exv10w46



 







Exhibit 10.46




AGREEMENT AND PLAN OF MERGER




Among




GLOBALSECURE HOLDINGS, LTD.,

GLOBALSECURE MERGER SUB, INC.,

HAZTRAIN, INC.




and




JERRY L. SMITH, Ph.D.




and




HAZTRAIN, INC. EMPLOYEE STOCK OWNERSHIP PLAN




Dated as of December 15, 2003





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	RECITALS
	 	 	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE 1 MERGER
	 	 	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 1.1
	 	The Merger	 	 	1	 
	SECTION 1.2
	 	Articles of Merger	 	 	2	 
	SECTION 1.3
	 	Closing Effective Time of the Merger	 	 	2	 
	SECTION 1.4
	 	Directors	 	 	2	 
	SECTION 1.5
	 	Officers	 	 	2	 
	SECTION 1.6
	 	Conversion of Shares	 	 	2	 
	 
	 	 	 	 	 	 
	ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDER	 	 	5	 
	 
	 	 	 	 	 	 
	SECTION 2.1
	 	Organization and Qualification, Etc.; Capital Stock; Subsidiaries	 	 	5	 
	SECTION 2.2
	 	Authority Relative to Agreement	 	 	6	 
	SECTION 2.3
	 	No Breach; Consents	 	 	7	 
	SECTION 2.4
	 	No Material Adverse Change	 	 	7	 
	SECTION 2.5
	 	Title to Properties	 	 	7	 
	SECTION 2.6
	 	Tax Matters	 	 	7	 
	SECTION 2.7
	 	Contracts and Commitments	 	 	8	 
	SECTION 2.8
	 	Litigation, Etc	 	 	9	 
	SECTION 2.9
	 	Brokerage	 	 	9	 
	SECTION 2.10
	 	Insurance	 	 	10	 
	SECTION 2.11
	 	Compliance with Laws	 	 	10	 
	SECTION 2.12
	 	Employees	 	 	10	 
	SECTION 2.13
	 	Licenses and Permits	 	 	11	 
	SECTION 2.14
	 	Business Records; Bank Accounts	 	 	11	 
	SECTION 2.15
	 	Environmental Matters	 	 	11	 
	SECTION 2.16
	 	Financial Statements	 	 	12	 
	SECTION 2.17
	 	Accounts Receivable	 	 	12	 
	SECTION 2.18
	 	Absence of Undisclosed Liabilities	 	 	12	 
	SECTION 2.19
	 	Inventories	 	 	13	 
	SECTION 2.20
	 	Transactions with Certain Persons	 	 	13	 
	SECTION 2.21
	 	Absence of Certain Business Practices	 	 	13	 
	SECTION 2.22
	 	Operations	 	 	13	 
	SECTION 2.23
	 	Absence of Certain Developments	 	 	13	 
	SECTION 2.24
	 	ERISA	 	 	15	 
	SECTION 2.25
	 	Intellectual Property	 	 	16	 
	SECTION 2.26
	 	Debt	 	 	18	 
	SECTION 2.27
	 	Material Misstatements or Omissions	 	 	18	 






 









 






	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	SECTION 2.28
	 	Effective Date of Warranties, Representations and Covenants	 	 	18	 
	SECTION 2.29
	 	Investment Representations	 	 	18	 
	SECTION 2.30
	 	Resignations	 	 	19	 
	SECTION 2.31
	 	GlobalSecure’s Knowledge	 	 	19	 
	SECTION 2.32
	 	Disclosures	 	 	19	 
	SECTION 2.33
	 	U.S. Real Property Holding Corporation	 	 	19	 
	SECTION 2.34
	 	Business Activity Restriction	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF GLOBALSECURE	 	 	20	 
	 
	 	 	 	 	 	 
	SECTION 3.1
	 	Organization Etc	 	 	20	 
	SECTION 3.2
	 	Authority Relative to Agreement	 	 	20	 
	SECTION 3.3
	 	No Breach; Consents	 	 	20	 
	SECTION 3.4
	 	Litigation	 	 	21	 
	SECTION 3.5
	 	Brokerage	 	 	21	 
	SECTION 3.6
	 	Financial Statements	 	 	21	 
	SECTION 3.7
	 	Intellectual Property	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE 4 CLOSING CONDITIONS	 	 	21	 
	 
	 	 	 	 	 	 
	SECTION 4.1
	 	Closing Conditions Relating to GlobalSecure	 	 	21	 
	SECTION 4.2
	 	Closing Conditions Relating to the Company Shareholders	 	 	23	 
	 
	 	 	 	 	 	 
	ARTICLE 5 PRE-CLOSING AGREEMENTS	 	 	24	 
	 
	 	 	 	 	 	 
	SECTION 5.1
	 	Due Diligence	 	 	24	 
	SECTION 5.2
	 	Operation of Business	 	 	25	 
	SECTION 5.3
	 	Best Efforts	 	 	25	 
	SECTION 5.4
	 	Confidentiality	 	 	25	 
	SECTION 5.5
	 	Public Announcements	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE 6 POST-CLOSING AGREEMENTS
 	 	 	26	 
	 
	 	 	 	 	 	 
	SECTION 6.1
	 	Indemnification by the Shareholder and GlobalSecure	 	 	26	 
	SECTION 6.2
	 	Further Assurances	 	 	28	 
	SECTION 6.3
	 	Transfer	 	 	28	 
	SECTION 6.4
	 	Lock Up Agreements	 	 	29	 
	SECTION 6.5
	 	ESOP Provisions	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE 7 TERMINATION	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE 8 MISCELLANEOUS	 	 	30	 
	 
	 	 	 	 	 	 
	SECTION 8.1
	 	Survival	 	 	30	 
	SECTION 8.2
	 	Expenses	 	 	30	 
	SECTION 8.3
	 	Amendments and Waivers	 	 	31	 
	SECTION 8.4
	 	Notices	 	 	31	 






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	 	 	 	 	Page	 
	SECTION 8.5
	 	Assignment	 	 	32	 
	SECTION 8.6
	 	Severability	 	 	32	 
	SECTION 8.7
	 	Complete Agreement	 	 	32	 
	SECTION 8.8
	 	No Third-Party Beneficiaries	 	 	32	 
	SECTION 8.9
	 	Singular and Plural; Gender	 	 	32	 
	SECTION 8.10
	 	Governing Law	 	 	32	 
	SECTION 8.11
	 	Counterparts	 	 	33	 
	SECTION 8.12
	 	Schedules	 	 	33	 
	SECTION 8.13
	 	Headings	 	 	33	 
	SECTION 8.14
	 	Further Documents	 	 	33	 
	SECTION 8.15
	 	Arbitration	 	 	33	 






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EXHIBITS AND SECTIONS OF DISCLOSURE SCHEDULE




	 	 	 
	Annex A

	 	Allocation of Merger Consideration
	Exhibit A

	 	Form of Articles of Merger
	Exhibit B

	 	Disclosure Schedule
	Exhibit 1.6.3

	 	Form of First Promissory Note
	Exhibit 1.6.3.A

	 	Form of Second Promissory Note
	Exhibit 1.6.3.B

	 	Form of Security Agreement
	Section 1.6.8

	 	Exclusions to GAAP
	Section 2.3

	 	Exceptions to No Breach; Consents
	Section 2.7

	 	Contracts and Commitments
	Section 2.8

	 	Litigation, Etc.
	Section 2.10

	 	Insurance
	Section 2.12

	 	Employees
	Section 2.13

	 	Licenses and Permits
	Section 2.14

	 	Bank Accounts
	Exhibit 2.16

	 	Financial Statements
	Section 2.17

	 	Account Receivable Adjustments
	Section 2.18

	 	Liabilities
	Section 2.20

	 	Transactions with Certain Persons
	Section 2.21

	 	Certain Business Practices
	Section 2.22

	 	Operations
	Section 2.23

	 	Exceptions to Absence of Certain Developments
	Section 2.24

	 	ERISA
	Section 2.25

	 	Intellectual Property
	Exhibit 4.1.6.1

	 	General Release and Noncompetition Agreement
	Exhibit 4.1.6.2

	 	Employment Agreement
	Exhibit 4.1.6.4

	 	Opinion of Counsel for the Shareholder and the Company
	Exhibit 4.1.6.4.A

	 	Opinion of Counsel for the ESOP
	Exhibit 6.1.6.1

	 	Indemnity Escrow Agreement






-iv-









 





AGREEMENT AND PLAN OF MERGER




     THIS AGREEMENT AND PLAN OF MERGER (the “Agreement”) dated as of December 15, 2003 among
GLOBALSECURE HOLDINGS, LTD., a Delaware corporation (“GlobalSecure”); GLOBALSECURE MERGER SUB,
INC., a Maryland corporation (“GlobalSecure Sub”) and a wholly-owned subsidiary of GlobalSecure;
HAZTRAIN, INC., a Maryland corporation (the “Company”); and JERRY L. SMITH, Ph.D. (the
“Shareholder” or “Dr. Smith”) and the HAZTRAIN, INC. EMPLOYEE STOCK OWNERSHIP PLAN by its sole
trustee, Timothy J. Czysz (the “ESOP” and, collectively with the Shareholder, the Company
Shareholder”).



W I T N E S S E T H




     WHEREAS, the Company is engaged in the business of providing environmental health and safety
training and providing products and services to the hazardous materials management industry at
facilities located in White Plains, Maryland (the “Business”); and



     WHEREAS, the Shareholder is the owner of a majority of the issued and outstanding shares of
capital stock of the Company and, together with the ESOP, owns all of the issued and outstanding
shares of capital stock of the Company (the “Stock”); and



     WHEREAS, GlobalSecure and GlobalSecure Sub desire that GlobalSecure Sub merge with and into
the Company and, to realize the benefits thereof, the Company and the Shareholder also desire that
GlobalSecure Sub merge with and into the Company, upon the terms and subject to the conditions set
forth herein and in accordance with the Maryland General Corporation Law, and that the outstanding
shares of Common Stock, no par value per share, of the Company (“Company Common Stock”), excluding
any such shares held in the treasury of the Company, be converted upon such merger (the “Merger”)
into the right to receive cash and such number of shares of voting common stock, par value $0.001
per share, of GlobalSecure (“GlobalSecure Common Stock”) as is equal to the Merger Consideration
(GlobalSecure Sub and the Company being hereinafter sometimes referred to as the “Constituent
Corporations” and the Company being hereinafter sometimes referred to as the “Surviving
Corporation”);



     NOW, THEREFORE, in consideration of the premises, and of the mutual representations,
warranties, covenants, agreements and conditions hereinafter set forth, and in order to set forth
the terms and conditions of the Merger and the mode of carrying the same into effect, the parties
hereby agree as follows:



ARTICLE 1




MERGER




     SECTION 1.1 The Merger. At the Effective Time (as hereinafter defined), GlobalSecure
Sub shall be merged with and into the Company on the terms and conditions hereinafter set forth as
permitted by and in accordance with the Maryland General Corporation Law. Thereupon, the separate
existence of GlobalSecure Sub shall cease, and the Company, as the Surviving Corporation, shall continue to
exist under and be governed by the Maryland



 









 




General Corporation Law and its Articles of Incorporation and Bylaws as in effect at the Effective Time shall remain unchanged until further
amended in accordance with the provisions thereof and applicable law.




     SECTION 1.2 Articles of Merger. As soon as practicable following fulfillment or
waiver of the conditions specified in Article 4 hereof, and provided that this Agreement has not
been terminated or abandoned pursuant to Article 7 hereof, the Company and GlobalSecure Sub will
cause the Articles of Merger in substantially the form of Exhibit A attached hereto (the “Articles
of Merger”) to be executed and filed with the Maryland State Department of Assessments and Taxation
as provided in the Maryland General Corporation Law. The purpose of the Surviving Corporation
shall be to engage in any and all business activities in which a corporation is permitted to engage
in accordance with the Maryland General Corporation Law.



     SECTION 1.3 Closing Effective Time of the Merger.



          1.3.1 The closing of the Merger (the “Closing”) shall take place on December 18, 2003, or on
such other date as GlobalSecure and the Company may agree. The time and date on which Closing is
actually held is sometimes referred to herein as the “Closing Date”.




          1.3.2 The Merger shall become effective at 11:59 p.m. on the day of the filing of the Articles
of Merger with the Maryland State Department of Assessments and Taxation or at such other date or
time thereafter as the parties may agree. The date and time of such effectiveness is herein
sometimes referred to as the “Effective Time”.




     SECTION 1.4 Directors. From and after the Effective Time, the members of the Board of
Directors of the Surviving Corporation shall consist of the members of the Board of Directors of
GlobalSecure Sub (as constituted immediately prior to the Effective Time) until changed in
accordance with its Articles of Incorporation and Bylaws and applicable law.



     SECTION 1.5 Officers. From and after the Effective Time, the officers of the
Surviving Corporation shall consist of the officers of the Company (as constituted immediately
prior to the Effective Time) until changed in accordance with its Articles of Incorporation and
Bylaws and applicable law.



     SECTION 1.6 Conversion of Shares.



          1.6.1 Consideration. Upon the Effective Time, the shares of Company Common Stock
issued and outstanding immediately prior to the Effective Time (other than any shares of
Company Common Stock to be canceled pursuant to Section 1.6.2 and any Dissenting Shares (as
hereinafter defined)) shall, without any further action on the part of GlobalSecure or GlobalSecure
Sub, on the one hand, or the Company or its shareholders, on the other hand, be converted into the
right to receive such amount of consideration as shall equal such cash and such number of shares of
GlobalSecure Common Stock as is determined in accordance with the formula set forth in Section
1.6.3 below.




          1.6.2 Cancellation of Shares; Conversion of GlobalSecure Sub Common Stock. At the
Effective Time, (i) all shares of Company Common Stock owned by the Company or any direct or
indirect wholly-owned subsidiary of the Company immediately prior to the Effective




 - 2 -









 







Time shall be cancelled and extinguished without any conversion thereof and (ii) all shares of common stock of
GlobalSecure Sub shall be converted without further action into shares of common stock of the
Company.




          1.6.3 Conversion of Company Common Stock. At the Effective Time, the aggregate
outstanding shares of Company Common Stock shall be converted, in the aggregate, into (i) cash in
the amount of $1,348,906.80 (the “Cash Merger Consideration”); (ii) two promissory notes from
GlobalSecure in the aggregate original principal amount of $1,000,000, one of which notes will be
in the original principal amount of $250,000 in the form of Exhibit 1.6.3 attached hereto and
hereby made a part hereof (the “First Promissory Note”) and the second of which notes will be in
the original principal amount of $750,000 in the form of Exhibit 1.6.3.A attached hereto and hereby
made a part hereof (the “Second Promissory Note”) (the First Promissory Note and the Second
Promissory Note are collectively referred to as the “Promissory Notes”) (the “Promissory Note
Merger Consideration”) together with a security agreement from GlobalSecure in the form of Exhibit
1.6.3.B attached hereto and hereby made a part hereof (the “Security Agreement”); and (iii) 300,000
shares of GlobalSecure Common Stock (the “Common Stock Merger Consideration”). In addition, at
Closing, GlobalSecure shall cause to be refinanced by the Company $1,312,500 of liabilities of the
Company (the “Bank Loan”) and will cause the assets pledged by Dr. Smith to secure the Bank Loan to
be released. Moreover, the shares of Company Common Stock pledged in consideration for a loan from
the Company to the ESOP (the “ESOP Loan”) pursuant to an ESOP Pledge Agreement dated July 19, 2002
(the “Pledge Agreement”), to the extent pledged and not yet released and allocated to participants
in the ESOP as of the Closing Date, shall be surrendered by the ESOP to the Company for
cancellation and any outstanding debt owing from the ESOP to the Company pursuant to the ESOP Loan
shall be discharged. The Cash Merger Consideration, the Promissory Note Merger Consideration and
the Common Stock Merger Consideration are collectively referred to herein as the “Merger
Consideration”. The Merger Consideration and the assumed liability consisting of the Bank Loan are
collectively referred to herein as the ‘Purchase Price”. The Merger Consideration shall be
allocated to Dr. Smith and to the ESOP as set forth on Annex A hereto. At the Effective Time, the
Company shall have a target amount of accounts receivable (defined as the ‘Target Amount”) equal to
$440,000, which shall be calculated by taking the actual amount of accounts receivable as reflected
on the Company’s balance sheet and adding to that amount any Cash on Hand in excess of $100,000.
In addition, the Company will have a “Closing Cash Requirement” totaling at least $100,000 in Cash
on Hand as of the Effective Time. Cash on Hand as used herein is defined as the cash reflected in
the Company’s financial books and ledgers. To the extent that the accounts receivable plus Cash on
Hand in excess of the Closing Cash Requirement at the Effective Time is less than the Target Amount
or the Cash on Hand on the Closing Date is less than the Closing Cash Requirement, the Cash Merger Consideration
payable to Dr. Smith shall be reduced by One Dollar ($1.00) for each One Dollar ($1.00) that the
Closing Amount is less than the Target Amount and that the Cash on Hand is less than the Closing
Cash Requirement The Company shall, at Closing, issue to Dr. Smith, as additional compensation, a
promissory note (the “Excess Accounts Receivable Note”) in an original principal amount equal to
the excess, if any, of the Closing Amount over the Target Amount, which Excess Accounts Receivable
Note shall not bear interest and shall be repaid, if at all, in an amount equal to 50% of the
amounts actually collected and received by the
 Company following Closing on account of such
accounts receivable which are on the Company’s books at Closing




 - 3 -









 







and thereafter collected, until the principal balance of the Excess Accounts Receivable Note has been reduced to zero.




          1.6.4 Surrender. At Closing, the Company Shareholders shall deliver certificates
representing all of the issued and outstanding shares of Company Common Stock together with duly
executed stock powers.




          1.6.5 Dissenting Shares.




          (a) No Conversion. Notwithstanding any provision of this Agreement to the contrary,
any shares of Company Common Stock held by a shareholder who has demanded and perfected appraisal
or dissenters’ rights for such shares in accordance with the Maryland General Corporation Law and
who has not effectively withdrawn or lost such appraisal or dissenters’ rights (“Dissenting
Shares”) shall not be converted into or represent a right to receive the Merger Consideration set
forth in Section 1.6.3, but the holder thereof shall only be entitled to such rights as are granted
by the Maryland General Corporation Law.




          (b) Withdrawal or Loss of Dissenters’ Rights. Notwithstanding the provisions of
Section 1.6.5(a), if any holder of shares of Company Common Stock who is otherwise entitled to
exercise appraisal or dissenters’ rights under the Maryland General Corporation Law shall
effectively withdraw or lose (through failure to perfect or otherwise) such appraisal or
dissenters’ rights, then, as of the later of the Effective Time and the occurrence of such event,
such shareholder’s shares shall automatically be converted into and represent only the right to
receive the Merger Consideration upon surrender of the certificate representing such shares.




          (c) Notice, etc. The Company shall give GlobalSecure (i) prompt notice of any written
demands for the exercise of appraisal or dissenters’ rights in respect of any shares of Company
Common Stock, withdrawals of such demands, and any other instruments served pursuant to the
Maryland General Corporation Law (including instruments concerning appraisal or dissenters’ rights)
and received by the Company and (ii) the opportunity to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with the prior written
consent of GlobalSecure, voluntarily make any payment with respect to any demands for the exercise
of appraisal or dissenters’ rights in respect of any shares of Company Common Stock or offer to
settle or settle any such demands.




          1.6.6 No Further Transfers; Lost, Stolen or Destroyed Certificates. The amount paid
pursuant to the Merger upon and following the surrender of shares of Common Stock, in accordance
with the terms hereof shall be deemed to have been paid in full satisfaction of all
rights pertaining to such shares of Company Common Stock, and, upon and after the Effective
Time, no transfer of the shares of Company Common Stock outstanding prior to the Effective Time
shall be made on the stock transfer books of the Surviving Corporation. If, after the Effective
Time, certificates representing Company Common Stock are presented to the Surviving Corporation for
any reason, they shall be cancelled and exchanged as provided in this Article 1.




          1.6.7 Closing. Evidence of the fulfillment or waiver of the conditions set forth in
Article 4 hereof (the “Closing”) shall be provided by the parties hereto to each other (a) at the
offices of GlobalSecure, 8401 Corporate Drive, Suite 230, Landover, Maryland 20785 at 10 a.m.,






 - 4 -









 







local time, on the business day on which the last of the conditions set forth in Article 4 hereof
is fulfilled or waived or (b) at such other time and place as the parties hereto may agree.




          1.6.8 Effect of the Merger. Upon and after the Effective Time: (a) GlobalSecure Sub
shall merge with and into the Surviving Corporation; (b) the separate existence of GlobalSecure Sub
shall cease; (c) the shares of the Company shall be converted as provided in this Agreement; (d)
the former holders of such shares are entitled only to the rights provided in this Agreement or to
the rights provided under Section 3-202 of the Maryland General Corporation Law; and (e) the Merger
shall otherwise have the effect provided under the applicable laws of the State of Maryland
(including Section 3-114 of the Maryland General Corporation Law).




          1.6.9 Further Assurances. If at any time after the Effective Time the Surviving
Corporation shall consider or be advised that any further deeds, assignments or assurances in law
or any other acts are necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation, the title to any property or right of the Constituent
Corporations acquired or to be acquired by reason of, or as a result of, the Merger, or (b)
otherwise to carry out the purposes of this Agreement, the Constituent Corporations agree that the
Surviving Corporation and its proper officers and directors shall and will execute and deliver all
such property, deeds, assignments and assurances in law and do all acts necessary, desirable or
proper to vest, perfect or confirm title to such property or rights in the Surviving Corporation
and otherwise to carry out the purposes of this Agreement, and that the proper officers and
directors of the Constituent Corporations and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of the Constituent Corporations or otherwise to take
any and all such action.




ARTICLE 2




REPRESENTATIONS AND WARRANTIES OF COMPANY AND SHAREHOLDER




     As a material inducement to GlobalSecure to enter into and perform its obligations under this
Agreement, the Company and Shareholder, jointly and severally, hereby represent and warrant to
GlobalSecure and GlobalSecure Sub that, except as set forth on the disclosure schedule attached
hereto as Exhibit B (the “Disclosure Schedule”) (which specifically identifies the relevant
subsection(s) hereof, which Disclosure Schedule shall be deemed to be part of the representations
and warranties as if made hereunder):



     SECTION 2.1 Organization and Qualification, Etc.; Capital Stock; Subsidiaries.



          2.1.1 The Company is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Maryland, and has the corporate power to own, lease or operate all
of its properties and assets and to carry on the Business as and where it is now being conducted.
Copies of the Company’s Articles of Incorporation and Bylaws, previously delivered to GlobalSecure
and certified by the Secretary of the Company, are true, correct and complete copies of such
documents and will not be amended prior to the Closing Date without the prior written consent of
GlobalSecure. The Company is duly qualified to transact business as a foreign corporation in each
jurisdiction in which the nature of the business





 - 5 -









 







conducted by the Company or the character and location of its properties or assets require that it be so qualified, except where the failure to
be so qualified is not reasonably likely to have a material adverse change in or effect on the
business, assets, properties, operations, results of operations, or condition (financial or
otherwise) or prospects of the Company, the legality or validity of the Company, the enforceability
as against the Company of, or the ability of the Company to perform its obligations under, this
Agreement or its Articles of Incorporation (a “Material Adverse Effect”).




          2.1.2 The entire authorized capital stock of the Company consists of 500,000 shares of common
stock, no par value per share. There are presently issued and outstanding 500,000 shares of common
stock of the Company, all of which are duly authorized, validly issued, fully paid and
nonassessable and without restriction on the right of transfer thereof. All of the issued and
outstanding shares of the Company (the “Stock’) are owned of record by the Company Shareholders
free and clear of all liens, security interests, claims and encumbrances or other restrictions of
any kind, except for the Bank Loan, and no shares are held in the Company’s treasury. The Company
does not have outstanding any stock or securities convertible or exchangeable for any shares of its
capital stock, nor does it have outstanding any warrants, rights or options to subscribe for or to
purchase any capital stock or any capital stock or securities convertible into or exchangeable for
any capital stock. There are no preemptive rights existing with respect to the capital stock of
the Company. The Company is not subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital stock. There are no agreements (oral or
written) to which any of the Company Shareholders is a party or by which any Company Shareholder is
bound involving the voting or sale of any of the Stock.




          2.1.3 The Company does not own, of record or beneficially, any capital stock or other
securities of any other corporation; does not own, directly or indirectly, any interest in a
business, business trust, joint stock company or other business organization or association; and is
not a party to any partnership or joint venture agreement. The Company, to the extent it may have
previously owned stock in any corporation, has legally divested itself of such ownership, has paid
all obligations relative to such ownership, has filed all tax returns and paid all taxes required
by such prior ownership and divestment thereof, and certifies that it has no obligations,
contingent or otherwise, relating to such ownership or sale or divestment thereof.




     SECTION 2.2 Authority Relative to Agreement. Each Company Shareholder has the power, capacity and authority, and the Company has the
corporate power and authority, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. Each Company Shareholder has the power, capacity and authority
to transfer and deliver the Company Common Stock hereunder, free and clear of all liens, claims of
ownership, security interests and encumbrances whatsoever, except for the Bank Loan. The execution
and delivery of this Agreement by the Company and the consummation of the transactions contemplated
on its part have been authorized by its Board of Directors. No other corporate proceedings on the
part of the Company are necessary to authorize the execution and delivery of this Agreement by it
or the consummation by it of the transactions contemplated on its part hereby. Except for consents
by participants in the ESOP who are beneficial owners of not more than 27, 990 shares of the
245,000 shares of Company Common Stock owned by the ESOP, which consents the Company agrees to use
its reasonable efforts to obtain by December 15, 2003, this Agreement



 - 6 -









 




has been duly executed and delivered by each Company Shareholder and the Company and is a valid and binding agreement of each
Company Shareholder and the Company, enforceable in accordance with its terms, except as the
enforceability may be affected by bankruptcy, insolvency, reorganization or other similar laws
presently or hereafter in effect affecting the enforcement of creditors’ rights generally.




     SECTION 2.3 No Breach; Consents. Except as set forth in Section 2.3 of the Disclosure
Schedule, the negotiation, execution, delivery and performance of this Agreement by the Company
Shareholders and the Company, and the consummation of the transactions contemplated hereby, (i) do
not and will not conflict with or result in any breach of any of the provisions of, constitute a
default under, result in a violation of, result in the creation of any lien, security interest,
charge, encumbrance or other restriction upon the assets of the Company under, or require arty
authorization, consent, approval, exemption or other action by or notice to any third party under,
the provisions of the Charter or Bylaws of the Company or any license, permit, contract, franchise,
indenture, mortgage, lease, loan agreement or other agreement (oral or written) or instrument to
which the Company is a party or under which its properties are bound or to which any Company
Shareholder is a party, and (ii) do not require arty authorization, consent, approval, exemption or
other action by or notice to any court or governmental body under any law, statute, rule,
regulation or decree to which the Shareholder or the Company is subject.



     SECTION 2.4 No Material Adverse Change. Except for accounts receivable and cash,
which are addressed in Section 1.6.3 hereof, since August 31, 2003, there has been no material
adverse change in the financial condition, properties, assets, operating results, employee
relations, relations with suppliers, customer relations or business of the Company.



     SECTION 2.5 Title to Properties.



          2.5.1 Except for leased property (in which it holds a valid leasehold interest), the Company
owns good and marketable title, free and clear of all liens and encumbrances, to all
of the material properties and assets shown on its balance sheet as of August 31, 2003, or
acquired thereafter, except to the extent that such properties and assets have been disposed of for
fair value in the ordinary course of business consistent with past practice.




          2.5.2 To the Shareholder’s knowledge, the Company is not in violation of any material
applicable zoning ordinance or other law, regulation or requirement relating to the operation of
owned or leased properties and the Company has not received any notice of any such material
violations within the three years prior to the date hereof which has not been remedied.




          2.5.3 The Company leases, licenses or owns all of the properties and assets used in the
Business.




     SECTION 2.6 Tax Matters. Each of the Company and its subsidiaries has filed all tax
returns and reports as required by law. To the best of the Company’s and the Shareholder’s
knowledge these returns and reports are true and correct in all material respects. Each of the
Company and its subsidiaries has paid all taxes and other assessments due. The Company has



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not elected pursuant to Section 1362(a) of the Internal Revenue Code of 1986, as amended (the “Code”),
and applicable provisions of state law, to be treated as an S corporation. The Company has not
elected to be treated as a collapsible corporation pursuant to Section 341(f) of the Code, nor has
it made any other elections pursuant to the Code (other than elections that relate solely to
methods of accounting, depreciation, or amortization) that are reasonably likely to have a Material
Adverse Effect. The Company has never had any tax deficiency assessed, or, to the best of the
Company’s and the Shareholder’s knowledge, proposed, against it and has not executed any waiver of
any statute of limitations on the assessment or collection of any tax or governmental charge.
Except as set forth in Section 2.6 of the Disclosure Schedule, none of the Company’s federal income
tax returns and none of its state income or franchise tax or sales or use tax returns have ever
been audited by governmental authorities. The Company has withheld or collected from each payment
made to each of its employees the amount of all taxes, including, but not limited to, federal
income taxes, Federal Insurance Contribution Act taxes and Federal Unemployment Tax Act taxes
required to be withheld or collected therefrom, and had paid the same to the proper tax receiving
officers or authorized depositories. The Company has made adequate provisions on its books or
account for all taxes, assessments, and governmental charges with respect to its business,
properties, and operations through the Closing Date. The consideration payable to Dr. Smith for
his Stock will be reduced by the amount of any Company federal income taxes payable for the
calendar year ending December 31, 2003, but in no event shall the reduction in such consideration
be greater than the amount of tax payable on taxable income of $100,000. If any reduction in the
consideration payable to Dr. Smith is required pursuant to this Section 2.6, such reduction shall
be effected by reducing the principal amount of the First Promissory Note by the amount of the
reduction.




     SECTION 2.7 Contracts and Commitments. Except as set forth in Section 2.7 of the
Disclosure Schedule, the Company is not a party to:




     (i) any contract, agreement, purchase order (other than purchase orders in the
ordinary course of business) or other commitment for the purchase, sale or provision
to or by the Company of goods, property or services having an individual value in
excess of $10,000 or an aggregate value in excess of $100,000;




     (ii) any pension, profit sharing, stock option, employee stock purchase or
other plan providing for deferred compensation or other employee benefit plan, or
any contract with any labor union;




     (iii) any agreement or indenture relating to the borrowing of money or to the
mortgaging, pledging or otherwise placing a lien on any asset or group of assets of
the Company;




     (iv) any lease or agreement under which it is lessee of or holds or operates
any property, real or personal, owned by any other party, except for any lease of
personal property under which the aggregate annual rental payments do not exceed
$5,000;



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     (v) any lease or agreement under which it is lessor of or permits any third
party to hold or operate any property, real or personal, owned or controlled by it;




     (vi) any agreements providing for the services of an independent contractor to
which the Company is a party or by which it is bound;




     (vii) any oral or written direct or indirect guarantee of any obligation; or




     (viii) any other or additional material contracts, commitments, agreements,
arrangements, writings, guarantees, leases and licenses to which the Company is a
party or by which the Company or any of its property is bound having an individual
value in excess of $10,000 or an aggregate value in excess of $100,000.



     Each of the contracts, agreements, leases, licenses and commitments required to be listed in
Section 2.7 of the Disclosure Schedule (the “Contracts”) is valid and binding, enforceable in
accordance with its respective terms, in full force and effect and, at Closing, will remain in full
force and effect without the consent, approval or act of, or the making of any filing with, any
other person. To the Shareholder’s knowledge, none of the Contracts were entered into with any
intent or for any purpose prohibited by law. True and complete copies of all of the Contracts
(together with any and all amendments thereto) have been delivered to GlobalSecure and initialed by
the Company’s Secretary and identified with a reference to this Section of this Agreement. The
Company has performed all obligations required to be performed by it and is not in default under,
or in breach of, or in receipt of any claim of default or breach under, any of the Contracts and no
event has occurred which with the passage of time or the giving of notice or both would result in a
default, breach or event of noncompliance under any such Contract neither the Company nor the
Shareholder has any knowledge of any breach or anticipated breach by the other parties to any such
Contract and to the Shareholder’s knowledge the Company is not a party to any Contract for the purchase of goods or services at a rate currently materially
above market prices.



     SECTION 2.8 Litigation, Etc. Except as set forth in Section 2.8 of the Disclosure
Schedule, there are no actions, suits, proceedings, orders, investigations (including without
limitation any official inquiries or requests for documents to the Company or the Shareholder or
others relating to the Company’s business) or claims pending or, to the knowledge of the
Shareholder or the Company, threatened against the Company, or to which the Company is a party, at
law or in equity, or before or by any court tribunal, governmental department commission, board,
bureau, agency or instrumentality, or any arbitration proceedings pending under collective
bargaining agreements or otherwise, or any actions which seek to prohibit restrict or delay the
consummation of transactions contemplated hereby or to limit in any manner the right of
GlobalSecure to control the Company or any material aspect of the business of the Company after the
Closing Date.



     SECTION 2.9 Brokerage. There are no claims for brokerage commissions, finders’ fees
or similar compensation in connection with the transactions contemplated by this Agreement based on
any arrangement or agreement (oral or written) binding upon the Shareholder or the



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Company. The Shareholder will pay, and hold the Company and GlobalSecure harmless against any liability, loss or
expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising in
connection with any such claim.




     SECTION 2.10 Insurance. Section 2.10 of the Disclosure Schedule contains an abstract
or summary of each outstanding insurance policy maintained by the Company. The Company has given
to GlobalSecure a copy of each such insurance policy maintained with respect to the Company’s
properties, assets and the Business, and each such policy is in full force and effect.



     SECTION 2.11 Compliance with Laws. To the Shareholder’s knowledge, the Company has
complied in an material respects with all laws, rules, regulations, ordinances, orders, judgments,
and decrees applicable to its business or properties and has not failed to comply with any law or
any regulation or requirement which reasonably could be expected to have a Material Adverse Effect
and the Company has not received notice of any such violation or non-compliance.



     SECTION 2.12 Employees. To the best knowledge, information and belief of the
Shareholder, the Company has complied with all laws relating to the employment of labor, including
provisions thereof relating to wages, hours, equal opportunity, collective bargaining and the
payment of social security and other taxes. To the Shareholder’s knowledge, no present or former
employee of the Company has any material claim against the Company (whether under law, any
employment agreement or otherwise) on account of or for (i) overtime pay, other than overtime for
the current payroll period, (ii) wages or salary for any period other than the current payroll period, (iii)
vacation, time off or pay in lieu of vacation or time off, other than that earned in respect of the
current fiscal year, or (iv) any violation of any statute, ordinance or regulation relating to
minimum wages or maximum hours of work To the knowledge of the Shareholder and the Company, no
person has any claim or basis for any proceeding against the Company arising out of any statute,
ordinance or regulation relating to discrimination in employment or employment practices or
occupational safety and health standards which reasonably could be expected to have a Material
Adverse Effect Each officer of the Company set forth in Section 2.12 of the Disclosure Schedule has
executed a Proprietary Information and Confidentiality Agreement substantially in form or forms
which have been approved by GlobalSecure, which have been delivered to GlobalSecure. Each officer
of the Company set forth in Section 2.12 of the Disclosure Schedule has executed an agreement with
noncompetition provisions which have been delivered to GlobalSecure. To the knowledge of the
Company, no employee of the Company (A) is in violation of any term of any employment contract,
patent disclosure agreement, non-competition agreement or any restrictive covenant to a former
employer relating to the right of any such employee to be employed by the Company because of the
nature of the business conducted or presently proposed to be conducted by the Company or to the use
of trade secrets or proprietary information of others or (B) has given notice to the Company, nor
is the Company otherwise aware that any employee intends to terminate his or her employment with
the Company. The names and current rates of compensation of all employees of the Company are as
set forth on Section 2.12 of the Disclosure Schedule. Effective on or prior to the Effective Time,
any and all employment agreements between the Company and any of its employees that shall be
cancelled and shall be of no further effect.



 - 10 -









 





     SECTION 2.13 Licenses and Permits. All material permits, licenses and franchises held
by the Company, or by its officers, employees or agents, with respect to the Business are listed in
Section 2.13 of the Disclosure Schedule. Except as set forth in Section 2.13 of the Disclosure
Schedule, such licenses, permits and franchises are freely transferable by the Company. All of the
licenses, permits, approvals and clearances listed and described in Section 2.13 of the Disclosure
Schedule represent all of the material licenses, permits, approvals and clearances (collectively,
the “Licenses”) issued to the Company as of the date hereof by a governmental or other authority
and currently used by or necessary to the Company in connection with the operation of the Business
as presently conducted. To Shareholder’s knowledge, the Licenses represent all material
governmental or other authority licenses, permits, approvals or clearances which the Company is
required to maintain by applicable statute or regulation in connection with its Business as
presently conducted. The Licenses are in full force and effect in accordance with their terms, and
there is no outstanding notice of cancellation or termination in connection therewith, nor is there
any pending or, to the knowledge of the Shareholder or the Company, threatened administrative or
judicial proceeding to revoke, cancel or declare any such License invalid in any respect To the
Shareholder’s knowledge, the Licenses are sufficient and adequate in all material respects to
permit the continued lawful conduct of the Company’s Business in the manner now conducted.



     SECTION 2.14 Business Records; Bank Accounts. The Company’s personnel files, accounting records, and customer correspondence files shall
be made available to GlobalSecure promptly upon the execution of this Agreement and are complete
and correct in all material respects, and accurately reflect the Company’s business operations for
a period of not less than three (3) years. As of the date hereof, Section 2.14 of the Disclosure
Schedule contains a complete and accurate list showing the name and location of each bank or other
institution in which the Company has any deposit account or safe deposit box, together with a
listing of account numbers and the names of all persons authorized to draw thereon or have access
thereto. The Company has not given any power of attorney, whether limited or general, to any
person, firm, corporation or otherwise that is continuing in effect.



     SECTION 2.15 Environmental Matters. Neither the Company nor any of its subsidiaries
has caused or allowed, or contracted with any party for, the generation, use, transportation,
treatment, storage or disposal of any Hazardous Substances (as defined below) in violation of any
applicable Environmental Law (as defined below) in connection with the operation of its business or
otherwise. Each of the Company and its subsidiaries, the operation of its business, and any real
property that it owns, leases or otherwise occupies or uses (collectively, the “Premises”) are in
compliance in all material respects with all applicable Environmental Laws and orders or directives
of any governmental authorities having jurisdiction under such Environmental Laws, including,
without limitation, any Environmental Laws or orders or directives with respect to any cleanup or
remediation of any release or threat of release of Hazardous Substances. Neither the Company nor
any of its subsidiaries has received any written notice, citation, directive, letter or other
communication about any proceeding, claim or lawsuit, from any Person concerning the ownership or
occupation of the Premises, or the conduct of its operations in material violation of any
applicable Environmental Laws. Each of the Company and its subsidiaries has obtained and is
maintaining in full force and effect all necessary permits, licenses and approvals required by all
Environmental Laws applicable to the Premises and the business operations conducted thereon
(including operations conducted by



 - 11 -









 




tenants on the Premises), and is in compliance in all material respects with all such permits, licenses and approvals. Neither the Company nor any of its
subsidiaries has caused or allowed a release, or, to the best of the Company’s and the
Shareholder’s knowledge, a threat of release, of any Hazardous Substance into, at or near the
Premises, and the Premises have not been subject to a release, or, to the best of the Company’s and
the Shareholder’s knowledge, a threat of release, of any Hazardous Substance. For the purposes of
this Agreement, the term “Environmental Laws” shall mean any Federal, state or local law or
ordinance or regulation pertaining to the protection of human health or the environment, including,
without limitation, the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Sections 9601, et seq., the Emergency Planning and Community Right-to-Know Act, 42 U.S.C.
Sections 11001, et seq., and the Resource Conservation and Recovery Act, 42, U.S.C. Sections 6901,
et seq. For purposes of this Agreement, the term “Hazardous Substances’ shall include oil and
petroleum products, asbestos, polychlorinated biphenyls, urea formaldehyde and any other materials
classified as hazardous or toxic under any Environmental Laws.




     SECTION 2.16 Financial Statements. The Company’s unaudited financial statements and notes thereto as at and for the fiscal
year ended December 31, 2002, and for the eleven month period ended November 30, 2003, consisting
of balance sheets and statements of income, are attached as Exhibit 2.16 (the “Statements”). The
Statements fairly present the financial condition and results of the operations of the Company as
of the date indicated and for the period indicated, and are in accordance with the books and
records of the Company, complete and correct in all material respects. The Statements shall be in
a form which is auditable as determined by GlobalSecure. As to its government contracting
business, the Company’s books and records are compliant with all requirements of the Defense
Contract Audit Agency.



     SECTION 2.17 Accounts Receivable. The accounts receivable of the Company, as shown on
the Company’s accounting records, are valid and existing and represent monies owed to the Company
for services provided or goods sold and delivered, are collectible in the amounts there shown, and
all such accounts receivable acquired subsequent to the date of such Statements are collectible in
the aggregate amounts shown on the books of the Company, in each case after application of reserves
for returns and bad debts in accordance with accounting principles consistently applied by the
Company. Except as reflected in Exhibit 2.16 or Section 2.17 of the Disclosure Schedule, there are
no refunds, discounts or other adjustments payable relating to a material amount of such accounts
receivable, and the Company has not received any written notice asserting any defenses, rights of
set-off, assignments or conditions enforceable by third parties against the Company relating to a
material amount of such accounts receivable.



     SECTION 2.18 Absence of Undisclosed Liabilities. Except as set forth on Section 2.18
of the Disclosure Schedule, the Company has no material obligation or liability (whether accrued,
absolute, contingent, unliquidated or otherwise, whether due or to become due and whether or not
insured, except (i) liabilities to be reflected on the Company’s balance sheets as of November 30,
2003, (ii) liabilities under contracts or commitments described in Section 2.7 of the Disclosure
Schedule which have arisen since November 30, 2003 in the ordinary course of business, (iii)
liabilities for which the Company has valid insurance coverage, subject to policy limits and
deductibles disclosed in Section 2.10 of the Disclosure Schedule, and (iv) all other liabilities
incurred in the ordinary course of business since the Statements.



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     SECTION 2.19 Inventories. The Company’s inventories, if any, reflected on the
Company’s August 31, 2003 financial statements, and the inventories thereafter produced or acquired
(i) consist of items of a quality and quantity usable or salable in the ordinary course of its
business, at prevailing market prices, (ii) none of such items is materially damaged or generally
unsalable in the ordinary course of business, or below standard quality, and (iii) the values at
which such inventories are carried reflect an inventory valuation policy stating inventory based on
actual physical count and at the lower of cost or wholesale market value. At Closing, the
inventories will include a sufficient quantity of inventory necessary to meet the normal
requirements of the operations of the Company as of the Closing in accordance with past practice
and procedure.



     SECTION 2.20 Transactions with Certain Persons. Except as set forth in Section 2.20
of the Disclosure Schedule, (i) during the past three (3) years, the Company has not, directly or
indirectly, purchased, leased or otherwise acquired any goods, services or property from the
Shareholder or from any person, firm, corporation or other entity directly or indirectly controlled
by (or under common control with) the Shareholder, and (ii) the Company does not owe any amount to,
nor is any amount owed to the Company by, the Shareholder or any person, firm, corporation or other
entity directly or indirectly controlled by (or under common control with) the Company or the
Shareholder.



     SECTION 2.21 Absence of Certain Business Practices. Except as set forth in Section
2.21 of the Disclosure Schedule, neither the Company nor any officer, employee or agent acting on
its behalf, has within the past five (5) years given (or agreed to give) any material gift or
similar benefit to any customer, supplier, governmental employee or other person in a position to
help or hinder the Company’s business. Neither the Company nor any of its subsidiaries has taken
any action which would cause it to be in violation of the Foreign Corrupt Practices Act of 1977, as
amended, or any rules or regulations thereunder. To the best of the Company’s and the
Shareholder’s knowledge, there is not now, and there has never been, any employment by the Company
or any of its subsidiaries of, or beneficial ownership in the Company or any of its subsidiaries
by, any governmental or political official in any country in the world.



     SECTION 2.22 Operations. Section 2.22 of the Disclosure Schedule will list at Closing
all material referral sources within the three (3) year period prior to the date of this Agreement.



     SECTION 2.23 Absence of Certain Developments. Except as set forth on Section 2.23 of
the Disclosure Schedule and except for transactions contemplated by this Agreement including
without limitation Section 1.6.3 hereof, since August 31, 2003, the Company has not:



          (a) redeemed or repurchased, directly or indirectly, any shares of its capital stock or
declared or paid any dividends or distribution with respect to any shares of its capital stock;




          (b) issued any equity securities, securities convertible into equity securities, or warrants,
options or other rights to acquire equity securities, or bonds or other securities;





 - 13 -









 








          (c) borrowed any amount or incurred or become subject to any material liabilities, except
current liabilities incurred in the ordinary course of business and liabilities under contracts
entered into in the ordinary course of business having an individual value in excess of $5,000 or
an aggregate value in excess of $25,000;




          (d) discharged or satisfied any material lien or encumbrance or paid any material obligation
or liability other than current liabilities paid in the ordinary course of business;




          (e) mortgaged, pledged or subjected to any lien, charge or any other encumbrance, any of its
properties or assets, except liens for current property taxes not yet due and payable;




          (f) sold, assigned, transferred or otherwise disposed of or committed to sell, assign,
transfer or otherwise dispose of (including by license, franchise, option or other right of any
nature whatsoever) any of its tangible assets having an individual value in excess of $5,000 or an
aggregate value in excess of $25,000 (including books and records of the Company), except in the
ordinary course of business, or canceled any material debts or claims having an individual value in
excess of $5,000 or an aggregate value in excess of $25,000;




          (g) suffered any extraordinary losses or waived any rights of material value, whether or not
in the ordinary course of business or consistent with past practice;




          (h) made capital expenditures in excess of $10,000 or made any binding commitments therefor
which would cause the aggregate amount of all actual capital expenditures for the period subsequent
to August 31, 2003 to exceed $10,000;




          (i) paid or committed to any salary increases, bonuses or similar payments or any increase of
other benefits or any adoption or establishment of any benefit plan or any payments of severance or
termination pay, except in the ordinary course of business consistent with past practices;




          (j) made any loans or advances to, guarantees for the benefit of, or any investments in, any
person or entity in excess of an aggregate of $10,000;




          (k) made or committed to any charitable or political contributions or pledges in excess of an
aggregate of $1,000;




          (l) suffered any material damage, destruction or casualty loss, whether or not covered by
insurance;




          (m) made or instituted any unusual or novel method of transacting business or changed any
accounting methods, procedures or practices of the Company;




          (n) suffered any material adverse action, ruling, order or position affecting the Company made
or taken by a governmental or other authority, which action, ruling, order or position reasonably
could be expected to have a Material Adverse Effect;




 - 14 -









 





          (o) disposed of any patents, trademarks or copyrights or any patent, trademark or copyright
applications used in the operations of its business;




          (p) entered into any transaction material to its business or relating to its business, except
in the ordinary course of business consistent with past practice;




          (q) written down the value of any inventory or written off as uncollectible any accounts
receivable, in any material amounts, specifically relating to its business or any portion thereof;




          (r) discontinued the manufacture or sale of any material products, product line, program or
service;




          (s) entered into any capital leases having a value in excess of $10,000;




          (t) made any amendments to or changes in its articles of incorporation or by-laws; or




          (u) entered into any material agreement or made any commitment to do any of the foregoing or
performed any act; or attempted to do any act, or permitted any act or omitted to act, which would
cause a breach of any material contracts commitment or obligation to which the Company is a party.




          2.24.1 Employee Plans. Except as set forth in Section 2.24.1 of the
Disclosure Schedule, neither the Company nor any entity required to be aggregated with the Company
under Sections 414(b), (c), (m), (n) or (o) of the Code (an “ERISA Affiliate”) sponsors, maintains,
has any obligation to contribute to, has any liability under, or is otherwise a party to, any
Benefit Plan. For purposes of this Agreement, “Benefit Plan” shall mean any plan, fund, program,
policy, arrangement or contract whether formal or informal, which is in the nature of (i) an
employee pension benefit plan (as defined in Section 3(2) of the Employment Retirement Income
Security Act of 1974, as amended (“ERISA”)), (ii) an employee welfare benefit plan (as defined in
Section 3(1) of ERISA), or (iii) each employment, severance or similar contract, plan, arrangement
or policy and each other plan or arrangement (written or oral) providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other forms of incentive or deferred
compensation, vacation benefits, insurance coverage (including any self-insured arrangements),
health or medical benefits, disability benefits, workers’ compensation, supplemental unemployment
benefits, severance benefits and post-employment or retirement benefits (including compensation,
pension, health, medical or life insurance benefits) which is maintained, administered, contributed
to or required to be contributed to by the Company or any ERISA Affiliate and covers any employee
or former employee of the Company, or with respect to which the Company or any ERISA Affiliate has
any liability, whether direct or indirect, actual or contingent, and whether formal or informal.



2.24.2 ERISA Plan Operations.



(a) Each Benefit Plan which is intended to be qualified under Section 401(a) of the Code is so
qualified and has been so qualified during the period from its adoption to date, and each trust
forming a part thereof is exempt from tax pursuant to Section 501(a) of the Code.





 - 15 -









 







The Company has furnished to GlobalSecure copies of the most recent Internal Revenue Service determination letters,
if any, with respect to each such Benefit Plan. To the Company’s knowledge, no event or circumstance has occurred since the date of such determination that
would jeopardize the qualification of the Company’s Benefit Plans. Each Employee Plan has been
maintained in compliance in all material respects with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations, including ERISA and the Code,
which are applicable to such Plan.




          (b) Except as set forth in Section 2.242 of the Disclosure Schedule, the transactions
contemplated hereby will not (i) entitle any employee or independent contractor of the Company to
severance pay or (ii) accelerate the time of payment or vesting or trigger any payment or funding
(through a grantor trust or otherwise) of compensation or benefits under, increase the amount
payable or trigger any other material obligation pursuant to, any Benefit Plan.




          (c) The Company has no liability with respect to post-retirement health, medical or life
insurance benefits for retired, former or current employees of the Company.




          (d) Except as has been furnished or made available to GlobalSecure, there has been no
amendment to, written interpretation or announcement (whether or not written) by the Company
relating to any Benefit Plan which would increase materially the expense of maintaining such
Benefit Plan above the level of the expense incurred in respect thereof for the Company’s fiscal
year ended on December 31, 2002.




          (e) There is no pending or, to the Company’s knowledge, threatened or contingent claims
against the Company relating to any Benefit Plans, except benefit claims in the ordinary course.




          (f) Neither the Company nor any ERISA Affiliate maintains, or has in the past maintained or
contributed to, (i) any plan that constitutes or constituted a “multiemployer plan,” as defined in
Section 3(37) of ERISA, or (ii) a plan that is or was subject to Title IV of ERISA.




     SECTION 2.25 Intellectual Property.



          2.25.1 Set forth in Section 2.25 of the Disclosure Schedule is a list and brief description of
all domestic and foreign patents, patent applications, registered trademarks, trademark
applications, registered service marks, service mark applications, trade names, registered
copyrights and copyright applications which are in the process of being prepared, owned by or
registered in the name of the Company or any of its subsidiaries, of which the Company or its
subsidiaries is a licensee. Each of the Company and its subsidiaries is the sole and exclusive
owner or a licensee of all Intellectual Property (as defined below) material to the conduct of its
business as presently or proposed to be conducted (the “Company Intellectual Property”), free and
clear of any liens, claims, encumbrances or adverse interests, except that one or more lenders to
the Company or its subsidiaries may have a security interest in such Company Intellectual Property.
Each of the Company and its subsidiaries owns or possesses adequate licenses or other rights to
use and license its customers the right to use (in the manner and to the





 - 16 -









 







extent presently or proposed to be used or licensed) all Intellectual Property currently or proposed to be used in its business unless such absence or failure is not reasonably likely to
have a Material Adverse Effect None of the Intellectual Property that the Company or any of its
subsidiaries owns or purports to own, or, to the knowledge of the Company, any of the other Company
Intellectual Property infringes or conflicts with, and neither the Company nor any of its
subsidiaries has interfered with, infringed upon, misappropriated, or otherwise come into conflict
with, any Intellectual Property Rights (as defined below) of third parties and, to the knowledge of
the Company, no third party has interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property Rights of the Company or any of its subsidiaries. No
claim is pending or, to the best of the Company’s or the Shareholder’s knowledge, threatened to the
effect that the operations of the Company or any of its subsidiaries or the use by the Company’s or
any of its subsidiaries’ customers of any of the Company Intellectual Property licensed to them as
provided in such license infringe upon or conflict with the asserted rights of any other Person.
No claim is pending, or to the best of the Company’s or the Shareholder’s knowledge, threatened to
the effect that any such Intellectual Property owned or licensed by the Company or any of its
subsidiaries, or which the Company or any of its subsidiaries otherwise has the right to use, is
invalid or unenforceable by the Company. All prior art known to the Company which may be or may
have been pertinent to the examination of any United States patent or patent application listed in
Section 2.25 of the Disclosure Schedule has been cited to the United States Patent and Trademark
Office. Each of the Company and its subsidiaries uses reasonable measures to safeguard any
confidential technical information developed by and belonging to the Company and such subsidiary.




          2.25.2 None of the Intellectual Property that the Company or any of its subsidiaries owns or
purports to own, is subject to any outstanding judgment or contract restricting the use thereof by
the Company or such subsidiary. Neither the Company nor any of its subsidiaries has entered into
or become subject to any agreement to indemnify any other Person against any charge of infringement
of any Intellectual Property Rights, except for infringement indemnification obligations incurred
in the ordinary course of business.




          2.25.3 All licenses, sublicenses or other rights of use that the Company or any of its
subsidiaries has or purports to have granted to customers are valid and authorized by the terms
under which the Company or such subsidiary licenses or otherwise uses such rights. Neither the
Company nor any of its subsidiaries is in default in the payment of any royalties, license fees or
other consideration to any owner or licensor of any Intellectual Property used in or necessary for
the conduct of its business as now conducted and/or as proposed to be conducted or to any agent or
representative of any such owner or licensor by reason of the use thereof by the Company or any of
its subsidiaries nor otherwise is in default in any material respect in the performance of any of
its obligations to any such owner or licensor, and no such owner or licensor, nor any such agent or
representative thereof, has notified the Company or any of its subsidiaries in writing of any claim
of any such default.




          2.25.4 “Intellectual Property” means (i) all inventions (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto, and all patents, patent
applications, and patent disclosures, (ii) all trademarks, service marks, trade dress, logos, trade
names and corporate names, including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (iii) all copyrightable works, all





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copyrights, and all applications, registrations, and renewals in connection therewith, (iv) all trade
secrets and confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing and cost information,
and business and marketing plans and proposals), (v) all computer software (including data and
related documentation), (vi) all other proprietary rights, and (vii) all copies and tangible
embodiments thereof (in whatever form or medium).




          2.25.5 “Intellectual Property Rights” means, with reference to any Intellectual Property, any
or all of the legally enforceable rights (including any or all inchoate rights, whether such rights
are perfected or not perfected) and moral rights, if any, with respect to such Intellectual
Property under the laws of any jurisdiction, including (i) any and all patents, patents pending,
inventor’s certificates, trademarks, service marks, copyrights, any and all applications therefor
or for registration thereof, and any and all substitutions, extensions, reissues, renewals,
divisions, continuations, or continuations-in-art thereof and (ii) any rights under laws relating
to trade secrets.




     SECTION 2.26 Debt. On the Closing Date, other than the Bank Loan, the Company shall
have no debt on its books other than ordinary and customary accounts payable and miscellaneous
other expenses which are not material to the financial condition of the Company.



     SECTION 2.27 Material Misstatements or Omissions. The Shareholder and the Company
have not knowingly made any material misstatements of fact or omitted to state any material fact
necessary or desirable to make complete, accurate, and not misleading every representation,
warranty, schedule, and agreement set forth, described or referred to herein.



     SECTION 2.28 Effective Date of Warranties, Representations and Covenants. Each
warranty, representation, and covenant set forth in this Article 2 shall be deemed to be made on
and as of and speak on and as of the date hereof and as of the Closing Date (except as otherwise
specifically provided herein). Prior to the Closing Date, the Shareholder will notify GlobalSecure
of any change since the date hereof in any fact, condition or circumstance which would require a
modification of the foregoing representations and warranties (including any Schedule thereto) to
make such representation or warranty (or Schedule thereto) complete, accurate and not misleading in
all material respects. Prior to the Closing, the Shareholder and the Company will revise certain
parts of each Schedule hereto so that such Schedule shall, at the Closing, reflect any material
fact affecting such Schedule occurring after the date hereof and on or prior to the Closing Date.
The representations and warranties contained in this Article 2 shall not be affected or deemed
waived by reason of the fact that GlobalSecure and/ or its representatives should have known that
any such representation or warranty is or might be inaccurate in any respect.



     SECTION 2.29 Investment Representations. The Shareholder is an accredited investor as such term is defined in Section 501(a) of
Regulation D promulgated under the Securities Act The GlobalSecure Common Stock is being acquired
for the Shareholder’s own account for investment purposes and not with a view to the distribution
or resale thereof (except in compliance with the Securities Act of 1933, as amended, and any
comparable State securities laws or any exemptions therefrom). The Shareholder has such experience
in evaluating and



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investing in private placement transactions of securities in companies similar to
GlobalSecure so as to be capable of evaluating the merits and risks of the Shareholder’s investment
in GlobalSecure and has the capacity to protect the Shareholder’s own interests. The Shareholder
represents and warrants to GlobalSecure that he is aware that the acquisition of GlobalSecure
Common Stock involves substantial risk and that his financial condition and investments are such
that he is in a financial position to hold such shares for an indefinite period of time and to bear
the economic risk of and withstand a complete loss of such investment.




     SECTION 2.30 Resignations. The Shareholder has obtained the resignation of the
Shareholder as the sole Director of the Company, effective as of the Closing Date, and has obtained
the resignations of all officers of the Company, effective as of the Closing Date.



     SECTION 2.31 GlobalSecure’s Knowledge. As soon as GlobalSecure (for purposes of this
Section 2.31, “GlobalSecure” shall mean the President or any Vice President of GlobalSecure) knows
or discovers, through its due diligence review of the Company or its analysis of any documents or
other written materials provided to GlobalSecure by the Shareholder or the Company as part of
GlobalSecure’s due diligence review of the Company, any inaccuracy in, or breach of, any
representations and warranties contained in this Article 2, GlobalSecure shall inform the
Shareholder and the Company of such inaccuracy or breach, in writing, and give the Shareholder and
the Company an opportunity to cure any such inaccuracy within ten (10) days of the receipt of any
such notice.



     SECTION 2.32 Disclosures. Neither this Agreement, nor the Disclosure Schedule, nor
any Exhibit to this Agreement, nor any due diligence materials, nor other information furnished by
or on behalf of the Company to GlobalSecure contains an untrue statement of a material fact or
omits a material fact necessary to make the statements contained herein or therein, in light of the
circumstances in which they were made, not misleading. None of the Ancillary Agreements or
certificates prepared or supplied by the Company with respect to the transactions contemplated
hereby or thereby contains an untrue statement of a material fact or omits a material fact
necessary to make the statements contained therein, in light of the circumstances in which they
were made, not misleading. There is no fact known to the Shareholder which the Company has not
disclosed to GlobalSecure and their counsel in writing which materially and adversely affects the
business, financial condition, operations, prospects, property or assets of the Company. The
financial projections provided by or on behalf of the Company to GlobalSecure (collectively,
‘Projections”) were prepared in good faith based on the experience of the Company in the industry
and on reasonable assumptions of fact and opinion as to future events. As of the date
hereof no facts have come to the attention of the Company which would, in its opinion, require
the Company to revise the assumptions underlying such projections and other estimates or the
conclusions derived therefrom.



     SECTION 2.33 U.S. Real Property Holding Corporation. Neither the Company nor any of
its subsidiaries is now or has ever been a “United States real property holding corporation,” as
defined in Section 897(c)(2) of the Code and Section 1.897-2(b) of the Regulations promulgated by
the Internal Revenue Service.



SECTION 2.34 Business Activity Restriction





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     . There is no non-competition or other similar agreement, commitment, judgment, injunction,
order or decree to which the Company is a party or subject to that has or could reasonably be
expected to have the effect of prohibiting or impairing the conduct of business by the Company.
The Company has not entered into any agreement under which the Company is restricted from selling,
licensing or otherwise distributing any of its technology or products to, or providing services to,
customers or potential customers or any class of customers, in any geographic area, during any
period of time or in any segment of the market or line of business.



ARTICLE 3




REPRESENTATIONS AND WARRANTIES OF GLOBALSECURE




     As a material inducement to the Shareholder to enter into and perform his obligations under
this Agreement, GlobalSecure represents and warrants to the Shareholder as follows:



     SECTION 3.1 Organization, Capital Stock, Etc.



          3.1.1 Each of GlobalSecure and GlobalSecure Sub is a corporation duly incorporated, validly
existing and in good standing under the laws of its state of incorporation (Delaware, in the case
of GlobalSecure, and Maryland, in the case of GlobalSecure Sub).




          3.1.2 The entire authorized capital stock of GlobalSecure consists of 100,000,000 shares of
capital stock, $.0001 par value per share, comprised of 75,000,000 shares of Common Stock of which
26,321,431 shares are issued and outstanding, 20,000,000 shares of undesignated Preferred Stock of
which no shares are issued and outstanding and 5,000,000 shares of Series A Preferred Stock of
which 5,000,000 shares are issued and outstanding.




     SECTION 3.2 Authority Relative to Agreement. GlobalSecure Sub has not conducted any
business activities prior to the date of this Agreement, other than the negotiation and execution
of this Agreement All outstanding shares of capital stock of GlobalSecure Sub are owned,
beneficially and of record, by GlobalSecure. GlobalSecure and GlobalSecure Sub each has the
corporate power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated on its part hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by the Boards of Directors of GlobalSecure and of GlobalSecure
Sub. No other corporate proceedings on their part or the part of the stockholders of GlobalSecure
or GlobalSecure Sub are necessary to authorize the execution and delivery of this Agreement by it
or the consummation by it of the transactions contemplated on its part hereby. This Agreement has
been duly executed and delivered by each of GlobalSecure and GlobalSecure Sub and is the valid and
binding agreement of each of GlobalSecure and GlobalSecure Sub except as the enforceability may be
affected by bankruptcy, insolvency, reorganization or other similar laws presently or hereafter in
effect affecting the enforcement of creditors’ rights generally.



     SECTION 3.3 No Breach; Consents. The execution, delivery and performance of this
Agreement by GlobalSecure and GlobalSecure Sub and the consummation of the transactions
contemplated hereby (a) do not and will not conflict with or result in any breach of any of the
provisions of, constitute a default under, result in a violation of, result in the creation of any
lien,



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security interest, charge or encumbrance upon the assets of either of GlobalSecure or
GlobalSecure Sub under, or require any authorization, consent, approval, exemption or other action
by or notice to any third party under the provisions of the Charter or Bylaws of GlobalSecure or
GlobalSecure Sub or any license, indenture, mortgage, lease, loan agreement or other agreement
(oral or written) or instrument to which either GlobalSecure or GlobalSecure Sub is a party, and
(b) do not require any authorization, consent, approval, exemption or other action by or notice to
any court or governmental body under any law, statute, rule, regulation or decree to which either
GlobalSecure or GlobalSecure Sub is subject.




     SECTION 3.4 Litigation. There is no claim, action, suit or proceeding pending or, to
the knowledge of GlobalSecure, threatened against GlobalSecure or any of its properties which seeks
to prohibit, restrict or delay consummation of the transactions contemplated hereby or to limit in
any manner the right of GlobalSecure to control the Company or any material aspect of the Business
of the Company after the Effective Time, and there is no judgment, decree, injunction, ruling or
order of any court, governmental department, commission, agency or instrumentality or arbitrator
outstanding against GlobalSecure having, or which GlobalSecure believes may in the future have, any
such effect.



     SECTION 3.5 Brokerage. There are no claims for brokerage commissions, finders’ fees
or similar compensation in connection with the transactions contemplated by this Agreement based on
any arrangement or agreement made by or on behalf of GlobalSecure or GlobalSecure Sub.



     SECTION 3.6 Financial Statements. GlobalSecure’s unaudited balance sheet dated at,
and income statement for the ten-month period ended, October 31, 2003, have been provided to the
Company Shareholders and fairly present the financial condition and results of the operations of
GlobalSecure as of the date indicated and for the period indicated and have been prepared in accordance with generally
accepted accounting principles consistently applied, and are in accordance with the books and
records of GlobalSecure, complete and correct in all material respects.



     SECTION 3.7 Intellectual Property. Each of GlobalSecure and its subsidiaries owns or
possesses adequate licenses or other rights to use and license its customers the right to use (in
the manner and to the extent presently or proposed to be used or licensed) all Intellectual
Property currently or proposed to be used in its business unless such absence or failure is not
reasonably likely to have a Material Adverse Effect on GlobalSecure.



ARTICLE 4




CLOSING CONDITIONS




     SECTION 4.1 Closing Conditions Relating to GlobalSecure. The obligations of
GlobalSecure under this Agreement are subject to the satisfaction at or prior to the Effective Time
of each of the following conditions, any of which may be waived by GlobalSecure in its sole and
absolute discretion:



          4.1.0 Contingencies.





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          4.1.1 The representations and warranties of the Company and the Company Shareholders contained
in this Agreement shall be true and correct on the date hereof and on the Closing Date (except to
the extent that they expressly relate to an earlier date);




          4.1.2 The Company and the Company Shareholders shall have performed and complied in all
material respects with all the covenants and agreements contained in this Agreement and satisfied
all the conditions required by this Agreement to be performed or complied with or satisfied by it
or them at or prior to the Closing;




          4.1.3 GlobalSecure and the Company shall have received all approvals and actions of or by all
Governmental Bodies, which are necessary to consummate the transactions contemplated hereby, and
shall have obtained the written consent of each of the participants in the ESOP as to whom an
aggregate of 27,990 shares of Company Common Stock have been allocated as of the date of this
Agreement; provided that the Company agrees to use its reasonable efforts to obtain such written
consents on or before December 15, 2003, and, further, provided, however, that GlobalSecure may
extend the Closing hereunder until such time as all of such consents have been received by the
Company;




          4.1.4 On the Closing Date, there shall be no injunction, restraining order or decree of any
nature of any court or Governmental Body in effect that restrains or prohibits the consummation of
the transactions contemplated by this Agreement; and no action, suit or proceeding shall have been
instituted by any person or entity, or threatened by any Governmental Body, before a court or
Governmental Body, to restrain or prevent the carrying out of the transactions contemplated by this Agreement or that would, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;




          4.1.5 All existing employment agreements between the Company and any employee thereof shall be
cancelled prior to the Effective Time and shall be of no further effect and GlobalSecure shall have
received evidence to such effect. To be effective as of the Effective Time, each of the following
members of the Company’s management team shall have entered into an Employment Agreement with
GlobalSecure substantially in the form set forth in Exhibit 4.1.6.2: Timothy J. Czysz.




          4.1.6 Deliveries. At or prior to the Closing, the Shareholder shall deliver, or cause
to be delivered to GlobalSecure, the following items, fully executed by all appropriate parties and
in form and substance acceptable to GlobalSecure:




               4.1.6.1 General Release and Noncompetition Agreement; Termination of Agreements. The
Shareholder shall execute and deliver to the Company a release of the Company of and from all
manner of action and actions, cause or causes of actions, debts and sums of money, claims and
demands whatsoever, except for any obligations that are specifically included hereunder or
including the Merger Consideration, and a noncompetition agreement in the form of Exhibit 4.1.6.1
attached hereto which, among other things, provides that GlobalSecure shall pay the health
insurance costs on the current policy of Dr. Smith and his wife (i.e., CareFirst Blue
Cross/Blue Shield PPO — the “Insurance Coverage”) until Dr. Smith has reached the age of 65-1/2
years old and, thereafter, if Dr. Smith so desires, continue the Insurance Coverage at Dr. Smith’s
sole cost and expense. GlobalSecure shall have received



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evidence of termination and waiver, and indemnification from the Shareholder as to any further obligations or liabilities under, (i) the
Stock Appreciation Rights Agreement dated as of July 19, 2002 between the Company and Timothy J.
Czysz; (ii) the Nonqualified Deferred Compensation Plan of the Company with an effective date of
July 19, 2002; and (iii) the Company’s Phantom Stock Plan.




               4.1.6.2 Employment Agreement. The Employment Agreement in the form of Exhibit 4.1.6.2
attached hereto shall have been executed and delivered to GlobalSecure by Timothy J. Czysz.



               4.1.6.3 Consents. The Shareholder and the Company shall deliver to GlobalSecure
copies of all necessary third party and governmental consents, in a form satisfactory to
GlobalSecure, that the Shareholder and the Company are required to obtain in order to consummate
the transactions contemplated by this Agreement



               4.1.6.4 Opinion of Counsel for the Shareholder and the Company. GlobalSecure shall
receive an opinion dated the Closing Date of Johnson, Pope, Bokor, Ruppel & Burns, P.A. (“Johnson,
Pope”), of Clearwater, Florida, special counsel for the Shareholder and the Company, in the form of
Exhibit 4.1.6.4 attached hereto.



               4.1.6.4.A
 Opinion of Counsel for the ESOP. GlobalSecure shall receive an opinion dated
the Closing Date of Womble Carlyle Sandridge & Rice, P.L.L.C., of Charlotte, North Carolina, special counsel for the ESOP (“ESOP Counsel”), in the form of
Exhibit 4.1.6.4.A attached hereto.



          4.1.7 Due Diligence Results. Nothing shall have come to the attention of
GlobalSecure, in the course of its due diligence investigation pursuant to Section 5.1 or
otherwise, which demonstrates that any of the representations or warranties of the Shareholder or
the Company is inaccurate or incomplete in any material respects; provided, however, that
GlobalSecure shall, prior to Closing, inform the Shareholder of any such inaccuracy in order to
allow Shareholder or the Company to cure any such inaccuracy within ten (10) days of the receipt of
any such notice.




          4.1.8 No Injunction. The consummation of the transactions contemplated hereby shall
not have been enjoined by any court of competent jurisdiction and no proceeding seeking such an
injunction shall be pending.




          4.1.9 Termination of ESOP. The Company shall deliver to GlobalSecure copies of
resolutions of the Board of Directors of the Company to the effect that the ESOP is terminated
prior to Closing, plus any additional documents required by the terms of the ESOP to terminate the
ESOP.




     SECTION 4.2 Closing Conditions Relating to the Company Shareholders. The obligations
of the Company Shareholders and the Company under this Agreement are subject to the satisfaction at
or prior to the Effective Time of the following conditions, but compliance with any or all of such
conditions may be waived by the Company or the Shareholder, as the case may be:



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          4.2.1 The representations and warranties of GlobalSecure contained in this Agreement shall be
true and correct on the date hereof and on the Closing Date (except to the extent that they
expressly relate to an earlier date);




          4.2.2 GlobalSecure shall have performed and complied in all material respects with all of the
covenants and agreements contained in this Agreement and satisfied all of the conditions required
by this Agreement to be performed or complied with or satisfied by GlobalSecure at or prior to the
Closing;




          4.2.3 GlobalSecure and the Company shall have received all approvals and actions of or by all
governmental bodies, which are necessary to consummate the transactions contemplated hereby;




          4.2.4 On the Closing Date, there shall be no injunction, restraining order or decree of any
nature of any court or governmental body in effect that restrains or prohibits the consummation of
the transactions contemplated by this Agreement;




          4.2.5 No action, suit or proceeding shall have been instituted by any person or entity, or
threatened by any governmental body, before a court or governmental body, to restrain or prevent
the carrying out of the transactions contemplated by this Agreement and the Merger Agreement;




          4.2.6 Deliveries. At or prior to the Closing, GlobalSecure shall deliver, or cause to
be delivered to Dr. Smith or Timothy J. Czysz, as applicable, the following items:




               4.2.6.1 The General Release and Noncompetition Agreement in the form of Exhibit 4161 hereof to
Dr. Smith.



               4.2.6.2 The Employment Agreement in the form of Exhibit 4.1.6.2 hereof to Timothy J. Czysz.



               4.2.6.3 The Promissory Notes in the form of Exhibits 1.6.3 and Exhibit 1.6.3.A hereto to Dr.
Smith, with the delivery of the First Promissory Note as part of the Escrow Assets pursuant to
Section 6.1.6.1 hereof.



               4.2.6.4
The Security Agreement in the form of Exhibit 1.6.3.A hereto to Dr. Smith.



               4.2.6.5 The Common Stock Merger Consideration to Dr. Smith, with 170,000 shares thereof being
delivered as part of the Escrow Assets pursuant to Section 6.1.6.1 hereof.



ARTICLE 5




PRE-CLOSING AGREEMENTS




     SECTION 5.1 Due Diligence. The Shareholder and the Company shall grant to
GlobalSecure, and its employees, counsel, accountants and other representatives, full and



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complete access to the Company, its facilities, management, employees and records and its outside
accountants and counsel for purposes of a due diligence investigation in connection with the
transactions contemplated hereby. GlobalSecure agrees to exercise its reasonable best efforts in
conducting such due diligence in a manner that will not significantly interfere with or disrupt the
normal operations of the Company or arouse suspicions of the Company’s employees, customers or
suppliers that the capital stock of the Company is for sale. The Company will provide GlobalSecure
and its representatives full access to all relevant financial information, personnel, service and
contractual information. The cost of any such due diligence shall be borne by GlobalSecure.




     SECTION 5.2 Operation of Business. The Company shall continue to operate the Business
in the ordinary course in such manner that each and every warranty and representation of the
Company and the Shareholder made herein (including as to each and every Schedule hereto) as of the
date hereof will be true, complete and accurate in all material respects as of the date of the
Closing hereunder, without substantial change, and will maintain or cause to be maintained all
existing insurance coverage on the properties and assets of the Company until the Closing. Until
the Effective Time, all risk of loss, damage, or destruction to the assets and properties of the
Company shall be upon the Company and Shareholder, and in the event of any material loss, damage,
or destruction to the assets and properties of the Company, GlobalSecure shall be entitled to
terminate this Agreement within thirty (30) days of learning of the same. Prior to Closing, the Company shall not
increase any current compensation levels of employees or pay any bonuses or other direct or
indirect compensation without the prior written consent of GlobalSecure. Shareholder agrees to
provide to GlobalSecure monthly financial statements for the periods following August 31, 2003, as
they become available. The Company and Shareholder will use their respective best efforts to
preserve the management team and work force of the Company and to preserve employee morale
generally. The Company shall not knowingly and intentionally take any material action that it
believes is out of the ordinary course of business without the prior written consent of
GlobalSecure.



     SECTION 5.3 Best Efforts. The parties hereto agree to use their best efforts to cause
all conditions to Closing to be satisfied and to cause the transactions contemplated hereby to be
consummated.



     SECTION 5.4 Confidentiality. GlobalSecure, the Company and Shareholder agree that
they, and their respective officers, directors and other representatives, will hold in strict
confidence the negotiations relating to the transactions contemplated by this Agreement, and all
information exchanged pursuant thereto. If, for any reason, Closing does not occur, all
information exchanged by GlobalSecure, the Company and Shareholder shall promptly be returned to
the other party. In addition, Shareholder and the Company will refrain from, and the Company will
cause its officers, directors, representatives, agents and employees to refrain from, directly or
indirectly, encouraging, soliciting, initiating or participating in discussions or negotiations
with or providing any non-public information to any person other than GlobalSecure concerning the
sale or purchase of the Business (except in the ordinary course of its business), any merger or
consolidation involving the Company or any other transaction in which the Company’s Business or the
Shareholder’s Stock would be acquired by a person other than GlobalSecure.



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     SECTION 5.5 Public Announcements. None of GlobalSecure, the Company or the
Shareholder shall issue any press release or otherwise make any public statement with respect to
this Agreement or the transactions contemplated hereby unless such press release or public
statement is satisfactory to the other party to this Agreement, and GlobalSecure and the
Shareholder (including on behalf of the Company) shall consult with each other as to the form and
substance of any public disclosure related thereto; provided, however, that nothing contained
herein shall prohibit any party from making any disclosure which is required by law.



ARTICLE 6




POST-CLOSING AGREEMENTS




     SECTION 6.1 Indemnification by the Shareholder and GlobalSecure.



          6.1.1 Without limitation as to the other rights of GlobalSecure, up to the amount set forth in
Section 6.1.6.3 hereof, the Shareholder shall indemnify, save and keep GlobalSecure, its successors
and assigns and its stockholders, directors, officers, affiliates, representatives and employees
and the estates, personal representatives and heirs of such persons, forever harmless against and
from all liability, demands, claims, actions or causes of action, assessments, losses, penalties
costs, damages or expenses, including, without limitation, reasonable attorneys’ and expert witness
fees (collectively, the “Losses”) sustained or incurred by any of the foregoing persons as a result
of or arising out of or by virtue of (i) any breach by the Shareholder or the Company of any
representations, warranties or covenants made by the Shareholder or the Company herein or in any
certificate, exhibit or Schedule delivered to GlobalSecure in connection herewith, or (ii) any
misrepresentation contained in any certificate, exhibit or Schedule or other document or instrument
delivered by the Shareholder or the Company in accordance with any provision of this Agreement.
The Shareholder acknowledges and agrees that the obligation to indemnify and hold harmless pursuant
to this Section 6.1.1 is an obligation solely of the Shareholder and that, from and after the
Closing, the Shareholder shall have no right of contribution from the Company or the Surviving
Corporation, its successors, or any assigns of any of them in respect of the obligations of the
Shareholder under this Section 6.1.1 and that the right to recover from the Shareholder shall not
require GlobalSecure to seek any recovery from the Company or the Surviving Corporation in respect
of any Losses.




          6.1.2 Without limitation as to the other rights of the Shareholder, GlobalSecure shall
indemnify, save and keep the Shareholder, his successor and assigns and the estates, personal
representatives and heirs of such persons forever harmless against and from all liability, demands,
claims, actions, or causes of actions, assessments, losses, penalties, costs, damages or expenses
including reasonable attorneys and expert witness fees (collectively the “Losses”) sustained or
incurred by any of the foregoing persons as a result of or rising out of or by virtue of (i) any
breach by GlobalSecure of any representations, warranties or covenants made by GlobalSecure or
GlobalSecure Sub to the Shareholder herein or in any certificate, exhibit or Schedule delivered by
GlobalSecure or GlobalSecure Sub to the Shareholder, if any, in connection herewith, or (ii) any
misrepresentation contained in any certificate, exhibit or Schedule or other document or instrument
delivered by GlobalSecure to Shareholder in accordance with any provision of this Agreement.






 - 26 -









 








          6.1.3 A party required under this Section 6.1 to furnish indemnity (the “Indemnifying Party”)
shall satisfy its obligation of indemnification under this Section 6.1 within forty-five (45) days
after written notice thereof from any party entitled to such indemnity hereunder (the “Indemnified
Party”) to the Indemnifying Party; provided, however, that a party shall not be deemed in breach
hereof for so long as it contests in good faith its liability for indemnification hereunder.




          6.1.4 As soon as practicable after obtaining knowledge thereof, any Indemnified Party shall
notify the Indemnifying Party of any claim or demand which the Indemnified Party has determined has
given or could give rise to a right of indemnification under this Agreement. A failure to give
such notice shall not negate a right to indemnification hereunder; provided, however, that the
Indemnified Party shall bear any amount of Loss resulting directly from a failure to give a timely
notice. If such claim or demand relates to a claim or demand asserted by a third party against the
Indemnified Party, the Indemnifying Party shall have the right to employ such counsel as is reasonably acceptable to the Indemnified Party to defend any such claim or
demand asserted against the Indemnified Party. The Indemnified Party shall have the right to
participate in the defense of any said claim or demand at its own cost and expense, provided that
unless the Indemnified Party bears a greater risk of loss than the Indemnifying Party, the
Indemnifying Party shall control the defense of said claim or demand. So long as the Indemnifying
Party is defending in good faith any such claim or demand, (i) the Indemnified Party shall not
settle such claim or demand without the prior written consent of the Indemnifying Party, and (ii)
any settlement of such claim or demand made without such consent of the Indemnifying Party shall
not be subject to indemnity under this Section 6.1.




          6.1.5 The Indemnified Party shall make available to the Indemnifying Party or its
representatives all records and other materials required for use in contesting any claim or demand
asserted by a third party against any Indemnified Party. Whether or not the Indemnifying Party so
elects to defend any such claim or demand, the Indemnified Party shall not have any obligation to
do so and the Indemnified Party shall not waive any rights it may have against the Indemnifying
Party under this Section 6.1 with respect to any such claim or demand by electing or failing to
elect to defend any such claim, provided that the Indemnified Party against which a claim or demand
is asserted in the first instance shall file in a timely manner any answer or pleading with respect
to a suit or proceeding in such action as is necessary to avoid default or other adverse results.




          6.1.6 The obligations of Section 6.1.1 above shall be subject to and limited by the following:




               6.1.6.1 On the Closing Date, the Shareholder shall deliver into an escrow account that portion
of the Promissory Note Merger Consideration comprised of the First Promissory Note and 170,000
shares of the Common Stock Merger Consideration (the “Escrow Assets”) to be held and subsequently
disbursed in accordance with the terms of an Indemnity Escrow Agreement in the form of Exhibit
6.1.6.1 hereto. The right of the Shareholder to receive any Escrow Assets held in such escrow
account shall be conditioned upon such Escrow Assets not being otherwise distributed in accordance
with the Indemnity Escrow Agreement to indemnify or reimburse GlobalSecure for any Losses in
accordance with this Section 6.1.



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               6.1.6.2 The parties hereto agree that, in the case of any tax period that begins before and
ends after the Closing Date, the tax for the pre-closing portion of such period shall be determined
by allocating items of income, deductions, credits and allowances between the pre-closing and
post-closing portion and by calculating the tax for such pre-closing portion as if such portion
were a separate taxable year.



               6.1.6.3 Notwithstanding any provision herein to the contrary, GlobalSecure shall not be
entitled to indemnification for any amounts in excess of an amount equal to $517,500.



               6.1.6.4 The remedies set forth in Section 6.1.1 shall be the sole and exclusive remedy against
the Company and the Shareholder under this Agreement.



               6.1.6.5 All representations and warranties in this Agreement will survive the Closing until
the first anniversary of the Closing Date except that the representations and warranties in
Sections 2.6 and 2.15 will survive until all applicable statutes of limitation with respect to the
matters set forth in such representations and warranties have elapsed, and except that all
representations and warranties in Sections 2.1.2 and 2.2 will survive indefinitely.



          6.1.7 Coincidence of Parties. After the Closing Date, losses, damages and expenses
incurred or sustained by the Company by reason of any act or omission of the Shareholder
indemnified against in Section 6.1.1 hereof shall be deemed, for the purposes of this Article 6, to
have been incurred or sustained by GlobalSecure or the Company. Additionally, the obligations of
GlobalSecure set forth in Section 6.1.2 hereof shall, where appropriate, be deemed to be the
obligation of the Company after the Closing Date; and references to GlobalSecure in Section 6.1.2
hereof shall, where appropriate, be deemed to include the Company.




     SECTION 6.2 Further Assurances. The Company Shareholders shall, at any time and from
time to time on and after the Closing Date, upon request by GlobalSecure and without further
consideration, take such actions or cause others to do so, and execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, all transfers, conveyances, powers of attorney
and assurances, as may be reasonably required or desirable for the better conveying, transferring,
assigning, delivering, assuring and confirming to GlobalSecure, or its respective successors and
assigns, or for aiding and assisting in collecting or reducing to possession, any or all of the
Company Shareholders’ obligations under this Agreement.



     SECTION 6.3 Transfer. Each certificate representing the GlobalSecure Common Stock and
any other securities issued in respect of the GlobalSecure Common Stock upon any stock split, stock
dividend, recapitalization, merger, or similar event, shall be stamped or otherwise imprinted with
a legend substantially in the following form (in addition to any legend required under applicable
State securities or other laws):



THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE (FEDERAL) SECURITIES ACT OF 1933 OR THE
APPLICABLE SECURITIES ACT OF ANY STATE BUT HAVE BEEN ISSUED IN
RELIANCE UPON EXEMPTIONS FROM



 - 28 -









 





REGISTRATION CONTAINED IN SAID ACTS.
NO SALE, OFFER TO SELL OR OTHER TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE UNLESS A REGISTRATION
STATEMENT UNDER SAID ACTS IS IN EFFECT WITH RESPECT TO THE
SECURITIES, OR AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH
ACTS IS THEN APPLICABLE.



     SECTION 6.4 Lock Up Agreements. The Shareholder warrants that he shall enter into a
“lockup” agreement for the GlobalSecure Stock received at Closing for a period of time equal to
such period as may be required of the principal stockholders of GlobalSecure by the underwriter(s)
of the IPO and which shall be on terms which are no less favorable than the terms of the lock-up
applicable to Mr. C. Thomas McMillen.



     SECTION 6.5 ESOP Provisions.



          6.5.1 From and after the Closing, GlobalSecure and the Company shall take such actions as are
necessary to facilitate the termination of the ESOP in accordance with the actions of the Board of
Directors of the Company and the ESOP taken before the Closing. Without limiting the foregoing,
GlobalSecure and the Company shall (i) maintain the ESOP as a tax-qualified plan under applicable
federal income tax laws and regulations until all ESOP assets are distributed to ESOP participants
and (ii) cause the ESOP to comply with all applicable laws. The Company will be responsible for
any cost and expenses, including the tax penalty, arising from the termination of the ESOP.




          6.5.2 Upon receipt by the Trustee of the ESOP of a determination letter from the Internal
Revenue Service relating to the termination of the ESOP, GlobalSecure and the Company shall provide
participants in the ESOP with the opportunity to receive a distribution or make a “direct rollover”
(within the meaning of Treasury Regulation Section 1.401(a)(31)-1) of amounts credited to their
ESOP accounts to other qualified retirement plans sponsored by GlobalSecure.




          6.5.3 The obligations of GlobalSecure and the Company under this Section 6.5 shall expire as
of the date the ESOP has been terminated and distributions have been made to ESOP participants and
the final Annual Return (Department of Labor Form 5500) has been filed with the Employee Benefit
Security Administration.




ARTICLE 7




TERMINATION




     Anything herein or elsewhere to the contrary notwithstanding, this Agreement may be terminated
and abandoned at any time prior to consummation of the transactions contemplated hereby:



     7.1 By the mutual consent of GlobalSecure and the Shareholder.




 - 29 -










 







     7.2 By GlobalSecure in its sole discretion within ten (10) business days following its receipt
of the Statements referred to in Section 2.16.



     7.3 By GlobalSecure if all of the conditions to Closing described in Section 4.1 have not been
satisfied by December 18, 2003, as such date may be extended hereunder.



     7.4 By GlobalSecure if the transactions shall not have been consummated by December 18, 2003,
or such later date as may be agreed upon by the parties.



     7.5 By GlobalSecure (if GlobalSecure is not then in breach of any term of this Agreement) if
the Shareholder (i) has failed to perform or observe any covenant, agreement or condition contained
in this Agreement required to be performed or observed on or prior to the Closing Date; or (ii)
breached any of its representations or warranties contained in this Agreement, which failure or
breach shall not have been cured within ten (10) days after GlobalSecure has notified the
Shareholder of its intent to terminate this Agreement pursuant to this Section 7.5.



     7.6 By the Shareholder if GlobalSecure has materially breached any representation or warranty
herein or failed to perform any material obligation or condition hereof and such breach or failure
has not been cured within ten (10) days after the Shareholder has notified GlobalSecure of its
intent to terminate this Agreement pursuant to this Section 7.6.



     7.7 Notwithstanding anything to the contrary otherwise contained herein, the Company and the
Shareholder jointly and severally agree, in recognition of GlobalSecure’s significant efforts and
costs and expenses in connection with the transactions hereunder, that if the Company or the
Shareholder fail to close for any reason other than a reason solely related to GlobalSecure’s
failure to close, the Company and the Shareholder shall jointly and severally be responsible to pay
an amount equal to $100,000, not as a penalty but as nonaccountable agreed-to liquidated damages to
reimburse the out-of-pocket costs and expenses of GlobalSecure related to the transactions
hereunder.


Any termination pursuant to this Article 7 shall be without liability on the part of any party,
except as provided in this Article 7.




ARTICLE 8




MISCELLANEOUS




     SECTION 8.1 Survival. Subject to the time limitations for the assertion of
indemnification claims set forth in this Agreement, the representations and warranties of the
Shareholder and GlobalSecure shall survive Closing, notwithstanding any investigation on the part
of the Shareholder or GlobalSecure, as the case may be.



     SECTION 8.2 Expenses. Except as otherwise provided in Article 7 hereof, each party
will pay all of its Expenses in connection with the negotiation of this Agreement, the performance
of its obligations hereunder, and the consummation of the transactions contemplated by this
Agreement provided, however, that the Expenses of Johnson, Pope shall be paid by the Company prior
to Closing or by the Shareholder and the Expenses of the ESOP,



- 30 -









 




including the Expenses of ESOP
Counsel, shall be paid by the Company. For purposes of this Section 8.2, “Expenses” shall include
all out-of-pocket expenses and fees (including, without limitation, fees and expenses payable to
investment banking firms, counsel, accountants, experts and consultants) incurred in
connection with this Agreement and the transactions contemplated by this Agreement.




     SECTION 8.3 Amendments and Waivers. The parties hereto, by mutual agreement in
writing, may amend, modify and supplement this Agreement. The failure of any party hereto to
enforce at any time any provision of this Agreement shall not be construed to be a waiver of such
provision, nor in any way to affect the validity of this Agreement or any part hereof or the right
of any party thereafter to enforce each and every such provision. No waiver of any breach of this
Agreement shall be held to constitute a waiver of any other or subsequent breach.



     SECTION 8.4 Notices. All notices or other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given (i) upon delivery if delivered
by hand; (ii) four (4) days subsequent to mailing if mailed by express, certified or registered
mail, with postage prepaid, in the continental United States; (iii) two (2) days subsequent to
pick-up by such courier if sent by a nationally or internationally recognized overnight courier
service that regularly maintains records of items picked up and delivered; or (iv) when transmitted
if sent by telecopier, as follows:



If to GlobalSecure:



GlobalSecure Holdings, Ltd.

8401 Corporate Drive

Suite 230

Landover, Maryland 20785

Attn.: Craig R. Bandes, President

FAX No.: (301) 306-3479



with a copy to:



George S. Lawler, Esquire

Whiteford, Taylor & Preston L.L.P.

210 West Pennsylvania Avenue

Towson, Maryland 21204

FAX No.: (410) 832-2015



If to the Shareholder or, prior to the Closing, to the Company:



HazTrain, Inc.

P.O. Box 2206

LaPlata, Maryland 20646

Attn.: Jerry L. Smith, Ph.D., Chief Executive Officer and President

FAX NO.: (301) 934-9584



with a copy to:




- 31 -









 







A.R. (Charlie) Neal, Esquire

Johnson, Pope, Bokor, Ruppel & Burns, PA

911 Chestnut Street

P.O. Box 1368

Clearwater, Florida 33756

FAX No.: (727) 441-8617



If to the ESOP:



HazTrain, Inc. ESOP

P.O. Box 2206

LaPlata, Maryland 20646

Attn.: Timothy J. Czysz, Trustee

FAX NO.: (301) 934-9584


or such other address as shall be furnished in writing by any of the parties, and any such notice or
communication shall be deemed to have been given two (2) business days after the date so mailed.




     SECTION 8.5 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
permitted assigns. This Agreement, and the rights, interests and obligations hereunder, may not be
assigned by either party without the prior written consent of the other party hereto.
Notwithstanding the foregoing, GlobalSecure may assign its rights and obligations hereunder to any
of GlobalSecure’s wholly-owned subsidiaries with the effect that the Merger contemplated hereby may
be made by such subsidiary.



     SECTION 8.6 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be prohibited by or invalid under applicable law, such provision will
be ineffective only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provision of this Agreement unless the consummation of
the transaction contemplated hereby is adversely affected thereby.



     SECTION 8.7 Complete Agreement. This document and the documents referred to herein
contain the complete agreement between the parties and supersede any prior understandings,
agreements or representations by or between the parties, written or oral, which may have related to
the subject matter hereof in any way.



     SECTION 8.8 No Third-Party Beneficiaries. This Agreement shall be for the benefit
only of the parties hereto, and their respective successors and assigns.



     SECTION 8.9 Singular and Plural; Gender. The singular shall include the plural and
vice-versa, and the use of one gender shall be deemed to include all other genders whenever
appropriate.



     SECTION 8.10 Governing Law. All questions concerning the construction, validity and
interpretation of this Agreement and the performance of the obligations imposed by this



- 32 -









 




Agreement
will be governed by the laws of the State of Maryland without reference to any conflict of laws
rules.




     SECTION 8.11 Counterparts. This Agreement may be executed in two or more counterparts
each of which shall be deemed an original and all of which together shall constitute one and the
same instrument.



     SECTION 8.12 Schedules. The Schedules hereto are an integral part of this Agreement
Information described in any Schedule of this Agreement shall be deemed disclosed in all Schedules
of this Agreement and the term “Agreement” shall include all Schedules, exhibits and other
deliveries attached or made pursuant hereto. Except as otherwise specifically provided for herein,
any Schedules which have not been prepared and attached to this Agreement on the date of execution
hereof shall be prepared and delivered by Shareholder to GlobalSecure within ten (10) days from the
date of execution of this Agreement.



     SECTION 8.13 Headings. The headings and captions set forth herein are for convenience
of reference only and shall not affect the construction or interpretation hereof.



     SECTION 8.14 Further Documents. Shareholder shall, whenever and as often as requested
to do so by GlobalSecure, but without expense to Shareholder, execute, acknowledge, and deliver all
such further conveyances, assignments, confirmations, satisfactions, releases, instruments of
further assurance, approvals, consents and any and all other further instruments and documents as
may be necessary, expedient, or proper in the reasonable opinion of GlobalSecure or its counsel in
order to complete the transactions contemplated herein.



     SECTION 8.15 Arbitration. Any and all disputes, controversies or claims that lead up
to the execution of this Agreement or that arise out of or relate to this Agreement or the breach
of it, and including any claims regarding the validity, scope and enforceability of this
arbitration clause, shall, if not
promptly settled by the parties, be solely and finally resolved by arbitration. The
arbitration shall be conducted in accordance with the commercial arbitration rules of the American
Arbitration Association (the “AAA”) in effect at the time and shall be conducted before a single
arbitrator. The parties to the arbitration shall attempt to agree, by mutual consent, to the
appointment of the arbitrator. In the absence of agreement among the parties, any party to the
arbitration may apply to AAA for a list of arbitrators from which list the arbitrator shall be
selected in accordance with the commercial arbitration rules of AAA.



     Any such action or proceeding brought by GlobalSecure arising out of or relating to this
Agreement shall be brought in Baltimore City, Maryland and in no other location. Any such action
or proceeding brought by Shareholder arising out of or relating to this Agreement shall be brought
in Baltimore City, Maryland and no other location. All cross complaints shall be filed with the
same arbitration panel and in the same location in which the original complaint was filed. The
parties hereby waive the right to object to such location on the basis of venue or forum
nonconveniens. Judgment upon any award rendered by the arbitrator may be entered in any court of
competent jurisdiction in Maryland and each party hereto consents to the jurisdiction of such
courts and waives all claims of improper venue. The arbitrator shall determine all claims in
accordance with the internal law of the State of Maryland. The internal procedural and substantive
laws of Maryland and the United States Federal Arbitration Act shall



- 33 -









 




govern all questions of
arbitral procedure, arbitral review, scope of arbitral authority, and arbitral enforcement. The
parties further agree that the arbitration proceeding shall constitute an absolute bar to the
institution of any court proceeding, and that the decision and award of the arbitrator shall be
final and binding.




     The cost of the arbitration proceeding shall be shared equally by the parties except that each
party shall be responsible for its own attorneys fee, if any.



[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]





- 34 -









 








     IN WITNESS WHEREOF, the parties hereto have executed this Agreement, under seal, on the day
and year first above written, intending to be legally bound hereby.



	 	 	 	 	 	 	 	 	 
	WITNESS:

	 	 	 	 	 	HAZTRAIN, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/

	 	 	 	By:
	 	          /s/ Jerry L. Smith
	 	(SEAL)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Jerry L. Smith, Ph.D., Chief	 	 
	 

	 	 	 	 	 	Executive Officer and President	 	 
	 

	 	 	 	 	 	-Company-	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/

	 	 	 	 	 	          /s/ Jerry L. Smith
	 	(SEAL)
	 	 	 	 	 	 	 
	 	 	 	 	Jerry L. Smith, Ph.D., Individually	 	 
	 
	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	HAZTRAIN, INC. EMPLOYEE STOCK
	 	 	 	 	OWNERSHIP PLAN
	 
	 	 	 	 	 	 	 	 
	/s/

	 	 	 	By:
	 	          /s/ Timothy J. Czysz
	 	(SEAL)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Timothy J. Czysz, Sole Trustee	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
-Company Shareholders-
	 
	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	GLOBALSECURE HOLDINGS, LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/

	 	 	 	By:
	 	          /s/ Craig R. Bandes
	 	(SEAL)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Craig R. Bandes, President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
-GlobalSecure-
	 
	 	 	 	 	 	 	 	 
	WITNESS:	 	 	 	GLOBALSECURE MERGER SUB, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	/s/

	 	 	 	By:
	 	          /s/ Craig R. Bandes
	 	(SEAL)
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Craig R. Bandes, President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	
-GlobalSecure Sub-






- 35 -









 






ANNEX A




ALLOCATION OF MERGER CONSIDERATION




	 	 	 	 	 
	 	 	 	 	Consideration to be Deposited Under
	 	 	Merger Consideration	 	Indemnity Escrow Agreement
	Jerry L. Smith, Ph.D.

	 	$1,200,000 of the Cash Merger
Consideration, subject to any
adjustment pursuant to Section 1.63
hereof
	 	-0-
	 
	 	 	 	 
	 

	 	Promissory Note Merger Consideration
	 	First Promissory Note
	 
	 	 	 	 
	 

	 	300,000 shares GlobalSecure Common

Stock
	 	170,000 shares GlobalSecure Common Stock
	 
	 	 	 	 
	ESOP

	 	Refinancing by the Company and
GlobalSecure, as guarantor, of
$1,312,500 Bank Loan and Discharge
of ESOP Loan by the Company
	 	-0-
	 
	 	 	 	 
	 

	 	$148,906.80 of the Cash Merger
Consideration
	 	-0-






- 36 -









 






EXHIBIT A




FORM OF ARTICLES OF MERGER




- 37 -









 








EXHIBIT B




DISCLOSURE SCHEDULE




- 38 -









 








EXHIBIT 1.6.3




FORM OF FIRST PROMISSORY NOTE




- 39 -









 








EXHIBIT 1.6.3.A




FORM OF SECOND PROMISSORY NOTE




- 40 -









 








Exhibit 1.6.3.B




FORM OF SECURITY AGREEMENT




- 41 -









 








EXHIBIT 2.16




FINANCIAL STATEMENTS




- 42 -









 








EXHIBIT 4.1.6.1




GENERAL RELEASE AND NONCOMPETITION AGREEMENT




- 43 -









 








EXHIBIT 4.1.6.2




EMPLOYMENT AGREEMENT




- 44 -









 








EXHIBIT 4.1.6.4




OPINION OF COUNSEL FOR THE SHAREHOLDER AND THE COMPANY




- 45 -









 








EXHIBIT 4.1.6.4.A




OPINION OF COUNSEL FOR THE ESOP




- 46 -









 








EXHIBIT 6.1.6.1




INDEMNITY ESCROW AGREEMENT





- 47 -