Exhibit 10.13
LOAN & SECURITIZATION AGREEMENT
This Loan & Securitization Agreement ("Agreement"), dated June 8, 2010, is
entered into by and between Boston Pizza Restaurants (USA), Inc., a Delaware
corporation, whose mailing address is 0000 XXX Xxxxxxx, Xxxxx #000, Xxxxxx, XX
00000 (the "Lender") and Global Entertainment Corporation, a Nevada corporation,
whose mailing address is 0000 Xxxxx Xxxxxx Xxxxx Xxxxx 000 Xxxxx, Xxxxxxx 00000
(the "Borrower"). The parties hereby agree as follows:
I. REVOLVING CREDIT
1.1 General. Subject to the terms of this Agreement, the Lender hereby
establishes a credit facility in favor of the Borrower (the "Credit
Facility") under which the Lender will extend credit to the Borrower from
time to time until December 31, 2010 (the "Credit Termination Date"), by
way of Loans pursuant to Section 1.2 hereof. Each extension of credit shall
be in such amount as the Borrower may request, but shall not be less than
an amount equal to $30,000 per request. The aggregate principal amount of
the Credit Facility established herein shall be $300,000 (the
"Commitment"). In consideration for Lender making the Loans described
herein, the Borrower's cumulative outstanding balance shall not exceed at
any one time an amount equal to one hundred percent (100%) of the
Borrower's and any of its subsidiaries' collectable accounts receivable.
The Borrower may obtain credit, repay without penalty and obtain further
credit as provided for under this Agreement, from the date hereof until the
Credit Termination Date.
1.2 Drawings. The Borrower may draw on the Commitment in the following manner:
By submitting a written "Notice of Borrowing" request to Lender, in the
form attached hereto as Exhibit A, the terms of which are incorporated by
reference herein, for a cash advance (each such cash advance herein
referred to as a "Loan," or collectively as "Loans"), in a minimum amount
of $30,000 per Loan. Borrower may request a maximum of two (2) Loans in any
one calendar month prior to October 31, 2010. No Loans to Borrower shall be
made by Lender after October 31, 2010 ("Final Loan Date").
1.3 Purpose. The proceeds of the Loans and other extensions of credit under the
Credit Facility shall be used exclusively for general corporate
expenditures as described on the Borrower's "Monthly Cash Flow Forecast-
June 2010 through May 2011," dated May 26, 2010, the terms of which are
incorporated herein by this reference.
1.4 Security. The Credit Facility and Loans shall be secured by one hundred
percent (100%) of Borrower's and its subsidiaries' accounts receivable. A
copy of Borrower's collectable accounts receivable shall be provided to
Lender within three (3) business days following each previous month's end.
In addition, Lender shall cause a UCC-1 Financing Statement to be filed
with the Office of the Secretary of State of Arizona to evidence the
pledged security as described herein.
1.5 Requests for Loans or Credit. Within three (3) business days of Lender's
receipt and approval of Borrower's Notice of Borrowing, Lender shall send
via wire transfer the requested Loan amount to Borrower's bank account as
designated in the Notice of Borrowing. Borrower shall be responsible for
any and all costs associated with the wiring of said Loan funds.
1.6 Interest; Repayment of Loans and Credit.
(a) Interest Rate. Borrower agrees to pay interest on the outstanding
principal balance of each Loan at the Prime Rate plus seven percent
(7%) per annum. Prime Rate shall be defined as the U.S. prime rate as
published in the Wall Street Journal.
Interest shall be computed on the basis of the actual daily
outstanding balance of the Loans multiplied by the daily Interest Rate
on a 360-day year basis.
In no event shall the Borrower be obligated to pay any amount under
this Agreement that exceeds the maximum amount allowable by law. If
any sum is collected in excess of the applicable maximum amount
allowable by law, the excess collected shall, at the Lender's
discretion, be applied to reduce the principal balance of the Loans or
returned to the Borrower.
(b) Repayment of Loans.
Payment Schedule.
(i) The Borrower agrees to make payments to the Lender of all accrued
and unpaid interest on the outstanding principal balance of the
Loans as of the end of each calendar quarter end within ten (10)
business days following the expiration of such calendar quarter.
(ii) In addition, if, at the first day of any calendar month during
the term of this Agreement, Borrower has not requested and
received Loans from Lender equal to the entire amount of the
Commitment, Borrower shall be obligated to pay to Lender an
Unused Line of Credit Fee in an amount equal to 0.5% multiplied
by the remaining amount of the Commitment not yet loaned to
Borrower. Borrower shall be obligated to pay such Unused Line of
Credit Fee to Lender within ten (10) business days following the
expiration of each calendar quarter.
(iii)The Borrower may make Loan payments to Lender at any time,
without penalty, on or before the Credit Termination Date in
amounts of not less than $20,000 ("Loan Pre-Payments") per
payment, unless the total amount of any outstanding and unpaid
principal balance of the Loans, and any and all accrued and
unpaid interest and fees ("Total Outstanding Balance") is less
than $20,000, in which case such Loan Pre-Payment shall be equal
to the Total Outstanding Balance. Any Loan Pre-Payments paid by
Borrower will first be applied to and reduce any accrued and
unpaid interest with the remaining amount of such Loan
Pre-Payment(s) applied to the outstanding balance of the Loans.
(iv) Notwithstanding any Loan Pre-Payments made by Borrower prior to
the Final Loan Date and any date thereafter, the Borrower shall
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pay in full on or before the Credit Termination Date the Total
Outstanding Balance under the Credit Facility.
1.7 Evidence of Indebtedness; Loan Documents. The Credit Facility shall be
evidenced and/or secured by this Agreement, a Master Note in the form
attached as Exhibit B, and a UCC-1 Financing Statement to be filed with the
Office of the Secretary of State of Arizona (collectively the "Loan
Documents").
1.8 Borrower's Obligations. The Borrower's obligations to pay, observe and
perform all indebtedness, liabilities and covenants under this Agreement
and the remainder of the Loan Documents are herein collectively called the
"Obligations."
II. CONDITIONS OF LENDING
2.1 Extension of Credit. The obligation of the Lender to make the first Loan or
other extension of credit under this Agreement is subject to the
satisfaction of all of the following conditions on or before the date on
which the Lender shall grant such Loan or other extension of credit to
Borrower (the "Closing Date"):
Documents Required Prior to Closing Date. The Lender shall have
received such fully executed originals or certified copies of the Term
Sheet executed by Borrower and Lender on June 4, 2010, and executed
originals of this Agreement and an accompanying Notice of Borrowing.
2.2 Subsequent Loans or Extensions of Credit. The obligation of the Lender to
make the second or any subsequent Loan or other extension of credit is
subject to (i) the prior satisfaction of all conditions stated above in
Section 1.2; and (ii) the delivery to the Lender of any such additional
Loan Documents as may have been reasonably requested by the Lender in
respect to such subsequent Loan or other extension of credit.
III. GRANT OF STOCK SHARE OPTIONS TO LENDER
To further induce the Lender to make the Commitment available to the Borrower,
the Borrower shall grant 30,000 options ("Options") to eligible individuals as
designated by Lender to purchase an equal number of Borrower's shares of stock
at a price equal to $0.20 per share. The Options shall be fully vested in
Lender's designee, as applicable, on December 31, 2010 and shall expire on
December 31, 2020.
IV. THE LENDER'S RIGHTS UPON DEFAULT
4.1 Events of Default. Each of the following events is an "Event of Default"
under this Agreement and the date upon which such Events of Default occur
shall collectively be referred to as the "Default Date":
(a) The Borrower's failure to pay when due any sum payable to the Lender
under the Loan Documents or under any other agreement or note between
the Lender and the Borrower, whether now existing or hereafter
executed;
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(b) The Borrower's failure to perform or observe any other obligation of
the Borrower to the Lender (including, without limitation, all
obligations undertaken in any of the Loan Documents);
(c) The dissolution or insolvency of the Borrower;
(d) The commencement of any proceeding or the taking of any act by or
against the Borrower for any relief under bankruptcy, insolvency or
similar laws for the protection of debtors, or for the appointment of
a receiver of the business or assets of the Borrower or the Borrower's
inability (or admission of inability) to pay its debts as they become
due.
(e) If an Event of Default has occurred under other than Sections 4.1 (a),
(c), and/or (d), Lender shall send Borrower a notice of default within
three (3) days of the date the Event of Default occurred ("Notice
Date"), and/or if an Event of Default occurred under Section 4.1(a),
Lender shall afford Borrower a period of ten (10) days from the
Default Date or Notice Date, as applicable, in which to cure said
Event of Default ("Cure Period").
4.2 If an Event of Default shall occur and be continuing beyond the Cure
Period, as applicable, the Lender shall have, in addition to any and all
other rights and remedies, legal or equitable, available to the Lender
under any and all of the Loan Documents or at law, the following additional
rights and remedies:
(a) The right, at the option of the Lender, to deny to the Borrower any
further Loan or extension of credit (the Lender's obligation to extend
any further credit to the Borrower shall immediately terminate);
(b) The right, at the option of the Lender, to declare, without notice,
the Total Outstanding Balance under this Agreement, plus any fees and
charges reasonably incurred by the Lender under any of the Loan
Documents, immediately due and payable.
(c) In the event that an Event of Default occurs under Sections 4.1(a),
(c), and/or (d), or Borrower receives a Notices of Default in
accordance with Section 4.1(e), Borrower agrees to pay interest on the
outstanding balance of the Loans at the rate of Prime Rate plus twelve
percent (12%) per annum ("Default Interest Rate"). The Default
Interest Rate shall begin to accrue on the later of the Default Date
or the Notice Date until such time as Borrower has cured the Event of
Default.
V. MISCELLANEOUS
5.1 Notices. Any notices or consents required or permitted by this Agreement or
the remainder of the Loan Documents shall be in writing and shall be deemed
delivered if delivered in person or if sent by certified mail, postage
prepaid, return receipt requested, at the addresses first written above.
5.2 Applicable Law. The substantive laws of the State of Texas shall govern the
construction of this Agreement and the rights and remedies of the parties
hereto.
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5.3 Binding Effect. This Agreement shall inure to the benefit of the parties
hereto and their respective personal representatives, successors and
permitted assigns, and shall be binding on the parties hereto and their
respective personal representatives, successors and assigns.
5.4 Merger. This Agreement and any attached exhibits, and the remainder of the
Loan Documents constitute the full and complete agreement between the
Lender and the Borrower with respect to the Credit Facility, and all prior
oral and written agreements, commitments, and undertakings shall be deemed
to have been merged into the Loan Documents and such prior oral and written
agreements, commitments, and undertakings shall have no further force or
effect except to the extent expressly incorporated in the Loan Documents.
5.5 Amendments; Consents. No amendment, modification, supplement, termination,
or waiver of any provision of this Agreement or the other Loan Documents,
and no consent to any departure by the Borrower therefrom, may in any event
be effective unless in writing signed by the Lender, and then only in the
specific instance and for the specific purpose given.
5.6 Severability. If any provision of any of the Loan Documents shall be held
invalid under any applicable law, such invalidity shall not affect any
other provision of the Loan Documents that can be given effect without the
invalid provision, and, to this end, the provisions of the Loan Documents
are severable.
5.7 Headings. The headings of the various provisions of this Agreement are
inserted for convenience of reference only and shall not affect the meaning
or construction of any provision.
5.8 Counterparts. This Agreement may be executed in counterparts, each of which
shall be an original instrument and all of which shall together constitute
one and the same agreement.
IN WITNESS WHEREOF, the Borrower and the Lender have duly executed this
Agreement.
GLOBAL ENTERTAINMENT CORPORATION
By /s/ Xxxxxxx Xxxxxxxx
-------------------------------
Title: President and CEO
BOSTON PIZZA RESTAURANTS (USA), INC.
By /s/ Xxxxxxx X. Best
-------------------------------
Title: CFO
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EXHIBIT A
NOTICE OF BORROWING
DATE: __________________________________, 2010
TO: Boston Pizza Restaurants (USA), Inc.
Attn: Xxxxxxx X. Best, CFO
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Pursuant to Section 1.5 of the Agreement, the Borrower hereby requests a draw
under the Credit Facility and confirms the following instructions therefore
(capitalized terms not defined herein shall have the respective meanings
assigned in the Agreement):
FORM OF DRAWING - LOAN
Requested Date: __________________________
Principal Amount: $_______________________
METHOD OF DRAWING
Wire funds to: [Bank Name] _________________
Account Name:
ABA #:
Account Number:
Special Instructions:
Borrower hereby certifies as follows:
As of the date hereof, no event has occurred and is continuing that (a)
constitutes an Event of Default under the Agreement, or (b) with the giving of
notice or passage of time, or both, would constitute an Event of Default. The
Borrower has observed and performed all of the Borrower's covenants and other
agreements, and satisfied every condition, contained in the Agreement and in the
other Loan Documents, to be observed, performed or satisfied by the Borrower.
GLOBAL ENTERTAINMENT CORPORATION
By: ___________________________________
Title: ________________________________
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EXHIBIT B
MASTER NOTE
$300,000
Phoenix, Arizona
_______________________________, 2010
The undersigned ("Borrower") promises to pay to the order of BOSTON PIZZA
RESTAURANTS (USA), INC. ("Lender"), the principal amount of $300,000 or so much
thereof as shall have been disbursed by the Lender and may remain outstanding,
together with interest on outstanding balances of principal in accordance with
and under the terms of that certain Loan & Securitization Agreement of even
date, between Lender and Borrower, relating to the Credit Facility therein
described.
GLOBAL ENTERTAINMENT CORPORATION
By: ______________________________________________________
Title:____________________________________________________
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