Allied Research Corporation

May 27, 1999

                           SUPPORT YOUR CURRENT BOARD!
                        VOTE THE WHITE PROXY CARD TODAY!

Dear Fellow Shareholders:

Let me begin by thanking the many institutional and individual shareholders that
have expressed  their support for your current Board of Directors and management
team during this blatant attempt by Zilkha Capital Partners L.P. to take control
of your  company.  Do not let Zilkha's  misstatements,  contradictions,  lack of
understanding  of Allied's  businesses or "we can do it better"  rhetoric divert
you from their real objective.  We believe Zilkha's motives are clear - they are
self  serving  and  detrimental  to other  shareholders.  This proxy fight is an
attempt by Zilkha to take control of your company  without  offering any benefit
to all shareholders.

                                DO NOT BE MISLED!

ZILKHA HAS ATTEMPTED TO DISTORT THE EXCELLENT  OPERATING RESULTS ACHIEVED BY OUR
MANAGEMENT  DURING  THE PAST FIVE  YEARS.  ALLIED  HAS AN  IMPRESSIVE  RECORD OF
OPERATING RESULTS.

o    During the period  from 1994 to 1998,  revenue has  increased  at an annual
     compounded  rate of 20%,  from  $69.8  million to $143.5  million,  and net
     earnings  have  improved  from a loss of $10.9  million to a profit of $9.1
     million.

o    In 1998,  Allied's  return  on  assets  of 11% and  return on equity of 21%
     exceeded  the  median  performance  of the  companies  in the S&P Small Cap
     Aerospace/Defense  Index  which  achieved  a 10%  return on assets  and 13%
     return on equity.

ALLIED IS  IMPLEMENTING  A  DIVERSIFICATION  STRATEGY  THAT HAS  POSITIONED  THE
COMPANY FOR PROFITABLE FUTURE GROWTH.

o    Mecar, our principal  operating  subsidiary,  has teamed with major defense
     contractors  on new weapons  systems  that we expect will  provide  steady,
     long-term revenues and profits.  Furthermore,  the company's BRI subsidiary
     has successfully diversified its revenue base into foreign markets.

o    Beginning in 1998, Allied engaged  investment bankers to pursue acquisition
     opportunities for its electronic security business in Europe and the United
     States.  The success of Allied's VSK Group,  which accounted for 35% of the
     company's 1998 pre-tax profit, supports management's decision to expand its
     electronic  security  business.  Allied  will  continue  to be patient  and
     prudent acquirers.

I am asking you to support your current  Board of Directors  and allow  existing
management  to continue to pursue the strategic  plan we have adopted,  which is
already showing positive results.

ZILKHA HAS POORLY MANAGED THEIR EXISTING COLT'S  MANUFACTURING  CO. BUSINESS AND
ADMITS THEY HAVE NO SPECIFIC PLAN TO MANAGE ALLIED.

o    Under  Zilkha  management,  Colt's  Manufacturing  Co.  provoked a customer
     boycott of Colt's products resulting in an apparent decline in revenues, as
     reported by The Wall Street Journal.

o    With  their  statement,  "...until  we  replace  the  Board and are able to
     analyze the company from the inside, it is impossible to develop...specific
     plans",  Zilkha  continues to demonstrate  little current  understanding of
     Allied's  business,  and has  therefore,  offered  no clear,  specific,  or
     credible  plan for the  management  of Allied's  business.





IF ZILKHA TAKES  CONTROL OF THE BOARD,  THEY WILL BE ABLE TO DISMANTLE  ALLIED'S
ANTI-TAKEOVER DEFENSES AND DEPRIVE YOU OF A FAIR PRICE FOR YOUR COMPANY.

o    A  Zilkha-nominated  Board of Directors  could  approve an  acquisition  of
     Allied at an inadequate  price and impose  impediments  to any other bidder
     interested in acquiring the company at a higher price.

o    Your  Board of  Directors  has the power to reject any  inadequate  bids to
     acquire Allied and to negotiate the highest and best bid for the company if
     and when a sale/merger is appropriate.

ZILKHA  HAS BEEN  REJECTED  BY A BELGIAN  GOVERNMENT  IN HIS  ATTEMPT TO ACQUIRE
ANOTHER BELGIAN DEFENSE CONTRACTOR.

o    Under  Zilkha's  ownership,  Colt's  recent  attempt to acquire  one of the
     world's main  suppliers  of small arms was  rejected by a regional  Belgian
     government.  Rather than let Zilkha take control, the government bought the
     company itself.

o    In contrast, Allied currently enjoys a very favorable relationship with the
     Belgian government that is essential to Mecar's continued success.

ANY DISTURBANCE OF ALLIED'S  RELATIONSHIPS WITH ITS FOREIGN CUSTOMERS WOULD HAVE
A MATERIAL ADVERSE EFFECT ON ALLIED'S BUSINESS.

o    Allied's  management team has spent years developing and building  personal
     relationships  with  customers,  many of which are  foreign  companies  and
     governmental  organizations  located principally in the Middle East, Europe
     and Southeast Asia.

o    Your management team is extremely  concerned that these relationships would
     suffer if the Board is replaced by the Zilkha nominees.

IF ZILKHA REDEPLOYS  ALLIED'S CASH AS THEY SUGGEST IN THEIR PROXY MATERIALS,  IT
COULD ADVERSELY IMPACT ALLIED'S CORE BUSINESS. ZILKHA SIMPLY DOES NOT UNDERSTAND
OUR BUSINESS.

o    The large and  profitable  orders  at Mecar  and BRI in recent  years  have
     required  cash deposits to assure our  customers,  suppliers and banks that
     they could perform as  contractually  required.  Our cash serves as part of
     the  collateral  necessary  for our  banks  to  assure  our  suppliers  and
     customers of timely payment and delivery.

o    We are expecting  orders to increase as a result of the recent  increase in
     oil prices.  We believe our existing cash and credit  facilities are at the
     appropriate  levels to finance  the growth of our core  business as well as
     support our acquisition program in the electronic security field.

LET'S SUMMARIZE ZILKHA'S TRACK RECORD.

o    Zilkha's poor  management of Colt's has resulted in an apparent  decline in
     revenues.

o    Zilkha's lack of  understanding of Allied has rendered them unable to offer
     a  clear,  specific,  or  credible  plan  for the  management  of  Allied's
     business.

o    Zilkha's  rejection  by a Belgian  government  as an  acquiror of a Belgian
     defense company may make them unwelcome owners of Belgian-based Mecar.

o    Zilkha's self serving,  unnecessary  and highly dilutive  convertible  note
     financing  proposal was  determined by your Board to be  detrimental to the
     interests of shareholders.

                    WOULD THE ELECTION OF THE ZILKHA NOMINEES
            REALLY BE IN THE BEST INTEREST OF ALLIED'S SHAREHOLDERS?




When you look at the issues, the choice is clear.  Support your current Board by
marking, signing and returning the WHITE PROXY CARD in the enclosed postage paid
envelope.  Time is running  short.  It is very  important  that you vote  today,
regardless of the number of shares you own.

Thank you for your continued support.


On behalf of your Board of Directors,

/s/ J. R. Sculley

J. R. Sculley,
Chairman and
Chief Executive Officer




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                                    IMPORTANT

Regardless  of the  number of shares of Allied  Research  you own,  your vote is
important.  Please vote FOR the Board's nominees by signing,  dating and mailing
the enclosed WHITE PROXY CARD.

Do not vote the opposition gold proxy card,  even to oppose their  nominees.  If
you have done so by  mistake  already  you may change  your vote by signing  and
returning  the  enclosed  WHITE PROXY CARD.  Only your  latest  dated,  properly
executed card will count.

If you own your shares in the name of a brokerage  firm, your shares will not be
voted unless you give your broker  specific  instructions.  So please sign, date
and return the enclosed WHITE PROXY CARD in the  postage-paid  envelope that has
been provided.

If you have any  questions as to how to vote your shares,  please call our proxy
solicitor:

                     Corporate Investor Communications, Inc.
                            Toll free: (877) 460-4348

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                MAKE THE RIGHT CHOICE - VOTE THE WHITE PROXY CARD