Document:

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                    DATED          26 NOVEMBER           2003
                    -----------------------------------------

                    (1) ARMOR HOLDINGS INC.

                    (2) ARMOR GROUP LIMITED PARTNERSHIP

                    (3) ARMOR HOLDINGS MOBILE SECURITY L.L.C.

                    (4) ARMOR GROUP SERVICES L.L.C.

                    (5) ARMORGROUP INTERNATIONAL LIMITED

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

                                    AGREEMENT

                for the sale and purchase of ArmorGroup Services

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                                TABLE OF CONTENTS

                                                                         PAGE

1.       INTERPRETATION.....................................................1

2.       SALE AND PURCHASE..................................................7

3.       COMPLETION AND POST-COMPLETION PAYMENTS...........................10

4.       POST COMPLETION UNDERTAKINGS......................................15

5.       WARRANTIES........................................................20

6.       INDEMNITIES.......................................................21

7.       BUYER'S Warranties ...............................................24

8.       PROTECTION OF GOODWILL............................................25

9.       CONFIDENTIAL INFORMATION..........................................28

10.      TAX AFFAIRS.......................................................29

11.      ANNOUNCEMENTS.....................................................29

12.      ASSIGNMENT........................................................29

13.      COSTS.............................................................30

14.      EFFECT OF COMPLETION..............................................30

15.      FURTHER ASSURANCES................................................30

16.      ENTIRE AGREEMENT..................................................31

17.      VARIATIONS and third party rights.................................32

18.      WAIVER/consents...................................................32

19.      INVALIDITY........................................................32

20.      NO SET-OFF........................................................33

21.      NOTICES...........................................................33

22.      COUNTERPARTS......................................................34

24.      GOVERNING LAW AND JURISDICTION....................................34

         SCHEDULE 1    Particulars relating to the Target Companies........36

         SCHEDULE 2    Particulars relating to the Subsidiaries............42

         SCHEDULE 3    The Warranties......................................52

         SCHEDULE 4    Seller Protection Provisions........................67

         SCHEDULE 5    The Properties......................................72

         SCHEDULE 6    Additional Consideration............................77

         SCHEDULE 7    Resigning Directors.................................80

         SCHEDULE 8    Pre-sale Restructuring..............................81

         SCHEDULE 9    Inter-Group Payables................................83

         Part A        ....................................................83

         Part B        ....................................................85

                                       -i-
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                                TABLE OF CONTENTS
                                   (continued)

                                                                         PAGE

         SCHEDULE 10   Litigation Schedule.................................87

                  Part A   Angolan Litigation..............................87

                  Part B   Bosnian Landmine Claim..........................89

         SCHEDULE 11   List of Key Employees...............................90

         SCHEDULE 12   Employee Benefits Plans.............................91

         SCHEDULE 13   Relevant Security (Clause 15.4).....................93

                                      -ii-
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AGREED FORM DOCUMENTS

Non-US Trade Mark Assignment.

Bank of America Release.

Deed of assignment in respect of the UN Contract.

Deeds of release of Bank of Scotland Guarantees

Technology Assignment.

Management Accounts.

Power of attorney regarding voting rights.

Press announcement.

Resignations of directors and secretary.

Tax Deed.

Waiver of Inter-Group Indebtedness.

Trade Mark Assignment

Angolian Litigation Summary

Accounts Schedule

Russian Novation Agreement

Wachavia National Bank Association deeds of release

New Promissory Note

                                      iii

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DATED 26 November 2003

PARTIES

(1)      ARMOR HOLDINGS, INC. a corporation incorporated under the laws of the
         State of Delaware, USA whose principal office is at 1400 Marsh Landing
         Parkway, Suite 112, Jacksonville, FL 32250, U.S.A. ("Armor");

(2)      ARMOR GROUP LIMITED PARTNERSHIP (acting by its general partner Armor
         Holdings GP, LLC) a limited liability partnership formed under the laws
         of Scotland whose principal office is at 20 Castle Terrace, Edinburgh,
         Scotland (No. SL003883) ("ARMOR GROUP LP");

(3)      ARMOR HOLDINGS MOBILE SECURITY, L.L.C. a limited liability corporation
         incorporated under the laws of Delaware, USA whose principal office is
         at 1400 Marsh Landing Parkway, Suite 112, Jacksonville, FL 32250,
         U.S.A. ("ARMOR MOBILE SECURITY");

(4)      ARMOR GROUP SERVICES, L.L.C. a limited liability corporation
         incorporated under the laws of Delaware, USA whose principal office is
         at 1400 Marsh Landing Parkway, Suite 112, Jacksonville, FL 32250,
         U.S.A. ("AGS"); and

(5)      ARMORGROUP INTERNATIONAL LIMITED, a private limited company
         incorporated in England and Wales with Company Number 4931893 whose
         registered office is at Brierly Place, New London Road, Chelmsford,
         Essex, CM2 0AP ("THE BUYER").

THE PARTIES AGREE AS FOLLOWS:

1.       INTERPRETATION

1.1      In this agreement the following words and expressions and abbreviations
         have the following meanings, unless the context otherwise requires:

         "ACCOUNTS" means the financial statements of each Group Company,
         comprising the balance sheet, profit and loss account and cash flow
         statement (where applicable) of each Group Company, together in each
         case with the notes thereon, directors' report and auditors'
         certificate, as at and for the financial period ended on the Accounts
         Date to the extent that same are indicated in grey shading to exist on
         the Accounts Schedule in the agreed form, true and complete copies of
         which are included in the Data Room Information;

         "ACCOUNTS DATE" means 31 December 2002;

         "ACTUAL RECONCILIATION DATE" shall have the meaning given to the
         expression in clause 3.4(B);

         "AGAP SHARES" means 29,500 shares of THAI BHAT 100 each of Armor Group
         (Asia Pacific) Co. Ltd. (Thailand) (details of which are set out in
         schedule 1) representing 49.17 per cent. of its issued stock;

         "AGLP GABON SHARES" means 500 shares of XAF 10,000 each of Armor Group
         Gabon SA (details of which are set out in schedule 1) representing 50
         per cent. of its issued stock;

         "AGNA SHARES" means 100 shares of $1 each of Armor Group North America
         Inc. (details of which are set out in schedule 1) representing its
         entire issued stock;

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         "AGS GABON SHARES" means 500 shares of XAF 10,000 each of Armor Group
         Gabon SA (details of which are set out in schedule 1) representing 50
         per cent. of its issued stock;

         "AHL SHARES" means 11,239,543 ordinary shares of (pound)1 each in the
         share capital of Armor Holdings Limited (details of which are set out
         in schedule 1) representing its entire issued share capital;

         "ARMOR CONFIDENTIAL INFORMATION" shall have the meaning given to that
         expression in clause 9.2;

         "ARMORGROUP CONFIDENTIAL INFORMATION" shall have the meaning given to
         that expression in clause 9.1;

         "ASSETS" means the Shares, the UN Contract, the Russian Technology Use
         Agreement, the intellectual property rights the subject of the
         Technology Assignment, the Trademark Assignment and the Non-US Trade
         Mark Assignment;

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

         "BUSINESS DAY" means a day (excluding Saturdays) on which banks
         generally are open in New York for the transaction of normal banking
         business;

         "BUYER'S GROUP" means the Buyer, the subsidiary undertakings and
         associated companies from time to time of the Buyer (including the UK
         Buyer and the US Buyer) and all of them and each of them as the context
         admits;

         "BUYER'S SOLICITORS" means Jones Day Gouldens of 10 Old Bailey, London
         EC4M 7NG or, after 28 November 2003, 21 Tudor Street, London, EC4Y 0DJ;

         "COBRA" means the requirements of Part 6 of Subtitle B of Title I of
         ERISA and Code Section 4980B;

         "CODE" means the Internal Revenue Code of 1986, as amended, and any
         successor statute thereto;

         "COMPLETION" means the completion of the sale and purchase of the
         Assets;

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

         "CONSIDERATION" means the consideration payable by the UK Buyer and the
         US Buyer for the Assets, payment of which is to be procured by the
         Buyer under this Agreement;

         "DATA ROOM INFORMATION" means the materials and information copies of
         which are attached to the Disclosure Letter;

         "DISCLOSURE LETTER" means the letter of today's date together with the
         attachments thereto addressed by Armor to the Buyer, the UK Buyer and
         the US Buyer disclosing exceptions to the Warranties;

         "EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" (as such term
         is defined in ERISA Section 3(3)) maintained by any member of the
         Group;

         "EMPLOYEE PENSION BENEFIT PLAN" has the meaning set out in ERISA
         Section 3(2);

         "EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set out in ERISA
         Section 3(1);

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         "ENCUMBRANCE" means all security interests, options, equities, claims,
         or other third party rights, including rights of pre-emption of any
         nature whatsoever;

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

         "ERISA AFFILIATE" means each person (as defined in Section 3(9) of
         ERISA) whether or not incorporated, which is a subsidiary of or under
         common control or would be considered a single employer with any member
         of the Group within the meaning of Section 414(b), (c), (m) or (o) of
         the Code and regulations promulgated under those sections or within the
         meaning of Section 4001(b) of ERISA;

         "EXCLUDED SUBSIDIARIES" means Armor Products International Limited (no.
         00328076), Defence Systems France Sarl (no. 97B06525), Defence Systems
         International Africa SA (no. 97B02790) and CDR International Inc.;

         "FAIRLY DISCLOSED" means, in the context of the Warranties or
         particular matter concerned, that the facts or circumstances giving
         rise to any inconsistency therewith and a reasonable assessment of
         their consequences are fairly disclosed by the wording of the
         Disclosure Letter or the Data Room Information and, in relation to
         Warranties 18.4, 18.6, 18.7 and 18.9, by the wording of the documents
         listed in or other information contained in schedule 12, the Disclosure
         Letter or the Data Room Information;

         "FINALLY DETERMINED" means when a matter is agreed between the Buyer,
         the UK Buyer or the US Buyer on the one hand and Armor on the other
         hand or determined by a Court which has accepted jurisdiction of the
         relevant claim and from whose determination there is no right of appeal
         or where there is a right of appeal when any appeal is finally refused
         or such right of appeal has expired without exercise;

         "GABON SHARES" means the AGLP Gabon Shares and the AGS Gabon Shares;

         "GROUP" means the Target Companies and the Subsidiaries and "GROUP
         COMPANY" means any one of them;

         "INDEMNITIES" means the indemnities contained in clause 6.1;

         "INTELLECTUAL PROPERTY" means patents, trade marks, service marks,
         design rights, registered designs, trade names, interest domain names,
         logos, copyrights, (whether registered or not and any applications to
         register or rights to apply for registration of any of the foregoing),
         rights in inventions, know-how, trade secrets and other confidential
         information, and all other intellectual property rights of a similar or
         corresponding character in any part of the world;

         "INTER-GROUP INDEBTEDNESS" means all debts outstanding from the Group
         Companies to members of the Sellers' Group (other than the debts to be
         repaid pursuant to clauses 3.4(B) and 3.5);

         "KEY EMPLOYEES" means those persons whose names are listed in schedule
         11;

         "KPMG REPORT" means the financial due diligence report on the Group
         prepared by KPMG dated 22 May 2003 (as updated on 1 October 2003);

         "MANAGEMENT" means Jerry Hoffman, Christopher Beese, Noel Philp and
         Dave Seaton;

         "NON-US TRADE MARK ASSIGNMENT" means the assignment in the agreed form
         between Armor and the UK Buyer relating to the use of certain marks in
         the jurisdictions mentioned therein;

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         "O'GARA SHARES" means 100 shares of O'Gara Security Associates, Inc.
         (details of which are set out in schedule 1) representing its entire
         issued stock;

         "OTHER PLAN" means any other "material employee benefit plan, program
         or arrangement" of any kind maintained by any member of the Group in
         the United States or on behalf of any United States employee of any
         such company, or any dependent or beneficiary of any United States
         employee of any such company that it is not an Employee Benefit Plan.
         For purposes of this definition, "material employee benefit plan,
         program or arrangement" shall mean any plan, program or arrangement for
         which the annual liability or expenditure to maintain or provide the
         benefits thereunder exceeds $25,000 per annum per such plan, program or
         arrangement;

         "PARVUS SHARES" means 100 shares of The Parvus Company (details of
         which are set out in schedule 1) representing its entire issued stock;

         "PBGC" means the Pension Benefit Guaranty Corporation or any successor
         thereto;

         "PROHIBITED TRANSACTION" has the meaning set out in ERISA Section 406
         and Code Section 4975;

         "PROMISSORY NOTES" the promissory notes in the original amounts of
         (pound)4,635,000 and (pound)3,143,000 both dated 17 April 1997 issued
         by Armor Holdings Limited in favour of Armor;

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

         "RELATED PERSON" means in relation to any party its holding companies
         and the subsidiary undertakings and associated companies from time to
         time of such holding company, all of them and each of them as the
         context admits;

         "REPORTABLE EVENT" has the meaning set out in ERISA Section 4043;

         "RUSSIAN NOVATION AGREEMENT" means the novation agreement in the agreed
         form between Armor, Armor Group LP, the UK Buyer and OOO ChoP DSL
         Eurasia relating to the Russian Technology Use Agreement;

         "RUSSIAN TECHNOLOGY USE AGREEMENT" means the Russian Technology Use
         Agreement dated 27 November 2000 made between Armor Group LP and DSL
         Eurasia;

         "SELLERS" means Armor, Armor Group LP, Armor Mobile Security and AGS;

         "SELLERS' GROUP" means the Sellers and their subsidiary undertakings
         and their associated companies (excluding the Target Companies and the
         Subsidiaries) from time to time, and all limited and general
         partnerships in which they or any of them from time to time hold fifty
         per cent. or more of the limited partnership interests and/or act as
         general partner and all of them and each of them as the context admits;

         "SELLERS' SOLICITORS" means Ashurst Morris Crisp of Broadwalk House, 5
         Appold Street, London EC2A 2HA;

         "SHARES" means the AHL Shares, the AGAP Shares, the AGNA Shares, the
         Gabon Shares, the O'Gara Shares and the Parvus Shares;

         "SUBSIDIARIES" means the companies and limited partnerships listed in
         schedule 2 and "SUBSIDIARY" shall mean each and any of them as the
         context admits;

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         "TA" means the Income and Corporation Taxes Act 1988;

         "TARGET COMPANIES" means Armor Holdings Limited, Armor Group (Asia
         Pacific) Co. Ltd. (Thailand), Armor Group North America Inc., The
         Parvus Company, Armor Group Gabon SA and O'Gara Security Associates,
         Inc. further details of which are set out in schedule 1 and "Target
         Company" means any of them;

         "TAX" or "TAX" means any tax, and any duty, contribution, impost,
         withholding or deduction, levy or charge in the nature of tax, whether
         domestic or foreign, and any fine, penalty, surcharge or interest or
         costs and expenses payable to a taxation authority connected therewith;

         "TAXATION STATUTES" means all statutes, statutory instruments, orders
         enactments, laws, by-laws, directives and regulations, whether domestic
         or foreign decrees, providing for or imposing any Tax;

         "TAX DEED" means a deed of indemnity in the agreed form;

         "TECHNOLOGY ASSIGNMENT" means the assignment in the agreed form between
         Armor and the UK Buyer relating to the rights the subject of the
         Russian Technology Use Agreement;

         "TRADE MARK ASSIGNMENT" means the assignment in the agreed form between
         Armor and the US Buyer relating to the use of the ARMORGROUP mark,
         amongst others, in the United States of America;

         "UK BUYER" means ArmorGroup (UK) Limited, a private limited company
         incorporated in England and Wales with company number 4969936, whose
         registered office is at Brierly Place, New London Road, Chelmsford,
         Essex, CM2 8AP;

         "UN ASSETS" the UN Contract, together with the aggregate amount paid to
         AGS under such contract since 1 January 2003 less the aggregate amount
         paid out by AGS since that date to cover costs incurred in performing
         such contract and further together with all rights of AGS to the
         repayment of any monies owed to it by any member of the Group;

         "UN CONTRACT" the benefit, subject to the burden, of the contract dated
         3 May 2002 made between (1) The United Nations Office for Project
         Services and (2) AGS relating to de-mining operations in Lebanon, as
         amended;

         "US BUYER" means ArmorGroup International Inc., a corporation organised
         under the laws of the State of Delaware, USA, with Tax ID Number (EIN)
         43-2034282;

         "US COMPANIES" means Armor Group North America Inc., O'Gara Security
         Associates Inc. and the Parvus Company and "US COMPANY" shall be
         construed accordingly;

         "US SHARES" means the Parvus Shares, the O'Gara Shares and the AGNA
         Shares;

         "US SUBSIDIARIES" means all Subsidiaries owned at Completion directly
         or indirectly by a US Company; and

         "WARRANTIES" means the warranties set out in schedule 3.

1.2      In this agreement unless otherwise specified, reference to:

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         (A)      a "SUBSIDIARY UNDERTAKING" is to be construed in accordance
                  with section 258 of the Companies Act 1985 and a "SUBSIDIARY"
                  or "HOLDING COMPANY" is to be construed in accordance with
                  section 736 of that Act;

         (B)      a document in the "AGREED FORM" is a reference to that
                  document in the form approved and for the purposes of
                  identification signed by or on behalf of each party;

         (C)      "INCLUDES" and "INCLUDING" means including without limitation;

         (D)      a "PARTY" means a party to this agreement and includes its
                  assignees (if any) and/or the successors in title to
                  substantially the whole of its undertaking;

         (E)      a "PERSON" includes any person, individual, company, firm,
                  corporation, partnership, limited liability company,
                  government, state or agency of a state or any undertaking
                  (whether or not having separate legal personality and
                  irrespective of the jurisdiction in or under the law of which
                  it was incorporated or exists);

         (F)      a "STATUTE" or "STATUTORY INSTRUMENT" or "ACCOUNTING STANDARD"
                  or any of their provisions is to be construed as a reference
                  to that statute or statutory instrument or accounting standard
                  or such provision as the same may have been amended, replaced,
                  consolidated or re-enacted before the date of this agreement
                  (including any subordinate legislation from time to time made
                  under or pursuant to the statute or statutory instrument or
                  provision concerned as itself from time to time amended
                  re-enacted replaced or consolidated);

         (G)      "CLAUSES", "PARAGRAPHS" or "SCHEDULES" are to clauses and
                  paragraphs of and schedules to this agreement;

         (H)      "WRITING" includes any methods of representing words in a
                  legible form (other than writing on an electronic or visual
                  display screen) or other writing in non-transitory form;

         (I)      words denoting the singular include the plural and vice versa
                  and words denoting any gender include all genders;

         (J)      the time of day is reference to time in New York;

         (K)      "$" or "DOLLARS" are to dollars in the currency of the United
                  States of America; and

         (L)      "IS MATERIAL IN THE CONTEXT OF THE GROUP AS A WHOLE", for the
                  purposes of clauses 4.2(D) and 4.2(E) and Warranties 7, 10.1,
                  10.2(A)5 and 17.7, means that the matter concerned would give
                  rise to an economic loss of more than $1 million.

1.3      The schedules form part of the operative provisions of this agreement
         and references to this agreement shall, unless the context otherwise
         requires, include references to the schedules.

1.4      The index to and the headings and the descriptive notes in brackets
         relating to provisions of Taxation Statutes in this agreement are for
         information only and are to be ignored in construing the same.

1.5      Where it is necessary to determine whether a monetary limit or
         threshold set out in schedule 4 or elsewhere in this agreement has been
         reached or exceeded (as the case may be) and the liability under the
         amount of the claim or claims concerned or other relevant financial
         amount is expressed in a currency other than Dollars, the value of that
         claim or such financial amount shall be translated into Dollars at the
         closing midpoint Dollar spot rate applicable to that

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         amount of non-Dollar currency at (in the case of a claim) the close of
         business in New York on the date of receipt by Armor of notification
         from the Buyer in accordance with schedule 4 or the Tax Deed of the
         existence of such claim or (in any other case) as of the date on which
         the calculation is to be made (or if such day is not a Business Day, on
         the Business Day immediately preceding such day) as shown in The
         Financial Times (New York edition) published on the next following day
         or, if The Financial Times is not published on that day or no such spot
         rate is available from The Financial Times, at the exchange rate quoted
         in writing to the Buyer by Barclays Bank PLC for exchange of such
         currency into Dollars on that date.

1.6      Where any sums have fallen due for payment to the Buyer, the UK Buyer
         or the US Buyer under the Warranties, the Indemnities or any other
         provision of this agreement or under the Tax Deed or other agreement
         entered into pursuant to this agreement in a currency other than
         Dollars, Armor (or the relevant Seller) shall make such payment in
         Dollars (as opposed to the other currency concerned) and in order to
         determine the Dollar equivalent of the sum concerned the parties shall
         refer to the closing midpoint Dollar rate applicable to that non-Dollar
         currency at the close of business in New York on the date that the
         requirement to make such payment is Finally Determined (or if such day
         is not a Business Day, on the Business Day immediately preceding such
         day) as shown in The Financial Times (New York edition) published on
         the next following day or if The Financial Times is not published on
         that day or if there is no such spot rate available from The Financial
         Times the rate quoted to the Buyer by Barclays Bank PLC for exchange of
         such currency into Dollars on the day concerned.

2.       SALE AND PURCHASE

2.1      Upon the terms and subject to the conditions of this agreement:

         (A)      Armor shall sell:

                  1        the AGNA Shares and the Parvus Shares to the US Buyer
                           (being the entity nominated by the Buyer to acquire
                           the same), with full title guarantee, free from any
                           Encumbrance and together with all accrued benefits
                           and rights attached thereto (including the right to
                           all dividends and other distributions declared in
                           respect of any period or payable after the period
                           ended on the Accounts Date);

                  2        the trademarks the subject of the Trademark
                           Assignment to the US Buyer (being the entity
                           nominated by the Buyer to acquire the same), with
                           full title guarantee and free from any Encumbrance;

                  3        the AGAP Shares to the UK Buyer (being the entity
                           nominated by the Buyer to acquire the same), with
                           full title guarantee, free from any Encumbrance and
                           together with all accrued benefits and rights
                           attached thereto (including the right to all
                           dividends and other distributions declared in respect
                           of any period or payable after the period ended on
                           the Accounts Date);

                  4        the Intellectual Property the subject of the
                           Technology Assignment and the benefit (subject to the
                           burden) of the Russian Technology Use Agreement to
                           the UK Buyer (being the entity nominated by the Buyer
                           to acquire the same), with full title guarantee and
                           free from any Encumbrance; and

                  5        the trademarks the subject of the Non-US Trademark
                           Assignment to the UK Buyer (being the entity
                           nominated by the Buyer to acquire the same),with full
                           title guarantee and free from any Encumbrance;

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         (B)      Armor Group LP shall sell the AHL Shares and the AGLP Gabon
                  Shares to the UK Buyer (being the entity nominated by the
                  Buyer to acquire the same), with full title guarantee free
                  from any Encumbrance and together with all accrued benefits
                  and rights attached thereto (including the right to all
                  dividends or other distributions declared or payable in
                  respect of any period after the period ended on the Accounts
                  Date);

         (C)      Armor Mobile Security shall sell the O'Gara Shares to the US
                  Buyer (being the entity nominated by the Buyer to acquire the
                  same), with full title guarantee free from any Encumbrance and
                  together with all accrued benefits and rights attached thereto
                  (including the right to all dividends and other distributions
                  declared in respect of any period or payable after the period
                  ended on the Accounts Date); and

         (D)      AGS shall sell:

                  1        the AGS Gabon Shares to the UK Buyer (being the
                           entity nominated by the Buyer to acquire the same),
                           with full title guarantee free from any Encumbrance
                           and together with all accrued benefits and rights
                           attached thereto (including the right to all
                           dividends and other distributions declared in respect
                           of any period or payable after the period ended on
                           the Accounts Date); and

                  2        the UN Assets to the UK Buyer (being the entity
                           nominated by the Buyer to acquire the same)

          and in each case the Buyer shall procure that the UK Buyer and the US
          Buyer shall purchase the Assets in accordance with the above
          provisions of this clause 2.1.

2.2      The Sellers waive and agree to procure the waiver of any restrictions
         and pre-emption rights in relation to the transfer of the Shares
         (whether under the by-laws of the Target Companies or otherwise).

2.3      The consideration for the sale and purchase of:

         (A)      the AGNA Shares shall be the sum of $12,860,000 payable to
                  Armor to be satisfied in cash on Completion;

         (B)      the Parvus Shares shall be the sum of $1 payable to Armor to
                  be satisfied in cash on Completion;

         (C)      the AGAP Shares shall be the sum of $200,000 payable to Armor
                  to be satisfied in cash on Completion;

         (D)      the Intellectual Property to be assigned under the Technology
                  Assignment and the benefit (subject to the burden) of the
                  Russian Technology Use Agreement shall be $200,000 payable to
                  Armor to be satisfied in cash on Completion;

         (E)      the trademarks the subject of the Trade Mark Assignment shall
                  be $10,000 payable to Armor to be satisfied in cash on
                  Completion;

         (F)      the trademarks the subject of the Non-US Trade Mark Assignment
                  shall be $10,000 payable to Armor to be satisfied in cash on
                  Completion;

         (G)      the AHL Shares shall be the sum of $1 payable to Armor Group
                  LP to be satisfied in cash on Completion;

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         (H)      the AGLP Gabon Shares shall be the sum of $1 payable to Armor
                  Group LP to be satisfied in cash on Completion;

         (I)      the O'Gara Shares shall be:

                  1        the sum of $11,870,000 payable to Armor Mobile
                           Security to be satisfied in cash at Completion; and

                  2        such amount (if any) calculated to be payable in
                           accordance with the provisions of schedule 6;

         (J)      the AGS Gabon Shares shall be the sum of $1 payable to AGS to
                  be satisfied in cash on Completion;

         (K)      the UN Assets shall be:

                  1        the sum of $10,000 payable to AGS to be satisfied in
                           cash on Completion; and

                  2        the assumption by the UK Buyer (being the entity
                           nominated by the Buyer to acquire the same) of all
                           liabilities of AGS arising under the UN Contract,
                           together with all obligations and liabilities of AGS
                           incurred for the purposes of enabling it to perform
                           its obligations pursuant to such contract (and the
                           Buyer undertakes to AGS that, with effect from
                           Completion, it will procure that the UK Buyer
                           satisfies such obligations in full).

2.4      The Buyer shall procure that at Completion the UK Buyer and the US
         Buyer shall pay the Consideration due to the relevant Seller according
         to the Assets to be acquired by them respectively as specified in
         clause 2.1 and so that the aggregate payments which the Buyer will
         procure are made by the UK Buyer and the US Buyer are as follows:-

         (A)      by the UK Buyer:

                  1        to Armor $410,000;

                  2        to Armor Group LP $2; and

                  3        to AGS $10,001; and

         (B)      by the US Buyer:

                  1        to Armor $12,870,001; and

                  2        to Armor Mobile Security $11,870,000.

2.5      Nothing in this agreement shall oblige the Buyer to buy any of the
         Assets or otherwise complete this agreement unless the sale and
         purchase of all of the Assets is completed simultaneously.

2.6      The Consideration has been determined on the basis that:

         (A)      there will be no Inter-Group Indebtedness outstanding
                  immediately after the Actual Reconciliation Date; and

                                       9
<PAGE>

         (B)      since (and including) 1 January 2003 the Sellers' Group has
                  not received from the Group any dividend, distribution, loan
                  or other cash payment or transfer of assets (including by way
                  of surrender of tax relief, set-off or loan waiver), except:

                  1        payments made in satisfaction or part satisfaction of
                           bona fide trading debts in respect of goods supplied
                           by the Sellers' Group; and

                  2        under the reorganisation described in schedule 8.

         If after Completion the Buyer establishes that (i) (notwithstanding the
         waiver to be given pursuant to clause 3.2(E)) any Inter-Group
         Indebtedness is still outstanding from the Group to the Sellers' Group
         after the Actual Reconciliation Date and/or (ii) that any payments or
         assets have been made or transferred by the Group to any members of the
         Sellers' Group since 1 January 2003 otherwise than as permitted by
         paragraph (B) above or clauses 3.4(B) or 3.5, then Armor shall on
         written demand by the Buyer in the case of (i) take such steps and
         procure the execution of such documents as shall be necessary to waive
         or procure the effective cancellation of the obligations of the Group
         to pay such Inter-Group Indebtedness (at no cost to the Buyer's Group)
         and in the case of (ii) pay to the Buyer (or the UK Buyer or the US
         Buyer as it may direct) an amount equal to the amount or value of the
         payments or assets transferred to the Sellers' Group (which Armor
         hereby covenants to pay).

2.7      Any dispute as to the quantum of any payment required under clause 2.6
         shall if not resolved between the Buyer and Armor within 14 days of the
         same arising be referred to an independent chartered accountant for
         determination. The independent chartered accountant shall be appointed
         by agreement between the Buyer and Armor or in default of such
         agreement within three days by the President for the time being of the
         Institute of Chartered Accountants in England and Wales on application
         by the Buyer or Armor. The determination of such independent chartered
         accountant shall be delivered in writing and (in the absence of
         manifest error on the face thereof) shall be final and binding on the
         parties. His fees and expenses shall be borne as he shall direct in
         writing or in the absence of such direction between the Buyer and Armor
         in equal portions. Each of the Buyer and Armor shall provide to the
         independent chartered accountant such information and assistance as he
         shall reasonably require for the purposes of making his determination.

2.8      Where the Buyer procures that either the UK Buyer or the US Buyer shall
         acquire any of the Assets under this agreement (i) the agreement so to
         acquire and the transfer of such Assets shall for all purposes be
         treated as an agreement to transfer and a transfer by the relevant
         Seller to the UK Buyer or the US Buyer, as appropriate and (ii) payment
         for those Assets shall be treated for all purposes as made by the UK
         Buyer or the US Buyer, as appropriate to the relevant Seller. In this
         clause 2.8 the "RELEVANT SELLER" means the Seller which owns
         beneficially immediately prior to Completion the Assets in question.

3.       COMPLETION AND POST-COMPLETION PAYMENTS

3.1      Completion shall take place at the offices of the Buyer's Solicitors
         immediately after the execution of this agreement.

3.2      On Completion the Sellers shall deliver to or, if the Buyer shall so
         agree, make available to the UK Buyer or the US Buyer, as indicated
         below (by way of nomination by the Buyer of the entity to which the
         relevant Assets are to be transferred):

         (A)      share certificates representing the AHL Shares, together with
                  a stock transfer form relating to all the AHL Shares duly
                  executed in favour of the UK Buyer;

         (B)      stock certificates:

                                       10
<PAGE>

                  1        representing the US Shares, together with stock
                           powers in respect of the transfer of such shares duly
                           executed in favour of the US Buyer;

                  2        representing the AGAP Shares, together with stock
                           powers in respect of the transfer of such shares duly
                           executed in favour of the UK Buyer and together with
                           stock powers in respect of the transfer of the Gabon
                           Shares duly executed in favour of the UK Buyer save
                           in respect of one share which the Buyer hereby
                           directs to be transferred to David Seaton as nominee
                           for the UK Buyer;

         (C)      resignations in the agreed form of the persons listed in
                  schedule 7 from their offices as director or secretary of any
                  Group Company containing a confirmation that they have no
                  claims (whether statutory, contractual or otherwise) against
                  any Group Company;

         (D)      to the extent not in the possession or control of the relevant
                  Group Company, the statutory books of each Group Company
                  incorporated in the United Kingdom and in the case of each
                  other Group Company their equivalent in the jurisdiction of
                  its incorporation and all books of account concerning the
                  businesses of any Group Company;

         (E)      an acknowledgement in the agreed form from Armor to the effect
                  that, on behalf of itself and the other members of the
                  Sellers' Group (by whom it confirms it has been authorised to
                  act), Armor confirms that save for those debts outstanding
                  from the Group Companies to members of the Sellers' Group to
                  be paid pursuant to clauses 3.4(B) and 3.5, there will be no
                  outstanding debt owed by any Group Company to any member of
                  the Sellers' Group immediately following the Actual
                  Reconciliation Date and, to the extent that such confirmation
                  should be inaccurate, waives with effect from the Actual
                  Reconciliation Date all rights in respect of the same;

         (F)      the Tax Deed, duly executed by Armor;

         (G)      the Trade Mark Assignment, duly executed by Armor;

         (H)      the Non-US Trade Mark Assignment, duly executed by Armor;

         (I)      the Technology Assignment and the Russian Novation Agreement
                  duly executed by Armor and, in the case of the Russian
                  Novation Agreement, Armor Group LP;

         (J)      a deed of assignment in the agreed form respect of the UN
                  Contract, duly executed by AGS;

         (K)      a power of attorney in the agreed form from each of the
                  registered holder(s) of the Shares other than the US Shares
                  entitling the UK Buyer or the US Buyer, as appropriate, to
                  exercise all voting and other rights applicable to the Shares
                  pending registration of their transfer in the name of the UK
                  Buyer or the US Buyer, as appropriate;

         (L)      the share certificates or other documents of title in respect
                  of all shares or limited partnership interests (as applicable)
                  in those of the Subsidiaries incorporated or otherwise
                  existing under the laws of the United Kingdom, the United
                  States, Colombia, Ecuador and Jersey, together with:

                                       11
<PAGE>

                  1        to the extent not in the possession of a Group
                           Company, the share certificates or other documents of
                           title in respect of all shares in all other
                           Subsidiaries where such shares are registered in the
                           name of a Group Company; and

                  2        declarations of trust in favour of a Group Company in
                           respect of all shares in all other Subsidiaries other
                           than ArmorGroup Peru SAC where such shares are held
                           by a nominee on behalf of a Group Company, being all
                           shares not registered in the name of a Group Company,
                           other than:

                           (i)      10 per cent (or 300,000) of the issued
                                    shares in the capital of Mozambique Mine
                                    Action Limited and owned by Chimbabaira
                                    Limitada;

                           (ii)     2.5 per cent (or 57,000) of the issued
                                    shares in the capital of Defense Systems
                                    Colombia SA owned by Norman Charles Weston;

                           (iii)    one per cent of the issued share capital of
                                    Armor Group Mozambique Ltd and owned by Dr T
                                    A Waty; and

                           (iv)     26 per cent of the issued shares in the
                                    capital of O'Reilly Vernier & Gurkha
                                    Singapore Private Limited owned as follows:

                                    Wong Siew Mei - 5 per cent; and

                                    Wilfred Douglas Anthony - 21 per cent;

         (M)      a letter of resignation from the auditors of each Group
                  Company incorporated in England and Wales;

         (N)      the title deeds to the property situated at 25 Buckingham
                  Gate, London, S.W.1;

         (O)      deeds of release in the agreed form in respect of the release
                  of each member of the Group from all Encumbrances granted by
                  it (if so granted by it) in favour of Wachavia National Bank
                  Association pursuant to an Indenture dated 12 August 2003 (as
                  supplemented by a first supplemental Indenture dated 30
                  September 2003) entered into between Armor, the subsidiary
                  guarantors party thereto and Wachavia National Bank
                  Association;

         (P)      a copy letter from the Governor and Company of the Bank of
                  Scotland ("BANK OF SCOTLAND") confirming that AGS has been
                  released from the Group's pooled banking arrangements with the
                  Bank of Scotland and an original deed of release in the agreed
                  form confirming that all guarantees by any member of the Group
                  in favour of AGS's liabilities under such pooling arrangements
                  in favour of the Bank of Scotland have been released;

         (Q)      a release in the agreed form duly executed by Bank of America,
                  NA, releasing and discharging each of Armor Group North
                  America Inc, International Training, Inc, ITI Limited
                  Partnership, O'Gara Security Associates, Inc. Parvus Crisis
                  Management Corporation, The Parvus Company, The Parvus
                  International Information Company and US Defense Systems, LLC
                  (the "RELEASE COMPANIES") from all guarantees given by them in
                  respect of the credit agreement dated 12 August 2003 made
                  between Armor and Bank of America, NA, and releasing and
                  discharging all security created by the Release Companies in
                  connection with such credit agreement, and further

                                       12
<PAGE>

                  releasing and discharging all security held by it over (i) any
                  shares in the Target Companies held by Armor, (ii) the UN
                  Assets and (iii) the other Assets;

         (R)      a bank statement from the Bank of Scotland in respect of the
                  pooled bank account of the Group held with the Bank of
                  Scotland showing the credit/debit amount of such account as at
                  the close of business on 25 November 2003;

         (S)      a letter from KPMG in a form acceptable to the Buyer
                  evidencing the fact that KPMG has extended its duty of care in
                  respect of the KPMG Report to the UK Buyer (and Armor hereby
                  acknowledges receipt of $278,995.13 previously paid on behalf
                  of the UK Buyer in respect thereof); and

         (T)      to the extent not included within the Data Room Information,
                  true and accurate copies of all documentation entered into for
                  the purposes of giving effect to the re-organisation of the
                  Group and the waiver or cancellation or other re-organisation
                  of Inter-Group Indebtedness carried out prior to Completion as
                  described in schedule 8.

3.3      The Sellers shall procure the passing of board resolutions:

         (A)      of each Target Company other than the US Companies sanctioning
                  for registration (subject where necessary to due stamping) the
                  transfers in respect of, in each case depending on the
                  relevant Target Company, the AHL Shares, the AGAP Shares and
                  the Gabon Shares; and

         (B)      of each Group Company incorporated in England and Wales
                  resolving to appoint KPMG as auditors and, where applicable,
                  accepting the resignations of those persons specified in
                  schedule 7.

3.4      On Completion the Buyer shall:

         (A)      procure the payment by the UK Buyer and the US Buyer (in
                  accordance with the apportionments specified in clause 2.4) by
                  telegraphic transfer of:

                  1        $13,280,001 to Armor, to the Armor Holdings Inc.
                           Master Account at Bank of America, 9000 South Side
                           Boulevarde, Jacksonville, Florida 32256, ABA#
                           063100277, Account No. 002101236613, in satisfaction
                           of the consideration for the AGNA Shares, the Parvus
                           Shares, the AGAP Shares and the Intellectual Property
                           to be assigned under the Technology Assignment and
                           under the Trade Mark Assignment and the Non-US Trade
                           Mark Assignment;

                  2        $2 to Armor Group LP, to Armor's account referred to
                           at paragraph (A)1 above, in satisfaction of the
                           consideration for the AHL Shares and the AGLP Gabon;

                  3        $11,870,000 to Armor Mobile Security to Armor's
                           account referred to at paragraph (A)1 above, in
                           satisfaction of the consideration for the O'Gara
                           Shares;

                  4        $10,001 to AGS, to Armor's account referred to at
                           paragraph (A)1 above, in satisfaction of the
                           consideration for the AGS Gabon Shares and the UN
                           Assets;

         (B)      procure that the sum of $6,200,000 is paid to Armor by way of
                  telegraphic transfer of funds to the account referred to in
                  paragraph (A)1 above to be applied as to $4,348,435 in
                  repayment, on behalf of Armor Holdings Limited, of part of the

                                       13
<PAGE>

                  balance of the Promissory Notes and as to the balance of
                  $1,851,565 (the "DEFERRED DEBT BALANCE") to be held by Armor
                  on account of the balance of the inter-group debts due from
                  members of the Group to members of the Sellers' Group as
                  identified in Part A of schedule 9 (to the extent that such
                  debts are ascertained to be valid and outstanding) (the "AG TO
                  A DEBT"), after accounting for (by way of set-off, where
                  available) the debts due from the Seller's Group to the Group
                  specified in that schedule (to the extent that such debts are
                  ascertained to be valid and outstanding) (the "A TO AG DEBT")
                  (the net amount being the "NET DEBT"). On or before 5pm
                  (London time) on 12 December 2003, Armor and the Buyer will
                  seek to determine (and will provide all reasonable assistance
                  and information to one another for such purpose):

                  1.       how the Deferred Debt Balance is to be applied in
                           satisfying, on behalf of the relevant members of the
                           Group and of the Sellers' Group, as appropriate, the
                           Net Debt (and the specific debts concerned), or in
                           each case the relevant proportion thereof, and the
                           amounts of the AG to A Debt (and the specific debt
                           concerned) which is to be written off as Intra-Group
                           Indebtedness (pursuant to the waiver given pursuant
                           to clause 3.2(E)); and

                  2.       the transactions necessary to arrive at the Net Debt
                           by applying the Agreed Principles.

                  If the parties, having negotiated in good faith, are unable to
                  agree on such matters by 5pm (London time) on 12 December
                  2003, Armor shall be entitled by written notice to elect for
                  the Deferred Debt Balance to be apportioned and for the Net
                  Debt to be arrived at in such manner as it sees fit (subject
                  always to applying the Agreed Principles) provided that if
                  Armor fails to serve any such notice by 5pm (London time) on
                  16 December 2003, the Buyer shall at any time thereafter be
                  entitled by written notice to Armor to elect for the Deferred
                  Debt Balance to be apportioned and for the Net Debt to be
                  arrived at (subject always to applying the Agreed Principles)
                  as specified in its notice. The parties shall be bound by such
                  apportionments and determination accordingly and the Buyer
                  shall procure that, to the extent that after applying the
                  Agreed Principles any A to AG Debt remains, all members of the
                  Group irrevocably waive all rights they may have to receive
                  such A to AG Debt from the Sellers' Group.

                  For the purposes of this paragraph (B):

                  the "ACTUAL RECONCILIATION DATE" shall mean the date on which
                  any apportionments and determination of Net Debt become
                  effective pursuant to this paragraph (B); and

                  the "AGREED PRINCIPLES" shall mean the principles whereby:

                  (a)      each debt comprising the A to AG Debt shall be
                           transferred or novated to the extent necessary to
                           enable the same to be set-off against the debts
                           comprising the AG to A Debt (the AG to A Debt also
                           having been appropriately transferred or novated so
                           as to enable such set-off to take place) and the
                           set-offs shall be effected; and

                  (b)      so far as possible, the Deferred Debt Balance shall
                           be applied to settle trading debt and not funded
                           debt, with a view to minimising exposure to taxation.

         (C)      procure that forthwith upon payment of the monies pursuant to
                  paragraph (B) above, Armor Holdings Limited issues to Armor a
                  promissory note in the agreed form in respect of the balance
                  of the promissory notes then outstanding (namely $2,300,000),
                  as varied and reconstituted in such document; and

                                       14
<PAGE>

         (D)      deliver to Armor:

                  1.       counterparts of the Technology Assignment, the
                           Russian Novation Agreement, the Trade Mark
                           Assignment, the Non-US Trade Mark Assignment, the
                           deed of assignment of the UN Contract and the Tax
                           Deed, duly executed by the Buyer, the UK Buyer or the
                           US Buyer, as appropriate; and

                  2.       a letter, or an instruction delivered through SWIFT,
                           from the Governor and Company of the Bank of Scotland
                           irrevocably confirming release of the letter of
                           credit provided by Bank of America, NA as security in
                           respect of the Group's overdraft facility with Bank
                           of Scotland or such other evidence of release of such
                           letter of credit as is reasonably satisfactory to
                           Armor.

3.5      By way of post-Completion obligations, subject as provided in clause
         20.2, the Buyer agrees to procure the following amounts are paid to
         Armor (for itself or as otherwise specified below) by or on behalf of
         the companies mentioned below and on the dates specified, by way of
         telegraphic transfer of funds to the account referred to in paragraph
         (A)1 above:

         (A)      to Armor by Armor Holdings Limited, in full and final
                  settlement of the balance of the promissory notes issued by
                  Armor Holdings Limited to Armor as referred to at clause
                  3.4(C), in the aggregate amount of $2,300,000, to be paid on
                  the dates specified below:

                           1.       as regards the first $500,000 of such
                                    amount:

                                    Instalment ($)       Payment date
                                    --------------       ------------
                                    125,000              31 December 2003
                                    125,000              31 January 2004
                                    125,000              29 February 2004
                                    125,000              31 March 2004

                           2.       as regards the remaining $1,800,000 of such
                                    amount:

                                    Instalment ($)       Payment date
                                    --------------       ------------
                                    300,000              31 July 2004
                                    300,000              31 August 2004
                                    300,000              30 September 2004
                                    300,000              31 October 2004
                                    600,000*             25 November 2004

                  *less the amount to be set-off against such payment pursuant
                  to clause 20.2

                                       15
<PAGE>

                  (or if any such date does not fall on a Business Day, the
                  relevant payment shall be made on the next following Business
                  Day); and

         (B)      to Armor (on behalf of those members of the Sellers' Group
                  listed in Part B of schedule 9) by or on behalf of the
                  relevant Group Company as specified in Part B of schedule 9,
                  in the aggregate amount of $1,200,679.43, to be paid in three
                  instalments of $400,226.45, $400,226.45 and $400,226.53 on
                  each of 31 March 2004, 30 April 2004 and 31 May 2004 (or if
                  any such date does not fall on a Business Day the relevant
                  payment shall be made on the next following Business Day),
                  with each payment to be applied first against the longest
                  outstanding invoice, but with the deposit, in the case of
                  payments due to Trasco, being deducted from the two most
                  recent invoices and with the commissions and deduction re
                  Colin Stanford, in the case of payments due to Armor Products
                  International Ltd, being deducted from the three most recent
                  invoices. Amounts to be paid pursuant to this paragraph (B)
                  may be paid in the currency in which the relevant invoice was
                  issued, as stated in Part B of Schedule 9, in which event any
                  such payment shall be made to such account as Trasco or Armor
                  Products International Limited (as appropriate) may specify.

                  Provided that, in the event that the Buyer should fail to
                  procure any one of the above mentioned payments in this clause
                  3.5, for value on the "PAYMENT DATE" specified and the same
                  shall remain unpaid for more than five Business Days from the
                  Payment Date, or if an administrator or administrative
                  receiver or other receiver or liquidator (or similar officer)
                  should be appointed over the Buyer, the UK Buyer, the US
                  Buyer, Armor Holdings Limited or any Material Subsidiary (each
                  a "RELEVANT COMPANY") or their respective assets or any
                  Relevant Company should make or enter into an arrangement or
                  composition with its creditors generally or make an
                  application to a court of competent jurisdiction (or filing at
                  any such court) for protection from its creditors generally
                  (including, without limitation, proceedings under the
                  Insolvency Act 1986 (as amended) or chapter 11 of the U.S.
                  Bankruptcy Code but excluding any bona fide solvent
                  reorganisation or reconstruction) or should become unable to
                  pay its debts when due within the meaning of section 123 of
                  the Insolvency Act 1986, then notwithstanding the payment
                  schedules set out in paragraphs (A) and (B) above, the full
                  amount of the balance of the monies shall thereupon become due
                  and payable upon demand by Armor, and the Buyer shall procure
                  payment of the same in accordance with any such demand. For
                  the purpose of this proviso, "MATERIAL SUBSIDIARY" means a
                  subsidiary of the Buyer incorporated in England and Wales (i)
                  whose gross assets represent 5 per cent or more of the
                  consolidated gross assets of the Group; and (ii) whose EBITDA
                  represent 5 per cent or more of the EBITDA of the Group, in
                  each case, based on the most recent financial statements of
                  the Group readily available.

3.6      On or as soon as reasonably practicable after Completion, Armor shall
         procure that each member of the Seller's Group to whom payments are to
         be made pursuant to clause 3.5(B) formally confirms to the relevant
         Group Company the extension to the payment terms of the debts concerned
         so as to accord with the dates for payment thereof specified in clause
         3.5(B).

3.7      Effective as of the Completion Date, those employees of the Group who
         participate in the Armor Holdings, Inc. 401(k) Plan (the "PLAN") (the
         "TRANSFERRED EMPLOYEES"), shall cease to participate therein and Armor
         Group NA and the other Group Companies shall each withdraw as a
         participating employer under the Plan, and Armor shall cause the Plan
         to be amended to fully vest the Transferred Employees in their account
         balances. Promptly following the Completion Date, Armor shall make
         contributions to the Plan of all accrued but unpaid employer and
         employee contributions in respect of the Transferred Employees.

                                       16
<PAGE>

3.8      The obligations of the Buyer to pay the amounts referred to in clauses
         3.4(A) and 3.4(B) shall, for the purposes of effecting Completion, be
         deemed satisfied by the delivery by the Buyer's Solicitors to the
         Sellers' Solicitors of an undertaking confirming that the Buyer's
         Solicitors hold in their client account the sum of $31,360,004 to the
         order of Armor and undertaking to instruct their bankers on 27 November
         2003 to transfer the Sum to Armor's bank account as soon as reasonably
         possible.

4.       POST COMPLETION UNDERTAKINGS

4.1      The Buyer undertakes to Armor that, subject to Completion having taken
         place:

         (A)      it shall procure the payment of the amounts referred to in
                  clause 3.5; and

         (B)      it will procure that no member of the Group seeks to enforce
                  as against Armor any right it may have as regards any rebate
                  of any insurance premiums.

4.2      Armor undertakes to the Buyer that, following Completion, it will:

         (A)      use all reasonable endeavours to ensure that each Group
                  Company is released from any guarantee, indemnity, bond,
                  letter of comfort or Encumbrance or other similar obligation
                  given or incurred by it prior to Completion which relates in
                  whole or in part to debts or other liabilities or obligations,
                  whether actual or contingent, of a member of the Sellers'
                  Group and pending such release, to pay to the Buyer from time
                  to time such amounts as would, if paid to the relevant member
                  of the Group, indemnify the relevant member of the Group
                  against any liability arising under any such guarantee,
                  indemnity, bond, letter of comfort or Encumbrance (to the
                  extent that the relevant member of the Seller's Group does not
                  itself made good the loss);

         (B)      procure (subject to any requisite licences being obtainable
                  and where any payment is required to obtain such licences such
                  payment to be at the Buyer's cost) that during the period of
                  30 days following Completion, the Group shall continue to have
                  access to the computer system of the Sellers' Group operated
                  in Jacksonville to which the Group currently has access for
                  the same purposes as currently enjoyed including use of the
                  Optemize contract arrangements relating to the user of such
                  computer system and that the Sellers' Group will provide such
                  assistance as the Buyer may reasonably require for the
                  purposes of migration of the Group's use of such system to the
                  Buyer's own discrete computer system it being agreed that if
                  the Sellers' Group anticipates the need to incur any third
                  party costs in order to provide such assistance Armor shall,
                  prior to incurring the same, seek the Buyer's consent in
                  writing thereto and, to the extent the Buyer has given its
                  consent in writing, the Buyer shall reimburse such costs on
                  demand. Armor shall not be required to procure the Seller's
                  Group to provide any assistance pursuant to this clause 4.2(B)
                  which requires such costs to be incurred unless the Buyer's
                  written consent thereto has been first obtained.

         (C)      to the extent that it is not prevented from so doing by any
                  obligation of confidentiality (whether or not legally
                  binding):

                  1        make available to the Buyer and (subject as provided
                           below in this paragraph (C)) to Granville Baird
                           Capital Partners Limited copies and/or extracts from
                           such of Armor's records and papers concerning the
                           process undertaken by or on behalf of Armor in
                           seeking purchasers for the Group as Armor in good
                           faith considers appropriate with a view to assisting
                           the Buyer and/or Granville Baird Capital Partners
                           Limited identify potential purchasers of the Group in
                           the future and address possible obstacles to
                           achieving such a sale; and

                                       17
<PAGE>

                  2        if so required by the Buyer, authorise Trevor Civval
                           of Cavendish Corporate Finance Limited and/or Merrill
                           Lynch & Co. Inc. (together with its subsidiaries,
                           agents, employees and consultants) to discuss such
                           sale process and the matters set out above with the
                           Buyer and Granville Baird Capital Partners Limited,
                           subject to such restrictions as Armor may in good
                           faith consider appropriate.

                  All and any information provided to the Buyer and/or Granville
                  Baird Capital Partners Limited pursuant to this paragraph (C)
                  shall constitute Armor Confidential Information and Armor
                  shall be under no obligation to provide the same to or to
                  authorise Trevor Civval and/or Merrill Lynch & Co. Inc. to
                  enter into discussions with Granville Baird Capital Partners
                  Limited unless and until Armor has received an undertaking
                  from Granville Baird Capital Partners Limited, addressed to
                  Armor and in such form as Armor may reasonably require,
                  undertaking to be bound by confidentiality obligations in
                  respect of the same in the terms of clause 9.2; and

         (D)      if it is discovered that the share capital of any of the
                  Target Companies or companies within the Group to be acquired
                  pursuant to this Agreement or any beneficial interest therein
                  has not been acquired in accordance with this Agreement for
                  any reason whatsoever (excluding for such purposes any
                  minority shareholdings in any such companies beneficially
                  owned by third parties and Fairly Disclosed to the Buyer
                  before entry into of this Agreement) and the loss arising from
                  one or more such circumstances is material in the context of
                  the Group as a whole, procure that all and any such share
                  capital or beneficial interests, as appropriate, are
                  transferred to the Buyer or as the Buyer may direct in writing
                  free from any Encumbrance for no additional consideration; and

         (E)      if any person attempts to declare as void any transaction
                  effected prior to Completion which concerns title to any of
                  the Shares or any of the share capital of any of the
                  Subsidiaries on grounds that such transaction may justly be
                  challenged under any applicable laws relating to insolvency
                  and the transaction concerned took place whilst both parties
                  to it were under the direct or indirect control of Armor and
                  the loss arising (or which would arise should such attempt
                  succeed) from one or more such circumstances is material in
                  the context of the Group as a whole, procure that before any
                  order for the setting aside of such transaction is made, and
                  with the purpose of preventing it being made, the person on
                  whose behalf such transaction is sought to be set aside is
                  irrevocably and unconditionally put in funds (so that such
                  funds are free funds in the hands of that person without any
                  liability to account to the provider thereof for the same) to
                  such amount as is required to prevent such transaction being
                  set aside.

4.3      The Buyer undertakes to Armor that, following Completion, the Buyer
         will or will procure that the UK Buyer or the US Buyer will:

         (A)      use all reasonable endeavours to ensure that Armor is released
                  from all obligations it may have in respect of:

                  1        the performance and payment bonds each numbered
                           104034207 dated 24 June 2003 issued by Travelers
                           Casualty and Surety Company of America in favour of
                           Kellog & Root Services in respect of certain
                           obligations of ArmorGroup North America; and

                  2        the licence bond numbered 104090976 (Fianzas Atlas #
                           III-310195-RC) Effective 3/3/03 - 3/2/04 issued in
                           favour of certain obligations of ArmorGroup Mexico SA
                           de CV

                                       18
<PAGE>

                  and pending such release, to indemnify Armor against liability
                  arising under any such bond Provided that the Buyer shall be
                  automatically released from its obligation to procure the
                  release of such bonds if and to the extent any such bond
                  expires by the effluxion of time;

         (B)      procure that, as soon as reasonably practicable after
                  Completion and in any event within six months thereafter, the
                  Group shall cease in any manner whatsoever to use, or display
                  any trade or service marks, trade or service names or logos
                  used or held by any member of the Sellers' Group (other than
                  "CDR" or "USDS") or any confusingly similar mark, name or logo
                  including but not limited to the name "ARMOR" or "ARMOR
                  HOLDINGS" save as used in the marks or names "ARMORGROUP".

4.4      Within the periods mentioned below according to the territory concerned
         the Buyer shall procure all companies in the Group with names which
         include "Armor Group" shall change their corporate names to
         "ArmorGroup" or any other corporate name not restricted pursuant to
         clause 4.3(B) and Armor shall procure that any companies within the
         Sellers' Group with names which include "Armor Group" or "ArmorGroup"
         shall change their corporate names to exclude such references and to
         such names as are not restricted by clause 8.1(E). The periods
         mentioned above are as follows:

         Period                             Territory

         9 months                           North America and Europe
         36 months                          Africa and Russia
         24 months                          rest of the World

4.5      The following provisions shall apply with regard to elections to be
         made under Section 338(h)(10) of the Unites States Internal Revenue
         Code of 1986, as amended:

         (A)      with respect to the Sellers' sale of the US Shares (and,
                  indirectly, the US Subsidiaries) to the US Buyer (as directed
                  by the Buyer), the Sellers, the Buyer and the US Buyer shall,
                  where permissible, jointly make timely, effective and
                  irrevocable elections under Section 338(h)(10) of the United
                  States Internal Revenue Code of 1986, as amended (the "CODE"),
                  and, if permissible, similar elections under any applicable
                  state or local income tax laws (the "ELECTIONS"), and file the
                  Elections in accordance with applicable regulations. The US
                  Buyer, the Sellers, the US Companies and the US Subsidiaries
                  shall report the transaction consistent with such Elections
                  and agree not to take any action that could cause such
                  Elections to be invalid, and shall take no position contrary
                  thereto unless required to do so pursuant to a determination
                  (as defined in Section 1313(a) of the Code) or any similar
                  state or local Tax provision. The Sellers shall bear the
                  responsibility for payment of any US federal, state, local or
                  foreign Tax attributable to making the Elections, and shall
                  promptly reimburse the Buyer, the US Buyer, the US Companies
                  or the US Subsidiaries to the extent any of the Buyer, the US
                  Buyer, the US Companies or the US Subsidiaries incur any Tax
                  Liability arising from such Election, including any state or
                  local liability to Tax attributable to a deemed election under
                  Section 338(g) of the Code;

         (B)      to the extent possible, the Buyer, the US Buyer, the Sellers,
                  the US Companies and the US Subsidiaries shall execute at the
                  Completion any and all forms necessary to effectuate the
                  Elections (including, without limitation , IRS Form 8023 and
                  any similar forms under applicable state and local income tax
                  laws (the "SECTION 338 FORMS")). In the event, however, any
                  Section 338 Forms are not executed at the Completion, the
                  Buyer, the US Buyer, the Sellers, the US Companies and the US
                  Subsidiaries shall prepare and complete each such Section 338
                  Form not later than 15

                                       19
<PAGE>

                  days prior to the date such Section 338 Form is required to be
                  filed. The Buyer, the US Buyer, the Sellers, the US Companies
                  and the US Subsidiaries shall each cause the Section 338 Forms
                  to be duly executed by an authorised person for the Buyer, the
                  US Buyer, the Sellers, the US Companies and the US
                  Subsidiaries in each case, and shall duly and timely file the
                  Section 338 Forms in accordance with applicable tax laws and
                  the terms of this Agreement;

         (C)      the Buyer and the US Buyer shall prepare a schedule setting
                  out the fair market value of the assets of the US Companies
                  and the US Subsidiaries and the allocation of the aggregate
                  deemed sales price of the assets of the US Companies and the
                  US Subsidiaries resulting from the elections under Section
                  338(h)(10) of the Code (as required pursuant to Section
                  338(h)(10) of the Code and the Treasury Regulations
                  promulgated thereunder) (the "SECTION 338 ALLOCATION") and
                  shall deliver such Section 338 Allocation to the Sellers for
                  their review within 170 days after the Completion Date. The
                  Section 338 Allocation shall be prepared in accordance with
                  the rules under Sections 1060 and 338 of the Code, as
                  applicable. The Sellers shall have thirty (30) days to review
                  and comment on the Section 338 Allocation prepared by the
                  Buyer and the US Buyer, provided that if the Buyer and/or the
                  US Buyer deliver the Section 338 Allocation to the Sellers
                  prior to the 170th day following the Completion Date, such
                  period of review and comment shall extend to the 200th day
                  following the Completion Date (the "REVIEW PERIOD"). If the
                  Sellers and the Buyer and/or the US Buyer are unable to agree
                  on the Section 338 Allocation during the Review Period, they
                  shall request a nationally recognised accounting firm within
                  the United States of America to prepare such Section 338
                  Allocation (subject to the limitation contained in the
                  immediately preceding sentence). The cost of any such firm
                  shall be borne equally by the US Buyer, on one hand, and the
                  Sellers, on the other. In the event the Section 338 Allocation
                  is audited or disputed by any Tax authority, the party
                  receiving notice thereof shall promptly notify the other party
                  hereto. The Buyer and the US Buyer shall, at their own
                  expense, control all audits or disputes in connection with any
                  Section 338 Allocation (including selection of legal advisers
                  and accountants) and, without limiting the foregoing, may in
                  their sole discretion pursue or forego any and all
                  administrative appeals, proceedings, hearings, audits and
                  conferences with any Tax authority in connection therewith,
                  subject to the last sentence of this paragraph (C).
                  Notwithstanding the foregoing, (i) the party controlling the
                  audit or dispute shall (A) consult with the other party prior
                  to taking any action in connection with such audit or dispute
                  that could reasonably be expected to have a material adverse
                  effect on such other party and (B) not take any action in
                  connection with such audit or dispute that would legally bind
                  the other party without the prior written consent of such
                  other party and (ii) each of the Buyer and the US Buyer and
                  the Sellers shall (A) be bound by the Section 338 Allocation
                  for purposes of determining any Taxes, (B) prepare and file,
                  and cause its affiliates to prepare and file, its Tax returns
                  on a basis consistent with the Section 338 Allocation and (C)
                  take no position, and cause its affiliates to take no
                  position, inconsistent with the Section 338 Allocation on any
                  Tax return, in any refund claim, in any audit, dispute or
                  proceeding before any Tax authority or otherwise with respect
                  to such Tax returns; and

         (D)      where any obligation is expressed in this clause 4.5 to be an
                  obligation of any of the US Buyer, the US Companies or the US
                  Subsidiaries, such obligation shall be deemed to be an
                  obligation of the Buyer to procure the performance by the US
                  Buyer, the US Companies and the US Subsidiaries, as
                  applicable, of that obligation.

4.6      The Buyer undertakes to Armor as follows with regards to the carrying
         on of business in the Republic of Angola ("ANGOLA"):

                                       20
<PAGE>

         (A)      the Buyer shall not and shall procure that no member of the
                  Buyer's Group shall carry on business in Angola for a period
                  commencing on the date of this Agreement and expiring on the
                  earlier of (i) the first anniversary of that date and (ii) the
                  date upon which the Angolan Litigation is Determined (the
                  "LOCK-OUT PERIOD"). For this purpose "DETERMINED" shall mean
                  when the matter is agreed between the parties to the Angolan
                  Litigation or determined by a French Court from whose
                  determination there is no right of appeal or where there is a
                  right of appeal when any appeal is finally refused or such
                  right of appeal has expired without exercise; and

         (B)      if the Buyer or any member of the Buyer's Group shall, after
                  expiry of the Lock-out Period carry on business in Angola then
                  the Buyer shall and shall procure that the relevant member(s)
                  of the Buyer's Group carrying on business in Angola shall:

                  1        comply in all material respects with the laws and
                           statutory regulations applicable to the carrying on
                           in Angola of such business;

                  2        not carry on such business under any names which
                           include any of "ArmorGroup", "DSL", "Defense
                           Systems", "Armor" or any derivative thereof provided
                           that the Buyer shall not be in breach of the
                           undertaking in this paragraph 2 merely by virtue of
                           the fact that any company or other person through
                           which it may carry on such business in Angola is
                           connected with companies bearing such names by virtue
                           of common ownership provided such connection is not
                           actively promoted by the Buyer's Group in Angola; and

                  3        not be a member of the Group nor a company whose
                           share capital is owned or held by any member of the
                           Group.

         The undertakings set out in this clause 4.6 shall cease to apply when
         the Angolan Litigation has been Determined.

4.7      The Buyer acknowledges and agrees (subject to the Court's discretion)
         that in the event of a breach of its undertakings in clauses 4.6(A),
         4.6(B)2 and 4.6(B)3 damages may not be an adequate remedy and that the
         most appropriate remedy available to Armor may be an order for specific
         performance.

4.8      Armor undertakes to the Buyer that it shall fully enforce all its
         rights under Section 9.1 and 9.2 of each of the Armor Holdings, Inc.
         1999 Stock Incentive Plan and the Armor Holdings, Inc. 2002 Stock
         Incentive Plan (together the "PLANS") in respect of each exercise of
         any option granted under either of the Plans and shall in all cases
         require the Participant (as defined in the Plans) to remit to Armor an
         amount sufficient to satisfy any and all federal, state and local
         withholding tax requirements on the exercise of the relevant option (by
         way of allowing a withholding of Shares as described in Section 9.2 of
         the Plans if appropriate).

5.       WARRANTIES

5.1      Armor warrants to the Buyer on behalf of the UK Buyer and the US Buyer,
         according to the Assets to be acquired by them pursuant to this
         Agreement (and so that they shall be entitled to enforce the same
         direct against Armor notwithstanding that they are not a party to this
         Agreement), that:

         (A)      the Warranties numbered 1 (Sellers' Capacity), 2.2 (The
                  Shares) and 2.3(D) (Subsidiaries - Encumbrances) are true and
                  accurate; and

                                       21
<PAGE>

         (B)      all the Warranties other than those referred to in paragraph
                  5.1(A) are, so far as Armor is aware, true and accurate.

5.2      Any Warranty expressed to be given "so far as Armor is aware" or
         otherwise qualified by reference to the knowledge of Armor shall refer
         to the actual knowledge immediately before Completion of any of Robert
         Schiller, Glenn Heiar, Phil Baratelli or Todd Smith without their
         having made enquiries of any person to establish the truth and accuracy
         of that Warranty Provided that each of Robert Schiller, Glenn Heiar,
         Phil Baratelli and Todd Smith will be deemed to be actually aware of
         all information of which he ought reasonably to be aware were he to
         have reviewed in a reasonably diligent manner the hard copy documents
         within his own files (and not, for the avoidance of doubt, the files of
         any other officer or employee of Armor) located at the offices of Armor
         at 1400 Marsh Landing Parkway, Suite 112, Jacksonville in existence as
         at (or following) 11 November 2003 for the avoidance of doubt "hard
         copy documents" does not include any documents which is only in
         electronic form, including emails. For the purpose of this clause 5,2
         "files" shall include papers in filing cabinets, boxes, binders, wallet
         files and other methods of document storage.

5.3      Any claim under the Warranties is subject to the terms and provisions
         of schedule 4.

5.4      Each of the Warranties shall be construed as a separate Warranty and
         shall not be limited by reference to any of the others of them.

5.5      When calculating any damages due in respect of any breach of the
         Warranties due regard shall be had to the fact that the Buyer has
         valued the Assets at $33,660,004 on the basis that all of the
         Warranties are true and accurate. This clause 5.5 is without prejudice
         to the limitation contained in paragraph 3 of schedule 4.

5.6      Each of the Sellers hereby irrevocably waives all rights and claims
         which it may have against any Group Company and/or officer or employee
         thereof in respect of any misrepresentation inaccuracy or omission in
         or from any information or advice given where any such Group Company or
         officer or employee to such Seller or a member of the Sellers' Group to
         enable it to give any of the Warranties and/or to prepare the
         Disclosure Letter and/or to assume any of the obligations assumed or to
         be assumed by it under or pursuant to this agreement provided that this
         clause 5.6 shall not operate to exclude liability for any fraudulent
         misrepresentation.

5.7      Armor hereby covenants with the US Buyer to pay from time to time to
         the US Buyer an amount equal to any amount payable (but for the
         provisions of this clause 5.7) by Armor to the UK Buyer in respect of a
         claim for breach of any of the Warranties Provided that:

         1        to the extent that Armor makes any such payment to the US
                  Buyer, notwithstanding any other provision of this agreement,
                  the liability of Armor in respect of the relevant claim for
                  breach of the Warranties shall be reduced;

         2        to the extent that Armor satisfies any claim by the UK Buyer
                  for breach of any of the Warranties, the liability of Armor to
                  make any payment pursuant to this clause 5.7 shall be reduced;
                  and

         3        the limitations of liability of Armor in respect of claims
                  under the Warranties contained in schedule 4 shall apply
                  mutandis mutatis in respect of claims under the covenant
                  contained in this clause 5.7.

6.       INDEMNITIES

6.1      Armor undertakes to the US Buyer (and so that the rights under this
         clause 6 shall be fully enforceable by the US Buyer direct against
         Armor notwithstanding that it is not party to this

                                       22
<PAGE>

         Agreement) to pay to the US Buyer from time to time and promptly upon
         demand such sums as would, if paid to the relevant member or members of
         the Buyer's Group, indemnify such member or members of the Buyer's
         Group against all liabilities and losses which it or they may suffer
         and all costs and expenses which it or they may reasonably incur
         (provided that, save in the case of paragraph (D) below, such costs and
         expenses are approved by Armor in writing in advance where reasonably
         practicable, such approval not to be unreasonably withheld or delayed)
         to the extent the same arise or are incurred as a result of or in
         connection with:

         (A)      the matters described in part A of schedule 10 (the "ANGOLAN
                  LITIGATION");

         (B)      the potential litigation described, at paragraph 1, in the
                  letter from the Sellers' Solicitors to the Buyer's Solicitors
                  dated 26 November 2003 and headed "Centurion - Indemnity for
                  Potential Payments";

         (C)      the matters described in part B of schedule 10 (the "BOSNIAN
                  LANDMINE CLAIM");

         (D)      the potential payments and/or liabilities which may be paid or
                  become due and which are described, at paragraph 2, in the
                  letter from the Sellers' Solicitors to the Buyer's Solicitors
                  dated 26 November 2003 and headed "Centurion - Indemnity for
                  Potential Payments" ("RELEVANT CIRCUMSTANCES") including any
                  payment made by any such Group Company in connection with the
                  Relevant Circumstances following agreement of the same with
                  the recipient thereof (the "POTENTIAL CLAIMANT") and whether
                  or not any such payment comes about as a result of a formal
                  claim made by the Potential Claimant against any Group Company
                  and Armor shall not be entitled to be consulted in connection
                  with any such payment or the settlement or determination of
                  the same. Notwithstanding the introductory paragraph to this
                  clause 6.1, the indemnity in this paragraph (D) shall extend
                  to any payment whatsoever made in connection with the Relevant
                  Circumstances but Armor's liability under such indemnity shall
                  be limited to an amount equal to fifty per cent of the sum for
                  which Armor would be responsible in the absence of such
                  limitation and shall be limited to a maximum amount of
                  $125,000; and

         (E)      the reorganisation of the Group and the waiver or cancellation
                  or other reorganisation of Inter-Group Indebtedness carried
                  out on or prior to Completion as described in schedule 8 to
                  the extent that the liabilities concerned are not liabilities
                  for Tax.

6.2      The provisions of schedule 4 shall apply in relation to any claim under
         clause 6.1 to the extent set out in schedule 4. In addition:

         (A)      no liability shall attach to Armor in respect of any claim
                  under the Indemnities to the extent that the loss or damage
                  giving rise to the claim is recovered by the Group under any
                  insurance policy (and the Buyer shall procure that where any
                  amount is recovered by the Group under any such insurance
                  policy in relation to the subject matter of the claim
                  concerned subsequent to any payment made by Armor, the US
                  Buyer shall reimburse to Armor an amount equal to the amount
                  recovered promptly following such recovery having been made).
                  The Buyer undertakes to Armor that where any matter which
                  gives rise to a claim under the Indemnities is a matter in
                  respect of which a member of the Group carries insurance, the
                  Buyer will procure that that member of the Group uses all
                  reasonable endeavours to recover the maximum amount
                  recoverable from the relevant insurance provider. If Armor is
                  relieved of any liability to make any payment in respect of
                  the Indemnities, or is reimbursed in respect of any payment
                  made by it in respect of the Indemnities, in either case as a
                  result of the operation of the above provisions of this
                  paragraph (A), Armor shall promptly following receipt of the
                  benefit of such relief or receipt of the

                                       23
<PAGE>

                  reimbursement, as appropriate, pay to the US Buyer an amount
                  equal to five per cent of the amount not paid or the amount
                  reimbursed, as appropriate; and

         (B)      any liability of Armor under clause 6.1 (before the operation
                  of this paragraph (B)) shall be reduced by an amount equal to
                  (i) any tax relief obtained or obtainable by the Buyer's Group
                  and (ii) the amount by which any taxation for which the
                  Buyer's Group is or may be liable to be assessed or
                  accountable is reduced or extinguished, in either case to the
                  extent that the same arises in consequence of the matter which
                  gives rise to the liability of Armor under clause 6.1 Provided
                  that Armor shall not be entitled to the benefit of this
                  paragraph (B) unless and until the date (the "BENEFIT DATE")
                  being the earlier of (a) the date on which the Group receives
                  the benefit of the tax relief in question or has not had to
                  pay (or would not have had to pay but for the availability of
                  any other tax relief) the relevant tax, as the case may be,
                  and (b) the date falling 12 months after the date on which
                  Armor makes the relevant payment under clause 6.1 and further
                  provided that no such reduction of Armor's liability under
                  clauses 6.1 shall apply where (b) applies if at such time no
                  such tax reliefs are available or the Buyer's Group has no
                  liability to taxation which may be so reduced or extinguished.
                  The Buyer shall procure that where by virtue of the operation
                  of this paragraph (B) Armor has overpaid an amount due to the
                  US Buyer as a result of a claim by the US Buyer under any of
                  the Indemnities, the US Buyer shall reimburse to Armor an
                  amount equal to the overpayment promptly following the benefit
                  date.

6.3      Subject to clause 6.6, the Buyer (having made reasonable enquiries of
         each member of the Group and in particular ArmorGroup Services Limited,
         Armor Group (Asia Pacific) Co. Ltd. (BVI) and Armor Holdings Limited to
         ascertain the facts and circumstances then existing) shall promptly:

         (A)      inform Armor in writing of any fact, matter, event or
                  circumstance which comes to its notice whereby it appears to
                  the Buyer that Armor is or may be liable to make any payment
                  in respect of any claim under the Indemnities;

         (B)      thereafter keep Armor reasonably informed of all material
                  developments in relation thereto; and

         (C)      provide at the cost of Armor all such information and
                  documentation (no matter how it is recorded or stored) as
                  Armor shall reasonably request in connection therewith and, in
                  connection with the Angolan Litigation, actively assist Armor
                  (at Armor's cost) where such assistance is reasonably required
                  for the benefit of pursuing such litigation (but having regard
                  to the fact that Armor shall have conduct thereof) including
                  if so required by Armor using reasonable endeavours to procure
                  that any relevant employees of the Group provide affidavit
                  evidence in support of Armor's claim that the Group has not
                  been engaged in Angola since January 1998.

6.4      Subject to clause 6.6, the Buyer undertakes to Armor that it will (and
         that it will procure that the relevant members of the Buyer's Group
         will) accept that Armor shall (as it hereby agrees) have sole conduct
         of all discussions and negotiations in relation to any claim which
         gives rise to or may give rise to any claim by the Buyer or the UK
         Buyer or the US Buyer under any of paragraphs (A), (B), (C) or (E) of
         clause 6.1 (including any proceedings or actions brought against the
         any member of the Buyer's Group or the Sellers' Group), including the
         right to conduct any such proceedings or actions in its own name or in
         the name of any member of the Buyer's Group.

6.5      Subject to clause 6.6, the Buyer undertakes to Armor that it will (and
         that it will procure that each member of the Buyer's Group will)
         provide promptly to Armor (at Armor's cost) all information, documents
         and assistance which Armor might reasonably request in relation to

                                       24
<PAGE>

         any proceedings arising out of the circumstances mentioned in clause
         6.1 including using its reasonable endeavours to ensure that officers
         or employees of the Group Companies are made available to give evidence
         before any court, enquiry, tribunal or similar forum as and when
         reasonably requested by Armor upon reasonable notice.

6.6      Nothing in clauses 6.3, 6.4 and 6.5 shall oblige the Buyer or any
         member of the Buyer's Group:

         (A)      to supply any information or assistance to the Sellers or any
                  members of the Sellers' Group to the extent that provision is
                  prohibited by law (provided that Armor shall retain any
                  information provided in breach of any obligations of
                  confidentiality in force at Completion as confidential, save
                  that it may disclose the same to its professional advisers and
                  otherwise in the course of any discussions or negotiations
                  with any person a party to any claim which gives rise to or
                  may give rise to any claim by the Buyer under clause 6.1 or in
                  any proceedings relating thereto); or

         (B)      to do or (insofar as required by any member of the Sellers'
                  Group or their representatives) to refrain from doing anything
                  which is unlawful; or

         (C)      to provide the services and assistance of its officers and
                  employees as contemplated by clause 6.5 to the extent it would
                  in the reasonable opinion of the Buyer unreasonably interfere
                  with the day to day operations of the business carried on by
                  the Buyer's Group and in any event unless the Sellers have
                  agreed to pay a reasonable fee to compensate the Buyer's Group
                  for the use of the management and employment time concerned.

6.7      Armor shall procure that the Buyer is kept informed of all material
         matters and developments arising out of any conduct by the Armor or any
         members of the Sellers' Group or their representatives of any matters
         contemplated by clause 6.4 and shall provide to the Buyer or members of
         the Buyer's Group such information and assistance relating thereto and
         to the matters referred to in clause 6.1 (to the extent relevant to the
         Group or to the Buyer's Group's obligations under this clause 6) as it
         may reasonably request from time to time. In no circumstances will
         Armor or any members of the Sellers' Group or their representatives
         enter into or purport to enter into any settlement, compromise or other
         material agreement in relation to the conduct of such matters or the
         subject matter thereof without the prior written consent of the Buyer,
         such consent not to be unreasonably withheld or delayed and in any
         event without first providing evidence to the Buyer that the Buyer's
         Group will be fully funded (without recourse) for any of its
         obligations under the settlement compromise or other agreement
         concerned.

7.       BUYER'S WARRANTIES

7.1      The Buyer warrants to the Sellers that (and each such warranty shall be
         construed as a separate warranty):

         (A)      the execution and delivery of this agreement and the
                  completion of the transactions contemplated hereby, have,
                  where required, been duly and validly authorised and no other
                  proceedings or action on the part of the Buyer, the US Buyer
                  or the UK Buyer is necessary to authorise the agreement or to
                  complete the transactions so contemplated;

         (B)      there is no agreement, arrangement or understanding (whether
                  verbal or in writing) in relation to the transactions
                  contemplated by this agreement between any member of the
                  Buyer's Group and any Key Employee which is materially
                  different to the financial arrangements set out in the offer
                  letter from Granville Baird Capital Partners

                                       25
<PAGE>

                  Limited to the Management dated 5 September 2003, a copy of
                  which Armor acknowledges it has received and read;

         (C)      it is a limited company duly incorporated under the laws of
                  the jurisdiction of its incorporation and has been in
                  continuous existence since incorporation;

         (D)      it has all corporate power and has obtained all corporate
                  authorisations and all other applicable governmental,
                  statutory, regulatory, or other consents, licenses, waivers,
                  or exemptions required to empower it to enter into and to
                  perform its obligations under this agreement;

         (E)      the execution, delivery and performance of this agreement by
                  the Buyer do not violate or conflict with:

                  1        any applicable law or any writ, order or decree of
                           any court or governmental authority;

                  2        any provision of the Buyer's formation or governance
                           documents, or

                  3        any material agreement to which the Buyer is a party
                           or by which the Buyer is bound.

7.2      The Buyer warrants to Armor that it has received and read a copy of the
         English translation of the pleadings in the Angolan Litigation in the
         agreed form.

8.       PROTECTION OF GOODWILL

8.1      Armor hereby undertakes to the Buyer for itself and on behalf of the UK
         Buyer and the US Buyer to procure that (except as otherwise agreed in
         writing with the Buyer) no member of the Sellers' Group will either
         solely or jointly with any other person (either on its own account or
         as the agent of any other person) and directly or indirectly:

         (A)      for the Restricted Period in the Restricted Territories carry
                  on or be engaged or (except as the holder of shares in a
                  company which confers not more than five per cent. of the
                  votes which can generally be cast at a general meeting of the
                  company) interested directly or indirectly in a business which
                  provides close quarter defence (CQD) training, remote site
                  security services, man-guarding services, security consultancy
                  services, humanitarian mine clearing services, investigation
                  services, security training, lethal fire arm training, driver
                  training, close protection training or dog training or which
                  otherwise competes with any business carried on by a Group
                  Company at Completion (each "A PROTECTED BUSINESS"); and/or

         (B)      for a period of three years from Completion induce, solicit or
                  endeavour to entice to leave the service or employment of any
                  member of the Group, any person who at Completion was an
                  employee of any member of the Group occupying a senior or
                  managerial position and likely (in the reasonable opinion of
                  the Buyer) to be:

                  1        in possession of ArmorGroup Confidential Information
                           relating to any member of the Group; or

                  2        able to influence the customer relationships or
                           connections of any member of the Group

                  provided that this shall not restrict any member of the
                  Sellers' Group from advertising or otherwise taking steps to
                  recruit (and/or from subsequently employing) any person

                                       26
<PAGE>

                  which is or are not specifically aimed at or intended to
                  recruit a particular employee or group of employees of any
                  Group Company save that if any of the Key Employees responds
                  to such advertisement or recruitment process Armor will not,
                  and will procure that no member of the Sellers' Group will,
                  employ such person; and/or

         (C)      for a period of three years from Completion prevent or
                  restrict any person who at any time in the period of 12 months
                  prior to Completion has been a client or customer of a
                  Protected Business from continuing such client or customer
                  relationship with the Group or endeavour to supply services to
                  any such client or customer in competition with any Protected
                  Business; and/or

         (D)      for a period of three years from Completion prevent or
                  restrict any person firm or company (other than a member of
                  the Sellers' Group) which at any time in the period of 12
                  months prior to Completion has been a supplier of goods or
                  services in connection with any Protected Business from
                  supplying such goods or services to any member of the Group,
                  where the cessation or restriction of such supply will or
                  could reasonably be expected to have a materially adverse
                  effect on or cause material loss to any member of the Group;
                  and/or

         (E)      at any time after Completion use any of the names
                  "ArmorGroup", "DSL", "Defense Systems", "ITI", "International
                  Training", "Parvus", "Mine Action", "APS", "Alarm Protection
                  Services", "Site Logistic", "Vulcano", "Special Clearance
                  Services" or any name similar thereto or likely to be confused
                  therewith, other than the name "Armor" or "Armour" (whether
                  alone or in conjunction with any other name provided that it
                  is not used as part of the name "ArmorGroup" or "ArmorGroup"),
                  nor at any time after the expiry of six months from Completion
                  use the name "CDR" or "USDS" or any name similar thereto or
                  likely to confused therewith.

         for the purposes of this clause 8:-

         "RESTRICTED PERIOD" shall mean the period of three years in relation to
         territories within the European Union and five years elsewhere; and

         "RESTRICTED TERRITORIES" means all and any of the following countries
         together with any other countries in which the Group carries on
         business or intends to carry on business imminently (that is to say,
         within the next six months, if possible) and has made preparatory steps
         (or more) towards achieving such goal:

         Afghanistan, Algeria, Bahrain, Bosnia, Cambodia, Cameroon, Chad, China
         inc Hong Kong, Colombia, the Congo, Cote D'Ivoire, Croatia, Ecuador,
         France, Gabon, Greece, Guinea, Iraq, Italy, Japan, Jersey, Kenya,
         Lebanon, Mozambique, Nepal, Nigeria, Papua New Guinea, Peru, Russia,
         Saudi Arabia, South Africa, Spain, Sierra Leone, Singapore, Tanzania,
         Thailand, Turkey, Uganda, UK, USA, Venezuela, Vietnam.

8.2      Nothing in clause 8.1(A), (C) or (D) shall prevent or restrict any
         member of the Sellers' Group from:

         (A)      carrying on or being engaged in or economically interested in
                  any of the following businesses:

                  1        remote site surveys;

                  2        surveillance detection services;

                  3        surveillance detection training;

                                       27
<PAGE>

                  4        training pertaining to law enforcement (excluding
                           driver training and further excluding lethal firearms
                           training other than holster training and less-lethal
                           firearms training);

                  5        security consultancy services in relation to data and
                           network security; or

         (B)      acquiring the whole or any part of a business which includes,
                  or the share capital of a company or group of companies whose
                  business or a part of whose business includes, operations the
                  carrying on of which would otherwise amount to a breach of the
                  undertaking contained in clause 8.1 (the "COMPETITIVE
                  OPERATIONS"), as part of a larger acquisition or series of
                  related acquisitions if the Competitive Operations comprise a
                  minor part of the business or the business of such company or
                  group of companies acquired (the "OVERALL OPERATIONS"). For
                  the purpose of this clause 8.2(B), a "MINOR PART" of the
                  Overall Operations shall be a part of the Overall Operations
                  the turnover or profit before tax of which does not, at the
                  time of the acquisition, exceed 10 per cent. of the gross
                  turnover or profit before tax of the Overall Operations as a
                  whole.

8.3      Armor undertakes to the Buyer for itself and on behalf of the UK Buyer
         and the US Buyer that if Armor or any other member of the Sellers'
         Group completes the acquisition of Competitive Operations as detailed
         in clause 8.2(B) above:

         (A)      Armor will promptly inform the Buyer (and, if so requested by
                  the Buyer, provide the Buyer with such information as the
                  Buyer may reasonably require for the purposes of enabling the
                  Buyer to verify that the Competitive Operations in question
                  constitute a minor part of the Overall Operations) and further
                  that it will, or will procure that the relevant member of the
                  Sellers' Group will, use its reasonable endeavours to sell or
                  otherwise dispose of the Competitive Operations to a third
                  party or to the Buyer or any member of the Buyer's Group as
                  soon after such acquisition as is commercially practicable and
                  Armor will or will procure that the relevant member of the
                  Seller's Group will permit the Buyer or any member of the
                  Buyer's Group to participate in any sale process relating to
                  the disposal of the Competitive Operations as a potential
                  purchaser thereof on a basis no less preferential to any other
                  potential purchaser; and

         (B)      where the acquisition of Competitive Operations as detailed in
                  clause 8.2(B) above is made prior to the expiry of two years
                  from Completion, Armor will, for a period of two years from
                  Completion, ensure that the turnover or profit before tax of
                  the Competitive Operations does not increase to an extent such
                  that the turnover or profit before tax of the Competitive
                  Operations exceeds five per cent. of the gross turnover or
                  profit before tax of the Seller's Group as a whole and further
                  that it will, if so requested by the Buyer, provide the Buyer
                  with such information as the Buyer may reasonably require for
                  the purposes of enabling the Buyer to verify that the turnover
                  or profit before tax of the Competitive Operations in question
                  exceeds five per cent. of the gross turnover or profit before
                  tax of the Seller's Group as a whole

         provided that nothing in this clause 8.3 will require Armor to sell or
         otherwise dispose of, or to procure the sale or other disposal of, the
         Competitive Operations on less than commercially reasonable terms.

8.4      Armor agrees that the undertakings contained in this clause 8 are fair
         and reasonable and are necessary to ensure to the Buyer the full
         benefit of the Group and are entered into for the purpose of protecting
         the goodwill of the business of each member of the Group. In the event
         that any such restriction shall be found to be void or unenforceable
         but would be valid or effective if some part or parts thereof were
         deleted, such restriction shall apply with such deletion as may be
         necessary to make it valid and effective.

                                       28
<PAGE>

8.5      Armor agrees and undertakes to the Buyer for itself and on behalf of
         the UK Buyer and the US Buyer that it will in no way seek to use,
         register or otherwise exploit the trademarks the subject of the Trade
         Mark Assignment and the Non-US Trade Mark Assignment.

9.       CONFIDENTIAL INFORMATION

9.1      Armor shall not and shall procure that no other member of the Sellers'
         Group shall use or disclose to any person any information relating to
         the business or financial or other affairs of any member of the Group
         which is of a secret or confidential nature ("ARMORGROUP CONFIDENTIAL
         INFORMATION") Provided that clause 9.1 shall not apply to:

         (A)      use or disclosure of ArmorGroup Confidential Information to or
                  at the written request of the Buyer;

         (B)      disclosure of ArmorGroup Confidential Information required to
                  be disclosed by law, rule regulation or legal process or by a
                  recognised securities exchange or any other regulatory or
                  governing body;

         (C)      disclosure of ArmorGroup Confidential Information on a
                  confidential basis to professional advisers for the purpose of
                  advising the Seller;

         (D)      ArmorGroup Confidential Information which becomes generally
                  known other than by Armor's breach of this clause 9.1; or

         (E)      ArmorGroup Confidential Information that may be required in
                  order to enforce, through the institution of legal
                  proceedings, the Sellers' rights under this agreement or any
                  agreement delivered in connection with the transactions
                  contemplated hereby.

9.2      The Buyer shall not and shall procure that no other member of the
         Buyer's Group shall use or disclose to any person any information
         relating to the business or financial or other affairs of any member of
         the Sellers' Group which is of a secret or confidential nature ("ARMOR
         CONFIDENTIAL INFORMATION") Provided that clause 9.2 shall not apply to:

         (A)      use or disclosure of Armor Confidential Information to or at
                  the written request of the Armor;

         (B)      disclosure of Armor Confidential Information required to be
                  disclosed by law, rule regulation or legal process or by a
                  recognised securities exchange or any other regulatory or
                  governing body;

         (C)      disclosure of Armor Confidential Information on a confidential
                  basis to professional advisers for the purpose of advising the
                  Buyer;

         (D)      Armor Confidential Information which becomes generally known
                  other than by the Buyer's breach of this clause 9.2; or

         (E)      Armor Confidential Information that may be required in order
                  to enforce, through the institution of legal proceedings, the
                  Buyer's rights under this agreement or any agreement delivered
                  in connection with the transactions contemplated hereby.

9.3      The restrictions in this clause 9 shall apply without limit in time.

                                       29
<PAGE>

10.      TAX AFFAIRS

10.1     The Buyer shall procure that after Completion the Sellers' Group and
         its duly authorised agents are afforded all such access (including, at
         their own expense, the right to take copies) to the books, accounts,
         records and Tax returns of each Group Company and all such other
         information and assistance as may reasonably be required to enable the
         Sellers and their agents to prepare any Tax returns, computations,
         notices, claims or elections on behalf of any member of Sellers' Group.

10.2     Armor shall likewise procure that the Buyer and its duly authorised
         representatives are provided with access (including, at their own
         expense, the right to take copies) to the books and records and Tax
         returns of the Sellers' Group and such other information and assistance
         as may be reasonably required for the preparation of any Tax returns,
         computations, notices, claims or elections on behalf of any members of
         the Buyer's Group.

11.      ANNOUNCEMENTS

11.1     No party shall disclose the making of this agreement nor its terms nor
         any other agreement entered into pursuant to this agreement (except
         those matters set out in the press release in the agreed form) and each
         party shall procure that each of its Related Persons shall not make any
         such disclosure without the prior consent of the other party unless
         disclosure is:

         (A)      to its professional advisers for the purposes of taking advice
                  in connection with this agreement and/or its legal
                  obligations; or

         (B)      required by law, rules or regulations or the rules or
                  requirements of any recognised securities exchange or any
                  other regulatory or governing body and disclosure shall then
                  only be made by that party:

                  1        after it has taken all such steps as may be
                           reasonable in the circumstances to agree the contents
                           of such announcement with the other party before
                           making such announcement and provided that (to the
                           extent practicable) any such announcement shall be
                           made only after notice to the other party/parties;
                           and

                  2        to the person or persons and in the manner required
                           by law, rules or regulation or by the relevant
                           recognised securities exchange or such other
                           regulatory body or as otherwise agreed between the
                           parties; or

         (C)      to its financiers, but only for the purpose of bona fide
                  compliance with reporting obligations imposed under the terms
                  of the financing documentation.

11.2     The restrictions contained in clause 11.1 shall apply without limit of
         time.

12.      ASSIGNMENT

12.1     Subject to clause 12.2, this agreement is personal to the parties and
         accordingly no party without the prior written consent of the other
         shall assign, transfer or declare a trust of the benefit of all or any
         of any other party's obligations nor any benefit arising under this
         agreement.

12.2     Notwithstanding clause 12.1, following Completion:

         (A)      each of the Buyer, the UK Buyer and the US Buyer shall be
                  entitled to charge and/or assign the benefit of its rights
                  under this agreement (the "RIGHTS") (in each case by way of
                  security) to a bank or financial institution that provides
                  facilities to it or any

                                       30
<PAGE>

                  Group Company itself or act, as facility agent and security
                  trustee or security agent by way of security for the
                  indebtedness incurred in connection with the acquisition of
                  the Shares (or in replacement in whole or part of any such
                  facilities) whether with or without other facilities (provided
                  always that the Buyer, the UK Buyer and the US Buyer, as
                  applicable, shall procure that the Rights may not be further
                  charged or assigned by such a security assignee to any third
                  party except pursuant to clause 12.3); and

         (B)      any Rights of the Buyer, the UK Buyer and the US Buyer may be
                  assigned to any member for the time being of the Buyer's Group
                  (but on the basis that any such assignee may only enforce and
                  enjoy the Rights so assigned to it while it remains a member
                  of the Buyer's Group) and any Rights so assigned to a member
                  of the Buyer's Group may be assigned by that member of the
                  Buyer's Group to another member of the Buyer's Group for the
                  time being on an equivalent basis.

12.3     The person to whom Rights have been charged or assigned in accordance
         with clause 12.2 or any administrative receiver appointed by it or
         other person appointed to enforce any such security may charge or
         assign all or any of the Rights to any third party for the purpose of
         or in connection with such enforcement.

12.4     Any permitted assignee of the Buyer, the UK Buyer and the US Buyer or
         of another permitted assignee and the UK Buyer and the US Buyer may
         enforce any right or benefit assigned to it as if it had been named in
         this agreement as Buyer and may recover thereunder as if it had
         acquired the Shares or other relevant Assets for the consideration and
         upon the other terms of this agreement and has thereby sustained all
         diminutions of value and losses and expenses and consequences of such
         acquisition as have been sustained by the Buyer, the UK Buyer or the US
         Buyer, as applicable, and any subsequent holder for the time being of
         any such Shares and/or Assets, including itself, as if they were all
         one entity which had retained the ownership of such Shares and Assets
         throughout Provided that the assignee shall not be entitled to recover
         from Armor any more than the Buyer, the UK Buyer or the US Buyer, as
         applicable, would have been able to recover were the assignment not to
         have been made.

13.      COSTS

13.1     Unless expressly otherwise provided in this agreement each of the
         parties shall bear its own legal, accountancy and other costs, charges
         and expenses connected with the sale and purchase of the Shares.

13.2     The Sellers undertake that none of the members of the Group have borne
         any costs and expenses in connection with the sale or, so far as Armor
         is aware, purchase of the Shares and other assets hereunder and to the
         extent that they have the Sellers will procure that the same are
         reimbursed to the relevant members of the Group without any rights of
         recourse against the Buyer's Group on the part of the person
         reimbursing the same.

14.      EFFECT OF COMPLETION

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

15.      FURTHER ASSURANCES

15.1     Each of the parties shall from time to time upon reasonable request
         from the other do or procure the doing of all acts and/or execute or
         procure the execution of all such documents in so far as each is
         reasonably able and in a form reasonably satisfactory to the party
         concerned

                                       31
<PAGE>

         for the purpose of transferring to the Buyer (or the UK Buyer, the US
         Buyer or as the Buyer may otherwise direct) the Shares and other Assets
         acquired pursuant to this agreement and otherwise giving the other
         parties the full benefit of this agreement.

15.2     Without prejudice to clause 15.1, if it is discovered that any
         Intellectual Property or other rights or assets currently exclusively
         used in the business of the Group or of any Group member are vested in
         or owned by any member of the Sellers' Group, Armor shall procure that
         the same are duly transferred to and vested in the Buyer or such member
         or members of the Group as it may direct in writing for no additional
         consideration.

15.3     The Buyer hereby acknowledges that it is not buying any interest in the
         shares or other securities of any of the Excluded Subsidiaries or USDS
         Inc or New Technologies Armor Inc. pursuant to this agreement and to
         the extent that any interest in the title to such shares or securities
         becomes vested in the Buyer, the Buyer shall as soon as reasonably
         practicable following request from Armor at Armor's expense do or
         procure the doing of all acts and/or execute or procure the execution
         of all such documents in a form reasonably satisfactory to Armor for
         the purpose of vesting such title in Armor or any other member of the
         Sellers' Group as Armor shall direct.

15.4     The parties acknowledge that prior to the entry into of this agreement
         it has not been possible, due to the requirements of third parties, for
         Armor (or the relevant Seller) to obtain releases of the security
         specified in schedule 13 (the "RELEVANT SECURITY") which affects the
         Group and that, consequently, it will be necessary to effect such
         releases and relevant filings in connection therewith after Completion.
         Armor will (at its sole cost and expense) use all reasonable endeavours
         to obtain releases of the Relevant Security and effect such filings as
         soon as reasonably practicable following Completion and in terms
         reasonably satisfactory to the Buyer.

15.5     The Buyer agrees that it shall procure that the current financial year
         end of any member of the Group will not change from 31 December for
         tax, accounting or statutory purposes.

16.      ENTIRE AGREEMENT

16.1     Each party on behalf of itself and as agent for each of its Related
         Persons acknowledges and agrees with the other parties (each such party
         acting on behalf of itself and as agent for each of its Related
         Persons) that:

         (A)      this agreement together with any other documents referred to
                  in this agreement (together the "TRANSACTION DOCUMENTS")
                  constitute the entire and only agreement between the parties
                  and their respective Related Persons relating to the subject
                  matter of the Transaction Documents;

         (B)      neither it nor any of its Related Persons have been induced to
                  enter into any Transaction Document in reliance upon, nor have
                  they been given, any warranty, representation, statement,
                  assurance, covenant, agreement, undertaking, indemnity or
                  commitment of any nature whatsoever other than as are
                  expressly set out in the Transaction Documents and, to the
                  extent that any of them have been, it (acting on behalf of
                  itself and as agent on behalf of each of its Related Persons)
                  unconditionally and irrevocably waives any claims, rights or
                  remedies which any of them might otherwise have had in
                  relation thereto; and

         (C)      neither it (nor its Related Persons, where appropriate) have
                  any right to rescind or terminate any Transaction Documents
                  either for breach of contract or for negligent or innocent
                  misrepresentation or otherwise;

                                       32
<PAGE>

         PROVIDED THAT the provisions of this clause 16 shall not exclude any
         liability which any of the parties or, where appropriate, their Related
         Persons would otherwise have to any other party or, where appropriate,
         to any other party's Related Persons or any right which any of them may
         have to rescind this agreement in respect of any statements made
         fraudulently by any of them prior to the execution of this agreement or
         any rights which any of them may have in respect of fraudulent
         concealment by any of them.

17.      VARIATIONS AND THIRD PARTY RIGHTS

17.1     This agreement may be varied only by a document signed by all the
         parties to this agreement.

17.2     The provisions of The Contracts (Rights of Third Parties) Act 1999
         shall not apply to this agreement save to the extent that rights are
         expressly granted hereunder to the UK Buyer, the US Buyer and/or
         Granville Baird Capital Partners Limited but this clause 17.2 shall not
         affect any right or remedy of a third party which exists or is
         available otherwise than by operation of that Act.

18.      WAIVER/CONSENTS

18.1     A waiver of any term, provision or condition of, or consent granted
         under, this agreement shall be effective only if given in writing and
         signed by the waiving or consenting party and then only in the instance
         and for the purpose for which it is given.

18.2     No failure or delay on the part of any party in exercising any right,
         power or privilege under this agreement shall operate as a waiver
         thereof, nor shall any single or partial exercise of any such right,
         power or privilege preclude any other or further exercise thereof or
         the exercise of any other right, power or privilege.

18.3     No breach of any provision of this agreement shall be waived or
         discharged except with the express written consent of the parties to
         this agreement.

18.4     The obligations and liabilities of any party hereto shall not be
         prejudiced released or effected by any time or forbearance or
         indulgence release or compromise given or granted by any person to whom
         such obligations and liabilities are owed or by any other person to
         such party or any other parties so obliged or liable nor by any other
         matter or circumstance which (but for this provision) would operate to
         prejudice release or effect any such obligations, except in any such
         case an express written release by all the parties to whom the relevant
         obligations and liabilities are owed and due.

18.5     The written consent or waiver of Armor shall operate due consent or
         waiver, as appropriate, on behalf of all of the Sellers for the
         purposes of this agreement, the Tax Deed and any other agreement
         entered into pursuant hereto.

19.      INVALIDITY

19.1     If any provision of this agreement is or becomes invalid, illegal or
         unenforceable in any respect under the law of any jurisdiction:

         (A)      the validity, legality and enforceability under the law of
                  that jurisdiction of any other provision; and

         (B)      the validity, legality and enforceability under the law of any
                  other jurisdiction of that or any other provision,

         shall not be affected or impaired in any way.

                                       33
<PAGE>

20.      NO SET-OFF

20.1     The Buyer shall not have the right to set-off any amount due by it, or
         due to be procured to be paid by it, under any provision of this
         agreement against any amount due by Armor or any other of the Sellers
         to it (or, for the avoidance of doubt to either the UK Buyer or the US
         Buyer) under this agreement.

20.2     Notwithstanding the foregoing, the Buyer shall be entitled to withhold
         $65,714.50 from the monies otherwise due to be procured by it to be
         paid by Armor Holdings Limited on 25 November 2004 (pursuant to the
         provisions of clause 3.5(A)2) on the basis that were this agreement to
         have been signed prior to settlement of the claim made by Terence
         Bramble of his claim against the Group (which was settled on or about
         20 November 2003), it would have included in clause 6.1 a further
         indemnity in respect of such claim (along the lines of the indemnity
         included at clause 6.1(D)) and accordingly Armor would have been liable
         to pay $65,714.50 to the US Buyer under such indemnity. Armor agrees to
         account for such set-off as repayment by Armor Holdings Limited of
         $65,714.50 of the debt otherwise due by Armor Holdings Limited to Armor
         and a payment by Armor of an equivalent amount to the US Buyer, and the
         Buyer shall procure that Armor Holdings Limited accounts to the US
         Buyer for the same.

21.      NOTICES

21.1     Any notice, demand or other communication given or made under or in
         connection with the matters contemplated by this agreement shall be in
         writing and shall be delivered personally or sent by fax or prepaid
         first class post or (if sent abroad) air mail:

         In the case of the Buyer to:
         ArmorGroup International Limited,
         Eggington House,
         25-28 Buckingham Gate
         London SW1E 6LD

         Fax:                               +44 (0)20 7828 2845
         Attention:                         Dave Seaton/Christopher Beese

         with a copy to:
         Granville Baird Capital Partners Limited
         5th Floor
         Walsingham House
         35 Seething Lane
         London EC3N 4AH

         Fax:                               +44 (0)20 7667 8481
         Attention:                         Simon Havers/Mike Fell

         In the case of the Sellers to:
         Armor Holdings, Inc.,
         1400 Marsh Landing Parkway
         Suite 112
         Jacksonville
         Florida 32250

         Fax:                               +1 904 741 5403
         Attention:                         Robert Schiller

                                       34
<PAGE>

         with copy to:
         Kane Kessler P.C.
         1350 Avenue of the Americas
         26th Floor
         New York,
         New York 10019

         Fax:                               +1 212 245 3009
         Attention:                         Robert L. Lawrence

         and shall be deemed to have been duly given or made as follows:

         (A)      if personally delivered, upon delivery at the address of the
                  relevant party;

         (B)      if sent by first class post, two Business Days after the date
                  of posting;

         (C)      if sent by air mail, five Business Days after the date of
                  posting; and

         (D)      if sent by fax, when despatched with confirmation of delivery;

         provided that if, in accordance with the above provisions, any such
         notice, demand or other communication would otherwise be deemed to be
         given or made outside 9.00 a.m. - 5.00 p.m. on a Business Day such
         notice, demand or other communication shall be deemed to be given or
         made at 9.00 a.m. on the next Business Day.

21.2     A party may notify the other party to this agreement of a change to its
         name, relevant addressee, address or fax number for the purposes of
         clause 21.1 provided that such notification shall only be effective:

         (A)      on the date specified in the notification as the date on which
                  the change is to take place; or

         (B)      if no date is specified or the date specified is less than
                  five Business Days after the date on which notice is given,
                  the date falling five Business Days after notice of any such
                  change has been given.

22.      COUNTERPARTS

         This agreement may be executed in any number of counterparts which
         together shall constitute one agreement. Any party may enter into this
         agreement by executing a counterpart and this agreement shall not take
         effect until it has been executed by all parties.

23.      COMPLIANCE OBLIGATION

         Armor undertakes to the Buyer for itself and on behalf of the UK Buyer
         and the US Buyer that Armor will procure compliance by each of the
         Sellers with their respective obligations under this agreement.

24.      GOVERNING LAW AND JURISDICTION

24.1     This agreement (and any dispute, controversy, proceedings or claim of
         whatever nature arising out of or in any way relating to this agreement
         or its formation) shall be governed by and construed in accordance with
         English law.

24.2     The parties irrevocably agree that the Courts of England are to have
         non-exclusive jurisdiction to settle any dispute which may arise out of
         or in connection with this agreement

                                       35
<PAGE>

         and the documents to be entered into pursuant to it. Each of the
         parties irrevocably submits to the jurisdiction of such courts and
         waives any objection to proceedings in any such court on the ground of
         venue or on the ground that proceedings have been brought in an
         inconvenient forum.

24.3     Each party irrevocably agrees that a final and non-appealable judgment
         of a court of competent jurisdiction in connection with a dispute over
         this agreement and/or any documents to be entered into pursuant to it
         shall be conclusive and binding upon it and may be enforced against it
         in the courts of any other jurisdiction.

IN WITNESS whereof this agreement has been executed by each of the parties on
the date first above written.

                                       36
<PAGE>

SIGNED for and on behalf of                )         /s/ Warren B Kanders
ARMOR HOLDINGS INC.                        )         Warren B Kanders
                                                     Chief Executive Officer

SIGNED for on behalf of                    )
ARMOR GROUP LIMITED                        )
PARTNERSHIP                                )
acting through its general partner         )         /s/ Todd Smith
ARMOR HOLDINGS GP, LLC                     )         Todd Smith
                                                     Manager

SIGNED for and on behalf of                )
ARMOR HOLDINGS MOBILE                      )         /s/ Todd Smith
SECURITY LLC                               )         Todd Smith
                                                     Secretary

SIGNED for and on behalf of                )         /s/ Todd Smith
ARMOR GROUP SERVICES LLC                   )         Todd Smith
                                                     Manager

SIGNED for and on behalf of                )
ARMORGROUP INTERNATIONAL                   )         /s/ David Seaton
LIMITED                                    )         David Seaton<PAGE>

               DATED             26 NOVEMBER                  2003
               ---------------------------------------------------

               (1) ARMOR HOLDINGS INC.

               (2) ARMORGROUP INTERNATIONAL INC.

               (3) ARMORGROUP (UK) LIMITED

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

                                    TAX DEED

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

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                                TABLE OF CONTENTS

                                                                       PAGE

1.       INTERPRETATION....................................................1

2.       INDEMNITY.........................................................3

3.       TIMING............................................................6

4.       RIGHT TO REIMBURSEMENTS AND CREDITS...............................6

5.       REFUNDS...........................................................7

6.       RESISTANCE OF CLAIMS..............................................7

7.       TAX RETURNS.......................................................8

8.       COUNTER INDEMNITY.................................................8

9.       GROSS UP.........................................................10

10.      MISCELLANEOUS....................................................10

         Schedule.........................................................12

                                       -i-

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DATED 26 November 2003

PARTIES

(1)      ARMOR HOLDINGS INC. a corporation incorporated under the laws of the
         State of Delaware whose principal office is at 1400 Marsh Landing
         Parkway, Suite 112, Jacksonville, FL 32250 U.S.A. (the "COVENANTOR");

(2)      ARMORGROUP INTERNATIONAL INC. a corporation organised under the laws of
         the State of Delaware, USA with Tax ID Number (EIN) 43-2034282 (the "US
         BUYER" which expression shall include its successors and assigns) ; and

(3)      ARMORGROUP (UK) LIMITED, a private limited company incorporated in
         England and Wales with the company number 4969936 whose registered
         office is at Brierly Place, New London Road, Chelmsford, Essex, CM2 0AP
         (the "UK BUYER").

RECITAL

This deed is entered into pursuant to the provisions of an agreement (the "SALE
AGREEMENT") made on the date hereof pursuant to which the Buyer and its
affiliates have agreed to purchase all of the issued shares in the capital of
each of the companies details of which are set out in schedule 1 and 2 of the
Sale Agreement.

NOW THIS DEED WITNESSES AS FOLLOWS:

1.       INTERPRETATION

1.1      Subject to clause 1.2 and unless the context otherwise indicates,
         words, expressions and abbreviations defined in the Sale Agreement
         shall have the same meanings in this deed and any provisions of the
         Sale Agreement concerning matters of construction or interpretation
         shall mutatis mutandis apply to this deed.

1.2      The following words, expressions and abbreviations used in this deed
         shall, unless the context otherwise requires, have the following
         meanings:

         "ACTUAL TAX LIABILITY" means any liability of the Company to make an
         actual payment of Tax or in respect of Tax (including in relation to a
         group payment arrangement entered into in accordance with section 36 of
         the Finance Act 1998), in which case the amount of the Actual Tax
         Liability shall be the amount of the actual payment;

         "BUYER'S RELIEF" means any Relief to the extent that the same arises in
         respect of periods after the Completion Date;

         "CLAIM FOR TAX" means:

         (a)      any claim, assessment, demand, notice, determination or other
                  document issued or action taken by or on behalf of any Tax
                  Authority or any other person by virtue of which the Company
                  is or may have a Tax Liability; and/or

         (b)      any self-assessment made by the Company in respect of any Tax
                  Liability which it considers that it is or may become liable
                  to pay;

         "COMPANY" means each and all of the companies listed in schedules 1 and
         2 of the Sale Agreement;

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         "COVENANTOR'S GROUP" has the meaning ascribed to the "Seller's Group"
         in the Sale Agreement;

         "DEEMED TAX LIABILITY" means:

         (a)      the utilisation or set-off of a Buyer's Relief available to
                  the Company against any Actual Tax Liability or against any
                  income, profits or gains where, but for such setting off, the
                  US Buyer would have been entitled to make a claim under this
                  deed, in which case the amount of the Deemed Tax Liability
                  shall be equal to the amount which would have been payable in
                  the absence of that Buyer's Relief; or

         (b)      any liability to make any payment for Group Relief to the
                  extent that the surrender of such Group Relief for no payment
                  has been reflected in the net assets of the Company as shown
                  by the Accounts, in which case the amount of the Deemed Tax
                  Liability shall be the amount of such liability;

         "GROUP RELIEF" means any of the following:

         (a)      relief surrendered or claimed pursuant to Chapter IV Part X of
                  the Taxes Act 1988;

         (b)      advance corporation tax surrendered or claimed pursuant to
                  section 240 of the Taxes Act 1988;

         (c)      a tax refund relating to an accounting period as defined by
                  section 102(3) of the Finance Act 1989 in respect of which a
                  notice has been given pursuant to section 102(2) of the
                  Finance Act 1989;

         or, in each case, any foreign equivalent

         "INCOME, PROFITS OR GAINS" includes any other measure by reference to
         which Tax is computed;

         "RELEVANT EVENT" means every event, act, omission, or transaction done
         or omitted to be done by the Covenantor or the Company or which in any
         way concerns or affects the Company whether or not done or omitted to
         be done by the Company or the Covenantor and including, for the
         avoidance of doubt, Completion;

         "RELIEF" means any allowance, credit, exemption, deduction, set-off or
         relief from or in computing Tax or any right to the repayment of Tax;

         "TAX AUTHORITY" means any taxing or other authority (whether within or
         outside the United Kingdom) competent or authorised to impose any Tax;

         "TAX LIABILITY" means either an Actual Tax Liability or a Deemed Tax
         Liability;

         "TAX RETURNS" means all computations and returns relating to Tax
         matters (and correspondence and documentation relating thereto);

         "TAXATION STATUTES" means all statutes, statutory instruments, decrees,
         orders, enactments, laws, directives and regulations, whether domestic
         or foreign, providing for or imposing any Tax;

         "TAX" or "TAX" means any tax, and any duty, levy, impost or charge in
         the nature of tax, whether domestic or foreign, and, except insofar as
         the same is attributable to the

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         unreasonable delay or default of the Buyer's Group or the Company after
         Completion, any penalty or interest connected therewith; and

         "TAXES ACT 1988" means the Income and Corporation Taxes Act 1988

1.3      For the purposes of this deed, and in particular for determining to
         what extent any liability for Tax arises in respect of or by reference
         to any income, profits or gains earned, accrued or received on or
         before Completion or otherwise relates to the period ending on the date
         of Completion, the date of Completion shall be deemed to be an actual
         accounting date of the Company for the purposes of section 12 of the
         Taxes Act 1988 (or its equivalent in any other jurisdiction) and
         without prejudice to the generality of the foregoing:

         (A)      any Relief which would on that basis arise after the date of
                  Completion shall be deemed for the purposes of this deed to be
                  a Relief which arises in respect of a period after Completion
                  or in respect of any Relevant Event occurring after
                  Completion;

         (B)      any income, profits or gains which would on that basis accrue
                  after the date of Completion shall be deemed for the purposes
                  of this deed to be income, profits or gains earned, accrued or
                  received after Completion;

         (C)      any Relief which would on that basis arise on or before the
                  date of Completion shall be deemed for the purposes of this
                  deed to be a Relief which arises in respect of a period on or
                  before Completion or in respect of any Relevant Event
                  occurring on or before Completion; and

         (D)      any income, profits or gains which would on that basis accrue
                  on or before the date of Completion shall be deemed for the
                  purposes of this deed to be income, profits or gains earned,
                  accrued or received on or before Completion;

2.       INDEMNITY

2.1      Subject to clause 2.3, the Covenantor hereby covenants with the US
         Buyer to pay from time to time to the US Buyer an amount equal to:

         (A)      any Actual Tax Liability of the Company which arises:

                  (1)      as a consequence of a Relevant Event occurring or
                           having been entered into on or before Completion
                           (including as a consequence of the combined effect of
                           two or more Relevant Events one or more of which
                           shall have taken place in the ordinary course of the
                           Company's business before Completion); or

                  (2)      in respect of any income, profits or gains earned,
                           accrued or received on or before Completion;

         (B)      any Deemed Tax Liability;

         (C)      any Actual Tax Liability (arising by reference to income,
                  profits or gains of the Company arising on or before
                  Completion) for which any Company becomes liable by virtue of
                  the relationship between that Company and the Covenantor or
                  any member of the Covenantor's Group at any time on or before
                  Completion and for which the Company becomes liable as a
                  result of the failure by the Covenantor or any member of the
                  Covenantor's Group to discharge the same;

         (D)      any Tax Liability which arises in relation to the
                  reorganisation described in schedule 8 of the Sale Agreement;

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         (E)      any Tax Liability comprising a liability of the Company
                  arising on or before Completion to make any payment on account
                  of Tax (including any liability to make any prepayment,
                  deposit or like amount) due or payable under the Federal or
                  State laws of the United States of America;

         (F)      any Tax Liability which arises as a consequence of a Relevant
                  Event occurring or having been entered into on or before
                  Completion or in respect of any income, profits or gains
                  earned, accrued or received on or before Completion under
                  Russian law or regulations in relation to the technology use
                  agreement dated 27 November 2000 and entered into between (1)
                  Armor Group Limited Partnership and (2) OOO DSL Eurasia;

         (G)      any Tax Liability which arises as a result of the Seller
                  waiving (whether before, on or after Completion) any
                  Inter-Group Indebtedness; or

         (H)      any costs and expenses reasonably and properly incurred or
                  payable in connection with any Tax Liability which is the
                  subject of a successful claim under this deed.

2.2      The covenant contained in clause 2.1 shall not apply to any Tax
         Liability to the extent that:

         (A)      it arises in the ordinary course of business of the Company
                  since the Accounts Date or as a result of acquiring and
                  disposing of capital assets since the Accounts Date (save as
                  part of the reorganisation described in schedule 8 of the Sale
                  Agreement);

         (B)      it has been paid on or before Completion or that specific,
                  identified provision or reserve for the liability to which the
                  same relates has been made in the Accounts;

         (C)      it shall have arisen in consequence of any act, omission or
                  transaction of the Company and/or the Buyer's Group after
                  Completion otherwise than in the ordinary course of the
                  business of the Company or in accordance with any contractual
                  arrangement entered into by the Company prior to Completion
                  and which in all cases, any member of the Buyer's Group knew,
                  or ought to have known would give rise to the relevant Tax
                  Liability;

         (D)      it arises as a result of or by reference to income, profits or
                  gains actually earned or received by the Company on or before
                  the Accounts Date and not reflected in the Accounts but
                  provided that such income, profits, or gains not reflected in
                  the accounts is realised in the Company at or after Completion
                  in cash or assets readily convertible into cash; (E) it would
                  not have arisen or is increased as a result of any failure by
                  the Company or the UK Buyer or the US Buyer to comply with its
                  obligations under this deed;

         (F)      it would not have arisen but for the passing of or any change
                  in, after the date of Completion, any law, regulation,
                  published interpretation of the law or published
                  administrative practice of any government, governmental
                  department, agency or regulatory body or an increase in the
                  rate of Tax or any imposition of Tax not actually or
                  prospectively in force at the date of the Sale Agreement or
                  any withdrawal of any published extra-statutory concession
                  after such date;

         (G)      it would not have arisen but for:

                  (1)      any claim, election, surrender or disclaimer made, or
                           notice or consent given, or any other thing done
                           after the date of Completion (other than one the
                           making, giving or doing of which was taken into
                           account in computing any

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                           provision or reserve for Tax in the Accounts) under
                           or in connection with the provisions of any Tax
                           statutes by the Company or any member of the Buyer's
                           Group; or

                  (2)      the failure or omission by the Company to make any
                           claim, election, surrender or disclaimer, or give any
                           notice or consent or do any other thing the making,
                           giving or doing of which was taken into account in
                           computing any provision or reserve for Tax in the
                           Accounts and full details of which were notified to
                           the UK Buyer or the US Buyer in writing at least 10
                           Business Days before the expiry of any time limit for
                           making such claim, election, surrender or disclaimer;

         (H)      it would not have arisen but for some act, omission,
                  transaction or arrangement carried out at the written request
                  or with the written approval of the UK Buyer or US Buyer in
                  either case prior to Completion or which was expressly
                  authorised in writing by the Sale Agreement (save that nothing
                  in this clause 2.2(H) shall exclude clause 2.1 applying to any
                  Tax Liability arising in relation to the reorganisation
                  described in schedule 8 of the Sale Agreement);

         (I)      any Relief (other than a Buyer's Relief but including the
                  surrender to the Company of any Reliefs or losses by the
                  Covenantor or any member of the Covenantor's Group at no cost
                  to the Company where such surrender was not assumed or
                  provided for in the preparation of the Accounts) is available
                  to the Company to set against or otherwise mitigate the Tax
                  Liability in question or would be available on the making of
                  an appropriate claim provided that this clause 2.2(I) shall
                  not apply in respect of claims made under clause 2.1(G) of
                  this deed up to a limit of $500,000 less any amounts
                  consisting of a Deemed Tax Liability which relate to the
                  utilisation or set-off of a Buyers Relief against any Actual
                  Tax Liability or against any income, profits or gains where,
                  but for such setting off, the US Buyer would have been
                  entitled to make a claim under clause 2.1(G);

         (J)      it would not have arisen but for a cessation of or any change
                  in the nature or conduct of any trade carried on by the
                  Company being a cessation or change occurring on or after
                  Completion;

         (K)      it arises as a result of any change after Completion in any
                  accounting policy (including the length of any accounting
                  period for Tax purposes), any Tax or accounting basis or
                  practice of the Company save where such change was required to
                  comply with generally accepted accounting principles;

         (L)      it arises as a result of the Company ceasing on or after
                  Completion to be eligible either for the corporation tax
                  starting rate or the small companies rate of Tax (as the case
                  may be) or the equivalent in any jurisdiction;

         (M)      an amount in respect of such Tax Liability has been recovered
                  under the Warranties or otherwise under the Sale Agreement or
                  this deed (or in either case would have been so recovered but
                  for a threshold or de minimis provision limiting liability) or
                  the Covenantor's Group has made payment in respect of such Tax
                  Liability pursuant to sections 767A and 767AA of the Taxes Act
                  1988 or any other provision in the United Kingdom or elsewhere
                  imposing liability on the Covenantor or any member of the
                  Covenantor's Group for Tax primarily chargeable against the
                  Company;

         (N)      the liability of the Covenantor in respect thereof is limited
                  or restricted pursuant to the provisions of schedule 4
                  (Seller's Protection) to the Sale Agreement;

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         (O)      it is a liability arising in relation to the payment of
                  bonuses (whether by way of release from an obligation to pay
                  any debt or otherwise) as contemplated in the Schedule to this
                  deed and in the amounts listed in the column of that Schedule
                  headed "Total Cash Received"; or

         (P)      it is a liability arising on the grant or exercise or
                  otherwise in relation to or arising in respect of any options
                  granted under the Armor Holdings Inc. 1999 Stock Incentive
                  Plan and the Armor Holdings Inc. 2002 Stock Incentive Plan.

2.3      Any payment made under this deed between the parties (including in
         particular any payments made pursuant to clause 2.1 hereof by the
         Covenantor to the US Buyer) shall be treated so far as possible as an
         adjustment to the consideration paid by the US Buyer or its affiliates
         under the Sale Agreement for the shares of the Company in question.

3.       TIMING

         Where the Covenantor becomes liable to make any payment pursuant to
         clause 2, the due date for the making of that payment shall be the
         later of seven days after the date of demand therefor and:

         (A)      insofar as the claim relates to an Actual Tax Liability but
                  subject to clause 3(E) of this deed, three business days
                  before the last day on which a payment of that Tax may be made
                  by the Company without incurring any liability to interest
                  and/or penalties;

         (B)      insofar as the claim arises in respect of a Deemed Tax
                  Liability which relates to the utilisation or set-off of a
                  Buyer's Relief against any Actual Tax Liability but subject to
                  clause 3(E) of this deed, three business days before the last
                  date on which the Company would, but for such utilisation or
                  set-off have been liable to pay such Actual Tax Liability to
                  avoid any charge to interest/penalties;

         (C)      insofar as the claim arises in respect of a Deemed Tax
                  Liability which relates to any liability of the Company to
                  make any payment for Group Relief, three business days before
                  the day on which the Company is liable to pay such amount;

         (D)      insofar as the claim arises pursuant to clause 2.1(H), the day
                  on which the costs and expenses fall due for payment; and

         (E)      insofar as the claim arises in respect of the first $500,000
                  of either (1) claims made under clause 2.1(G) of this deed or
                  (2) claims consisting of a Deemed Tax Liability which relate
                  to the utilisation or set-off of a Buyer's Relief against any
                  Actual Tax Liability or against any income, profits or gains
                  where, but for such utilisation or setting off, the US Buyer
                  would have been entitled to make a claim under clause 2.1(G)
                  (the "RELEVANT CLAIMS") and to the extent there is a Relief
                  available or a Relief would be available on the making of an
                  appropriate claim (no matter in which Group Company and
                  including by way of group relief and carry back of losses and
                  including any Buyer's Relief which has been utilised or
                  set-off in establishing the Relevant Claim) to reduce or
                  extinguish such liability arising or to set-off against
                  income, profits or gains, the Relevant Claims shall fall due
                  for payment three business days before the last day on which
                  the Company becomes (and to the extent only that it becomes)
                  after the date hereof liable to make an actual payment of Tax
                  (or a payment on account of Tax) to avoid incurring any
                  liability to interest and/ or penalties.

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4.       RIGHT TO REIMBURSEMENTS AND CREDITS

4.1      If any member of the Buyer's Group or the Company is or becomes
         entitled to recover from some other person any amount as a result of or
         by reference to any Tax Liability which is likely to result or has
         resulted in a payment by the Covenantor to the US Buyer under this
         deed, then the UK Buyer or the US Buyer shall promptly notify the
         Covenantor of the said entitlement and, if so required by the
         Covenantor and if the Covenantor undertakes to pay and provides
         satisfactory security for all reasonable costs and expenses properly
         incurred by the UK Buyer or the US Buyer and the Company, shall and
         shall procure that the Company shall enforce that recovery (keeping the
         Covenantor fully informed of progress) and shall apply the same in
         accordance with clause 4.2.

4.2      If any member of the Buyer's Group or the Company receives a recovery
         as mentioned in clause 4.1 or a Relief as a result of a Tax Liability
         which gives rise to a claim by the US Buyer under the terms of this
         deed then (and subject to the prior payment of the relevant costs and
         expenses by the Covenantor):

         (A)      where the Covenantor has previously paid any amount in respect
                  of such Tax Liability under this deed, the US Buyer shall
                  promptly pay to the Covenantor an amount equal to so much of
                  the recovery or Relief received (less any Tax paid by the
                  recipient in respect thereof) as does not exceed the amount
                  which the Covenantor has previously paid under this deed
                  (together with so much of any interest or repayment supplement
                  paid to the recipient of the recovery or Relief or benefit in
                  respect thereof as corresponds to the proportion of the
                  recovery or Relief or benefit accounted for under this
                  clause); and

         (B)      where the Covenantor has not yet paid any amount in respect of
                  such Tax Liability, the amount of such recovery, Relief (less
                  any Tax paid by the recipient in respect thereof, but together
                  with any interest or repayment supplement received) shall be
                  offset against any subsequent payment which the Covenantor
                  would otherwise have been liable to make.

4.3      To the extent the sum recovered or Relief received (less any Tax paid
         by the recipient in respect thereof, but together with any interest or
         repayment supplement received) exceeds the amount which the Covenantor
         has previously paid under this deed or the amount of any subsequent
         payment which would otherwise have been made in respect of that Tax
         Liability, then such excess shall be carried forward and set off
         against any future claims made against the Covenantor under this deed.

5.       REFUNDS

5.1      The UK Buyer or the US Buyer shall promptly notify the Covenantor of
         any repayment or right to repayment of Tax which the Company is or
         becomes entitled to or receives in respect of a Relevant Event
         occurring or period prior to Completion, where or to the extent that
         such right or repayment was not included in the Accounts as an asset (a
         "REFUND").

5.2      Any Refund obtained (less any reasonable costs of obtaining it) shall
         be promptly paid by the US Buyer or the UK Buyer to the Covenantor
         where the amount of such Refund exceeds $10,000.

6.       RESISTANCE OF CLAIMS

6.1      If the Buyer's Group or the Company becomes aware of any Claim for Tax
         which may result in the US Buyer having a claim against the Covenantor
         under this deed (or which would so result in any such case but for the
         provisions of paragraphs 2 or 3 of schedule 4 to the Sale

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         Agreement), the UK Buyer or the US Buyer shall give notice to the
         Covenantor in the manner provided by the Sale Agreement as soon as is
         reasonably practicable and in any event at least 21 days prior to the
         expiry of any time limit in which an appeal against the Claim for Tax
         has to be made.

6.2      The UK Buyer and the US Buyer shall, and shall procure that the Company
         shall keep the Covenantor informed of all material matters pertaining
         to the dispute, including providing the Covenantor with copies of all
         written communications pertaining to the dispute and acting in good
         faith take such action and give such information and assistance in
         connection with the affairs of the Company as the Covenantor may
         reasonably request by written notice for the purpose of avoiding,
         resisting, appealing, or compromising a Claim for Tax or paying an
         amount in respect of the Tax Liability provided that the UK Buyer, the
         US Buyer and the Company shall not be obliged to comply with any
         request of the Covenantor which involves contesting any assessment for
         tax before any tribunal, court or other appellate body unless they have
         been advised in writing by leading Tax counsel instructed by agreement
         between the UK Buyer, the US Buyer and the Covenantor at the expense of
         the Covenantor that an appeal against the assessment will, on the
         balance of probabilities, be successful.

6.3      Nothing in this clause 6 shall oblige any member of the Buyer's Group
         to supply any information or assistance to the extent such is
         prohibited by law or to do or refrain from doing anything which is
         unlawful.

6.4      The UK Buyer and the US Buyer shall procure that the Claim for Tax is
         not settled or otherwise compromised without the Covenantor's prior
         written consent, such consent not to be unreasonably withheld or
         delayed.

6.5      The action which the Covenantor may request under clause 6.2 shall
         include (without limitation but subject to the provisions of the clause
         6.2) the Company applying to postpone (so far as legally possible ) the
         payment of any Tax but shall not include allowing the Covenantor to
         take on or take over the conduct of any proceedings arising in
         connection with the Claim for Tax in question.

7.       TAX RETURNS

7.1      The UK Buyer and the US Buyer or their duly authorised agents shall be
         responsible for and have the conduct of preparing, submitting and
         agreeing the Tax Returns for all accounting periods commencing before
         Completion takes place provided that each such Tax Return is submitted
         in draft form to the Covenantor or its duly authorised agent for
         comment at least 40 Business Days before the same is due to be sent to
         the relevant Tax Authority. The Covenantor or its agent shall comment
         within 20 Business Days of such submission and if the UK Buyer or the
         US Buyer has not received comments within that period, the Covenantor
         or its agents shall be deemed to have approved such draft computations
         and documentation. If the Covenantor or its agents have any comments or
         suggestions, the UK Buyer or the US Buyer or their agents shall not
         unreasonably refuse to adopt such comments or suggestions provided
         always that nothing herein shall oblige the UK Buyer or the US Buyer to
         submit any computation or other document unless the UK Buyer or the US
         Buyer acting reasonably is satisfied that the same is accurate and
         complete in all material respects. The Covenantor and the UK Buyer and
         the US Buyer shall respectively afford (or procure to be afforded) to
         the other or its duly authorised agents such information and assistance
         as may reasonably be required to prepare, submit and agree such Tax
         Return.

7.2      The UK Buyer and the US Buyer shall procure that no Claim for Tax, Tax
         Liability, action or issue in respect of which the Covenantor could be
         required to make a payment under this deed is settled or otherwise
         compromised without the Covenantor's prior written consent, such
         consent not to be unreasonably withheld, and the UK Buyer and the US
         Buyer shall procure

<PAGE>

         that the Company and its advisers do not submit any correspondence or
         return or send any other document to any Tax Authority in circumstances
         where the UK Buyer or the US Buyer or any such person is aware or could
         reasonably be expected to be aware that the effect of submitting such
         correspondence or return or sending such document would or could be to
         put such Tax Authority on notice of any matter which could give rise
         to, or could increase, a claim under this deed without first affording
         the Covenantor a reasonable opportunity to comment thereon and without
         taking account of such comments so far as it is reasonable to do so.

7.3      Nothing in this clause 7 shall oblige any member of the Buyer's Group
         to supply any information or assistance to the extent such is
         prohibited by law or to do or refrain from doing anything which is
         unlawful.

7.4      The costs of preparation, submission and agreement of the Tax Returns
         referred to in this clause 7.1 shall be borne as follows:

         (A)      as to the Tax Returns for all accounting periods ended on or
                  before 31 December 2001, by the Covenantor but only to the
                  extent such costs are reasonable; and

         (B)      as to all other Tax Returns by the Company.

8.       COUNTER INDEMNITY

8.1      The US Buyer hereby covenants with the Covenantor to pay to the
         Covenantor by way of adjustment to the consideration for the sale of
         the Shares, an amount equal to any of the following:

         (A)      any liability for Tax for which the Covenantor or any other
                  person falling within section 767A(2) or 767AA(4) of the Taxes
                  Act 1988 becomes liable by virtue of the operation of sections
                  767A, 767AA and 767B of the Taxes Act 1988 in circumstances
                  where the taxpayer company (as referred to in section 767A(1))
                  and/or the transferred company (as referred to in section
                  767AA(1)) is the Company;

         (B)      any liability for Tax (arising by reference to income, profits
                  or gains of the Company arising after Completion) for which
                  any member of the Covenantor's Group becomes liable by virtue
                  of the relationship between that member of the Covenantor's
                  Group and the Company at any time on or before Completion;

         (C)      any liability or increased liability to Tax of any member of
                  the Covenantor's Group which arises as a consequence of or by
                  reference to any of the following occurring or being deemed to
                  occur after Completion:

                  (1)      the disposal by the Company of any asset or of any
                           interest in or right over any asset;

                  (2)      the Company ceasing to be resident in the United
                           Kingdom for the purposes of any Tax;

                  (3)      the effecting by the Company of any such payment or
                           transfer of assets as constitutes the receipt by
                           another person of an abnormal amount by way of
                           dividend (as defined in section 709 of the Taxes Act
                           1988);

         (D)      any liability or increased liability to Tax of the Covenantor
                  or any member of the Covenantor's Group which arises as a
                  result of or by reference to any reduction or disallowance of
                  Group Relief that would otherwise have been available to the

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                  Covenantor or the relevant member of the Covenantor's Group
                  where and to the extent that such reduction or disallowance
                  occurs as a result of:

                  (1)      any total or partial withdrawal effected by the
                           Company after Completion of any surrender of Group
                           Relief that was submitted by the Company to the
                           Inland Revenue or other Tax Authority on or before
                           Completion in respect of any accounting period ended
                           on or before Completion; or

                  (2)      any total or partial disclaimer made by the Company
                           after Completion of any capital allowances available
                           to the Company in respect of any accounting period
                           ended on or before Completion,

                  save where any such withdrawal or disclaimer is made at the
                  express written request of the Covenantor; and

         (E)      any other liability to Tax for which the Covenantor or any
                  member of the Covenantor's Group becomes liable as a result of
                  the failure by the Company or any member of the Buyer's Group
                  to discharge the same.

8.2      The covenant contained in clause 8.1 shall:

         (A)      extend to all costs reasonably and properly incurred by the
                  Covenantor or such other person in connection with such
                  liability to Tax under clause 8.1;

         (B)      not apply to any liability to Tax to the extent that the US
                  Buyer could claim payment in respect of it under clause 2; and

         (C)      apply mutatis mutandis to any liability to Tax for which the
                  Covenantor or any other person is liable as a result of the
                  application in any jurisdiction other than the United Kingdom
                  of any rule of law or legislation equivalent to that mentioned
                  in clause 8.1(A) and 8.1(C).

8.3      Clauses 3 and 6 of this deed (timing and resistance of claims) shall
         apply to the covenants contained in this clause 8 as they apply to the
         covenants contained in clause 2, replacing references to the Covenantor
         by the US Buyer (and vice versa) and making any other necessary
         modifications.

9.       OVERPROVISIONS

9.1      The Covenantor may require at any time on or before 31 December 2004
         the auditors for the time being of the Company to certify (at the
         Covenator's expense) the existence and amount of any overprovision and
         the UK Buyer and the US Buyer shall provide, or procure that the
         Company provides, any information or assistance reasonably required for
         the purpose of production by the auditors of a certificate to that
         effect.

9.2      If any liability contingency or provision in the Accounts has proved to
         be an overprovision then the amount of such overprovision shall be
         dealt with in accordance with clause 9.3.

9.3      Where it is provided under clause 9.2 that any amount is to be dealt
         with in accordance with this clause 9.3:

         (A)      the amount of the overprovision shall first be set against any
                  payment then due from the Covenantor under this deed in
                  respect of the Company, the Accounts of which have given rise
                  to an overprovision (the "RELEVANT COMPANY")

<PAGE>

         (B)      to the extent there is an excess, a refund shall be made to
                  the Covenantor of any previous payment or payments made by the
                  Covenantor under this deed in respect of the Relevant Company
                  (and not previously refunded) up to the amount of the excess;
                  and

         (C)      to the extent that the excess referred to in clause 9.3(B) is
                  not exhausted under that clause, the remainder of that excess
                  shall be carried forward and set against any future payment or
                  payments which become due from the Covenantor to the US Buyer
                  under this deed in respect of the Relevant Company.

9.4      For the purposes of this clause an overprovision exists if:

         (A)      any liability in respect of Tax (including any liability in
                  respect of deferred Tax) has been overstated in the Accounts,
                  or such liability has been discharged or satisfied below the
                  amount attributed thereto in the Accounts, or such liability
                  has been discharged or satisfied below the amount attributed
                  thereto in the Accounts; or

         (B)      any contingency or provision in respect of Tax in the Accounts
                  proves to be overstated.

10.      MISCELLANEOUS

10.1     Claims by the US Buyer under clause 2 of this deed shall be wholly
         barred and unenforceable unless full written particulars of the claim
         shall have been given to the Covenantor by not later than 5 p.m. on the
         seventh anniversary of the date hereof.

10.2     In determining the amount of any recovery, the amount of any Relief
         received by any company or person for the purposes of this deed, any
         party hereto shall be entitled to require that the auditors of the
         company or person in question (or if the auditors are unwilling or
         unable to act such other firm of chartered accountants as may be agreed
         between the parties or may, in default of agreement, be appointed at
         the request (and expense) of either party by the President or next
         available officer of the Institute of Chartered Accountants) shall be
         instructed to determine the amount in question or whether any earlier
         determination in respect thereof remains correct in the light of all
         relevant circumstances including circumstances which have only become
         known since such earlier determination and the fees of such auditors or
         accountants shall be paid by such of the parties as the auditors or
         accountants may themselves determine as being fair and reasonable. Any
         determination made by the auditors or accountants shall be binding upon
         the parties who shall make such adjusting payments (if any) as may be
         required to reflect the same as soon as practicable thereafter.

10.3     The provisions of schedule 4 (Seller's Limitations on Liabilities) and
         of clauses 12 (Assignment), 17 (Variations), 18 (Waiver/ Consents), 19
         (Invalidity), 21 (Notices), 22 (Counterparts), 24 (Governing Law and
         Jurisdiction) and any assignment of the Sale Agreement shall apply to
         this deed as if the same were incorporated herein mutatis mutandis.

<PAGE>

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

Signed as a deed by ARMOR                           )
HOLDINGS INC. acting by its                         )     /s/ Warren B. Kanders
authorised representative                           )         Warren B Kanders
                                                              Chief Executive
                                                              Officer

Signed as a deed by ARMOR GROUP                     )
INTERNATIONAL INC.                                  )     /s/ David Seaton
acting by its authorised representative             )         David Seaton

Signed as a deed by ARMOR                            )
GROUP (UK) LIMITED                                   )
acting by a director and its                         )    /s/ David Seaton
secretary/two directors                              )        David Seaton

                                                     Director

                                                     Secretary/Director

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