EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
BY AND AMONG
GLOBALOPTIONS, INC.
AND
CONFIDENTIAL BUSINESS RESOURCES, INC.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ASSOCIATES, INC.
DATED AS OF MAY 19, 2005
TABLE OF CONTENTS
ARTICLE 1. SALE AND TRANSFER OF ASSETS; CLOSING..................................2
Section 1.1 Assets to Be Sold................................................2
Section 1.2 Excluded Assets..................................................2
Section 1.3 Purchase Price...................................................3
Section 1.4 Liabilities......................................................4
Section 1.5 Allocation.......................................................4
Section 1.6 Closing..........................................................4
Section 1.7 Closing Obligations..............................................4
Section 1.8 Consents.........................................................6
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF
SELLER AND SHAREHOLDERS...............................................7
Section 2.1 Organization and Good Standing...................................7
Section 2.2 Authority; No Conflict...........................................7
Section 2.3 Capitalization...................................................8
Section 2.4 Financial Statements.............................................8
Section 2.5 Sufficiency of Assets............................................8
Section 2.6 Real Property Leases.............................................8
Section 2.7 Personal Property................................................8
Section 2.8 Taxes............................................................9
Section 2.9 Employees........................................................9
Section 2.10 Employee Benefits................................................9
Section 2.11 Compliance With Legal Requirements, Governmental Authorizations.10
Section 2.12 Legal Proceedings, Orders.......................................10
Section 2.13 Insurance.......................................................10
Section 2.14 Contracts; No Defaults..........................................10
Section 2.15 Intellectual Property...........................................11
Section 2.16 Relationships with Related Persons..............................11
Section 2.17 No Undisclosed Liabilities......................................11
Section 2.18 No Material Adverse Change......................................12
Section 2.19 Brokers or Finders..............................................12
Section 2.20 Accounts Receivable.............................................12
Section 2.21 Customers and Suppliers.........................................12
Section 2.22 Books and Records...............................................12
Section 2.23 Bank Accounts...................................................12
Section 2.24 Prepayments and Deposits........................................13
Section 2.25 Disclosure......................................................13
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER..............................13
Section 3.1 Organization and Good Standing..................................13
Section 3.2 Authority, No Conflict..........................................13
Section 3.3 Consents and Approvals..........................................14
Section 3.4 Regulatory Approvals............................................14
Section 3.5 Availability of Financing.......................................14
Section 3.6 Brokers or Finders..............................................14
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ARTICLE 4. COVENANTS OF SELLER PRIOR TO CLOSING.................................14
Section 4.1 Access and Investigation........................................14
Section 4.2 Operation of the Business of Seller.............................14
Section 4.3 Negative Covenant...............................................15
Section 4.4 Notification....................................................15
Section 4.5 No Negotiation..................................................16
Section 4.6 Best Efforts....................................................16
Section 4.7 Payment of Liabilities..........................................16
Section 4.8 Change of Name..................................................16
Section 4.9 Audited Financial Statements....................................16
ARTICLE 5. COVENANTS OF BUYER PRIOR TO CLOSING..................................16
Section 5.1 Required Approvals..............................................16
Section 5.2 Best Efforts....................................................16
ARTICLE 6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE..................17
Section 6.1 Accuracy of Representations.....................................17
Section 6.2 Seller's Performance............................................17
Section 6.3 Consents........................................................17
Section 6.4 Availability of Financing.......................................17
Section 6.5 Additional Documents............................................17
Section 6.6 No Proceedings..................................................17
Section 6.7 Governmental Authorizations.....................................18
Section 6.8 Purchase Price Adjustment.......................................18
ARTICLE 7. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.................18
Section 7.1 Accuracy of Representations.....................................18
Section 7.2 Buyer's Performance.............................................18
Section 7.3 Consents........................................................18
Section 7.4 Additional Documents............................................18
Section 7.5 Purchase Price..................................................19
ARTICLE 8. ADDITIONAL COVENANTS.................................................19
Section 8.1 Employees and Employee Benefits.................................19
Section 8.2 Payment of Taxes Resulting From Sale of Assets by Seller........19
Section 8.3 Payment of Other Retained Liabilities...........................20
Section 8.4 Covenant Not to Compete.........................................20
Section 8.5 Customer and Other Business Relationships.......................20
Section 8.6 Retention and Access to Records.................................21
Section 8.7 Uncollected Accounts Receivable.................................21
ARTICLE 9. TERMINATION..........................................................21
Section 9.1 Termination Events..............................................21
Section 9.2 Effect of Termination...........................................22
Section 9.3 Financing Fees..................................................22
ARTICLE 10. INDEMNIFICATION.....................................................22
Section 10.1 Survival........................................................22
Section 10.2 Indemnification and Reimbursement By Seller, ▇▇▇▇▇▇▇
and the Shareholder.............................................22
Section 10.3 Indemnification and Reimbursement by Buyer......................23
Section 10.4 Limitations on Amount - Seller, ▇▇▇▇▇▇▇ and Shareholder.........23
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Section 10.5 Time Limitations................................................24
Section 10.6 Procedure for Indemnification - Third Party Claims..............24
Section 10.7 Procedure For Indemnification - Other Claims....................25
ARTICLE 11. GENERAL PROVISIONS..................................................25
Section 11.1 Expenses........................................................25
Section 11.2 Notices.........................................................25
Section 11.3 Jurisdiction....................................................26
Section 11.4 Waiver..........................................................26
Section 11.5 Entire Agreement and Modification...............................26
Section 11.6 Assignments, Successors, and No Third-Party Rights..............26
Section 11.7 Severability....................................................26
Section 11.8 Section Headings, Construction..................................26
Section 11.9 Governing Law...................................................27
Section 11.10 Counterparts....................................................27
Section 11.11 Further Assurances..............................................27
Section 11.12 Legal Fees......................................................27
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT"), is made as of May
19, 2005, by and among GLOBALOPTIONS, INC., a Delaware corporation ("BUYER"),
CONFIDENTIAL BUSINESS RESOURCES, INC., a Delaware corporation ("SELLER"),
▇▇▇▇▇▇▇ & ASSOCIATES, INC., a Tennessee corporation (the "SHAREHOLDER") and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual resident of Tennessee ("▇▇▇▇▇▇▇").
RECITALS
Seller desires to sell, and Buyer desires to purchase, the Assets
(as defined below) of Seller for the consideration and on the terms set forth in
this Agreement.
AGREEMENT
The parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1.
SALE AND TRANSFER OF ASSETS; CLOSING
SECTION 1.1 ASSETS TO BE SOLD. Upon the terms and subject to the
conditions set forth in this Agreement, at the Closing, but effective as of the
Effective Date (as defined in SECTION 1.6 below), Seller shall sell, convey,
assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from
Seller, free and clear of any charge, claim, equitable interest, lien, option,
pledge, security interest, mortgage, encroachment, or restriction of any kind
(an "ENCUMBRANCE"), other than any Encumbrance identified on ANNEX A as
acceptable to Buyer (a "PERMITTED ENCUMBRANCE"), all of Seller's property and
assets, real, personal or mixed, tangible and intangible, of every kind and
description, wherever located, belonging to Seller and used in the conduct of
the Seller's private investigations and surveillance business (the "BUSINESS"),
including the following (but excluding the Excluded Assets):
(a) all leasehold interest in all real property leased or used by
Seller (the "REAL PROPERTY"), including the Real Property described in SCHEDULE
2.6;
(b) all equipment, furniture, office equipment, computer hardware,
supplies, materials, vehicles, and other items of tangible personal property
(other than inventory) of every kind owned or leased by Seller (the "TANGIBLE
PERSONAL PROPERTY"), including those items described in SCHEDULE 2.7(B);
(c) all trade accounts receivable and all other accounts or notes
receivable of Seller (the "ACCOUNTS RECEIVABLE");
(d) any oral or written contracts or agreement (i) under which
Seller has or may acquire any rights or benefits, (ii) under which Seller has or
may become subject to any obligation or liability, or (iii) by which Seller or
any of the Assets is or may become bound (any such contract or agreement, a
"SELLER CONTRACT"), including those Seller Contracts listed on SCHEDULE 2.14;
(e) all Governmental Authorizations (as defined in SECTION 2.11(B))
and all pending applications therefor or renewals thereof, in each case to the
extent transferable to Buyer;
(f) all data and records related to the operations of Seller, and
copies of all records referenced in SECTION 1.2(E) below;
(g) all of the intangible rights and property of Seller, including
the Intellectual Property Assets (as defined in SECTION 2.16) and the
Proprietary Assets (as defined in SECTION 2.16), going concern value, goodwill,
telephone, telecopy and e-mail addresses, websites, domain names, and listings
including the name "Confidential Business Resources, Inc." and abbreviations
thereof;
(h) all insurance benefits, including rights and proceeds, arising
from or relating to the Assets prior to the Closing Date;
(i) all claims of Seller against third parties relating to the
Assets;
(j) all cash and cash equivalents and all securities and short term
investments;
(k) all rights of Seller relating to deposits and prepaid expenses,
claims for refunds and rights to offset in respect thereof which are not
excluded under SECTION 1.2(F); and
(l) all other properties and assets of every kind, character and
description, tangible or intangible, of every kind and description, owned by
Seller, whether or not similar to the items specifically set forth above.
All of the property and assets to be transferred to Buyer hereunder are referred
to collectively as the "ASSETS". Notwithstanding the foregoing, the transfer of
the Assets pursuant to this Agreement will not include the assumption of any
liability or obligation in respect thereof unless the Buyer expressly assumes
such liability or obligation pursuant to SECTION 1.4(A).
SECTION 1.2 EXCLUDED ASSETS. Notwithstanding anything to the
contrary contained in SECTION 1.1 or elsewhere in this Agreement, the following
items (collectively, the "EXCLUDED ASSETS") are not part of the sale and
purchase contemplated hereunder, are excluded from the Assets, and will remain
the property of Seller after the Closing:
(a) the minute book, stock records and corporate seal of Seller;
(b) the shares of capital stock of Seller held in treasury;
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(c) all of Seller's insurance policies and rights thereunder (except
to the extent specified in SECTIONS 1.1(H) and (I));
(d) all personnel records and other records that Seller is required
by law to retain in its possession;
(e) all claims for refund of taxes and other governmental charges of
whatever nature;
(f) all rights in connection with and assets of any Employee Benefit
Plans (as defined in SECTION 2.10 below);
(g) all rights of Seller in connection with the transactions
contemplated hereby; and
(h) the property and assets expressly designated in SCHEDULE 2.7(A).
SECTION 1.3 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 cash
component of 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 and the Seller's
accounts payable (the "CURRENT LIABILITIES"). In the event the Current Assets
are less than the Current Liabilities, the cash component of the Purchase Price
shall then be reduced by an amount equal to the difference between Current
Liabilities and the Current Assets (the "PURCHASE PRICE ADJUSTMENT"). The
parties agree that the cash component of the Purchase Price shall not be less
than Four Million Five Hundred Thousand and No/100 Dollars ($4,500,000). In the
event the Purchase Price Adjustment exceeds Five Hundred Thousand and No/100
Dollars ($500,000), the Buyer shall be responsible for such excess of
liabilities up to an additional Two Hundred Fifty Thousand and No/100 Dollars
($250,000). In the event the Purchase Price Adjustment is greater than Seven
Hundred Fifty Thousand and No/100 Dollars ($750,000) ("MAXIMUM BUYER'S AMOUNT"),
then the Buyer shall have an option to terminate this Agreement without further
obligation.
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, the
Purchase Price shall be delivered by Buyer to Seller as follows: (A) the payment
of Four Million Five Hundred Thousand and No/100 Dollars ($4,500,000) (or such
lesser amount to reflect any adjustments pursuant to this SECTION 1.3, but in no
event, less than $4,000,000) by wire transfer to an account specified by Seller,
and (B) the payment of Five Hundred Thousand and No/100 Dollars ($500,000) at
Closing to Silicon Valley Bank, as escrow agent (the "ESCROW AGENT") under the
Escrow Agreement (as defined in SECTION 1.7(A) below).
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SECTION 1.4 LIABILITIES.
(a) At the Closing, but effective as of the Effective Time, Buyer
shall assume and agree to discharge only the following specifically enumerated
liabilities and obligations of Seller (the "ASSUMED LIABILITIES"):
(i) any trade account payable (including a trade account payable
to any shareholder of Seller (A) reflected on the Interim Balance Sheet, and (B)
that is incurred by Seller in the Ordinary Course of Business between the date
of the Interim Balance Sheet and the Closing Date, in each case which remains
unpaid at and is not delinquent as of the Closing;
(ii) any liability arising after the Closing under any Seller
Contract included in the Assets (other than any liability arising out of or
relating to a breach which occurred prior to the Closing; and
(iii) any liability of Seller described in SCHEDULE 1.4(A)(III),
including amounts owed to SunTrust Bank under the Seller's revolving credit
facility (the "SELLER'S BANK LINE OF CREDIT").
(b) All liabilities and obligations of Seller, whether arising prior
to the Closing Date, other than the Assumed Liabilities, are referred to as the
"RETAINED LIABILITIES". All of the Retained Liabilities will remain the sole
responsibility of and will be retained, paid, performed and discharged solely by
Seller.
SECTION 1.5 ALLOCATION. The Purchase Price will be allocated as set
forth in EXHIBIT 1.5. After the Closing, the parties shall make consistent use
of the allocation specified in EXHIBIT 1.5 for all tax purposes and in any tax
returns filed with the Internal Revenue Service in respect thereof, including
IRS Form 8594.
SECTION 1.6 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 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, at 10:00 a.m.
(local time) on such date as the parties may mutually agree but no later than
June 30, 2005 (the "CLOSING DATE").
SECTION 1.7 CLOSING OBLIGATIONS.
(a) At the Closing, Seller, ▇▇▇▇▇▇▇ and the Shareholder, as the case
may be, shall deliver to Buyer:
(i) a ▇▇▇▇ of sale for all of the Assets in a form to be agreed
upon (the "▇▇▇▇ OF SALE"), executed by Seller;
(ii) an assignment of all of the Assets which are intangible
personal property in form to be agreed upon, which assignment will also contain
Buyer's undertaking and assumption of the Assumed Liabilities (the "ASSIGNMENT
AND ASSUMPTION AGREEMENT"), executed by Seller;
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(iii) with respect to each interest in real property leased by
Seller as set forth in SCHEDULE 2.6, an Assignment and Assumption of Lease in a
form to be agreed upon (the "ASSIGNMENT AND ASSUMPTION OF LEASE"), executed by
Seller and the applicable lessor;
(iv) copies of any other consent (excluding consents relating to
the Non-Material Contracts (as defined in SECTION 1.8 below)) required to be
obtained in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby as disclosed on SCHEDULE
2.2(C);
(v) an escrow agreement in the form of EXHIBIT 1.7(A)(V),
executed by Seller, the Shareholder and the Escrow Agent (the "ESCROW
AGREEMENT");
(vi) an employment agreement in the form of EXHIBIT 1.7(A)(VI),
executed by ▇▇▇▇▇▇▇ (the "EMPLOYMENT AGREEMENT");
(vii) noncompetition, nondisclosure and nonsolicitation
agreements in the a form to be agreed upon, executed by the Shareholder and
certain employees to be agreed upon no later than ten (10) business days prior
to the Closing Date;
(viii) a certificate of the Secretary of Seller certifying, as
complete and accurate as of the Closing, attached copies of the bylaws of
Seller, certifying and attaching all requisite resolutions or actions of
Seller's board of directors and shareholders approving the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby and the change of name contemplated by SECTION 4.5 and certifying to the
incumbency of the officers of Seller executing this Agreement and any other
document relating to the transactions contemplated hereby and accompanied by the
requisite documents for amending the Certificate of Incorporation of Seller
required to effect such change of name in form sufficient for filing with the
Delaware Secretary of State;
(ix) an opinion of ▇▇▇▇▇▇ I.N. ▇▇▇▇▇▇▇▇, Esq., dated the Closing
Date, in a form customary for similar transactions;
(x) the certificate of incorporation and all amendments thereto
of Seller, duly certified as of a recent date by the Secretary of State of
Delaware;
(xi) certificates as to the good standing of Seller and payment
of all applicable state taxes by Seller, executed by the appropriate officials
of the jurisdiction of Seller's incorporation and each jurisdiction in which
Seller is licensed or qualified to do business as a foreign corporation as
specified in SCHEDULE 2.1; and
(xii) such other deeds, bills of sale, assignments, certificates
of title, documents and other instruments of transfer and conveyance as may
reasonably be requested by Buyer, each in form and substance satisfactory to
Buyer and its counsel and executed by Seller for the purpose of facilitating the
consummation or performance of the transactions contemplated hereby.
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(b) At the Closing, Buyer shall deliver to Seller:
(i) Four Million Five Hundred Thousand and No/100 Dollars
($4,500,000) or such lesser amount as may be adjusted in accordance with SECTION
1.3 of this Agreement but in no event less than Four Million and No/100 Dollars
($4,000,000), 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);
(ii) the Assignment and Assumption Agreement, executed by Buyer;
(iii) the Escrow Agreement, executed by Buyer and the Escrow
Agent, together with the delivery of Five Hundred Thousand and No/100 Dollars
($500,000) to the Escrow Agent by wire transfer to an account specified by the
Escrow Agent;
(iv) the Employment Agreement, executed by Buyer;
(v) the Noncompetition Agreements, executed by Buyer; and
(vi) a certificate of the Secretary of Buyer certifying, as
complete and accurate as of the Closing, attached copies of the bylaws of Buyer
and certifying and attaching all requisite resolutions or actions of Buyer's
board of directors approving the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby and certifying to the
incumbency of the officers of Buyer executing this Agreement and any other
document relating to the transactions contemplated hereby.
SECTION 1.8 CONSENTS. Buyer may waive the requirement that Seller
obtain consents to assignment with respect to any of the Seller Contracts
disclosed on SCHEDULE 2.2(C) (the contracts with respect to which Buyer grants
such waiver, the "NON-MATERIAL CONTRACTS"), in which case any such Non-Material
Contracts will be identified as such on SCHEDULE 2.2(C). Notwithstanding
anything to the contrary in this Agreement, if any consents to assignment
relating to the Non-Material Contracts have not been obtained at or prior to the
Closing, this Agreement will not constitute an assignment or an agreement to
assign if such assignment or attempted assignment would constitute a breach of
the Non-Material Contract or result in the loss or diminution thereof; PROVIDED,
HOWEVER, that in each such case, Seller shall take commercially reasonable steps
after the Closing to obtain the consent of such other party to the Non-Material
Contract to the assignment of such Non-Material Contract to the Buyer. If such
consent is not obtained, Seller shall cooperate with the Buyer to the extent
legally permissible and feasible in any reasonable arrangement designed to
provide for Buyer the benefits of any Non-Material Contract, including, without
limitation, the enforcement, for the account and benefit of the Buyer, of any
and all rights of Seller against any other person with respect to a Non-Material
Contract.
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ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDERS
Seller, ▇▇▇▇▇▇▇ and the Shareholder represent and warrant, jointly and
severally, to Buyer as follows:
SECTION 2.1 ORGANIZATION AND GOOD STANDING.
(a) Seller is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware, with full
corporate power and authority to conduct its business as it is now being
conducted, to own or use its properties and assets, and to perform all its
obligations under its contracts. Seller is duly qualified to do business as a
foreign corporation and is in good standing under the laws of each state or
other jurisdiction set forth in SCHEDULE 2.1.
(b) Complete and accurate copies of the certificate of
incorporation and bylaws of Seller (collectively, the "GOVERNING DOCUMENTS"), as
currently in effect, have been delivered to Buyer.
(c) Seller does not own and has not entered into any agreement
or contract to acquire, any equity securities or other securities of any person
or any direct or indirect equity ownership interest in any other business.
SECTION 2.2 AUTHORITY; NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Seller, ▇▇▇▇▇▇▇ and the Shareholder, enforceable against each of
them in accordance with its terms. Upon the execution and delivery by Seller,
▇▇▇▇▇▇▇ and the Shareholder of each of the documents and instruments to be
executed and delivered by Seller, ▇▇▇▇▇▇▇ and the Shareholder at Closing
pursuant to SECTION 1.7(A) (collectively, the "SELLER'S CLOSING DOCUMENTS"),
each of Seller's Closing Documents will constitute the legal, valid, and binding
obligation of each of Seller, ▇▇▇▇▇▇▇ and the Shareholder a party thereto,
enforceable against each of them in accordance with their respective terms.
Seller has the right, power, authority and capacity to execute and deliver this
Agreement and Seller's Closing Documents and to perform its obligations under
this Agreement and Seller's Closing Documents, and such action has been duly
authorized by all necessary action by Seller's shareholders and board of
directors. ▇▇▇▇▇▇▇ and the Shareholder have all necessary legal capacity to
enter into this Agreement and the Seller's Closing Documents to which such
person is a party and to perform his obligations hereunder and thereunder.
(b) Neither the execution and delivery of this Agreement nor
the consummation or performance of any of the transactions contemplated hereby
will (with or without notice or lapse of time): (i) contravene, conflict with,
or result in a violation of any provision of any of the Governing Documents of
Seller, (ii) contravene, conflict with, or result in a violation of any Legal
Requirement (as defined in SECTION 2.11(A) below) or Order (as defined in
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SECTION 2.12(B) below) of any court or governmental authority to which Seller or
any of the Assets are subject, or (iii) breach any provision of, give any person
the right to declare a default or exercise any remedy under, accelerate the
maturity or performance of or payment under, result in the creation or
imposition of any Encumbrance upon any of the Assets under, or cancel,
terminate, or modify, any contract to which Seller is a party or by which Seller
or the Assets are bound.
(c) Except as set forth in SCHEDULE 2.2(C), Seller is not and
will not be required to give any notice to or obtain any consent from any person
in connection with the execution and delivery of this Agreement or the
consummation or performance of the transactions contemplated hereby (including
the assignment of the Seller Contracts hereunder).
SECTION 2.3 CAPITALIZATION. The authorized equity securities of
Seller consist of 10,000,000 shares of common stock, par value $.001 per share,
of which 1,932,241.1 shares are issued and outstanding, and 1,000,000 shares of
preferred stock, $.001 par value, of which 187,600 shares have been designated
as Series A Convertible Preferred Stock of which 93,000 shares are issued and
outstanding.
SECTION 2.4 FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 2.4
are the Seller's unaudited balance sheet as of December 31, 2004, unaudited
profit and loss statement for the twelve months ended December 31, 2004,
unaudited balance sheet as of March 31, 2005 and unaudited profit and loss
statement for the 3 months ended March 31, 2005 (the "FINANCIAL STATEMENTS").
The Financial Statements fairly present the financial condition and the results
of operations of Seller as at the respective dates of and for the periods
referred to in such financial statements, all in accordance with generally
accepted accounting principals ("GAAP") except as set forth on SCHEDULE 2.4. The
Financial Statements have been prepared from and are in accordance with the
books and records of Seller.
SECTION 2.5 SUFFICIENCY OF ASSETS. The Assets (a) constitute all of
the assets, tangible and intangible, necessary to conduct Seller's business in
the manner presently operated by Seller, and (b) constitute all of the operating
assets of Seller.
SECTION 2.6 REAL PROPERTY LEASES. SCHEDULE 2.6 sets forth all leases
of real property to which the Seller is a party (the "LEASES"). Complete and
accurate copies of the Leases, as amended or modified, have been delivered to
Buyer. The Leases are in full force and effect, are binding and enforceable
against each of the parties thereto in accordance with their respective terms,
and have not been amended or modified since the date of delivery to the Buyer.
No party to any Lease has sent written notice to the other claiming that such
party is in default thereunder, which alleged default remains uncured. Seller
enjoys peaceful and undisturbed possession of all such real property.
SECTION 2.7 PERSONAL PROPERTY.
(a) Except as set forth on SCHEDULE 2.7(A), Seller owns good
and transferable title to all of its Assets (excluding its interest in the real
property described in SCHEDULE 2.6), free and clear of any Encumbrances other
than Permitted Encumbrances.
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(b) SCHEDULE 2.7(B) sets forth all items of Tangible Personal
Property with an initial, nondepreciated book value in excess of $500. Each item
of Tangible Personal Property is in good repair and good operating condition,
ordinary wear and tear excepted, and is suitable for immediate use in the
ordinary course of business, No item of Tangible Personal Property is in need of
repair or replacement other than as part of routine maintenance in the ordinary
course of business. All Tangible Personal Property is in the possession of
Seller.
SECTION 2.8 TAXES. Seller has timely filed all tax returns (federal,
state or local) required to be filed by it in accordance with applicable Legal
Requirements. All of such tax returns are accurate and complete in al material
respects. Seller has paid or made provision for the payment of all taxes that
have or may become due for all periods covered by the tax returns or otherwise,
or pursuant to any assessment received by Seller. Except as set forth in
SCHEDULE 2.8, there is no dispute or claim concerning any taxes of Seller either
claimed or raised by any governmental authority in writing. Except as set forth
in SCHEDULE 2.8, Seller has not requested or been given any extension of time
within which to file returns in respect of any taxes for which Seller may be
liable. All taxes that Seller is or was required by Legal Requirements to
withhold, deduct or collect have been duly withheld, deducted and collected and,
to the extent required, have been paid to the proper governmental authority.
SECTION 2.9 EMPLOYEES. SCHEDULE 2.9 sets forth a complete and
accurate list, giving name, job title, current compensation paid or payable,
sick and vacation leave that is accrued but unused, and services credited for
purposes of vesting and eligibility to participate under any Employee Benefit
Plan (as defined below) (in each case, to the extent applicable), (a) for each
employee of Seller, including each employee on leave of absence or layoff status
(the "EMPLOYEES"), (b) for any independent contractors who render services on a
regular basis to, or are under contract with, Seller. Seller has not experienced
any organized slowdown, work interruption strike or work stoppage by its
employees, and, to the knowledge of Seller, ▇▇▇▇▇▇▇ and the Shareholder, there
is no strike, labor dispute or union organization activities pending or
threatened affecting Seller. None of the Employees belongs to any union or
collective bargaining unit. Except as set forth on SCHEDULE 2.9, no Employee of
Seller is bound by (a) any employment or similar contract or agreement with
Seller, or (b) any contract or agreement that purports to limit or restrict the
ability of such Employee to (i) perform his duties as an employee of Seller, or
(ii) engage in any conduct, activity, or practice relating to Seller's business.
SECTION 2.10 EMPLOYEE BENEFITS. SCHEDULE 2.10 sets forth all plans,
programs, or arrangements that Seller has maintained, sponsored, adopted or
obligated itself under with respect to employees' benefits, including pension or
retirement plans, medical or dental plans, life or long-term disability
insurance, bonus or incentive compensation, stock option or equity participation
plans (the "EMPLOYEE BENEFIT PLANS"). Seller has no liability or obligation with
respect to any Employee under any Employee Benefit Plan other than normal salary
or wage accruals and paid vacation, sick leave and holiday accruals in
accordance with Seller's past practice and policy. Seller has performed all
obligations required to be performed under, and has complied with all Legal
Requirements in connection with, all such Employee Benefit Plans and is not in
arrears under any of the terms thereof.
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SECTION 2.11 COMPLIANCE WITH LEGAL REQUIREMENTS, GOVERNMENTAL
AUTHORIZATIONS.
(a) Seller is, and at all times since January 1, 2001, has
been, in compliance in all material respects with any federal, state, or local
law, ordinance or regulation (including with respect to environmental, disposal
of hazardous substances, or public health or safety) (a "LEGAL REQUIREMENT"),
that is or was applicable to the operation of its business or the ownership or
use of any of its assets, except as set forth in SCHEDULE 2.11(A). Except as set
forth on SCHEDULE 2.11(A), Seller has not received, at any time since January 1,
2001, any notice or other communication (whether oral or written) from any
governmental authority or any other person regarding any actual or alleged
violation of, or failure to comply with, any Legal Requirement.
(b) SCHEDULE 2.11(B) contains a complete and accurate list of
each approval, license or permit (the "GOVERNMENTAL AUTHORIZATIONS") that is
held by Seller or that otherwise relates to the Seller's business or the Assets.
The Governmental Authorizations listed in SCHEDULE 2.11(B) collectively
constitute all of the approvals, licenses and permits necessary to permit Seller
to lawfully conduct and operate its business in the manner it currently conducts
and operates such business and to permit Seller to own and use its assets in the
manner in which it currently owns and uses such assets. Except as set forth on
SCHEDULE 2.11(B), each such private investigations license or permit is
transferable to Buyer as of the Closing.
SECTION 2.12 LEGAL PROCEEDINGS, ORDERS.
(a) Except as set forth in SCHEDULE 2.12(A), there are no
actions or proceedings pending by or against Seller or that otherwise relate to
or may affect the business of, or any of the assets owned or used by, Seller.
Except as set forth in SCHEDULE 2.12(A), To the knowledge of Seller, ▇▇▇▇▇▇▇ and
the Shareholder, no such action or proceeding has been threatened, and no event
has occurred or circumstance exists that may serve as a basis for the
commencement of any such action or proceeding.
(b) There are no orders, injunctions, judgments or decrees (an
"ORDER") outstanding against Seller or that otherwise relate to or may affect
the business of, or any of the assets owned or used by, Seller.
SECTION 2.13 INSURANCE. SCHEDULE 2.13 sets forth (a) a complete and
accurate list of all insurance under which any of the assets or properties of
Seller is covered or otherwise relating to the business of Seller, and (b) all
life insurance policies covering the life of any Employee for which Seller has
paid any premiums. Such policies are in full force and effect, and Seller has
paid all premiums due, and has otherwise performed all of its obligations under,
each such policy of insurance.
SECTION 2.14 CONTRACTS; NO DEFAULTS. SCHEDULE 2.14 contains an
accurate and complete list of each Seller Contract. Seller has delivered to
Buyer accurate and complete copies of each written Seller Contract, and have
provided Buyer with a true and accurate description of each oral Seller
Contract. Each Seller Contract is valid and binding and in full force and
effect, Seller and each other person that has or had any obligation or liability
under any Seller Contract is in compliance with all material terms and
requirements of each Seller Contract, and, except a set forth in SCHEDULE 2.14,
no event has occurred or circumstance exists that (with or without notice or
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lapse of time) may contravene, conflict with, or result in a violation or breach
of, or give Seller or any other person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Seller Contract.
SECTION 2.15 INTELLECTUAL PROPERTY. SCHEDULE 2.15 lists any names,
assumed names, registered or unregistered trade names, patents, inventions or
discoveries that may be patentable, registered or unregistered trademarks,
registered or unregistered service marks, registered or unregistered copyrights,
applications for any of the foregoing, computer software, rights in internet web
sites and internet domain names, owned, used or licensed by Seller
(collectively, the "INTELLECTUAL PROPERTY ASSETS"). The documentation relating
to (a) such Intellectual Property Assets and (b) any trade secrets, know-how,
confidential or proprietary information and customer lists (the items referenced
in clause (b), the "PROPRIETARY ASSETS") is current, accurate, and sufficient in
detail and content to allow its full and proper use. Seller has taken all
reasonable precautions to protect the secrecy, confidentiality and value of the
all of the Intellectual Property Assets and Proprietary Assets, and has the
right to use all of the Intellectual Property Assets and Proprietary Assets.
None of the Intellectual Property Assets or Proprietary Assets is subject to any
adverse claim or has been challenged or threatened in any way or infringes or
conflicts with any patent or copyright application or registration or any other
intellectual property right of any other person. The ownership and use of the
Intellectual Property Assets and Proprietary Assets by Buyer following the
Closing will not infringe upon or conflict with the intellectual property rights
of any person.
SECTION 2.16 RELATIONSHIPS WITH RELATED PERSONS. Except as set forth
in SCHEDULE 2.16, no shareholder or any Related Person (as defined below) of the
shareholder has any interest in any property (whether real, personal, or mixed
and whether tangible or intangible), used in or pertaining to Seller's business.
To the knowledge of the Seller, no shareholder or any Related Person of any
shareholder owns an equity interest or any other financial interest in any
person that has (a) had business dealings or a material financial interest in
any transaction with Seller other than business dealings or transactions
disclosed in SCHEDULE 2.16, each of which has been conducted in the ordinary
course of business at substantially prevailing market prices and on
substantially prevailing market terms, or (b) engaged in competition with Seller
with respect to the Seller's business. Except as set forth on SCHEDULE 2.16, the
Seller is not indebted, directly or indirectly, to any person who is an officer,
director or shareholder of the Seller or any Affiliate of any such person in any
amount other than for salaries for services rendered or reimbursable business
expenses, and no such officer, director, shareholder or Affiliate is indebted to
the Seller, except for advances made to employees of the Seller in the ordinary
course of business to meet reimbursable business expenses anticipated to be
incurred by such person. For the purposes of this SECTION 2.16, "RELATED PERSON"
means, with respect to any individual: (i) an individual's spouse, siblings,
siblings' children, children, grandchildren or parents; or (ii) a trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, or owners, or persons holding a controlling interest of which consist
of such individuals referred to in the immediately preceding clause (i).
SECTION 2.17 NO UNDISCLOSED LIABILITIES. Seller has no liabilities
or obligations except for liabilities or obligations reflected or reserved
against in the unaudited balance sheet as of March 31, 2005 (the "INTERIM
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BALANCE SHEET") and current liabilities incurred in the ordinary course of
business of Seller since March 31, 2005, except as set forth on SCHEDULE 2.17.
SECTION 2.18 NO MATERIAL ADVERSE CHANGE. Since March 31, 2005, (a)
there has not been any material adverse change in the business, properties,
prospects, assets, results of operations or condition (financial or otherwise)
of Seller, and no event has occurred or circumstance exists that may result in
such a material adverse change; (b) there has not been any sale, lease, or other
disposition of any asset or property of Seller other than in the ordinary course
of business, or any Encumbrance on any asset or property of Seller; and (c)
Seller has conducted its business only in the ordinary course of business so as
to preserve its business intact, to keep available to its business the services
of Seller's employees, and to preserve its business and the goodwill of its
suppliers, customers and others having business relations with it.
SECTION 2.19 BROKERS OR FINDERS. Neither Seller nor any of its
officers, directors, employees or agents have incurred any liability or
obligation for brokerage or finders' fees or agents' commissions or other
similar payment in connection with the sale of the Assets or the transactions
contemplated hereby.
SECTION 2.20 ACCOUNTS RECEIVABLE. All Accounts Receivable that are
reflected on the Interim Balance Sheet or on the accounting Records of Seller as
of the Closing Date represent or will represent valid obligations arising from
services actually performed by Seller in the ordinary course of business,
subject to a modest amount of uncollectibility. Except to the extent paid prior
to the Closing Date, such Accounts Receivable are or will be as of the Closing
Date collectible net of the respective reserves to be shown on the audited
balance sheet as of March 31, 2005. Subject to such reserves, each of such
Accounts Receivable either has been or will be collected in full, without any
set-off, within 365 days after the day on which it first becomes due and
payable. SCHEDULE 2.20 contains a complete and accurate list of all Accounts
Receivable as of the date of the Interim Balance Sheet, which list sets forth
the aging of each such Account Receivable.
SECTION 2.21 CUSTOMERS AND SUPPLIERS. Since March 31, 2005, there
has been no adverse change in the business relationship of Seller with any
material customer or supplier. Seller has not received any notice that any
material customer or supplier has any intention to terminate or materially
reduce purchases from or supplies to Seller on account of the consummation of
the transactions contemplated hereby or otherwise.
SECTION 2.22 BOOKS AND RECORDS. The books of account and other
financial records of Seller are complete and correct in all material respects
and have been maintained in accordance with sound business practices and in
accordance with applicable laws and regulations.
SECTION 2.23 BANK ACCOUNTS. SCHEDULE 2.23 contains a complete and
accurate list of all bank accounts and safe deposit boxes in the name of or
controlled by the Seller, and the person or persons authorized to act or sign on
behalf of the Seller in respect of any of the foregoing.
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SECTION 2.24 PREPAYMENTS AND DEPOSITS. SCHEDULE 2.24 sets forth a
complete and accurate list of all prepayments or deposits from customers for
services to be performed after the Closing Date which have been received by
Seller as of the date hereof.
SECTION 2.25 DISCLOSURE. No representation or warranty or other
statement made by Seller, ▇▇▇▇▇▇▇ or the Shareholder in this Agreement or in any
certificate to be delivered hereunder, contains or will contain any untrue
statement of a material fact or omits, or will omit, to state a material fact
necessary to make any of them, not misleading. There does not now exist any
event, condition, or other matter, individually or in the aggregate, adversely
affecting Seller or the Seller's business, prospects, financial condition, or
results of its operations that has not been set forth this Agreement.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
SECTION 3.1 ORGANIZATION AND GOOD STANDING. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, with full corporate power and authority to conduct its
business as it is now being conducted.
SECTION 3.2 AUTHORITY, NO CONFLICT.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against it in accordance with its terms. Upon
the execution and delivery by Buyer of each of the documents and instruments to
be executed and delivered by Buyer at Closing pursuant to SECTION 1.7(B)
(collectively, the "BUYER'S CLOSING DOCUMENTS"), each of the Buyer's Closing
Documents will constitute the legal, valid, and binding obligation of Buyer,
enforceable against it in accordance with its respective terms. Buyer has the
absolute right, power and authority to execute and deliver this Agreement and
the Buyer's Closing Documents and to perform its obligations under this
Agreement and the Buyer's Closing Documents, and such action has been duly
authorized by all necessary corporate action.
(b) Neither the execution and delivery of this Agreement by
Buyer nor the consummation or performance of any of the transactions
contemplated hereby by Buyer will (with or without notice or lapse of time): (i)
contravene, conflict with or result in a violation of any provision of Buyer's
certificate of incorporation or bylaws; (ii) contravene, conflict with or result
in a violation of any Legal Requirement or Order of any court or governmental
authority to which Buyer or its assets are subject, or (iii) conflict with or
result in the breach or termination of any term or provision of, or constitute a
default under, or cause any acceleration under, or cause the creation of any
Encumbrance upon the properties or assets of the Buyer pursuant to, any
indenture, mortgage, deed of trust or other agreement or instrument to which the
Buyer is a party or by which the Buyer or any of its properties is or may be
bound.
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SECTION 3.3 CONSENTS AND APPROVALS. SCHEDULE 3.3 sets forth a
complete and accurate list of all consents and approvals of third parties that
are required in connection with the consummation by the Buyer of the
transactions contemplated by this Agreement, all of which consents and approvals
either have been obtained or will be obtained prior to the Closing Date.
SECTION 3.4 REGULATORY APPROVALS. All consents, approvals,
authorizations or other requirements prescribed by any law, rule or regulation
that must be obtained or satisfied by the Buyer and that are necessary for the
consummation of the transactions contemplated by this Agreement have been, or
will be prior to the Closing Date, obtained and satisfied.
SECTION 3.5 AVAILABILITY OF FINANCING. Buyer has no reason to
believe that the private placement for the funds necessary to finance the Buyer
to consummate the transactions contemplated by this Agreement will not be
available to Buyer on the Closing Date. Buyer has furnished to Seller
preliminary and draft documentation relating to its contemplated fund raising
transactions and Buyer shall promptly deliver to Seller additional information
and documents with respect to such fund raising as they become available,
including definitive documents related to the closing of such financing.
SECTION 3.6 BROKERS OR FINDERS. Neither Buyer nor any of its
officers, directors, employees or agents have incurred any liability for
brokerage or finders' fees or agents' commissions or other similar payment in
connection with the transactions contemplated hereby.
ARTICLE 4.
COVENANTS OF SELLER PRIOR TO CLOSING
SECTION 4.1 ACCESS AND INVESTIGATION. Between the date of this
Agreement and the Closing Date, and upon reasonable advance notice received from
Buyer, Seller shall (a) afford Buyer and its Representatives and prospective
lenders and their Representatives (collectively, the "BUYER GROUP") full and
free access, during normal business hours, to Seller's management personnel
offices, properties offices, and books and records, such rights of access to be
exercised in a manner that does not unreasonably interfere with the operations
of Seller, (b) furnish the Buyer Group with copies of all such Contracts,
Governmental Authorizations, books and records, and other existing data as Buyer
may reasonably request, (c) furnish the Buyer Group with such additional
financial, operating, and other relevant data and information as Buyer may
reasonably request, and (d) otherwise cooperate and assist, to the extent
reasonably requested by Buyer, with Buyer's investigation of the properties,
assets and financial condition related to Seller.
SECTION 4.2 OPERATION OF THE BUSINESS OF SELLER. Between the date of
this Agreement and the Closing Date, Seller shall:
(a) conduct the business of the Seller only in the Ordinary
Course of Business (as defined below);
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(b) use its commercially reasonable efforts to preserve intact
the current business organization of the Seller, keep available the services of
the Seller's officers, employees, and agents, and maintain the Seller's
relations and good will with suppliers, customers, landlords, creditors,
employees, agents, and others having business relationships with it;
(c) confer with Buyer prior to implementing operational
decisions of a material nature; and
(d) otherwise report periodically to Buyer concerning the
status of the business, operations, and finances of the Seller.
"ORDINARY COURSE OF BUSINESS" means an action that is consistent in
nature and scope with Seller's past practices, taken in the ordinary course of
the normal day-to-day operations of Seller and that does not require specific
authorization by the Board of Directors or shareholders of Seller.
SECTION 4.3 NEGATIVE COVENANT. Except in the Ordinary Course of
Business or as otherwise expressly permitted herein, between the date of this
Agreement and the Closing Date, Seller shall not, without the prior written
Consent of Buyer:
(a) pay or increase any bonuses, salaries, or other
compensation to any shareholder, director, officer or employee or entry into any
severance or similar contract with any director, officer, or employee;
(b) adopt, amend or increase the payments to or benefits under,
any Employee Benefit Plan with respect to the Employees;
(c) mortgage, pledge, or impose any Encumbrance on any Asset of
the Seller;
(d) modify any material Seller Contract or Governmental
Authorization;
(e) cancel or waive any claims or rights with a value to Seller
in excess of $10,000; or
(f) agree, whether orally or in writing, to do any of the
foregoing.
SECTION 4.4 NOTIFICATION. Between the date of this Agreement and the
Closing Date, Seller shall promptly notify Buyer in writing if it becomes aware
of (a) any fact or condition that causes or constitutes a breach of any of
Seller's representations and warranties made as of the date of this Agreement,
or (b) the occurrence after the date of this Agreement of any fact or condition
that would or be reasonably likely to (except as expressly contemplated by this
Agreement) cause any such representation or warranty to be inaccurate or
incomplete in any material respect, had that representation or warranty been
made as of the time of the occurrence of, or Seller's discovery of, such fact or
condition. Should any such fact or condition require any change to the
Schedules, Seller shall promptly deliver to Buyer a supplement to the Schedules
specifying such change.
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SECTION 4.5 NO NEGOTIATION. Until such time as this Agreement is
terminated pursuant to SECTION 9.1, Seller shall not directly or indirectly
solicit, initiate, encourage or entertain any inquiries or proposals from,
discuss or negotiate with, provide any non-public information to, or consider
the merits of any inquiries or proposals from, any person (other than Buyer)
relating to any business combination transaction involving Seller, including the
sale by the Shareholders of Seller's stock, the merger or consolidation of
Seller, or the sale of the Business or any of the Assets (other than in the
Ordinary Course of Business). Seller shall promptly notify Buyer of any such
inquiry or proposal.
SECTION 4.6 BEST EFFORTS. Seller and ▇▇▇▇▇▇▇ shall use their best
efforts to cause the conditions in Article 6 and Article 7 to be satisfied.
SECTION 4.7 PAYMENT OF LIABILITIES. Seller shall pay or otherwise
satisfy in the Ordinary Course of Business all of its liabilities and
obligations. Buyer and Seller hereby waive compliance with the bulk transfer
provisions of the Uniform Commercial Code (or any similar law) ("BULK SALES
LAWS") in connection with the contemplated transactions.
SECTION 4.8 CHANGE OF NAME. On or before the Closing Date, Seller
shall take all other actions necessary to amend its certificate of incorporation
and change its name to one sufficiently dissimilar to Seller's present name to
avoid confusion.
SECTION 4.9 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 for the three-month period
ending March 31, 2005 (the "AUDITED FINANCIAL STATEMENTS"). The Audited
Financial Statements shall be materially consistent with the unaudited financial
statements included in SCHEDULE 2.4, except as set forth in SCHEDULE 2.4. 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.
ARTICLE 5.
COVENANTS OF BUYER PRIOR TO CLOSING
SECTION 5.1 REQUIRED APPROVALS. As promptly as practicable after the
date of this Agreement, Buyer shall obtain all consents and approvals as
identified in SCHEDULE 3.3. Buyer also shall fully cooperate with Seller in
obtaining all consents identified in SCHEDULE 2.2(C).
SECTION 5.2 BEST EFFORTS. Buyer shall use its best efforts to cause
the conditions in Article 6 and Article 7 to be satisfied.
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ARTICLE 6.
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Assets and to take the other
actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Buyer, in whole or in part):
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties of Seller, ▇▇▇▇▇▇▇ and the Shareholder in this Agreement shall be
accurate in all material respects as of the Closing Date as if made on the
Closing Date, except for any changes consented to in writing by Buyer.
SECTION 6.2 SELLER'S PERFORMANCE. All of the covenants and
obligations that Seller is required to perform or to comply with pursuant to
this Agreement at or prior to the Closing shall have been duly performed and
complied with in all material respects.
SECTION 6.3 CONSENTS. Each of the consents identified in EXHIBIT 6.3
(the "MATERIAL CONSENTS") must have been obtained and must be in full force and
effect.
SECTION 6.4 AVAILABILITY OF FINANCING. Buyer and Buyer's Parent
shall have received financing in an amount sufficient to consummate the
transactions contemplated under this Agreement.
SECTION 6.5 ADDITIONAL DOCUMENTS. Seller must have caused the
documents and instruments required by SECTION 1.7(A) and the following documents
to be delivered (or tendered subject only to Closing) to Buyer:
(a) A statement from the holder of each note listed on SCHEDULE
1.4(A)(III), if any, dated the Closing Date, setting forth the principal amount
then outstanding on the indebtedness represented by such note, the interest rate
thereon, and a statement to the effect that Seller, as obligor under such note,
is not in default under any of the provisions thereof;
(b) releases of all Encumbrances on the Assets, other than
Permitted Encumbrances;
(c) certificates dated as of a recent date prior to the Closing
as to the good standing of Seller and payment of all applicable state Taxes by
Seller, from the appropriate officials of the State of Delaware and each
jurisdiction in which Seller is licensed or qualified to do business as a
foreign corporation as specified in SCHEDULE 2.1; and
(d) such other documents as Buyer may reasonably request for
the purpose of (i) evidencing the satisfaction of any condition referred to in
this Article 6, or (ii) otherwise facilitating the consummation or performance
of any of the Contemplated Transactions.
SECTION 6.6 NO PROCEEDINGS. Since the date of this Agreement, there
has not been commenced or threatened proceeding or action (a) involving any
challenge to, or seeking damages or other relief in connection with, any of the
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contemplated transactions, or (b) that may have the effect of preventing, making
illegal, imposing limitations or conditions on, or otherwise interfering, with
any of the contemplated transactions.
SECTION 6.7 GOVERNMENTAL AUTHORIZATIONS. Buyer must have received
such Governmental Authorizations as are necessary or desirable to allow Buyer to
operate the Assets from and after the Closing.
SECTION 6.8 PURCHASE PRICE ADJUSTMENT. If the Purchase Price
Adjustment, as set forth in SECTION 1.3 of this Agreement is greater than Seven
Hundred and Fifty Thousand Dollars ($750,000.00), the Buyer shall have the
absolute discretion to terminate this Agreement without any further obligations.
ARTICLE 7.
CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE
Seller's obligation to sell the Assets and to take the other actions
required to be taken by Seller at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Seller, in whole or in part):
SECTION 7.1 ACCURACY OF REPRESENTATIONS. All of Buyer's
representations and warranties in this Agreement must be accurate in all
material respects as of the Closing Date as if made on the Closing Date.
SECTION 7.2 BUYER'S PERFORMANCE. All of the covenants and
obligations that Buyer is required to perform or to comply with pursuant to this
Agreement at or prior to the Closing must have been performed and complied with
in all material respects.
SECTION 7.3 CONSENTS. Each of the Consents identified in EXHIBIT 6.3
must have been obtained and must be in full force and effect.
SECTION 7.4 ADDITIONAL DOCUMENTS. Buyer must have caused the
documents and instruments required by SECTION 1.7(B) and the following documents
to be delivered (or tendered subject only to Closing) to Seller and
Shareholders:
(a) an opinion of the Law Offices of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, dated
the Closing Date, in a form customary for similar transactions; and
(b) such other documents as Seller may reasonably request for
the purpose of evidencing the satisfaction of any condition referred to in this
Article 7.
(c) NO INJUNCTION. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits the consummation
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of the Contemplated Transactions, and (b) has been adopted or issued, or has
otherwise become effective, since the date of this Agreement.
SECTION 7.5 PURCHASE PRICE. The cash component of the Purchase Price
to be paid at Closing to Seller, after adjustments as provided in SECTION 1.3,
shall be at least $4,500,000 (inclusive of the amount to be paid to the Escrow
Agent).
ARTICLE 8.
ADDITIONAL COVENANTS
SECTION 8.1 EMPLOYEES AND EMPLOYEE BENEFITS.
(a) Effective immediately before the Closing Date, Seller shall
terminate the employment of all of its Employees (the "AVAILABLE EMPLOYEES") and
shall release such Available Employees from the provisions of any restrictive
covenants and/or agreements with Seller with respect to Buyer so as to enable
Buyer to employ such individuals. Buyer shall offer employment to all of the
Available Employees following the Closing at the same base salary and incentive
bonus arrangements, and comparable group health insurance and other benefits, as
each such Available Employee has with Seller. (b) It is understood and agreed
that (i) any offer of employment made by Buyer as referenced in SECTION 8.1(A)
above will not constitute any commitment, contract or understanding (expressed
or implied) of any obligation on the part of Buyer to a post-Closing Date
employment relationship of any fixed term or duration or upon any terms or
conditions other than those that Buyer may establish pursuant to individual
offers of employment; and (ii) employment offered by Buyer is "at will" and may
be terminated by Buyer or by an employee at anytime for any reason (subject to
any written commitments to the contrary made by Buyer).
(c) 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; 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.
SECTION 8.2 PAYMENT OF TAXES RESULTING FROM SALE OF ASSETS BY
SELLER. Seller shall pay in a timely manner all taxes (other than income taxes)
imposed on it resulting from or payable in connection with the sale of the
Assets pursuant to this Agreement.
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SECTION 8.3 PAYMENT OF OTHER RETAINED LIABILITIES. In addition to
payment of taxes pursuant to SECTION 8.2, Seller shall pay, or make adequate
provision for the payment, in full of all of the Retained Liabilities. If any
such Retained Liabilities are not so paid or provided for, or if Buyer
reasonably determines that failure to make any payments will impair Buyer's use
or enjoyment of the Assets or conduct of the business of the Seller previously
conducted using the Assets, Buyer may at any time after the Closing Date elect
to make all such payments directly or through the escrow (but shall have no
obligation to do so) and will be promptly reimbursed therefor by Seller.
SECTION 8.4 COVENANT NOT TO COMPETE.
(a) In consideration of the Purchase Price to be received under
this Agreement, Seller agrees that, for a period of three (3) years after the
Closing Date, it shall not directly or indirectly, do any of the following:
(i) engage in, or invest in, own, manage, operate,
finance, control, be employed by, associated with or in any manner connected
with, or render services or advice or other aid to, any person engaged in or
planning to become engaged in, or any other business whose products or
activities compete in whole or in part with, the business of Buyer, or any
business carried on by Buyer utilizing the Assets, anywhere within the
continental United States;
(ii) induce or attempt to induce any employee of Buyer to
leave the employ of Buyer, in any way interfere with the relationship between
Buyer and any employee of Buyer, or solicit, offer employment to, otherwise
attempt to hire, employ, or otherwise engage as an employee, independent
contractor, or otherwise, any such employee; or
(iii) induce or attempt to induce any person that was a
customer, client or business relation of Buyer at any time during the one (1)
year period preceding the Closing Date to cease doing business with Buyer, in
any way interfere with the relationship between Buyer and any such customer,
client or business relation, or solicit the business of any such customer,
client or business relation.
(b) Seller acknowledges that all of the foregoing provisions
are reasonable and are necessary to protect and preserve the value of the Assets
and to prevent any unfair advantage being conferred on Seller. If any of the
covenants set forth in this SECTION 8.4 are held to be unreasonable, arbitrary,
or against public policy, the restrictive time period herein will be deemed to
be the longest period permissible by law under the circumstances and the
restrictive geographical area herein will be deemed to comprise the largest
territory permissible by law under the circumstances.
SECTION 8.5 CUSTOMER AND OTHER BUSINESS RELATIONSHIPS. After the
Closing, Seller shall cooperate with Buyer in its efforts to continue and
maintain for the benefit of Buyer those business relationships of Seller
existing prior to the Closing and relating to the business to be operated by
Buyer after the Closing, including relationships with lessors, employees,
regulatory authorities, licensors, customers, suppliers and others, and Seller
will satisfy the Retained Liabilities in a manner which is not detrimental to
any of such relationships. Seller will refer to Buyer all inquiries relating to
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the Business. Neither Seller nor any of its officers or employees, shall take
any action which would tend to diminish the value of the Assets after the
Closing or which would interfere with the business of Buyer to be engaged in
after the Closing.
SECTION 8.6 RETENTION AND ACCESS TO RECORDS. After the Closing Date,
Buyer shall retain for a period of seven (7) years those records of Seller
delivered to Buyer. Buyer also shall provide Seller and a representative of the
shareholders reasonable access thereto, during normal business hours and on at
least three (3) days' prior written notice, to enable them to prepare financial
statements or tax returns or deal with tax audits. After the Closing Date,
Seller shall provide Buyer and Buyer's representatives reasonable access to
records that are Excluded Assets, during normal business hours and on at least
three (3) days' prior written notice, for any reasonable business purpose
specified by Buyer in such notice.
SECTION 8.7 UNCOLLECTED ACCOUNTS RECEIVABLE. In the event Seller
indemnifies Buyer pursuant to SECTION 10.2 for a claim under SECTION 2.20, each
such accounts receivable for which Buyer is indemnified shall revert to the
Seller. Seller shall retain any and all payments on such accounts receivable
received subsequent to the date of payment of any claim, and Seller shall be
entitled to take such action as it deems necessary to seek collection and
payment of any such account receivable.
ARTICLE 9.
TERMINATION
SECTION 9.1 TERMINATION EVENTS. This Agreement may be terminated by
written notice given prior to or at the Closing, subject to SECTION 9.2 as
follows:
(a) by Buyer or Seller if a material breach of any provision of
this Agreement has been committed by the other party and such breach has not
been waived by the non-breaching party;
(b) by Buyer if any condition in Article 6 has not been
satisfied as of the date specified for the Closing; or if satisfaction of such a
condition by such date is or becomes impossible (other than through the failure
of Buyer to comply with its obligations under this Agreement), or the Purchase
Price Adjustment exceeds the Maximum Buyer's Amount, as set forth in SECTION 1.3
of this Agreement and Buyer has not waived such condition on or before such
date;
(c) by Seller, if any condition in Article 7 has not been
satisfied as of the date specified for the Closing or if satisfaction of such a
condition by such date is or becomes impossible (other than through the failure
of Seller or the Shareholders to comply with their obligations under this
Agreement) and Seller has not waived such condition on or before such date;
(d) by mutual consent of Buyer and Seller; or
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(e) by Buyer or Seller if the Closing has not occurred on or
before June 30, 2005 or such later date as the parties may agree upon, unless
the party giving notice of termination is in material breach of this Agreement.
SECTION 9.2 EFFECT OF TERMINATION. Each party's right of termination
under SECTION 9.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of such right of termination will not
be an election of remedies. If the Agreement is terminated pursuant to SECTION
9.1, all obligations of the parties under this Agreement will terminate, except
that the obligations of (a) the parties in this SECTION 9.2 and Article 10; and
(b) Buyer in SECTION 9.3, will survive; PROVIDED, HOWEVER, that if this
Agreement is terminated because of a breach of this Agreement by the
non-terminating party or because one or more of the conditions to the
terminating party's obligations under this Agreement is not satisfied as a
result of the party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal remedies will
survive such termination unimpaired.
SECTION 9.3 FINANCING FEES. In the event this Agreement is
terminated due solely to Buyer failing to accomplish the financing contemplated
in SECTION 3.5 on or before the Closing Date, Buyer shall immediately pay to
Seller an amount in cash equal to the total amount of third-party fees and
expenses directly incurred by Seller in connection with the transactions
contemplated by this Agreement, including all counsel fees and expenses, and all
audit and accounting fees and expenses incurred in connection with the
preparation of the Financial Statements, in an amount not to exceed $50,000.
ARTICLE 10.
INDEMNIFICATION
SECTION 10.1 SURVIVAL. All representations, warranties, covenants,
and obligations in this Agreement, the Schedules attached hereto, and the
certificates delivered pursuant to SECTION 1.7, will survive the Closing and the
consummation of the transactions contemplated hereby. The right to
indemnification, reimbursement, or other remedy based on such representations,
warranties, covenants and obligations will not be affected by any investigation
conducted with respect to, or any knowledge acquired (or capable of being
acquired) about, the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation. Buyer is not aware of any
facts or circumstances that would serve as the basis for a claim by Buyer
against Seller, ▇▇▇▇▇▇▇ or the Shareholder based upon a breach of any of the
representations and warranties of the Seller, ▇▇▇▇▇▇▇ and the Shareholder
contained in this Agreement or breach by any of Seller's covenants or agreements
to be performed by any of them at or prior to Closing. Buyer will be deemed to
have waived in full any breach of any of Seller's, ▇▇▇▇▇▇▇'▇ and the
Shareholder's representations and warranties and any such covenants and
agreements of which Buyer has such awareness at the Closing.
SECTION 10.2 INDEMNIFICATION AND REIMBURSEMENT BY SELLER, ▇▇▇▇▇▇▇
AND THE SHAREHOLDER. Seller, ▇▇▇▇▇▇▇ and the Shareholder, jointly and severally,
(with respect to clause (a) below), and Seller (with respect to clauses (b) and
(c)) shall indemnify and hold harmless Buyer, and its directors, stockholders,
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members, partners, employees, representatives and agents (collectively, the
"BUYER INDEMNIFIED PERSONS"), and shall reimburse the Buyer Indemnified Persons,
for any loss, liability, claim, damage (including incidental and consequential
damages), or expense (including costs of investigation and defense and
reasonable attorneys' fees and expenses) whether or not involving a third-party
claim (collectively, "DAMAGES"), arising, directly or indirectly, from or in
connection with:
(a) any breach of any representation or warranty made by
Seller, ▇▇▇▇▇▇▇ or the Shareholder in this Agreement, or the certificates
delivered pursuant to SECTION 1.7;
(b) any breach of any covenant or obligation of Seller in this
Agreement; and
(c) any Retained Liabilities.
SECTION 10.3 INDEMNIFICATION AND REIMBURSEMENT BY BUYER. Buyer shall
indemnify and hold harmless Seller and its directors, stockholders, members,
partners, employees, representatives and agents (collectively, the "SELLER
INDEMNIFIED PERSONS") and shall reimburse the Seller Indemnified Persons for any
Damages arising, directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made by Buyer
in this Agreement or in any certificate or document delivered by Buyer pursuant
to this Agreement;
(b) any breach of any covenant or obligation of Buyer in this
Agreement or in any other document, writing or instrument delivered by Buyer
pursuant to this Agreement; and
(c) the Assumed Liabilities.
SECTION 10.4 LIMITATIONS ON AMOUNT - SELLER, ▇▇▇▇▇▇▇ AND
SHAREHOLDER. Seller, ▇▇▇▇▇▇▇ and the Shareholder will have no liability (for
indemnification or otherwise) with respect to claims under SECTION 10.2(A)
(other than with respect to claims under SECTION 2.20) until the total amount of
Damages with respect to such matters exceeds $50,000, and then only for the
amount by which such Damages exceed $50,000; PROVIDED, HOWEVER, that this
SECTION 10.4(A) will not apply to any breach of any of Seller's, ▇▇▇▇▇▇▇'▇ and
the Shareholder's representations and warranties of which the Seller had
knowledge at any time prior to the date on which such representation and
warranty is made. Further, Seller, ▇▇▇▇▇▇▇ and the Shareholder shall have no
liability for any Damages after all amounts paid with respect to claims under
SECTION 10.2 total $50,000 in the aggregate.
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SECTION 10.5 TIME LIMITATIONS.
(a) Seller and the Shareholders will have no indemnification
liability for the breach of any representation or warranty set forth in Article
2, unless on or before the first anniversary of the Closing Date, Buyer notifies
Seller or the Shareholder of a claim specifying the factual basis of that claim
in reasonable detail to the extent then known by Buyer; PROVIDED, HOWEVER, that
any claim with respect to SECTION 2.8, 2.10 or 2.11 may be made at any time,
subject to the applicable period of statute of limitations.
(b) Buyer will have no indemnification liability for the breach
of any representation or warranty set forth in Article 3, unless on or before
the first anniversary of the Closing Date, Seller notifies Buyer of a claim
specifying the factual basis of that claim in reasonable detail to the extent
then known by Seller.
SECTION 10.6 PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS. If,
after the Closing Date, either a Buyer Indemnified Person or Seller Indemnified
Person, as the case may be (the "INDEMNITEE"), receives notice of any
third-party claim or alleged third-party claim asserting the existence of any
matter of a nature as to which the Indemnitee is entitled to be indemnified
under this Agreement, the Indemnitee shall promptly notify Seller or the
Shareholder, or Buyer, as the case may be (the "INDEMNITOR"), in writing with
respect thereto, but the failure to notify the Indemnitor will not relieve the
Indemnitor of any liability that it may have to an Indemnitee, except to the
extent that the Indemnitor demonstrates that the defense of such action has been
prejudiced by the Indemnitee's failure to give such notice. The Indemnitor will
have the right to defend against any such claim provided (a) that the
Indemnitor, within ten (10) days after the giving of such notice by Indemnitee,
notifies Indemnitee in writing that (i) Indemnitor disputes such claim and gives
reasons therefor, and (ii) Indemnitor will, at its own cost and expense, defend
the same, and (b) such defense is instituted and continuously maintained in good
faith by Indemnitor. Indemnitee may, if it so elects, designate its own counsel
to participate with the counsel selected by Indemnitor in the conduct of such
defense. Indemnitor will not permit any lien or execution to attach to the
assets of Indemnitee as a result of such claim, and the Indemnitor shall provide
such bonds or deposits as are necessary to prevent the same. In any event,
Indemnitor will keep Indemnitee fully advised as to the status of such defense.
If Indemnitor is given notice of a claim as aforesaid and fails to notify
Indemnitee of its election to defend such claim within the time prescribed
herein, or after having elected to defend such claim fails to institute and
maintain such defense as prescribed herein, or if such defense is unsuccessful
then, in any such event, the Indemnitor shall fully satisfy and discharge the
claim within ten (10) days after notice from the Indemnitee requesting
Indemnitor to do so. If the Indemnitor assumes the defense of any action or
proceeding (y) no compromise or settlement of such claims may be effected by the
Indemnitor without the Indemnitee's consent unless (A) there is no finding or
admission of any violation of any legal requirement or any violation of the
rights of any person and no effect on any other claims that may be made against
the Indemnitee, and (B) the sole relief provided is monetary damages that are
paid in full by the Indemnitor; and (z) the Indemnitee will have no liability
with respect to any compromise or settlement of such claims effected without its
consent.
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SECTION 10.7 PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS. A
claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is sought.
ARTICLE 11.
GENERAL PROVISIONS
SECTION 11.1 EXPENSES. Except as otherwise expressly provided in
this Agreement, each party to this Agreement shall bear its respective expenses
incurred in connection with the preparation, execution, and performance of this
Agreement and the transactions contemplated hereby, including all fees and
expenses of its representatives.
SECTION 11.2 NOTICES. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be deemed to
have been duly given when (a) delivered by hand (with written confirmation of
receipt), (b) sent by facsimile with confirmation of transmission by the
transmitting equipment, (c) received by the addressee, if sent by certified
mail, return receipt requested, (d) sent by email; or (e) received by the
addressee, if sent by a nationally recognized overnight delivery service, in
each case to the appropriate addresses or facsimile numbers set forth below (or
to such other addresses or facsimile numbers as a party may designate by notice
to the other parties):
Buyer: GlobalOptions, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Seller, ▇▇▇▇▇▇▇ Confidential Business Resources, Inc.
or Shareholder: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
` Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
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with a copy to: ▇▇▇▇▇▇ I.N. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
SECTION 11.3 JURISDICTION. The parties agree that the state and
federal courts located in Davidson County, Tennessee, will be the sole venue and
will have sole jurisdiction for the resolution of all disputes arising
hereunder. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
SECTION 11.4 WAIVER. No failure to exercise, and no delay in
exercising, on the part of either party, any right hereunder will operate as a
waiver thereof, nor will any single or partial exercise of any right hereunder
preclude further exercise of any other right hereunder.
SECTION 11.5 ENTIRE AGREEMENT AND MODIFICATION. This Agreement,
together with the Confidentiality Agreement dated as of July 19, 2004 between
Seller and Buyer and the Schedules, Exhibits and other documents delivered
pursuant to this Agreement, constitutes a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter and supersedes all prior agreements, whether written or oral, between the
parties with respect to its subject matter. This Agreement may not be amended
except by a written agreement signed on behalf of each of the parties hereto.
SECTION 11.6 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS. No
party may assign any of its rights or delegate any of its obligations under this
Agreement without the prior written consent of the other parties, except that
Buyer may assign any of its rights and delegate any of its obligations under
this Agreement (i) to any affiliate of Buyer, and (ii) in connection with the
sale of all or substantially all of the assets of Buyer, provided that no such
assignment or delegation will relieve Buyer from any of its obligations
hereunder. Subject to the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties. Nothing in this Agreement will be construed to
give any person other than the parties to this Agreement any legal or equitable
right under or with respect to this Agreement or any provision of this
Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to this SECTION 11.6.
SECTION 11.7 SEVERABILITY. If any provision of this Agreement is
held invalid or unenforceable by any court of competent jurisdiction, the other
provisions of this Agreement will remain in full force and effect. The parties
agree that if any provision contained herein is, to any extent, held invalid or
unenforceable in any respect under the laws governing this Agreement, they shall
take any actions necessary to render the remaining provisions of this Agreement
valid and enforceable to the fullest extent permitted by law and, to the extent
necessary, shall amend or otherwise modify this Agreement to replace any
provision contained herein that is held invalid or unenforceable with a valid
and enforceable provision giving effect to the intent of the parties.
SECTION 11.8 SECTION HEADINGS, CONSTRUCTION. The headings of
Articles and Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All Exhibits and Schedules
to this Agreement are incorporated into and constitute an integral part of this
Agreement as if fully set forth herein. All words used in this Agreement will be
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construed to be of such gender or number as the context requires. The language
used in the Agreement shall be construed, in all cases, according to its fair
meaning, and not for or against any party hereto. The parties acknowledge that
each party has reviewed this Agreement and that rules of construction to the
effect that any ambiguities are to be resolved against the drafting party will
not be available in the interpretation of this Agreement.
SECTION 11.9 GOVERNING LAW. This Agreement will be governed by and
construed under the laws of the State of Tennessee without regard to conflicts
of laws principles that would require the application of any other law.
SECTION 11.10 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
SECTION 11.11 FURTHER ASSURANCES. The parties shall cooperate
reasonably with each other and with their respective representatives in
connection with any steps required to be taken as part of their respective
obligations under this Agreement, and the parties agree (a) to furnish upon
request to each other such further information, (b) to execute and deliver to
each other such other documents, and (c) to do such other acts and things, all
as the other party may reasonably request for the purpose of carrying out the
intent of this Agreement and the transactions contemplated hereby.
SECTION 11.12 LEGAL FEES. In the event that legal proceedings are
commenced by Buyer against Seller, or by Seller against Buyer, in connection
with this Agreement or the transactions contemplated hereby, the party or
parties that do not prevail in such proceedings shall pay the reasonable
attorneys' fees and expenses incurred by the prevailing party in such
proceedings.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date first written above.
BUYER:
GLOBALOPTIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Its: Chairman
--------------------------------
SELLER:
CONFIDENTIAL BUSINESS RESOURCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
ASSET PURCHASE AGREEMENT
SIGNATURE PAGE
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LIST OF ANNEXES/EXHIBITS/SCHEDULES
ANNEXES
Annex A - Permitted Encumbrances
EXHIBITS
Exhibit 1.3 - Form of Closing Date Statement
Exhibit 1.5 - Allocation of Purchase Price
Exhibit 1.7(a)(v) - Form of Escrow Agreement
Exhibit 1.7(a)(vi) - Form of Employment Contract
Exhibit 6.3 - Material Consents
SELLER'S SCHEDULES
Schedule 1.4(a)(iii) - Certain Liabilities of Seller
Schedule 2.1 - Foreign Qualifications
Schedule 2.2(c) - Consents; Non-material Contracts
Schedule 2.4 - Financial Statements
Schedule 2.6 - Description of Leased Real Property
Schedule 2.7(a) - Personal Property
Schedule 2.7(b) - Tangible Personal Property
Schedule 2.8 - Taxes
Schedule 2.9 - Employees
Schedule 2.10 - Employee Benefit Plans
Schedule 2.11(a) - Legal Requirements
Schedule 2.11(b) - Governmental Authorizations
Schedule 2.12(a) - Legal Proceedings
Schedule 2.13 - Insurance
Schedule 2.14 - Seller Contracts
Schedule 2.15 - Intellectual Property Assets
Schedule 2.16 - Relationship with Related Persons
Schedule 2.17 - Undisclosed Liabilities
Schedule 2.20 - Accounts Receivable
Schedule 2.23 - Bank Accounts
Schedule 2.24 - Prepayments and Deposits
BUYER'S SCHEDULES
Schedule 3.3 - Consents and Approvals
ANNEX A
PERMITTED ENCUMBRANCES
1. Security interest and lien in all the Company's assets, including accounts
receivable, granted to SunTrust Bank.
2. Purchase money security interests with respect to Cadillac and Dodge
Caravan.
EXHIBIT 1.3
FORM OF
CLOSING DATE STATEMENT
As of the close of business on [DAY BEFORE THE CLOSING DATE]:
CURRENT ASSETS:
Accounts Receivable ("AR") $
Cash $
Advances and Prepaid $_________
Total Current Assets: $
LESS CURRENT LIABILITIES:
Seller's Bank Line of Credit $
Accounts Payable $
Accrued Expenses $_________
Total Current Liabilities: $_________
Purchase Price Adjustment $_________
EXHIBIT 1.5
PURCHASE PRICE ALLOCATION
Class I Assets: $ 12,000*
Cash and General Deposits
Class II Assets: None
Class III Assets: $1,410,000*
Class IV Assets: None
Class V Assets: $ 285,000*
Class VI Assets: $__________
Section 197 Intangibles except Goodwill and Going Concern Value
Class VII Assets: $3,000,000*
Goodwill and Going Concern Value
*All subject to change based on final numbers at Closing.
EXHIBIT 6.3
MATERIAL CONSENTS
1. ▇▇▇▇▇▇ ▇▇▇▇▇ Venture Fund II, L.P. pursuant to the Investor's Agreement,
dated as of June 14, 2002.
2. SunTrust Bank, pursuant to the Seller's bank line of credit.