Document:

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Exhibit 10.4

                                  MAY 2000

                            SHARE PURCHASE AGREEMENT

                                 BY AND BETWEEN

                  THE EXECUTORS OF THE UNITED KINGDOM ESTATE OF
                              ERIC HURST (DECEASED)
                                  ROBERT HURST
                                  EDWARD HURST
                                   LINDA HURST
                                  HEATHER HURST
                               FIRST COURT LIMITED
                                MAYGARDEN LIMITED

           THE TEMPORARY ADMINISTRATOR OF THE UNITED STATES ESTATE OF
                              ERIC HURST (DECEASED)

                              MTL ACQUISITION CORP.

                             WEIL, GOTSHAL & MANGES

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                                TABLE OF CONTENTS

                                                                            Page

 1     CERTAIN DEFINITIONS ..............................................    1
 2     SALE OF SHARES AND RELATED MATTERS ...............................    6
 3     THE CLOSING ......................................................    7
 4     REPRESENTATIONS AND WARRANTIES OF SELLERS ........................    9
 5     REPRESENTATIONS AND WARRANTIES OF SECURITY VILLAGE AND
       BUYER ............................................................   17
 6     COVENANTS OF THE PARTIES .........................................   18
 7     CONDITIONS TO SELLERS' OBLIGATIONS ...............................   22
 8     CONDITIONS TO BUYER'S OBLIGATIONS ................................   23
 9     INDEMNIFICATION AND RELATED MATTERS ..............................   24
10     TERMINATION AND ABANDONMENT ......................................   26
11     MISCELLANEOUS PROVISIONS .........................................   27
ANNEX A - Opinion of Schiffman, Berger, Kaufman and Ritter ..............   33
ANNEX B - Officer's Certificate of Buyer ................................   41
ANNEX C - Seller's Certificate ..........................................   42
ANNEX D - Schedule of Incentive Payments ................................   43
ANNEX E - Tax and Indemnity Deed ........................................   45
ANNEX F - Working Capital Calculation ...................................   56

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This Share Purchase Agreement (the "AGREEMENT") is entered into as of __ May,
2000, by and between Stuart Lyons and Rimma Hurst (as co-executors of the United
Kingdom estate of Eric Hurst (deceased)), Robert Hurst, Edward Hurst, Linda
Hurst, Heather Hurst, First Court Limited and Maygarden Limited (collectively,
"TIMESMASTER HOLDERS"), Rimma Hurst (as Temporary Administrator of the United
States estate of Eric Hurst (deceased)) ("HURST") and MTL Acquisition Corp., a
Delaware corporation ("BUYER"). Timesmaster Holders and Hurst are collectively
referred to as "Sellers."

WHEREAS:

(A)  Timesmaster Holders, collectively, are the beneficial and record owners of
     15,110 ordinary shares (the "TIMESMASTER SHARES") of Timesmaster Limited,
     an English limited company (the "COMPANY"), constituting all of the issued
     share capital of the Company.

(B)  The Company is the beneficial and record owner of all of the issued share
     capital of LWG Holdings Limited, an English limited company ("LWG"), which
     is the beneficial and record owner of all of the issued and outstanding
     shares of capital stock of Griptight Holdings, Inc., a New Jersey
     corporation ("GRIPTIGHT").

(C)  Griptight is the beneficial and record owner of eight (8) shares of common
     stock, no par value per share (the "GRIPTIGHT SHARES"), of Monital Signal
     Corporation, a New York corporation ("MONITAL"), constituting 80% of the
     issued and outstanding shares of capital stock of Monital.

(D)  Hurst is the beneficial and record owner of two (2) shares of common stock,
     no par value per share of Monital (the "HURST SHARES") constituting 20% of
     the issued and outstanding shares of capital stock of Monital. The Hurst
     Shares and the Timesmaster Shares are hereinafter referred to as the
     "SHARES".

(E)  Sellers desire to sell to Buyer, and Buyer wishes to purchase from Sellers,
     the Shares for the Purchase Price upon the terms and conditions set forth
     in this Agreement.

Certain terms used in this Agreement are defined in Article I.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

1    CERTAIN DEFINITIONS

"AFFILIATE" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the United States Securities and Exchange Act of 1934, as
amended.

"AGREEMENT" has the meaning ascribed to it in the Preamble hereto.

"BASKET" has the meaning ascribed to such term in Section 9.3(a) hereof.

"BUSINESS DAY" means any day on which banks are open for business in London,
England and New York City.

"BUYER" has the meaning assigned to it in the Preamble hereto.

"BUYER GROUP" means Buyer and Buyer's Affiliates and their respective successors
and assigns.

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"BUYER INDEMNIFIED PARTIES" has the meaning ascribed to such term in Section
9.1(a) hereof.

"CLAIM NOTICE" has the meaning ascribed to such term in Section 9.4(a) hereof.

"CLOSING" means the closing of the transactions contemplated by this Agreement.

"CLOSING DATE" means the date on which the Closing actually occurs and the
transactions contemplated hereby become effective.

"CLOSING DATE BALANCE SHEET" means the balance sheet of Monital as of the
Closing Date, prepared on the same basis as used in the calculation entitled
"Working Capital Adjustment" attached as Annex F.

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

"COMPANY" has the meaning ascribed to it in the Preamble hereto.

"COMPANY SUBSIDIARY" means any subsidiary of the Company or any subsidiary of
such subsidiary.

"CONFIDENTIALITY AGREEMENT" means the Confidentiality Agreement, dated 20
August, 1999, and as amended, between SecureTech Partners LLC and Nomura
International PLC, on behalf of Security Village.com Inc.

"CONSENT" means a consent, waiver, approval, authorisation or permit.

"CONTRACT" means any of the items referred to in sections (a) through (g) of
Section 4.10 hereof.

"DISCLOSURE SCHEDULE" means the Disclosure Schedule dated the date hereof
delivered by Sellers to Buyer.

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

"ENCUMBRANCE" means a claim, lien, encumbrance, easement, security interest,
third-party rights, charge or restriction on transfer of any nature whatsoever.

"ENVIRONMENTAL LAWS" means all applicable United States federal, state or local
or foreign laws, rules, statutes, regulations, codes, ordinances, orders,
decrees, directives, all common law decisions and any other applicable legally
binding requirement of any Governmental Entity, in each case as in effect on the
Closing Date, relating to pollution or protection of the environment, including
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act,
the Clean Water Act, the Federal Insecticide, Fungicide and Rodenticide Act, the
Toxic Substance and Control Act, the Safe Water Drinking and Toxic Enforcement
Act of 1986 and the Occupational Safety and Health Act (but only to the extent
it regulates occupational exposure to Hazardous Materials) and similar state and
local laws.

"ESCROW AGENT" means Schiffman, Berger, Abraham, Kaufman & Ritter, P.C., United
States counsel to Sellers, or any other person designated by Sellers pursuant to
the Escrow Agreement and reasonably acceptable to Buyer.

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"ESCROW AGREEMENT" means the Escrow Agreement, dated as of 22 November, 1999,
among the Sellers, Security Village.com Inc. and the Escrow Agent, which governs
the custody of the Escrow Deposit.

"ESCROW DEPOSIT" means the U.S.$100,000 deposited by Buyer with Escrow Agent,
together with any interest or other amounts earned thereon, pursuant to the
terms of the Escrow Agreement.

"FACILITIES" shall mean all buildings and improvements on the Property.

"FINANCIAL STATEMENTS" means the (x) audited balance sheets of LWG, Griptight
and Monital and the related statements of earnings, retained earnings and cash
flows (including any related notes) as of and for the fiscal year ended 31 March
1999 and (y) the unaudited balance sheet of Monital as of 31 March 2000.

"GAAP" means generally accepted accounting principles in the United Kingdom or
the United States, as the case may be, as of the date hereof applied on a
consistent basis during the periods involved.

"GOVERNMENTAL ENTITY" means a governmental or regulatory authority, agency or
commission, including courts of competent jurisdiction, domestic or foreign.

"GRIPTIGHT" has the meaning ascribed to it in the Recitals hereto.

"GRIPTIGHT SHARES" has the meaning ascribed to it in the Recitals hereto.

"HAZARDOUS MATERIALS" means any substance, material or waste that is regulated,
identified or classified as "HAZARDOUS" "TOXIC", a "POLLUTANT", "CONTAMINANT" or
words of similar meaning under any Environmental Law, including, without
limitation, petroleum (including crude oil or any fraction thereof),
polychlorinated biphenyls and asbestos.

"HURST" has the meaning ascribed to it in the Preamble hereto.

"HURST SHARES" has the meaning ascribed to it in the Recitals hereto.

"INCENTIVE PAYMENT AMOUNT" means the sum of US$1,126,864.

"IRS" means the United States Internal Revenue Service.

"ISRA" means the New Jersey Industrial Site Recovery Act, N.J.S.A. 13:1K-6, et
seq.

"INDEMNIFIED PARTY" has the meaning ascribed to such term in Section 9.4(a)
hereto.

"INDEMNIFYING PARTY" has the meaning ascribed to such term in Section 9.4(a)
hereto.

"INSURANCE POLICIES" means all insurance policies with respect to the property,
assets, operations and business of the Company and any Company Subsidiaries,
whether purchased directly by or on behalf of the Company and any Company
Subsidiaries.

"INTELLECTUAL PROPERTY RIGHTS" means, wherever existing in the world, (i)
patents, whether in the form of utility patents or design patents, and all
pending applications for registration thereof, (ii) trademarks, trade names,
service marks, domain names, designs, logos, trade dress and trade styles,
whether or not registered, and all pending applications for registration
thereof, (iii) copyrights, whether or not registered, and all pending
applications for registration thereof, (iv)

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know-how, inventions, research records, trade secrets, confidential information,
product designs, engineering specifications and drawings, technical information,
formulae, customer lists, supplier lists and market analyses, (v) computer
software and programmes, including, without limitation, computer programmes
embedded in semiconductor chips or otherwise embodied, and related flow charts,
programmer notes, documentation, updates and data, whether in object or source
code form, and (vi) all other similar intellectual property rights, whether or
not registered.

"KNOWLEDGE" as applied herein to Sellers means such knowledge as any Seller
would have had had he made reasonable enquiry of Ray Sacks and Bob Heintz.
"KNOWLEDGE" as applied to a corporation means actual knowledge of an executive
officer (Vice President or higher) or of a member of the Board of Directors.

"LWG" has the meaning ascribed to such term in the Recitals.

"LWG Holdback" means the sum of $80,000 to be held back from the Purchase Price
on the terms set out in the Tax and Indemnity Deed.

"LOSSES" has the meaning ascribed to such term in Section 9.1(a) hereof.

"MAYGARDEN SETTLEMENT" means the settlement dated 21 January 1986 between
Penelope Jane Hart Carrega (formerly Gancikov ) and Rothschild Trust Guernsey
Limited (formerly Rothschild Trust Company (C.I.) Limited )(as amended).

"MONITAL" has the meaning ascribed to it in the Recitals.

"NOTICE PERIOD" has the meaning ascribed to such term in Section 9.4(a) hereof.

"OBLIGATION" means an indenture, mortgage, note, bond, licence, government
registration, contract, lease, agreement or other instrument or obligation.

"ORDER" means an order, writ, judgment, injunction, decree, statute, ordinance,
rule or regulation.

"PBGC" means the United States Pension Benefit Guaranty Corporation.

"PERSON" means any individual, corporation, limited liability company,
partnership, trust or other entity of whatever nature.

"PLAN" means each "EMPLOYEE BENEFIT PLAN" as such term is defined in Section
3(3) of ERISA, as amended, and any severance, bonus or other incentive
compensation, deferred compensation, relocation, tuition assistance, stock
purchase, stock option or award, vacation or disability plans, programmes or
policies, whether written or otherwise, that the Company or any of the Company
Subsidiaries maintains or contributes to on behalf of its current or former
employees for which the Company or any Company Subsidiary has any potential
liability.

"PROPERTY" shall mean all real property leased or owned by, or otherwise used in
the conduct of the business of, the Company or any Company Subsidiary, either
currently or in the past.

"PURCHASE PRICE" means U.S.$10,988,825. A portion of the Purchase Price will be
satisfied by payment to Sellers of the Escrow Deposit.

"SECURITIES ACT" means the United States Securities Act of 1933, as amended.

"SELLERS" has the meaning ascribed to it in the Preamble hereto.

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"SHARES" has the meaning ascribed to it in the Recitals hereto.

"SUBSIDIARY" means any corporation, association or other business entity of
which more than 50% of the total voting power of stock entitled to vote in the
election of directors or managers thereof is at the time owned or controlled,
directly or indirectly, by such Person.

"TAX AND INDEMNITY DEED" means the Tax and Indemnity Deed in the agreed form
annexed hereto as Exhibit E, to be entered into by Sellers (other than Hurst)
and Buyer, in relation to tax, real estate and other liabilities relating to
Timesmaster and LWG.

"TIMESMASTER HOLDERS" has the meaning ascribed to such term in the Preamble
hereto.

"TIMESMASTER SHARES" has the meaning ascribed to it in the Recitals hereto.

"TRANSACTION DOCUMENTS" means (i) this Agreement, (ii) the Escrow Agreement,
(iii) the Tax and Indemnity Deed, (iv) the Confidentiality Agreement as made a
part hereof and (v) any other agreement or certificate executed by any Seller or
Buyer in connection with the transactions contemplated herein.

"WORKING CAPITAL" shall mean the difference between the Total Current Assets and
the Total Current Liabilities of Monital, calculated on the same basis as used
in the calculation entitled "Working Capital Adjustment" attached as Annex F.

"WORKING CAPITAL DIFFERENTIAL" shall mean the differential between a negative
Working Capital of US$1,104,105 and the Working Capital at the close of business
in New York on the Closing Date as reflected in the Closing Date Balance Sheet.

2    SALE OF SHARES AND RELATED MATTERS

2.1  THE SALE Upon the terms and subject to the conditions of this Agreement, at
the Closing, Sellers will sell, assign, transfer and deliver to Buyer with (in
the case of the Timesmaster Shares), full title guarantee, and Buyer will
purchase from Sellers, the Shares.

2.2  PURCHASE PRICE In consideration of the aforesaid sale, assignment, transfer
and delivery of the Shares at the Closing, Buyer will pay or cause to be paid to
the Escrow Agent on behalf of the Sellers (whose receipt shall be a valid
release of the Buyer from the provisions of this Section), in immediately
available funds, the cash Purchase Price less the amount of the Escrow Deposit.

2.3  PURCHASE PRICE ADJUSTMENT

(a)  No later than sixty (60) calendar days following the Closing, Sellers shall
     prepare the Closing Date Balance Sheet and calculate the Working Capital
     Differential and shall deliver same to Buyer. Buyer shall deliver to
     Sellers its written acceptance or rejection of the submission within ten
     (10) calendar days after receipt from Sellers and a failure to provide
     notice shall be deemed an acceptance. If the parties are unable to agree on
     adjustments to the Closing Date Balance Sheet within an additional five (5)
     calendar days, then the open issue or issues shall be submitted to binding
     arbitration by a disinterested Certified Public Accountant mutually
     selected by the parties. If the parties are unable to agree upon an
     arbitrator within an additional five (5) calendar days, then either party
     may apply to a Judge of a Superior Court of New Jersey, Monmouth County,
     for the selection of a qualified Certified Public Accountant to serve as
     arbitrator. The arbitrator shall have free access to all pertinent records
     maintained by Buyer and Sellers

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     and shall issue a written decision within thirty (30) days of his or her
     appointment conclusively establishing the Closing Date Balance Sheet and
     the Working Capital Differential.

(B)  If the Working Capital Differential reflects a decrease in Working Capital
     exceeding US$10,000, then Sellers shall within 2 business days after final
     resolution of the Working Capital Differential pay Buyer the amount of the
     Working Capital Differential. If the Working Capital Differential reflects
     a decrease in Working Capital of US$10,000 or less, no payment shall be due
     from the Sellers to the Buyer.

(C)  If the Working Capital Differential reflects an increase in Working Capital
     exceeding US$10,000, then Buyer shall within 2 business days after final
     resolution of the Working Capital Differential pay to Sellers (care of
     their attorney's bank account details of which are set out in section 3.3)
     the amount of the Working Capital Differential, up to a maximum of
     US$160,000. If the Working Capital Differential reflects an increase in
     Working Capital of US$10,000 or less, no payment shall be due from the
     Buyer to the Sellers.

(D)  All deliveries pursuant to this Section 2.3 shall be in accordance with
     Section 11.5.

3    THE CLOSING

3.1  TIME AND PLACE OF CLOSING   Upon the terms and subject to the conditions
contained in this Agreement, the Closing will take place at the offices of Weil,
Gotshal & Manges, One South Place, London EC2M 2WG immediately following
satisfaction or waiver of all conditions set forth in Articles 7 and 8 hereof.

3.2 DELIVERIES BY SELLERS   At the Closing, Sellers will deliver or cause to be
delivered the following to Buyer:

(A)  Certificates representing the Shares accompanied by duly executed
     instruments of transfer from each Seller in the name of Buyer or its
     nominee.

(B)  The resignations (including releases of liability) of all members of the
     Board of Directors of the Company and each Company Subsidiary.

(C)  The certificate contemplated by Section 8.4 hereof in the form of Annex C.

(D)  A copy of the resolutions of the board of directors of the Company
     authorising the execution, delivery and performance of this Agreement,
     together with a copy of a board minute of the Company authorising
     registration of the Buyer as holder of the Timesmaster Shares.

(E)  Certificates of good standing, or the functional equivalent thereof, of the
     Company and each Company Subsidiary from the appropriate governmental
     office of each jurisdiction of organisation, and each jurisdiction where
     qualified to conduct business, dated not more than thirty (30) days prior
     to the Closing.

(F)  An Opinion of Schiffman, Berger, Abraham, Kaufman & Ritter, P.C., United
     States counsel to Sellers, addressed to Buyer and dated the Closing Date,
     substantially in the forms attached hereto as Annex A.

(G)  THE Tax and Indemnity Deed in the form of Annex E, duly executed by each
     Seller.

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(H)  The duly executed release of all charges to which the assets of the Company
     or any Company Subsidiary are subject and of all guarantees given by the
     Company or any Company Subsidiary, including without limitation the deed of
     negative pledge in favour of Lloyds Bank Plc entered into by LWG on 11 July
     1985.

(I)  Written confirmation by R. Sacks, G. Steinmetz, R. Heintz, Ann Chapman and
     Craig Sacks that transactions contemplated herein do not trigger change of
     control provisions in their contracts and releases of any obligation of
     Monital to make any payment in respect of any future change of control.

(J)  The duly executed release by each of the Sellers releasing the Company and
     each Company Subsidiary from all and any claims which Sellers may have
     against any such Company other than claims and liabilities arising pursuant
     to this agreement.

(K)  Such other documents reasonably necessary or appropriate to give full force
     and effect to this Agreement as Buyer may request not less than five (5)
     business days prior to the Closing.

3.3  DELIVERIES BY BUYER   At the Closing, Buyer will deliver or cause to be
delivered the following to Sellers:

(A)  The Purchase Price in immediately available funds (which Buyer authorises
     Weil, Gotshal & Manges LLP to pay on its behalf) to the Sellers, care of
     their attorney's bank account, details of which are as follows:

     Schiffman, Berger, Abraham, Kaufman & Ritter, P.C.

     Account No.       021201383 5150004147

     Bank:             Valley National Bank
                       Three University Plaza
                       Hackensack, New Jersey 07602

     Routing Number    021201383
     (ABA Number)

(B)  The certificate contemplated by Section 7.4 hereof.

(C)  A copy of the resolutions of the board of directors of Buyer authorising
     the execution, delivery and performance of this Agreement, and a
     certificate of the secretary or assistant secretary of Buyer, dated as of
     the Closing Date, to the effect that such resolutions were duly adopted and
     are in full force and effect.

(D)  The Tax and Indemnity Deed duly executed by Buyer.

(E)  Such other documents reasonably necessary or appropriate to give full force
     and effect to this Agreement as Buyer may request not less than five (5)
     business days prior to the Closing.

3.4 INCENTIVE PAYMENTS  At Closing, Buyer will pay (and authorises Weil, Gotshal
& Manges LLP to pay on its behalf) to the Escrow Agent the Incentive Payment
Amount and Buyer and Sellers hereby authorise the Escrow Agent to apply the
Incentive Payment Amount on behalf of Monital immediately after Closing in
making incentive payments to Raymond Sacks and other employees of Monital in
accordance with the schedule at Annex D, which payments Sellers warrant shall be
in full and final settlement of all claims by employees of Monital against
Monital

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in respect of the sale of the Shares and any subsequent change of control of
Griptight or Monital, direct or indirect.

3.5   DEBT REPAYMENTS At Closing, Buyer will pay (and authorises Weil, Gotshal &
Manges LLP to pay on its behalf) to the Escrow Agent the sum of US$224,311 and
Buyers and Sellers hereby authorize and instruct the Escrow Agent to pay such
amount to Lewis Woolf Griptight Limited, on behalf of Griptight as to US$68,765
and on behalf of LWG as to US$155,546, which Sellers warrant will be in full and
final satisfaction of all and any liabilities Griptight or LWG to Lewis Woolf
Griptight Limited.

For the avoidance of doubt, (i) the repayment of the intercompany loan
outstanding at Closing from Griptight to Lewis Woolf Griptight Limited will be
funded by an intercompany loan from the Buyer to LWG and a capital contribution
in similar amount by LWG to Griptight; and (ii) the repayment of the
intercompany loan outstanding at Closing from LWG to Lewis Woolf Griptight
Limited will be funded by an intercompany loan from the Buyer to LWG. Buyer
confirms these arrangements will not result in any liability to Griptight.

4    REPRESENTATIONS AND WARRANTIES OF SELLERS

Subject to Section 4.27, Sellers hereby jointly and severally represent
and warrant to Buyer as follows:

4.1  CORPORATE ORGANISATION; Etc The Company is a limited company duly
incorporated, validly existing and in good standing under the laws of England.
The Company has all requisite corporate power and authority to conduct its
business as it is now being conducted and to own, lease and operate its property
and assets. True and complete copies of the Memorandum and Articles of
Association of the Company have been heretofore delivered to Buyer. To the
knowledge of the Sellers all other copies of documents supplied to Buyer are in
all material respects true and complete copies of the original documents they
represent.

4.2   CAPITALISATION OF THE COMPANY The authorised capital stock of the Company
consists of 20,000 ordinary shares of (pound)0.05 each, of which the Timesmaster
Shares are the only shares issued and outstanding as of date hereof. Timesmaster
Holders are the record and beneficial owners of the Timesmaster Shares, and each
of the Timesmaster Holders has good and valid title to his or her Timesmaster
Shares, free and clear of all Encumbrances. All of the Timesmaster Shares are
duly authorised, validly issued, fully paid and non-assessable and were not
issued in violation of any pre-emptive rights. Except as set forth in Schedule
4.2 of the Disclosure Schedule, there are no outstanding (a) securities
convertible into or exchangeable for the capital stock of the Company, (b)
options, warrants or other rights to purchase or subscribe for capital stock of
the Company or (c) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock of the
Company, any such convertible or exchangeable securities or any such options,
warrants or rights, pursuant to which, in any of the foregoing cases, the
Company is subject or bound. The consummation of the transactions contemplated
hereby will convey to Buyer good and valid title to the Shares, free and clear
of all proxies, voting agreements and other Encumbrances.

4.3 COMPANY SUBSIDIARIES Each Company Subsidiary is listed in Schedule 4.3 of
the Disclosure Schedule together with its jurisdiction of incorporation or
organisation and the percentage interest held directly or indirectly by the
Company. All issued and outstanding capital stock or membership interest of each
Company Subsidiary is validly issued, fully paid and non-assessable, and, except
as set forth in Schedule 4.3 of the Disclosure Schedule, is owned directly or
indirectly by the Company free and clear of all Encumbrances. There are no
outstanding (a) securities convertible into or exchangeable for the capital
stock or membership interest of any

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Company Subsidiary, (b) options, warrants or other rights to purchase or
subscribe for capital stock or membership interest of any Company Subsidiary or
(c) contracts, commitments, agreements, understandings or arrangements of any
kind relating to the issuance of any capital stock or membership interest of any
of the Company Subsidiaries, any such convertible or exchangeable securities or
membership interest or any such options, warrants or rights pursuant to which,
in any of the foregoing cases, the Company or Company Subsidiaries are subject
or bound. Each Company Subsidiary is a duly organised and validly existing
corporation or limited liability company or other entity in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority to own its properties and carry on its business as
presently conducted. Except as set forth on Schedule 4.3 as to Monital, each
Company Subsidiary is qualified or licensed to do business as a foreign
corporation or to act as a provincial corporation in each jurisdiction wherein
the nature of its activities or its properties owned or leased makes such
qualification necessary, except where the failure to be so qualified or licensed
would not have a material adverse effect on its business. True and complete
copies of the Memorandum and Articles of Association or the Certificate of
Incorporation and By-Laws (or comparable organisational documents) of each
Company Subsidiary, as presently in effect, have been heretofore delivered to
Buyer.

4.4   AUTHORITY RELATIVE TO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS Each
Seller has all requisite authority and power to execute and deliver this
Agreement and each Transaction Document to which any Seller is a party and to
consummate the transactions contemplated hereby or thereby. The execution and
delivery of this Agreement and each Transaction Document to which any Seller is
a party and the consummation of the transactions contemplated hereby and thereby
have been duly and validly authorised by all required action and no other
proceedings on the part of any Seller is necessary to authorise this Agreement
or any Transaction Document to which any Seller is a party, or to consummate the
transactions contemplated hereby and thereby. This Agreement and each
Transaction Document to which any Seller is a party has been duly and validly
executed and delivered by such Seller and, assuming this Agreement and the
Transaction Documents have been duly authorised, executed and delivered by
Buyer, constitutes a valid and binding agreement of such Seller, enforceable
against such Seller in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganisation, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

4.5 CONSENTS AND APPROVALS; NO VIOLATIONS Except as set forth in Schedule 4.5 of
the Disclosure Schedule, neither the execution and delivery of this Agreement or
any of the Transaction Documents to which any Seller is a party nor any Seller's
consummation of the transactions contemplated hereby or thereby will (a)
conflict with or violate any provision of the Certificate or Articles of
Incorporation or By-Laws (or other comparable governing documents) of the
Company or any Company Subsidiary, (b) require any material Consent of, or
filing with or notification to, any Governmental Entity, except such as shall
have been lawfully and validly obtained prior to the Closing, (c) result in a
violation or breach of, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration of any obligation to repay), including, without limitation,
under any provision relating to changes of control, under any of the terms,
conditions or provisions of any material Obligation to which any Seller, the
Company or any Company Subsidiary is a party or by which any Seller, the Company
or any Company Subsidiary or any of their respective property or assets may be
bound except such violations, breaches and defaults as to which requisite
waivers or consents have been, or will be prior to the Closing, obtained, (d)
violate any material Order of any Governmental Entity applicable to any Seller,
the Company or any Company Subsidiary or

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(e) result in the creation of any Encumbrance against or with respect to the
Shares or any assets of the Company or any Company Subsidiary.

4.6 FINANCIAL STATEMENTS Schedule 4.6 of the Disclosure Schedule sets forth the
Financial Statements. The Financial Statements present fairly the financial
position and earnings and cash flows of LWG, Griptight and Monital, in each case
as of the dates or for the periods presented therein in conformity with GAAP,
except as otherwise noted therein.

4.7 ABSENCE OF CERTAIN CHANGES Except as set forth in Schedule 4.7 of the
Disclosure Schedule, since 31 December 1999, neither the Company nor any Company
Subsidiary has (a) suffered any material adverse change in its business,
operations or financial position, (b) (to the best of the knowledge of the
Shareholders) suffered any material damage, destruction or loss, whether covered
by insurance or not, to its properties, assets or business, (c) (to the best of
the knowledge of the Shareholders) conducted its business in any material
respect not in the ordinary and usual course consistent with past practice,
except pursuant to the terms of this Agreement or any of the Transaction
Documents, (d) changed in any material respect any accounting principle or
policy, (e) except in the ordinary course of business consistent with past
practice, sold, transferred or otherwise disposed of, any of its material
properties or assets, (f) made any loan to or entered into any other transaction
with, any of its consultants or agents, directors or officers or its
stockholders, (g) made any material capital expenditures other than in the
ordinary course of business consistent with past practice, (h) sold any of its
inventory other than in the ordinary course of business consistent with past
practice, (i) made any payments to Affiliates other than in the ordinary course
of business, (j) made any declaration, setting aside or payment of any dividend
or other distribution in respect of its capital stock or membership interest, as
applicable, any direct or indirect redemption, retirement, purchase or other
acquisition by it of any shares of its capital stock, (k) incurred any
indebtedness for borrowed money, (l) made any change in existing credit
arrangements with any bank or other institution, (m) entered into or assumed any
contract, agreement, arrangement, lease (as lessor or lessee), licence or other
commitment, whether written or oral, involving more than U.S.$25,000 in each
instance, except in the ordinary course of business, (n) made any payment of, or
commitment to pay, any severance or termination pay to any officer, director or
consultant that is a natural person or stockholder, (o) discharged or satisfied
any material Encumbrance or paid any liability, except in the ordinary course of
business, (p) cancelled or compromised any debts owed to it or known claims
against others exceeding U.S.$25,000 in the aggregate, other than in the
ordinary course of business or (q) made any sale, transfer or grant of any
Intellectual Property Rights other than in the ordinary course of business.

4.8  NO UNDISCLOSED LIABILITIES

(a)  Neither the Company nor any Company Subsidiary has any liability (whether
     accrued, absolute, contingent or otherwise and whether known or unknown)
     other than liabilities (a) of a nature not required to be disclosed or
     reflected in a balance sheet prepared in accordance with GAAP or the notes
     thereto, (b) reflected or reserved against (to the extent of the reserves
     therefor) in the Financial Statements (or, to the extent expressly
     quantified therein, in the notes thereto), (c) incurred or arising in the
     ordinary course of business since 31 December 1999, (d) relating to
     subscriber monitoring contracts or (e) with respect to the matters
     described in the Disclosure Schedule (including, without limitation,
     Schedule 4.8 thereof).

(b)  Without prejudice to the generality of Section 4.8(a), no Company
     Subsidiary other than Monital has any indebtedness other than the sums of
     US$68,765 owed by Griptight to Lewis Woolf Griptight Limited and the sum of
     US$155,546 owed by LWG to Lewis Woolf Griptight Limited.

                                       11

<PAGE>   13

4.9 COMPLIANCE WITH LAW; GOVERNMENTAL AUTHORISATIONS Except as set forth in
Schedule 4.9 of the Disclosure Schedule, each Seller, the Company and any
Company Subsidiary has complied and is currently in compliance with all
applicable material Orders of any Governmental Entity in all material respects.
Except as set forth in Schedule 4.9 of the Disclosure Schedule, the Company and
each Company Subsidiary has all material governmental licences and permits
necessary to conduct itself in the ordinary course of business. Each of the
Company and any Company Subsidiary has obtained each United States federal,
state, county, local or foreign governmental consent, licence, permit, grant, or
other authorisation of a Governmental Entity (i) pursuant to which such company
currently operates or holds any interest in any of its properties or (ii) that
is required for the operation of such company's business or the holding of any
such interest ((i) and (ii) herein collectively called "Authorisations"), and
all of such Authorisations are in full force and effect.

4.10 CONTRACTS AND COMMITMENTS Schedule 4.10 of the Disclosure Schedule sets
forth a complete list of all (a) collective bargaining agreements to which the
Company or each Company Subsidiary are a party, (b) agreements which require
aggregate future payments by or to the Company or any Company Subsidiary of more
than U.S.$25,000 which are not terminable by such entity on less than ninety
(90) days' notice without penalty, (c) agreements containing covenants limiting
the freedom of the Company or any Company Subsidiary to compete with any person
in any line of business or in any area or territory, (d) licence agreements with
respect to the Intellectual Property Rights, (e) indentures, mortgages and notes
or other debt instruments evidencing indebtedness of the Company or any Company
Subsidiary involving more than U.S.$25,000 in each instance, (f) leases for real
property to which the Company or any Company Subsidiary is a party and (g)
agreements to which the Company or any Company Subsidiary is a party under which
it has advanced or loaned any amount to any of its directors or officers. Except
as set forth in Schedule 4.10 of the Disclosure Schedule, all of the Contracts
are in full force and effect and, as to each Contract, there does not exist
thereunder any material default on the part of the Company or any Company
Subsidiary, or to the best of any Seller's knowledge, any other party thereto.
Schedule 4.10 of the Disclosure Schedule lists all Contracts that require a
novation or consent to assignment, as the case may be, prior to the Closing Date
as a result of the transactions contemplated hereby in order for such Contracts
to continue in full force and effect following the Closing.

4.11 LITIGATION Except as set forth in Schedule 4.11 of the Disclosure Schedule,
as of the date hereof, there is no material action, suit or proceeding pending
or, to the knowledge of any Seller, threatened, or unserved against either the
Company or any Company Subsidiary.

4.12 TAXES. Each of the Company and each Company Subsidiary, and any
consolidated, combined, unitary or aggregate group for Tax (as defined below)
for the purposes of which any of the Company or any Company Subsidiary is or has
been a member ("Tax Group"), has timely filed all material Tax Returns required
to be filed by it and has paid all Taxes shown thereon to be due. Such Tax
Returns are true, correct and complete in all material respects. There is (i) no
material claim for Taxes being asserted against the Company or any Company
Subsidiary, (ii) no audit of any Tax Return of the Company or any Company
Subsidiary being conducted by a Tax Authority, (iii) no extension of the statute
of limitations on the assessment of any Taxes granted by the Company or any
Company Subsidiary currently in effect, (iv) no agreement, contract or
arrangement to which the Company or any Company Subsidiary is a party that would
result in the payment of any amount that would not be deductible by reason of
Section 280G of the Code and (v) no material unpaid Tax for which the Company or
any of the Company Subsidiaries could be held liable as a transferee of any
other contributed assets. Neither the Company nor any Company Subsidiary is a
party to any Tax sharing or Tax allocation agreement and neither does the
Company nor any of the Company Subsidiaries has any liability or potential
liability to another party under any such agreement. Neither the Company nor any
Company Subsidiary has

                                       12

<PAGE>   14

ever been a member of a consolidated, combined or unitary group for United
States or English Tax purposes, except that Monital and Griptight have at all
times filed consolidated tax returns. None of the Tax Returns of Griptight or
Monital have ever been audited by any Tax Authority. For purposes of this
Agreement, the following terms have the following meanings: "TAX" (and, with
correlative meaning, "TAXES" and "TAXABLE") means (i) any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, value added, capital, transfer, franchise, profits, licence,
withholding, payroll, employment, social security, registration, excise,
severance, stamp, occupation, Pension Benefit Guaranty Corporation, premiums,
property, environmental or windfall profit tax, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or any penalty, addition to tax or additional amount
imposed by any governmental entity (a "TAX AUTHORITY") responsible for the
imposition of any such Tax either in the United States or in any non-United
States jurisdiction, including (but not limited to) England, (ii) any liability
for the payment of any amounts of the type described in section (i) above as a
result of being a member of an affiliated, consolidated, combined or unitary
group for any Taxable period and (iii) any liability for the payment of any
amounts of the type described in sections (i) or (ii) above as a result of being
a transferee of or successor to any person or as a result of any express or
implied obligation to indemnify any other person. As used herein, "TAX RETURN"
shall mean any return, statement, report or form (including, without limitation,
estimated tax returns and reports, withholding tax returns and reports and
information reports and returns) required to be filed with respect to Taxes.

4.13 EMPLOYEE BENEFIT PLANS; ERISA

(a)  Schedule 4.13 of the Disclosure Schedule contains a complete list of all
     Plans for the Company's U.S. Subsidiaries (the "US PLANS"). With respect to
     each U.S. Plan, Sellers have heretofore delivered or made available to
     Buyer, to the extent applicable: (i) true and complete copies of each U.S.
     Plan (including all amendments), (ii) complete copies of the most recent
     Form 5500 filed for the past three (3) years with respect to each U.S. Plan
     with the IRS and (iii) copies of the most recent IRS determination letters
     issued with respect to each U.S. Plan. None of the U.S. Plans is a
     multi-employer plan within the meaning of Section 3(37) of ERISA.

(b)  Except as set forth in Schedule 4.13 of the Disclosure Schedule: (i) there
     have been no non-exempt prohibited transactions within the meaning of
     Section 406 of ERISA, or Section 4975 of the Code with respect to any of
     the U.S. Plans; (ii) there is no outstanding liability under Title IV of
     ERISA with respect to any of the U.S. Plans other than for payment of
     premiums to the PBGC (which have been paid when due) or contributions not
     yet due; (iii) the PBGC has not instituted proceedings to terminate any of
     the U.S. Plans; (iv) each of the U.S. Plans has been operated and
     administered in accordance with its terms and applicable laws except for
     any failures that would not result in a liability (including any Tax or
     penalty under ERISA, the Code or any foreign law, the cost to correct such
     failure and reasonable professional fees) material to the relevant U.S.
     Plan; (v) there are no unfunded benefit liabilities within the meaning of
     Section 4001(a)(18) of ERISA with respect to any defined benefit plan
     maintained by the Company or any Company Subsidiary, as determined under
     the actuarial assumptions used in the most recent valuation report for the
     U.S. Plan; (vi) neither the Company nor any Company Subsidiary has taken
     any actions to terminate any Plan for which there is any outstanding
     liability; and (vii) the Company and the Company Subsidiaries have made or
     properly accrued on the books and records (as of the end of the month prior
     to the Closing Date) of the Company and the Company Subsidiaries all
     contributions (including periodic instalments) required by law or contract
     to be made to any U.S. Plan;

                                       13

<PAGE>   15

(c)  The Company, LWG and Griptight have no Plans of any type. None of the
     Monital Plans is maintained outside the United States or covers employees
     employed outside the United States.

(d)  Neither the Company, LWG nor Griptight has any liability, actual or
     contingent, to make any payment to any person arising out of or in respect
     of or in connection with any employment or alleged employment of any person
     by either of them, except as set forth on Schedule 4.13.

4.14 TITLE TO PROPERTIES Schedule 4.14 lists all real property owned or leased
by the Company or any Company Subsidiary. The Company and all Company
Subsidiaries have good, valid and, in the case of real property, marketable fee
simple title to all of the assets and properties which it owns and which are
reflected on the Financial Statements (except for assets and properties sold,
consumed or otherwise disposed of by Company or any Company Subsidiary in the
ordinary course of business since 29 February 2000, which are sold or disposed
of on or prior to the Closing). Such assets and properties are owned free and
clear of all Encumbrances, except for (i) Encumbrances listed in Schedule 4.14
of the Disclosure Schedule, (ii) liens for current Taxes not yet due and payable
or for Taxes the validity of which is being contested in good faith, (iii)
mechanics', materialmens' and other Encumbrances which have arisen in the
ordinary course of business and which, in the case of such other Encumbrances,
are not material in the aggregate, (iv) zoning, entitlement, building and other
land use and environmental regulations by any Governmental Entity, provided that
such regulations have not been materially violated and (v) such other
imperfections in title, including Encumbrances that do not materially interfere
with the present use or marketability of any assets or property subject thereto
or affected thereby, including all matters reflected on the policy of title
insurance and the survey annexed to Schedule 4.14 respecting the real property
owned by Monital (and Buyer agrees to accept title to said real property subject
to all facts disclosed on said policy of title insurance).

4.15 INTELLECTUAL PROPERTY RIGHTS Schedule 4.15 of the Disclosure Schedule sets
forth (i) a list of the Intellectual Property Rights and (ii) the owner or
licensor and any licensee of the Intellectual Property Rights. Except as set
forth in Schedule 4.15 of the Disclosure Schedule, (a) the Company and the
Company Subsidiaries own or possess adequate licences or other valid rights to
use all registered Intellectual Property Rights and, to the knowledge of any
Seller, all unregistered Intellectual Property Rights, (b) the Intellectual
Property Rights are, to the knowledge of any Seller, valid and the validity of
the Intellectual Property Rights and the title thereto of the Company or the
Company Subsidiary, as the case may be, are not being questioned in any
litigation to which the Company or any Company Subsidiary is a party nor, to the
knowledge of any Seller, is any such litigation threatened and (c) to the
knowledge of any Seller (i) the conduct of the business of the Company and the
Company Subsidiary as now conducted does not infringe or otherwise conflict with
any Intellectual Property Rights of others and (ii) neither the Company nor any
Company Subsidiary has received written notice alleging any such conflict.

4.16 INSURANCE The Insurance Policies are in full force and effect and neither
the Company nor any Company Subsidiary is in material default of any provision
thereof. Such insurances are issued on an "occurrence" basis. Sellers have
heretofore delivered or made available to Buyer copies of all Insurance Policies
that have been issued by carriers. Sellers make no representation or warranty
that such Insurance Policies will be continued or are continuable after the
Closing.

4.17 ENVIRONMENTAL MATTERS

(a)  Except as set forth in Schedule 4.17 of the Disclosure Schedule, the
     Company and each Company Subsidiary has timely obtained, complied with and
     currently possesses all

                                       14

<PAGE>   16

     material permits, licences or authorisations required by Environmental Laws
     ("ENVIRONMENTAL PERMITS"), and are in material compliance with all such
     Environmental Permits and applicable Environmental Laws.

(b)  (i) No methylene chloride or asbestos is contained in or has been used at
     or released from the Facilities except in material compliance with all
     applicable Environmental Laws; (ii) all Hazardous Materials have been
     disposed of in accordance with all applicable Environmental Laws; (iii)
     neither the Company nor any Company Subsidiary has received any notice
     (verbal or written) of any material non-compliance of the Facilities or its
     past or present operations with Environmental Laws; (iv) no administrative
     actions or suits are pending or threatened relating to a violation of any
     Environmental Law; (v) there have not been in the past, and are not now,
     any Hazardous Materials on, under or migrating to or from the Facilities or
     Property so as to give rise to any material liability under applicable
     laws; (vi) there have not been in the past, and are not now, any
     underground tanks or underground improvements at, on or under the Property,
     including, without limitation, treatment or storage tanks or sumps or
     water, gas or oil wells except those placed and maintained in material
     compliance with all applicable Environmental Laws; and (vii) the Property
     is not affected by any pollution or other negative environmental conditions
     which, regardless of the source, would create the obligation to assume any
     material obligation of clearance of the land or similar liability under
     Environmental Laws or any other material liability towards third parties
     under the same laws.

4.18 LABOUR RELATIONS None of the employees of the Company or any Company
Subsidiary is covered by a collective bargaining agreement. Neither the Company
nor any Company Subsidiary has ever suffered or experienced a strike, work
stoppage, material slowdown or other material labour dispute. To the knowledge
of Sellers, no employee of the Company or any Company Subsidiary has expressed
an intention to terminate his or her employment as a result of the transactions
contemplated by this Agreement.

4.19 BROKERS AND FINDERS Neither the Company nor any Company Subsidiary nor any
Seller or any of their respective officers, directors or employees has employed
any broker or finder or incurred any liability for any investment banking fees,
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement or the Transaction Documents, other than
SecureTech Partners, L.L.C., which has been partially paid by Monital, on or
before 31 March 2000, and any balance of which not paid as of 31 March 2000
shall be paid by Sellers.

4.20 ACCOUNTS RECEIVABLE Subject to any reserves set forth in the Financial
Statements and to the best of the knowledge of the Sellers, the accounts
receivable shown on the Financial Statements represent bona fide claims against
debtors for sales and other charges, and are not subject to discount except for
normal cash and immaterial trade discounts. The amount carried for doubtful
account and allowances disclosed in the Financial Statements was calculated in
accordance with GAAP and in a manner consistent with prior periods.

4.21 CUSTOMERS Except as set forth on Schedule 4.21 of the Disclosure Schedule,
none of the customers of the Company or any Company Subsidiary representing
U.S.$25,000 or more of revenues during the fiscal year ended 31 December 1999
has cancelled or otherwise terminated, or, to the knowledge of Sellers,
threatened to cancel or otherwise terminate, its relationship with the Company
or any Company Subsidiary between 31 December 1999 and the close of business on
the date immediately prior to the date hereof.

                                       15

<PAGE>   17

4.22 RESTRICTIONS ON BUSINESS ACTIVITIES There is no agreement, judgment,
injunction, order or decree binding upon either the Company or any Company
Subsidiary which has or could reasonably be expected to have the effect of
prohibiting or materially impairing (i) any current business practice of any of
them or (ii) any acquisition of property by any of them.

4.23 CERTAIN AGREEMENTS AFFECTED Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby or a sale
of the Shares or any issuance of shares in Griptight to Monitoring Acquisition
Corporation will (i) result in any payment (including, without limitation,
severance, unemployment compensation, golden parachute, bonus or otherwise)
becoming due to any director or employee of the Company or any Company
Subsidiary, other than Raymond Sacks pursuant to separate agreement, which will
be paid by Monital at Closing in accordance with Section 2.3 (ii) materially
increase any benefits otherwise payable by the Company or any Company
Subsidiary, or (iii) result in the acceleration of the time of payment or
vesting of any such benefits.

4.24 YEAR 2000 So far as Sellers are aware, having made reasonable enquiries,
except as a result of errors or "bugs" contained in data that are generated by
third parties, none of the products and services sold, licensed, rendered or
otherwise provided by the Company or any Company Subsidiary in the conduct of
its business will malfunction, will cease to function, will generate materially
incorrect data or will produce materially incorrect results and will not
directly cause any of the above with respect to the property or business of
third parties using such products or services when processing, providing or
receiving (i) date-related data from, into and between the twentieth (20th) and
twenty-first (21st) centuries, or (ii) date-related data in connection with any
valid date in the twentieth (20th) and twenty-first (21st) centuries. Other than
certifications as to Year 2000 compliance given to customers in the ordinary
course, neither the Company nor any Company Subsidiary has made any
representations or warranties specifically relating to the ability of any
product or service sold, licensed, rendered or otherwise provided by the Company
or any Company Subsidiary in the conduct of its business 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 (20th) and twenty-first
(21st) centuries, and (ii) date-related data in connection with any valid date
in the twentieth (20th) and twenty-first (21st) centuries.

4.25 NO PRIOR OPERATION The Company has not had any operation and has no assets
or liabilities other than its shareholding in LWG.

4.26 RELEASE BY ESTATE OF ERIC HURST The Estate of Eric Hurst hereby represents
and warrants that it has no claim to acquire any shares, options or other
securities of the Company or any Company Subsidiary (including, without
limitation, Monital) and that it hereby unconditionally and irrevocably releases
the Company, each Company Subsidiary, Buyer and Security Village from any claim
with respect thereto.

4.27 THE WARRANTIES Notwithstanding anything to the contrary in this Section 4,
the warranties are given on the following basis:

(a)  Hurst does not give any warranty or other representation, undertaking or
     indemnity with respect to the Company or LWG and gives its warranties
     severally and the liability of Hurst for all claims pursuant to this
     Agreement shall not exceed the aggregate Purchase Price received by it;

(b)  Each of Maygarden Limited and First Court Limited gives its warranties
     severally. The liability of each of Maygarden Limited and First Court
     Limited for all claims pursuant to this Agreement and the Tax and Indemnity
     Deed shall not, in any event, exceed the lower

                                       16

<PAGE>   18

     of (i) the aggregate cash Purchase Price received by either or (ii) the
     value of the capital assets of the Maygarden Settlement including, without
     limitation, those capital assets held by First Court Limited as nominee for
     Maygarden Limited from time to time (excluding the value of the existing
     loans made to beneficiaries of the Maygarden Settlement prior to the date
     of this Agreement ) provided in relation to (ii) that neither the Maygarden
     Settlement nor First Court Limited in its capacity as nominee of Maygarden
     Limited has after the date of this Agreement made distributions of capital
     (including, without limitation, by way of further loans, or guarantees of
     any obligations of beneficiaries of the Maygarden Settlement or directly or
     indirectly making capital payments to them in consideration for consulting
     or other services) whilst they respectively retain liability under this
     Agreement or the Tax and Indemnity Deed provided further that the Maygarden
     Settlement, in any financial year, shall be entitled to make capital loans
     to such beneficiaries which, when aggregated with all income distributions
     from the Maygarden Settlement, do not exceed in aggregate the value of the
     income derived by the Maygarden Settlement from the aggregate cash Purchase
     Price so received or investments derived therefrom; and

(c)   all warranties relating to Griptight are given on an absolute basis and
      not subject to the knowledge of the Sellers.

4.28 CERTAIN TRUSTS The Sellers acknowledge that the proportion of the Purchase
Price to be received by certain of the Sellers is as follows:

Maygarden Limited         47.75 per cent

First Court Limited         6.84 per cent

5    REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer jointly and severally represent and warrant to Sellers as follows:

5.1 CORPORATE ORGANISATION; ETC Buyer is a corporation duly organised, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to conduct its business as it is now
being conducted and to own, lease and operate its property and assets.

5.2 AUTHORITY RELATIVE TO THIS AGREEMENT AND THE TRANSACTION DOCUMENTS Buyer has
all requisite corporate authority and power to execute and deliver this
Agreement and each of the Transaction Documents to which it is a party and to
consummate the transactions contemplated hereby or thereby. The execution and
delivery of this Agreement, each of the Transaction Documents to which it is a
party and the consummation of the transactions contemplated hereby or thereby
have been duly and validly authorised by all required corporate action on the
part of Buyer and no other corporate proceedings on the part of Buyer are
necessary to authorise this Agreement, any Transaction Document to which it is a
party or to consummate the transactions contemplated hereby or thereby. This
Agreement and each Transaction Document to which Buyer is a party have been duly
and validly executed and delivered by Buyer and, assuming this Agreement and
each Transaction Document have been duly authorised, executed and delivered by
each Seller, constitutes a valid and binding agreement of Buyer, enforceable
against Buyer in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganisation, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

                                       17

<PAGE>   19

5.3  CONSENTS AND APPROVALS; NO VIOLATIONS   Except as set forth in Schedule 5.3
of the Disclosure Schedule, neither the execution and delivery of this Agreement
or any of the Transaction Documents by Buyer nor the consummation by Buyer of
the transactions contemplated hereby or thereby will (a) conflict with or
violate any provision of the certificate or their respective Certificates of
Incorporation or By-Laws, (b) require any material Consent of, or filing with or
notification to, any Governmental Entity, except such as shall have been
lawfully and validly obtained prior to the Closing, (c) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration
or any obligation to repay) under, any of the terms, conditions or provisions of
any material Obligation to which Buyer is a party or by which Buyer or any of
its properties or assets may be bound, except such violations, breaches and
defaults as to which requisite waivers or consents have been, or will be prior
to the Closing, obtained or (d) violate any material Order of any Governmental
Entity applicable to Buyer.

5.4  FINANCIAL CAPABILITY    Buyer has, and on the Closing Date will have,
sufficient funds to effect the Closing and all other transactions contemplated
by this Agreement or the Transaction Documents.

5.5  NO REPRESENTATION   Buyer has satisfactorily completed a thorough due
diligence investigation of the Company and each Company Subsidiary and
acknowledge that no representation or warranty is given by Sellers in respect of
the same except as set out in this Agreement.

5.6  BROKERS AND FINDERS   Neither the Buyer nor any of its respective officers,
directors or employees has employed any broker or finder or incurred any
liability for investment banking fees, brokerage fees, commissions or finders'
fees in connection with this Agreement or the Transaction Documents which is or
may become a liability of the Sellers other than in relation to SecureTech
Partners LLC.

6       COVENANTS OF THE PARTIES

6.1  CONDUCT OF BUSINESS OF THE COMPANY AND THE COMPANY SUBSIDIARIES   Except as
contemplated by this Agreement, as set forth in Schedule 6.1 of the Disclosure
Schedule or with the prior written consent of Buyer during the period from the
date of this Agreement to the Closing Date, Sellers will cause the Company and
the Company Subsidiaries to: (i) conduct its business and operations in the
ordinary course of business consistent with past practice, except as
contemplated by the terms of this Agreement or any Transaction Document and
except for acquisition from time to time by Monital of portfolios of contracts
for the provision of security services; and (ii) use all commercially reasonable
efforts consistent therewith to preserve intact its properties, assets and
business organisations, to keep available the services of its officers and
employees and to maintain satisfactory relationships with customers, suppliers,
distributors and others having commercially beneficial business relationships
with them, in each case in the ordinary course of business consistent with past
practice. Without limiting the generality of the foregoing, and except as
otherwise provided in this Agreement or any Transaction Document or as
contemplated hereby or thereby or as set forth in Schedule 6.1 of the Disclosure
Schedule, Sellers will cause the Company and the Company Subsidiaries not to,
prior to the Closing Date, without the prior written consent of Security Village
and Buyer, which consent shall not be unreasonably withheld or delayed:

(a)     issue, sell or pledge, or authorise or propose the issuance, sale or
        pledge of (i) additional shares of capital stock, or securities
        convertible into any such shares, or any rights, warrants or options to
        acquire any such shares or other convertible securities or (ii) any

                                       18

<PAGE>   20

     other securities in respect of, in lieu of or in substitution for, the
     shares of capital stock of the Company or any Company Subsidiary
     outstanding on the date hereof;

(b)  declare or pay any dividend or distribution on any of the Shares;

(c)  redeem, purchase or otherwise acquire any outstanding shares of the Company
     or any Company Subsidiary;

(d)  amend the Memorandum and Articles of Association or Certificates of
     Incorporation and By-Laws (or other comparable governing documents) of the
     Company or any Company Subsidiary;

(e)  sell, transfer or otherwise dispose of, any of its material property or
     assets (other than inventory in the ordinary course of business) or
     mortgage or encumber any of its material property or assets;

(f)  enter into other material agreements, commitments or contracts, except
     agreements, commitments or contracts made in the ordinary course of
     business consistent with past practice;

(g)  fail to pay any material obligation or liability, except in the ordinary
     course of business or unless being contested in good faith;

(h)  incur any indebtedness for borrowed money or enter into any capital leases;

(i)  make any capital expenditures (or commitment therefor) in excess of
     U.S.$25,000 (excluding any capital expenditures in progress as of the date
     hereof);

(j)  allow any insurance policy of the Company or any Company Subsidiary to
     lapse or be discontinued; or

(k)  agree or commit to take any of the foregoing actions.

6.2 ACCESS TO INFORMATION From the date of this Agreement to the Closing Date,
Sellers will cause the Company and the Company Subsidiaries to (i) give Buyer
and its authorised representatives reasonable access to all books, records,
offices and other facilities and properties of the Company and the Company
Subsidiaries, (ii) permit Buyer to make such inspections thereof as Buyer may
reasonably request, (iii) cause their officers to furnish Buyer with such
financial and operating data and other information with respect to the business
and properties of the Company and the Company Subsidiaries as Buyer may from
time to time reasonably request, (iv) permit an authorised representative of
Buyer to have access to appropriate personnel of the Company or any Company
Subsidiary as well as the offices and other facilities and properties of the
Company or any Company Subsidiary for the purpose of reviewing and observing the
day-to-day financial and accounting functions of the Company and the Company
Subsidiaries; provided, however, that (i) any such access shall be conducted at
a reasonable time and in such a manner as not to interfere unreasonably with the
operation of the business of the Company or any Company Subsidiary; (ii) the
rights hereunder shall not be construed as affording a further due diligence
period or contingency (Buyer agreeing that it has completed its due diligence
investigation); and (iii) no information or statements obtained by or
communicated to Buyer in the course of such access shall be construed as a
representation or warranty of Sellers nor shall any such information be relied
upon by the Buyer. All such information and access shall be subject to the terms
and conditions of the Confidentiality Agreement which shall be binding upon the
Buyer and its representatives.

                                       19

<PAGE>   21

6.3 CONSENTS AND APPROVALS Each of the parties hereto shall use its commercially
reasonable efforts to obtain as promptly as practicable all Consents required in
connection with the consummation of the transactions contemplated by this
Agreement.

6.4 FILINGS Promptly after the execution of this Agreement, each of the parties
hereto shall (and Sellers shall use their best efforts to cause the Company and
the Company Subsidiaries to) prepare and make or cause to be made any required
filings, submissions and notifications under the laws of any domestic or foreign
jurisdictions to the extent that such filings are necessary to consummate the
transactions contemplated hereby and will use its commercially reasonable
efforts to take all other actions necessary to consummate the transactions
contemplated hereby in a manner consistent with applicable law. Each of the
parties hereto will furnish to the other parties such necessary information and
reasonable assistance as such other parties may reasonably request in connection
with the foregoing.

6.5 LEGAL REQUIREMENTS Each party will, and will cause their respective
subsidiaries to, take all reasonable and necessary steps to comply in all
material respects promptly with all legal requirements which may be imposed on
them with respect to the consummation of the transactions contemplated by this
Agreement and will promptly cooperate with and furnish information to any party
hereto necessary in connection with any such requirements imposed upon such
other party in connection with the consummation of the transactions contemplated
by this Agreement and will take all reasonable actions necessary to obtain (and
will cooperate with the other parties hereto in obtaining) any consent,
approval, order or authorisation of, or any registration, declaration or filing
with, any Governmental Entity or other person, required to be obtained or made
by them in connection with the taking of any action contemplated by this
Agreement.

6.6 COVENANT TO SATISFY CONDITIONS Sellers will use their best efforts to ensure
that the conditions set forth in Article 7 hereof are satisfied, insofar as such
matters are within the control of Sellers, and Security Village and Buyer will
use their reasonable efforts to ensure that the conditions set forth in Article
8 hereof are satisfied, insofar as such matters are within the control of
Security Village and Buyer.

6.7 FURTHER ASSURANCES Subject to the terms and conditions herein provided, each
of the parties hereto agrees to use its reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement. If at any time after
the Closing Date any further action is necessary or desirable to carry out the
purposes of this Agreement, the parties hereto shall take or cause to be taken
all such necessary actions, including, without limitation, the execution and
delivery of such further instruments and documents as may be reasonably
requested by any party for such purposes or otherwise to consummate and make
effective the transactions contemplated hereby.

6.8 NO SHOP Sellers and the Company acknowledge and agree to refrain from, and
will cause their Affiliates and their Affiliates' officers, directors,
shareholders, advisers, employees and contractors to refrain from soliciting or
encouraging or entering into any discussions or negotiations with any party with
respect to the due diligence or the potential purchase or sale of the Shares or
assets of the Company or any Company Subsidiary or any potential business
combination with any of them.

6.9 CONFIDENTIALITY The parties acknowledge that the Confidentiality Agreement
shall continue in full force and effect in accordance with its terms and the
parties adopt same, make it a part hereof by reference and agree to be bound by
all of its terms. In addition, the parties agree that the terms and conditions
of the transactions contemplated hereby and information exchanged

                                       20

<PAGE>   22

in connection with the execution hereof shall be subject to the same standard of
confidentiality as is set forth in the Confidentiality Agreement.

6.10 PUBLIC DISCLOSURE   Unless otherwise permitted by this Agreement, the
parties shall follow the procedures and requirements at Section 11.8 before
issuing any press release or otherwise making any public statement or making any
other public (or non-confidential) disclosure (whether or not in response to an
inquiry) regarding the terms of this Agreement and the transactions contemplated
hereby.

6.11 PROPRIETARY INFORMATION   All information (i) about the Company or any
Company Subsidiary, including, without limitation, the identity of their
customers and suppliers, and all of their internal procedures and processes,
costs, materials, special customer requirements, pricing techniques, business
plans, and operational procedures and policies, and (ii) about any Intellectual
Property Rights is referred to herein as "PROPRIETARY INFORMATION". Proprietary
Information shall not include, however, information which is or becomes
generally available to the public other than as a result of a disclosure by
Sellers or their directors, officers, employees, agent and advisers (including,
without limitation, financial advisors, attorneys and accountants)
(collectively, "REPRESENTATIVES"), as required by law or a court or regulatory
authority or which becomes publicly available other than by a breach by Sellers
of this Agreement. Unless otherwise agreed in writing by Buyer, Sellers shall
keep all Proprietary Information confidential, shall not disclose or reveal any
Proprietary Information to any person and shall not use Proprietary Information
for any purpose. Sellers shall be responsible for any breach of the terms of
this provision by it or its Representatives. The provisions of this Section
shall survive the Closing for a period of five (5) years.

6.12 COVENANTS REGARDING EMPLOYEES AND COVENANT NOT TO INTERFERE, COMPETE OR
SOLICIT BUSINESS

(a)  Each Seller agrees that, commencing on the date hereof, neither it nor any
     of its Affiliates shall induce or encourage, or assist others to induce or
     encourage, any current employee of the Company or any Company Subsidiary to
     end or decline an employment arrangement with Monital, or interfere in any
     manner with the relationship between such Company and such employee and
     each Seller hereby agrees that for a period of two years from the Closing
     Date, neither it nor any of its Affiliates shall induce or encourage, or
     assist others to induce or encourage, any current employee of any such
     company to leave Monital's employ.

(b)  Each Seller hereby agrees that commencing on the date hereof and ending on
     the second anniversary of the Closing Date, neither it nor any of its
     Affiliates shall directly or indirectly in any manner whatsoever induce or
     assist others to induce any customer of the Company or any Company
     Subsidiary to terminate its association with such entity or do anything,
     directly or indirectly, to interfere with the business relationship between
     such entity and any of its current or prospective customers.

(c)  In furtherance of the sale of the Shares to Buyer and more effectively to
     protect the business and good will of the Company and the Company
     Subsidiaries, upon the consummation of the transactions contemplated
     hereby, each Seller agrees that, for a period commencing on the Closing
     Date and ending on the third anniversary of the Closing Date, it and (other
     than in the case of Maygarden Limited (which agrees for itself only) and
     First Court Limited (which agrees solely in its capacity as nominee for
     Maygarden Limited)) its Affiliates will not: directly or indirectly
     (whether as an employer, employee, partner, stockholder, consultant,
     investor, director, representative or otherwise) anywhere within the world
     own, manage, operate, control or be employed by,

                                       21

<PAGE>   23

     participate in, consult with or be otherwise connected in any manner with
     the ownership, management or operation of any business involving the
     monitoring of security alarm accounts located within the United States of
     America (the "COVERED ACTIVITIES"). Notwithstanding the foregoing, nothing
     herein shall restrict any Seller or (other than in the case of Maygarden
     Limited (which agrees for itself only) and First Court Limited (which
     agrees solely in its capacity as nominee for Maygarden Limited)) its
     Affiliates from owning, solely for investment purposes, up to five per
     cent. (5%) of any class of securities of any publicly traded company
     engaged in the Covered Activities. As to First Court Limited, conduct
     solely in its capacity as nominee for persons other than Maygarden Limited
     or any other Seller would not violate this covenant.

(d)  Without limiting the rights of the parties to pursue all other legal and
     equitable rights available to them for violation of this Section 6.12 or
     Section 6.11 by any of the other parties hereto, it is agreed that other
     remedies cannot fully compensate a party for such a violation and that the
     parties shall be entitled to injunctive relief to prevent the violation or
     the continuing violation thereof. It is the intent and understanding of
     each party hereto that if, in any action before any Governmental Entity
     legally empowered to enforce this Section 6.12 or Section 6.11, any term,
     restriction, covenant or promise in this Section 6.12 or Section 6.11 is
     found to be unreasonable and for that reason unenforceable, then such term,
     restriction, covenant or promise shall be deemed modified to the extent
     necessary to make it enforceable by such court or agency.

6.13 BEST EFFORTS AND FURTHER ASSURANCES Each of the parties to this Agreement
shall use its best efforts to effectuate the transactions contemplated hereby
and to fulfil and cause to be fulfilled the conditions to Closing under this
Agreement.

6.14 SECTION 338 ELECTION Following Closing, Buyer shall procure that LWG shall
make a Section 338 election under the Code effective on or prior to the Closing
Date and neither Griptight nor Monital shall have made a Section 338 election on
or prior to the Closing Date; providing, however, that all tax liabilities
resulting from the Section 338 election shall be paid and satisfied by the
Buyer.

7 CONDITIONS TO SELLERS' OBLIGATIONS

The obligations of Sellers to effect the transactions contemplated hereby shall
be subject to the fulfilment, or written waiver by Sellers, at or prior to the
Closing of each of the following conditions:

7.1 REPRESENTATIONS AND WARRANTIES TRUE The representations and warranties of
Buyer contained herein qualified as to materiality shall be true and correct,
and the representations and warranties of Buyer contained herein not qualified
as to materiality shall be true and correct in all material respects, at and as
of the Closing Date as though such representations and warranties were made at
and as of such date (except for such representations and warranties which are by
their terms made as of an earlier date, which shall speak only as of such date).

7.2 PERFORMANCE Buyer shall have performed and complied in all material respects
with all agreements, obligations, covenants and conditions required by this
Agreement to be performed or complied with by it on or prior to the Closing.

7.3 NO INJUNCTION OR PROCEEDING No Order shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits or restricts
the consummation of the transactions contemplated hereby. No action or
proceeding by any Governmental Entity shall have been commenced (and be pending)
against Buyer, any Seller, the Company or any Company

                                       22

<PAGE>   24

Subsidiary or any of their respective Affiliates, associates, officers or
directors seeking to prevent or delay the transactions contemplated hereby or
challenging any of the terms or provisions of this Agreement or seeking material
damages in connection therewith.

7.4 CERTIFICATES   Buyer shall have furnished Sellers with certificates to
evidence its compliance with the conditions set forth in this Article 7 in the
form attached hereto as Annex B.

7.5 TRANSACTION DOCUMENTS   Each of the Transaction Documents shall be executed
and delivered by the parties thereto in a form reasonably satisfactory to Buyer
and Sellers.

8       CONDITIONS TO BUYER'S OBLIGATIONS

The obligation of Buyer to effect the transactions contemplated hereby shall be
subject to the fulfilment, or written waiver by Buyer, at or prior to the
Closing of each of the following conditions:

8.1 REPRESENTATIONS AND WARRANTIES TRUE   The representations and warranties of
Sellers contained herein qualified as to materiality shall be true and correct,
and the representations and warranties of Sellers contained herein not qualified
as to materiality shall be true and correct in all material respects, at and as
of the Closing Date as though such representations and warranties were made at
and as of such date (except for such representations and warranties which are by
their terms made as of an earlier date, which shall speak only as of such date).

8.2 PERFORMANCE  Sellers shall have performed and complied in all material
respects with all agreements, obligations, covenants and conditions required by
this Agreement to be performed or complied with by it on or prior to the
Closing.

8.3 NO INJUNCTION OR PROCEEDING   No Order shall have been enacted, entered,
promulgated or enforced by any Governmental Entity which prohibits or restricts
the consummation of the transactions contemplated hereby. No action or
proceeding by any Governmental Entity shall have been commenced (or be pending
or threatened) against Buyer, Sellers, the Company or any Company Subsidiary or
any of their respective Affiliates, associates, officers or directors seeking to
prevent or delay the transactions contemplated hereby or challenging any of the
terms or provisions of this Agreement or seeking material damages in connection
therewith.

8.4 CERTIFICATES   Sellers shall have furnished Buyer with certificates to
evidence compliance by Sellers with the conditions set forth in this Article 8
in the form attached hereto as Annex C.

8.5 NO MATERIAL ADVERSE CHANGE   No act, event or condition shall have occurred
to the Company or any Company Subsidiary after the date hereof which has had or
could have or is likely to have a material adverse effect on the Company's or
the Company Subsidiaries' business results of operations, condition (financial
or otherwise) or prospects, and which is not remedied by Sellers.

8.6 TRANSACTION DOCUMENTS   Each of the Transaction Documents shall be executed
and delivered by the parties thereto in a form reasonably satisfactory to Buyer
and Sellers.

8.7     [INTENTIONALLY LEFT BLANK]

8.8 LIMITATION ON INDEBTEDNESS   The Company and the Company Subsidiaries shall
not have indebtedness in excess of U.S.$1,400,000 at the Closing Date. For the
purposes of this section 8.8 "indebtedness" shall mean all debts of the Company
and Company Subsidiaries which

                                       23

<PAGE>   25

should be stated on the balance sheet of the Company and/or the Company
Subsidiaries under GAAP, including but not limited to the current portion of
long term debt, long term debt and notes and specifically excluding (i) the
intercompany balance of US$331,312 owed by Monital to Griptight, the US$155,546
owed by LWG to Lewis Woolf Griptight Limited and the US$68,765 owed by Griptight
to Lewis Woolf Griptight (ii) deferred revenue (iii) corporate income taxes
payable (iv) accounts payable and accrued expenses as shown within current
liabilities on the balance sheet, (v) dealer holdbacks on acquisitions and (vi)
the intercompany loans provided by Buyer pursuant to Section 3.5.

8.9 BOARD RESIGNATIONS All board members of the Company and each Company
Subsidiary shall have resigned as directors and the persons designated by Buyer
shall have been appointed in their place, effective as at Closing.

8.10 CANCELLATION OF INTRA-GROUP RECEIVABLES AND PAYABLES At Closing, Sellers
shall procure that the balance of inter-company receivables and payables between
the Company and any Company Subsidiaries or between the Company Subsidiaries is
nil (save for the sum of US$331,312 owing from Monital to Griptight, which will
be left outstanding). To the extent that any tax charge arises in the Company or
any Company Subsidiary as a result of the cancellation of any such receivable or
payable, the Sellers shall indemnify the Buyer in respect of such charge which
shall upon demand be paid by the Sellers to the Buyer.

9       INDEMNIFICATION AND RELATED MATTERS

9.1     INDEMNIFICATION

(a)  Subject to the provisions of this Article 9 and the limiting provisions in
     Section 4.27, Sellers agree to jointly and severally indemnify and hold
     harmless the Buyer Group and the Buyer Group's respective directors,
     officers, attorneys, accountants, agents and employees and their respective
     heirs, successors and assigns (the "BUYER INDEMNIFIED PARTIES"), from and
     against any and all liabilities, obligations, damages, losses,
     deficiencies, costs, Taxes, penalties, interest and expenses (including,
     without limitation, reasonable accountants' and attorneys' fees), but
     excluding consequential damages and lost profits (except to the extent due
     to a third party pursuant to a third-party claim) (collectively, "LOSSES"),
     including, without limitation, those arising from third-party claims,
     arising out of, based upon, attributable to or resulting from:

     (i)  the failure of any of the representations or warranties of Sellers set
          forth in Article 4 or the Sellers' Certificate at Annex C to be true
          and correct as of Closing Date; or

     (ii) the breach of any covenant on the part of Sellers under the terms of
          this Agreement.

(b)  Subject to the provisions of this Article 9, Buyer hereby agrees to, and
     shall cause the Company and the Company Subsidiaries to, jointly and
     severally indemnify and hold harmless Sellers and their respective heirs,
     successors and assigns from and against any and all Losses, including,
     without limitation, those arising from third-party claims, arising out of,
     based upon, attributable to or resulting from:

     (i)  the failure of any of the representations or warranties of Buyer set
          forth in Article 5 to be true and correct as of the Closing Date; or

                                       24

<PAGE>   26

     (ii) the breach of any covenant on the part of Buyer under the terms of
          this Agreement.

9.2  SURVIVAL OF REPRESENTATIONS AND WARRANTIES

(a)  The parties hereto hereby agree that the representations and warranties
     contained in this Agreement shall survive the execution and delivery of
     this Agreement and the Closing hereunder; provided, however, that (subject
     to sub-section 9.2(c) any claims or actions with respect thereto shall
     terminate unless by July 31, 2001 (or in the case of a claim pursuant to
     any warranty in section 4.12, by July 31 2003) written notice of such
     claims setting forth the nature of the claims with reasonable specificity
     is given to the Indemnifying Party (as defined in Section 9.4(a) below) or
     such actions are commenced.

(b)  In the case of a claim under section 4.12, the claim shall survive after
     July 31, 2001 only to the extent that any tax audit giving rise to the
     claim is triggered other than as a result of the actions outside the
     ordinary course of business of the Buyer, and the relevant claim shall be
     reduced to the extent that a credit in relation to tax losses in the
     relevant companies existing at Closing is available to the Buyer or, having
     been available, has been used by Buyer to offset other tax liabilities
     arising within the Buyer's group of companies.

(c)  Notwithstanding the provisions of section 9.2(a) (and subject to section
     9.2(b)), any claims or actions with respect to any representation or
     warranty relating to Griptight shall terminate unless by the fifth
     anniversary of Closing written notice of such claim setting forth the
     nature of the claim with reasonable specificity is given to the Indemnified
     Party (as defined in section 9.4(a) below) or such actions are commenced.

9.3  LIMITATIONS ON INDEMNIFICATION BY SELLERS

(a)  Sellers shall not have any liability under Section 9.1(a)(i) hereof unless
     the aggregate amount of Losses to the Buyer Indemnified Parties finally
     determined to arise thereunder exceeds U.S.$225,000 (the "Basket") and, in
     such event, Sellers shall be required to pay the entire amount of such
     Losses in excess of the Basket, subject to the limitations set forth in
     Section 9.3(b) hereof; provided, however, that such limitation shall not
     apply to any Loss due to the failure of any of the representations and
     warranties set forth in Sections 4.1, 4.2, 4.3, 4.8(b), 4.12, 4.13, 4.17,
     4.19, 4.25 and 4.26 to be true and correct as of the date hereof and as of
     the Closing Date.

(b)  The aggregate amount that the Buyer Indemnified Parties shall be entitled
     to recover pursuant to this Article 9 for any Loss or Losses shall be
     limited to the Purchase Price.

9.4  INDEMNIFICATION PROCEDURES

(a)  Any Person entitled to make a claim for indemnification under Section 9.1
     (an "INDEMNIFIED PARTY") not involving a claim or demand by a third party,
     may make a claim for indemnification by giving written notice of the
     assertion of such claim covered by this indemnity to the Person from whom
     it is seeking indemnification (the "INDEMNIFYING PARTY"). With respect to
     third-party claims, all claims for indemnification by any Indemnified Party
     hereunder shall be asserted and resolved as set forth below in this Section
     9.4. In the event that any written claim or demand for which the
     Indemnifying Party would be liable to any Indemnified Party hereunder is
     asserted against or sought to be collected from any Indemnified Party by a
     third party, such Indemnified Party shall promptly, but in no event more
     than thirty (30) days following

                                       25

<PAGE>   27

     such Indemnified Party's receipt of such claim or demand, notify the
     Indemnifying Party of such claim or demand and the amount or the estimated
     amount thereof to the extent then feasible (which estimate shall not be
     conclusive of the final amount of such claim or demand) (the "CLAIM
     NOTICE"); provided, however, that the Indemnified Party's failure to
     provide such notice in not more than thirty (30) days shall not preclude
     the Indemnified Party from being indemnified for such claim or demand,
     except to the extent that the failure to give timely notice results in the
     forfeiture of substantive defences available to the Indemnifying Party. The
     Indemnifying Party shall have thirty (30) days (or such shorter period as
     may be necessary under the circumstances) from the personal delivery or
     mailing of the Claim Notice (the "NOTICE PERIOD") to notify the Indemnified
     Party whether or not it desires to defend the Indemnified Party against
     such claim or demand. All costs and expenses incurred by the Indemnifying
     Party in defending such claim or demand shall be a liability of, and shall
     be paid by, the Indemnifying Party. Except as hereinafter provided, in the
     event that the Indemnifying Party notifies the Indemnified Party within the
     Notice Period that it desires to defend the Indemnified Party against such
     claim or demand, the Indemnifying Party shall have the right to defend the
     Indemnified Party by appropriate proceedings and shall have the sole power
     to direct and control such defence and to negotiate, settle or otherwise
     deal with such claim or demand. If any Indemnified Party desires to
     participate in any such defence, it may do so at its sole cost and expense.
     The Indemnified Party shall not settle a claim or demand without the prior
     written consent of the Indemnifying Party. To the extent the Indemnifying
     Party shall direct, control or participate in the defence or settlement of
     any third-party claim or demand, the Indemnified Party will give the
     Indemnifying Party and its counsel, without charge, access to, during
     normal business hours, the relevant business records and other documents,
     and shall permit them to consult with the employees and counsel of the
     Indemnified Party. The Indemnified Party shall use its commercially
     reasonable best efforts in the defence of all such claims or demands.

(b)  Except in the case of common law fraud, this Article 9 shall be the
     exclusive remedy of the Indemnified Parties for any Losses arising out of
     this Agreement or the transactions contemplated hereby.

9.5 TAX TREATMENT OF INDEMNITY PAYMENTS The parties agree that any indemnity
payment made pursuant to this Article 9 shall be treated by the parties on their
respective tax returns as an adjustment to the Purchase Price.

9.6 COMPUTATION OF LOSSES The amount of any Loss subject to indemnification
under this Article 9 shall be calculated net of (i) any Tax benefit actually
realised by the Indemnified Party on account of such Loss and (ii) insurance
proceeds (net of direct collection expenses and deductibles) received by the
Indemnified Party on account of such Loss. In the event that a Tax benefit is
actually realised as set forth in section (i) above or an insurance recovery is
made by the Indemnified Party with respect to any Loss for which any such Person
previously has been indemnified, then a refund equal to the aggregate amount of
the realised Tax benefit or recovery (net of all direct collection expenses,
deductibles and Taxes payable with respect thereto) shall be made promptly to
the Indemnifying Party. Each party shall use best endeavours (at the cost of the
Indemnified Party) to obtain waiver of subrogation rights from its insurers on
all policies of insurance for the benefit of the other.

10 TERMINATION AND ABANDONMENT

10.1 TERMINATION This Agreement may be terminated at any time prior to the
Closing Date:

(a)  by mutual consent of all Sellers and Buyer;

                                       26

<PAGE>   28

(b)     by either all Sellers or Buyer at any time after the expiration of sixty
        (60) days from the date hereof if, through no fault of the party seeking
        termination, the Closing shall not have occurred; or

(c)     by either Buyer or (together) all the Sellers if there shall be in
        effect any Order of a Governmental Entity of competent jurisdiction
        restraining, enjoining or otherwise prohibiting the consummation of the
        transactions contemplated hereby or contemplated under any Transaction
        Document.

10.2 PROCEDURE AND EFFECT OF TERMINATION In the event of termination of this
Agreement and abandonment of the transactions contemplated hereby by any or all
of the parties pursuant to Section 10.1 hereof, written notice thereof shall
forthwith be given to the other party or parties hereto and this Agreement shall
terminate and the transactions contemplated hereby shall be abandoned, without
further action by any of the parties hereto, except that all confidentiality
obligations for the protection of the respective parties and their Affiliates
shall remain in full force and effect and shall survive any termination of this
Agreement. If this Agreement is terminated as provided herein, then each of the
parties shall be relieved of their duties and obligations arising under this
Agreement after the date of such termination and such termination shall be
without liability to the parties hereto; provided, however, that, with respect
to any termination pursuant to Section 10.1(b) or (c), nothing in this Section
10.2 shall be deemed to constitute a waiver of any rights or remedies otherwise
available under this Agreement, by operation of law or otherwise, to the party
who so terminates.

11      MISCELLANEOUS PROVISIONS

11.1 AMENDMENT AND MODIFICATION This Agreement may be amended, modified or
supplemented at any time by the parties hereto. This Agreement may be amended
only by an instrument in writing signed on behalf of the parties hereto.

11.2 EXTENSION; WAIVER At any time prior to the Closing Date, the party entitled
to the benefits of the respective term or provision may (a) extend the time for
the performance of any of the obligations or other acts of the other party
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document, certificate or writing delivered pursuant
hereto or (c) waive compliance with any obligation, covenant, agreement or
condition contained herein. Any agreement on the part of any party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of the party entitled to the benefits of such extended or
waived term or provision.

11.3 ENTIRE AGREEMENT; ASSIGNMENT This Agreement (a) constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof (other than the
Confidentiality Agreement and the Transactional Documents) and (b) shall not be
assigned or transferred by Buyer by operation of law or otherwise; provided,
however, that Buyer may assign the benefits of the representations, warranties,
covenants and indemnities in this Agreement to Monitoring Acquisition
Corporation in connection with their investment in the business and operations
of Griptight and/or Monital; providing that the assignee shall remain subject to
all offsets and defenses which could have been asserted against the assignor and
no assignee shall acquire the status of a holder in due course". This Agreement
shall be binding upon and insure to the benefit of the parties and their
respective successors and permitted assigns.

                                       27

<PAGE>   29

11.4   VALIDITY   The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, each of which shall remain in full force and
effect.

11.5  NOTICES   All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by facsimile transmission or three (3) days after being mailed by registered
or certified mail (return receipt requested), postage pre-paid, to the parties
at the following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):

(a)   if to Sellers other than First Court Limited or Maygarden Limited, to:

      Michael Houdret
      St Mary's Court
      39 Market Place
      Henley on Thames
      Oxon, RG9 2AA
      01491-573-512 (telephone)
      01491-579-793 (facsimile)
      Attention:  Michael Houdret

      with copies to:

      Richard G. Berger, Esq.
      Schiffman, Berger, Abraham, Kaufman & Ritter, P.C.
      Three University Plaza, Suite 410
      P.O. Box 568
      Hackensack, New Jersey 07602-0568
      201-488-2600 (telephone)
      201-488-5059 (facsimile)
      Attention:  Richard Berger

      if to First Court Limited or Maygarden Limited, to:

      PO Box 472
      St Peter's House
      Le Bordage
      St Peter Port
      Guernsey GY1 6AX

(b)   if to Buyer, to:

      Senia Rapisarda
      c/o WG&M Secretaries Limited,
      One South Place
      London, EC2M 2WG
      England
      +44 (0) 207 903 1000 (telephone)
      +44 (0) 207 903 0990 (facsimile)
      Attention:  Douglas Warner, Esq.

                                       28

<PAGE>   30

        with a copy to: K C Acquisition Corp.
        325 South River Street
        Hackensack
        New Jersey
        07601

        Attention: Thomas Few Senior

11.6 GOVERNING LAW This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to the
principles of conflicts of laws thereof.

11.7 ARBITRATION OF DISPUTES; SUBMISSION TO JURISDICTION; CONSENT TO SERVICE
OF PROCESS

(a)  Any and all disputes or controversies arising under, out of, in connection
     with or in relation to this Agreement shall be determined and settled by
     binding arbitration, held in Bergen County, New Jersey, in accordance with
     this Section 11.7 and in accordance with the Arbitration Rules of the
     American Arbitration Association. Upon the occurrence of a dispute or
     controversy, a party may submit the dispute or controversy for such
     arbitration pursuant to this Section 11.7 by delivery of written notice to
     the other party demanding an arbitration and specifying the controversy or
     dispute to be arbitrated. Within ten (10) Business Days of the delivery of
     such notice, the parties shall agree upon a single arbitrator. If the
     parties are unable to select a single arbitrator within such ten (10) day
     period, each party shall within five (5) Business Days thereafter select an
     arbitrator and the arbitrators so chosen shall select the single
     arbitrator. If any party fails to select an arbitrator, the arbitrator
     chosen by the other party shall act as the sole arbitrator. The arbitration
     shall be held in accordance with the rules of the American Arbitration
     Association and judgment upon any award rendered by the single arbitrator
     shall be valid, binding, final and non-appealable. No arbitrator shall have
     authority to disregard or modify any provisions of this Agreement. The
     arbitrator(s) shall have authority to award counsel fees and costs to the
     prevailing party. The reference to the rules and procedures of the American
     Arbitration Association shall not require arbitration by that entity unless
     otherwise agreed by the parties.

(b)  For the purpose of enforcement of any arbitral award hereunder, the parties
     hereto hereby irrevocably submit to the exclusive jurisdiction of the
     United States District Court for the District of New Jersey over any
     dispute arising out of or relating to this Agreement or any of the
     transactions contemplated hereby and each party hereby irrevocably agrees
     that all claims in respect of such dispute or any suit, action or
     proceeding related thereto may be heard and determined in such court. The
     parties hereby irrevocably waive, to the fullest extent permitted by
     applicable law, any objection which they may now or hereafter have to the
     laying of venue of any such dispute brought in such court or any defence of
     inconvenient forum for the maintenance of such dispute. Each of the parties
     hereto agrees that a judgment in any such dispute may be enforced in other
     jurisdictions by suit on the judgment or in any other manner provided by
     law.

(c)  Each of the parties hereto hereby consents to process being served by any
     party to this Agreement in any suit, action or proceeding by the mailing of
     a copy thereof in accordance with the provisions of Section 11.5 hereof.

                                       29

<PAGE>   31

11.8  PUBLICITY   Buyer and Sellers will consult with each other before issuing,
and provide each other a reasonable opportunity to provide input with respect
to, any press release or other public statements or filings with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement or filing prior to providing such
opportunity, except as may be required by applicable law, court process or
obligations pursuant to the requirement of any stock exchange upon which the
securities of Buyer are listed.

11.9  DESCRIPTIVE HEADINGS   The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.

11.10 COUNTERPARTS   This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall be
effective upon execution and delivery of either manually signed or
facsimile-signed signature pages.

11.11  FEES AND EXPENSES   Whether or not the transactions contemplated by this
Agreement or the Transaction Documents are consummated, all legal, accounting
and other costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses (save for the avoidance of doubt legal, accounting and brokerage fees
paid by Monital prior to 31 March 2000).

11.12  PARTIES IN INTEREST   This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and all direct successors and assigns
and nothing in this Agreement, express or implied, is intended by or shall
confer upon any other Person any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed by
its duly authorised officers as of the date first above written.

                                       30

<PAGE>   32

SELLERS:

---------------------------------------
ROBERT HURST

---------------------------------------
EDWARD HURST

---------------------------------------
LINDA HURST

---------------------------------------
HEATHER HURST

---------------------------------------
MAYGARDEN LIMITED

By:
   ------------------------------------
   Name:
   Title:

---------------------------------------
FIRST COURT LIMITED

By:
   ------------------------------------
   Name:
   Title:

ESTATE OF ERIC HURST

By:
   ------------------------------------
   Rimma Hurst
   Surviving Spouse and Temporary
   Executrix of the Estate of Eric Hurst,
   Deceased

By:
   ------------------------------------
   Stuart Lyons
   Co-executor of Last Will and Testament of Eric Hurst (UK)

By:
   ------------------------------------
   Rimma Hurst
   Co-executor of Last Will and Testament of Eric Hurst (UK)

                                       31

<PAGE>   33

MTL ACQUISITION CORP:

By:
   ------------------------------------
   Name:
   Title:

                                       32<PAGE>   1
Exhibit 10.5

                          PLAN AND AGREEMENT OF MERGER

                                     BETWEEN

                    SECURITY ASSOCIATES INTERNATIONAL, INC.,

                             KING ACQUISITION CORP.

                              KC ACQUISITION CORP.,

                             MR. THOMAS J. FEW SR.,

                               MR. DAVID L. SMITH

                                       and

                              MR. TIMOTHY M. MCGINN

                            DATED AS OF: MAY 11, 2000

<PAGE>   2

                          PLAN AND AGREEMENT OF MERGER

         THIS PLAN AND AGREMENT OF MERGER (the "Agreement"), dated and effective
as of 3:00 p.m., Central Daylight Savings Time, May 11, 2000, is entered into by
and among Security Associates International, Inc, a Delaware corporation
("SAI"), King Acquisition Corp., a Delaware corporation ("King Acquisition"), KC
Acquisition Corp., a New Jersey corporation (the "Company"), Mr. Thomas J. Few
Sr. ("Few"), Mr. David L. Smith ("Smith") and Mr. Timothy M. McGinn ("McGinn")
(Messrs. Few, Smith and McGinn are sometimes referred to herein individually as
a "Selling Shareholder" and collectively as the "Selling Shareholders").

                                    RECITALS

         WHEREAS, the board of directors of the Company, and the shareholders of
the Company (the "Shareholders"), have approved the transactions contemplated
hereby and have determined that it is advisable and in their respective best
interests to consummate the merger described in Article II (the "Merger') and
the other transactions contemplated herein; and

         WHEREAS, the respective boards of directors of SAI and King Acquisition
have approved the transactions contemplated hereby, subject to the approval of
the shareholders of SAI, and have determined that it is advisable and in their
respective best interests to consummate the Merger and the other transactions
contemplated herein; and

         WHEREAS, as a result of the Merger, King Acquisition will be merged
with and into the Company, all of the outstanding capital stock of the Company
will be converted into the right to receive a combination of cash and securities
of SAI, all of the outstanding capital stock of King Acquisition will be
converted into capital stock of the Company and the Company will be the
surviving corporation, all on the terms and subject to the conditions set forth
in this Agreement; and

         WHEREAS, for Federal income tax purposes the Parties intend that the
Merger shall qualify as a tax-free reorganization within the meaning of Section
368(a) of the Code (as defined herein);

         NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein and other good and valuable consideration, the parties hereto,
on the basis of, and in reliance upon, the representations, warranties,
covenants, obligations and agreements set forth in this Agreement, and upon the
terms and subject to the conditions contained herein, agree as follows:

<PAGE>   3

                                   ARTICLE 1

                                   DEFINITIONS

         The following terms shall have the meanings assigned below when used in
this Agreement:

         1.1   "Account" shall mean a written monitoring agreement pursuant to
which the Company or its Subsidiaries provides Monitoring Services to
Subscribers. All Accounts are "Dealer Owned Accounts," as defined below;

         1.2   "Affiliate" shall mean, with respect to any particular Person,
any Person controlling, controlled by or under common control with such Person,
whether by ownership or control of voting securities, by contract or otherwise;

         1.3   "Agreement" shall mean this Plan and Agreement of Merger;

         1.4   "AMEX" shall mean the American Stock Exchange;

         1.5   "Antenna" shall mean a radio antenna and antenna site used by the
Company or its Subsidiaries pursuant to an antenna site license agreement to
which the Company or its Subsidiaries is a party ("Antenna Lease");

         1.6   "Acquisition Common" shall mean the common stock, $0.01 par
value, of King Acquisition;

         1.7   "Assets" shall mean all of the assets (as defined under GAAP) of
the Company and its Subsidiaries, including, but not limited to, the assets
listed on Schedule 3.12(a);

         1.8   "Audited Company Financial Statements" shall have the meaning
assigned in Section 3.7(a);

         1.9   "Billed Accounts" shall mean Dealer Owned Accounts for which the
Company or its Subsidiaries bills Subscribers on behalf of the Dealers which own
the Accounts;

         1.10  "Central Stations" shall mean the central monitoring stations
owned and operated by the Company, or its Subsidiaries, which are located at the
locations set forth on Schedule 3.4;

         1.11  "Closing" shall mean the consummation of the Merger;

         1.12  "Closing Date" shall mean the third business day following the
date upon which the conditions to closing referred to in Articles 7 and 8, as
applicable, of this Agreement have been satisfied or waived by the Party
authorized to do so as provided in

<PAGE>   4

this Agreement and the Escrow Agreement or such other date as the Parties may
agree in writing;

         1.13  "Closing Date Balance Sheet" shall mean the balance sheet,
prepared as provided in Section 3.7, delivered at the Closing showing the assets
and liabilities of the Company and its Subsidiaries as of a date not more than
five days prior to the Closing Date;

         1.14  "Code" shall mean the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, and the rules and any successor statute
thereto, and the rules and regulations issued and promulgated thereunder, as in
effect from time to time;

         1.15  "Company" shall mean KC Acquisition Corp., a New Jersey
corporation;

         1.16  "Company Common" shall mean the Common Stock, with no par value
per share, of the Company;

         1.17  "Company Financial Statements" shall mean the Audited Company
Financial Statements, the Unaudited Company Financial Statements, the Escrow
Date Balance Sheet and the Closing Date Balance Sheet;

         1.18  "Company Released Claims" shall have the meaning assigned in
Section 5.15;

         1.19  "Company Released Parties" shall have the meaning assigned in
Section 5.15;

         1.20  "Company Releasing Parties" shall have the meaning assigned in
Section 6.5;

         1.21  "Confidential Information" shall mean any and all oral, written,
electronic or other information designated as confidential or which ought to be
considered as confidential from its nature or from the circumstances surrounding
its disclosure, regardless of whether such information was disclosed before, on
or after the date of this Agreement, other than such information that (i) is
generally available or known by the public immediately prior to the time of
disclosure (except through the actions or inactions of the Person to whom
disclosure has been made) or (ii) has been acquired or developed independent
from the Person making the disclosure thereof.

         1.22  "Contracts" shall mean Accounts, Dealer Monitoring Agreements,
and all agreements, contracts and arrangements relating to the businesses
conducted by the Company and its Subsidiaries;

<PAGE>   5

         1.23  "Dealer" shall mean an individual or business entity that
contracts in writing to provide Monitoring Services to Subscribers, and who in
turn subcontracts the provision of the actual Monitoring Services from the
Company or its Subsidiaries;

         1.24  "Dealer Monitoring Agreements" shall mean the written contracts
(and those oral contracts summarized on Schedule 1.24 attached hereto) pursuant
to which the Company or its Subsidiaries has contracted to provide Monitoring
Services to Dealer Owned Accounts;

         1.25  "Dealer Owned Account" shall mean any Account owned by a Dealer;

         1.26  "Distributed Business Items" means the assets and liabilities of
the business lines of the Company historically operated under the names "King
Capital" and "Monitoring Services" (the "Transferred Business Units") that are
described on Schedule 1.26 attached hereto and that are being transferred by the
Company to Morlyn Financial Group, LLC ("Morlyn") prior to Closing.

         1.27  "Effective Time" shall have the meaning assigned in Section 2.1;

         1.28  "Employee Benefit Plan" shall mean any employee benefit plan
within the meaning of Section 3(3) of ERISA which is (i) maintained for
employees of the Company or any ERISA Affiliate or (ii) has at any time within
the preceding six years been maintained for the employees of the Company its
Subsidiaries or any other current or former ERISA Affiliate.

         1.29  "Environmental Laws" shall mean any and all federal, state and
local laws, rules, regulations and ordinances that relate to or impose liability
or standards of conduct concerning public or occupational health and safety or
protection of the environment, as now or hereafter in effect and as have been or
hereafter may be amended or re-authorized, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C.
Sec. 9601 et seq.), the Hazardous Materials Transportation Act (42 U.S.C. Sec.
1802 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Sec. 6901,
et seq.), the Federal Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.
), the Toxic Substances Control Act (15 U.S.C. Sec. 2601 et seq.), the Clean Air
Act (42 U.S.C. Sec. 7901 et seq.), the National Environmental Policy Act (42
U.S.C. Sec. 4231 et seq.), the Refuse Act (33 U.S.C. Sec. 407 et seq.), the Safe
Drinking Water Act (42 U.S.C. Sec. 300(f) et seq.), the Occupational Safety and
Health Act (29 U.S.C. Sec 651 et seq.), and all rules, regulations, codes,
ordinances and guidance documents promulgated or published thereunder, and the
provisions of any licenses, permits, orders and decrees issued pursuant to any
of the foregoing.

         1.30  "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, and the rules and
regulations issued and promulgated thereunder, as in effect from time to time.

<PAGE>   6

         1.31  "ERISA Affiliate" shall mean any Person who is a member of group
which is under common control with the Company, who together with the Company is
treated as a single employer within the meaning of Section 414(b), (c), and (m)
of the Code and, if not otherwise so included, any other Subsidiary.

         1.32  "Equipment" shall mean the tangible assets used or useful in
connection with the Monitoring Business or any other business conducted by the
Company or its direct or indirect Subsidiaries, including, but not limited to
that listed on Schedule 3.12(a);

         1.33  "Equipment Lease" shall mean a lease pertaining to Equipment and
shall also include the Antenna Lease.

         1.34  "Escrow Agent" shall mean the Person acting as the escrow agent
pursuant to the Escrow Agreement;

         1.35  "Escrow Agreement" shall mean the Escrow Agreement to be entered
into among the Parties and the Escrow Agent pursuant to Section 9.2 which
provides, among other things, for the closing into, and release from, escrow of
the transactions contemplated by this Agreement on the terms and subject to the
conditions contained therein;

         1.36  "Escrow Closing" shall mean the closing in escrow pursuant to the
Escrow Agreement as contemplated in Section 9.2 and in the Escrow Agreement.

         1.37  "Escrow Date Balance Sheet" shall mean the balance sheet,
prepared as provided in Section 3.7, delivered at the Escrow Closing, showing
the assets and liabilities of the Company and it Subsidiaries as of a date not
more than five days prior to the Escrow Closing Date.

         1.38  "Escrow Closing Date" shall mean June 30, 2000 or such earlier
date which is three business days after the date upon which the conditions to
closing, other than SAI Stockholder Approval, referred to in Articles 7 and 8 of
this Agreement have been satisfied or waived by the Party authorized to do so as
provided in this Agreement or such other date as the Parties may agree upon in
writing;

         1.39  "Excluded Assets" shall have the meaning assigned in Section
3.12(b);

         1.40  "Facilities" shall have the meaning assigned in Section 3.27(a);

         1.41  "Form Contracts" shall have the meaning assigned in Section 3.13;

         1.42  "GAAP" shall mean "Generally Accepted Accounting Principles"
which shall mean the accounting rules, principles and conventions adopted by the
American Institute of Certified Public Accountants and referred to by that name;

<PAGE>   7

         1.43  "Hazardous Materials" shall mean any hazardous, toxic, dangerous
or other waste, substance or material defined as such in, regulated by or for
the purposes of any Environmental Law.

         1.44  "including" shall indicate examples of a foregoing general
statement and is not a limitation on that general statement.

         1.45  "Indemnitee" shall have the meaning assigned in Section 10.2;

         1.46  "Indemnitor" shall have the meaning assigned in Section 10.2;

         1.47  "Intellectual Property" shall mean all of the patents,
trademarks, trade names (excluding, the names "King Capital" and Monitoring
Services"), service marks, trade secrets, designs, know-how, copyrights,
computer programs and software and all rights, licenses and contracts relating
to any of the foregoing, and all other proprietary rights and information of the
Company and its Subsidiaries;

         1.48  "Knowledge" means actual knowledge and knowledge a reasonable
person would have after due investigation and includes such knowledge of such
Party's officers, directors, the Company's Central Regional Manager, the
Company's National Sales Manager, legal counsel, financial representatives and
subsidiaries.

         1.49  "Lease" shall mean each Real Estate Lease, each Equipment Lease
and each other lease pursuant to with the Company or its Subsidiaries rent or
lease Property;

         1.50  "Leasehold Property" shall mean any real estate which is the
subject of a Lease under which the Company or its Subsidiaries is or has been
the lessee.

         1.51  "Liabilities" shall have the meaning assigned under GAAP.

         1.52  "Letter of Intent" shall mean the letter of intent, dated as of
April 21, 2000, among SecurityVillage.com, Inc. ("SecurityVillage"), SAI, the
Company and TJS Partners, L.P. which provides, among other things for the Merger
and the other transactions contemplated in this Agreement;

         1.53  "Lien" shall have the meaning assigned in Section 3.12;

         1.54  "Material Adverse Effect" shall have the meaning assigned in
Section 3.7;

         1.55  "Material Contract" shall have the meaning assigned in Section
3.10;

         1.56  "Merger" shall have the meaning assigned in the first Recital;

         1.57  "Minimum RMR" shall mean RMR payable to the Company and its
Subsidiaries of not less than $1,100,000;

<PAGE>   8

         1.58  "Monital" shall mean Monital Signal Corporation, Griptight
Holdings, Inc. and their respective subsidiaries prior to the Monital
Acquisition;

         1.59  "Monital Acquisition" shall mean the merger of Griptight
Holdings, Inc. and Monital Signal Corporation into a Subsidiary of the Company
(the "Monital Acquisition Subsidiary") and the acquisition of a 20% equity
interest in Monital Signal Corporation, which transactions will result in the
Company owning 99.2% of the Monital Acquisition Subsidiary;

         1.60  "Monital Retail Account Transactions" shall mean the sale by
Monital of its retail accounts to Palisades Partners or its assignee for a
purchase price of $450,000, the application of the proceeds therefrom to
indebtedness of Monital to M&S Partners, the potential loan from Palisades
Partners or its assignee to Monital for the release of certain liens or
encumbrances on such retail accounts and the subsequent repayment of such loan
by SAI upon the closing of the Merger, all as contemplated in Section 2(d) of
the Letter of Intent;

         1.61  "Monitoring Business" shall mean the business of providing
Monitoring Services as presently conducted;

         1.62  "Monitoring Services" shall mean the provision of remote alarm
monitoring services to Subscribers, and all related security services, including
but not limited to, notification and dispatch of emergency personnel, supervised
openings and closings, closed circuit monitoring and any other security related
services;

         1.63  "Multiemployer Plan" shall mean any multiemployer plan as defined
pursuant to Section 3(37) of ERISA to which the Company or any ERISA Affiliate
makes, or accrues an obligation to make, contributions, or has made, or has been
obligated to make, contributions within the preceding six (6) years;

         1.64  "Pension Plan" shall mean any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Part 3 of Title I of
ERISA, or Section 412 of the Code and which (i) is maintained for employees of
the Company, its direct or indirect Subsidiaries or any ERISA Affiliate, or (ii)
has at any time within the preceding six years been maintained for the employees
of the Company or any of its current or former ERISA Affiliates;

         1.65  "Permits" shall mean all governmental licenses, registrations,
permits, approvals and applications therefor;

         1.66  "Person" shall mean any individual, trust, corporation,
partnership, limited partnership, limited liability company or other business
association or entity, court, governmental body or governmental agency;

<PAGE>   9

         1.67  "Prebilled RMR" shall mean RMR billed by the Company or its
Subsidiaries to Dealers in advance for monitoring services to be performed
subsequent to the Closing Date;

         1.68  "Proxy Statement" shall mean the proxy statement distributed by
SAI to its stockholders in connection with the meeting of the stockholders of
SAI called for the purpose, among other things, of obtaining SAI Stockholder
Approval;

         1.69  "Real Estate Leases" shall have the meaning assigned in Section
3.11(a);

         1.70  "Required Consents" shall have the meaning assigned in Section
5.3;

         1.71  "RMR" shall mean the total regular recurring monthly amounts
payable by Dealers, as appropriate, for Monitoring Services. RMR shall exclude
any amounts due under Dealer Monitoring Agreements listed on Schedule 1.72. RMR
includes all service charges, including leased equipment revenue. RMR does not
include any amounts derived from:

               (a)  reimbursement for or payment of telephone line or other
                    utility charges associated with the installation,
                    monitoring, maintenance, or furnishing of the alarm
                    services;

               (b)  reimbursement or payments of false alarm assessments;

               (c)  reimbursement or payment of taxes, fees or other charges
                    imposed by any governmental authority or utility relating to
                    the furnishing of alarm services;

               (d)  reimbursement or payment for time and materials charges that
                    are receivable from any seller or installer of monitoring
                    equipment for services which are not provided on a regular
                    or recurring basis; or

               (e)  charges incurred in connection with the maintenance of alarm
                    systems or the underlying equipment.

         1.72  "SAI" shall mean Security Associates International, Inc., a
Delaware corporation;

         1.73  "King Acquisition" shall mean King Acquisition Corp., a Delaware
corporation;

         1.74  "SAI Common" shall mean the common stock, $.001 par value, of
SAI;

         1.75  "SAI Financial Statements" shall have the meaning assigned in
Section 4.5;

<PAGE>   10

         1.76  "SAI Indemnified Parties" shall have the meaning assigned in
Section 10.1(a);

         1.77  "SAI Preferred" shall mean the Series B Convertible Preferred
Stock, par value $0.01 per share of SAI, having substantially the terms,
preferences and provisions previously disclosed to the Selling Shareholders;

         1.78  "SAI SEC Reports" shall have the meaning assigned in Section 4.5;

         1.79  "SAI/King LOI" shall mean the letter of intent, dated April 5,
2000, between SAI and the Selling Shareholders of the Company relating to the
acquisition of the Company by SAI and referred to in Section 3(c)(y) of the
Letter of Intent;

         1.80  "SAI Stockholder Approval" shall have the meaning assigned in
Section 7.21;

         1.81  "SAI Stockholders Meeting" shall have the meaning assigned in
Section 6.4;

         1.82  "SEC" shall mean the Securities and Exchange Commission;

         1.83  "Securities Act" shall mean the Securities Act of 1933, as
amended;

         1.84  "Securities Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended;

         1.85  "SecurityVillage" shall mean SecurityVillage.com, Inc., a
Delaware corporation;

         1.86  "Shareholder Indemnified Parties" shall have the meaning assigned
in Section 10.1(b);

         1.87  "Shareholders" shall have the meaning assigned in the first
Recital of this Agreement;

         1.88  "Shares" shall mean all of the issued and outstanding capital
stock of the Company;

         1.89  "Selling Shareholder Released Claims" shall have the meaning
assigned in Section 6.5;

         1.90  "Selling Shareholder Released Parties" shall have the meaning
assigned in Section 6.5;

         1.91  "Selling Shareholder Releasing Parties" shall have the meaning
assigned in Section 5.15;

<PAGE>   11

         1.92  "Selling Shareholders" shall mean Messrs. Thomas J. Few Sr.,
David L. Smith and Timothy M. McGinn;

         1.93  "Subscriber" shall mean any individual or entity who has
contracted to obtain remote security system monitoring services for a security
alarm system installed on the premises of that individual or entity;

         1.94  "Subsidiary" shall have the meaning assigned in Section 3.3;

         1.95  "SV/SAI Agreement" shall have the meaning assigned in Section 3
of the Letter of Intent;

         1.96  "SV Option" means the option referred to in Section 1 of the
Letter of Intent pursuant to which SecurityVillage has the right to acquire up
to 8% of the equity of the Company (on a fully diluted basis after giving effect
to the Monital Acquisition) for $1.5 million (or in lieu thereof a call option
for such 8% equity interest or another investment vehicle that provides
equivalent economic value to SecurityVillage);

         1.97  "Taxes" shall have the meaning assigned in Section 3.23;

         1.98  "Termination Event" shall mean (1) a "Reportable Event" described
in Section 4043 of ERISA and the regulations issued thereunder; or (ii) the
withdrawal of the Company or any ERISA Affiliate from a Pension Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2); or (iii) the termination of a Pension Plan, the filing of a notice
of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA; or (iv) the institution
of proceedings to terminate, or the appointment of a trustee with respect to,
any Pension Plan by the PBGC; or (v) any other event or condition which would
constitute grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan, or (vi) the partial or
complete withdrawal of the Company or any ERISA Affiliate from a Multiemployer
Plan or (vii) the imposition of a lien pursuant to Section 412 of the Code or
Section 302 of ERISA; or (viii) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA; or (ix) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.

         1.99  "Third Party Claim" shall have the meaning assigned in Section
10.2(a); and

         1.100 "Unaudited Company Financial Statements shall mean the reviewed
financial statements of the Company and its Subsidiaries for each of the two
years ended December 31, 1999 and the financial statements of the Company for
the three month

<PAGE>   12

period ended March 31, 2000, all as more fully described in Section 3.7 of this
Agreement.

                                   ARTICLE 2

                                   THE MERGER

         In connection with the Merger, the respective boards of directors and
shareholders of King Acquisition and the Company have, by resolutions duly
adopted, approved the following provisions of this Article II as their "Plan of
Reorganization" within the meaning of applicable law:

         2.1   Articles of Merger.  Subject to the provisions of this Agreement,
Certificates of Merger executed on behalf of each of King Acquisition and the
Company and meeting the requirements of applicable law (the "Certificates of
Merger"), shall be duly prepared, executed and acknowledged by the Company, King
Acquisition and such other parties as may be appropriate, and thereafter the
Certificates of Merger shall be delivered to the Secretary of State of the
states of New Jersey and Delaware, as provided under applicable law, for filing
at or before the Closing. The Merger shall become effective on the date upon
which the Certificates of Merger are filed in accordance with applicable law
(the "Effective Time").

         2.2   Closing. The Closing shall take place as provided in Article 9
and in the Escrow Agreement.

         2.3   Effects of the Merger.

                   (a)  At the Effective Time, the separate corporate existence
                        of King Acquisition shall cease, King Acquisition shall
                        be merged with and into the Company and the Company, as
                        the surviving corporation in the Merger (the "Surviving
                        Corporation"), shall continue its corporate existence
                        under the laws of the state of New Jersey under such
                        name as SAI shall designate.

                   (b)  At and after the Effective Time, the Merger will have
                        the effects set forth under applicable law.

         2.4   Certificate of Incorporation and Bylaws. The Certificate of
Incorporation of King Acquisition, as in effect immediately prior to the
Effective Time, shall be the Certificate of Incorporation of the Surviving
Corporation immediately after the Effective Time and shall thereafter continue
to be its Certificate of Incorporation until amended as provided therein and
under applicable law.

         2.5   Directors and Officers. The directors of King Acquisition holding
office immediately prior to the Effective Time shall be the directors of the
Surviving Corporation immediately after the Effective Time. The officers of King
Acquisition

<PAGE>   13

holding office immediately prior to the Effective Time shall be the officers of
the Surviving Corporation immediately after the Effective Time.

         2.6   Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of King Acquisition, the Company or
the holders of any of the following securities, the following securities will be
converted in the manner set forth below:

              (a)       Each share of Company Common which is issued and
                        outstanding immediately prior to the Effective Time
                        (other than treasury shares) shall be canceled and
                        extinguished and converted into and become a right to
                        receive (x) 225 shares of SAI Preferred (having in the
                        aggregate a $22.5 million liquidation value and
                        convertible into 4.5 million shares of SAI Common in the
                        aggregate), and (y) and $25,000 ($5 million in the
                        aggregate); provided, however, that if as the result of
                        the conversion of any Shareholder's Company Common upon
                        consummation of the Merger, a fractional interest in a
                        share of SAI Preferred would be deliverable under this
                        Section 2.6.(a), in lieu of a fractional share being
                        delivered therefor, such fractional interest shall
                        automatically be converted into the right to receive an
                        amount in cash (without interest) equal to the product
                        of the average of the high and low sale prices of the
                        SAI Common as reported by the AMEX on the trading day
                        immediately prior to the Effective Time, multiplied by
                        the number of shares of SAI Common into which such
                        fractional interest would be convertible. No such holder
                        will be entitled to dividends, voting rights or any
                        other rights as a shareholder in respect of any
                        fractional share.

              (b)       The SV Option shall be canceled and extinguished and
                        converted and become a right to receive 300,000 shares
                        of SAI Common in the aggregate.

              (c)       To the extent that actual RMR is less than the Minimum
                        RMR, then the number of shares of SAI Preferred, SAI
                        Common, and cash to be exchanged pursuant to this
                        Section 2.6 shall be proportionately reduced.

              (d)       Each share of Acquisition Common issued and outstanding
                        immediately prior to the Effective Time shall be
                        converted into one validly issued, fully paid and
                        nonassessable share of Company Common.

         2.7   Closing of Company Transfer Books. Immediately prior to the
Effective Time the stock transfer books of the Company shall be closed and no
transfer of shares of Company stock shall thereafter be made or recognized.
After the Effective Time valid

<PAGE>   14

certificates previously representing shares of Company Common which are
presented in accordance with this Agreement to the Surviving Corporation shall
be exchanged as provided in Section 2.8.

         2.8   Exchange of Common Certificates. Each holder of a certificate or
certificates representing shares of Company Common issued and outstanding
immediately prior to the Effective Time shall at or as soon as practicable
following the Closing, surrender to SAI for exchange a certificate or
certificates, duly endorsed in blank or accompanied by duly executed stock
powers, representing the number of shares of Company Common held by such holder.
In exchange therefor, SAI shall (x) issue to such holder of Company Common a
certificate or certificates representing the number of shares of SAI Preferred
to be issued to such holder pursuant to Section 2.6(a), and (y) the amount of
cash, if any, to be paid to be paid to such holder pursuant to Sections 2.6(a).
Surrendered certificates shall forthwith be canceled. At Closing,
SecurityVillage will surrender the original SV Option to SAI in exchange for the
SAI Common called for by Section 2.6(b). Until so surrendered and exchanged,
each such certificate (or the SV Option, as applicable) shall represent solely
the right to receive the consideration therefor provided in Sections 2.6(a) and
2.6(b), without interest, and SAI shall not be required to issue to such holder
the stock to which such holder otherwise would be entitled; provided, that
procedures allowing for payment against receipt of customary and appropriate
certifications and indemnities shall be provided with respect to lost or
destroyed certificates.

         2.9  Rights of the Company Shareholders. From and after the Effective
Time, the holders of shares of Company Common issued and outstanding at the
Effective Time shall have no rights with respect to such shares other than to
surrender the certificate or certificates representing such shares pursuant to
Section 2.8.

         2.10  Taking of Necessary Action; Further Action. SAI and King
Acquisition, on the one hand, and the Company and the Selling Shareholders, on
the other hand, shall use reasonable efforts to take all such action (including
action to cause the satisfaction of the conditions to the Merger) as may be
necessary or appropriate in order to effectuate the Merger as promptly as
possible. If, at any time after the Effective Time, any further action is
necessary or desirable to vest the Surviving Corporation with full possession of
all the rights, privileges, immunities and franchises of the Company and
Acquisition, the officers of the Surviving Corporation are fully authorized in
the name of either the Company or Acquisition or otherwise to take, and shall
take, all such action.

                                   ARTICLE 3

             REPRESENTATIONS WARRANTIES OF THE SELLING SHAREHOLDERS

         The Selling Shareholders, jointly and severally, represent, warrant and
acknowledge to SAI, King Acquisition, and their respective successors and
assigns that on the date of execution of this Agreement, at the Escrow Closing
and at the Closing, except in each case as set forth on the applicable
Disclosure Schedules attached hereto and except as provided in Section 3.32:

<PAGE>   15

         3.1   Organization and Standing; Certificate of Incorporation and
By-laws. The Company and each Subsidiary of the Company is a corporation duly
organized and validly existing under and by virtue of, the laws of the state of
its incorporation and is in good standing under such laws. The Company and each
Subsidiary of the Company has the requisite corporate power and authority to own
and operate its properties and assets, and to carry on its business as presently
conducted and as proposed to be conducted. The Company and each Subsidiary of
the Company is duly qualified or licensed and in good standing as a foreign
corporation in each jurisdiction where the character of its properties or the
nature of the activities conducted by it makes such qualification or licensing
necessary, each of which is listed on Schedule 3.1. The Company and its
Subsidiaries do business under the names listed on Schedule 3.1 and do not
conduct any business, and are not commonly known by any other names, other than
as set forth on Schedule 3.1. The Company and each Subsidiary of the Company has
complied with all laws requiring the registration or other recording of such
names in each jurisdiction in which the Company or such direct or indirect
Subsidiary does business. The certified copies of the Certificate or Articles of
Incorporation and By-laws of the Company and each of its Subsidiaries attached
to Schedule 3.1, are true, correct and complete and contain all amendments
through the date hereof.

         3.2   Power and Authority. The Company, each of its Subsidiaries and
the Selling Shareholders have, and will have at the Closing, all requisite legal
power and authority to execute and deliver this Agreement, to consummate the
Merger and to carry out and perform their obligations under this Agreement. None
of the Company's shareholders has dissented from the transactions contemplated
by this Agreement and no shareholder of the Company has or will have dissenter's
rights as a result thereof. This Agreement has been duly executed and delivered
by the Company and each Selling Shareholder, and constitutes a legal, valid and
binding obligation of the Company and each Selling Shareholder, enforceable
against each in accordance with its terms. Attached to Schedule 3.2 are
certified copies of the resolutions of the Company authorizing the transactions
contemplated hereby, which have not been amended or revoked.

         3.3   Subsidiaries. Except as disclosed on Schedule 3.3, the Company
has no Subsidiaries or affiliated companies and does not otherwise own or
control, directly or indirectly, any equity interest in any corporation,
association or business entity. As used herein, a "Subsidiary" is any
corporation, limited liability company, partnership, or other business entity
with respect to which the Company owns, directly or indirectly, any equity
interest, and includes any Subsidiary of a Subsidiary.

         3.4   Central Stations. The Company and its Subsidiaries own and
operate the Central Stations from which they monitor security systems pursuant
to the Accounts and the Dealer Monitoring Agreements. The Central Stations are
located at the locations described on Schedule 3.4.

         3.5   Capitalization. The authorized capital stock of the Company
consists, and will consist at the Closing, of 2,500 shares of common stock, with
no par value per share,

<PAGE>   16

of which 200 shares are issued and outstanding, and all of which are, and at the
Closing will be, owned, beneficially and of record by Few, Smith and McGinn, the
Selling Shareholders, as follows: Few (160 shares), Smith (20 shares) and McGinn
(20 shares). All of such shares have been duly authorized and validly issued and
are fully paid and nonassessable. The authorized, issued and outstanding capital
stock of each Subsidiary of the Company is, and at the Closing will be, as set
forth on Schedule 3.5. Except for the 0.8% interest in Monital held by LWG
Holdings Limited, an English limited company, all shares of capital stock of
each Subsidiary of the Company are, and at the Closing will be, owned
beneficially and of record by the Company or a Subsidiary of the Company, free
and clear of all liens, encumbrances, restrictions and claims of every kind.
Except for the SV Option and except as described on Schedule 3.5, there are no
pre-emptive rights, options, warrants, conversion rights, rights of exchange or
other rights, plans or agreements of any nature whatsoever providing for the
purchase, issuance or sale of any capital stock of the Company or any Subsidiary
of the Company or of any securities convertible into or exchangeable for any
shares of the capital stock of the Company or any Subsidiary of the Company.
Except for the Letter of Intent, no shareholder of the Company or any Subsidiary
of the Company is party to any agreement or arrangement pursuant to which it is
obligated to dispose of any of the capital stock of the Company or any
Subsidiary of the Company to any party other than SAI in connection with the
Merger. Other than the Selling Stockholders, there are no other holders of
capital stock of the Company. All securities of the Company and each Subsidiary
of the Company were issued and transferred in compliance with all applicable
federal and state securities laws and regulations. The Merger and the exchange
of the shares of Company Common involved therein as contemplated by this
Agreement will be in compliance with all applicable federal and state securities
regulations.

         3.6   Consents and Approvals. No approval or authorization of the
Shareholders or the directors of the Company or of any governmental authority or
agency or any other third party is required for the consummation by the Company
of the Merger or the other transactions contemplated by this Agreement, except
for those listed on Schedule 3.6, all of which have been obtained and copies of
which have been delivered to SAI. Except as contemplated by this Agreement, no
filing or registration with any court or governmental or regulatory agency or
board is required to be made on behalf of the Company or any Subsidiary of the
Company in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.

         3.7   Company Financial Statements; Closing Date Balance Sheet.

                    (a)  The Company has delivered to SAI the Unaudited Company
                         Financial Statements; and, prior to the Escrow Closing,
                         the Company will deliver to SAI the Escrow Date Balance
                         Sheet, and prior to the Closing, the Company will
                         deliver to SAI the Closing Date Balance Sheet. The
                         Unaudited Company Financial Statements are attached to
                         Schedule 3.7. The Unaudited Company

<PAGE>   17

                         Financial Statements are complete and correct in all
                         material respects and do not contain any information
                         which is false or misleading. The Escrow Date Balance
                         Sheet and the Closing Date Balance Sheet will contain,
                         among other things, specific schedules setting forth
                         the Company's RMR as of the dates thereof, and will be
                         true, accurate, complete and correct in all material
                         respects and will not contain any information which is
                         false or misleading as of their respective dates. The
                         Unaudited Company Financial Statements do, the Escrow
                         Date Balance Sheet, and the Closing Date Balance Sheet
                         will, fairly present the financial condition and
                         operating results of the Company and its Subsidiaries
                         as of the dates, and during the periods, indicated
                         therein. Prior to the Escrow Closing, the Company will
                         provide SAI with audited financial statements for
                         periods covered by the Unaudited Company Financial
                         Statements (the "Audited Company Financial
                         Statements"). The Audited Company Financial Statements
                         will fairly present the financial condition and
                         operating results of the Company and its Subsidiaries
                         as of the dates, and during the periods, indicated
                         therein, and will be prepared in accordance with GAAP,
                         consistently applied throughout the periods indicated,
                         except for the absence of footnotes and subject in the
                         case of interim financials, including the Escrow Date
                         Balance Sheet and the Closing Date Balance Sheet, to
                         the effect of normal year-end adjustments (which will
                         not be material). The Audited Company Financial
                         Statements will not differ from the Unaudited Company
                         Financial Statements in any material respect. Since
                         December 31, 1999, there has not been any material
                         adverse change, or any event or condition which could
                         reasonably be expected to result in any material
                         adverse change, in the financial condition, results or
                         operations, business, prospects or properties of the
                         Company or any of its Subsidiaries, the Monitoring
                         Business or any other business conducted by the Company
                         or any of its Subsidiaries (a "Material Adverse
                         Effect").

                    (b)  The books and records of the Company and each of its
                         Subsidiaries are and have been properly prepared and
                         maintained in form and substance adequate for preparing
                         audited financial statements in accordance with GAAP,
                         and fairly and accurately reflect all of the assets and
                         liabilities of the Company, its Subsidiaries and all
                         contracts and transactions to which the Company or its
                         Subsidiaries is or was a party or by which the Company,
                         its Subsidiaries or any of their respective businesses
                         or assets is or was affected. The corporate minute
                         books of the Company and each of its Subsidiaries,
                         copies of which have been made available

<PAGE>   18

                         to SAI, correctly reflect all resolutions adopted and
                         all other material corporate actions taken at all
                         meetings or through consents of the directors
                         (including committees thereof) and the shareholders of
                         the Company and each of its Subsidiaries. The stock
                         transfer books and stock ledger of the Company and each
                         of its Subsidiaries are complete and correctly reflect
                         all issuances and transfers of the capital stock of the
                         Company and each of such Subsidiaries.

                    (c)  At the Closing the Company will have a tax basis of at
                         least (i) $18 million in depreciable and/or amortizable
                         assets for Federal income tax purposes, calculated in
                         accordance with GAAP, less (ii) the amount by which
                         such assets have been depreciated and/or amortized for
                         Federal income tax purposes since January 1, 2000,
                         calculated in accordance with GAAP.

         3.8   Absence of Changes. Except for Monital Retail Account
Transactions, the transfer of the Distributed Business Items and the incurrence
in the ordinary course of indebtedness in the ordinary course of business for
working capital and/or under the Company's "8X" program, and except as otherwise
set forth in Schedule 3.8, since December 31, 1999:

                    (a)  neither the Company nor any of its Subsidiaries has
                         entered into any material agreement or transaction
                         which was not in the ordinary course of business;

                    (b)  there has been no material damage to, destruction of or
                         loss of physical property (whether or not covered by
                         insurance) or any other material adverse change in the
                         Company, its Subsidiaries, or their Assets, the
                         Monitoring Business or any other business conducted by
                         the Company or any of its Subsidiaries;

                    (c)  except as permitted pursuant to Section 5.11, neither
                         the Company nor any of its Subsidiaries has declared or
                         paid any dividend or made any distribution (in cash,
                         securities or other property) on its capital stock, or
                         redeemed, purchased or otherwise acquired any of its
                         capital stock;

                    (d)  neither the Company nor any of its Subsidiaries has
                         increased the compensation of its officers, or the rate
                         of pay of its employees as a group; and there are no
                         impending resignations or terminations of any officers
                         or employees of the Company or any of its Subsidiaries;

<PAGE>   19

                    (e)  there has been no labor dispute involving the Company
                         or any of its Subsidiaries;

                    (f)  there has not been any material change in the
                         contingent obligations of the Company or any of its
                         Subsidiaries by way of guaranty, endorsement,
                         indemnity, warranty or otherwise;

                    (g)  there have not been any loans made by the Company or
                         any of Subsidiaries to any of their employees, officers
                         or directors;

                    (h)  neither the Company nor any of its Subsidiaries has
                         borrowed any amount or incurred or become subject to
                         any liabilities (absolute or contingent), except
                         non-material expenses incurred in the ordinary course
                         of business;

                    (i)  neither the Company nor any of its Subsidiaries has
                         paid any material obligations or liabilities, other
                         than current liabilities paid in the ordinary course of
                         business;

                    (j)  neither the Company nor any of its Subsidiaries has
                         mortgaged, pledged or subjected to any lien, charge or
                         any other encumbrance, any of its properties or assets;

                    (k)  neither the Company nor any of its Subsidiaries has
                         sold, assigned, transferred or leased any of its assets
                         other than in the ordinary course of business;

                    (l)  neither the Company nor any of its Subsidiaries has
                         made any material capital expenditures or commitments
                         therefor;

                    (m)  neither the Company nor any of its Subsidiaries has
                         changed its accounting methods or practices;

                    (n)  there has been no other event or condition of any
                         character that has or can reasonably be expected to
                         result in a Material Adverse Effect to the Company and
                         its Subsidiaries;

                    (o)  neither the Company nor any of it Subsidiaries has
                         changed the pricing for its services or indicated that
                         reduced pricing for their services could be expected;
                         and

                    (p)  neither the Company nor any of its Subsidiaries has, to
                         the Knowledge of the Company or the Selling
                         Shareholders received, verbally or in writing, any
                         notice of intent to cancel or reduce use of its
                         services by any Dealer.

<PAGE>   20

         3.9   Liabilities and Indebtedness. Schedule 3.9 contains a true and
complete list of each and every Liability of the Company and each of its
Subsidiaries, including, but not limited to, all prebilled RMR and unearned
revenue and each and every agreement or other instrument under or pursuant to
which the Company or any of its Subsidiaries has outstanding indebtedness or
obligations of greater than $10,000 individually or $50,000 in the aggregate.
The Company has furnished SAI with true and correct copies of each such
agreement and instrument, including all amendments and copies of any guarantee
security agreements and/or financing statements executed by the Company or any
of its Subsidiaries relating to said agreements. Neither the Company nor any of
its Subsidiaries is in default in any material respect under any of its
agreements or evidences of indebtedness. Except as recorded on the face of the
Closing Balance Sheet or as disclosed on Schedule 3.9 attached hereto, neither
the Company nor any of its Subsidiaries has any material (individually or in the
aggregate) Liabilities or obligations, absolute or contingent.

         3.10  Material Contracts. Schedule 3.10 contains a true, accurate and
complete list of each and every agreement, contract, arrangement or
understanding of the Company and each of its Subsidiaries pursuant to which the
Company or its Subsidiaries is obligated (or potentially obligated) to pay more
than $10,000 or pursuant to which the Company or any of its Subsidiaries is
obligated (or potentially obligated) to provide services with a value in excess
of $10,000 ("Material Contract"). No party (including the Company or any of its
Subsidiaries) to any Material Contract is in default in any material respect
thereunder. Except as set forth on Schedule 3.10, neither the Company nor any of
its Subsidiaries is a party to any Material Contract.

         3.11  Leases.

               (a)  Schedule 3.11(a) contains a true and complete list of all
                    real estate leases of the Company and each of its
                    Subsidiaries (the "Real Estate Leases") and sets forth a
                    brief summary of the principal terms thereof. True and
                    complete copies of all such Real Estate Leases have been
                    supplied to SAI, including all amendments thereto. The
                    Company and its Subsidiaries will be able to utilize all of
                    the Central Stations under such Real Estate Leases for those
                    Facilities for the balance of the terms of their respective
                    leases, including any renewal terms. Neither the Company nor
                    its Subsidiaries or any Shareholder has any Knowledge of any
                    intention on the part of any lessor to terminate any Real
                    Estate Lease or raise the rental rate or take any other
                    action that might make the continued use by the Company or
                    any of its Subsidiaries of any of the Facilities housing the
                    Central Stations more onerous.

               (b)  Schedule 3.11(b) contains a true, accurate and complete list
                    of every equipment lease of the Company and each of its
                    Subsidiaries, including the Antenna Lease ("Equipment
                    Leases")

<PAGE>   21

                    and sets forth a brief summary of the principal terms of
                    each such lease. True, accurate and complete copies of all
                    such Equipment Leases have been supplied to SAI, including
                    all amendments thereto. The Company and its Subsidiaries
                    will be able to utilize all of the equipment leased under
                    such Equipment Leases for the balance of the terms of their
                    respective leases, including any renewal terms. Neither the
                    Company, its Subsidiaries nor any Shareholder has any
                    Knowledge of any intention on the part of any lessor to
                    terminate any Equipment Lease or raise the rental rate or
                    take any other action that might make the continued use by
                    the Company or any of its Subsidiaries of any of the
                    equipment leased thereunder more onerous.

               (c)  Schedule 3.11(c) contains a true, accurate and complete list
                    of all Leases not listed in Schedules 3.11(a) or 3.11(b).
                    Neither the Company, its Subsidiaries nor any other party is
                    in default under the terms of any Lease. None of the Leases
                    requires the consent of the lessors thereunder to the
                    transactions contemplated by this Agreement. Consummation of
                    the transactions contemplated hereby will not result in the
                    cancellation of any of the Leases or the acceleration of the
                    obligations thereunder. Prior to the Escrow Closing, the
                    Company shall have obtained and delivered to SAI all
                    necessary landlord and other lessor consents necessary for
                    the Company and its Subsidiaries to operate the Central
                    Stations, and to assume the rights of the Company or its
                    Subsidiaries under the Leases.

         3.12  Title to Properties and Assets; Liens, etc. The Company or one of
its Subsidiaries has good and marketable title to its properties and assets, and
has good title to all its leasehold interests, in each case subject to no
mortgage, pledge, lien, lease, claim, encumbrance, restriction or charge
("Lien"), except for the Liens listed on Schedule 3.12. The Company or its
Subsidiaries own or lease all such equipment and properties as are necessary to
the Monitoring Business and each other business conducted by the Company or its
Subsidiaries. Schedule 3.12(a) contains a true, accurate and complete list of
all (x) Leases which require the consent of a party other than the Company or
its Subsidiaries in connection with the Merger, and (y) Assets of the Company
and its Subsidiaries which consist of:

               (a)  Cash and Securities;

               (b)  Bank Accounts;

               (c)  Contracts;

               (d)  Real Estate;

<PAGE>   22

               (e)  Equipment;

               (f)  Intellectual property;

               (g)  Leasehold interests in Real Estate Leases and Equipment
                    Leases;

               (h)  The rights to the telephone lines used in the Monitoring
                    Business, all of which are listed on Schedule 3.12(a);

               (i)  Accounts receivable;

               (j)  Prepaid expenses and deposits;

               (k)  All books and records of the Company and each of its
                    Subsidiaries, including without limitation all financial,
                    accounting and personnel records, all original Contracts,
                    monitoring and service records, lockout codes, computer
                    codes, up and download codes and information, and all other
                    documentation necessary or appropriate in order for the
                    Company and its Subsidiaries to operate the Monitoring
                    Business and the other business operated by the Company and
                    its Subsidiaries;

               (l)  All other contracts and commitments by which the Company or
                    any of its Subsidiaries is bound;

               (m)  The goodwill of the Company;

               (n)  All contracts and policies of insurance; and

               (o)  All other assets and rights used in the operation of the
                    Monitoring Business, excepting only those listed on Schedule
                    3.12(b) as "Excluded Assets".

         All Equipment owned by the Company or any of its Subsidiaries is, and
at the Closing will be, in good operating condition and repair, ordinarily wear
and tear excepted. All of the Equipment is in compliance with all applicable
statutes, rules, regulations and ordinances.

         Except as disclosed on Schedule 3.12(a), all real property owned by the
Company or any of its Subsidiaries is free and clear of all Liens and is not
subject to any rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature, except (a) liens for current taxes
not yet due, and (b) (i) minor imperfections of title, if any, none of which is
substantial in amount, materially detracts from the value or impairs the use of
the property subject thereto, or impairs the operations of the Company or its
Subsidiaries, and (ii) zoning laws and other land use restrictions that do not
impair the present or anticipated use of the property subject thereto. Except as
disclosed on

<PAGE>   23

Schedule 3.12(a), all buildings, plants, and structures owned by the Company and
its Subsidiaries lie wholly within the boundaries of the real property owned by
the Company or its Subsidiaries and do not encroach upon the property of, or
otherwise conflict with the property rights of, any other Person.

         Schedule 3.12(b) is a true and complete list of those assets formerly
owned by the Company or any of its Subsidiaries which have been distributed to
the shareholders of the Company or any of its Subsidiaries or entities
controlled by such shareholders at or prior to the Closing. Assets listed on
Schedule 3.12(b) which are to be distributed to the Selling Shareholders
immediately prior to the Closing, if any, shall be referred to herein as
"Excluded Assets." Except as disclosed on Schedule 3.12 or referred to
specifically in this Agreement, other than the Excluded Assets, no Asset of the
Company or any of its Subsidiaries has been disposed of since December 31, 1999,
other than in the ordinary course of business.

         3.13  Form Contracts. Attached to Schedule 3.13 are the forms of
agreements the Company and its Subsidiaries use with Dealers and Subscribers to
document its arrangements for monitoring Dealer Owned Accounts (collectively,
the "Form Contracts"). The Form Contracts include all contracts currently in
use, and earlier forms of contracts that were used for agreements that are still
in effect. Neither the Company nor any of its Subsidiaries has entered into any
oral agreements with any Subscriber or Dealer, except for those agreements
described in reasonable detail on Schedule 3.13. Except as disclosed on Schedule
3.13 there are no agreements with any Dealer or Subscriber materially varying
from the provisions of the Form Contracts. Neither the Company nor any of its
Subsidiaries provides monitoring to any Subscriber of a Dealer that has not
executed a written contract with that Dealer. The Company and each of its
Subsidiaries has delivered to SAI all of the Dealer Monitoring Agreements of the
Company and its Subsidiaries and copies of the form agreements used by the
respective Dealers for each Dealer Owned Account.

         3.14  Telephone Lines. Schedule 3.14 contains a true, accurate and
complete list of (i) each telephone line being used in the operations of the
Company and its Subsidiaries; (ii) the name of the owner of the line if other
than the Company or one of its Subsidiaries, (iii) the name of the telephone
service supplier for each line; (iv) all charges associated with each line,
including without limitation, advertising and yellow pages charges, and (v) the
specific use to which each line is put. Where the use of a line is dedicated to
a particular Dealer or other entity, Schedule 3.14 also sets forth a brief
description of the agreement for dedication of that line. Except as disclosed on
Schedule 3.14, the Company and its Subsidiaries have the exclusive right to use
all the telephone lines. Except those disclosed on Schedule 3.14, there are no
charges associated with the telephone lines. Immediately following the Closing
the Company and its Subsidiaries will have all right, title, interest in and the
right to use as currently used all of said telephone lines. All of the contract
rights and outstanding obligations of the Company and its Subsidiaries with
respect to any and all Yellow Page listings and advertisements are set forth on
Schedule 3.14. The Company will provide SAI with the forms of any and all
telephone agency and supersession letters and will take such actions as are
necessary for

<PAGE>   24

the continuing right of the Company and its Subsidiaries to use of all such
telephone lines after the Closing.

         3.15  Compliance with Other Instruments. Neither the Company nor any of
its Subsidiaries is in violation of any term of its respective Articles or
Certificate of Incorporation or By-laws, or of any term or provision of any
mortgage, indebtedness, indenture, contract, agreement, instrument, judgment or
decree applicable to the Company or such Subsidiary. The execution, delivery and
performance of and compliance with this Agreement (i) have not resulted and will
not result in any violation of, or conflict with, or constitute a default under,
the Articles or Certificate of Incorporation or By-laws of the Company or any of
its Subsidiaries or of the governing documents of any Selling Shareholder, (ii)
have not resulted, and will not result, in the creation of, any Lien upon any of
the properties or assets of the Company or its Subsidiaries or any Selling
Shareholder, (iii) have not resulted and will not result in the loss of any
license, permit, certificate, legal privilege or legal right enjoyed or
possessed by the Company or any of its Subsidiaries; (iv) do not and will not
give any party to any agreement to which the Company or any of its Subsidiaries
is a party a right of termination; and (v) do not and will not require the
consent of any other person or entity under any agreement, indenture, mortgage,
lease or other instrument or undertaking by which the Company, any of its
Subsidiaries or any Selling Shareholder is bound or to which any of their
respective properties are subject. No Selling Shareholder is a party to, subject
to or bound by any agreement or any judgment, order, writ, prohibition,
injunction or decree of any court or other governmental body which would prevent
the execution or delivery of this Agreement by such Selling Shareholder, such
Selling Shareholder's approval of the Merger or the conversion of such
Shareholder's shares of Company Common pursuant to the Merger.

         3.16  Compliance with Laws.

               (a)  The Company and each of its Subsidiaries has complied, and
                    is currently in compliance, with all laws, rules,
                    regulations, and orders applicable to the operation of its
                    remote alarm monitoring business or any other business
                    conducted by the Company or any such Subsidiary. Neither the
                    Company nor any of its Subsidiaries has taken any action
                    which would, or failed to take any action which failure
                    would, in any way preclude or prevent the Company or any
                    such Subsidiary from continuing to operate the Monitoring
                    Business or any other business conducted by the Company or
                    any such Subsidiary following the Closing. The Company and
                    its Subsidiaries, and their respective employees, have, and
                    following the Closing, the Company, its Subsidiaries, and
                    their respective employees will continue to have, all
                    Permits necessary for the conduct of the Monitoring Business
                    (including, if required separate licenses required for the
                    monitoring of burglar alarm systems, fire

<PAGE>   25

                    alarm systems and combined systems) and any other business
                    conducted by the Company or any such Subsidiary in all
                    jurisdictions in which the Company or any such Subsidiary
                    does business, and all such Permits are currently in effect.
                    Schedule 3.16(a) contains a true, accurate and complete list
                    of all states in which the Company, its Subsidiaries or
                    individuals acting on their behalf are licensed, the
                    entities and individuals licensed in each of such state and
                    the Accounts with respect to which such entities and
                    individuals are licensed.

               (b)  No violations are, or have been, recorded in respect of any
                    such Permits and no proceedings are pending, or to the
                    Knowledge of the Company and the Selling Shareholders,
                    threatened concerning revocation or limitation of any such
                    Permit. No such Permit will be revoked as a result of the
                    transactions contemplated by this Agreement. Copies of all
                    Permits used in the conduct of the business of the Company
                    and its Subsidiaries are attached to Schedule 3.16.

               (c)  To the Knowledge of the Company and the Selling
                    Shareholders, all of the Dealers for which the Company and
                    its Subsidiaries provide Monitoring Services are licensed as
                    installers of security systems by the appropriate entities
                    in the jurisdictions in which they conduct business, and
                    neither the Company, its Subsidiaries nor any of their
                    respective shareholders are aware of any fact which could
                    lead to the revocation or suspension of any of such Dealer's
                    licenses.

         3.17  Intellectual Property. The Company and each of its Subsidiaries
owns or has the right to use, and following the Closing the Company and each of
its Subsidiaries will continue to own and have the right to use, free and clear
of all Liens, all Intellectual Property used in the conduct of their respective
businesses without infringing upon or otherwise acting adversely to the right or
claimed right of any person. Schedule 3.17 contains a true and complete list of
the Intellectual Property of the Company, its Subsidiaries and the owner(s),
licensors, grantors and licensee(s) thereof. Except as disclosed on Schedule
3.17, neither the Company nor any of its Subsidiaries is, or following the
Closing will be, obligated or under any liability to make any payments for
royalties, fees or otherwise to any owner of, licensor of, or other claimant to,
any Intellectual Property, with respect to the use thereof or in connection with
the conduct of its business or otherwise. Neither the Company nor any of its
Subsidiaries has granted any licenses allowing third parties to use any of the
Intellectual Property of the Company or its Subsidiaries. The conduct of the
Monitoring Business or any other business conducted by the Company and its
Subsidiaries does not, and will not, violate the Intellectual Property or any
other proprietary interest of any other Person. The Company

<PAGE>   26

and its Subsidiaries possess, and after the Closing will possess, ownership of
or licenses to utilize all proprietary technology necessary for the conduct of
the Monitoring Business and any other business conducted by the Company or its
Subsidiaries. Neither the Company nor any of its Subsidiaries is in default
under any agreement governing its use of any Intellectual Property.

         3.18  Schedule 3.18 consists of the following:

               (a)  Schedule 3.18(a) is a true, accurate and complete list of
                    the Dealer Monitoring Agreements of the Company, its
                    Subsidiaries, and sets forth completely and accurately, as
                    of April 30, 2000 (i) the RMR due from each Dealer under
                    each such agreement; (ii) the agings of the accounts
                    receivable from each Dealer under each such agreement; and
                    (iii) the method of billing such Dealers.

               (b)  Except as disclosed on Schedule 3.18(a), all Accounts and
                    Dealer Monitoring Agreements or included in the RMR are
                    evidenced by written contracts, except those oral agreements
                    described on Schedule 3.18. The Accounts and Dealer
                    Monitoring Agreements arose in bona-fide arms length
                    transactions in the normal course of business and such
                    agreements are valid and binding obligations of the Dealers
                    and Subscribers that are parties thereto without any
                    counterclaims, set-offs or other defenses thereto, and
                    neither the Company, its Subsidiaries or any selling
                    Shareholder has any basis to believe that the amounts
                    payable under such Accounts and Dealer Monitoring Agreements
                    are not collectible. Neither the Company nor any of its
                    Subsidiaries has any basis to believe that any Account or
                    Dealer Monitoring Agreement will not continue in existence
                    after the Closing.

         3.19  Litigation, etc. There are no actions, suits, proceedings or
investigations pending or threatened against the Company, its Subsidiaries or
their respective properties before any court, arbitration panel or governmental
agency (nor, to the Selling Shareholder's or the Company's Knowledge, is there
any reasonable basis therefor), nor is there any judgment, decree, injunction,
rule or order of any court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against the Company, its Subsidiaries
or their respective assets or the Monitoring Business or any other business
conducted by the Company and its Subsidiaries, except as described on Schedule
3.19. Schedule 3.19 also contains a true and complete list of every incident for
the last five years in which a Subscriber or third party asserted that it
experienced a loss related to any failure or omission of the Company, its
Subsidiaries (other than Monital except to the extent disclosed in the Monital
Acquisition) or their provision of Monitoring Services, a short description of
the claim and its current status or resolution.

<PAGE>   27
 3.20 Related Party Transactions. Except as disclosed on Schedule 3.20,
neither the Company, its Subsidiaries nor any shareholder, officer, director,
employee of the Company, its Subsidiaries, or any member of their immediate
families, is, directly or indirectly, interested in any contract with the
Company or its Subsidiaries, including but not limited to any agreement, written
or unwritten, for employment or consulting, or any lease for real or personal
property. No officer or employee of the Company or its Subsidiaries is a party
to or bound by any agreement, contract or commitment, or subject to any
restrictions (including confidentiality or non-compete restrictions) in
connection with any previous or current employment of any such person, which
adversely affects, or in the future may adversely affect, the business of the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is a guarantor or indemnitor of any indebtedness of any other
Person, except as disclosed on Schedule 3.20. All existing agreements between
each Shareholder and the Company or its Subsidiaries have been (or on or prior
to the Closing will be) terminated and, thereafter, except as contemplated
herein, such Shareholder will not be a party to, subject to or bound by any
agreement, commitment or understanding whatsoever between such Shareholder and
the Company.

 3.21  Securities Law Compliance.

       (a) Each of the Selling Shareholders understands and agrees that: (i) the
           SAI Preferred to be issued pursuant to the Merger has not been, and
           as of the Effective Time will not be, registered under the Securities
           Act or under any state securities laws; (ii) the SAI Preferred is
           being offered and issued in reliance upon Federal and state
           exemptions for transactions not involving any public offering; (iii)
           a "stop transfer" order will be placed against the certificates
           representing shares of SAI Preferred issued pursuant to the Merger
           until such time as (A) such SAI Preferred is registered under the
           Securities Act or (B) until SAI has received an opinion of counsel
           satisfactory to it that a proposed transfer or sale does not require
           registration or qualification under applicable law; and (iv) until
           removed in accordance with Section 5.17, the certificates
           representing the shares of SAI Preferred and SAI Common issued in the
           Merger will bear the legend set forth below:

              The shares evidenced by this certificate have not been registered
              under the Securities Act of 1933, as amended (the "Act"), or any
              applicable state securities laws, in reliance on exemptions under
              the Act and applicable state securities laws. No transfer or sale
              of these shares or any interest therein may be made without such
              registration and qualification unless the issuer has received an
              opinion of counsel satisfactory to it that a proposed
<PAGE>   28

                transfer or sale does not require registration or qualification
                under applicable law.
     (b)    The Selling Shareholders each further represent that: (i) he is
            acquiring the SAI Preferred to be acquired him pursuant to the
            Merger solely for his own account for investment purposes and not
            with a view to the distribution thereof within the meaning of the
            Securities Act; (ii) he is a sophisticated investor with knowledge
            and experience in business and financial matters and is an
            "accredited investor" within the meaning of Rule 501 under the
            Securities Act; (iii) he has had access to all SAI SEC Reports filed
            by SAI during the current year and the year preceding the current
            year, and has had the opportunity to obtain additional information
            and ask questions and receive answers as desired in order to
            evaluate the merits and risks inherent in holding the SAI Preferred;
            (iv) he has not been offered the SAI Preferred by any form of
            general advertising or general solicitation; and (v) he is able to
            bear the economic risk and lack of liquidity inherent in holding the
            SAI Preferred.

  3.22 Brokers or Finders. Neither the Company, its Subsidiaries nor any
Shareholder has dealt with any broker or finder, and have not incurred, and will
not incur, directly or indirectly, as a result of any action taken by the
Company, its Subsidiaries or any Selling Shareholder, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with the transactions contemplated by this Agreement.

  3.23 Tax Matters. The Company and each of its Subsidiaries: (i) has timely
filed all income, sales and employment tax returns that are required to have
been filed with all appropriate federal, state, county and local governmental
agencies that relate to the Company or its Subsidiaries or with respect to which
the Company or any of its Subsidiaries is liable or otherwise in any way
subject, including without limitation all tax returns due for the period ending
December 31, 1999, (and all such returns fairly reflect the operations of the
Company and its Subsidiaries for tax purposes), and all taxes, fees, assessments
and governmental charges of any nature ("Taxes") shown by such returns to be due
and payable have been paid, except for those amounts set forth on Schedule 3.23
as being contested in good faith and for which appropriate amounts have been
reserved and are reflected on the Company's Financial Statements, and will be
reflected on the Escrow Date Balance Sheet or the Closing Date Balance Sheet, as
the case may be, in accordance with GAAP; (ii) has timely paid all Taxes owed by
it or which it is obligated to withhold from amounts owing to any employee
(including without limitation social security taxes), creditor or third party
and (iii) has not waived any statute of limitations with respect to taxes or
agreed to any extension of time with respect to a tax assessment or deficiency.
The assessment of any additional Taxes for periods for which returns have been
filed will not exceed the liability therefor appearing on the Escrow Date
Balance

<PAGE>   29

Sheet or the Closing Date Balance Sheet, as the case may be, and there are no
material unresolved questions or claims concerning the tax liability of the
Company, its Subsidiaries. The tax returns of the Company and its Subsidiaries
have not been reviewed or audited by any federal, state, local or county taxing
authority. There is no pending dispute with any taxing authority relating to any
of said tax returns. The Company's Financial Statements do, and the Escrow Date
Balance Sheet and the Closing Date Balance Sheet will, accurately reflect all of
the tax liability of the Company and its Subsidiaries for Taxes as of their
respective dates. All of the income, sales and employment-related tax returns of
the Company and its Subsidiaries for the years 1997, 1998 and 1999 are attached
to Schedule 3.23. The books of the Company and its Subsidiaries will be closed
as of the Closing Date in order to properly determine the Taxes due for the
period ending on the Closing Date. The Selling Shareholders will fully cooperate
with the Company and its Subsidiaries in preparing their respective tax returns,
including, but not limited to, those for the stub period ending on the Closing
Date (the "Stub Period"). Neither the Company nor the Selling Shareholders have
taken or failed to take, or prior to the Closing will take or fail to take, any
action which would result in the loss of the Company's status as a Subchapter S
corporation or which would otherwise affect the Company's status as a Subchapter
S Corporation prior to Closing.

  3.24 Insurance. The Company and each of its Subsidiaries has valid workers'
compensation, fire, casualty, liability and errors and omissions policies, in
such amounts and with such coverage as is reasonably related to the foreseeable
risks of the Company and its Subsidiaries, in each case with reputable insurers.
The Company has provided to SAI true, accurate and complete copies of all such
policies. All of the fire, casualty, liability and errors and omissions policies
of the Company and its Subsidiaries are "occurrence" policies not "claims made"
policies. Neither the Company nor any of its Subsidiaries (a) is in default with
respect to any provision contained in any such policy, or (b) has failed to give
any notice or present any claim under any such policy in due and timely fashion.
Neither the Company nor any of its Subsidiaries will be placed in default, nor
will their coverage be canceled, as a result of the transactions contemplated by
this Agreement. There are no outstanding unpaid claims under any such policy.
Neither the Company nor any of its Subsidiaries has received notice of, nor have
they Knowledge of, any inaccuracy in any application for such policies, any
failure to pay premiums when due or any similar state of facts that might form
the basis for termination of any such insurance or rejection of any claim.
Within three years prior to the Closing Date, neither the Company nor any of its
Subsidiaries has canceled or terminated any insurance policy, nor has any
insurance company canceled or terminated any insurance policy of the Company or
its Subsidiaries or rejected any claim under such policy. All such policies will
remain in full force and effect following the Closing. Following the Closing,
the Company and its Subsidiaries will be able to cancel all such policies upon
no more than thirty (30) days written notice without payment of any additional
premium or any penalty.

<PAGE>   30

  3.25  Pension Plans. Neither the Company nor any of its Subsidiaries maintains
or contributes to, or has any obligation under, or on the Closing Date will
maintain, contribute to, or have any obligation under, any Employee Benefit Plan
other than those identified on Schedule 3.25. The Company has provided SAI with
true, accurate and complete copies of all contracts, agreements, and documents
described in Exhibit 3.25.

        (a)   ERISA and Code Compliance and Liability. The Company and each
              ERISA Affiliate is in compliance with all applicable provisions of
              ERISA with respect to all Employee Benefit Plans. Each Employee
              Benefit Plan that is intended to be qualified under Section 401(a)
              of the Code has been determined by the Internal Revenue Service to
              be so qualified, and each trust related to such plan has been
              determined to be exempt under Section 501(a) of the Code. No
              material liability has been incurred by the Company or any ERISA
              Affiliate that remains unsatisfied for any taxes or penalties with
              respect to any Employee Benefit Plan or any Multiemployer Plan.

        (b)   Funding. No Pension Plan has been terminated, nor has any
              accumulated funding deficiency (as defined in funding waiver from
              the Internal Revenue Service been received or requested with
              respect to any Pension Plan, nor has the Company or any ERISA
              Affiliate failed to make any contributions or to pay and amounts
              due and owing as required by Section 412 of the Code, Section 302
              of ERISA or the terms of any Pension Plan prior to the due dates
              of such contributions under Section 412 of the Code or Section 302
              of ERISA, nor has there been any event requiring any disclosure
              under Section 4041)(c)(3)(C), 4063(a) or 4068 of ERISA with
              respect to any Pension Plan.

        (c)   Prohibited Transactions and Payments. Neither the Company nor any
              ERISA Affiliate has (i) engaged in a non-exempt "prohibited
              transaction" as such term is defined in Section 406 of ERISA or
              Section 4975 of the Code; (ii) incurred any liability to the PBGC
              which remains outstanding other than the payment of premiums and
              there are no premium payments which are due and unpaid; (iii)
              failed to make a required contribution or payment to a
              Multiemployer Plan; or (iv) failed to make a required installment
              or other required payment under Section 412 of the code.

        (d)   No Termination Event. No Termination Event has occurred or is
              reasonably expected to occur.
<PAGE>   31

        (e)   ERISA Litigation. No material proceeding, claim, lawsuit and/or
              investigation is existing or threatened concerning or involving
              any (i) employee welfare benefit plan (as defined in Section 3(1)
              of ERISA) currently maintained or contributed to by the Company or
              any of its Subsidiaries, (ii) Pension Plan or (iii) Multiemployer
              Plan.

  3.26  Directors, Officers and Employees.

        (a)   Directors, Officers and Employees. Schedule 3.26 sets forth the
              names of each director, officer and employee of the Company and
              each of its Subsidiaries and states the rate of compensation
              payable to each. Attached to Schedule 3.26 are copies of each
              written employment agreement and noncompetition agreement with any
              of such directors, officers and employees. Except as set forth in
              Schedule 3.26, no such agreement shall cause the Company or its
              Subsidiaries to make additional payments as a result of the
              Merger.

        (b)   Labor Matters. Neither the Company nor any of its Subsidiaries has
              been, or is, a party to any collective bargaining agreement with
              any union representing any of its employees. The Company and each
              of its Subsidiaries has been, and is, in compliance with all
              applicable laws, rules and regulations relating to employment and
              employment practices, immigration laws, terms and conditions of
              employment, wages and hours. None of the employees of the Company
              or its Subsidiaries is represented by a labor union. There has not
              been, and there are not presently, pending or threatened any
              unfair labor practice or discrimination charges or complaints
              against the Company or its Subsidiaries before the National Labor
              Relations Board, the Equal Employment Opportunity Commission or
              any similar national, state or local body.

        (c)   Continued Service by Certain Employees. Mr. Thomas J. Few Sr. has
              agreed, without additional consideration, to remain employed by
              SAI, the Company or its Subsidiaries at his current compensation
              level. The individuals listed on Schedule 3.26(c) will continue to
              act as the Company's qualifying license holders. The Selling
              Shareholders agree to have each such employee execute a letter
              agreement with SAI providing for the following:

              (i)   Continued employment by SAI, the Company or a Subsidiary of
                    the Company;

              (ii)  Continued compensation at current levels; and

<PAGE>   32

              (iii) Confidentiality and non-competition undertakings.

   3.27   Environmental Matters.

          Except as set forth in Schedule 3.27:

          (a) The Company and its Subsidiaries are, and at all times have been,
              in full compliance with, and have not been and are not in
              violation of or liable under, any Environmental Law. None of the
              Selling Shareholders or the Company or its Subsidiaries has any
              basis to expect, nor has any of them or any other Person for whose
              conduct they are or may be held to be responsible received, any
              order, notice, or other communication from (i) any governmental
              body or private citizen acting in the public interest, or (ii) the
              current or prior owner or operator of any owned or leased property
              or facility ("Facilities"), of any actual or potential violation
              or failure to comply with any Environmental Law, or of any
              obligation to undertake or bear the cost of any environmental,
              health, and safety liabilities with respect to any of the
              Facilities or any other properties or assets (whether real,
              personal, or mixed) in which the Company or its Subsidiaries has
              had an interest, or with respect to any property or Facility at or
              to which hazardous materials were generated, manufactured,
              refined, transferred, imported, used, or processed by the Company,
              or any other Person for whose conduct they are or may be held
              responsible, or from which hazardous materials have been
              transported, treated, stored, handled, transferred, disposed,
              recycled, or received.

          (b) There are no pending or, to the Knowledge of the Selling
              Shareholders, the Company or its Subsidiaries, threatened claims,
              Liens, or other restrictions of any nature, resulting from any
              environmental, health, and safety liabilities or arising under or
              pursuant to any Environmental Law, with respect to or affecting
              any of the Facilities or any other properties and assets (whether
              real, personal, or mixed) in which Company has or had an interest.

          (c) None of the Selling Shareholders or the Company or its
              Subsidiaries has Knowledge of any basis to expect, nor has any of
              them or any other Person for whose conduct they are or may be held
              responsible, received, any citation, directive, inquiry, notice,
              Order, summons, warning, or other communication that relates to
              hazardous activity, hazardous materials, or any alleged, actual,
              or potential violation or failure to comply with any Environmental
              Law, or of any alleged, actual, or potential obligation to
              undertake or bear the cost of any environmental, health, and
              safety liabilities

<PAGE>   33

              with respect to any of the Facilities or any other properties or
              assets (whether real, personal, or mixed) in which the Company or
              its Subsidiaries had an interest, or with respect to any property
              or Facility to which hazardous materials generated, manufactured,
              refined, transferred, imported, used, or processed by the Company,
              or its Subsidiaries or any other Person for whose conduct they are
              or may be held responsible, have been transported, treated,
              stored, handled, transferred, disposed, recycled, or received.

          (d) There are no hazardous materials present on or in the environment
              at the Facilities or at any geologically or hydrologically
              adjoining property, including any hazardous materials contained in
              barrels, above or underground storage tanks, landfills, land
              deposits, dumps, equipment (whether moveable or fixed) or other
              containers, either temporary or permanent, and deposited or
              located in land, water, sumps, or any other part of the Facilities
              or such adjoining property, or incorporated into any structure
              therein or thereon.

          (e) There has been no release or, to the Knowledge of the Selling
              Shareholders, the Company, or its Subsidiaries threat of a
              release, of any hazardous materials at or from the Facilities or
              at any other locations where any hazardous materials were
              generated, manufactured, refined, transferred, produced, imported,
              used, or processed from or by the Facilities, or from or by any
              other properties and assets (whether real, personal, or mixed) in
              which the Company or its Subsidiaries has or had an interest, or
              to the Knowledge of the Selling Shareholders, Company or its
              Subsidiaries any geologically or hydrologically adjoining
              property, whether by the Company, its Subsidiaries or any other
              Person.

The Selling Shareholders have delivered to SAI true and complete copies and
results of any reports, studies, analyses, tests, or monitoring possessed or
initiated by or on behalf of the Company pertaining to hazardous materials or
hazardous activities in, on, or under the Facilities, or concerning compliance
by the Company, or any other Person for whose conduct they are or may be held
responsible, with Environmental Laws.

     3.28 UL Compliance and Compliance with Laws. The Central Stations are
certified by Underwriters Laboratories, Inc. ("U.L."). A copy of each U.L.
listing of the Central Stations is attached to schedule 3.28. The Selling
Shareholders are not aware of any reason why the Central Stations would lose
their U.L. certifications. No Accounts require inspections to be or remain in
compliance with any governmental regulation, law or code, and all Accounts are
in compliance with any applicable code or regulation.

     3.29 Ownership of Stock. The Selling Shareholders are the lawful owners,
both beneficially and of record, of the Shares, have good and marketable title
to the

<PAGE>   34

Shares and, except for the King Option referred to in Section 3 of the
Letter of Intent, such ownership and title are free and clear of all liens,
encumbrances, preemptive rights, shareholders' agreements, voting trusts or
similar agreements, rights of first refusal, restrictions on transfer and other
restrictions and claims of every kind. The Shares are fully paid and
non-assessable and have the rights set forth in the Company's Articles or
Certificate of Incorporation and Bylaws. Schedule 3.29 sets forth the Shares
owned by each Shareholder; and each Selling Shareholder has good and marketable
title to the Shares owned by such Selling Shareholder.

     3.30 Proxy Statement. The information supplied by the Company for inclusion
in the Proxy Statement shall not, at the time the Proxy Statement is first
mailed to the stockholders of SAI, at the time of the SAI Stockholders Meeting
or at the Effective Time, contain any statement which, at such time and in light
of the circumstances under which it was made, is false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements made in the Proxy Statement not false or
misleading. If at any time prior to the Effective Time any event relating to the
Company, it Subsidiaries or any of their respective affiliates, officers or
directors should be discovered by the Company which should be set forth in a
supplement to the Proxy Statement, the Company shall promptly inform SAI.

     3.31 Representations and Warranties True on Closing Date. The
representations and warranties made by the Selling Shareholders herein, and all
statements made in any exhibit, schedule or certificate or other document or
instrument furnished pursuant to this Agreement, do not contain, and as of the
Closing will not contain, any untrue statement of a material fact, or omit to
state any material fact required to be stated therein, or necessary in order to
make the statements made, in light of the circumstances under which they were
made, not misleading. The Selling Shareholders have clearly and fully disclosed
to SAI, in writing, all material facts concerning the Company and its
Subsidiaries necessary for SAI to accurately evaluate its investment in the
Company and its Subsidiaries, their Assets and the Monitoring Business and other
business conducted by the Company and its Subsidiaries.

     3.32 Representations relating to Monital. Notwithstanding anything in this
Agreement to the contrary, the Selling Shareholders' representations and
warranties as they relate to Monital, are made to the Knowledge of the Selling
Shareholders, the Company, the Central Regional Manager of the Company, the
National Sales Manager of the Company, the Company's Subsidiaries (except
Monital) and the respective officers, directors, legal counsel and financial
advisors of the Company and its Subsidiaries (except Monital) for all facts,
circumstances and conditions occurring with respect to Monital prior to the
consummation by the Company of the Monital Acquisition. The Selling Shareholders
hereby represent and warrant that (i) they have disclosed and provided, or prior
to the Escrow Closing Date will have disclosed and provided, to SAI all
documents and information received by the Selling Shareholders and/or their
representatives during the course of their due diligence investigation of
Monital

<PAGE>   35

(including without limitation, their document review and management interviews)
and (ii) they have no Knowledge that any of the representations and warranties
made in the transaction documents for the Monital Acquisition are untrue.

     3.33 Selling Shareholder Released Claims. Neither the Company nor any
Subsidiary has any pending claim or cause of action of any kind whatsoever
against any Selling Shareholder, including, but not limited to, any claim
relating to such Selling Shareholder's performance of his duties as an officer,
director or employee of the Company or any of its Subsidiaries, or any facts or
circumstances which now or , with the passage of time, would give rise to any
such claim or cause of action. Neither the Company nor any Subsidiary has
assigned or otherwise transferred, or prior to the Closing will assign or
otherwise transfer, any right or interest in or to any such claim or cause of
action, including, but not limited to, Selling Shareholder Released Claims.

                                   ARTICLE 4

                        REPRESENTATIONS, WARRANTIES, AND
                   ACKNOWLEDGEMENTS OF SAI AND KING ACQUSITION

     SAI and King Acquisition, jointly and severally, represent, warrant, and
acknowledge to the Selling Shareholders that:

     4.1 Incorporation. SAI is a validly existing corporation in good standing
under the laws of the State of Delaware. King Acquisition is a validly existing
corporation in good standing under the laws of the state of Delaware.

     4.2 Power and Authority. SAI and King Acquisition each have the requisite
corporate power and authority to own and operate their respective properties and
assets, and to carry on their respective businesses as presently conducted and
as proposed to be conducted. Subject to approval of the Merger and other
transactions contemplated herein by the shareholders of SAI and its lenders, SAI
and King Acquisition each have all requisite corporate power and authority to
execute and deliver this Agreement; to consummate the Merger and to carry out
and perform its obligations under the terms of this Agreement.

     4.3 Authorization. All action on the part of SAI and King Acquisition
necessary for the authorization, execution, delivery and performance of this
Agreement and the performance of all of the obligations of SAI and King
Acquisition hereunder have been taken or will be taken prior to the Closing.
This Agreement has been duly executed and delivered by SAI and King Acquisition,
respectively, and constitutes their valid and binding obligations, enforceable
against each in accordance with its terms. Except as contemplated by this
Agreement, no filing or registration with any court or governmental or
regulatory agency or board is required to be made on behalf of SAI or King
Acquisition in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby.

<PAGE>   36

     4.4 SAI Securities. SAI has taken, or prior to the Closing will take, all
actions necessary to authorize and approve the issuance of the SAI Preferred and
the SAI Common to be issued in connection with the Merger, and as of the
Effective Time the SAI Preferred and the SAI Common will, when issued in
accordance herewith, be duly authorized, validly issued, fully paid and
nonassessable. Except as contemplated in the Letter of Intent, there are no
statutory or contractual shareholders' preemptive rights or rights of refusal
with respect to the issuance of the SAI Preferred or the SAI Common upon
consummation of the Merger.

     4.5 Commission Filings. SAI has filed and made available to the Company and
the Shareholders all forms, reports and documents required to be filed by SAI
with the SEC under the Securities Exchange Act, and the Securities Act during
the one year period ending on the date hereof (collectively, the "SAI SEC
Reports"). The SAI SEC Reports (i) at the time filed, complied in all material
respects with the applicable requirements of the Securities Exchange Act, and
(ii) did not at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such SAI SEC Reports or necessary in order to make the
statements in such SAI SEC Reports, in the light of the circumstances under
which they were made, not misleading. As of their respective dates, the
financial statements of SAI included in the SAI SEC Reports (the "SAI Financial
Statements") complied when filed as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, and were, when filed, in accordance with the
books and records of SAI, complete and accurate in all material respects, and
presented fairly the consolidated financial position and the consolidated
results of operations, changes in Shareholders' equity and cash flows of SAI and
its Subsidiaries as of the dates and for the periods indicated, in accordance
with generally accepted accounting principles, consistently applied, subject in
the case of interim financial statements to normal year-end adjustments and the
absence of certain footnote information.

     4.6 Litigation, etc. Except as previously disclosed to the Selling
Shareholders or included in the SAI SEC Reports, there are no actions, suits,
proceedings or investigations pending or, to SAI's Knowledge, threatened against
SAI before any court, arbitration panel or governmental agency (nor, to SAI's
Knowledge, is there any reasonable basis therefor) which were not incurred in
the ordinary course and would have a material adverse effect on SAI, nor is
there any judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or arbitrator outstanding, that
in any such case seeks to enjoin or challenge the transactions contemplated
hereby.

     4.7 Disclosure. The representations and warranties made by SAI herein, and
all statements made in any exhibit, schedule or certificate furnished by SAI
pursuant to this Agreement, do not contain, and at the Closing Date will not
contain, any untrue statement

<PAGE>   37

of a material fact, or omit to state any material fact required to be stated
therein, or necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.

                                   ARTICLE 5

                      COVENANTS OF THE SELLING SHAREHOLDERS
     5.1 Maintenance of Business. From the date hereof until the Closing, the
Selling Shareholders shall cause the Company and its Subsidiaries to carry on
and preserve the business, goodwill and the relationships of the Company, its
Subsidiaries and the Monitoring Business and any other business conducted by the
Company or its Subsidiaries with Dealers, Subscribers, suppliers, employees,
agents and others in substantially the same manner as they have been prior to
the date hereof. The Company will provide SAI with prior notice prior to making
any changes to employee compensation or benefits.

     5.2 Absence of Certain Changes. From the date hereof until the Closing,
except for the Monital Retail Account Transactions, the transfer of the
Distributed Business Items or as otherwise expressly permitted or contemplated
hereby, the Selling Shareholders shall not cause or permit the Company and its
Subsidiaries to, and neither the Company nor any of its Subsidiaries shall,
without SAI's prior express written consent:

          (a) incur any additional indebtedness for money borrowed, or guarantee
              any indebtedness or obligation of any other party other than the
              incurrence of working capital indebtedness and 8x program debt in
              the ordinary course of business;

          (b) pay any dividends or make any distributions to its shareholders
              (other than distributions permitted pursuant to Section 5.11) with
              respect to its capital stock;

          (c) issue any capital stock or securities convertible into capital
              stock or grant or issue any options, warrants or rights to
              subscribe for its capital stock or securities convertible into its
              capital stock;

          (d) enter into, amend or terminate any agreement or arrangement, other
              than in the ordinary course of business and the Company shall
              notify SAI prior to entering into, amending or terminating any
              material agreement or arrangement even in the ordinary course of
              business;

          (e) increase the compensation payable or to become payable to any of
              its officers, employees or agents, or adopt or amend any employee
              benefit plan;

<PAGE>   38

          (f) acquire or dispose of any properties or assets used in its
              business except in the ordinary course of business;

          (g) permit any change in its business or the manner in which its books
              and records are maintained;

          (h) create or suffer to be imposed any lien, mortgage, security
              interest or other charge on or against its business, properties or
              assets;

          (i) acquire any new accounts other than pursuant to transactions
              mutually consented to by SAI and the Company;

          (j) engage in any activities or transactions outside the ordinary
              course of its business as conducted at the date hereof; or

          (k) agree or commit to any of the foregoing.

     5.3 Necessary Consents. Prior to the Closing, the Selling Shareholders will
use their best efforts to obtain written consents and take such other actions as
may be necessary or appropriate to allow the consummation of the transactions
contemplated hereby and to allow the continuation of the business and operations
of the Company and its Subsidiaries after the Closing, including but not limited
to, any consents required with respect to any Real Estate Leases or Equipment
Leases for continued use of such Facilities and Equipment following the Closing
on the terms set forth in such Real Estate Leases and Equipment Leases
(collectively, "Required Consents").

     5.4 Access to Information. From the date hereof until the Closing, the
Company and the Selling Shareholders shall give SAI and its accountants, legal
counsel and other representatives full access, during normal business hours, to
all of the properties, books, contracts, commitments and records relating to the
business, Assets and Liabilities of the Company and its Subsidiaries, and will
furnish SAI, its accountants, legal counsel and other representatives during
such period all such information concerning their affairs as SAI may reasonably
request; provided, that any furnishing of such information or any investigation
by SAI shall not affect SAI's right to rely on the representations, warranties
and covenants made by the Selling Shareholders in this Agreement. SAI shall, to
the extent that it has actual Knowledge, based on its review of materials
received from the Company, of any misstatements or omissions in the Company's
disclosure schedules, use its best efforts to inform the Company of such
misstatements or omissions.

     5.5 Certain Defaults; Litigation. The Selling Shareholders will give prompt
notice to SAI of:

          (a) any default by the Company, its Subsidiaries or any other party,
              subsequent to the date of this Agreement and prior to the Closing
              under any instrument or agreement to which the Company or any

<PAGE>   39

              of its Subsidiaries is a party or by which it is bound, which
              default could, if not remedied, result in any Material Adverse
              Effect on the Company, its Subsidiaries or the Monitoring Business
              or other business conducted by the Company or its Subsidiaries or
              which would render incorrect any representation or warranty made
              herein, and

          (b) any suit, action, proceeding or investigation instituted or
              threatened against or affecting the Company, its Subsidiaries or
              the Monitoring Business or other business conducted by the Company
              and its Subsidiaries subsequent to the date of this Agreement and
              prior to the Closing.

     5.6 Assistance in Transition. From the date hereof until the Closing, the
Selling Shareholders shall provide, and cause the Company and it Subsidiaries to
provide, SAI all reasonable assistance in connection with the transition of
ownership and management of the Company and its Subsidiaries.

     5.7 Other Negotiations. Except as expressly set forth in the Letter of
Intent, from the date hereof until the termination of this Agreement, the
Selling Shareholders and the Company will not, and will cause the Company's
officers and directors not to, initiate discussions or negotiate, or authorize
any Person to discuss or negotiate on behalf of the Selling Shareholders or the
Company, with any party other than SAI, or entertain or consider any inquiries
or proposals received from any party other than SAI, concerning the possible
disposition of all or any portion of the business, assets or capital stock of
the Company or its Subsidiaries.

     5.8 Assistance in Compliance with Loan Covenants. The Company and the
Selling Shareholders will cooperate with in (i) SAI's negotiating of all of the
documentation to be entered into by the Company, the Shareholders, SAI, SAI's
lenders, and any other party in connection with obtaining financing for the
acquisition of the Shares, (ii) any actions required of SAI, the Company or the
Shareholders to comply with the covenants contained in any loan agreement with
SAI's lenders and (iii) closing the transactions contemplated thereby or by this
Agreement. Each Selling Shareholder agrees to enter into a Consent to Assignment
of Acquisition Instruments, in the form of Exhibit 5.8(a) hereto, pursuant to
which such Selling Shareholder will agree that SAI's lenders may enforce SAI's
remedies under this Agreement in the event of SAI's default under its loan
agreements with such lenders. In addition, the Selling Shareholders will use
their best efforts to cause each lessor under the Leases to enter into an
agreement, in the form of Exhibit 5.8(b), collaterally assigning the Company's
interests in each such lease to SAI's lenders.

     5.9 Noncompetition and Nonsolicitation. The Selling Shareholders each
acknowledge that but for their agreement to be bound by the terms of this
Section 5.9, SAI would not consummate the transactions contemplated by this
Agreement. From the

<PAGE>   40

date hereof until the fifth (5th) anniversary of the Closing Date (unless
otherwise provided), each Selling Shareholder agrees that he will refer all
inquiries by current or former clients (as of the Closing) of the Company and
its Subsidiaries relating to the business of the Company and its Subsidiaries to
SAI, and that he will not, directly or indirectly:

          (a) enter into competition with the Company or SAI, or their
              respective Subsidiaries, by establishing a remote alarm system
              monitoring center providing monitoring services to any location
              within twenty five (25) miles of any location where the Company,
              SAI or their respective Subsidiaries provide such services;

          (b) provide, or solicit any Dealer or Subscriber for the purposes of
              providing, any services similar to those provided by the Company,
              SAI or their respective Subsidiaries, either directly or through
              any other Person.

          (c) reveal the customer list of the Company or its Subsidiaries to any
              Person;

          (d) employ any employee of the Company, SAI or their respective
              Subsidiaries or solicit or encourage any such employee to
              terminate his or her employment with any of the foregoing (other
              than employees who have worked primarily for the Transferred
              Business Units and who accept employment with Morlyn on or prior
              to Closing), at any time within one year after such employee's
              termination of employment with the Company or SAI; or

          (e) for so long as the Company and its Subsidiaries are engaged in the
              Monitoring Business and its other businesses, take any other
              action which is intended to, or which would reasonably be expected
              to:

              (i)    adversely affect the Company's, SAI's or their respective
                     Subsidiaries' interest in any Contract;

              (ii)   adversely affect the Company's, SAI's or their respective
                     Subsidiaries' contractual relationship with any Dealer or
                     Subscriber; or

              (iii)  discourage any Dealer, Subscriber or supplier from
                     continuing its business relationship with the Company, SAI
                     or their respective Subsidiaries after the Closing on the
                     same terms as were maintained prior to the Closing.
<PAGE>   41

     For purposes of this Section 5.9, the term "Selling Shareholder" shall also
include any corporation, partnership or other business entity in which a Selling
Shareholder now or in the future owns, directly or indirectly, a controlling
equity interest, and the parents, spouse, or children, of a Selling Shareholder,
or any entity in which any of them own, directly or indirectly, a controlling
interest. Notwithstanding any other provision of this Agreement, each Selling
Shareholder agrees that money damages would not be a sufficient remedy for
breach of this Section 5.9 and that SAI shall be entitled to specific
performance, injunctive relief or other equitable relief as a remedy for breach
of this Section 5.9; provided, however, that all such equitable remedies would
be in addition to all remedies available at law to SAI.
     5.10 Confidentiality. From the date hereof until the Closing, the Selling
Shareholders will, and will cause the Company and its Subsidiaries and their
respective officers, directors and employees to, treat as strictly confidential
all Confidential Information concerning SAI, the Company and their respective
Subsidiaries that is not part of the public domain and shall not disclose any
such information to any third party. At all times after the Closing each of the
Selling Shareholders will treat and hold as confidential all Confidential
Information concerning SAI, the Company and their respective Subsidiaries,
refrain from using any of such Confidential Information (except, as applicable,
in direct furtherance of such Shareholder's duties on behalf of SAI, the Company
or their respective Subsidiaries (as directed by SAI)) and shall deliver
promptly to the SAI or the Company or destroy, at the request and option of SAI,
all tangible embodiments (and all copies) of Confidential Information concerning
SAI, the Company or their respective Subsidiaries which are in such
Shareholder's possession. In the event that any of the Selling Shareholders is
requested or required (by oral question or written request for information or
documents in any legal proceeding, interrogatory, subpoena, civil investigative
demand, or similar process) to disclose any Confidential Information concerning
SAI, the Company or their respective Subsidiaries, such Shareholder will notify
SAI promptly of the request or requirement so that SAI may seek an appropriate
protective order or waive compliance with the provisions of this Section 5.10.
If, in the absence of a protective order or the receipt of a waiver hereunder,
any of the Selling Shareholders is, on the advice of counsel, compelled to
disclose any of such Confidential Information to any tribunal or else stand
liable for contempt, such Selling Shareholder may disclose such Confidential
Information to the tribunal; provided, however, that the disclosing Selling
Shareholder shall, upon the request of SAI or the Company and at their expense,
exert all reasonable efforts to obtain an order or other assurance that
confidential treatment will be accorded to such portion of the Company
Confidential Information required to be disclosed as the Company or SAI shall
reasonably designate.

     5.11 Tax Returns. The Selling Shareholders agree to cause the Company and
its Subsidiaries to file for all tax periods prior to the Closing Date, all
Federal, state, and local income, property, and payroll tax returns. The Selling
Shareholders hereby agree to indemnify SAI pursuant to Article 10 hereof for any
costs incurred for any unpaid tax liabilities related to the Company or its
Subsidiaries arising from any state of facts existing prior to the Closing Date,
including, but not limited to, Federal, state, and local

<PAGE>   42

income taxes. With regard to the partial tax year ended on the Closing Date (the
"Stub Period"), the Selling Shareholders shall cause the Company's final
Subchapter S return for such period to be prepared and filed. The Company will
cause its Subsidiaries to prepare and file in a timely manner their final tax
return(s) for the Stub Period consistent with the basis for preparation
previously disclosed by Weil Gotshall. The Company will make a distribution to
the Selling Shareholders in an amount equal to their Federal and state tax
liability arising from the inclusion of the Company's income on their personal
Federal and state tax returns for such period as reflected on such tax returns
or as certified to SAI by the accountant preparing such returns to the extent
not previously distributed by the Company. The Selling Shareholders will
indemnify the Company for any tax liability of the Company or its Subsidiaries
for the Stub Period in excess of the amount shown on the final tax returns of
the Company and its Subsidiaries for the Stub Period.

     5.12 Financial Statement Audits. If at any time SAI deems it necessary or
advisable to have an independent audit performed on the financial statements of
the Company or its Subsidiaries, (including, without limitation, in connection
with the Proxy Statement), the Selling Shareholders will fully cooperate with
SAI and the independent auditors in the performance of the audit. In furtherance
and not in limitation of the foregoing, the Selling Shareholders will cooperate
and provide all assistance reasonably requested by SAI's independent accountants
and the Company's independent accountants (including without limitation,
executing any and all customary management representation letters with respect
to the Company's financial statements) in connection with the preparation and
delivery to SAI of audited financial statements and for the Company as of and
for each of the fiscal years ended December 31, 2003.

     5.13 Disclosure to State Taxing Authorities. The Selling Shareholders shall
make all necessary disclosures related to the exchange of the Shares in
connection with the Merger as are required under the applicable state laws, and
no amounts are required to be withheld from consideration to be received by the
Selling Shareholders in connection with the Merger pursuant to such laws.

     5.14 Update Disclosure; Breaches. From and after the date of this Agreement
until the Closing, the Selling Shareholders shall promptly notify SAI, by
written update to the attachments hereto, of (i) the occurrence or
non-occurrence of any event which would be likely to cause any condition to its
obligations to effect the Merger and the other transactions contemplated by this
Agreement not to be satisfied, (ii) any fact, condition or occurrence which
would be likely to result in any of the representations or warranties of the
Selling Shareholders not being true and correct as of the Closing, or (iii) the
failure of the Selling Shareholders to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by the Company, its
Subsidiaries or the Selling Shareholders pursuant to this Agreement which would
be likely to result in any condition to the obligations of any Party to effect
the Merger and the other transactions contemplated by this Agreement not to be
satisfied. The delivery of any notice pursuant to this Section 5.14 shall not
cure any breach of any representation or

<PAGE>   43

warranty requiring disclosure of such matter prior to the date of this Agreement
or otherwise limit or affect the remedies available hereunder to SAI.

     5.15 Waiver and Release. Subject to, and conditioned upon, the consummation
of the Merger, each Selling Shareholder, on behalf of himself and his heirs,
executors, administrators, successors and assigns (with respect to each Selling
Shareholder, the "Selling Shareholder Releasing Parties"), irrevocably and
unconditionally waives and releases any and all rights with respect to, and
releases, forever acquits and discharges each of the Company and its
Subsidiaries and their officers, employees, agents and other representatives,
and their respective heirs, executors, administrators, successors and assigns
(the "Company Released Parties"), with respect to, each and all claims, demands,
charges, complaints, obligations, causes of action, suits, liabilities,
indebtedness, sums of money, covenants, agreements, instruments, contracts
(written or oral, express or implied), controversies, promises, fees, expenses
(including attorneys' fees, costs and expenses), damages and judgments, at law
or in equity, in contract or tort, in federal, state or other judicial,
administrative, arbitration or other proceedings, of any nature whatsoever,
known or unknown, suspected or unsuspected, previously, now or hereafter
arising, in each case which arise out of, are based upon or are connected with
facts or events occurring or in existence on or prior to the Effective Time (the
"Company Released Claims"). Each Selling Shareholder further represents and
warrants that such Shareholder has not assigned or otherwise transferred any
right or interest in or to any of the Released Claims. This Section 5.15 shall
not apply to any of the following: (a) claims for salaries and benefits accrued
through the Closing under the express terms of the written benefit plans of the
Company or its Subsidiaries, or (b) claims for indemnification pursuant to
Section 10.1(b) herein.

     5.16 Verbal Dealer Monitoring Arrangements. The Company and the Selling
Shareholders shall use their best efforts to replace all verbal Dealer or
Subscriber monitoring arrangements with written agreements reflecting such
arrangements prior to Closing.

     5.17 Post-Closing Transfer of SAI Securities.

          (a) The Selling Shareholders hereby acknowledge and agree that the SAI
              Preferred or the SAI Common issued in connection with the Merger
              may not be transferred except pursuant to (a) a registered
              offering under the Securities Act (in which case all transfers
              shall be made in accordance with all applicable provisions of the
              Registration Agreement), (b) Rule 144 promulgated pursuant to the
              Securities Act (or any similar rule or rules then in force) if
              available, or (c) subject to the conditions specified in
              subparagraph (b) below, any other legally available means of
              transfer.

          (b) In connection with the transfer of any SAI Preferred or SAI Common
              issued in connection with the Merger (other than a

<PAGE>   44

                 transfer pursuant to a registered public offering), the holder
                 thereof shall deliver written notice to SAI describing in
                 reasonable detail the transfer or proposed transfer, together
                 with an opinion of securities counsel (with such opinion and
                 such counsel being satisfactory to SAI) to the effect that such
                 transfer of SAI Preferred or SAI Common may be effected without
                 registration of such SAI Preferred or SAI Common under the
                 Securities Act or any applicable state securities law. In
                 addition, if the holder of SAI Preferred delivers to SAI such
                 an opinion that concludes that no subsequent transfer of such
                 SAI Preferred or SAI Common will require registration under the
                 Securities Act or any applicable state securities law, SAI
                 shall promptly upon such contemplated transfer deliver new
                 certificates for such SAI Preferred or SAI Common which do not
                 bear the restrictive legend set forth in Section 3.21(a). If
                 SAI is not required to deliver new certificates for such SAI
                 Preferred or SAI Common not bearing such legends, the holder
                 thereof shall not transfer the same until the prospective
                 transferee has confirmed to SAI in writing its agreement to be
                 bound by the conditions contained in this Section.

                                   ARTICLE 6

                                COVENANTS OF SAI
     6.1 Necessary Consents. Prior to the Closing, SAI will use its best efforts
obtain such consents and take such other actions as may be necessary or
appropriate to allow the consummation of the Merger and the other transactions
contemplated hereby, including the approval of its shareholders.

     6.2 Offer of Employment. SAI agrees that SAI, the Company or its
Subsidiaries will offer employment to each of the individuals listed on Schedule
6.2 at the annual salary rates set forth on Schedule 6.2. Each such employee
that accepts such an offer will be an employee at will.

     6.3 Confidentiality. SAI agrees to abide by the confidentiality provisions
of the Letter of Intent; provided, however, that SAI, as a reporting company
under the Securities Exchange Act and as an issuer of securities under the
Securities Act, may make all disclosures concerning this Agreement, the Selling
Shareholders and the Company and its Subsidiaries as are required by Federal and
state securities laws, as determined by SAI and its counsel.

     6.4 SAI Stockholders Meeting. SAI shall call a meeting of its stockholders
(the "SAI Stockholders Meeting"), to be held as promptly as practicable for the
purpose of voting, among other things, upon the Merger and the issuance of the
shares of SAI Preferred and SAI Common contemplated hereunder, SAI will, through
its Board of Directors recommend to its stockholders, as applicable, approval of
such matters and will

<PAGE>   45

coordinate and cooperate with respect to the timing of such meetings and shall
use its best efforts to hold such meeting on the same day and as soon as
practicable after the date hereof. As promptly as practicable after the
execution of this Agreement, but in any event on or prior to September 1, 2000,
SAI shall prepare and file with the SEC the Proxy Statement, shall use its best
efforts to cause the Proxy to become approved by the SEC as soon as after such
filing as practicable, and shall promptly furnish a copy of the Proxy Statement
to each of SAI's Stockholders.

     6.5 Subject to, and conditioned upon, the consummation of the Merger, the
Company, its Subsidiaries and their respective successors and assign (the
"Company Releasing Parties"), irrevocably and unconditionally waives and
releases any and all rights with respect to, and releases, forever acquits and
discharges each of the Selling Shareholders and their respective heirs,
executors, administrators, successors and assigns ("Selling Shareholder Released
Parties"), with respect to, each and all claims, demands, charges, complaints,
obligations, causes of action, suits, liabilities, indebtedness, sums of money,
covenants, agreements, instruments, contracts (written or oral, express or
implied), controversies, promises, fees, expenses (including attorneys' fees,
costs and expenses), damages and judgments, at law or in equity, in contract or
tort, in federal, state or other judicial, administrative, arbitration or other
proceedings, of any nature whatsoever, known or unknown, suspected or
unsuspected, previously, now or hereafter arising, in each case which arise out
of, are based upon or are connected with facts or events occurring or in
existence on or prior to the Effective Time ("Selling Shareholder Released
Claims"). This Section 6.5 shall not apply to limit or diminish in any way the
Selling Shareholders' joint and several obligations under Article 10.

                                   ARTICLE 7

                          SAI'S CONDITIONS FOR CLOSING
     The obligations of SAI and King Acquisition to consummate the Merger and
the other transactions contemplated by this Agreement are subject to the
fulfillment, at or before the Escrow Closing and the Closing, of all the
following conditions, unless waived in writing by SAI:

     7.1 Representations True. The representations and warranties of the Selling
Shareholders in this Agreement shall be true and correct when made and shall be
true and correct at the Escrow Closing and at the Closing as those made as of
the Escrow Closing and the Closing, respectively.

     7.2 Covenants Performed. The Company and the Selling Shareholders shall
have performed or complied with all of the terms, covenants and conditions of
this Agreement to be performed or complied with at or prior to the Closing.

     7.3 No Violations; No Actions. As of the Escrow Closing and as of the
Closing, consummation of the transactions contemplated by this Agreement shall
not violate any order, decree or judgment of any court or governmental entity
and no action or proceeding shall have been instituted by any Person or
threatened by any governmental

<PAGE>   46

entity which, in either such case, in the reasonable judgment of SAI, has a
probability of resulting in an order judgment or decree restraining, prohibiting
or rendering unlawful the consummation of the Merger or the other transactions
contemplated by this Agreement.

     7.4  Company RMR. As of the Escrow Closing and as of the Closing, the
Company's RMR shall not be less than $600,000.

     7.5  Company Assets. As of the Escrow Closing and as of the Closing, the
Company will have a tax basis of at least (i) $18 million in depreciable and/or
amortizable assets for Federal income tax purposes, calculated in accordance
with GAAP, less (ii) the amount by which such assets have been depreciated
and/or amortized for Federal income tax purposes since January 1, 2000,
calculated in accordance with GAAP.

     7.6  Closing Balance Sheet. The Company shall have delivered the Closing
Balance Sheet to SAI.

     7.7  Monital Retail Account Transactions. In the event that the Monital
Acquisition is consummated prior to the Closing, the Monital Retail Account
Transactions shall have been consummated.

     7.8  FCC Approvals. All required FCC approvals shall have been obtained.

     7.9  Few Company Note. Mr. Few shall have forgiven the indebtedness
represented by the outstanding promissory note, dated January 9, 1998, from the
Company to him.

     7.10 No Material Adverse Change. During the period commencing on the date
of execution of this Agreement to the Closing, there shall not have been any
material adverse change in the condition (financial or otherwise), liabilities,
business or prospects of the Company or any of its Subsidiaries.

     7.11 Closing Balance Sheets. The Company shall have delivered to SAI the
Escrow Date Balance Sheet prior to the Escrow Closing and the Closing Date
Balance Sheet prior to the Closing.

     7.12 Opinion of Counsel for the Selling Shareholders. SAI shall have
received opinions from counsel for the Selling Shareholders, in form and
substance satisfactory to SAI, dated as of the Escrow Closing Date and to be
dated as of the Closing Date, respectively, covering the subject matter
contained in Sections 3.1, 3.2, 3.3, 3.5, 3.6, 3.12, 3.15, 3.16, 3.17, 3.19,
3.20, 3.21, 3.25, 3.27 and 3.29.

     7.13 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be in form and substance
satisfactory to SAI, and SAI

<PAGE>   47

shall have received all such originals or certified or other copies of such
documents as it may reasonably request.

     7.14 Employment Agreement. SAI, the Company or its Subsidiaries shall have
entered into a written employment agreement with Mr. Few, in the form attached
as Exhibit 7.14.

     7.15 Delivery of Documents. SAI shall have received all documents and other
items to be delivered by the Selling Shareholders under Section 9.3 and 9.4.

     7.16 Exhibits. The Selling Shareholders shall have completed and attached
hereto all Exhibits and Schedules required by this Agreement, and all such
Schedules shall have been acceptable to SAI, in its sole discretion.

     7.17 Required Consents. As of the Closing Date, all corporate, statutory,
regulatory and third party consents and approvals which are required under the
laws or regulations of the United States and any other authority shall have been
obtained; and all other necessary consents and approvals of third parties to the
transactions contemplated hereby and to the continued uninterrupted operation of
the business of the Company and its Subsidiaries shall have been obtained,
including, but not limited to, the Required Consents.

     7.18 SV/SAI Transactions. In the event that the transactions contemplated
in the SV/SAI Agreement to be consummated at or prior to the consummation of the
transactions contemplated hereby shall not have been consummated, SAI's
obligation to close shall not be excused but may, at SAI's election, be delayed
for up to 120 days to the extent necessary to obtain financing to replace the
financial consideration to have been received by SAI as a result of the
consummation of the transactions contemplated in the SV/SAI Agreement.

     7.19 Monital Acquisition Documents. If the Company and the other parties
thereto shall have executed the Monital Acquisition Documents prior to the
Escrow Closing Date, true, accurate and complete copies of the Monital
Acquisition Documents shall be attached hereto as Schedule 7.19.

     7.20 Officer's and Other Certificates. The Selling Shareholders shall have
delivered to SAI the following:

          (a) certificates of the each Selling Shareholder, dated as of the
              Escrow Closing Date and to be dated as of the Closing Date,
              respectively, stating that the conditions specified in Sections
              7.1, 7.2, 7.3, 7.4, 7.5, 7.7, 7.8, 7.9, 7.10, 7.17 and 7.19 have
              been fulfilled at or prior to the Escrow Closing and the Closing,
              respectively;

<PAGE>   48

          (b) certificates of the Company, executed on behalf of the Company by
              its President, dated as of the Escrow Closing Date and to be dated
              as of the Closing Date, respectively, stating that the conditions
              specified in Sections 7.1, 7.2, 7.3, 7.4, 7.5, 7.7, 7.8, 7.9,
              7.10, 7.17 and 7.19 have been fulfilled at or prior to the
              Closing;

          (c) certificates of the Company's Secretary, dated as of the Escrow
              Closing Date and to be dated as of the Closing Date, respectively
              certifying that: (x) that attached thereto are true, accurate and
              complete copies of the Articles or Certificate of Incorporation
              and By-laws of the Company and each of its Subsidiaries, and all
              amendments thereto, and copies of the resolutions adopted by the
              Board of Directors and Shareholders approving the Merger and other
              transactions contemplated by this Agreement; and that (y) there
              have been no amendments or modifications to the attached Articles
              or Certificates of Incorporation since the date of such
              certificate and that the attached resolutions are in full force
              and effect on the date of such certificate and have not been
              superceded or modified in any manner whatsoever; and

          (d) incumbency certificates, in form and content, dated as of the
              Closing Date, satisfactory in form and content to SAI and its
              counsel.

    7.21  SAI Stockholder Approval. The stockholders of SAI shall have approved
the Merger and the issuance of the SAI Preferred and SAI Common required
pursuant to this Agreement ("SAI Stockholder Approval").

    7.22  Disclosure Schedules. The Company and the Selling Shareholders shall
have delivered to SAI all of the Schedules called for to be delivered by the
Company and/or the Selling Shareholders pursuant to this Agreement (including
without limitation, information concerning Monital for the period after the
closing of the Monital Acquisition and for the Company and its other
Subsidiaries for all other periods); and no fact, event, circumstance, contract
or condition disclosed in such Disclosure Schedules shall have or result, or
reasonably be expected to have or result, in a material adverse effect on the
financial condition, results or operations, business prospects or properties of
the Company or its Subsidiaries.

    7.23  Disposal of Distributed Business Items. The Company shall have
completed the transfer of the Distributed Business Items to and Morlyn shall
have assumed the related liabilities of the Company and its Subsidiaries.

<PAGE>   49
                                   ARTICLE 8

                  SELLING SHAREHOLDERS' CONDITIONS FOR CLOSING

     The obligation of the Selling Shareholders to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing, of all the following conditions, unless waived in writing by a majority
in interest of the Selling Shareholders:

     8.1 Representations True. The representations and warranties of SAI set
forth in Article 4 shall be true and correct when made and true and correct as
of the Closing as though made as of the Closing.

     8.2 Covenants Performed. SAI shall have performed or complied with all of
the terms, covenants and conditions of this Agreement to be performed or
complied with by SAI at or before the Closing.

     8.3 No Violations; No Actions. As of the Closing, consummation of the
transactions contemplated by this Agreement shall not violate any order, decree
or judgment of any court or governmental body having competent jurisdiction and
no action or proceeding shall have been instituted by any person or entity or
threatened by any governmental agency which, in either such case, in the
reasonable judgment of the Selling Shareholders, has a probability of resulting
in an order judgment or decree restraining, prohibiting or rendering unlawful
the consummation of the transactions contemplated by this Agreement.

     8.4 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be in form and substance
satisfactory to the Selling Shareholders, and they shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.

     8.5 Delivery of Documents. The Selling Shareholders shall have received all
documents and other items to be delivered by SAI under Section 9.3 and 9.5.

     8.6 Required Consents. As of the Closing, all statutory and regulatory
consents and approvals which are required under the laws or regulations of the
United States and any other authority shall have been obtained; and all other
necessary consents and approvals of third parties to the transactions
contemplated hereby shall have been obtained; provided, however, that the
consents of the shareholders of SAI and King Acquisition shall not have been
obtained prior to the meeting of shareholders of SAI contemplated herein.

<PAGE>   50

                                    ARTICLE 9

                                    CLOSINGS

     9.1 Time and Place. The Escrow Closing and the Closing, as the case may be,
shall each commence at the offices of SAI, or at any other place to which the
Parties shall mutually agree, at 10:00 a.m. on the Escrow Closing Date or the
Closing Date, as the case may be, or such other times, dates or places as the
Parties may mutually agree upon in writing. All actions to be taken, and all
documents and instruments to be delivered, at the Escrow Closing or the Closing,
as the case may be, shall be deemed to have been taken or delivered, as the case
may be, simultaneously. SAI shall file the Proxy Statement with the SEC by no
later than September 1, 2000, unless the delay shall have been the result of a
breach or delay on the part of the Company or SV or the Selling Shareholders.

     9.2 Escrow Closing. At or prior to the Escrow Closing, the Parties and the
Escrow Agent shall enter into an escrow agreement (the "Escrow Agreement")
which, in form and substance, shall be reasonably (x) consistent with the terms
and of this Agreement, and (y) satisfactory to the Parties. Pursuant to the
terms and conditions of the Escrow Agreement, on the Escrow Closing Date, the
parties shall execute and deliver to the Escrow Agent all documents and
instruments required to be executed and delivered, and take such other actions
as may be required by this Agreement to be taken, in connection with the Escrow
Closing; and the transactions contemplated hereby shall be considered tendered
in escrow (the "Escrow Closing"). From and after the Escrow Closing until the
Closing, (i) the parties shall continue to comply with their respective
covenants under this Agreement, including without limitation, those in Articles
5 and 6, and (ii) the Closing shall take place on the Closing Date upon the
terms and conditions set forth herein and in the Escrow Agreement.

     9.3 Actions to be taken in connection with the Closing. At the Closing, on
the Closing Date, upon the unanimous direction of the parties thereto to be
given upon satisfaction of the conditions to Closing set forth in Articles 7 and
8:

          (a)  SAI shall deliver to the Selling Shareholders a certificate,
               dated the Closing Date, in form and substance satisfactory to the
               Selling Shareholders and their counsel, confirming that the
               shareholders of SAI and SAI, as the sole shareholder of King
               Acquisition, have approved Merger and transactions contemplated
               hereby;

          (b)  the Selling Shareholders shall deliver to SAI the corporate
               records of the Company and its Subsidiaries relating to the
               Monitoring Business and other business conducted by the Company
               and its Subsidiaries; and

          (c)  the applicable Parties (or the Escrow Agent, as applicable)
               shall,: (i) file or cause to be filed the appropriate
               Certificates of Merger with the Secretary of State of the states
               of New Jersey and
<PAGE>   51

          Delaware; (ii) deliver to SAI the items called for by Section 9.4; and
          (iii) make the payments to the Selling Shareholders referred to in
          Section 9.5(a) and deliver to the Selling Shareholders the other items
          called for by Section 9.5.

     9.4 Deliveries of the Selling Shareholders. At or prior to the Closing, the
Selling Shareholders will execute and deliver or cause to be executed and
delivered, simultaneously with the execution and delivery of the items referred
to in Section 9.5 below, the following:

               (a)  Stock Certificates. Certificates representing the Company
                    Shares endorsed in blank over to SAI or accompanied by duly
                    executed stock powers endorsed in blank;

               (b)  Corporate Documents. The Articles or Certificate of
                    Incorporation of the Company and each of its Subsidiaries,
                    certified by the Secretary of State of their respective
                    state(s) of incorporation, as of a date not more than ten
                    days prior to the Closing Date, and the By-Laws of the
                    Company and each of its Subsidiaries, certified by the
                    Secretary of the Company as in effect at the Closing;

               (c)  Certificate of Good Standing. A Long-form Certificate of
                    Good Standing, dated not more than ten days prior to the
                    Closing Date, with respect to the Company, issued by the
                    Secretary of State of the state of New Jersey and
                    Certificates of Good Standing, dated not more than ten days
                    prior to the Closing Date, issued by the Secretary of State
                    of each foreign jurisdiction in which the Company or any of
                    its Subsidiaries is qualified to do business;

               (d)  Consents. Evidence that all consents, approvals, or
                    authorizations of or notifications to any third parties
                    (including governmental agencies), if any, required to
                    exchange the Shares in connection with the Merger and to
                    consummate the Merger and the other transactions
                    contemplated hereby and to continue to operate the business
                    of the Company and its Subsidiaries without interruption
                    have been obtained, including without limitation, any
                    revenue notices required by the state of New Jersey with any
                    corresponding taxes due paid by the Selling Shareholders,
                    and the consent the lessors under the Real Estate Leases and
                    the Equipment Leases for the continued use of any leased
                    Equipment and the Facilities following the Closing on the
                    terms contained in the respective leases.

               (e)  Opinion of Counsel. The opinion of counsel referred to in
                    Section 7.12 of this Agreement;

<PAGE>   52

               (f)  Certificates. The certificates referred to in Section 7.20
                    of this Agreement;

               (g)  Collateral Assignment of Leases. The Collateral Assignment
                    of Leases for each of the Company's Leases and Equipment
                    Leases in form and content reasonably satisfactory to SAI
                    and the Selling Shareholders;

               (h)  Employment Agreement. Executed employment agreement (s)
                    between the SAI or the Company and the individual (s)
                    referred to Section 7.14;

               (i)  Evidence of Release of Liens. Evidence, in form and
                    substance satisfactory to SAI, that all liens, charges and
                    encumbrances on the Shares, the Company and its properties
                    (other than Liens on the property of the Company or its
                    Subsidiaries incurred in the ordinary course of their
                    respective businesses) have been fully released prior to the
                    Closing, or will be released concurrently with the Closing;

               (j)  Resignations. The written resignations of each director and
                    officer of the Company and each of its Subsidiaries,
                    effective as of the Closing;

               (k)  Signature Cards. Substitute signature cards for all of the
                    bank accounts of the Company and each of its Subsidiaries
                    naming persons designated by SAI as the new signatories for
                    said bank accounts;

               (l)  Credit Cards. All corporate credit cards of the Company and
                    its Subsidiaries; and

               (m)  Other Documents. Such other documents and instruments as SAI
                    or its counsel reasonably shall deem necessary to consummate
                    the transactions contemplated hereby.

     9.5 Deliveries of SAI. At the Closing, SAI will execute and deliver or
cause to be executed and delivered, simultaneously with the delivery of the
items referred to in Section 9.4 above, the following:

               (a)  Payment of Cash Consideration. SAI shall pay the cash
                    consideration to be paid pursuant to Article 2 in connection
                    with the Merger to the Selling Shareholders at the Closing
                    by bank wire transfer;

<PAGE>   53

               (b)  Delivery of SAI Preferred and SAI Common. SAI shall deliver
                    a certificate or certificates representing the shares of SAI
                    Preferred or SAI Common to which each equity holder of the
                    Company is entitled in connection with the Merger for
                    delivery pursuant to Article 2;

               (c)  Resolutions. A copy of the resolutions of the Board of
                    Directors and Stockholders of SAI and the Board of Directors
                    and SAI, as the sole shareholder of King Acquisition,
                    certified by SAI's Secretary as having been duly and validly
                    adopted and being in full force and effect, authorizing
                    execution and delivery of this Agreement, the consummation
                    of the Merger and the performance of the transactions
                    contemplated hereby by SAI and SAI, respectively, subject to
                    SAI Stockholder Approval;

               (d)  Corporate Documents. The Certificate of Incorporation of SAI
                    and the Certificate of Incorporation of King Acquisition,
                    certified by the Secretary of State of the state's of
                    Delaware and New Jersey, respectively, as of a date not more
                    than ten days prior to the Closing Date, and the By-Laws of
                    SAI and King Acquisition, certified by the secretary of SAI
                    as in effect at the Closing;

               (e)  Certificate of Good Standing. Certificates of Good Standing,
                    dated not more than ten days prior to the Closing Date, with
                    respect to SAI and King Acquisition, issued by the Secretary
                    of State of the states of Delaware and New Jersey;

               (f)  Officer's Certificate. Certificates, dated as of the Escrow
                    Closing Date and the Closing Date, respectively, from an
                    officer of SAI, confirming the satisfaction of the
                    conditions required pursuant to Sections 8.1 and 8.2 as of
                    the Escrow Closing and the Closing, respectively; and

               (g)  Other Documents. Such other documents and instruments as the
                    Selling Shareholders or their counsel reasonably shall deem
                    necessary to consummate the transactions contemplated
                    hereby.

     All actions and proceedings hereunder and all documents and other papers
required to be delivered by SAI or King Acquisition hereunder or in connection
with the consummation of the Merger and the other transactions contemplated
hereby and all other related matters shall have been approved by, and, in the
case of such documents and papers, shall be in form and substance reasonably
satisfactory to, the Company, the Selling Shareholders and their respective
counsel.

<PAGE>   54

                                   ARTICLE 10

                                 INDEMNIFICATION

10.1     Indemnification.

         (a) Subject to Section 10.1(d), the Selling Shareholders, jointly and
             severally, will indemnify and hold harmless SAI, its Subsidiaries
             and their respective successors, affiliates and assignees and their
             respective shareholders, officers, directors, employees and agents
             ("SAI Indemnified Parties") against any losses, claims, damages or
             liabilities, including, without limitation, reasonable attorneys'
             fees and other reasonable defense costs, in each case, to the
             extent not covered by insurance (hereafter "Losses"), to which any
             SAI Indemnified Party becomes subject in connection with the
             following; provided, however, that, in the event that the Merger is
             not consummated as provided herein, the Company and the Selling
             Shareholders, jointly and severally, shall be responsible for the
             indemnification obligations of the Selling Shareholders contained
             in Section 10.1(a); and provided further, that in the event that
             the Merger is not consummated as provided herein, the Selling
             Shareholders shall be responsible for the indemnification
             obligations contained in Section 101.(a) only if such Selling
             Shareholders caused the Company to take, or to fail to take, any
             action or failure to act giving rise to the claim for
             indemnification thereunder:

             (i)    finders' fees or brokerage commissions incurred or alleged
                    to have been incurred by the Selling Shareholders with
                    respect to the transactions contemplated by this Agreement;

             (ii)   any liability of the Company or its Subsidiaries not
                    disclosed in writing prior to the Escrow Closing (other than
                    liabilities of a similar type as those disclosed which arise
                    thereafter prior to the Closing in the ordinary course of
                    business to the extent expressly permitted by the terms of
                    this Agreement);

             (iii)  any misrepresentation of fact, or failure to disclose a
                    material fact, by the Selling Shareholders;

             (iv)   any breach of any representation or warranty by the Selling
                    Shareholders contained in this Agreement or in any document
                    delivered hereunder;

<PAGE>   55

             (v)    any claims which have been or may be in the future asserted
                    arising out of the provision of Monitoring Services (or
                    failure to adequately provide such services) or otherwise
                    arising out of the business conducted by the Company or its
                    Subsidiaries which occurred prior to the Closing;

             (vi)   any breach of any covenant or agreement by the Company or
                    the Selling Shareholders contained herein or in any document
                    delivered hereunder, to be performed prior to or after the
                    Closing;

             (vii)  the failure to obtain any Required Consent; or

             (viii) any other liability or expense resulting from a dispute or
                    cause of action relating to the business of the Company or
                    its Subsidiaries, arising from an event, act, or omission
                    occurring before the Closing or related to the enforcement
                    of the indemnification provisions of this Agreement.

     (b)  SAI will indemnify and hold harmless the Selling Shareholders, their
          heirs, successors, affiliates, assigns ("Selling Shareholder
          Indemnified Parties") against any Loss to which any Selling
          Shareholder Indemnified Party becomes subject in connection with:

             (i)   finders' fees or brokerage commissions incurred or alleged to
                   have been incurred by SAI with respect to the purchase
                   transaction;

             (ii)  any misrepresentation of fact, or failure to disclose a
                   material fact, by SAI;

             (iii) any breach of any representation or warranty by SAI
                   contained herein or in any document delivered hereunder;

             (iv)  any breach of any covenant or agreement by SAI contained
                   herein or in any document delivered hereunder, to be
                   performed prior to or after the Closing Date; or

             (v)   any liability or expense resulting from a dispute or cause of
                   action relating to the Company or its Subsidiaries, arising
                   from an event, act or omission occurring after the Closing.

<PAGE>   56

     (c)  Such indemnification shall include any and all actions, suits,
          proceedings, demands, assessments or judgments, costs and expenses
          incidental to any of the foregoing matters set forth in Section
          10.1(a) and 10.1(b) or enforcement of the indemnification provisions
          of this Agreement.

     (d)  The obligation of the Selling Shareholders to indemnify SAI under
          Section 10.1(a) shall be subject to the following:

          (i)  The Selling Shareholders will be obligated to indemnify SAI from
               and against any Losses (other than Losses under Section
               10.1(a)(vii)) only after SAI shall have suffered aggregate Losses
               in excess of $50,000, at which point the Selling Shareholders
               will be obligated to indemnify SAI from and against all Losses
               relating back to the first dollar; and

          (ii) The Selling Shareholders will be obligated to indemnify SAI from
               and against any Losses under Section 10.1(a)(vii) only after SAI
               shall have suffered aggregate Losses under such Section in excess
               of $50,000 (with respect to any particular Required Consent), or
               $150,000 (with respect to all Required Consents in the
               aggregate), at which point the Selling Shareholders will be
               obligated to indemnify SAI from and against all such Losses in
               excess of such amounts; and

         (iii) The Selling Shareholders shall be obligated to indemnify SAI
               from and against any Losses arising out of the breach of any of
               the representations and warranties made by the Selling
               Shareholders only to the extent that SAI makes a written claim
               within the applicable survival period (as specified in Section
               12.1) with respect to the breach which gives rise to such Losses.

     10.2 Indemnification Procedures. For the purposes of this Section 10.2, the
term "Indemnitee" shall refer to the person or persons entitled, or claiming to
be entitled, to be indemnified, pursuant to the provisions of Section 10.1. The
term "Indemnitor" shall refer to the person or persons having the obligation to
indemnify pursuant to such provisions.

          (a)  Notice. An Indemnitee shall promptly give the Indemnitor written
               notice of any matter which an Indemnitee has determined has given
               or could give rise to a right of indemnification under this
               Agreement, stating the amount of the Loss, if known, and method

<PAGE>   57

               of computation thereof, all with reasonable particularity and
               containing a reference to the provisions of this Agreement in
               respect of which such right of indemnification is claimed or
               arises. If an Indemnitee shall receive notice of any claim by a
               third party which is or may be subject to indemnification (a
               "Third Party Claim"), the Indemnitee shall give the Indemnitor
               prompt written notice of such Third Party Claim and shall permit
               the Indemnitor, at its option, to participate in the defense of
               such Third Party Claim by counsel of its own choice (subject to
               Indemnitee's approval, which shall not be unreasonably withheld)
               and at the Indemnitor's expense. If, however, the Indemnitor
               acknowledges in writing its obligation to indemnify the
               Indemnitee hereunder against all Losses that may result from such
               Third Party Claim (subject to the limitations set forth herein),
               then the Indemnitor shall be entitled, at its option, to assume
               and control the defense of such Third Party Claim at its expense
               and through counsel of its choice, provided however, that
               Indemnitee shall have the right to approve in its sole reasonable
               discretion the choice of counsel. In the event the Indemnitor
               exercises its right to undertake the defense of any such Third
               Party Claim, the Indemnitee shall co-operate with the Indemnitor
               in such defense and make available to the Indemnitor, at the
               Indemnitor's expense, all witnesses, pertinent records, materials
               and information in its possession or under its control relating
               thereto as is reasonably required by the Indemnitor. Similarly,
               in the event the Indemnitee is, directly or indirectly,
               conducting the defense against any such Third Party Claim, the
               Indemnitor shall co-operate with the Indemnitee in such defense
               and make available to it all such witnesses, records, materials
               and information in its possession or under its control relating
               thereto as is reasonably required by the Indemnitee. In the event
               that the Indemnitor fails to agree to undertake defense of the
               Third Party Claim within thirty (30) days of receipt of notice of
               such claim from the Indemnitee, the Indemnitee shall be entitled
               to undertake such defense with counsel of its own choice, and the
               Indemnitor shall promptly reimburse the Indemnitee for all
               expenses incurred. The Indemnitor without the written consent of
               the Indemnitee may settle no Third Party Claim, unless the
               settlement involves only the payment of money by the Indemnitor.
               Similarly, no Third Party Claim, which is being defended in good
               faith by the Indemnitor, shall be settled by the Indemnitee
               without the written consent of the Indemnitor.

          (b)  Calculation of Losses. Losses shall be determined after taking
               into account any insurance proceeds received by an Indemnitee or
               its

<PAGE>   58

               affiliates from a non-affiliated insurance company on account of
               such Losses (after taking into account any costs incurred in
               obtaining such proceeds and any increase, determined in the
               reasonable judgment of the Indemnitee and confirmed by the
               insurance company, in insurance premiums as a result of the claim
               for which such proceeds were paid). The Indemnitor shall not be
               liable for any increase in Losses sustained by the Indemnitee,
               resulting from Indemnitee's failure to give Indemnitor timely
               written notice of any matter likely to give rise to a right of
               Indemnification hereunder.

                                   ARTICLE 11

                                   TERMINATION

     11.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, by written notice by the terminating Party to the other Parties,
whether before or after approval of the matters presented in connection with the
Merger by the Selling Shareholders of the Company, as follows:

          (a)  by mutual written consent of SAI and the Company; or

          (b)  by either SAI or the Company, if the Merger shall not have been
               consummated by December 29, 2000 (provided, however, that the
               right to terminate this Agreement under this Section 11.1(b)
               shall not be available to any Party whose failure to fulfill any
               obligation under this Agreement has been the cause of or resulted
               in the failure of the Merger to occur on or before such date, and
               provided further, that this Agreement may be extended up to 45
               days by either Party by written notice to the other Party if the
               Merger would have been consummated but for the absence of one or
               more required Approvals or third-party consents, and such
               Approval (s) or consent(s) can reasonably be expected to be
               obtained within such 45 day period); or

          (c)  by either SAI or the Company if a court of competent jurisdiction
               or other governmental entity shall have issued a final order,
               decree or ruling, or taken any other action, having the effect of
               permanently restraining, enjoining or otherwise prohibiting the
               Merger, and all appeals with respect to such order or action have
               been exhausted or the time for appeal of such order, decree,
               ruling or action shall have expired;

          (d)  by SAI, if a material breach of any representation, warranty,
               covenant or agreement on the part of the Selling Shareholders set

<PAGE>   59

               forth in this Agreement shall have occurred which would cause the
               conditions set forth in Article 7 not to be satisfied, and, that
               with respect to any breach of a covenant or agreement hereunder,
               such covenant or agreement is incapable of being cured or, if
               capable of being cured, shall not have been cured within ten (10)
               business days following receipt by the Company of written notice
               of such breach from SAI;

          (e)  by the Company, if a material breach of any representation,
               warranty, covenant or agreement on the part of SAI set forth in
               this Agreement shall have occurred which would cause the
               conditions set forth in Article 8 not to be satisfied, and, with
               respect to any breach of a covenant or agreement hereunder, such
               covenant or agreement is incapable of being cured or, if capable
               of being cured, shall not have been cured within ten (10)
               business days following receipt by SAI of written notice of such
               breach from the Company; or

          (f)  by the Company, if the Proxy Statement has not been filed by SAI
               on or prior to September 1, 2000.

     11.2 Effect of Termination. In the event of termination of this Agreement
pursuant to Section 11.1, there shall be no Liability or obligation on the part
of SAI, the Company, or their respective officers, directors, shareholders or
affiliates, except as provided in Article 10, and further except for the
liability of any Party then in breach of any of its representations, warranties,
covenants or agreements in this Agreement; and provided, that the provisions of
Sections 5.9, 5.10 and 6.3, Article 10 and this Section 11.2 shall remain in
full force and effect and survive any termination of this Agreement.

<PAGE>   60

                                   ARTICLE 12

                                  MISCELLANEOUS

     12.1 Survival. The covenants and indemnification obligations of the parties
contained in this Agreement and their respective obligations to be performed
under the terms hereof at, prior to or after the Closing hereunder, shall not
expire with, or be terminated or extinguished by, such Closing, but shall
survive the Closing and any investigation made at any time by or on behalf of a
party. The representations and warranties set forth in this Agreement shall
survive the Closing until the fourth anniversary of the Closing, except for
representations and warranties relating to taxes, title to stock and
environmental matters and claims of the nature covered by the insurance carried
by the Company and its Subsidiaries, which shall survive until the expiration of
the applicable statute of limitation of the particular matter, and except claims
for fraudulent breach, which shall have no expiration period.

     12.2 Further Assurances. At the request of a party to this Agreement, and
without further consideration, the other party agrees to execute such documents
and instruments and to do such further acts as may be necessary or desirable to
effectuate the transactions contemplated hereby.

     12.3 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW JERSEY
WITHOUT GIVING ANY EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. THE SELLING
SHAREHOLDERS AGREE THAT THEY WILL NOT ASSERT ANY CLAIM AGAINST ANY OFFICER,
DIRECTOR, EMPLOYEE OR AGENT OF SAI OR ANY OF ITS AFFILIATES, PURSUANT TO ANY
CLAIM THEY MAY HAVE UNDER THIS AGREEMENT BY REASON OF ANY FAILURE OR ALLEGED
FAILURE BY SAI TO MEET ITS OBLIGATIONS HEREUNDER. THE PARTIES HERETO AGREE AND
INTEND THAT THE PROPER AND EXCLUSIVE FORUM FOR THE LITIGATION OF ANY DISPUTES OR
CONTROVERSIES ARISING OUT OF, OR RELATED TO, THIS AGREEMENT SHALL BE THE COURTS
OF THE STATE OF ILLINOIS FOR THE COUNTY OF COOK. EACH PARTY AGREES THAT HE OR IT
WILL NOT COMMENCE OR MOVE TO TRANSFER ANY ACTION OR PROCEEDING, ARISING OUT OF
OR RELATING TO THIS AGREEMENT, IN OR TO ANY COURT OTHER THAN A STATE COURT
LOCATED IN THE COUNTY OF COOK IN THE STATE OF ILLINOIS. EACH PARTY IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE AFORESAID COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE SELLING SHAREHOLDERS AT THE ADDRESSES PROVIDED
HEREIN, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.
NOTHING CONTAINED IN THIS SECTION SHALL AFFECT THE RIGHT OF SAI TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW. IN THE

<PAGE>   61

EVENT THAT ANY PARTY SHOULD COMMENCE OR MAINTAIN ANY ACTION ARISING OUT OF OR
RELATED TO THIS AGREEMENT IN A FORUM OTHER THAN THE STATE COURTS LOCATED IN THE
STATE OF ILLINOIS, COUNTY OF COOK, THE OTHER PARTY SHALL BE ENTITLED TO MOVE FOR
THE DISMISSAL OF SUCH ACTION, AND THE NON-MOVING PARTY STIPULATES THAT SUCH
ACTION SHALL BE DISMISSED. THE PARTIES AGREE THAT PRIOR TO INSTITUTING ANY SUIT,
THEY WILL GIVE WRITTEN NOTICE OF THEIR INTENT TO DO SO AND MAKE A REASONABLE
ATTEMPT TO RESOLVE ANY DISPUTE BY NEGOTIATING WITH EACH OTHER IN GOOD FAITH.

     12.4 Successors and Assigns. This Agreement shall be binding on, and inure
to the benefit of, the parties to it and their respective heirs, legal
representatives, successors, and assigns.

     12.5 Each Party to Bear Own Costs. The Selling Shareholders and SAI shall
each bear its own legal and other expenses incurred on its behalf with respect
to the preparation of this Agreement, any related documents and the transactions
contemplated hereby.

     12.6 Entire Agreement; Amendment. This Agreement, its Schedules, the Escrow
Agreement and the other documents delivered to be delivered pursuant to this
Agreement constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof, and no party shall be
liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
Accordingly, this agreement supercedes, among other things, the SAI/King LOI and
all provisions of the Letter of Intent or the SV/SAI Agreement relating to the
consummation of the acquisition of the Company by SAI which are covered by the
terms of this Agreement. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge or termination is sought.

     12.7 Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, or otherwise delivered by hand or by messenger,
addressed:

     To SAI or King Acquisition at:   Security Associates International, Inc.
                                      2101 South Arlington Heights Road
                                      Arlington Heights, Illinois 60005-4142
                                      ATTN:  PRESIDENT

     To KC ACQUISITION CORP. at:      KC Acquisition Corp.
                                      P.O. Box 1943
                                      South Hackensack, NJ 07606-0543

<PAGE>   62

   To Mr. Thomas J. Few Sr. at:       Mr. Thomas J. Few Sr.
                                      c/o King Acquisition Corp.
                                      325 South River Street
                                      Hackensack, NJ 07601

   To Mr. Timothy M. McGinn at:       Mr. Timothy M. McGinn
                                      c/o McGinn Smith
                                      99 Pine Street
                                      Albany, N.Y. 12207

   To Mr. David L. Smith at:          Mr. David L. Smith
                                      c/o McGinn Smith
                                      99 Pine Street
                                      Albany, N.Y. 12207

     Any party may change its address for purposes of this Section by giving
notice of the new address to the other party in the manner set forth above. Each
such notice or other communication shall for all purposes of this Agreement be
treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or seventy-two
(72) hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and mailed as
aforesaid. 12.8 Delays or Omissions. Except as expressly provided herein, no
delay or omission to exercise any right, power or remedy accruing to any party
to this Agreement, upon any breach or default by the other party under this
Agreement, shall impair any such party, power or remedy of such party nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

     12.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
instrument.

     12.10 Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided

<PAGE>   63

that no such severability shall be effective if it materially changes the
economic benefit of this Agreement to any party.

     12.11 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and shall not be considered in construing or
interpreting this Agreement.

     12.12 Incorporation by Reference. The Schedules, Exhibits, certificates and
other documents attached hereto or referred to herein are deemed to be a part of
this Agreement and are incorporated herein by this reference.

                                      *****

<PAGE>   64

      The foregoing Agreement is hereby executed as of the date first above
written.

                                  SECURITY ASSOCIATES
                                  INTERNATIONAL, INC.

                                  By:_____________________________________
                                           James S. Brannen, its President

                                  KING ACQUISITION CORP.

                                  By:_____________________________________
                                  Title:__________________________________

                                  KC ACQUISITION CORP.

                                  By:_____________________________________
                                  Title:__________________________________

                                  SELLING SHAREHOLDERS

                                  ________________________________________
                                  Thomas J. Few, Sr.

                                  ________________________________________
                                  Timothy M. McGinn

                                  ________________________________________
                                  David L. Smith

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