Exhibit 10.1
LINE OF CREDIT AND SECURITY AGREEMENT
This Line of Credit and Security Agreement ("Agreement"), dated December 13,
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").
RECITALS
Pursuant to that certain Loan & Securitization Agreement dated June 8, 2010 as
amended by that certain First Amendment to Loan & Securitization Agreement dated
August 31, 2010, Lender established a revolving credit facility for Borrower in
the principal amount of $500,000 (the "Initial Loan"). The unpaid principal
balance of the Initial Loan as of the date hereof is $500,000 with unpaid
accrued interest in the amount of $10,260.
Borrower desires to obtain an additional line of credit in the principal amount
of $2,000,000 from Lender for the purposes set forth herein and Lender is
willing to do so, subject, however, to the terms and conditions hereinafter set
forth.
Now, therefore, the parties hereby agree as follows:
I. LINE OF CREDIT
1.1 GENERAL. Subject to the terms of this Agreement, the Lender hereby
establishes a line of credit in favor of the Borrower (the "Line of
Credit") under which the Lender will make advances to the Borrower from
time to time until April 30, 2011 (the "Final Advance Date"), pursuant to
Section 1.2 hereof. The aggregate principal amount of the Line of Credit
established herein shall be $2,000,000; of which the outstanding unpaid
balance of the Initial Loan in the amount of $510,260 shall be rolled into
the outstanding balance of the Line of Credit. Thereafter, Lender agrees,
on the terms and conditions hereinafter set forth, to make additional
advances to Borrower under the Line of Credit in amounts not to exceed
$1,489,740 in the aggregate at any one time outstanding.
1.2 DRAWINGS. The Borrower may draw on the Line of Credit 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 under the Line of Credit, not to
exceed the following amounts during the applicable time period:
December 2010 $875,000
January 2011 $175,000
February 2011 $175,000
March 2011 $132,370
April 2011 $132,370
Borrower may request a maximum of one (1) advance in any one calendar month
prior to April 30, 2011 not to exceed the above amounts during the
applicable time periods. No advances to Borrower shall be made by Lender
after the Final Advance Date. Each request for an advance must be signed by
the then current Chief Financial Officer of the Borrower and by either the
then current Chief Executive Officer or the Chief Administrative Officer.
1.3 PURPOSE. The proceeds of the Line of Credit shall be used exclusively for
general corporate expenditures as described on the Borrower's "Summary
Business Plan Forecast for the 18 months ending May 31, 2012," dated
November 22, 2010, the terms of which are incorporated herein by this
reference. Any use of Line of Credit funds deviating from the above plan
must be approved by Lenders in advance.
1.4 SECURITY. The Line of Credit shall be secured by: (i) one hundred percent
(100%) of Borrower's and its subsidiaries' accounts receivable; (ii) a
Stock Pledge Agreement pledging to and granting Lender a security interest
in all of Borrower's shares of Western Professional Hockey League, Inc., a
Texas corporation; and (iii) a Stock Pledge Agreement pledging to and
granting Lender a security interest in all of Borrower's shares of Global
Entertainment Ticketing, Inc., a Nevada corporation. Borrower hereby
expressly grants to Lender a first position lien on and security interest
in the all 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, Nevada and/or Texas to
evidence the pledged security as described herein.
1.5 REQUESTS FOR LOANS OR CREDIT. Within three (3) business days of Lender's
receipt of a Notice of Borrowing from Borrower in compliance with the
provisions of this Agreement, 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 funds.
1.6 INTEREST; REPAYMENT OF LINE OF CREDIT.
(a) Interest Rate. Borrower agrees to pay interest on the outstanding
principal balance of the Line of Credit at the annual fixed rate of
twelve and three quarter percent (12 3/4%) per annum.
Interest shall be computed on the basis of the actual daily outstanding
balance of the Line of Credit 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 Line of Credit or
returned to the Borrower.
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(b) Repayment of Line of Credit.
Payment Schedule.
(i) All unpaid principal and accrued interest, if not sooner paid,
shall be due and payable on June 30, 2011 (the "Maturity Date");
provided, however, that if there shall then exist no Event of
Default hereunder nor any matter which with the giving of notice
or lapse of time or both would constitute an event of default
hereunder, then Borrower shall have the right , upon 30 days
written notice to Lender prior to the Maturity Date, to extend
the Maturity Date for up to two (2) successive six (6) month
periods upon payment to Lender of a fee in consideration of each
such extension equal to $20,000. Interest shall continue to
accrue during any extension periods.
(iii)The Borrower may make Line of Credit payments to Lender at any
time, without penalty, on or before the Maturity 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 Line of Credit, 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 principal balance of
the Line of Credit.
(iv) Notwithstanding any Loan Pre-Payments made by Borrower prior to
the Final Advance Date and any date thereafter, the Borrower
shall pay in full on or before the Maturity Date the Total
Outstanding Balance under the Line of Credit.
1.7 EVIDENCE OF INDEBTEDNESS; LOAN DOCUMENTS. The Line of Credit shall be
evidenced and/or secured by this Agreement, a Line of Credit Promissory
Note in the form attached as Exhibit B, two (2) Stock Pledge Agreements as
provided for above, and appropriate UCC-1 Financing Statements 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 advance
under the Line of Credit 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 make such advance or other
extension of credit to Borrower (the "Closing Date"):
Documents Required Prior to Closing Date. The Lender shall have
received fully executed originals of this Agreement and an accompanying
Notice of Borrowing.
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2.2 SUBSEQUENT LINE OF CREDIT ADVANCES. The obligation of the Lender to make
any additional advances under the Line 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
advance or other extension of credit.
2.3 FINANCIAL INFORMATION. The obligation of the Lender to make additional
advances under the Line of Credit is further subject to Borrower submitting
to Lender, monthly financial statement consisting of a Balance Sheet,
Income Statement, and Cash Flow Statement. Lender may request such other
financial information in its sole discretion, acting reasonably, to monitor
Borrower's financial position and use of cash.
III. GRANT OF STOCK SHARE OPTIONS TO LENDER
To further induce the Lender to make the Line of Credit available to the
Borrower, the Borrower shall grant 50,000 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 June 30, 2011
and shall expire on June 30, 2021.
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;
(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").
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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 advances under the Line 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 Line of Credit at the rate of seventeen and
three quarter percent (17 3/4%) 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.
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 Line of Credit, 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
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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
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Title: Chief Executive Officer
BOSTON PIZZA RESTAURANTS (USA), INC.
By /s/ Xxxxxxx X. Best
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Title: Chief Financial Officer
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