AMENDED AND RESTATED SECURITY AGREEMENT
This Amended and Restated Security Agreement (the "AGREEMENT")
made as of this 12th day of October, 2006 (the "Effective Date") between
GlobalOptions Group, Inc., a Nevada corporation (the "Guarantor") and Silicon
Valley Bank, a California corporation ("Bank"). This Agreement amended and
restates that certain Security Agreement between the parties dated March 8,
WHEREAS, the Guarantor is indebted to Bank pursuant to a Guaranty
Agreement of even date herewith (as amended from time to time, the "Guaranty"),
pursuant to which Guarantor has unconditionally guaranteed payment of all
obligations owed to Bank by GlobalOptions, Inc. (the "Borrower") under, among
other agreements, that certain Second Amended and Restated Loan and Security
Agreement, dated October 12, 2006 (as may be further amended, restated, or
otherwise modified from time to time, the "Loan Agreement" and, collectively
with all other related agreements, the "Loan Documents"); and
WHEREAS, it is in the interests of the Guarantor to grant in
favor of the Bank security for all present and future indebtedness, liabilities
and obligations of the Borrower to the Bank and therein charge, mortgage,
assign, transfer and otherwise encumber and grant security interests in all its
present and future undertaking, property and assets;
WHEREAS, this Agreement is made to secure the obligations of the
Guarantor under the Guaranty and in consideration of advances, credit or other
financial accommodations now or hereafter being afforded to Borrower by Bank.
NOW, THEREFORE, the parties hereto hereby agree as follows:
"ACCOUNT", "ACCOUNT GUARANTOR", "CHATTEL PAPER", "COMMERCIAL
TORT CLAIMS", "DEPOSIT ACCOUNTS", "DOCUMENTS", "EQUIPMENT", "FIXTURES", "GENERAL
INTANGIBLES", "GOODS", "INSTRUMENTS", "INVENTORY", "INVESTMENT PROPERTY",
"LETTER OF CREDIT RIGHTS", "PROCEEDS" and "TANGIBLE CHATTEL PAPER" shall have
the respective meanings assigned to such terms, as of the Effective Date, in the
California Uniform Commercial Code.
"COLLATERAL" shall mean all of the property of Guarantor
described in Exhibit "A" hereto.
"INSOLVENCY PROCEEDING" is any proceeding by or against
Guarantor under any bankruptcy or insolvency law, including assignments for the
benefit of creditors, compositions, extensions generally with its creditors, or
proceedings seeking reorganization, arrangement, or other relief.
"LIEN" is a mortgage, lien, deed of trust, charge, pledge,
security interest or other encumbrance.
"OBLIGATIONS" or "OBLIGATION" shall mean and include without
limitation any and all of Borrower's and Guarantor's indebtedness and/or
liabilities to Bank of every kind, nature and description, direct or indirect,
joint or several, absolute or contingent, due or to become due, now existing or
hereafter arising including, without limitation, the indebtedness and
liabilities of Borrower to Bank under the Loan Agreement, and the liabilities of
Guarantor to Bank under the Guaranty and under this Agreement.
"PERMITTED LIENS" shall mean:
(a) Liens arising under this Agreement or other Loan
(b) Liens for taxes, fees, assessments or other government
charges or levies, either not delinquent or being contested in good faith and
for which Guarantor maintains adequate reserves on its Books, if they have no
priority over any of Bank's security interests;
(c) Leases or subleases and non-exclusive licenses or
sublicenses granted in the ordinary course of Guarantor's business, IF the
leases, subleases, licenses and sublicenses permit granting Bank a security
(d) Liens incurred in the extension, renewal or refinancing of
the indebtedness secured by Liens described in (a) through (c), BUT any
extension, renewal or replacement Lien must be limited to the property
encumbered by the existing Lien and the principal amount of the indebtedness may
"SCHEDULE" is any attached schedule of exceptions.
2. SECURITY INTEREST.
As security for the payment or other satisfaction of all
Obligations, Guarantor hereby assigns to Bank and grants to Bank a continuing
security interest in the Collateral, whether now or hereafter owned, existing,
acquired or arising and wherever now or hereafter located.
3. POSSESSION OF COLLATERAL AND RELATED MATTERS.
Until an Event of Default has occurred, Guarantor shall have
the right, except as otherwise provided in this Agreement, in the ordinary
course of Guarantor's business, to (a) sell, lease or furnish under contracts of
service any of Guarantor's inventory normally held by Guarantor for any such
purpose, and (b) use and consume any raw materials, work in process or other
materials normally held by Guarantor for such purpose; PROVIDED, HOWEVER, that a
sale in the ordinary course of business shall not include any transfer or sale
in satisfaction, partial or complete, of a debt owed by Guarantor. Bank through
its officers, employees or agents, shall have the right, at any time and from
time to time in Bank's name, in the name of a nominee of Bank or in Guarantor's
name, to verify the validity, amount or any other matter relating to any of
Guarantor's accounts, by mail, telephone, telegraph or otherwise. Guarantor
shall reimburse Bank, on demand, for all reasonable costs, fees and expenses
incurred by Bank in this regard.
Immediately upon Guarantor's receipt of any portion of the
Collateral evidenced by an agreement, security, Instrument or Document,
including, without limitation, any Tangible Chattel Paper and any Investment
Property consisting of certificated securities, Guarantor shall deliver the
original thereof to Bank together with an appropriate endorsement or other
specific evidence of assignment thereof to Bank (in form and substance
acceptable to Bank). If an endorsement or assignment of any such items shall not
be made for any reason, Bank is hereby irrevocably authorized, as Guarantor's
attorney and agent-in-fact, to endorse or assign the same on Guarantor's behalf.
4. WARRANTIES AND COVENANTS.
Guarantor warrants and agrees that:
A. All of the Collateral is and will at all times be owned by
Guarantor free and clear of all Liens and security interests, except for (i) the
security interests granted hereunder, (ii) Permitted Liens, and (iii) the Liens
set forth on the Schedule.
B. Guarantor is duly existing and in good standing in its
jurisidiction of formation and qualified and licensed to do business in, and in
good standing in, any jurisdiction in which the conduct of its business or its
ownership of property requires that it be qualified, except where the failure to
do so could not reasonably be expected to have a material adverse effect of the
business and operations of Guarantor (a "Material Adverse Effect"). The
execution, delivery and performance of this agreement, the Guaranty and any
other documents executed by Guarantor in connection herewith have been duly
authorized, and do not conflict with Guarantor's formation documents, nor
constitute an event of default under any material agreement by which Guarantor
is bound. Guarantor is not in default under any agreement to which or by which
it is bound in which the default could reasonably be expected to cause a
Material Adverse Effect.
C. Except as shown in the Schedule, there are no actions or
proceedings pending or, to the knowledge of Guarantor, threatened by or against
Guarantor in which a likely adverse decision could reasonably be expected to
cause a Material Adverse Effect.
D. Guarantor will keep its business and the Collateral insured
for risks and in amounts standard for Guarantor's industry, and as Bank may
reasonably request. Insurance policies will be in a form, with companies, and in
amounts that are satisfactory to Bank in Bank's reasonable discretion. All
property policies will have a lender's loss payable endorsement showing Bank as
an additional loss payee and all liability policies will show the Bank as an
additional insured and provide that the insurer must give Bank at least 20 days
notice before cancelling its policy. At Bank's request, Guarantor will deliver
certified copies of policies and evidence of all premium payments. Proceeds
payable under any policy will, at Bank's option, be payable to Bank on account
of the Obligations.
E. Guarantor will not sell, lease, transfer, assign or
otherwise dispose of any of its property or any interest therein, EXCEPT FOR
transfers (i) of inventory in the ordinary course of business; (ii) of
non-exclusive licenses and similar arrangements for the use of the property of
Guarantor in the ordinary course of business; or (iii) of worn-out or obsolete
Equipment, without the prior written consent of Bank in each instance or as
otherwise permitted in this Agreement.
F. The fair salable value of Guarantor's assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities.
G. Guarantor has not violated any laws, ordinances or rules,
the violation of which could reasonably be expected to cause a Material Adverse
H. No written representation, warranty or other statement of
Guarantor in any certificate or written statement given to Bank (taken together
with all such written certificates and written statements to Bank) contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained in the certificates or statements not
I. Guarantor will not, without at least 30 days prior written
notice, relocate its principal office or add any new offices or business
J. Guarantor will not directly or indirectly enter into or
permit to exist any material transaction with any affiliate of Guarantor except
for transactions that are in the ordinary course of Guarantor's business, upon
fair and reasonable terms that are no less favorable to Guarantor than would be
obtained in an arm's length transaction with a non-affiliated person.
K. Guarantor will execute any further instruments and take
further action as Bank reasonably requests to perfect or continue Bank's
security interest in the Collateral or to effect the purposes of this Agreement.
5. EVENTS OF DEFAULT.
Any one of the following is an Event of Default
A. An event of default occurs under the Loan Agreement or any
other Loan Documents that is not cured within the applicable cure period, if
B. Failure by Guarantor to pay or perform any of its
Obligations when first due or demanded.
C. Breach by Guarantor of any warranty, representation or
covenant contained herein or in the Guaranty Agreement; or
D. Except for Transfers permitted hereunder, the loss, theft
or destruction of, or sale, lease or furnishing under a contract of service of,
any of the Collateral.
6. RIGHTS AND REMEDIES.
Upon the occurrence of an Event of Default, Bank may exercise
from time to time any rights and remedies available to it under any applicable
law in addition to, and not in lieu of, any rights and remedies expressly
granted in this Agreement or in any other agreements between Bank and Guarantor
and all of Bank's rights and remedies shall be cumulative and non-exclusive to
the extent permitted by law. In particular, but not by way of limitation of the
foregoing, Bank may, without notice, demand or legal process of any kind, take
possession of any or all of the Collateral (in addition to Collateral of which
it already has possession), wherever it may be found, and for that purpose may
pursue the same wherever it may be found, and may enter onto any of Guarantor's
premises where any of the Collateral may be, and search for, take possession of,
remove, keep and store any of the Collateral until the same shall be sold or
otherwise disposed of, and Bank shall have the right to store the same at any of
Guarantor's premises without cost to Bank. At Bank's request, Guarantor shall,
at Guarantor's expense, assemble the Collateral and make it available to Bank at
one or more places to be designated by Bank and reasonably convenient to Bank
and Guarantor. Guarantor recognizes that if Guarantor fails to perform, observe
or discharge any of its Obligations, no remedy at law will provide adequate
relief to Bank, and agrees that Bank shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages. Any notification of intended disposition of any of the
Collateral required by law will be deemed to be a reasonable authenticated
notification of disposition if given at least ten (10) days prior to such
disposition and such notice shall (i) describe Bank and Guarantor, (ii) describe
the Collateral that is the subject of the intended disposition, (iii) state the
method of the intended disposition, (iv) state that Guarantor is entitled to an
accounting of the Obligations and state the charge, if any, for an accounting
and (v) state the time and place of any public disposition or the time after
which any private sale is to be made. Bank may disclaim any warranties that
might arise in connection with the sale, lease or other disposition of the
Collateral and has no obligation to provide any warranties at such time. Any
Proceeds of any disposition by Bank of any of the Collateral may be applied by
Bank to the payment of expenses in connection with the Collateral, including,
without limitation, legal expenses and reasonable attorneys' fees, and any
balance of such Proceeds may be applied by Bank toward the payment of such of
the Obligations, and in such order of application, as Bank may from time to time
elect. In the event of any excess Proceeds after payment in full of the
Obligations, such excess shall be paid to Guarantor.
7. FEES, COSTS AND CHARGES.
Guarantor shall be obligated to reimburse Bank, as part of the
Obligations, for all fees, costs or charges of any kind incurred by Bank in
connection with this Agreement, including without limitation, any reasonable
fees, costs or charges incurred by Bank in enforcing its rights and remedies
under the Loan Documents, the Guaranty, this Agreement or any other agreement
between Bank and Guarantor.
A. Any failure or delay by Bank to require strict performance
by Guarantor of any of the provisions, warranties, terms and conditions
contained herein or in any other agreement, document or instrument, shall not
affect Bank's right to demand strict compliance and performance therewith, and
any waiver of any Event of Default shall not waive or affect any other Event of
Default, whether prior or subsequent thereto, and whether of the same or of a
different type. None of the warranties, conditions, provisions and terms
contained herein, or in any other agreement, document or instrument shall be
deemed to have been waived by any act or knowledge of Bank, its agents, officers
or employees, other than pursuant to an instrument in writing, signed by an
officer of Bank, directed to Guarantor and specifying such waiver.
B. Any notice under this Agreement shall be addressed to the
parties at their respective addresses set forth herein, or to such other address
as either party designates to the other in the manner herein described.
C. In the event that any provision hereof shall be deemed to
be invalid by any court, such invalidity shall not affect the remainder of this
D. This Agreement shall be binding upon and for the benefit of
the parties hereto and their respective successors and assigns.
E. California law governs this Agreement without regard to
principles of conflicts of law. Guarantor and Bank each submit to the exclusive
jurisdiction of the State and Federal Courts in Santa Xxxxx County, California.
GUARANTOR AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.
IN WITNESS WHEREOF, the undersigned have executed and
delivered this Agreement on the date set forth above.
SILICON VALLEY BANK GLOBALOPTIONS GROUP, INC.
By /s/ Xxx X. Xxxxxxx By /s/ Xxxxxx X. Xxxxxxxx, Ph.D.
Name: Xxx X. Xxxxxxx Name: Xxxxxx X. Ph.X. Xxxxxxxx
Title: Vice President Title: Chairman and Chief Executive Officer