EXHIBIT 4.19.1
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VALUESTAR CORPORATION
VALUESTAR, INC.
WAIVER AGREEMENT
THIS WAIVER AGREEMENT (this "Agreement") is dated effective as of July
21, 1999, by and among SEACOAST CAPITAL PARTNERS LIMITED PARTNERSHIP, a Delaware
Limited Partnership ("Seacoast"), PACIFIC MEZZANINE FUND, L.P. a California
limited partnership ("Pacific") and TANGENT GROWTH FUND, L.P., a California
limited partnership ("Tangent") (each a "Lender" and collectively, the
"Lenders") and VALUESTAR CORPORATION, a Colorado corporation (the "Company" or
"ValueStar").
RECITALS
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A. On March 31, 1999, the Lenders entered into various agreements with
ValueStar, ValueStar, Inc., a California corporation and the Company's
wholly-owned subsidiary ("Subsidiary"), Xxxxx X. Xxxxxx ("Xxxxxx") and/or Xxxxx
X. Xxxxx ("Polis"), including but not limited to a Note Purchase Agreement (the
"Note Purchase Agreement"), a Warrant Purchase Agreement (the "Warrant Purchase
Agreement") and individual Pledge and Security Agreements with each of Polis and
Xxxxxx (collectively, the "Pledge Agreements") (and collectively the "Lender
Transaction Documents").
B. The Lenders desire to waive certain rights and/or exclude certain
securities from the provisions of the Lender Transaction Documents in
consideration of the purchase by the Lenders, Polis, Xxxxxx and certain other
parties of shares of the Company's Series A Convertible Preferred Stock pursuant
to that certain ValueStar Series A Preferred Stock Purchase Agreement dated on
even date herewith by and among Lenders, Polis, Xxxxxx and various other
purchasers that may become parties thereto on, or before, August 31, 1999 (the
"Purchase Agreement").
C. "C"apitalized terms not defined herein shall have the meanings
established in the Lender Transaction Documents and are incorporated herein by
reference.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual agreements, covenants,
representations and warranties contained in this Agreement, the parties hereto
hereby agree as follows:
1. Pledge and Security Agreements. Lenders hereby agree that the
Company's Series A Convertible Preferred Stock (and any other Capital Stock
issued hereafter in connection therewith) acquired by Xxxxxx or Polis pursuant
to the Purchase Agreement is expressly excluded from the definition of Pledged
Property under the Pledge Agreements and shall not be subject to the provisions
or restrictions of the Pledge Agreements.
2. Warrants. Lenders hereby agree that the number of shares issuable
under the Warrants shall not be adjusted pursuant to Section 2.08 of the Warrant
Purchase Agreement or any other provision of the Transaction Documents as a
result of the issuance of the Series A Convertible Preferred Stock (or any other
Capital Stock issued hereafter in connection therewith) or as a result of the
issuance after the date hereof of any Capital Stock excluded from the definition
of "Additional Shares of Common Stock" set forth in the Company's Certificate of
Designation establishing the Company's Series A Convertible Preferred Stock.
3. Notices Waiver. Lenders hereby waive any notices required pursuant
to the Lender Transaction Documents, including but not limited to the notices
required under Section 4.08 of the Warrant Purchase Agreement, in connection
with the transactions to be consummated and the actions to be taken pursuant to
the Purchase Agreement and/or filing of the Company's Certificate of
Designation.
4. Waiver of EBITDA/Minimum Net Income Defaults. Effective as of June
30, 1999, the Lenders hereby waive the Company's default under Section 7.9(b)
and Section 7.9(c) of the Note Purchase Agreement for the Company's failure to
incur no more than (i) an EBITDA loss amount of ($800,000) and (ii) a net income
loss of $1,000,000, respectively, for the fiscal quarter ending June 30, 1999,
and agree that such failures shall not be deemed a default under any provision
of the Lender Transaction Documents, including but not limited to Article VIII
of the Note Purchase Agreement and Section 4.01(a)(iv) of the Shareholder
Agreement.
5. Waiver of Notice of Board Meeting. Lenders hereby waive any notices
required pursuant to the Lender Transaction Documents, including but not limited
to the notices required under Section 6.19 of the Note Purchase Agreement, in
connection with the special meeting of the Board of Directors of the Company
held on July 20, 1999 for the purpose of authorizing the Series A Preferred
Stock and the transactions contemplated under that Series A Preferred Stock
Purchase Agreement.
6. No Deemed Future Waivers. The Company hereby agrees with the
foregoing provisions and agrees and acknowledges that the foregoing waivers and
consents (a) shall in no event be construed or be deemed to obligate Lenders to
agree to any subsequent waiver or consent; (b) shall in no event be construed or
be deemed as a waiver of any of the other terms and conditions of the Lender
Transaction Documents; and (c) shall in no event be construed or be deemed to
(i) impair, prejudice or otherwise adversely affect Lenders' right at any time
to exercise any right, privilege, or remedy in connection with the Lender
Transaction Documents, (ii) amend or alter any provision of the Lender
Transaction Documents, or (iii) constitute any course of dealing or other basis
or altering any obligation of the Company or any right, privilege or remedy of
Lenders under the Lender Transaction Documents.
IN WITNESS WHEREOF, the Lenders and Company have executed and
delivered this Waiver as of the date first above written.
SEACOAST CAPITAL PARTNERS LIMITED
PARTNERSHIP
By: Seacoast Capital Corporation,
its general partner
By: /s/ XXXXXXX X. XXXXXXX
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Name: Xxxxxxx X. Xxxxxxx
Its: Vice President
PACIFIC MEZZANINE FUND, L.P.
By: Pacific Private Capital
its general partner
By: /s/XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
Its: General Partner
TANGENT GROWTH FUND, L.P.
By: Tangent Fund Management, LLC
its general partner
By: /s/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Its: Vice President
VALUESTAR CORPORATION
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
Its: President and Chief Executive Officer
/s/ XXXXX X. XXXXXX
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Xxxxx X. Xxxxxx, individually, as President of Sunrise
Capital, Inc. and General Partner of Xxxxxxx Investments,
and as General Partner of Xxxxxxx Investments Limited
Partnership
/s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx, individually, as President of Davric
Corporation and Trustee of the Xxxxx X. Xxxxx Family
Trust
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