EXHIBIT 10.9
WAIVER OF CERTAIN PROVISIONS OF THE STOCK PURCHASE AGREEMENT
DATED AS OF MARCH 7, 1997 BY AND AMONG
VALUEVISION INTERNATIONAL, INC., NAVARRE CORPORATION AND NETRADIO CORPORATION
This waiver is made and executed by the undersigned as of February 26,
1999.
All of the capitalized terms herein shall have the meaning ascribed to
them in the Stock Purchase Agreement by and among ValueVision International,
Inc., NetRadio Corporation and Navarre Corporation dated as of March 7, 1997.
RECITALS
A. ValueVision International, Inc. ("ValueVision"), NetRadio Corporation
("NetRadio") and Navarre Corporation ("Navarre") are parties to that
certain Stock Purchase Agreement dated March 7, 1997 (the "Stock
Purchase Agreement") and ValueVision and Navarre are parties to that
certain Conversion Agreement dated March 20, 1997 (the "Conversion
Agreement");
B. Section 9.15 of the Stock Purchase Agreement provides ValueVision with
certain preemptive rights should NetRadio decide to issue and sell
additional shares of any capital stock, warrants, or securities
convertible into capital stock of NetRadio;
C. Section 5 of the Stock Purchase Agreement provides that, among other
things, if NetRadio achieves net revenues (excluding revenues from
product sales) equal to or greater than $3.0 million in any rolling
consecutive four quarter period, then for 180 days thereafter,
NetRadio has the right to require ValueVision to make an additional
investment of $500,000 in cash for such additional shares of NetRadio
common stock equal to 4.95 percent of the issued and outstanding
shares of NetRadio Common Stock after such issuance, and during such
period ValueVision has the right to purchase 4.95 percent of the
issued and outstanding shares of NetRadio Common Stock for $500,000;
D. In September 1998, the Board of Directors of NetRadio sold a total of
40,000 shares of Common Stock at $1.64 per share to Xxxxxxx Xxxxxxxx,
Xxx Xxxxxxxx, Xxxxx Xxxxxx and Xxxxx Xxxxxxx in a private sale (the
"Private Sale");
E. NetRadio has authorized the issuance of 2,000,000 shares of its Common
Stock pursuant to its Stock Option Plan;
F. Section 12 of the Stock Purchase Agreement provides ValueVision and
Navarre with certain demand registration rights if NetRadio has not
commenced an initial
public offering of Common Stock in a minimum aggregate amount of
$10 million before on or about March 7, 2000;
G. The Board of Directors and shareholders of NetRadio have engaged
EVEREN Securities, Inc. as Underwriters to undertake an initial public
offering of Common Stock of NetRadio (the "Offering");
H. The Offering may trigger ValueVision's preemptive rights under Section
9.15 of the Stock Purchase Agreement;
I. As of December 31, 1998, NetRadio had 5,922,500 shares of Common Stock
outstanding of which Navarre held 5,000,000 shares and ValueVision
held 882,500 shares. Based on discussion with the Underwriters,
NetRadio believes that the Underwriters propose to sell approximately
3,000,000 shares to the public (before any stock split or reverse
stock split);
J. NetRadio and ValueVision have determined that NetRadio's right to
require ValueVision to acquire additional shares of Common Stock and
ValueVision's right to acquire shares of Common Stock under Section 5
of the Stock Purchase Agreement may impede the Offering;
L. ValueVision, Navarre and NetRadio acknowledge that they will benefit
from an initial public offering of NetRadio securities and the
transactions contemplated thereby;
In consideration of the foregoing recitals, the respective covenants and
agreements contained herein, and for other valuable consideration the receipt
and adequacy of which are hereby acknowledged, ValueVision, Navarre and
NetRadio agree as follows:
1. ValueVision hereby waives, as of the date hereof, all of its
preemptive rights as set forth in Section 9.15 of the Stock Purchase
Agreement to the extent such rights have been triggered by the
Private Sale or the grant of options under the NetRadio Stock Option
Plan through the date hereof.
2. ValueVision hereby waives its preemptive rights as set forth in
Section 9.15 of the Stock Purchase Agreement for any shares of Common
Stock issued to the public through an underwriting syndicate managed
by EVEREN Securities, such waiver to be effective upon the closing
(the "Closing") of the Offering, provided that the Offering will
result in gross proceeds to NetRadio of at least $10,000,000.
3. ValueVision hereby waives its preemptive rights as set forth in
Section 9.15 of the Stock Purchase Agreement to purchase additional
securities of NetRadio in
connection with all future issuances by NetRadio of equity securities
or rights to purchase equity securities, such waiver to be effective
upon the Closing.
4. Based upon the representation of NetRadio that the Offering is to be
structured in the manner specified in Section H and assuming that the
total number of shares of Common Stock to be sold by NetRadio in the
Offering will not exceed 3,500,000, (before any stock split or reverse
stock split), ValueVision and NetRadio hereby agree that the right of
NetRadio in Section 5 of the Stock Purchase Agreement to require
ValueVision to purchase Common Stock of NetRadio and the right of
ValueVision to require NetRadio to sell Stock to it are terminated
effective as of the Closing.
5. ValueVision has decided not sell in the Offering and is waiving any
rights it has to sell shares in the Offering, as part of the over-
allotment option or otherwise. This waiver does not affect any future
registration rights that ValueVision may have or may receive as part
of this agreement.
6. Immediately prior to the closing, NetRadio agrees to sell to
ValueVision and ValueVision agrees to purchase from NetRadio 550,000
shares of Common Stock of NetRadio for aggregate consideration of
$500,000, with payment to be made for the shares immediately prior
to the Closing. Payment for such shares shall be made in cash. If
the number of shares of Common Stock to be sold by NetRadio in the
Offering exceeds 3,499,999, then the 550,000 shares of Common Stock
to be issued to ValueVision hereunder shall be increased in accordance
with the following formula: If the number of shares sold is 3,500,000
more, then ValueVision shall receive an additional 10,000 shares, plus
an additional 7000 shares for each additional 100,000 shares sold by
NetRadio in the Offering.
7. In connection with the Offering, ValueVision shall have the
registration rights attached as Exhibit A. As soon as practicable
after the execution of this Agreement, NetRadio, Navarre and
ValueVision will work to finalize the registration rights and other
documents anticipated by this Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Waiver to be executed
and to be dated as of the date written above.
VALUEVISION INTERNATIONAL, INC., NETRADIO CORPORATION,
a Minnesota corporation a Minnesota corporation
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------- -------------------------------
Its: Vice President & General Counsel Its: President & C.E.O.
---------------------------------- -------------------------------
NAVARRE CORPORATION,
a Minnesota corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Its: C.F.O.
----------------------------------
Exhibit A
1. Demand right for the 550,00 shares 12 months after closing.
2. Demand right for all remaining shares of ValueVision 24 month after
closing.
3. Piggyback rights subject to reasonable underwriter backdown.
4. Indemnification and related rights similar to those in conversion
agreement.
5. Fees and expenses.
a. If shares are sold in an offering with NetRadio selling, NetRadio and
the selling shareholders will share all expenses pro rata.
b. If there are only selling shareholders, the selling shareholders will
share all expenses pro rata.
c. If NetRadio grants to Navarre any registration rights in which
NetRadio agrees to pay for expenses for Navarre as a selling
shareholder, NetRadio will grant equal rights to ValueVision.
