JOINT VENTURE AGREEMENT

which contracts and all plans and specifications, change orders, modifications, amendments and supplements thereto are hereinafter referred to as the “Security Services Contract(s)” and the work provided to be done by the Contractor (as defined in the Contract(s)) under said Security Services Contract(s) is hereinafter referred to as the “Work”;

WHEREAS, it is the desire of the Joint Venturers to undertake the performance of the Security Services Contract(s) as Joint Venturers, and to evidence their understanding with respect to their respective duties and obligations under their respective rights and interests in the Security Services Contract(s), in the profits to be derived therefrom, and in the liabilities incurred in connection therewith;

WHEREAS, the Proposal will state that any contract awarded implementing the Proposal or modifications thereof pursuant to the RFP will be performed by Southeastern and Paragon as a Joint Venture;

WHEREAS, during the term of this Agreement, each Joint Venturer shall work exclusively with the Joint Venture in implementing the purpose set forth herein, shall not compete directly or indirectly with the Joint Venture, and shall refer any information which it receives concerning the Security Services Contract(s) to the Joint Venture.

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and subject to all of the terms, provisions and conditions hereinafter set forth, IT IS HEREBY AGREED:

1.             JOINT VENTURE PURPOSE

The Joint Venturers hereby associate themselves together as joint venturers for the purpose of proposing, negotiating, entering into and ensuring the performance of all Work for the Security Services Contract(s). The Joint Venture created hereunder shall be known as Southeastern Paragon (hereinafter the “Joint Venture”). The principal place of business and the principal office shall be established in Maryland.

2.             MANAGEMENT

The Joint Venture shall be managed jointly by one representative from each of the parties to serve on a Management Committee. These persons shall have responsibility for the routine business affairs of the Joint Venture, and shall have the authority to:

(1)           Execute the Security Services Contract(s);

(2)           Execute any amendment or change order to the Security Services Contract(s);

(3)           Execute subcontracts, purchase orders and rental agreements;

(4)           Adopt or modify methods of accounting, financial control, or reporting and scheduling;

(5)           Distribute excess working capital funds or net profits according to the provisions of this Agreement; and

(6)           Establish Joint Venture policies and procedures

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The Management Committee shall direct the conduct of the Security Services Contract(s), in all respects, through the appointment of a JV Administrator. The JV Administrator shall perform the day-to-day management and administration of the Security Services Contract(s) in accordance with all legal and regulatory requirements, including the Statement of Work for each Service Contract(s).

3.             APPOINTMENT OF PROFITS

All profits (after taxes) and liabilities of the Joint Venture shall be apportioned between the parties in the following manner: Fifty-One Percent (51%) to Southeastern and Forty-Nine (49%) to Paragon.

4.             SPECIAL BANK ACCOUNT

A bank account shall be opened in the name of the Joint Venture. All Security Services Contract(s) related payments due to the Joint Venture shall be deposited to this account. All Security Services Contract(s) related expenses incurred will be paid from this account. All checks, wires, transfers, deductions and withdrawals written on this account shall be signed and/or authorized in writing by both Joint Venturers to this Joint Venture. Each Joint Venturer hereto agrees to execute and deliver all necessary authorizations as may be required by any of the depository banks to effect the purposes thereof. All such funds shall be deemed and are declared to be trust funds of the Joint Venture and shall not be commingled with any other funds of either of the Joint Venturers.

5.             MAJOR EQUIPMENT, FACILITIES, &OTHER RESOURCES ITEMIZATION

An itemization of all major equipment, facilities, and other resources to be provided by each Joint Venturer to the Joint Venture will be completed prior to contract initiation. This itemized list will include a detailed schedule of the cost or value of each item. Pursuant to the provisions of Paragraph 14.B hereto rental of said facilities or equipment furnished by a Joint Venturer to the Joint Venture shall be credited and paid to the Joint Venturer furnishing said facilities or equipment.

6.             RESPONSIBILITIES OF THE JOINT VENTURERS

The Joint Venturers shall furnish such parts of their organizations and personnel as necessary for the performance of the Work, and each Joint Venturer further expressly agrees that it shall contribute and make available to the Joint Venture, as far as is reasonably practicable for the performance of the Contract(s), the utmost skill, experience and knowledge of their respective organization. It is expressly agreed and understood that Southeastern, the 8(a) participant, shall perform a significant portion of the Work, and not less than Fifty-One Percent (51%).