EXHIBIT 10.13
MULTIPLE ADVANCE
TERM NOTE
$5,234,840.00 New Hope, Minnesota
March 1, 1999
1. FOR VALUE RECEIVED, NET RADIO CORPORATION, a Minnesota corporation,
its successors and assigns (the "Borrower") promises to pay to the
order of NAVARRE CORPORATION, a Minnesota corporation (the "Lender"),
at its address at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
the principal sum of FIVE MILLION TWO HUNDRED THIRTY-FOUR THOUSAND
EIGHT HUNDRED FORTY AND 00/100 DOLLARS ($5,234,840.00) plus such
additional amounts as may be advanced to or for the benefit of the
Borrower for working capital financing through December 31, 1999, in
lawful money of the United States and immediately available funds,
together with interest on the unpaid balance accruing as of January 1,
1999 at an initial rate equal at all times to one-half percent (0.5%)
in excess of the "Prime Rate of Interest" (as hereinafter defined) as
the same changes from time to time and is adjusted in the manner
hereinafter set forth.
2. Principal and accrued interest on this Note shall be due and payable
on the earlier of (i) June 1, 2001, or (ii) the occurrence of an "Event
of Default" (as hereinafter defined) (the earlier of said dates
hereinafter referred to as (the "Maturity Date").
3. The term "Prime Rate of Interest" shall mean the prime rate of
interest or reference rate of interest (or equivalent successor rate)
published in the Midwest Edition of the WALL STREET JOURNAL as a basis
for determining the rate of interest on commercial borrowing, whether
or not the Lender makes loans to other parties at, above or below said
base rate of interest.
4. The rate of interest due hereunder shall initially be determined as
of the date hereof and shall thereafter be adjusted on the first day of
each month (each such day hereinafter being referred to as an
"Adjustment Date") to the Prime Rate of Interest in effect on such
Adjustment Date. All such adjustments to said rate shall be made and
become effective as of the Adjustment Date and said rate as adjusted
shall remain in effect until and including the day immediately
preceding the next Adjustment Date. Interest hereunder shall be
computed on the basis of a year of three hundred sixty (360) days but
charged for actual days principal is unpaid.
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5. This Note is a multiple advance note but does not evidence a
revolving credit facility. The Borrower acknowledges that as of January
1, 1999, $5,234,840.00 has already been advanced to the Borrower with
additional amounts advanced hereunder from January 1, 1999 to December
31, 1999 to be evidenced by subsequent advance confirmations issued by
▇▇▇▇▇▇ to Borrower and thereby added to the principal balance hereof.
6. All payments and prepayments shall, at the option of the Lender, be
applied first to any costs of collection, second to any late charges,
third to accrued interest and the remainder thereof to principal (and,
in the case of prepayment of principal, to installments of principal in
the inverse order of their maturity).
7. Any one or more of the following events shall constitute an "Event
of Default" hereunder and under the documents related hereto:
(a) the Borrower shall fail to pay when due, any amounts required to be
paid by the Borrower under this Note or any other indebtedness of the
Borrower to the Lender whether any such indebtedness is now existing or
hereafter arises and whether direct or indirect, due or to become due,
absolute or contingent, primary or secondary or joint or joint and
several; or
(b) the Borrower shall file a petition in bankruptcy or for
reorganization or for an arrangement pursuant to any present or future
state or federal bankruptcy act or under any similar federal or state
law, or shall be adjudicated a bankrupt or insolvent, or shall make a
general assignment for the benefit of its creditors, or shall be unable
to pay its debts generally as they become due; or if an order for
relief under any present or future federal bankruptcy act or similar
state or federal law shall be entered against the Borrower; or if a
petition or answer requesting or proposing the entry of such order for
relief or the adjudication of the Borrower as a debtor or a bankrupt or
its reorganization under any present or future state or federal
bankruptcy act or any similar federal or state law shall be filed in
any court and such petition or answer shall not be discharged or denied
within thirty (30) days after the filing thereof; or if a receiver,
trustee or liquidator of the Borrower of all or substantially all of
the assets of the Borrower or of the collateral or any part thereof,
shall be appointed in any proceeding brought against the Borrower and
shall not be discharged within thirty (30) days of such appointment; or
if the Borrower shall consent to or acquiesce in such appointment; or
if any property of the Borrower (including without limitation the
estate or interest of the Borrower in the collateral or any part
thereof) shall be levied upon or attached in any proceeding; or
(c) final judgment(s) for the payment of money shall be rendered
against the Borrower and shall remain undischarged for a period of
thirty (30) days during which execution shall not be effectively
stayed; or
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(d) the Borrower shall be or become insolvent (whether in the equity or
bankruptcy sense) or shall liquidate, dissolve, terminate or suspend
its business operations or otherwise fail to operate its business in
the ordinary course, or sell all or substantially all of its assets,
without the prior written consent of the Lender; or
(e) any representation or warranty made by the Borrower herein or in
other any document related hereto shall prove to be untrue or
misleading in any material respect, or any statement, certificate or
report furnished hereunder or under any of the foregoing documents by
or on behalf of the Borrower shall prove to be untrue or misleading in
any material respect on the date when the facts set forth and recited
therein are stated or certified; or
(f) any material adverse change in the condition of the Borrower
(financial or otherwise) which, in the reasonable opinion of the
Lender, increases its risk with respect to this Note or any other
obligations, or the Lender otherwise in good ▇▇▇▇▇ ▇▇▇▇▇ itself
insecure for any reason with respect to the payment of this Note, any
other obligations of the Lender; or
(g) the Borrower shall fail to pay, withhold, collect or remit any tax
or tax deficiency when assessed or due (other than any tax or tax
deficiency which is being contested in good faith and by proper
proceedings and for which it shall have set aside on its books adequate
reserves therefor) or notice of any state or federal tax liens shall be
filed or issued; or
(h) any property of the Borrower shall be garnished, levied upon, or
attached in any proceeding and such garnishment or attachment shall
remain undischarged for a period of thirty (30) days during which
execution has not been effectively stayed.
8. Notwithstanding anything to the contrary contained herein, if and
for so long as an Event of Default, or an event or condition which with
the passage of time or the giving of notice or both would constitute an
Event of Default, has occurred and continues or exists, the rate of
interest hereunder shall be four and one-half percent (4.5%) per annum
in excess of the Reference Rate of Interest in effect at the time such
increased rate of interest is imposed. Such increased rate of interest
is intended to compensate the Lender for (i) the resulting increased
cost of servicing and monitoring the credit facility; and (ii) the
increased risk to the Lender.
9. Upon the occurrence of any Event of Default or at any time
thereafter, the outstanding principal balance hereof and accrued
interest and all other amounts due hereon shall become immediately due
and payable, without formal notice or demand.
10. Upon the occurrence at any time of an Event of Default, the Lender
shall have the right to set off any and all amounts due hereunder by
the Borrower to the Lender against
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any indebtedness or obligation of the Lender to the Borrower and while
such Event of Default is continuing.
11. Upon the occurrence at any time of an Event of Default, the
Borrower promises to pay all costs of collection of this Note,
including but not limited to attorneys' fees, paid or incurred by the
Lender on account of such collection, whether or not suit is filed with
respect thereto and whether or not such costs are paid or incurred, or
to be paid or incurred, prior to or after the entry of judgment.
12. Demand, presentment, protest and notice of nonpayment and dishonor
of this Note are hereby waived.
13. This Note shall be governed by and construed in accordance with the
laws of the State of Minnesota.
14. The Borrower irrevocably submits to the jurisdiction of any
Minnesota state court or federal court over any action or proceeding
arising out of or relating to this Note, and any instrument, agreement
or document related hereto, and the Borrower hereby irrevocably agree
that all claims in respect of such action or proceeding may be heard
and determined in such Minnesota state or federal court. The Borrower
hereby irrevocably waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of such
action or proceeding. The Borrower agrees that judgment final by
appeal, or expiration of time to appeal without an appeal being taken,
in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdictions by suit on the judgment or in any
other manner provided by law. Nothing in this paragraph shall affect
the right of the Lender to serve legal process in any other manner
permitted by law or affect the right of the Lender to bring any action
or proceeding against the Borrower or its property in the courts of any
other jurisdiction to the extent permitted by law.
NET RADIO CORPORATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Its CHIEF EXECUTIVE OFFICER
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