EXHIBIT 4.20.1
CONSENT AND AMENDMENT BY PURCHASERS OF SENIOR DEBT
On March 31, 1999, the undersigned 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") entered into various
agreements with VALUESTAR CORPORATION, a Colorado corporation (the "Company"),
including but not limited to a Warrant Purchase Agreement dated March 31, 1999
and as amended hereby (the "Warrant Agreement") and a Shareholder Agreement
originally dated March 31, 1999 and as amended hereby (the "Shareholder
Agreement") (and collectively the "Agreements"). All terms not defined herein
shall have the meaning set forth in that certain Bridge Loan and Common Stock
Purchase Agreement dated on even date herewith (the "Bridge Loan Agreement").
In consideration of the transactions set forth in the Bridge Loan
Agreement, the undersigned hereby agree to the following effective as of April
24, 2001:
1. Consent to the sale of the Bridge Loan Notes, up to a maximum aggregate
principal amount of $3,500,000 and the proposed 6 % Senior Convertible
Notes in a maximum aggregate principal amount of $20,000,000 to
investors which may include directors, officers and 5% shareholders of
the Company or entities affiliated or controlled by such persons.
2. Amend the Warrant Agreement by terminating Sections 4.04(j), 4.08, and
4.10 thereof.
3. Amend Section 8.02 of the Shareholder Agreement, by deleting the second
paragraph thereof and replacing it with the following:
"Subject to the confidentiality provisions set forth in Section 11.17, the
Company will deliver to each Purchaser a copy of the minutes of and all material
distributed at or prior to all meetings of the Board of Directors (including the
executive committee thereof) or shareholders of the company, certified as true
and accurate by the Secretary of the Company, promptly following each such
meeting. The Company will (a) permit Holders to designate three (3) persons to
attend all meetings of the Company's Board of Directors (including executive
committee meetings)(so long as Pacific, Tangent, and Seacoast are Holders, each
of them shall be permitted to designate one (1) person) unless in the case of
Seacoast or Pacific they have a representative as a member of the Board of
Directors, (b) provide such designees not less than the notice required to Board
Members of all regular meetings and all special meetings of the Board of
Directors (including the executive meetings thereof) or shareholders, which
notice will be delivered not less than seventy-two (72) hours prior to such
meeting; provided, however, such notice may be provided not less than
twenty-four (24) hours prior to any such meeting not more than two (2) times in
any fiscal year of the Company, (c) permit such designees to attend such
meetings as an observer, and (d) provide to such designees a copy of all
materials distributed at such meetings or
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otherwise to the Board of directors of the Company. Such meetings shall be held
in person at least quarterly, and the Company will cause the Board of Directors
to call a meeting at any time upon a request of either Seacoast or Pacific not
more than two (2) occasions per calendar year upon fourteen (14) calendar days
actual written notice to the Company. The Company agrees to reimburse each
individual referred to in Subsection (c) above for all reasonable expenses
incurred in traveling to and from such meetings and attending such meetings. All
actions that may be taken at a duly called Board meeting likewise may be taken
by unanimous written consent of each Board member, which consent, if signed by
Seacoast or Pacific either as a Board member or observer shall be deemed
effective upon such signing whether or not the relevant number of advance days'
notice has been given as required if a meeting had been held in lieu of written
consent."
The Company and the undersigned hereby agree that (a) the payment of
Seacoast's legal fees and expenses in the amount of $19,215.57, in immediately
available funds, is a condition precedent for the consents and amendments
contained herein and (b) a failure to pay such legal fees and expenses from the
first proceeds of the transactions contemplated in the Bridge Loan Agreement
contemporaneously with the consummation of such transactions shall render the
consent and amendments contained herein void ab initio. Lastly, the Company and
the undersigned hereby agree that the Company will pay, in immediately available
funds, the additional legal fees and expenses related to the consummation of the
transactions contemplated herein within five (5) business days of receipt of a
bill from Seacoast.
The Company and the undersigned hereby agree and acknowledge that the
foregoing consent (a) shall in no event be construed or be deemed to obligate
the undersigned 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 Agreements not amended hereby; and (c) shall in no event be
construed or be deemed to (i) impair, prejudice or otherwise adversely affect
the undersigneds' respective rights at any time to exercise any right,
privilege, or remedy in connection with the Agreements, (ii) amend or alter any
provision of the Agreements other than as provided herein or by previous
amendment, or (iii) constitute any course of dealing or other basis or altering
any obligation of the Company or any right, privilege or remedy of the
undersigned under the Agreements.
(signature page follows)
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
VALUESTAR CORPORATION
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
Its: Chief Executive Officer
SEACOAST CAPITAL PARTNERS LIMITED
PARTNERSHIP
By: Seacoast I Advisors, LLC, its
general partner
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Its: Vice President
PACIFIC MEZZANINE FUND, L.P.
By: Pacific Private Capital, its
general partner
By: /s/ XXXXXX X. XXXX
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Name: Xxxxxx X. Xxxx
Its: General Partner
TANGENT GROWTH FUND, L.P.
By: Tangent Fund Management, LLC,
its general partner
By: /s/ XXXX X. XXXXXX
------------------
Name: Xxxx X. Xxxxxx
Its: Vice President
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