Document:

EXHIBIT
10.7

    

    FIRST
AMENDMENT TO SETTLEMENT AGREEMENT

    

    THIS FIRST AMENDMENT TO SETTLEMENT
AGREEMENT (“Amendment”) is made and entered into as of the 12th day of
August, 2010, and is made effective as of April 29, 2010 (the “Effective Date”),
by and among (i) LY HOLDINGS,
LLC, a Kentucky limited liability company (“LYH”), (ii) LIGHTYEAR NETWORK SOLUTIONS,
LLC, a Kentucky limited liability company (“LNS”), (iii) CHRIS SULLIVAN, an individual
resident of Nevada (“Sullivan”), (iv) LANJK, LLC, a Kentucky limited
liability company (“LANJK”), (v) RICE REALTY COMPANY, LLC, a
Kentucky limited liability company (“RRC”), (vi) RIGDON O. DEES, III, an
individual resident of California (“Dees”), (vii) CTS EQUITIES LIMITED
PARTNERSHIP, a Nevada limited partnership (“CTS”), and (viii) RON CARMICLE, an individual
resident of Kentucky (“Carmicle,” collectively with LANJK, RRC, Dees, and CTS,
the “Letter Agreement Holders”).

    

    RECITALS:

    

    A.           LYH,
LNS, Sullivan, and the Letter Agreement Holders entered into that certain
Settlement Agreement dated April 29, 2010 (the “Settlement Agreement”), pursuant
to which (1) LNS purchased and assumed the Sullivan Note from Sullivan in
exchange for the Settlement Payment, (2) LYH became indebted to LNS pursuant to
and in the amount of the Sullivan Note, and (3) the Letter Agreement Holders (a)
granted LNS security interests in the Letter Agreements to secure payment by LYH
of the Sullivan Note to LNS, and (b) gave LNS an option pursuant to which LNS
may purchase the Letter Agreements.

     

     B.           The
parties now desire to amend the Settlement Agreement to, inter alia, recognize and
rectify a mutual mistake of Sullivan, LYH, and LNS concerning past due and
future commitment fees pursuant to Section 5 of the Sullivan Note and account
for accrued and unpaid interest due to Sullivan from April 1, 2010, to the
Effective Date.  All capitalized terms not defined in this Amendment
shall have the definitions set forth in the Settlement Agreement.

     

    NOW, THEREFORE, in consideration of the
mutual covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of all of which is hereby
acknowledged, the parties do hereby agree as follows:

     

    1.           Amendment of Settlement
Agreement Section 2(a); Amendment of Sullivan Note Section
5.  By mutual mistake of Sullivan, LYH, and LNS, the Settlement
Agreement did not account for the intent of Sullivan, LYH, and LNS to cause the
right to receive past due and future commitment fees under Section 5 of the
Sullivan Note to remain with Sullivan.  Thus, Sullivan, LYH, and LNS
agree that LNS did not purchase and shall not receive any commitment fee
pursuant to Section 5 of the Sullivan Note, whether due and owing to Sullivan as
of the Effective Date or to become due from and after the Effective
Date.  As a consequence of the foregoing, Section 2(a) of the
Settlement Agreement is amended and modified as follows:

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    Purchase and Assumption of
Sullivan Note.  LNS hereby purchases and assumes any and all of
Sullivan’s rights and obligations under and in connection with the Sullivan
Note; provided, however, that LNS is not purchasing and shall not assume
Sullivan’s right to receive any Commitment Fee (as defined in the Sullivan Note)
pursuant to the Sullivan Note, whether past due as of the Effective Date or to
be incurred from and after the Effective Date.

     

    Additionally,
Section 5 of the Sullivan Note is deleted in its entirety.

     

    2.           Amendment of Settlement
Agreement Section 2(b).  The Settlement Payment reflected in
the Settlement Agreement failed to account for the accrued and unpaid interest
due to Sullivan pursuant to the Sullivan Note for the period beginning April 1,
2010, and ending on the Effective Date.  Therefore, effective as of
the Effective Date, the first paragraph of Section 2(b) of the Settlement
Agreement is amended and modified as follows:

     

    In
exchange for the purchase of the Sullivan Note, LNS shall pay to Sullivan the
sum of Seven Million Seven Hundred Fifty Thousand and No/100 Dollars
($7,750,000) plus the accrued and unpaid interest due to Sullivan pursuant to
the Sullivan Note for the period beginning April 1, 2010, and ending on the
Effective Date (the “Settlement Payment”).  Sullivan acknowledges that
LNS paid $250,000 contemporaneous with the Closing of the Settlement
Agreement.  The remainder of the Settlement Payment shall be paid as
follows: (a) on October 1, 2010, and on the first day of each quarter year
thereafter until and including the Maturity Date (as defined below), $250,000
plus accrued and unpaid interest payable to Fifth Third as directed by Sullivan
(the “Quarterly Payments”), and (b) on the Maturity Date, the then-outstanding
principal amount plus accrued and unpaid interest (the “Final Payment,”
collectively with the Quarterly Payments, the “Deferred Payment”).  If
all such sums are not paid and satisfied in full by the Maturity Date, any sums
remaining due shall thereafter bear interest at the Default Rate (as defined
below).  For purposes of this Agreement, “Maturity Date” shall mean
the sooner of (i) July 1, 2011, or (ii) the maturity date of the Fifth Third
Note.  The parties hereto acknowledge that the Fifth Third Note has
not matured as of the date of this Amendment and Fifth Third agreed to extend
the maturity date of the Fifth Third Note six months to January 10,
2011.

    

    The
second and third paragraphs of Section 2(b) shall remain as set forth in the
Settlement Agreement and shall not be amended or modified.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    3.           Amendment of Settlement
Agreement Section 2(c).  The last sentence of the third
paragraph of Section 2(c) of the Settlement Agreement is amended and modified as
follows:

     

    If
Sullivan avoids the Agreement pursuant to this Section 2(c), the payments
Sullivan received from LNS hereunder shall be credited against the Sullivan
Note, the Sullivan Note shall revert to Sullivan, LNS will have no further
obligation to make any payments to Sullivan whether for amounts withheld or to
become due, and LYH shall execute a new promissory note in favor of LNS in a
principal amount equal to the amount of the payments Sullivan received from LNS
hereunder prior to the date the Sullivan Note reverts to Sullivan, which
promissory note shall include the same interest and payment terms as the
Sullivan Note.

     

    4.           Acknowledgement;
Waiver.  Pursuant to the Settlement Agreement, LYH, LNS, and
the Letter Agreement Holders bargained for a settlement of Sullivan’s claims
arising from the Sullivan Note, and specifically from the payments LYH paid
after becoming past due.  Sullivan acknowledges and agrees that he
waived pursuant to the Settlement Agreement, and hereby expressly waives, any
right to charge a default rate of interest or receive a late payment penalty for
or as a result of any failure of LYH to make timely payments under the Sullivan
Note prior to the Effective Date.  This waiver applies only to the
past due payments made prior to the Effective Date and shall not apply to any
Event of Default under the Sullivan Note or the Settlement Agreement that occurs
on or after the Effective Date.

     

    5.           Amendment of Sullivan Note
Section 2.  Section 2 of the Sullivan Note is amended and
modified as follows:

     

    
      	
               
      

            	
              The
      principal of, and all interest on, this Note shall be due and payable
      without setoff, offset, credit, counterclaim or
  defense.

            

    

     

    6.           Amendment of Sullivan Note
Section 3.  Section 3 of the Sullivan Note is amended and
modified as follows:

    

    Maturity
Date.  All outstanding principal of this Note, all accrued but
unpaid interest thereon and all other charges, fees or expenses hereunder shall
be due and payable upon demand to LNS.  The date upon which demand is
made to Borrower is referred to herein as the “Maturity Date”.

     

    7.           Letter Agreement
Holders.  Each of the Letter Agreement Holders joins in this
Amendment for the purpose of, among other things, acknowledging that the term of
the Sullivan Note has been modified and amended such that the maturity date has
been extended to the date upon which LNS demands payment, subject to the terms
of the Settlement Agreement and this Amendment, and acknowledging and agreeing
that the security interests granted in the Settlement Agreement shall secure the
Sullivan Note until it is paid in full.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    8.           Life Insurance
Policy.  Pursuant to that certain Assignment of Life Insurance
Policy as Collateral Agreement dated December 30, 2004, LYH assigned life
insurance policy number 75 173 549 (the “Policy”) to Sullivan.  In the
event of the death of the named insured, the proceeds of the Policy would be
credited against some or all of the then-current amount due to Sullivan under
the Sullivan Note.  LYH, LNS, and Sullivan hereby agree that Sullivan
shall remain as the beneficiary of the Policy; provided, however, that (a)
Sullivan shall credit any proceeds of the Policy against the then-current amount
of the Settlement Payment and deliver all excess proceeds to LNS, and (b) if the
Settlement Payment if fully paid prior to the death of the named insured,
Sullivan shall assign the Policy to LNS immediately upon the full payment of the
Settlement Payment and LNS shall be the sole beneficiary of the Policy
thereafter.

     

    9.           Representations, Warranties
and
Covenants.  Each party to this Amendment represents,
warrants and covenants, as of the date hereof, as follows:

     

    (a).          Each
party hereto has the requisite power and authority to enter into this
Amendment.  The execution and delivery hereof and the performance by
each party hereto of his or its obligations hereunder will not violate or
constitute an event of default under the terms and provisions of any agreement,
document or instrument to which any such party is a party or by which any such
party is bound;

     

    (b).          This
Amendment is a valid and binding obligation of each party hereto;

     

    (c).           To
the best of each party’s knowledge as of the date hereof, each party is in full
compliance with all applicable laws and any other local, municipal, regional,
state or federal requirements and no party hereto has received actual notice
from any governmental authority that he or it is not in full compliance with all
applicable laws and any other local, municipal, regional, state or federal
requirements;

     

    (d).          The
Letter Agreement Holders have not granted any option or any other rights to
acquire  the Letter Agreements, other than as set forth in the
Settlement Agreement;

     

    (e).           So
long as the Option remains in effect, each Letter Agreement
Holder reaffirms that he or it will take no action, or fail to take any
required action, that would prohibit him or it from complying with the
obligations hereunder or that would cause any of the representations or
warranties hereunder to be untrue as of the date hereof or at any future
date;

     

    (f).           So
long as the Option remains in effect, each Letter Agreement Holder reaffirms
that he or it will not grant any liens on any Letter Agreement, or sell or
otherwise transfer any Letter Agreement.

     

    10.           Miscellaneous.  The
Settlement Agreement, as amended and modified by this Amendment, constitutes the
entire understanding between the parties with respect to the subject matter
hereof and supersedes all prior or contemporaneous agreements in regard
thereto.  The Settlement Agreement, as modified, cannot be amended
except by an agreement in writing signed by authorized representatives of all
parties and specifically referring to the Settlement Agreement.  The
paragraph headings set forth herein are for convenience only and do not
constitute a substantive part of this Amendment.  This Amendment shall be
governed by and construed under the laws of the Commonwealth of Kentucky,
without regard to conflicts of law principles.  If any
provision of this Amendment shall be determined to be illegal or unenforceable
by any Court of law or any competent governmental or other authority, the
remaining provisions shall be severable and enforceable in accordance with their
terms.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    11.           Binding
Effect.  The Settlement Agreement, as amended and modified by
this Amendment, is binding upon, and shall inure to the benefit of, the parties
hereto and their heirs, personal representatives, successors and
assigns.

     

    12.           Counterparts.  This
Amendment may be executed in several counterparts, each of which shall be an
original and all of which together shall constitute but one and the same
instrument.

     

    13.           Continuing
Obligation.  As amended hereby, the Settlement Agreement shall
remain in full force and effect.  From and after the date of this
Amendment, all references to the Settlement Agreement in any document executed
in conjunction with this transaction shall include the terms of this
Amendment.

    

    [SPACE
INTENTIONALLY BLANK; SIGNATURES ON FOLLOWING PAGE]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have executed this Amendment as of the day and date first above
written.

    

    
      
        	
                LY
      HOLDINGS, LLC

              
	 
      
	
                By:

              	
                /s/  J. Sherman Henderson
      III

              
	 
      
	
                Its:
      Chief Executive Officer

              
	 
      
	
                LIGHTYEAR
      NETWORK SOLUTIONS, LLC

              
	 
      
	
                By:

              	
                /s/  J. Sherman Henderson
      III

              
	 
      
	
                Its:
      Chief Executive Officer

              
	 
      
	
                /s/ Chris Sullivan

              
	
                CHRIS
      SULLIVAN

              
	 
      
	
                LANJK,
      LLC

              
	 
      
	
                By:  

              	
                /s/  J. Sherman Henderson
      III

              
	 
      
	
                Its:
      Manager

              
	 
      
	
                RICE
      REALTY COMPANY, LLC

              
	 
      
	
                By:

              	
                /s/ W. Brent Rice

              
	 
      
	
                Its:
      Manager

              

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        	
                /s/ Rigdon O. Dees, III

              
	
                RIGDON
      O. DEES, III

              
	 
      
	
                CTS
      EQUITIES LIMITED PARTNERSHIP

              
	 
      
	
                By:  

              	
                /s/ Chris Sullivan

              
	 
      
	
                Its:
      General Partner

              
	 
      
	
                /s/    Ronald L.
      Carmicle

              
	
                RON
      CARMICLEEXHIBIT
10.1

    

    GLOBALOPTIONS
GROUP, INC.

    75
Rockefeller Plaza  27th Floor

    New York,
NY  10019

     

    May 13,
2010

     

    Harvey W.
Schiller, Chairman & CEO

    GlobalOptions
Group, Inc.

    75
Rockefeller Plaza

    27th
Floor

    New York,
NY  10019

     

    
      	
               
      

            	
              Re:

            	
              Your
      Employment Agreement dated January 29, 2004, Assignment dated June 2005,
      amendment December 19, 2006 (the “December 19, 2006 Amendment”), and
      the amendment August 13, 2009 (collectively the “Agreement” capitalized
      terms used herein without definition have the meanings specified in the
      Agreement)

            

    

     

    Dear
Harvey:

     

    This
letter is to modify and clarify the Agreement, effective as of the date written
above.  Accordingly, the following modifications and clarifications
are made to the Agreement:

     

    
      	
               
      

            	
              1.

            	
              The
      parties hereby acknowledge that the current term of your employment was
      extended to January 31, 2012 by the operative provisions contained in
      Section 1 of the Agreement, subject to earlier termination, amendments or
      automatic extension as contemplated therein.  Accordingly,
      Section 1 is amended and restated as
follows:

            

    

     

     “The
Company hereby agrees to continue to employ the Employee as its Chairman and
Chief Executive Officer and the Employee hereby accepts such continued
employment with the Company, upon the terms set forth in this Agreement. The
Company has determined to examine the sale of a portion of its assets and in
doing so may require Employee to refocus his responsibilities with the Company
to accomplish such. The Company and the Employee agree, that in the event the
Company sells substantially all of its assets (further defined herein), Employee
will not elect to terminate this Agreement under Section 8B(x) and thereafter
will continue his employment and devote the necessary working time and efforts,
but less then substantial working time and efforts, to the business of the
Company, and the Company accepts and supports your participation in the
non-Company activities, as set forth in Exhibit A attached hereto, as well as
future non-competitive activities. The Term of this Agreement shall continue
until one year from the date the Company closes upon a sale of substantially all
of the assets of the Company, as defined in Section 10 of this Agreement. For
purposes of this Agreement and this Section 1, substantially all of the assets
of Company shall mean upon the Company selling and closing assets (including the
stock of a subsidiary) that constitutes a sale and closing of two of its four
divisions, and the sale of one or more of such two divisions requires the
approval of the Company’s shareholders (the “ Sales Event”). The Company has the
option to continue the Term beyond the one year term from the date of the Sales
Event, on a month to month basis, under the same terms and
conditions.

     

    
      	
               
      

            	
              2.

            	
              Section
      2 shall be continued as in the previous year by
      modifying   Section 2 as
follows:

            

    

     

    Salary.  Effective
as of February 1, 2009 and for the period until the Sales Event, the Company
shall pay the Employee a base salary per annum of $425,000 (as it may be
increased (but not decreased) in the discretion of the Compensation Committee,
“Base Salary”) and all executive officer benefits. For the one year period after
the Sales Event, the Employee’s base salary shall be $180,000 and all executive
officer benefits, including New York living expenses and commuting expenses. If
the Company elects to extend the term beyond the one year period, the base
salary shall be $20,000 per month and all executive officer benefits, including
commuting expenses.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              3.

            	
              The
      bonus program described in Section 3 shall continue consistent with past
      practice and is amended and restated as
follows:

            

    

     

    Annual
Bonus.  Starting January 1, 2007, the Employee shall be
eligible for a performance bonus payable 50% in cash and 50% in vested
restricted stock established from the 2007-2009 Annual Incentive Plan (or in
future years, based upon a substantially similar plan), based upon the mutually
agreed to goals between you and the Compensation Committee of the Board of
Directors of the Company (the “Compensation Committee”). The performance bonus
and payment for 2007 – 2010 shall be based upon achieving certain goals as set
forth in Exhibit 1 to the December 19, 2006 Amendment (as modified by the
Compensation Committee pursuant to its meeting on April 8, 2008, Exhibit A)
(“December 19, 2006 Amendment”) and for purposes of calendar years 2009 and
2010, those goals, including the Targeted Performance Bonus-Annual, set forth
for year 2008 in Exhibit 1 shall be applied for said years 2009 and
2010.  In the event there is a Sales Event, the Bonuses shall be
applied to the date of the Sales Event and paid within thirty (30) days of the
Sales Event to which the bonus relates. This Section shall not be applicable
subsequent to the date of the Sales Event.

     

    
      	
               
      

            	
              4.

            	
              Section
      3.B. of the Agreement shall be continued as in previous years by adding
      the following sentences to the end of Section
  3.B.:

            

    

     

    In the
event there is a Sales Event, the Bonuses shall be applied to the date of the
Sales Event and paid within thirty (30) days of the Sales Event to which the
bonus relates. This Section shall not be applicable subsequent to the date of
the Sales Event.

     

    
      	
               
      

            	
              5.

            	
              Section
      10B.amended by adding the following sentences, as
  follows:

            

    

     

    
      	
               
      

            	
              The
      Company agrees upon a Sales Event and notwithstanding the Employee
      continuing his employment with the Company as set forth in Section 1 of
      this Agreement, it will within ten days of the Sales Event, deposit
      negotiable funds that would have been required herein if the Employee
      terminated his employment under this Section 10B (from the date of the
      Sales Event until January 31, 2012, the remaining Term of this Agreement
      prior to this Amendment) including such additional amount as equals the
      gross up payment (described in Section 24 of this
      Agreement)  into a “rabbi trust.” The payments from the Trust
      Arrangement shall be pursuant to this Section
  10B.

            

    

     

    
      	
               
      

            	
              6.

            	
              Section
      18 shall be modified and restated as
follows:

            

    

     

    Professional
Fees.  The Company agrees to pay in one lump sum your personal
accounting and legal fees relating to the review of this Agreement, and upon the
execution of the Letter Amendment dated May  , 2010 up to a maximum of
$10,000 on an after tax basis.

     

    Except as
hereby amended, the Agreement and all of its terms and conditions shall remain
in full force and effect and are hereby confirmed and ratified. All references
to the Agreement shall be deemed references to the Agreement as amended and
clarified hereby.  This amendment shall be governed and construed
under the laws of the District of Columbia.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Please
sign below to acknowledge your agreement to and acceptance of this amendment to
the Agreement.

     

    
      
        	
                Sincerely,

              
	 
      
	
                
                  /s/
      John Oswald

                

              
	
                John
      Oswald

              
	
                Chairman
      – Compensation Committee

              

      

    

    

    
      
        	
                Agreed
      to:

              
	 
      
	
                
                  /s/
      Harvey Schiller

                

              
	
                Harvey
      Schiller

              
	 
      
	
                Date:
      May 13, 2010

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