Exhibit 10.3
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT, dated as of July 29, 2005, to Asset Purchase
Agreement (the "AGREEMENT") dated as of May 19, 2005 by and among GLOBALOPTIONS,
INC., a Delaware corporation ("BUYER"), CONFIDENTIAL BUSINESS RESOURCES, INC., a
Delaware corporation ("SELLER"), XXXXXXX & ASSOCIATES, INC., a Tennessee
corporation (the "SHAREHOLDER") and XXXXXX X. XXXXXXX, an individual resident of
Tennessee ("XXXXXXX").
For good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. Section 1.3 of the Agreement is hereby amended and restated as
follows:
(a) PURCHASE PRICE. The consideration for the Assets (the "PURCHASE
PRICE") will be Five Million and No/100 Dollars ($5,000,000), and the
assumption of the Assumed Liabilities (as defined in SECTION 1.4 below);
PROVIDED, HOWEVER, there shall be a dollar for dollar adjustment to the
Purchase Price, if at the Closing Date, the current assets (comprising the
following items: (1) cash; (2) Accounts Receivable; and (3) advances and
prepaid items, hereinafter defined as "CURRENT ASSETS") are less than the
aggregate of the amount outstanding under the Seller's Bank Line of Credit
(as defined in SECTION 1.4(A)(III)), accrued expenses, including payroll,
sales tax payable, accrued vacation pay, and the Seller's accounts payable
(the "CURRENT LIABILITIES"). In the event the Current Assets are less than
the Current Liabilities, the Purchase Price shall then be reduced by an
amount equal to the difference between Current Liabilities and the Current
Assets, less Two Hundred and Fifty Thousand Dollars ($250,000) (the
"PURCHASE PRICE ADJUSTMENT"). The parties agree that the cash component of
the Purchase Price shall be Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000). In the event there is a Purchase Price Adjustment,
the Buyer shall be required from the Escrow funds (as defined in Section
1.7(a) below) pay such excess liabilities on behalf of the Seller.
Seller shall prepare a Closing Date Statement based upon the Seller's
books and records as of the close of business on the business day
immediately preceding the Closing Date, which shall set forth the foregoing
matters and the adjustment, if any, in the Purchase Price, substantially in
the form of EXHIBIT 1.3. In accordance with SECTION 1.7(B), at the Closing,
notwithstanding any adjustments to the Purchase Price as provided in this
Section 1.3, the Purchase Price shall be delivered by Buyer to Seller as
follows: (A) the payment of Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000) by wire transfer to an account specified by Seller,
and (B) the delivery of a Two Million Five Hundred Thousand and No/100
Dollars ($2,500,000) promissory note (in the form of Exhibit 1.3 (a)) at
Closing to Law Offices of Xxxxxx X. Xxxxxxx, as escrow agent (the "ESCROW
AGENT") under the Escrow Agreement (as defined in SECTION 1.7(A) below).
2. Section 1.6 of the Agreement is hereby amended and restated as
follows:
CLOSING. The consummation of the purchase and sale provided for in
this Agreement (the "CLOSING") will take place at the offices of Buyer's
counsel at 0000 00xx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 10:00 a.m.
(local time) on such date as the parties may mutually agree but no later
than August 15, 2005 (the "CLOSING DATE").
3. Section 1.7 (b) (i) of the Agreement is hereby amended and restated as
follows:
(i) Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000) by wire transfer to accounts specified in writing by
Seller (which wire transfer instructions must be delivered by Seller
to Buyer at least one (1) Business Day prior to Closing);
4. Section 1.7 (b) (iii) of the Agreement is hereby amended and restated
as follows:
(iii) the Escrow Agreement, executed by Buyer and the Escrow
Agent, together with the delivery of the Two Million Five Hundred
Thousand and No/100 Dollars ($2,500,000) note to the Escrow Agent.
5. Section 3.6 of the Agreement is hereby amended and restated as
follows:
BROKERS AND FINDERS. Buyer has contracted with Xxxxxxx to assist in
the anticipated transaction contemplated under this agreement and Buyer
shall be solely responsible for any fees thereunder.
6. Section 4.9 of the Agreement is hereby amended and restated as
follows:
AUDITED FINANCIAL STATEMENTS. On or before the Closing Date, Seller
shall provide to the Buyer audited financial statements for the years ended
December 31, 2003, December 31, 2004, and on or before thirty days
subsequent to the Closing Date, for the three-month period ending March 31,
2005 (the "AUDITED FINANCIAL STATEMENTS"). The parties to this Second
Amendment Agreement acknowledge that The Audited Financial Statements for
the years ended December 31, 2003 and 2004 are materially inconsistent with
the unaudited financial statements included in SCHEDULE 2.4, and as a
result thereof, this Second Amendment has been provided to compensate for
such. The Audited Financial Statements shall be accompanied by an opinion
from a public accounting firm registered with the Public Company Accounting
Oversight Board, it being understood that the Audited Financial Statements
shall be included with the Buyer's financial statements in filings by the
Buyer with the Securities and Exchange Commission.
7. Section 6.8 of the Agreement is hereby amended and restated as
follows:
PURCHASE PRICE ADJUSTMENT.If the Purchase Price Adjustment, as set
forth in SECTION 1.3 of this Agreement is greater than Two Million Five
Hundred Thousand Dollars ($2,500,000.00), the Buyer shall have the absolute
discretion to terminate this Agreement without any further obligations.
8. Section 7.5 of the Agreement shall be amended and restated as follows:
PURCHASE PRICE. The cash component of the Purchase Price to be paid at
Closing to Seller shall be $2,500,000.
9. Section 8.1 (c) of the Agreement shall be amended and restated as
follows:
Seller will be responsible for (i) the payment of all wages and other
remuneration due to its Employees with respect to their services as
employees of Seller through the close of business on the Closing Date, with
the exception of accrued vacation, which will be assumed by the Buyer; and
(ii) the payment of any termination or severance payments and the provision
of health plan continuation coverage in accordance with the requirements of
the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as
amended, or any other legal requirement. Seller will be liable for any
claims made or incurred by the Employees and their beneficiaries under the
Employee Benefit Plans, and Buyer will not have any responsibility,
liability or obligation, to the Employees or to any other person with
respect to any Employee Benefit Plan.
10. In all other respects, the Agreement remains according to its terms.
11. The parties to this Second Amendment acknowledge it will require
respective Board of Directors approval, and it is further agreed to by the
parties that if the respective Board of Directors fail to approve such Second
Amendment, this Second Amendment and the Agreement shall be null and void, and
no party shall have any further obligation under the Agreement.
IN WITNESS WHEREOF, the parties have executed this Amendment to Asset
Purchase Agreement as of the date first written above.
BUYER:
GLOBALOPTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Its: Chairman
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SELLER:
CONFIDENTIAL BUSINESS RESOURCES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
XXXXXXX & ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President
