EXHIBIT 10.16
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Agreement"), dated as of March 1, 1999, is made
and entered into by and between Navarre Corporation, a Minnesota corporation
("Navarre") and Net Radio Corporation, a Minnesota corporation ("Net Radio").
RECITALS
WHEREAS, Navarre currently owns approximately 85% of the issued and
outstanding common stock of Net Radio, and as such, currently performs certain
corporate services for Net Radio;
WHEREAS, Net Radio is undertaking a public offering of its common stock
pursuant to a Form S-1 Registration Statement filed under the Securities Act of
1933 (the "Offering"), on such terms and conditions as are contained therein;
WHEREAS, following the Offering, Navarre and Net Radio will be operated
as independent public companies, and Net Radio will no longer be a subsidiary of
Navarre; and
WHEREAS, Navarre and Net Radio wish to provide for the separation of
certain services provided by Navarre to Net Radio following the Offering, in
connection with Net Radio's transition to an independent public company; and
WHEREAS, Navarre and Net Radio have determined that it is necessary and
desirable to establish certain other agreements governing matters relating to
the Offering and the relationship of Navarre and Net Radio after the Offering.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein and intending to be legally bound,
Navarre and Net Radio hereby agree as follows:
1. TRANSITIONAL SERVICES. Subject to the terms and conditions of this
Agreement, Navarre and Net Radio will endeavor to separate the accounting,
finance, human resources, and other administrative functions of Net Radio
from Navarre during the 45-day period following the closing date of the
Offering (the "Closing Date") at a cost to NetRadio of $7,500.00. During
this time, it is acknowledged that Navarre may provide some transitional
services to Net Radio. Net Radio understands that the services are intended
only to be transitional in nature, and may be furnished by Navarre solely
for the purpose of accommodating Net Radio in connection with its
transition to a separate public company. Net Radio hereby covenants and
agrees to undertake such actions as may be necessary to phase out the
services provided by Navarre within forty-five (45) days after the
Offering, which actions may include, but are not
limited to, hiring appropriate personnel to provide the services within its
own internal organization, or entering into agreements with third parties
for the provision of the services.
2. BILLING AND PAYMENT TERMS. Navarre will invoice Net Radio for all services
delivered during the 45-day period, and Net Radio will pay such invoice
within thirty (30) days after the date thereof.
3. INTERCOMPANY NOTES. Navarre and NetRadio have entered into a $5,234,840.00
Multiple Advance Term Note in the form of Exhibit A (the "Note"),
evidencing the indebtedness due to Navarre as of December 31, 1998. Upon
the successful completion of the Offering, (1) Navarre will contribute the
amount of $5,234,840.00 (the amount of the original indebtedness due to
Navarre as of December 31, 1998), to the equity of NetRadio without the
issuance of additional shares, and (2) the remaining outstanding principal
balance, plus accrued interest, on the note (as increased by any subsequent
advances) shall be evidenced by a replacement Term Note, in the form
attached hereto as Exhibit B.
4. COVENANT NOT TO COMPETE. From the Closing Date and for a period of four
years thereafter, Navarre shall not, either directly or indirectly:
(a) engage in Internet broadcasting of music and information or online
retail sales of entertainment-related products in substantially the
same manner and format as conducted by Net Radio on the date of this
Agreement; or
(b) disclose, make available or divulge to any corporation, partnership,
individual, firm, other business or person any trade secret
information concerning the business and affairs of Net Radio or other
information concerning the business and affairs of Net Radio.
Navarre agrees that any breach of covenants (a) or (b) above will cause Net
Radio irreparable harm for which there is no adequate remedy at law, and,
without limiting whatever other rights and remedies Net Radio may have
under this Section 4, Navarre consents to the issuance of an injunction in
favor of Navarre enjoining the breach of any of the aforesaid covenants by
any court of competent jurisdiction. If any or all of the aforesaid
covenants are held to be unenforceable because of the scope or duration of
such covenant or the area covered thereby, the parties agree that the court
making such determination shall have the power to reduce the scope,
duration and area of such covenant to the extent that allows the maximum
scope, duration and/or area permitted by applicable law.
5. Confidential Information.
(a) Each of Navarre and Net Radio will hold, and will cause its officers,
employees, agents, consultants, advisors and affiliates to hold, in
strict confidence, and not to disclose, unless compelled to disclose
by judicial or administrative process or, in the opinion of its
independent legal counsel, by other requirements of law, all
confidential information concerning the other party.
(b) For purposes of this Section 5, confidential information about a
particular party (referred to herein as the "first party") shall mean
information known by the other party on the Closing Date and
reasonably understood by the other party to be
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confidential and related to the first party's business interests, or
disclosed confidentially by the first party to the other party after
the Closing Date under the terms and for the purposes of this
Agreement, except for:
(i) information learned by the other party for the first time after
the Closing Date, but prior to any disclosure by the first party;
(ii) information which is or becomes publicly available through no act
of the other party, from and after the date of public
availability;
(iii) information disclosed to the other party by a third party,
provided: (A) under the circumstances of disclosure the other
party does not have a duty of non-disclosure owed to such third
party; (B) the third party's disclosure is not violative of a
duty of non-disclosure owed to another, including the first
party; and (C) the disclosure by the third party is not otherwise
unlawful; and
(iv) information developed by the other party independent of any
confidential information of the first party which is known by the
other party on the Closing Date and/or disclosed by the first
party thereafter.
(c) The foregoing restrictions will expire with respect to business
information which is confidential information five (5) years after the
date of disclosure of such information, unless and to the extent the
parties agree to a longer period for the foregoing restrictions with
respect to specific categories of business information which is
confidential information on the expiration of such longer period. The
date of disclosure in the case of confidential business information
known by a party on the Closing Date shall be the Closing Date. Each
of Navarre and Net Radio shall not disclose to another, or use, except
for purposes of fulfilling their respective obligations under this
Agreement, any business information which is confidential information
of Net Radio or confidential information of Navarre, respectively. The
foregoing restrictions shall not expire until such time and to the
extent that such information ceases to be confidential information.
(d) Each party will protect confidential information hereunder by using
the same degree of care, but no less than a reasonable degree of care,
to prevent the unauthorized disclosure of the other party's
confidential information as the party uses to protect its own
confidential information.
(e) Each party shall ensure that its affiliates, sublicensees and other
transferees agree to be bound by the same restrictions on use and
disclosure of confidential information as set forth herein prior to
disclosure of confidential information of the other party to such
persons.
6. INDEMNIFICATION.
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(a) INDEMNIFICATION BY NET RADIO. Net Radio agrees to indemnify, defend
and hold harmless Navarre, its directors, officers, employees, agents
and representatives from any and all third-party claims, actions,
demands, judgments, losses, costs, expenses, damages and liabilities
relating to, arising out of or resulting from: (1) Net Radio's failure
to pay, perform or otherwise promptly discharge any of Net Radio's
debts or other liabilities in accordance with their respective terms;
(2) any breach by Net Radio of the terms of this Agreement or any
other written agreement between Navarre and Net Radio; and (3) any
untrue statement or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, with respect to all information contained in the
Prospectus or Registration Statement related to the Offering of which
it forms a part; provided, however, that in no event will Net Radio be
required to indemnify and hold harmless Navarre in the event damages
are attributable to Navarre's fraud, intentional criminal misconduct
or gross negligence. Navarre agrees to indemnify, defend and hold
harmless Net Radio in respect of all liabilities related to, arising
from asserted against or associated with such fraudulent,
intentionally criminal, or grossly negligent conduct.
(b) INDEMNIFICATION BY NAVARRE. Navarre agrees to indemnify, defend and
hold harmless Net Radio, its directors, officers, employees, agents
and representatives from any and all third-party claims, actions,
demands, judgments, losses, costs, expenses, damages and liabilities
relating to, arising out of or resulting from: (1) Navarre's failure
to pay, perform or otherwise promptly discharge any of Navarre's debts
or other liabilities in accordance with their respective terms, other
than Net Radio's liabilities; and (2) any breach by Navarre of the
terms of this Agreement or any other written agreement between Navarre
and Net Radio.
(c) PROCEDURE. If either party intends to claim indemnification under this
Section 6, the claiming party (the "Indemnitee") will promptly notify
the other party (the "Indemnifying Party") in writing of any such
claim, tender to the Indemnifying Party the right to defend or settle
such claim at the Indemnifying Party's expense, and reasonably
cooperate with the Indemnifying Party in defending or settling any
such claim. At its expense, the Indemnitee may be represented by, and
actively participate through, counsel of its choice in the defense or
settlement of any such claim. In any event, the Indemnifying Party may
not settle any claim under this Section 6 without the prior written
consent of the Indemnitee, which consent will not be unreasonably
withheld or delayed. The Indemnifying Party will have no liability
whatsoever with respect to claims which the Indemnitee or its
independent counsel settle without the prior consent of the
Indemnifying Party. The Indemnifying Party will have the right to
pursue any and all claims, whether at law or in equity, that the
Indemnifying Party may have against the Indemnitee, its successors in
interest, permitted assigns, officers, directors, employees, agents,
representatives and persons and entities acting on its behalf based
upon, arising out of or in connection with the performance,
non-performance or delayed performance of this Agreement or any acts
or omissions relating thereto.
7. RELEASE OF EXISTING CLAIMS. Each of Net Radio and Navarre hereby release
all rights, claims and actions they and their successors have or may have
against the other party, and
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hereby discharge all liabilities between the parties, relating to or
arising from all acts and events occurring or failing to occur or alleged
to have occurred or to have failed to occur and all conditions existing or
alleged to have existed on or before the Closing Date between Navarre and
Net Radio (including any contractual agreements or arrangements existing or
alleged to exist between Navarre and Net Radio or before the Closing Date).
8. DISPUTE RESOLUTION.
(a) PROCEDURES. If a dispute, controversy or claim (collectively, a
"Dispute") between Navarre and Net Radio arises out of or relates to
this Agreement, Navarre and Net Radio agree to use the following
procedures in lieu of either party pursuing other available remedies
and as the sole remedy (except as provided in subsection 8(d) below),
to resolve the Dispute.
(b) INITIATION. A party seeking to initiate the procedures will give
written notice to the other party, briefly describing the nature of
the Dispute. The parties will hold a meeting within ten (10) days of
the receipt of such notice, attended by individuals with
decision-making authority regarding the Dispute, to attempt in good
faith to negotiate a resolution of the Dispute.
(c) SUBMISSION TO ARBITRATION. If, within thirty (30) days after such
meeting, the parties have not succeeded in negotiating a resolution of
the Dispute, they agree to submit the Dispute to binding arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, by a sole arbitrator selected by the parties.
The arbitration proceeding will be held in Minneapolis, Minnesota,
will be governed by the Minnesota equivalent of the Federal
Arbitration Act, 9 U.S.C. Sections 1-16, and judgment upon the award
rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The costs of arbitration may be apportioned
between Navarre and Net Radio by the arbitrator in such manner as the
arbitrator deems reasonable, taking into account the circumstances of
the Dispute, the conduct of each of the parties during the proceeding,
and the result of the arbitration.
(d) EQUITABLE RELIEF. Nothing herein will preclude either party from
taking whatever actions are necessary to prevent any immediate,
irreparable harm to its interests, including multiple breaches of this
Agreement by the other party. Otherwise, the parties agree to fully
exhaust these procedures prior to initiating litigation. Either party
may seek specific enforcement of any arbitrator's decision under this
Section 8(d).
(e) CONSOLIDATION. The arbitrator may consolidate an arbitration under
this Agreement with any arbitration arising under or relating to any
other agreement between the parties if the subject of the Disputes
thereunder arise out of or relate essentially to the same set of facts
or transactions. Such consolidated arbitration will be determined by
the arbitrator appointed for the arbitration proceeding that was
commenced first in time.
9. FORCE MAJEURE. Neither party will hold the other party responsible for a
delay in the performance of any obligation hereunder due to labor
disturbances, accidents, fires,
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floods, wars, riots, rebellions, blockages, acts of governments,
governmental requirements and regulations, restrictions imposed by law or
any other similar conditions, beyond the reasonable control and without the
fault or negligence of such party, and the time for performance by such
party will be extended by the period of such delay.
10. RELATIONSHIP OF THE PARTIES. Neither party is an agent of the other party
and neither party has any authority to bind the other party, transact any
business in the other party's name or on its behalf, or make any promises
or representations on behalf of the other party unless provided for in any
Exhibit or otherwise agreed to in writing. Each party will perform all of
its respective obligations under this Agreement as an independent
contractor, and no joint venture, partnership or other relationship will be
created or implied by this Agreement.
11. ENTIRE AGREEMENT. This Agreement, and the Exhibits the Agreement refers to
and which are incorporated into and made a part of this Agreement by
reference, constitute the entire agreement between Navarre and Net Radio
relating to the subject matter hereof, and there are no further agreements
or understandings, written or oral, between the parties with respect to
such subject matter.
12. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Minnesota (regardless
of the laws that might otherwise govern under applicable principles of
conflict of laws) as to all matters, including, without limitation, matters
of validity, construction, effect, performance and remedies.
13. JURISDICTION AND VENUE. Subject to the arbitration provisions of this
Agreement, each party consents to the personal jurisdiction of the state
and federal courts located in the State of Minnesota and hereby waives any
argument that venue in any such forum is not convenient or proper.
14. NOTICES. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given
(i) on the date of service if served personally on the party to whom notice
is given; (ii) on the day of transmission if sent via facsimile
transmission to the facsimile number given below, provided telephonic
confirmation of receipt is obtained promptly after completion of
transmission; (iii) on the business day after delivery to an overnight
courier service or the express mail service maintained by the United States
Postal Service, provided receipt of delivery has been confirmed; or (iv) on
the fifth day after mailing, provided receipt of delivery is confirmed, if
mailed to the party to whom notice is to be given, by registered or
certified mail, postage prepaid, properly addressed and return-receipt
requested, to the party as follows:
If to Navarre: Navarre Corporation
0000 - 00xx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attn: Chief Executive Officer
Facsimile No. (000) 000-0000
If to Net Radio: Net Radio Corporation
00 Xxxx Xxxxxx XX, Xxxxx 000
0
Xxxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Facsimile No. (000) 000-0000
Any party may change its address by giving the other party written notice
of its new address in the manner set forth above.
15. MODIFICATION OF AGREEMENT. No modification, amendment or waiver of any
provision of this Agreement shall be effective unless the same shall be in
writing and signed by each of the parties hereto and then such
modification, amendment or waiver shall be effective only in the specific
instance and for the purpose for which given.
16. SUCCESSORS AND ASSIGNS. A party's rights and obligations hereunder may not
be assigned or transferred without the prior written consent of the other
party hereto. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and shall survive any acquisition,
disposition or other corporate restructuring or transaction involving
either party.
17. NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit of
the parties to this Agreement and should not be deemed to confer upon third
parties any remedy, claims, liability, reimbursement, claim of action or
other right in excess of those existing without this Agreement.
18. TITLES AND HEADINGS. The titles and headings to Sections herein are
inserted for convenience of reference only and are not intended to
constitute a part of or to affect the meaning or interpretation of this
Agreement.
19. SEVERABILITY. In case any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable, the enforceability
of the remaining provisions hereof shall not in any way be affected or
impaired thereby. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions hereof without including any of such
which may hereafter be declared invalid, void or unenforceable. In the
event that any such term, provision, covenant or restriction is hereafter
held to be invalid, void or unenforceable, the parties hereto agree to use
their best efforts to find and employ an alternate means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction.
20. NO WAIVER. Neither the failure nor any delay on the part of any party
hereto to exercise any right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right preclude any
other or further exercise of the same or any other right, nor shall any
waiver of any right with respect to any occurrence be construed as a waiver
of such right with respect to any other occurrence.
21. SURVIVAL OF PROVISIONS. The representations, warranties and covenants
contained herein will survive termination or expiration of this Agreement
to the full extent necessary to protect the party in whose favor they run.
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22. CONFLICTING PROVISIONS. In the event any provision of any Exhibit conflicts
with the provisions of this Agreement, the provisions of this Agreement
will be controlling.
23. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall
become a binding agreement when one or more counterparts have been signed
by each party and delivered to the other party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first written above.
NAVARRE CORPORATION
By: /s/ XXXX X. XXXXXXX
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Its: PRESIDENT
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NET RADIO CORPORATION
By: /s/ XXXXXX X. XXXXXXXX
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Its: PRESIDENT AND C.E.O
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EXHIBIT A
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 0000 00xx Xxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxx 00000,
the principal sum of FIVE MILLION TWO HUNDRED THIRTY-FOUR THOUSAND
EIGHT HUNDRED FORTY AND 00/100 DOLLARS ($5,234,840.00), 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. 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 hereafter 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.
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
lender 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
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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
(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
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respect to this Note or any other obligations, or the Lender otherwise
in good xxxxx xxxxx 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 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.
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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
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