed,
    rendered, or otherwise provided by the Company or by  any  of
    its   Subsidiaries   in  the  conduct  of  their   respective
    businesses  will  malfunction, will cease to  function,  will
    generate  incorrect  data or will produce  incorrect  results
    when processing, providing or receiving (i) date-related data
    from,   into  and  between  the  twentieth  and  twenty-first
    centuries  or (ii) date-related data in connection  with  any
    valid date in the twentieth and twenty-first centuries;  and,
    accordingly,  neither the Company nor any of its Subsidiaries
    is  or  will  be subject to any claim, demand, action,  suit,
    liability, damage, material loss, or material expense arising
    from,  or  related to, circumstances where such products  and
    services  malfunction, cease to function, generate  incorrect
    data, or produce incorrect results when processing, providing
    or receiving (i) date-related data from, into and between the
    twentieth  and  twenty-first centuries or  (ii)  date-related
    data  in connection with any valid date in the twentieth  and
    twenty-first centuries.

        (c)  Neither the Company nor any of its Subsidiaries  has
    made  any  other representations or warranties regarding  the
    ability  of any product or service sold, licensed,  rendered,
    or  otherwise  provided  by the Company  or  by  any  of  its
    Subsidiaries in the conduct of their respective businesses to
    operate  without malfunction, to operate without  ceasing  to
    function,  to  generate correct data or  to  produce  correct
    results  when  processing, providing or receiving  (i)  date-
    related data from, into and between the twentieth and twenty-
    first centuries and (ii) date-related data in connection with
    any valid date in the twentieth and twenty-first centuries.

        IV.24   Seniority.  No class of equity securities of  the
Company  is  senior to the Preferred Shares in right of  payment,
whether upon liquidation, dissolution or otherwise.

        IV.25   Investment Company.  The Company is not,  and  is
not  controlled by or under common control with an affiliate  of,
an  "investment  company"  within the meaning of  the  Investment
Company Act of 1940, as amended.

        IV.26   Certain Fees.  Other than fees and  expenses  due
and  payable to Lehman Brothers, no fees or commissions  will  be
payable  by the Company to any broker, financial advisor, finder,
investment  banker,  or  bank with respect  to  the  transactions
contemplated  by this Agreement.  The Purchasers  shall  have  no
obligation with respect to any fees or with respect to any claims
made by or on behalf of Lehman Brothers or other Persons for fees
of  a  type  contemplated in this Section  that  may  be  due  in
connection  with the transactions contemplated by this Agreement.
The  Company  shall  indemnify and  hold  harmless  each  of  the
Purchasers,  its  employees,  officers,  directors,  agents   and
partners,  and  their  respective affiliates  (as  such  term  is
defined  under  Rule 405 promulgated under the  Securities  Act),
from  and  against all claims, losses, damages, costs  (including
the  costs  of  preparation  and attorney's  fees)  and  expenses
suffered in respect to any such claimed or existing fees.

        IV.27   Solicitation Materials.  The Company has not  (i)
distributed  any  offering  materials  in  connection  with   the
offering  and  sale  of  the  Preferred  Shares  other  than  the
disclosure  materials  delivered to Purchasers  (the  "Disclosure
Materials")  or  (ii) solicited any offer  to  buy  or  sell  the
Preferred Shares by means of any form of general solicitation  or
advertising.   None  of  the Disclosure Materials  or  any  other
information  provided to the Purchasers by or on  behalf  of  the
Company contain any untrue statement of material fact or omit  to
state  a material fact required to be stated therein or necessary
to make the statements therein not misleading.

        IV.28   Form S-3 Eligibility.  No later than May 1, 1998,
the  Company will be eligible to register securities  for  resale
with the SEC under Form S-3 promulgated under the Securities Act.

        IV.29   Listing and Maintenance Requirements  Compliance.
(i)   The Company has not received notice (written or oral)  from
the American Stock Exchange that the Company is not in compliance
with the listings or maintenance requirements of such Exchange.

    (ii)  Upon conversion of the Preferred Shares into shares  of
Common  Stock  and  upon the affirmative vote  of  the  Company's
shareholders approving the issuance of the Preferred  Shares  and
the Conversion Shares, which vote shall occur not later than July
31,  1998, all Conversion Shares shall be listed on the  American
Stock Exchange.

        IV.30   Registration  Rights;  Rights  of  Participation.
Except as described on Schedule 4.30 hereto, (A) the Company  has
not  granted  or  agreed  to  grant  to  any  Person  any  rights
(including   "piggy-back"  registration  rights)  to   have   any
securities  of the Company registered with the SEC or  any  other
governmental authority which has not been satisfied  and  (B)  no
Person,  including,  but  not  limited  to,  current  or   former
shareholders of the Company, underwriters, brokers or agents, has
any   right  of  first  refusal,  preemptive  right,   right   of
participation,  or  any  similar  right  to  participate  in  the
transactions contemplated by this Agreement or any other  related
document which has not been waived.

        IV.31    Recent  Results  of Operations.   Set  forth  on
Schedule 4.31 is (i) the Company's monthly recurring revenues for
the  month  of  December 1997 and (ii) the  Company's  number  of
subscribers  as  of  December  31, 1997,  each  as  prepared  and
calculated in the Ordinary Course of Business.

        IV.32   Small Business Matters.  The Company acknowledges
that each SBIC Holder is a federally licensed SBIC under the SBIC
Act.   The Company, together with its "affiliates" (as that  term
is  defined  in  13  CFR 121.103), is a "small business  concern"
within  the  meaning of the SBIC Regulations,  including  13  CFR
121.301.    The  information  regarding  the  Company   and   its
affiliates set forth in SBA Form 480, Form 652 and Parts A and  B
of  Form  1031  delivered at the Closing  will  be  accurate  and
complete.   Neither the Company nor any of its subsidiaries  will
use  the proceeds of the Financing directly or indirectly for any
purpose, for which an SBIC is prohibited from providing funds  by
SBIC Regulations (including 13 CFR 107.720).

                           Article V

        REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

        Each  Purchaser  hereby represents and  warrants  to  the
Company as follows:

        V.1 Authorization and Enforceability.  Such Purchaser has
taken  all  action necessary to permit it to execute and  deliver
this  Agreement  and the other documents and  instruments  to  be
executed by it pursuant hereto and to carry out the terms  hereof
and  thereof.   This Agreement and each such other  document  and
instrument,  when duly executed and delivered by such  Purchaser,
will constitute a valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms.

        V.2  Government Approvals. Such Purchaser is not required
to obtain any order, consent, approval or authorization of, or to
make  any declaration or filing with, any Governmental Agency  in
connection with the execution and delivery of this Agreement  and
the other documents and instruments to be executed by it pursuant
hereto  or  the  consummation  of the  transactions  contemplated
hereby  and  thereby, except for such order,  consent,  approval,
authorization, declaration or filing as which has been or will be
obtained or  made.


                           Article VI

                COMPLIANCE WITH SECURITIES LAWS

        VI.1     Investment Intent of Purchasers.  Each Purchaser
represents  and warrants to the Company that it is acquiring  the
Preferred  Shares for its own account, with no present  intention
of selling or otherwise distributing the same to the public.

        VI.2     Status  of Preferred Shares. Each Purchaser  has
been  informed by the Company that the Preferred Shares have  not
been and will not be registered under the Securities Act or under
any  state  securities laws and are being  offered  and  sold  in
reliance  upon federal and state exemptions for transactions  not
involving any public offering.

        VI.3      Sophistication  and  Financial   Condition   of
Purchaser. Each Purchaser represents and warrants to the  Company
that  it  is an "Accredited Investor" as defined in Regulation  D
under  the Securities Act and that it considers itself to  be  an
experienced and sophisticated investor and to have such knowledge
and experience in financial and business matters as are necessary
to  evaluate  the  merits  and risks  of  an  investment  in  the
Preferred Shares.

        VI.4     Transfer  of  Preferred  Shares  and  Conversion
Shares.

        (a)  Preferred  Shares  and  Conversion  Shares  may   be
    transferred pursuant to (i) public offerings registered under
    the  Securities Act, (ii) Rule 144 of the SEC (or any similar
    rule   then  in  force),  (iii)   to  an  Affiliate  of   the
    transferor,  or (iv) subject to the conditions set  forth  in
    Section   6.4(b),  any  other  legally-available   means   of
    transfer.

        (b)  In  connection with any transfer  of  any  Preferred
    Shares  or Conversion Shares (other than a transfer described
    in  Section  6.4(a)(i), (ii) or (iii)), the  holder  of  such
    shares shall deliver written notice to the Company describing
    in  reasonable detail the proposed transfer, together with an
    opinion  of  counsel (Kirkland & Ellis or such other  counsel
    which,   to   the   Company's  reasonable  satisfaction,   is
    knowledgeable in securities law matters) to the  effect  that
    such  transfer may be effected without registration  of  such
    shares  under the Securities Act.  The holder of  the  shares
    being transferred shall not consummate the transfer until (i)
    the  prospective transferee has confirmed to the  Company  in
    writing  its agreement to be bound by the provisions of  this
    Section 6.4 or (ii) such holder shall have delivered  to  the
    Company  an  opinion  of  such  counsel  that  no  subsequent
    transfer of such Preferred Shares or Conversion Shares  shall
    require registration under the Securities Act.  Promptly upon
    receipt  of  any  opinion described in  clause  (ii)  of  the
    preceding sentence, the Company shall prepare and deliver  in
    connection  with  the consummation of the proposed  transfer,
    new  certificates  for  the Preferred  Shares  or  Conversion
    Shares  being  transferred that do not bear  the  legend  set
    forth  in  Section 6.4(c).  Notwithstanding anything  to  the
    contrary  contained  herein,  Preferred  Shares  may  not  be
    transferred  to  any of the Company's competitors  listed  on
    Schedule 6.4(b) hereto without the Company's written  consent
    (other than pursuant to clauses (a)(i) or (a)(ii) above or  a
    tender  offer  made  to each holder of the  Company's  Common
    Stock).

        (c)   Except   as  provided  in  Section  6.4(b),   until
    transferred pursuant to clauses (a)(i) or (a)(ii) above, each
    certificate  for Preferred Shares or Conversion Shares  shall
    be  imprinted  with a legend substantially in  the  following
    form:

        THE  SECURITIES  REPRESENTED BY THIS  CERTIFICATE
        WERE  ORIGINALLY ISSUED ON FEBRUARY 2,  1998  [OR
        FEBRUARY 13, 1998 IN THE CASE OF PREFERRED SHARES
        ISSUED ON THE ADVANCE CLOSING DATE] AND HAVE  NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
        AS  AMENDED  OR  ANY APPLICABLE STATE  SECURITIES
        LAW.   THE TRANSFER OF THE SECURITIES REPRESENTED
        BY  THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS
        SET   FORTH  IN  THE  PREFERRED  STOCK   PURCHASE
        AGREEMENT  DATED AS OF FEBRUARY 2,  1998  BETWEEN
        THE  ISSUER  (THE "COMPANY") AND  THE  PURCHASERS
        LISTED   ON  SCHEDULE  I  THERETO.  THE   COMPANY
        RESERVES THE RIGHT TO REFUSE ANY TRANSFER OF SUCH
        SECURITIES  UNTIL  SUCH  CONDITIONS   HAVE   BEEN
        FULFILLED WITH RESPECT TO SUCH TRANSFER.  A  COPY
        OF  SUCH  CONDITIONS SHALL BE  FURNISHED  WITHOUT
        CHARGE  TO THE HOLDER HEREOF UPON WRITTEN REQUEST
        TO THE COMPANY.

        VI.5    Exculpation  Among  Purchasers.   Each  Purchaser
acknowledges  that  it is not relying upon any  person,  firm  or
corporation  (including without limitation any other  Purchaser),
other  than the Company and its officers and directors, in making
its  investment  or  decision to invest  in  the  Company.   Each
Purchaser  agrees  that  no  other  Purchaser  (acting  in   such
capacity)  nor  the  respective  controlling  persons,  officers,
directors,  partners,  agents  or employees  of  any  such  other
Purchaser  shall be liable to any other Purchaser  in  connection
with  this investment for any action taken or omitted to be taken
by  any  of them prior to the date hereof in connection with  the
Preferred Shares.

                          Article VII

                      CONDITIONS PRECEDENT

        VII.1    Closing  Deliveries  to  the  Purchasers.    The
following  documents  and  items  shall  be  delivered   to   the
Purchasers at or prior to the Closing:

        (a) Evidence acceptable to the Purchasers of adoption  by
    the Company of the Certificate of Designations;

        (b)  A  fully executed and delivered counterpart  of  the
    Registration Rights Agreement;

        (c)  The  written opinion of Robinson & Cole LLP, counsel
    for the Company, in the form of Exhibit D hereto dated as  of
    the Closing Date;

        (d)  certificates  of a duly authorized  officer  of  the
    Company dated as of the Closing Date:

        (A)  stating  that  the  following conditions  have  been
    satisfied as of the Closing Date,

            (i) the representations and warranties of the Company
        contained  herein  and in any writing delivered  pursuant
        hereto shall be true and correct when made and at and  as
        of the time of the Closing;

            (ii)     No action, suit, investigation or proceeding
        shall  be  pending  or  threatened before  any  court  or
        Governmental   Agency  to  restrain,  prohibit,   collect
        damages  as  a  result  of  or otherwise  challenge  this
        Agreement  or  any  Related Document or  any  transaction
        contemplated hereby or thereby;

            (iii)    All acts or covenants required hereunder  to
        be  performed  by the Company prior to the Closing  shall
        have been fully performed by it;

            (iv)      No  Material  Adverse  Change  shall   have
        occurred  between the date of the Current  Balance  Sheet
        and the Closing Date; and

        (B)  setting  forth  the  resolutions  of  the  board  of
    directors  of  the  Company  authorizing  the  execution  and
    delivery   of  this  Agreement  and  the  Related   Documents
    (including   the   Certificate  of  Designations)   and   the
    consummation  of  the  transactions contemplated  hereby  and
    thereby  and  certifying  that  such  resolutions  were  duly
    adopted and have not been rescinded or amended;

        (e)  such  other  documents relating to the  transactions
    contemplated  hereby  as  Advance  or  other  Purchasers  may
    reasonably request; and

        (f)     to each SBIC Holder,

            (i)   duly completed and executed SBA Forms 480,  652
        and Parts A and B of 1031, and

            (ii)    a  written  certification  from  the  Company
regarding  its  intended  use  of  the        proceeds   of   the
Financing.

        VII.2    Closing Deliveries to the Company.  At  Closing,
each Purchaser other than Advance will deliver to the Company the
aggregate  purchase price for the Preferred Shares  purchased  by
it.   At the Advance Closing, Advance will deliver to the Company
the  aggregate purchase price for the Preferred Shares  purchased
by it.


                          Article VIII

                    COVENANTS OF THE COMPANY

        VIII.1   Restricted Actions.  Without the  prior  written
consent  of  the  holders of two-thirds of the  then  outstanding
Preferred Shares the Company shall not, and shall not permit  any
Subsidiary to:

        (a)  become subject to any agreement or instrument  which
    by  its  terms  would (under any circumstances) restrict  the
    Company's right to comply with the terms of this Agreement or
    any of the Related Documents;

        (b)  use  the  proceeds from the sale  of  the  Preferred
    Shares other than (i) primarily for acquisitions of assets or
    businesses  reasonably  related  to  the  Company's  existing
    business,  and  repayment  of  indebtedness,  and  (ii)   the
    remainder for other working capital purposes of the Company;

        (c)  enter into any transaction or series of transactions
    with   any   stockholder,  director,  officer,  employee   or
    Affiliate which would require disclosure pursuant to Rule 404
    of  Regulation  S-K  under  the Securities  Act  unless  such
    transaction   is  approved  by  the  Company's  disinterested
    directors; or

        (e)      expand  the  Company's  Board  of  Directors  to
greater than nine members.

        VIII.2  Required Actions.  For so long as at least 20% of
the  Preferred Shares remain outstanding, the Company shall,  and
shall cause each Subsidiary to:

            (a)  cause all properties owned by the Company or any
    of its Subsidiaries or used or held for use in the conduct of
    its business or the business of any of its Subsidiaries to be
    maintained  and  kept in good condition, repair  and  working
    order  (reasonable wear and tear excepted) and supplied  with
    all  necessary  equipment  and will  cause  to  be  made  all
    necessary  repairs, renewals, replacements,  betterments  and
    improvements thereof, all as in the judgment of the Board  of
    Directors may be necessary so that the business carried on in
    connection  therewith  may  be  properly  and  advantageously
    conducted at all times; provided, however, that the foregoing
    shall   not  prevent  the  Company  from  discontinuing   the
    maintenance  of any of such properties if such discontinuance
    is,  in  the  judgment  of  the management  of  the  Company,
    desirable  in the conduct of its business or the business  of
    any  of  its Subsidiaries and is not disadvantageous  in  any
    material respect to the holders of Preferred Shares;

            (b)  preserve and keep in full force and  effect  the
    corporate existence, rights (charter and statutory), licenses
    and  franchises of the Company and each of its  Subsidiaries;
    provided, however, that the Company shall not be required  to
    preserve any such right, license or franchise if the Board of
    Directors shall determine that the preservation thereof is no
    longer  desirable  in  the conduct of  the  business  of  the
    Company  and  its Subsidiaries as a whole and that  the  loss
    thereof is not disadvantageous in any material respect to the
    holders of Preferred Shares;

            (c)  maintain the books, accounts and records of  the
    Company  and its Subsidiaries in accordance with past  custom
    and  practice  as  used in the preparation of  the  Financial
    Statements  except  to the extent permitted  or  required  by
    GAAP;

             (d) keep all of its and its Subsidiaries' properties
    which  are  of  an  insurable nature insured  with  insurers,
    believed by the Company in good faith to be financially sound
    and  responsible, against loss or damage to the  extent  that
    property  of  similar  character is  usually  so  insured  by
    corporations  similarly situated and owning  like  properties
    (which  may  include  self-insurance, if  reasonable  and  in
    comparable  form  to  that maintained by companies  similarly
    situated);

            (e)  comply with all material legal requirements  and
    material contractual obligations applicable to the operations
    and  business of the Company and its Subsidiaries and pay all
    applicable Taxes as they become due and payable;
            (f)   permit   representatives  of  the  holders   of
    Preferred  Shares (upon the request of holders  of  Preferred
    Shares  aggregating  12.5% or more of  the  Preferred  Shares
    originally  issued  hereunder) and  their  agents  (including
    their   counsel,   accountants  and  consultants)   to   have
    reasonable  access  during business hours  to  the  Company's
    books,   records,   facilities,  key   personnel,   officers,
    directors,  customers,  independent  accountants  and   legal
    counsel;

            (g)  at  all times file all reports (including annual
    reports, quarterly reports and the information, documentation
    and  other reports) required to be filed by the Company under
    the  Exchange  Act and Sections 13 and 15 of  the  rules  and
    regulations  adopted by the SEC thereunder, and  the  Company
    shall use its best efforts to file each of such reports on  a
    timely  basis, and take such further action as any holder  or
    holders  of  Securities may reasonably request,  all  to  the
    extent  required  to enable such holders to  sell  Securities
    pursuant  to Rule 144 adopted by the SEC under the Securities
    Act  (as such rule may be amended from time to time)  or  any
    similar  rule or regulation hereafter adopted by the SEC  and
    to  enable the Company to register securities with the SEC on
    Form S-3 or any similar short-form registration statement and
    upon the filing of each such report deliver a copy thereof to
    each holder of the Preferred Shares (or, if the Company is no
    longer  subject  to  the requirements of  the  Exchange  Act,
    provide  reports in substantially the same form  and  at  the
    same  times  as would be required if it were subject  to  the
    Exchange Act);

            (h)  maintain  at all times a valid listing  for  the
    Common  Stock on a national securities exchange or the Nasdaq
    National Market System;

            (i)   maintain  all  material  Intellectual  Property
    Rights  necessary to the conduct of its business and  own  or
    have a valid license to use all right, title and interest  in
    and to, such material Intellectual Property Rights;

            (j)  within  fifteen  (15)  days  after  the  Advance
    Closing Date (but not before) and at each subsequent election
    of  directors,  (and each Purchaser agrees to  use  its  best
    efforts)  elect  to  the Board of Directors  of  the  Company
    pursuant to Section 5A of the Certificate of Designations (x)
    one  individual designated by Advance as long as Advance owns
    any  Preferred Shares and (y) one individual elected  by  the
    holders of a plurality of the Series A Preferred and Series B
    Preferred, voting together as a single class; and

            (k)  on the Closing Date, have executed and delivered
    the  Credit  Agreement on substantially  the  same  principal
    terms  and  conditions as set forth in the commitment  letter
    issued by the lenders a party thereto dated January 7,  1998;
    and

            (l)  deliver Conversion Shares in accordance with the
    terms  and  conditions, and time periods, set  forth  in  the
    Certificate of Designations.

        VIII.3   Reservation of Common Stock.  The Company  shall
at all times reserve and keep available out of its authorized but
unissued  shares  of  Common Stock, solely for  the  purposes  of
issuance upon conversion of the Preferred Shares, such number  of
shares of Common Stock as are issuable upon the conversion of all
outstanding shares of the Preferred Shares.  All shares of Common
Stock  which  are  so issuable shall, when issued,  be  duly  and
validly  issued, fully paid and nonassessable and free  from  all
Taxes,  liens  and  charges.  The Company  shall  take  all  such
actions  as  may be necessary to assure that all such  shares  of
Common Stock may be so issued without violation of any applicable
law  or  governmental  regulation  or  any  requirements  of  any
domestic  securities exchange upon which shares of  Common  Stock
may be listed (except for official notice of issuance which shall
be immediately transmitted by the Company upon issuance).

        VIII.4  Purchasers' Rights if Trading in Common Stock  is
Suspended  or  Delisted.  If at any time while any Purchaser  (or
any  assignee  thereof) owns any Preferred Shares  or  Conversion
Shares, trading in the shares of the Common Stock is suspended on
or  delisted  from  the  American Stock  Exchange  or  any  other
principal  market or exchange for such shares (other  than  as  a
result  of the suspension of trading in securities on such market
or  exchange  generally  or  temporary  suspensions  pending  the
release of material information) for more than five business days
in  the aggregate, at the option of any Purchaser exercisable  by
written notice to the Company delivered after such suspension  or
delisting,  the  Company shall redeem, in cash, one-twentieth  of
the  Preferred  Shares and Conversion Shares then  held  by  such
Purchaser, at an aggregate purchase price equal to the sum of (i)
the  number of Preferred Shares to be redeemed multiplied by  the
product  of (1) the average per share market value for  the  five
(5)  business  days immediately preceding (a)  the  day  of  such
notice or (b) the date of payment in full of the redemption price
calculated  under this Section, whichever is greater  and  (2)  a
fraction, the numerator of which is 1,000 and the denominator  of
which  is  the Conversion Price on (a) the date of the repurchase
notice,  or  (b)  the date of payment in full of  the  redemption
price  pursuant  to this Section, whichever is  lower,  (ii)  the
aggregate of all accrued but unpaid dividends payable in  respect
of  all  Preferred  Shares to be redeemed, (iii)  the  number  of
Conversion Shares then held by such Purchaser multiplied  by  the
average  per  share market value for the five (5)  business  days
immediately preceding (A) the date of the notice or (B) the  date
of  payment  in  full  by  the Company of  the  redemption  price
calculated  under  this Section, whichever is greater,  and  (iv)
interest  on the amounts set forth in (i) - (iii) above  accruing
from  the 5th business day after such notice until the repurchase
price  under this Section is paid in full at the rate of 14%  per
annum.    The  Company  shall  provide  written  notice  of   any
redemption  demand made pursuant to this Section  to  each  other
holder  of Preferred Shares or Conversion Shares within 24  hours
of its receipt thereof.

        VIII.5    Use of Proceeds.  At the same time the  Company
files  its annual report on Form 10-K and at such other times  as
any SBIC Holder reasonably requests, the Company shall deliver to
each  SBIC  Holder a written statement certified by the Company's
president  or  chief financial officer describing  in  reasonable
detail the use of the proceeds of the Financing hereunder by  the
Company  and  its Subsidiaries.  In addition to any other  rights
granted  hereunder, the Company shall grant such SBIC Holder  and
the SBA access to the Company's books and records for the purpose
of   verifying  the  use  of  such  proceeds  and  verifying  the
certifications  made  by the Company in SBA  Forms  480  and  652
delivered  pursuant to Section 7.1(f)  above and for the  purpose
of  determining  whether the principal business activity  of  the
Company  and its Subsidiaries continues to constitute an eligible
business activity (within the meaning of the SBIC Regulations).

                           Article IX

                            SURVIVAL

        IX.1    Survival.  The representations and warranties  of
the  parties hereto contained herein, or in any writing delivered
pursuant  hereto, shall survive the Closing and  expire  30  days
following the filing of the Company's annual report on Form  10-K
with  the  SEC for the Company's fiscal year that ends  in  1999,
except  that, notwithstanding anything to the contrary  contained
herein,  the representations of the Company contained in  Section
4.23 hereof shall survive the Closing and expire on December  31,
2001.


                           Article X

                        INDEMNIFICATION

        X.1    Indemnification.    In   consideration   of   each
Purchaser's   execution  and  delivery  of  this  Agreement   and
acquiring the Preferred Stock hereunder and in addition to all of
the Company's other obligations under this Agreement, the Company
shall defend, protect, indemnify and hold harmless each Purchaser
and  each  other  holder  of Preferred Stock  and  all  of  their
officers,  directors,  employees and agents  (including,  without
limitation,  those retained in connection with  the  transactions
contemplated by this Agreement) (collectively, the "Indemnitees")
from  and  against any and all actions, causes of action,  suits,
claims,  losses, costs, penalties, fees, liabilities and damages,
and  expenses (including, without limitation, costs of  suit  and
attorneys'   fees   and   expenses)   in   connection   therewith
(irrespective of whether any such Indemnitee is a  party  to  the
action  for  which  indemnification  hereunder  is  sought)  (the
"Indemnified Liabilities"), incurred by the Indemnitees or any of
them  as  a result of, or arising out of, or relating to (a)  the
breach  of  any  representation  of  warranty  contained  in  any
agreement relating to any transaction financed or to be  financed
in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Preferred Stock, (b) the execution, delivery,
performance  or  enforcement  of this  Agreement  and  any  other
instrument, document or agreement executed pursuant hereto by any
of  the  Indemnitees  or (c) resulting from  any  breach  of  any
representation,  warranty, covenant  or  agreement  made  by  the
Company  herein  or  in any Related Document. The  Company  shall
reimburse the Indemnitees for the Indemnified Liabilities as such
Indemnified  Liabilities are incurred.  To the  extent  that  the
foregoing undertaking by the Company may be unenforceable for any
reason,  the Company shall make the maximum contribution  to  the
payment  and  satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.




                           Article XI

                       GENERAL PROVISIONS

        XI.1     Successors  and Assigns.  This  Agreement  shall
bind  and  inure to the benefit of the parties hereto  and  their
respective  successors  and  assigns, including  each  subsequent
holder  of  Preferred  Shares or Conversion  Shares.   Except  as
otherwise specifically provided herein, this Agreement shall  not
be  assignable by any party without the prior written consent  of
the other parties hereto.

        XI.2     Entire Agreement.  This Agreement and the  other
writings   referred  to  herein  or  delivered  pursuant   hereto
constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior arrangements or
understandings.

        XI.3     Notices.   All notices, requests,  consents  and
other communications provided for herein shall be in writing  and
shall  be  (i) delivered in person, (ii) transmitted by telecopy,
(iii)  sent by first-class, registered or certified mail, postage
prepaid,  or  (iv)  sent by reputable overnight courier  service,
fees  prepaid, to the recipient at the address or telecopy number
set  forth below, or such other address or telecopy number as may
hereafter  be  designated in writing by such recipient.   Notices
shall  be  deemed  given  upon  personal  delivery,  seven   days
following   deposit  in  the  mail  as  set  forth  above,   upon
acknowledgment by the receiving telecopier or one  day  following
deposit with an overnight courier service.

        (a) If to the Company:

                Alarmguard Holdings, Inc.
                125 Frontage Road
                Orange, Connecticut  06477
                Telecopy:   (203) 799-9636
                Attention:  Russell R. MacDonnell

            with a copy to:

                Robinson & Cole LLP
                695 East Main Street
                Stamford, Connecticut  06904
                Telecopy:   (203) 462-7599
                Attention:  Richard A. Krantz, Esq.

        (b) If to Advance:

                Advance Capital Partners, L.P.
                660 Madison Avenue
                15th Floor
                New York, New York 10021
                Telecopy:   (212) 835-2020
                Attention:  Robert A. Bernstein

            with a copy to:

                Kirkland & Ellis
                153 East 53rd Street
                New York, New York  10022
                Telecopy:   (212) 446-4900
                Attention:  Joshua N. Korff, Esq.

        (c)  If  to any other Purchaser to the address set  forth
    opposite such Purchaser's name on Schedule I hereto.

        XI.4     Purchasers Fees and Expenses.  The Company shall
reimburse the Purchasers for the reasonable fees and expenses  of
Kirkland  &  Ellis incurred in connection with the documentation,
negotiation and consummation of the transactions contemplated  by
this  Agreement and the Related Documents (including  any  future
amendments  or waivers thereto) and for reasonable due  diligence
expenses incurred by the Purchasers.

        XI.5     Amendment  and  Waiver.   No  amendment  of  any
provision of this Agreement shall be effective, unless  the  same
shall be in writing and signed by the Company and the holders  of
two-thirds of the Preferred Shares and Conversion Shares held  by
holders  of  Series  A Preferred and Series  B  Preferred,  taken
together.   Any  failure  of  the  Company  to  comply  with  any
provision hereof may only be waived in writing by the holders  of
two-thirds of the Preferred Shares and Conversion Shares held  by
holders  of  Series  A Preferred and Series  B  Preferred,  taken
together,  and any failure of any holder of Preferred  Shares  or
Conversion Shares to comply with any provision hereof may only be
waived  in writing by the Company.  No such waiver shall  operate
as  a  waiver of, or estoppel with respect to, any subsequent  or
other  failure.   No  failure by any party  to  take  any  action
against  any  breach of this Agreement or default  by  any  other
party  shall constitute a waiver of such party's right to enforce
any provision hereof or to take any such action.  Notwithstanding
anything  to  the contrary contained herein, no amendment  to  or
waiver  of  Section 8.2(j) without the prior written  consent  of
Advance  shall  be permitted.  No amendment of any  provision  of
this Agreement shall be effective prior to the Advance Closing.

        11.6     Like Treatment of Holders.  Neither the  Company
nor  any of its affiliates shall, directly or indirectly, pay  or
cause  to  be paid any consideration, whether by way of interest,
fee, payment for the redemptions or exchange of Preferred Shares,
or  otherwise, to any holder of Preferred Shares, for  or  as  an
inducement  to,  or in connection with the solicitation  of,  any
consent,  waiver or amendment of any terms or provisions  of  the
Preferred  Shares  or  this Agreement or the Registration  Rights
Agreement,  unless such consideration is required to be  paid  to
all holders of Preferred Shares bound by such consent, waiver  or
amendment whether or not such holders so consent, waive or  agree
to  amend  and whether or not such holders tender their Preferred
Shares  for  redemption  or exchange.   The  Company  shall  not,
directly  or indirectly, redeem any Preferred Shares unless  such
offer  of redemption is made pro rata to all holders of Preferred
Shares on identical terms.

        11.7    Counterparts.  This Agreement may be executed  in
any  number of counterparts, each of which shall be deemed to  be
an  original,  but  all  of which together shall  constitute  one
agreement.

        11.8     Headings.  The headings of the various  sections
of this Agreement have been inserted for reference only and shall
not be deemed to be a part of this Agreement.

        11.9     Specific Performance.  The Company, on  the  one
hand,  and  the  Purchasers, on the other hand, acknowledge  that
money damages would not be a sufficient remedy for any breach  of
this  Agreement.  It is accordingly agreed that the parties shall
be  entitled  to  specific performance and injunctive  relief  as
remedies for any such breach, these remedies being in addition to
any  of  the  remedies to which they may be entitled  at  law  or
equity.

        11.10     Remedies  Cumulative.   Except   as   otherwise
provided herein, the remedies provided herein shall be cumulative
and  shall not preclude the assertion by any party hereto of  any
other  rights  or the seeking of any other remedies  against  any
other party hereto.

        11.11    GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS
OF  THE  STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE  LAWS  OF
CONFLICT  OR CHOICE OF LAWS OF THE STATE OF NEW YORK  OR  OF  ANY
OTHER  JURISDICTION THAT WOULD RESULT IN THE APPLICATION  OF  ANY
LAWS OTHER THAN THOSE OF THE STATE OF NEW YORK.

        11.12     No   Third  Party  Beneficiaries.   Except   as
specifically set forth or referred to herein, nothing  herein  is
intended  or  shall  be construed to confer upon  any  person  or
entity  other  than  the parties hereto and their  successors  or
assigns,  any  rights  or remedies under or  by  reason  of  this
Agreement.

        11.13    Severability.  If any term, provision,  covenant
or  restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the  remainder
of  the  terms,  provisions, covenants and restrictions  of  this
Agreement shall remain in full force and effect and shall  in  no
way be affected, impaired or invalidated.

                   *     *     *     *     *

        IN WITNESS WHEREOF, the parties have caused their duly
authorized officers to execute this Agreement as of the date
first above written.


                               ALARMGUARD HOLDINGS, INC.


                               By:
                                   Name:
                                   Title:


                               ADVANCE CAPITAL PARTNERS, L.P.

                               By:  Advance Capital Associates, L.P.,
                                        its General Partner
                               By:Advance Capital Management,LLC,
                                        its General Partner


                               By:
                                   Name:  Robert A. Bernstein
                                   Title:    Principal


                               ADVANCE CAPITAL OFFSHORE
                               PARTNERS, L.P.

                               By:Advance Capital Offshore
                                   Associates, LDC,
                                        its General Partner
                               By:Advance Capital Associates,
                                   L.P.,
                                        its Sole Director
                               By:Advance Capital Management,
                                   LLC,
                                        its General Partner


                               By:
                                   Name:     Robert A. Bernstein
                                   Title:    Principal


                               CANAAN EQUITY, L.P.

                               By:  Canaan Equity Partners, L.L.C.


                               By:
                                   Name:  Stephen L. Green
                                   Title:  Member/Manager



                               EXETER CAPITAL PARTNERS IV, L.P.

                               By:  Exeter IV Advisors, L.P.
                                        its General Partner
                               By:  Exeter IV Advisors, Inc.,
                                        its General Partner


                               By:
                                   Name:  Keith R. Fox
                                   Title:    President



                               LB I GROUP INC.


                               By:
                                   Name: Alan H. Washkowitz
                                   Title:  Senior Vice President



                               ELLIOTT ASSOCIATES, L.P.





                               By:
                                   Name:  Paul E. Singer
                                   Title:    General Partner



                               WESTGATE INTERNATIONAL, L.P.
                                   By:  Martley International, Inc.
                                           as Attorney-in-Fact



                               By:
                                   Name:  Paul E. Singer
                                   Title:    President



                               ZIFF ASSET MANAGEMENT, L.P.





                               By:
                                   Name: Philip B. Korsant
                                   Title:  President



                               OZ MASTER FUND, LTD.





                               By:
                                   Name:  Daniel S. Och
                                   Title:    Managing Member
                                        OZ Management, L.L.C.



                               IBJS CAPITAL CORPORATION




                               By:
                                   Name:  Kevin P. Falvey
                                   Title:    Director



                               CREDIT SUISSE (GUERNSEY) LIMITED
                                   as trustee of the Dynamic
Growth Fund II




                               By:
                                   Name: M. E. Zunino
                                   Title:  Associate



                               AETNA LIFE INSURANCE COMPANY





                               By:
                                   Name:  Alan Vartelas
                                   Title:  Assistant Vice President



                               GRANITE PROPERTIES MANAGEMENT CORP.




                               By:
                                   Name:  Daren J. Wells
                                   Title:    Director, Private Equity








                               By:
                                   Name:  Paul Finkelstein