Pluribus Capital Management

�Invest in those technologies, services and companies that will improve Homeland, Global and Corporate Security

while delivering high returns for investors�

Homeland and Global Security A new growth market

  The Homeland and Global Security(HGS) market is defined as:   The technologies, products, and services required by the Private

and Public sectors in order to ensure the normal operation and continuity of commerce, infrastructure services, transportation, logistics and communication in the case of :

  Terrorism, Espionage and Sabotage   Natural Disasters   Radiological/Biological/Chemical agent outbreaks and attacks   Cybercrime   Cataclysmic events and outages

What�s the economic opportunity?

  Prior to Sept 11, US spent $10B/year on homeland security

  After Sept 11, that number has increased to $40B/year with a 5-10% growth rate/year

  In June 2004 DHS awarded US-VISIT(biometric customs screening) contract   $10B To a single company(Accenture)

Large HGS Market Size*

  In a recent report by Equity International, public sector homeland security spending (federal, state, local) in the United States is projected to rise to $55.9 billion during 2004 and to $56.8 billion in 2005

  In the UK, 93% of businesses with over $1B in revenue polled believe that terrorism will increase over the next 2 years as a result of the Iraq war, and that their operations will be affected somehow**

  Global spending by governments on homeland security will rise to $562 billion in 2004 and to $572 billion in 2005

*Centre for Global and Homeland Security, 2003

** RAND/Janusian Terrorism Survey, 2004

Private Spend vs Public Spend Total US Spend Between $93B and $139B in FY 2003

�The biggest rise in spending is likely to come from the private sector�

---Fortune, �The Fruits of Safety�, June 28 2004

Current and Projected Size of Security Markets Estimated

1995 2002 Est. Five-Year Market Market Compound Size ($ Mil.) Size ($Mil.) Growth (%) What is Different?

Physical Security Then-1995 Now-2002 Guards $12,000 $18,000 5.0% 7.0% Pricing, quality slowly improving at largest U.S. brands; must

Improve on 4% EBIT margins. Wither Ira Lipman? Armoring 2,000 8.0% Not Covered in 1995; includes government contracts Personnel armoring/protection 1,500 8.0% Not Covered in 1995; includes government contracts Intelligence, Investigations, Consulting 8,000 9.0% Post 9-11, post-Enron business soars;Not Covered in 1995 Specialized Protection 3,000 12.0% Not Covered in 1995 Armored:

Armored Transport 1,200 1,600 5.5% 5.0% Slower growth, significant consolidation. Ancillary, Outsourced Services 450 1,200 20.0% 15.0% ATM, counting, coin wrapping up to 50% of revs.

Electronic Security

Alarm Monitoring ((Commerical) 3,500 4,950 7.0% 7.0% Massive consolidation virtually over. ADT with 35% share!?! Alarm Monitoring (r(Residential) 2,500 4,800 17.0% 10.0% Sanity returns as credit scores mean something again.

Alarm Equipment (Comm. & Res.)

4,000 6,900 11.0% 9.0% Tyco, Honeywell, GE, Siemens take over, encouraging integration Fire Equipment (Commercial) 2,500 3,500 7.0% 6.0% Again – Tyco, Siemens, Honeywell and GE. Wither SPX/Edwards?

CCTV Equipment & Systems 1,200 2,600 14.0% 14.0% Digital video becomes standard and analog prices/margins plummet Computer Security (not covered here) 1,500

7,000 30.0% 25.0%

Access Control Door Peripherals, Cards, fences 15,000 18,000 4.0% 6.0% Assa Abloy leads in doors, Magal in high-tech fences. Look for ECSI Electronic Access Control 675 1,200 24.0% 15.0% Tyco, Honeywell, GE, Siemens, et. al. New Technologies:

Biometrics (law & access) 60 420 40.0% 35.0% Huge growth from tiny base. AFIS growth slow. Where are profits? Smart/Token Cards 200 1,500 40.0% 30.0% U.S. still far behind Europe. Whose got the back end? RFID 240 1,100 30-35% 40.0% Lack of standards, cost/benefit hamper potentially huge market

“Homeland,” Explosives Detectiion 100 2,000 30.0% Post 9-11 drives bulk and trace detection revenues

EAS 1,100 2,300 15.0% 8-9% Tyco vs. Checkpoint. Source tagging here, but now more cyclical. Systems Integration TOTAL

1,500 4,500 $96,000

22.0% 12-15% We were too optimistic in 1995 on integration. But TYC, HON, GE, Siemens, will help drive total market to its potential.

© 2004, Jeffrey Kessler Sr. VP, Lehman Brothers TM Equity Research

Security Sector Analysis – Sector Scorecard

SECTOR FIRE PROTECTION

ACCESS CONTROL CCTV LOCKING

SYSTEMS BIOMETRICS HOMELAND SECURITY

GUARDING SERVICES

ALARM MONITORING

FACILITIES SERVICES

BUILDING CONTROLS & MONITORING

SYSTEMS INTEGRATION

SUPPLY CHAIN

TECHNOLOGY

Global Market Size

$15-$20bn $1-$2 bn $1-$2 bn $20 bn $525 mm $20 bn $43 bn $23 bn $220 bn NA NA $12 bn

Projected Growth Rate

GDP+ 8% - 10% 9% - 11% 4% - 5% NM NA 5% - 7% 7% - 9% GDP 5% - 8% NA 13%-16%

Product vs. Service Focus

Product Product Product Product Product Product Service Service Service Product/Svc Product/Svc Product

Technology Intensive ◑ ◕ ◑ ◑ ● ● ○ ◑ ○ ◑ ◕ ◕

Product Innvovation ◑ ◑ ◑ ◑ ● ◕ ○ ◔ ○ ◑ ◑ ◑

Market Fragmentation ◔ ◕ ◑ ◑ ● ◔ ◑ ◕ ● ◑ ◕ ◕

Competitive Pressure ◕ ◕ ◕ ◕ ◑ ◕ ◑ ◑ ◑ ◕ ◕ ◕

Acquisition Opportunities ◑ ◑ ◕ ◑ ● ◔ ◑ ◑ ◑ ◑ ◕ ◕

Area to Focus? ● ◕ ● ◕ ◑ ◑ ◔ ◔ ◑ ◑ ◕ ◑

Low

High

© 2004, Jeffrey Kessler Sr. VP, Lehman Brothers TM Equity Research

Homeland Security Market Forces

  The HGS sector will see considerable mergers and acquisitions activity as a result of the need for larger established companies to deliver more innovative solutions   Established HGS companies will acquire best of breed startups to

supplement R&D budgets reduced during the 2000-2003 downturn   GE Acquisition of Invision for $900M in 3/04

  Like other multi-year trends, HGS is a global market with global needs as evidenced by:   Madrid Train Bombings   Saudi, Bali, Kenya, and Morocco attacks   HSBC Bank bombings in Turkey   Ongoing security presence in UK, France   Emerging threat concerns in China, Japan

New Security Market Consolidating

Ion TrackInvision

Kampro Technology

Kalatel8x8

Osborn HoffmnFiber Optix

InterlogixSentrol

ITI

Casi RuscoInfoGraphis

GE

NotifierGamwell

FCI, FireliteSystem Sensor

NorthernWSE

Silent Witness(Gyyr)Ultrak

AdemcoADI

Honeywell

PhillipsBurle

Detection Systems

RadionicsReady Key

Bosch

Motorola Indala

HID(et all)

Securitron

Yale LocKMedeco

Assa Abloy

Sensormatic

DSC

ADT

SimplexGrinnell

Tyco

© 2004, Sandra Jones and Company

Future Drivers

  �Money makes the world go round�   Global economy   War and politics   Government spending   Fear and treat   Technology evolution   Battle of the brands   Things not on our radar screen

Defense sector vs. HGS sector Force Protection, the unexploited niche

  The Aerospace and Defense sectors are historically oriented towards Force Projection solutions   Overseas military use

  There has historically been a lack of focus on Force Protection solutions, to protect against:   Improvised Explosive Device (IED) attacks such as in Iraq   Attempted missile (MANPAD) attacks on commercial jetliners

  The HGS market category embodies the new global focus on force protection ;the HGS market is evolving as more spending occurs in the private sector   70% of US Critical infrastructure (oil wells, chemical plants,

computer systems) is in the private sector

The Innovation Problem Large Capabilities Gap

  Recent observations from Department of Homeland Security Advanced Research Projects Agency (HSARPA) bidders conferences reveal gaps between existing technology and needs:   Example: Current DHS focus is on complete Systems vs.

Components   Result: DHS is funding yesterday�s technology, not �best of breed�

innovation from universities and small startups

  An opportunity exists to introduce best of �breed technology� where current market standards are �best available�   Startups don't necessarily build complete systems but can create

ecosystems with larger companies to deliver full systems

Top DHS/Public Sector Investment Opportunities*

I.  BioSurveillance/Biosensors II.  US-VISIT Program III.  Radiation Detection Equipment and Technology IV.  Anti-Missile Technology for Commercial Aviation V.  Intelligence Integration and Risk Analysis Systems VI.  Explosive Detection and Baggage Systems VII.  Air Cargo Security Technology VIII.  Remote Video Surveillance Technology IX.  Identification and Credentialing Systems and Technologies X.  Vaccine and Medication Stockpiles XI.  Cyber Security XII.  DHS Human Resources System XIII.  Operation Center Establishment and Management

*Civitas Group LLC, Implications of President�s 2005 DHS Budget Request

Private Sector Investment Areas

  High Availability   Disaster Recovery   Business Continuity Solutions

  Data Storage/Networking   LT Hardened storage

  Enterprise and Internet Software   Business Intelligence, Data

Warehousing   Network Availability and

Management   Nuclear/Biological/Chemical   Environmental Technologies   Water/Power/Food Production

and Security solutions

  Information Security   Wireless and Satellite

Communications   Unmanned Aerial Vehicles &

Robotics   Risk Management and Insurance

Services   Explosive Detection and Narcotic

Interdiction   Physical Security   Surveillance and Video   Logistics, Trade and

Transportation Systems   Navigation Technologies

Biometrics Data Mining Wireless RFID

Internet & Remote Video

Fiber Optics & Bandwidth

GPS

? Unknown

Today Intelligent Video

© 2004, Sandra Jones and Company

Technologies to Watch

National Focus with Targeted Investment Regions

DC/NOVA

• Federal Lab Infrastructure

Atlanta

• Info Security

• CDC

LA-Long Beach

• Defense Integrators

New England

• MIT/Draper

San Diego

• Bioscience

• Defense Integrators/Infrastructure

Silicon Valley

• LBL/LLNL

• Stanford/UCB

• NPS

RTP/Carolinas

• Biotechnology

Conclusion: Homeland and Global Security (HGS) is an excellent Early

Stage Investment Category

  Serves a Market need in closing the gap between Systems vs. Components

  Potentially generates high returns for investors due to   Cyclically low valuations for seed/A round investing   M&A activity