Document:

THIS PRECEDENT SHOULD ONLY BE USED BY THE EMPLOYMENT DEPARTMENT – IF IT IS USED BY ANY OTHER FEE EARNER, IT MUST BE CHECKED BY

DATED: 16 JUNE  2004

SECURE RISKS LIMITED  (1)

and

BRUCE M. BRAES  (2)

_________________________________

SERVICE AGREEMENT

___________________________________

Mishcon de Reya

Summit House

12 Red Lion Square

London WC1R 4QD

Tel: 020 7440 7000

Fax: 020 7404 5982

Ref: 65/JCB/SML

j:\jmw\jmw business\jmw active\richardson & patel\universal guardian holdings\strategic securities solutions\braes sssi service agreement.doc

TABLE OF CONTENTS

1

DEFINITIONS

1

2

APPOINTMENT

1

3

TERM

1

4

DUTIES

1

5

HOURS AND PLACE OF WORK

1

6

REMUNERATION

1

7

EXPENSES

1

8

HOLIDAYS

1

9

SICKNESS

1

10

PENSION/DEATH BENEFITS

1

11

OTHER ACTIVITIES

1

12

CONFIDENTIAL INFORMATION

1

13

COMPANY PROPERTY

1

14

INTELLECTUAL PROPERTY

1

15

TERMINATION

1

16

GARDEN LEAVE

1

17

RESTRICTIVE COVENANTS

1

18

DISCIPLINARY AND GRIEVANCE PROCEDURE

1

19

PERSONAL DATA

1

20

E-MAIL AND INTERNET

1

21

NOTICES

1

22

FORMER AGREEMENTS

1

23

CONSTRUCTION

1

24

THIRD PARTY RIGHTS

1

25

PROPER LAW

1

1

Braes SSSI Service Agreement

THIS AGREEMENT is dated June 17th, 2004 and is made BETWEEN:

(1)      SECURE RISKS LIMITED, whose registered office is at Summit House, 12 Red Lion Square, London WC1R 4QD United Kingdom, (the "Company"); and

(2)

BRUCE M. BRAES of  13 Westcroft Court, Beechwood Grove, Livingston, West Lothian, Scotland. EH 54 7EW. United Kingdom.                                                           (the "Executive")

IT IS AGREED as follows:

1.

DEFINITIONS"\l 1 DEFINITIONS

1.1

In this Agreement:

the following expressions have the following meanings:

"associated company" means an associated company within the meaning of section 416 of the Income and Corporation Taxes Act 1988;

the "Board" means the board of directors for the time being of the Company or any committee of the board of directors duly appointed by it;

"Change of Control" means that the control (as defined for the purposes of Section 416 of the Income and Corporation Taxes Act 1988) of the company concerned shall have passed or been transferred to any person or persons other than the person or persons in control of the company concerned at the date of this Agreement;

the "Employment" means the Executive's employment under this Agreement;  

"Good Reason" means a Change of Control or  the Company demoting the Executive from his position as Managing Director;

"Group Company" and "Group" means the Company, its ultimate holding company and any subsidiary or associated company of the Company or its ultimate holding company;

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"Intellectual Property Rights" means all copyright (including rights in software), trade marks, service marks, registered and unregistered design rights, patents, applications for and the right to register any of the above rights and all rights or forms of protection of a similar nature or having equivalent or similar effect to any of these which may subsist anywhere in the world.

"Investment" means any holding as a bona fide investment of not more than three per cent of the total issued share capital or debentures in any company whose shares are quoted or dealt in on any recognised investment exchange.

"subsidiary" and "holding company" have the meanings given to them in section 736 of the Companies Act 1985 as amended;

2.

APPOINTMENT"\l 1 APPOINTMENT

The Executive will be employed as Managing Director – Secure Risks - Strategic Security Solutions on the terms set out in this Agreement.

3.

TERM"\l 1 TERM

3.1

The Employment will commence on June 17th, 2004 (the "Start Date") and will continue until terminated:

3.1.1

as provided for elsewhere in this Agreement;

3.1.2

by either party giving to the other not less than 3 months' prior written notice (such notice not to expire at any time before the first anniversary of the Start Date), but in any event automatically on the third anniversary of the Start Date; or

3.1.3

automatically when the Executive reaches 65 years of age or such other age as the Board shall determine is the normal retirement age from time to time.

3.2

The Executive's previous employment with Strategic Security Solutions International Limited does not count as part of the Executive's continuous employment with the Company.

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4.

DUTIES"\l 1 DUTIES

4.1

The Executive shall:-

4.1.1

devote the whole of his working time and attention to the duties assigned to him;

4.1.2

faithfully and diligently serve the Company (and all Group Companies);

4.1.3

use his best endeavours to promote and protect the interests of the Company (and all Group Companies);

4.1.4

obey all reasonable and lawful directions given to him by or under the authority of the Board;

4.1.5

perform services for and hold offices in any Group Company without additional remuneration;

4.1.6

carry out his duties and exercise his powers jointly with such person as the Board may appoint to act jointly with him; and

4.1.7

make such reports to the Board on any matters concerning the affairs of the Company or any Group Company as are reasonably required. 

4.2

The Company may at its sole discretion transfer this Agreement to any Group Company at any time.

5.

HOURS AND PLACE OF WORK"\l 1 HOURS AND PLACE OF WORK

5.1

The Executive's normal working hours are 9.00 a.m. to 5.00 p.m. Monday to Friday, together with such additional hours as may be necessary for the proper performance of his duties.

5.2

The Working Time Regulations 1998 limit the average working week (as calculated over a 17 week period) of workers to a maximum of 48 hours.  The Executive agrees to opt out of the relevant part of the Working Time 

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Regulations. Should the Executive wish to terminate this opt-out then he may do so by giving not less than three months' written notice addressed to the Company Secretary.

5.3

The Executive's normal place of work will be the Company's premises at 1st Floor, Stadium House, Alderstone Road, Livingston, EH54 7DN

but the Company may require the Executive to work at any place within the United Kingdom on either a temporary or an indefinite basis.  The Executive will be given reasonable notice of any change in his place of work, at a time after the Board of Directors have unanimously agreed this change.

5.4

If the Executive's principal place of work is changed to a location which is outside reasonable commuting distance from his home, the Company will reimburse his reasonable relocation expenses in accordance with the Company's relocation policy from time to time.

5.5

If so required by the Company, the Executive shall travel to such places (whether in the United Kingdom or abroad) by such means and on such occasions as the Company may from time to time require.

6.

REMUNERATION"\l 1 REMUNERATION

6.1

The Company will pay to the Executive a salary at the rate of £100,000 per annum, payable by equal monthly instalments in arrears on or before the last working day of each calendar month. 

6.2

The Executive shall be entitled to receive by way of further remuneration a discretionary bonus calculated in accordance with the Company’s established bonus schedule, as determined by the Board of Directors of the Company.   The Executive acknowledges that he has no right to receive a bonus and that he will not acquire such a right, nor shall the Board come under such an obligation, merely by virtue of having received one or more bonus payments during the Employment.  For the avoidance of doubt, the Executive will not be entitled to receive a bonus if his employment has terminated (for any reason) or he is serving any period of notice (whether on Garden Leave or otherwise) at the time that bonuses are paid.

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6.3

The remuneration specified in clause 6.1 shall be inclusive of any fees to which the Executive may be entitled as a director of the Company or any Group Company.

6.4

For the purposes of the Employment Rights Act 1996 or otherwise, the Executive hereby consents to the deduction of any sums owing by him to the Company or any Group Company at any time from his salary or any other payment due from the Company to the Executive. 

7.

EXPENSES"\l 1 EXPENSES

The Company shall reimburse the Executive in respect of all travelling, hotel and other expenses properly and reasonably incurred by him in the proper performance of his duties under this Agreement, subject to the Executive providing such receipts or other evidence as the Company may require.

8.

HOLIDAYS"\l 1 HOLIDAYS

8.1

In addition to bank and other public holidays, the Executive will be entitled to minimum of 20 working days' paid holiday in each holiday year (being the period from 1 January to 31 December) to be taken at such time or times as may be approved by the Board.

8.2

In the respective holiday years in which the Employment commences or terminates, the Executive's entitlement to holiday shall accrue on a pro rata basis for each complete month of service during the relevant year.

8.3

On termination of the Employment, the Company may either require the Executive to take any unused accrued holiday entitlement during any notice period or make payment in lieu of that entitlement. If the Executive has taken more holiday than his accrued entitlement, he will be required to reimburse the Company in respect of the excess days taken and the Company is authorised to deduct the appropriate amount from any sums due to him. Any payment in lieu or deduction made shall be calculated on the basis that each day of paid holiday is equivalent to 1/260th of the Executive's salary.

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8.4

Any holiday not taken in a holiday year cannot be carried over to the subsequent year without the permission of the Board.

9.

SICKNESS BENEFITS"\l 1 SICKNESS BENEFITS

9.1

Provided the Executive complies with the notification and certification procedures below (or such additional or alternative procedures as the Company shall notify from time to time) he will be paid his salary during any absence from work due to illness or injury for an aggregate of up to 13 weeks in any period of 12 months. Such payments will be inclusive of any statutory sick pay and the Company may deduct from such payments the amount of any social security or other benefits that the Executive may be entitled to receive and, to the extent that such sums are recoverable from third parties in relation to such incapacity, payments under this clause will constitute a loan repayable on demand at such time as the Executive receives such third party payment. 

9.2

The Executive shall notify the Company as soon as possible on the first day of absence of the reason for the absence.  The Executive shall be required to complete self-certification forms in respect of any period of absence and shall provide a medical certificate for any period of incapacity of more than seven days (including weekends). Further certificates must be provided to cover any further periods of incapacity.

9.3

The Company may require the Executive to be examined by a doctor appointed by the Company and the Executive consents to such doctor disclosing the results of the examination to the Company.

9.4

If the Executive is away from work due to illness or injury for a consecutive period of 40 working days the Company may (without prejudice to the provisions of clause 15) appoint another person or persons to perform the Executive's duties.

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10.

PENSION [AND OTHER BENEFITS]"\l 1 PENSION/DEATH BENEFITS

10.1

The Company does not currently operate a pension scheme.  There is no contracting-out certificate in force in respect of the Employment.  The Company does not contribute to the stakeholder pension scheme.  

10.2

Secure Risks is required to provide a £500,000 term life insurance policy in the name of the Executive for the benefit of his family, in the event of the Executive's death whilst in service. 

11.

OTHER ACTIVITIES"\l 1 OTHER ACTIVITIES

The Executive shall not (unless otherwise agreed in writing by the Board) whether directly or indirectly, paid or unpaid, undertake, be engaged or concerned in the conduct of, be or become an employee, agent, partner, consultant or director of or assist or have any financial interest in any other actual or prospective business or profession, provided that this shall not prevent the Executive from holding an Investment.

12.

CONFIDENTIAL INFORMATION"\l 1 CONFIDENTIAL INFORMATION

12.1

The Executive shall not (save in the proper course of his duties or as authorised by the Company) use or communicate to any person (and shall use his best endeavours to prevent the use or communication of) any trade or business secrets or confidential information of or relating to the Company or any Group Company (including, but not limited to details of customers or suppliers, terms of business, business plans, financial information, sales and marketing information, details of employees and officers and their remuneration and other benefits, source codes, passwords or other confidential matters relating to computer systems, research and development projects, intellectual property, know-how and any information which the Executive has been told is confidential or which has been obtained in circumstances in which the Company or any Group Company is subject to a duty of confidentiality in relation to that information).  

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12.2

The restriction in clause 12.1 above shall continue to apply after the termination of the Employment howsoever arising and shall include information in the public domain for so long as the Executive is in a position to use such information more readily than others who have not worked for the Company or any Group Company.  It shall not apply to information which the Executive may be ordered to disclose by a court of competent jurisdiction or which the Executive discloses pursuant to and in accordance with the Public Interest Disclosure Act 1998.

13.

COMPANY PROPERTY"\l 1 COMPANY PROPERTY

On the termination of the Employment or at any time at the request of the Company, the Executive shall immediately deliver up to the Company all property of the Company or any Group Company which may be in the Executive's possession or control including, without limitation, keys, mobile phone, company car, computer equipment, all correspondence, documents, papers, memoranda, notes and records (including, without limitation, any records stored by electronic means, together with any codes or implements necessary to give full access to such records), system designs, software designs and software programmes (in whatever media) and all copies of the above.

14.

INTELLECTUAL PROPERTY"\l 1 INTELLECTUAL PROPERTY

14.1

The Executive shall promptly disclose to the Company any idea, invention or work which is relevant to or capable of use in the business of the Company or any Group Company, made by him in the course of his employment (whether or not in the course of his duties).  The Executive acknowledges that the Intellectual Property Rights subsisting (or which may in the future subsist) in any such ideas, inventions or works will, on creation, vest in and be the exclusive property of the Company and if they do not do so he hereby assigns them to the Company, such assignment to take effect upon the creation of each of the Intellectual Property Rights.  The Executive hereby irrevocably waives any moral rights which he may have in any such ideas, inventions or works 

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Braes SSSI Service Agreement

which are or have been conferred upon him by chapter IV of part I of the Copyright, Designs and Patents Act 1988.

14.2

The Executive hereby irrevocably appoints the Company to be his attorney in his name and on his behalf to execute and do any such instrument or thing and generally to use his name for the purpose of giving to the Company or its nominee the full benefit of the provisions of this clause and acknowledges in favour of any third party that a certificate in writing signed by any Director or Secretary of the Company that any instrument or act falls within the authority hereby conferred shall be exclusive evidence that such is the case.

15.

TERMINATION"\l 1 TERMINATION

15.1

The Company may terminate the Executive's employment at any time without prior notice or payment in lieu of notice if the Executive:-

15.1.1

is guilty of gross misconduct (which, for the avoidance of doubt, includes any conduct which tends to bring the Company into disrepute);

15.1.2

is convicted of any criminal offence other than a motoring offence for which no custodial sentence is given to him;

15.1.3

becomes bankrupt or makes any arrangement or composition with or for the benefit of his creditors;

15.1.4

is disqualified from holding any office which he holds in the Company or resigns from such office without the prior written approval of the Board; or

15.1.5

becomes of unsound mind or a patient under any statute relating to mental health.

15.2

Termination by Executive for Good Reason.  

Should the Executive terminate the Employment for a Good Reason, 

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he will be entitled to payment of the Termination Benefits, subject to him giving the Company notice in writing within 90 days of the event allowing termination for a Good Reason. 

 

15.3

Termination Benefits.

In the event of termination of the Executive’s employment with the Company pursuant to Sections 15.2 , the Company shall

 (i) pay a sum to the Executive equal to the remaining balance of salary that would have been earned until the end of the third anniversary of the Start Date;

(i) for a period of 16 months, continue to pay the premiums for any life insurance policy or health insurance policy paid for by the Company in accordance with the terms of this Agreement and in effect on the date of Executive’s termination and

 (ii) provide outplacement services, as offered by the Company on the date of termination (the "Termination Benefits").

The parties hereto agree that the Termination Benefits are to be in full satisfaction, compromise and release of any contractual and statutory claims arising out of any termination of the Employment  pursuant to Section 15.2, and such amounts shall be contingent upon the Executive's delivery of a compromise agreement of such claims upon termination of employment in a form reasonably satisfactory to the Company, it is being understood that no Termination Benefits shall be provided unless and until the Executive determines to enter into the said compromise agreement. 

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15.4

Notwithstanding termination of this Agreement as provided in this Section 15 or any other termination of Executive’s employment with the Company, Executive’s obligations under Section 17 hereof shall survive any termination of Executive’s employment with the Company at any time and for any reason.

 

16.

GARDEN LEAVE"\l 1 GARDEN LEAVE

16.1

Despite any other provision in this Agreement the Company is under no obligation to provide the Executive with work and may (if either party serves notice to terminate the Employment or if the Executive purports to terminate the Employment without due notice and the Company has not accepted that resignation) require the Executive to perform:

16.1.1

only a specified part of his normal duties, and no others;

16.1.2

such duties as it may reasonably require, and no others; or

16.1.3

no duties whatever

and may exclude the Executive from any premises of any Group Company ("Garden Leave").

16.2

During any period of Garden Leave, the Executive shall:-

16.2.1

remain an employee of the Company;

16.2.2

not (except as a representative of the Company or with the prior written approval of the Board) whether directly or indirectly, paid or unpaid, be engaged or concerned in the conduct of any other actual or prospective business or profession or be or become an employee, agent, partner, consultant or director of any other company or firm or assist or have any financial interest in any other such business or profession (provided the Executive shall not be prevented from holding an Investment);

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16.2.3

not have any contact or communication with any client or customer, employee, officer, director, agent or consultant of the Company or any Group Company except such person(s) as the Company shall designate;

16.2.4

keep the Company informed of his whereabouts so that he can be called upon to perform any appropriate duties as required by the Company;

16.2.5

continue to receive his salary and, any bonus payment due under clause 6.2 and contractual benefits in the usual way; and 

16.2.6

continue to be bound by his contractual and implied duties of good faith and fidelity.

17.

RESTRICTIVE COVENANTS"\l 1 RESTRICTIVE COVENANTS 

17.1

In this clause:

"Customer" means any person, firm, company or entity who has at any time during the Relevant Period been a customer or client of the Company or any Group Company and with whom the Executive was materially involved or had personal dealings during the Relevant Period;

"Key Employee" means any employee of the Company or any Group Company who immediately prior to the Termination Date was a manager or consultant of the Company or any Group Company with whom the Executive had personal dealings during the Relevant Period;

"Prospective Customer" means any person, firm, company or entity who has at any time during the period of six months prior to the Termination Date been in negotiations with the Company or any Group Company for the provision of services and with whom during such period the Executive was materially involved or had personal dealings during the Relevant Period;

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"Relevant Area" means any part of any country in which the Executive was actively involved in the business of the Company or any Group Company at any time during the Relevant Period;

"Relevant Period" means the period of 12 months ending on the Termination Date;

"Services" means services identical or similar to those being provided by the Company or any Group Company at the Termination Date and with which the Executive was materially involved during the Relevant Period; 

"Termination Date" means the date on which the Employment terminates or, if the Executive spends a period on Garden Leave immediately before the termination of the Employment, such earlier date on which such Garden Leave commences.

17.2

The Executive covenants with the Company that he will not (save with the prior written consent of the Board (which shall not be unreasonably withheld)), directly or indirectly, either alone or with or on behalf of any person, firm, company or entity and whether on his own account or as principal, partner, shareholder (disregarding any Investment), director, employee, consultant or in any other capacity whatsoever:-

17.2.1

for six months following the Termination Date be engaged or concerned in any business which is carried on in the Relevant Area and which is competitive with any business carried on by the Company or any Group Company at the Termination Date in which the Executive was materially involved in the course of the Employment;

17.2.2

for six months following the Termination Date and in competition with the Company or any Group Company canvass or solicit business or custom from any Customer or Prospective Customer in relation to Services;

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17.2.3

for six months following the Termination Date and in competition with the Company or any Group Company be concerned with the provision to any Customer or Prospective Customer of Services or otherwise deal with any Customer or Prospective Customer in relation to Services;

17.2.4

for six months following the Termination Date and in competition with the Company or any Group Company canvass or solicit business or custom from any Supplier in relation to services identical or similar to those supplied to the Company or any Group Company in the Relevant Period;

17.2.5

for six months following the Termination Date and in competition with the Company or any Group Company be concerned with the receipt of services from any Supplier where such services are in competition with those supplied to the Company or any Group Company in the Relevant Period;

17.2.6

for six months following the Termination Date solicit or endeavour to solicit the employment or engagement of any Key Employee in a business which is in competition with the Company or any Group Company (whether or not such person would breach their contract of employment or engagement);

17.2.7

at any time after the Termination Date represent himself as being in any way connected with (other than as a former employee) or interested in the business of the Company or any Group Company or use any registered names or trading names associated with the Company or any Group Company.

17.3

The Executive has given the covenants in clause 17.2 above to the Company as trustee for itself and for each Group Company.  The Executive agrees that he shall (at the request and cost of the Company) enter into a direct agreement with any Group Company for which he performs services under which he will accept restrictions identical to the restrictions contained in this clause 17 (or such similar restrictions as will be appropriate provided that such restrictions 

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shall be no wider in scope than those contained in this clause) in relation to such Group Company.

17.4

Each of the restrictions contained in this clause is an entirely separate and independent restriction, despite the fact that they may be contained in the same phrase, and if any part is found to be unenforceable the remainder will remain valid and enforceable.  

17.5

While the restrictions in this clause (on which the Executive has had the opportunity to take independent legal advice) are considered by the parties to be fair and reasonable in the circumstances, it is agreed that if any such restriction should be held to be void or ineffective for any reason but would be treated as valid and effective if some part or parts of the restriction were deleted, the restriction in question will apply with such modification as may be necessary to make it valid and effective.

17.6

If, during the Employment or any period during which the restrictions in this clause 17 apply, any person, firm, company or entity offers to the Executive any arrangement or contract which might or would cause the Executive to breach any of the restrictions, he will notify that person, firm, company or entity of the terms of this clause 17.

18.

DISCIPLINARY AND GRIEVANCE PROCEDURE"\l 1 DISCIPLINARY AND GRIEVANCE PROCEDURE

18.1

There are no specific disciplinary rules that apply to the Executive except those provided in this Agreement.  If the Executive is dissatisfied with any disciplinary decision, he should apply in writing to the Board.

18.2

The Company may at any time suspend the Executive on full pay for a period of up to 20 working days, or such longer period as shall be reasonably necessary, for the purposes of investigating any allegation of misconduct or neglect against him. 

18.3

If the Executive wishes to obtain redress of any grievance relating to the Employment or make any protected disclosure in accordance with the Public 

16

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Interest Disclosure Act 1998, he shall apply in writing to the Managing Director with a copy to the Chairman of the Board, setting out the nature and details of any such grievance or disclosure.

19.

PERSONAL DATA"\l 1 PERSONAL DATA

The Executive consents to the Company or any Group Company holding and processing both electronically and manually any data (which may include sensitive personal data) which relates to the Executive for the purposes of the administration and management of its employees and its business and for compliance with applicable procedures, laws and regulations.  The Executive also consents to the transfer of such personal data to other offices the Company may have or to a Group Company or to other third parties, whether or not in the European Economic Area, for administration purposes and other purposes in connection with the Executive's employment where it is necessary or desirable for the Company to do so. 

20.

E-MAIL AND INTERNET"\l 1 E-MAIL AND INTERNET 

Telephone calls made and received by the Executive using the Company's equipment, use of the e-mail system to send or receive business or personal correspondence and use of the Internet may be monitored and/or recorded by the Company. The Executive acknowledges that the content of any communications using the Company's systems will not be private and confidential to the Executive. 

21.

NOTICES"\l 1 NOTICES

Any notice to be given under this Agreement shall be in writing.  Notices may be given by either party by personal delivery or post or by fax addressed to the other party at (in the case of the Company) its registered office for the time being and (in the case of the Executive) either to his address shown in this Agreement or to his last known address and shall be deemed to have been served at the time at which it was delivered personally or transmitted or, if sent by post, would be delivered in the ordinary course of post.

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22.

FORMER AGREEMENTS"\l 1 FORMER AGREEMENTS

22.1

This Agreement contains the entire understanding between the parties and is in substitution for any previous letters of appointment, agreements or arrangements, whether written, oral or implied, relating to the employment or engagement of the Executive, which shall be deemed to have been terminated by mutual consent as from the commencement of this Agreement.

22.2

The Executive hereby warrants and represents to the Company that he will not, in entering into this Agreement or carrying out his duties under this Agreement, be in breach of any terms of employment whether express or implied or any other obligation binding upon him.

23.

CONSTRUCTION"\l 1 CONSTRUCTION

23.1

The headings in this Agreement are inserted for convenience only and shall not affect its construction.

23.2

Any reference to a statutory provision shall be construed as a reference to any statutory modification or re-enactment of such provision (whether before or after the date of this Agreement) for the time being in force.

23.3

The schedules to this Agreement, if any, form part of and are incorporated into this Agreement.

23.4

No modification, variation or amendment to this Agreement shall be effective unless such modification, variation or amendment is in writing and has been signed by or on behalf of both parties. 

24.

THIRD PARTY RIGHTS"\l 1 THIRD PARTY RIGHTS

Any Group Company may enforce the terms of this Agreement against the Executive but this Agreement shall not convey any rights on any other third party and the provisions of the Contracts (Rights of Third Parties) Act 1999 shall be excluded for these purposes.

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25.

PROPER LAW"\l 1 PROPER LAW

Any dispute, controversy, proceedings or claim of whatever nature arising out of or relating to this Agreement shall be governed by, and this Agreement shall be construed in all respects, in accordance with English law.

IN WITNESS whereof this Agreement has been executed as a deed on the date first above written

EXECUTED as a deed by 

)

SECURE RISKS LIMITED

)

Director 

and signed by two duly authorised

)

Director/Secretary 

officers on its behalf 

)

/s/  Michael J. Skellern

EXECUTED and DELIVERED

as a deed by BRUCE M. BRAES

/s/  Bruce Braes

in the presence of 

Signature of witness

/s/ Maria Louise Braes

Address

13 Westcroft Court

Beechwood Grove

Livingston

EH54 7EW

Occupation

Housewife

19

Braes SSSI Service AgreementEMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into as of August 1, 2004 (the “Effective Date”) by and between William M. Glanton (the “Executive”) and Secure Risks Limited, a wholly owned subsidiary of Universal Guardian Holdings, Inc., (the “Company”).

WHEREAS, the Company believes that Executive’s service, experience, and knowledge are valuable to the Company in connection with its business; and

WHEREAS, the Company desires to employ Executive, and Executive desires to be employed by the Company, as Managing Director – United States of the Company.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the parties hereto agree as follows:

1.

Employment.  The Company hereby employs Executive and Executive accepts such employment upon the terms and conditions hereinafter set forth.

2.

Term of Employment.  Subject to the provisions of Section 6, the term of Executive’s employment pursuant to this Agreement shall commence on and as of the Effective Date and shall terminate on the 2nd day of August 2005 (the “Term”).  Should Executive’s employment extend beyond the Term, it shall be employment at-will, terminable by either party by 30 days’ notice to the other, and such at-will employment may be modified only by a writing signed by the party to be bound thereby.  All other provisions of this Agreement, with the exception of Sections 6(b), 6(c), 6(d), and 6(e) shall continue to apply to such at-will employment relationship following the Term.

3.

Duties; Extent of Service.  During Executive’s employment under this Agreement, Executive (i) shall serve as an employee of the Company with the title and position of Managing Director – United States, reporting to Managing Director - Chief Operating Officer of Secure Risks, shall have such executive responsibilities as the Managing Director and Chief Operating Officer shall from time to time designate, provided that, in all cases Executive shall be subject to the oversight and supervision of the Managing Director, or Chief Executive Officer of the Company in the performance of his duties, and (ii) shall render all services reasonably incident to the foregoing.  Executive hereby accepts such employment, agrees to serve the Company in the capacities indicated, and agrees to use Executive’s best efforts in, and shall devote Executive’s not less than 50% of normal working time, and during that time shall devote 100% of his attention, skill and energies to, the advancement of the interests of the Company and its subsidiaries and the performance of Executive’s duties and responsibilities hereunder. 

4.

Salary and Bonus.

(a)

Salary.  During Executive’s employment under this Agreement, the Company shall pay Executive a salary at the rate of US$72,000 per annum (the 

“Salary”).  Such Salary shall be subject to withholding under applicable law, shall be prorated for partial periods and shall be payable in periodic installments not less frequently than monthly.

(b)

Bonus.  Executive shall be entitled to a performance bonus based on the delivery of new contract revenue delivered to the Company during each fiscal year, based on the following schedule:    

	Net Contract Sales

	Commission %

	      Commissions $

	$         1,000,000 +

	3.00%

	$   30,000 

	$         3,000,000 +

	2.50%

	$   75,000 

	$         5,000,000 +

	1.75%

	$   87,500 

	$         7,000,000 +

	1.50%

	$ 105,000 

	$         9,000,000 +

	1.25%

	$ 112,500 

	$       12,000,000 +

	1.00%

	$ 120,000 

(c)

Bonus Payment:  The Company shall pay to Executive fifty percent (50%) of the Bonus in options to the purchase of the common stock of Universal Guardian Holdings, Inc. (the “Parent”), and such options shall be priced at the closing price of the stock at the close of each fiscal year, and such option shall be exercisable for a period of five (5) years after the grant date.  The remaining fifty percent (50%) of the Bonus will be paid in cash, not later than 30 days after the completion of the close of fiscal year accounting.  Bonus shall be subject to any applicable tax withholdings and/or employee deductions.  Stock options granted pursuant to this section shall qualify as incentive stock options pursuant to section 422 of the Internal Revenue Code, shall vest on the date of grant and shall have an exercise price equal to the fair market value of the common stock of the Parent on the grant date.

(c)

Stock Options.  Not withstanding stock options granted to Executive in his prior capacity as an Advisor to the parent corporation of the Company, and as an inducement to enter into this Agreement, the Company grants to Executive an option to purchase one hundred thousand (100,000) shares of the Parent’s common stock.  The stock option shall qualify as an incentive stock option pursuant to section 422 of the Internal Revenue Code.  The exercise price for the common stock shall be $0.76 per share, the fair market value on the Effective Date.  The right to purchase the common stock shall vest in equal increments, over two (2) years.  One-half shall vest 12 months after the Effective Date and one-half on the second anniversary after the Effective Date.  The stock option shall be granted pursuant to the Company’s Incentive Equity Stock Plan (the “Plan”).  Executive agrees to be bound by the terms of the Plan.  In accordance with the terms of the Plan and with California law, the Parent will reserve to itself the right to repurchase the common stock that Executive receives if Executive’s employment is terminated for any reason.

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5.

Benefits.

(a)

Benefits.  The Executive agrees that the Company shall not be responsible for the Executive’s health and dental benefits during the term of this employment under this Agreement.

(b)

Expenses.  The Company shall reimburse Executive for all reasonable business expenses incurred by Executive during Executive’s employment hereunder to the extent in compliance with the Company’s business expense reimbursement policies in effect from time to time and upon presentation by Executive of such documentation and records, as the Company shall from time to time require.  When Executive is required to travel on behalf of the Company’s business, the cost of an economy class ticket for any domestic flight, and the cost of a business class ticket for any international flight that is in excess of eight (8) hours, shall be included hereunder as a reimbursable business expense.

(f)

Taxation of Payments and Benefits.  The Company shall undertake to make deductions, withholdings and tax reports with respect to payments and benefits under this Agreement to the extent that it reasonably and in good faith believes that it is required to make such deductions, withholdings and tax reports.  Payments under this Agreement shall be in amounts net of any such deductions or withholdings.  Nothing in this Agreement shall be construed to require the Company to make any payments to compensate Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.

(g)

Exclusivity of Salary and Benefits.  The Executive shall not be entitled to any payments or benefits other than those provided under this Agreement.  Compliance with the provisions of this Section 5 shall in no way create or be deemed to create any obligation, express or implied, on the part of the Company or any of its affiliates with respect to the continuation of any particular benefit or other plan or arrangement maintained by them or their subsidiaries as of or prior to the date hereof or the creation and maintenance of any particular benefit or other plan or arrangement at any time after the date hereof.

6.

Termination and Termination Benefits.  Notwithstanding the provisions of Section 2, Executive’s employment under this Agreement shall terminate under the following circumstances set forth in this Section 6.

(a)

Termination by the Company for Cause.  Executive’s employment under this Agreement may be terminated for Cause without further liability on the part of the Company other than for accrued but unpaid Salary through the date of termination effective immediately upon written notice to Executive.  “Cause” shall mean the following:

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(i)

the commission by Executive of any act of embezzlement, fraud, larceny or theft on or from the Company or an affiliate of the Company;

(ii)

the commission by Executive of, or indictment of Executive for a felony or any misdemeanor, which misdemeanor involves moral turpitude, deceit, dishonesty or fraud;

(iii)

failure to perform, or materially poor performance of, Executive’s duties and responsibilities assigned or delegated under this Agreement, or any material misconduct or violation of the Company’s policies, in either case, which continues for a period of 30 days after written notice given to Executive; or

(iv)

a material breach by Executive of any of the covenants, terms or provisions of this Agreement or any agreement between the Company and Executive regarding confidentiality or assignment of inventions.

(b)

Termination by Executive Without Good Reason.  Executive’s employment under this Agreement may be terminated by Executive by written notice to the Board of Directors at least 90 days prior to such termination.

(c)

Termination by the Company Without Cause.  Subject to the payment of Termination Benefits pursuant to Section 6(d), Executive’s employment under this Agreement may be terminated without Cause by the Company upon written notice to Executive.

(d)

Certain Termination Benefits.  Unless otherwise specifically provided in this Agreement or otherwise required by law, all compensation and benefits payable to Executive under this Agreement shall terminate on the date of termination of Executive’s employment under this Agreement.  If Executive is terminated Without Cause then Executive shall be entitled to compensation pursuant to Section 4(a)(c), for a period of (6) six months after such termination.

(e)

Death; Disability.  Upon the death of the Executive, or upon the permanent disability (as defined below) of the Executive continuing for a period in excess of 90 consecutive days, all obligations of the Company under this Agreement shall immediately terminate other than any obligation of the Company with respect to earned but unpaid Salary and earned benefits contemplated hereby to the extent accrued or vested through the date of termination.  As used herein, the terms “permanent disability” or “permanently disabled” shall mean the inability of the Executive, by reason of injury, illness or other similar cause, to perform a major part of his duties and responsibilities in connection with the conduct of the business and affairs of the Company, as determined reasonably and in good faith by the Company.

(f)

Notwithstanding termination of this Agreement as provided in this Section 6 or any other termination of Executive’s employment with the Company, 

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Executive’s obligations under Section 7 hereof shall survive any termination of Executive’s employment with the Company at any time and for any reason.

7.

Non-Solicitation; Confidentiality; Proprietary Rights.

(a)

Non-Solicitation.  Executive agrees that he shall not, during the term of this Agreement and for a period of 1 year thereafter solicit any employee of the Company to terminate such employee’s employment with the Company, or agree to hire any such employee or former employee of the Company (unless at least 12 months have passed since the termination of such employee’s employment with the Company).

(b)

Confidential Information.  As used in this Agreement, the term “Confidential Information” shall mean information belonging to the Company (for purposes of this Section 7 including all predecessors of the Company) of value to the Company or with respect to which Company has right in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Company.  Confidential Information includes information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including, by way of example and without limitation, trade secrets, ideas, concepts, designs, configurations, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts processes, techniques, formulas, software, improvements, inventions, domain names, data, know-how, discoveries, copyrightable materials, marketing plans and strategies, sales and financial reports and forecasts, customer lists, studies, reports, records, books, contracts, instruments, surveys, computer disks, diskettes, tapes, computer programs and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Company.  Confidential Information includes information developed by Executive in the course of Executive’s employment by the Company, as well as other information to which Executive may have access in connection with Executive’s employment.  Confidential Information also includes the confidential information of others with which the Company has a business relationship.  Notwithstanding the foregoing, Confidential Information does not include information in the public domain, unless due to breach of Executive’s duties under Section 7(c).

(c)

Confidentiality.  In the course of performing services hereunder on behalf of the Company and its affiliates, Executive has had and from time to time will have access to Confidential Information.  Executive agrees (i) to hold the Confidential Information in strict confidence, (ii) not to disclose the Confidential Information to any person (other than in the regular business of the Company or its affiliates), and (iii) not to use, directly or indirectly, any of the Confidential Information for any purpose other than on behalf of the Company and its affiliates.  All documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information, that are furnished to Executive by the Company or are produced by Executive in connection with Executive’s employment 

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will be and remain the sole property of the Company.  Upon the termination of Executive’s employment with the Company for any reason and as and when otherwise requested by the Company, all Confidential Information (including, without limitation, all data, memoranda, customer lists, notes, programs and other papers and items, and reproductions thereof relating to the foregoing matters) in Executive’s possession or control shall be immediately returned to the Company.

(d)

Third Party Agreements and Rights.  Executive hereby confirms that Executive is not bound by the terms of any agreement with any previous employer or other party that restricts in any way Executive’s use or disclosure of information or Executive’s engagement in any business.  Executive represents to the Company that Executive’s execution of this Agreement, Executive’s employment with the Company and the performance of Executive’s proposed duties for the Company will not violate any obligations Executive may have to any such previous employer or other party.  In Executive’s work for the Company, Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and Executive will not bring to the premises of the Company any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

(e)

Litigation and Regulatory Cooperation.  During and after Executive’s employment, Executive shall cooperate fully with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company that relate to events or occurrences that transpired while Executive was employed by the Company.  Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times.  During and after Executive’s employment, Executive also shall cooperate fully with the Company in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by the Company.  The Company shall reimburse Executive for any reasonable out-of-pocket expenses incurred in connection with Executive’s performance of obligations pursuant to this Section 7(e).

(f)

Inventions.  Executive recognizes that the Company and its affiliates possess a proprietary interest in all of the Confidential Information and have the exclusive right and privilege to use, protect by copyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to the exclusion of Executive, except as otherwise agreed between the Company and Executive in writing.  Executive expressly agrees that any products, inventions, discoveries or improvements made by Executive in the course of Executive’s employment, including any of the foregoing which is based on or arises out of the Confidential Information, shall be the property of and inure to the exclusive benefit of the Company.  Executive further agrees that any and all products, inventions, discoveries or improvements developed by Executive (whether or not able to be protected by copyright, patent or 

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trademark) during the course of his employment, or involving the use of the time, materials or other resources of the Company or any of its affiliates, shall be promptly disclosed to the Company and shall become the exclusive property of the Company, and Executive shall execute and deliver any and all documents necessary or appropriate to implement the foregoing.

(g)

Business Opportunities.  Executive agrees, while he is employed by the Company, to offer or otherwise make known or available to it, as directed by the Board of Directors of the Company and without additional compensation or consideration, any business prospects, contracts or other business opportunities that Executive may discover, find, develop or otherwise have available to Executive in the Company’s general industry and further agrees that any such prospects, contacts or other business opportunities shall be the property of the Company.  

(h)

Acknowledgment.  Executive acknowledges that the provisions of this Section 7 are an integral part of Executive’s employment arrangements with the Company.

8.

Indemnification.  So long as Executive’s actions were taken in good faith and in furtherance of Company’s business and within the scope of Executive’s duties and authority, Company shall indemnify and hold Executive harmless to the full extent of the law from any and all claims, losses and expenses sustained by Executive as a result of any action taken by him to discharge his duties under this Agreement, and Company shall defend Executive, at Company’s expense, in connection with any and all claims by stockholders or third parties which are based upon actions taken by Executive to discharge his duties under this Agreement. 

9.

Parties in Interest; Certain Remedies.  It is specifically understood and agreed that this Agreement is intended to confer a benefit, directly or indirectly, on the Company and its direct and indirect subsidiaries and affiliates, and that any breach of the provisions of this Agreement by the Executive or any of the Executive’s affiliates will result in irreparable injury to the Company and its subsidiaries and affiliates, that the remedy at law alone will be an inadequate remedy for such breach.  Accordingly, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Company or its subsidiaries and affiliates shall be entitled, in addition to any other remedy it may have, to enforce the specific performance of this Agreement by the Executive through both temporary and permanent injunctive relief without the necessity of posting a bond or proving actual damages, but without limitation of their right to damages and any and all other remedies available to them, it being understood that injunctive relief is in addition to, and not in lieu of, such other remedies.

10.

Integration.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties with respect to any related subject matter.

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11.

Assignment; Successors and Assigns, etc.  Neither the Company nor the Executive may make any assignment of this Agreement or any interest herein without the prior written consent of the other party; provided that the Company may assign its rights under this Agreement without the consent of the Executive in the event of a Change in Control.  This Agreement shall inure to the benefit of and be binding upon the Company and the Executive.

12.

Enforceability.  If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be determined to be invalid, illegal or unenforceable under present or future laws effective during the term of this Agreement, then and, in that event: (A) the performance of the offending term or provision (but only to the extent its application is invalid, illegal or unenforceable) shall be excused as if it had never been incorporated into this Agreement, and, in lieu of such excused provision, there shall be added a provision as similar in terms and amount to such excused provision as may be possible and be legal, valid and enforceable, and (B) the remaining part of this Agreement (including the application of the offending term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable) shall not be affected thereby and shall continue in full force and effect to the fullest extent provided by law.

13.

Waiver.  No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving parry.  The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

14.

Notices.  Unless otherwise specifically provided in this Agreement, all notices, demands, requests, consents, approvals or other communications (collectively and severally called “Notices”) required or permitted to be given hereunder, or which are given with respect to this Agreement, shall be in writing, and shall be given by: (A) personal delivery (which form of Notice shall be deemed to have been given upon delivery), (B) by private airborne/overnight delivery service (which forms of Notice shall be deemed to have been given upon confirmed delivery by the delivery agency), (C) by electronic or facsimile or telephonic transmission, provided the receiving party has a compatible device or confirms receipt thereof (which forms of Notice shall be deemed delivered upon confirmed transmission or confirmation of receipt), or (D) by mailing in the United States mail by registered or certified mail, return receipt requested, postage prepaid (which forms of Notice shall be deemed to have been given upon the 5th business day following the date mailed).  Notices shall be addressed to the Executive at the last address the Executive has filed in writing with the Company or, in the case of the Company, 4295 MacArthur Blvd., Suite 300, Newport Beach, CA 92660 and copy to the Company at 36 Alie Street, London, EC1 United Kingdom.

15.

Amendment.  This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Company.

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16.

Governing Law.  This contract shall be construed under and be governed in all respects by the laws of the State of California, without giving effect to the conflict of laws principles thereof.

17.

Counterparts.  This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original and all of which taken together shall constitute one and the same document.

18.

Certain Definitions.  For purposes of this Agreement, the term “person” means an individual, corporation, limited liability company, partnership, entity, association, trust or any unincorporated organization; a “subsidiary” means any corporation more than 50 percent of whose outstanding voting securities, or any limited liability company, partnership, joint venture or other entity more than 50 percent of whose total equity interest, is directly or indirectly owned by such person; and an “affiliate” of a person shall mean, with respect to a person or entity, any person or entity which directly or indirectly controls, is controlled by, or is under common control with such person or entity.

19.

Arbitration.  Any controversy, dispute or claim arising out of or in connection with Executive’s employment or this Agreement shall be resolved at the request of either Executive or Company by final and binding arbitration conducted at a location determined by the arbitrator in Orange County, California.  An arbitration proceeding is not a court proceeding, and no jury may be present in an arbitration proceeding.  The arbitration shall be administered by and in accordance with the then existing Rules of Practice and Procedure of J*A*M*S/Endispute, Inc.  Judgment upon any award rendered by the arbitrator(s) may be entered in any State or Federal Court.  Either Executive or Company may commence an arbitration proceeding by giving notice to the other party.  Upon filing a demand for arbitration, both Executive and Company will have the right to discovery to the maximum extent provided by law for actions tried before a court, and both agree that in the event of an arbitration, disputes as to discovery shall be determined by the arbitrator(s).  The arbitrator(s) in any such proceeding shall apply California substantive law and the California Evidence Code to the proceeding.  The arbitrator(s) shall have the power to grant all legal and equitable remedies (provisional and final) and award damages provided by California law.  The arbitrator(s) shall prepare in writing and provide to the parties an award including findings of fact and conclusions of law.  The arbitrator(s) shall not have the power to commit errors of law or legal reasoning, and the award may be vacated or corrected pursuant to California Code of Civil Procedure §§1286.2 or 1286.6 for any such error.  Company shall pay all fees of the arbitrator, and each party shall bear its or his expenses, costs and attorney fees relating to the arbitration and recovery under any order and/or judgment rendered therein.

20.

Preparation of Agreement.  It is acknowledged by each party that such party either had separate and independent advice of counsel or the opportunity to avail itself or himself of same.  In light of these facts it is acknowledged that no party shall be construed to be solely responsible for the drafting hereof, and therefore any ambiguity shall not be construed against any party as the alleged draftsman of this Agreement.

SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.

COMPANY:

Secure Risks Limited

By: /s/ Michael J. Skellern

Authorized Signatory

EXECUTIVE:

/s/ William M. Glanton

       William M. Glanton

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