EXHIBIT 4.31
SECURITIES PURCHASE AGREEMENT
Securities Purchase Agreement (the "Agreement"), dated effective as of
March 24, 2000, by and among ValueStar Corporation, a Colorado corporation (the
"Company"), and each of the purchasers set forth on the signature pages hereto
(individually, a "Purchaser" and, collectively, the "Purchasers").
WHEREAS, the Company proposes to issue and sell to the Purchasers for
cash, or in exchange for cancellation or conversion of outstanding indebtedness,
or in lieu of certain callable warrant proceeds, an aggregate maximum of
2,500,000 shares (individually, a "Share" and, collectively, the "Shares") of
common stock, par value $0.00025 per share, of the Company (the "Common Stock")
and warrants to purchase shares of Common Stock (as further described below);
and
WHEREAS, the Company, among other things, has agreed to provide certain
registration rights under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the Shares and the warrants that are being
issued to the Purchasers pursuant to this Agreement.
NOW THEREFORE, in consideration of the above recitals and the mutual
covenants set forth herein, the parties hereto agree as follows:
1. Sale of Stock and Delivery of Warrants; Closing.
(a) Purchase and Sale. Subject to the terms and conditions
hereof, the Company shall issue and sell to each of the Purchasers, and each
Purchaser, severally, shall purchase from the Company, the number of Shares set
forth opposite such Purchaser's name on Schedule 1 hereto at a purchase price of
$5.85 per Share for an aggregate purchase price set forth on such Schedule 1.
The Company shall deliver to each Purchaser warrants to purchase, at an exercise
price of $5.85 per share, such number of shares of Common Stock set forth
opposite such Purchaser's name on Schedule 1 hereto (the "Warrants"). The shares
of Common Stock issued or issuable upon exercise of the Warrants are hereinafter
referred to as the "Warrant Shares." The number of Warrant Shares shall equal
ten percent (10%) of the Shares of Common Stock purchased hereunder. The
Warrants shall be in the form of Exhibit A hereto.
(b) First Closing. The first closing of the purchase and sale
of the Shares and Warrants (the "First Closing") shall take place at the offices
of Bay Venture Counsel, LLP, 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000
at 10:00 A.M. on March 17, 2000, or such later date on which the conditions set
forth in Sections 4(a) and 5(a) hereof shall have been satisfied or waived;
provided, however, that the First Closing, in no event, shall occur later than
March 22, 2000. The date of the First Closing shall be hereinafter referred to
as the "First Closing Date".
(c) Second Closing. The Second Closing of the purchase and
sale of the Shares and Warrants (the "Second Closing") shall take place at the
offices of the Company, on or before April 4, 2000 such earlier date on which
the conditions set forth in Section 4(b) and 5(b) hereof shall have been
satisfied or waived, provided that:
Purchasers participating in the Second Closing shall become a party to and agree
to be bound by the provisions of this Agreement and each other Transaction
Documents (as defined below). The date of the Second Closing shall be
hereinafter referred to as the "Second Closing Date", the First Closing Date and
the Second Closing Date are each referred to individually as a "Closing Date"
and, collectively as the "Closing Dates".
(d) Delivery. At each Closing, the Company shall deliver to
each Purchaser a stock certificate representing the Shares purchased by such
Purchaser and the Warrants to be delivered to such Purchaser, against payment of
the purchase price therefor by check, payable to the order of the Company, by
wire transfer of immediately available funds to the Company in accordance with
the Company's wiring instructions, or by cancellation or conversion of
indebtedness or in lieu of certain callable warrant proceeds, or some
combination thereof. In addition, the Company shall deliver to each Purchaser
such other agreements, documents and certificates as specified in this Agreement
or as may reasonably be requested by such Purchaser.
2. Representations and Warranties of Purchasers. Each of the Purchasers
represents and warrants, severally, to the Company as follows:
(a) Authorization. The Purchaser has the full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution and delivery of, and the performance under, this
Agreement by the Purchaser will not conflict with any rule, regulation, judgment
or agreement applicable to the Purchaser.
(b) Investment Purpose. The Purchaser is purchasing the Shares
and acquiring the Warrants, and will purchase the Warrant Shares (together with
the Shares and the Warrants, the "Securities"), for investment purposes and not
with a present view to, or for sale in connection with, a distribution thereof
within the meaning of the Securities Act. The Purchaser understands that it must
bear the economic risk of this investment indefinitely, unless the Securities
are registered pursuant to the Securities Act and any applicable state
securities or blue sky laws or an exemption from such registration is available.
(c) Reliance On Exemptions. The Purchaser understands that the
Securities are being offered and sold in reliance upon specific exemptions from
the registration requirements of Federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations and
warranties of the Purchaser set forth herein in order to determine the
availability of such exemptions and the eligibility of the Purchaser to acquire
the Securities.
(d) Information. The Purchaser has been furnished all
documents relating to the business, finances and operations of the Company which
the Purchaser requested from the Company. The Purchaser has been afforded the
opportunity to ask questions of the Company's representatives concerning the
Company in making the decision to purchase the Shares and acquire the Warrants,
and such questions have been answered to its satisfaction. However, neither the
foregoing nor any other due diligence investigation conducted by the Purchaser
or on its behalf shall limit, modify or affect the representations and
warranties of the Company in Section 3 of this Agreement or the right of the
Purchaser to rely thereon.
(e) Governmental Review. The Purchaser understands that no
Federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
(f) Purchaser's Qualifications. The Purchaser is an
"accredited investor" as defined in Rule 501 under Regulation D of the
Securities Act ("Regulation D"). The Purchaser is capable of evaluating the
merits and risks of an investment in the Securities.
(g) Restrictions on Transfer. The Purchaser understands that
it may not transfer any of the Securities unless such Securities are registered
under the Securities Act or unless an exemption from registration and
qualification requirements are available under the Securities Act and applicable
state securities laws. The Purchaser understands that certificates representing
the Shares, the Warrants, the Warrant Shares and shares of Common Stock issued
pursuant to Section 4 of this Agreement shall bear the following, or a
substantially similar, legend until such time as they have been registered under
the Securities Act or otherwise may be sold under Rule 144 under the Securities
Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED
UNDER ANY STATE SECURITIES LAW, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, OR THE HOLDER
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THE SECURITIES
SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT AND THE QUALIFICATION
REQUIREMENTS UNDER STATE LAW."
The Company shall be entitled to enter stop transfer notices on its
stock books with respect to the Shares until the conditions as set
forth in the legend above with respect to the transfer of such
securities have been met.
(h) Residence. The Purchaser is a resident of the jurisdiction
set forth under its name on the signature pages hereto.
(i) Investment Experience. The Purchaser has experience as an
investor in securities of Internet - related and technology companies and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities. If other than an individual, the Purchaser also represents it
has not been organized for the purpose of acquiring the Securities.
3. Representations and Warranties of the Company. Except as set forth
on a Schedule of Exceptions attached hereto and incorporated herein by
reference, the Company represents and warrants to each Purchaser as of the First
Closing as follows:
(a) Corporate Existence and Authority.
(i) The Company (i) is a corporation duly organized,
validly existing, and in good standing under the laws of Colorado; (ii) has all
requisite corporate power and authority to own its assets and carry on its
business as now conducted; and (iii) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a material adverse effect
in the business, assets, financial condition, results of operations, affairs or
prospects of the Company of any of its subsidiaries (A "Material Adverse
Effect"). The Company has the corporate power and authority to execute, deliver,
and perform its obligations under this Agreement to which it is, or in
connection with the transactions contemplated hereby, may become, a party.
(ii) ValueStar, Inc., a California corporation and
wholly owned subsidiary of the Company (the "Subsidiary") (i) is a corporation
duly organized, validly existing, and in good standing under the laws of
California; (ii) has all requisite corporate power and authority to own its
assets and carry on its business as now conducted; and (iii) is qualified to do
business in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a Material
Adverse Effect.
(b) Financial Statements and Reports. The Company has timely
filed all required forms, reports, statements and documents with the SEC, all of
which have complied in all material respects with all applicable requirements of
the Exchange Act of 1934, as amended (the "Exchange Act"), and the Securities
Act of 1933, as amended (the "Securities Act"), as the case may be. The Company
has delivered or made available to each Purchaser true and complete copies of
(i) the Company's Annual Report on Form 10-KSB for the fiscal year ended June
30, 1999, (ii) its proxy statement relating to the Company's annual stockholders
meeting held November 19, 1999, (iii) all other forms, reports, statements and
documents filed by the Company with the SEC pursuant to the Exchange Act since
June 30, 1999, and (iv) all reports, statements and other information provided
by the Company to its stockholders since January 1, 1999 (collectively, the "SEC
Reports"). As of their respective dates, the SEC Reports did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. Each of the
consolidated financial statements of the Company included or incorporated by
reference in the SEC Reports (including any such SEC Report filed after the date
of this Agreement until the First Closing) were prepared in accordance with GAAP
applied on a consistent basis (except as otherwise stated in such financial
statements or, in the case of audited statements, the related report thereon of
independent certified public accounts), and present fairly the financial
position and results of operations, cash flows and of changes in stockholders'
equity of the Company and its consolidated subsidiaries as of the dates and for
the periods indicated, subject, in the case of unaudited interim financial
statements, to normal year-end audit adjustments, and except that the unaudited
interim financial statements do not contain all of the disclosures required by
GAAP. Since June 30, 1999
there has been no change in any of the significant accounting (including tax
accounting) policies, practices, or procedures of the Company or any of its
consolidated subsidiaries. The Company is and has been subject to the reporting
requirements of the Exchange Act and has timely filed with the SEC all periodic
reports required to be filed by it pursuant thereto and all reports required to
be filed under Sections 13, 14 or 15(d) of the Exchange Act since June 30, 1999.
(c) Default. Except as disclosed on Schedule 3(c), neither the
Company nor the Subsidiary is in default under any loan agreement, indenture,
mortgage, security agreement, lease, franchise, permit, license or other
agreement or obligation to which it is a party or by which any of its properties
may be bound which default would cause a Material Adverse Effect. The Company is
paying its debts as they become due.
(d) Authorization and Compliance with Laws and Material
Agreements. Except as set forth on Schedule 3(d), the execution, delivery and
performance by the Company of this Agreement have been or prior to the
consummation of such transactions will be duly authorized by all requisite
action on the part of the Company and do not and will not violate any of the
Company's Certificate of Designations, or the Company's Articles of
Incorporation or Bylaws or any law or any order of any court, governmental
authority or arbitrator, and do not and will not upon the consummation of the
transactions contemplated hereby conflict with, result in a breach of, or
constitute a default under, or result in the imposition of any lien upon any
assets of the Company pursuant to the provisions of any loan agreement,
indenture, mortgage, security agreement, franchise, permit, license or other
instrument or agreement by which the Company or any of its properties is bound.
Except as set forth on Schedule 3(d), no authorization, approval or consent of,
and no filing or registration with, any court, governmental authority or third
person is or will be necessary for the execution, delivery or performance by the
Company of this Agreement or the validity or enforceability thereof. All such
authorizations, approvals, consents, filings and registrations described in
Schedule 3(d) have been obtained. The Company is not in violation of any term of
its Articles of Incorporation or Bylaws or any contract, agreement, judgment or
decree and is in full compliance with all applicable laws, regulations and rules
where such violation would cause a Material Adverse Effect. All officers of the
Company to the best of their knowledge have complied with all material
applicable laws, regulations and rules in the course and scope of their
employment with the Company.
(e) Litigation and Judgments. Except as disclosed on Schedule
3(e), there is no suit, action, proceeding or investigation pending or, to the
best knowledge of the Company, threatened against or affecting the Company or
the Subsidiary, the outcome of which, in the reasonable judgment of the Company,
is likely to have a Material Adverse Effect, nor is there any judgment, decree,
injunction, ruling or order of any court, governmental, regulatory or
administrative department, commission, agency or instrumentality, arbitrator or
any other person outstanding against the Company or the Subsidiary having, or
which is reasonably likely to have, a Material Adverse Effect.
(f) Rights in Properties; Liens. Except as disclosed on
Schedule 3(f), the Company and the Subsidiary have good and marketable title to
all properties and
assets reflected on their balance sheets, and none of such properties or assets
is subject to any liens. The Company and the Subsidiary enjoy peaceful and
undisturbed possession under all leases necessary for the operation of their
other properties, assets, and businesses and all such leases are valid and
subsisting and are in full force and effect. There exists no default under any
provision of any lease which would permit the lessor thereunder to terminate any
such lease or to exercise any rights under such lease which, individually or
together with all other such defaults, could have a Material Adverse Effect. The
Company and the Subsidiary have the right to use all of the patents, patent
rights, patent applications, licenses, inventions, trade secrets, know-how,
proprietary techniques (including processes and substances), trademarks, service
marks, trade names and copyrights (the "Intellectual Property") necessary to
their business as presently conducted, and to the knowledge of the Company and
the Subsidiary, the Company's and the Subsidiary's use of the Intellectual
Property does not infringe on the rights of any other person where such
infringement would not have a Material Adverse Effect. To the best of the
Company's knowledge, no other person is infringing the rights of the Company or
the Subsidiary in any of the Intellectual Property. Neither the Company nor the
Subsidiary owe any royalties, honoraria or fees to any person by reason of its
use of the Intellectual Property.
(g) Enforceability. This Agreement, when delivered, shall
constitute the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(h) Taxes. Except as set forth on Schedule 3(h), the Company
and the Subsidiary have timely filed all tax returns (federal, state, and local)
required to be filed, including, without limitation, all income, franchise,
employment, property, and sales taxes, and have timely paid all of their tax
liabilities, other than immaterial amounts and taxes that are being contested by
the Company or the Subsidiary in good faith by appropriate actions or
proceedings diligently pursued, and for which adequate reserves in conformity
with GAAP with respect thereto have been established. Neither the Company nor
the Subsidiary know of any pending investigation of the Company or the
Subsidiary by any taxing authority or pending but unassessed tax liability of
the Company or the Subsidiary, except as disclosed on Schedule 3(h). The Company
and the Subsidiary have made no presently effective waiver of any applicable
statute of limitations or request for an extension of time to file a tax return,
and neither the Company nor the Subsidiary are a party to any tax-sharing
agreement.
(i) Disclosure. No representation or warranty made by the
Company in this Agreement or in any of the documents, instruments, or other
information furnished to the Purchaser by the Company, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make any statements made therein not misleading. No representation,
warranty, or statement made by the Company in this Agreement or in any document,
certificate, exhibit or schedule attached hereto or thereto or delivered in
connection herewith or therewith, contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make any statements made herein or therein not misleading. There is no fact that
materially and adversely affects the condition (financial or otherwise), results
of operations, business, properties, or prospects of the Company or any of its
Subsidiaries that has not been disclosed in the documents provided to Purchaser.
(j) Subsidiaries and Capitalization. The Company has no
Subsidiaries, other than the Subsidiary. All the issued and outstanding shares
of capital stock of the Company are duly authorized, validly issued, fully paid
and nonassessable. The capitalization of the Company on the First Closing Date
is set forth on Schedule 3(j). No violation of any preemptive rights of
shareholders of the Company has occurred by virtue of the transactions
contemplated under this Agreement. There are no outstanding contracts, options,
warrants, instruments, documents or agreements binding upon the Company granting
to any person or group of persons any right to purchase or acquire shares of the
Company's capital stock other than as set forth on Schedule 3(j).
(k) Current Locations. Schedule 3(k) identifies (a) the
Company's principal place of business and chief executive office, (b) all the
locations where the Company maintains any books or records relating to any of
its assets, (c) all other locations where the Company has a place of business,
and (d) each address where any of the Company's assets are located. Schedule
3(k) accurately indicates whether each such location is owned or leased, and, if
leased, identifies the owner of such location. No person other than the Company
has possession of any material amount of the assets of the Company except as
disclosed on Schedule 3(k).
(l) Investment Company Act. Neither the Company, the
Subsidiary nor any company controlling the Company or the Subsidiary is required
to be registered as an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(m) Public Utility Holding Company Act. Neither the Company
nor the Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or a "public utility"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(n) Securities Laws. Assuming the truthfulness and accuracy of
each Purchaser's representations and warranties in Section 2, the Company has
complied with or is exempt from the registration and/or qualification
requirements of all federal and state securities or blue sky laws applicable to
the issuance or sale of the Securities.
(o) No Labor Disputes. Neither the Company nor the Subsidiary
is involved in any labor dispute. The Company is not a party to any collective
bargaining agreement, and there are no strikes or walkouts or union organization
of any of the Company's or the Subsidiary's employees threatened or in existence
and no labor contract is scheduled to expire during the term of this Agreement.
(p) Brokers. Except as described in Schedule 3(p), neither the
Company nor any of its shareholders has dealt with any broker, finder,
commission agent or other person in connection with the transactions referenced
in or contemplated by this Agreement, nor is the Company or any of its
shareholders under any obligation to pay any broker's fee or commission in
connection with such transactions.
(q) Insurance. The amount and types of insurance carried by
the
Company and the Subsidiary, and the terms and conditions thereof, are
substantially similar to the coverage maintained by companies in the same or
similar business as the Company and the Subsidiary and similarly situated.
(r) Survival of Representations. All representations made by
the Company in or under this Agreement shall be true and accurate as of the
First Closing and shall survive the First Closing for a period of two (2) years
thereafter (except for those changes contemplated in and provided for by this
Agreement).
4. Conditions to Obligations of the Purchasers at the Closings.
(a) First Closing. The obligation of each Purchaser purchasing
Shares at the First Closing to purchase such Shares shall be subject to the
fulfillment on or prior to the First Closing Date of the following conditions,
any of which may be waived by such Purchaser:
(i) Certificates. The Company shall have delivered to
each such Purchaser a duly executed certificate representing the Shares and the
Warrants issuable to such Purchaser.
(ii) Representations and Warranties; Performance of
Obligations. The representations and warranties of the Company set forth in this
Agreement shall be true and correct when made, and shall be true and correct on
the First Closing Date with the same force and effect as if they had been made
on and as of said date, except for representations and warranties made as of a
specific date which shall be true and correct as of such date. The Company shall
have performed, satisfied and complied with all obligations and conditions
required to be performed or observed by it under this Agreement on or prior to
the First Closing Date.
(iii) Consents and Waivers. The Company shall have
made all filings and obtained any and all consents (including, without
limitation, all governmental or regulatory consents), approvals or
authorizations, permits and waivers necessary or appropriate for consummation of
the transactions contemplated by this Agreement.
(iv) No Litigation or Legislation. No statute, rule,
regulation, decree, ruling or injunction shall have been enacted or entered, and
no litigation, proceeding, government inquiry or investigation shall be pending,
which challenges, prohibits or restricts, or seeks to prohibit or restrict, the
consummation of the transactions contemplated by this Agreement, or restricts or
impairs the ability of the Purchasers to own an equity interest in the Company.
(v) Compliance Certificate. The Company shall have
delivered to the Purchasers a certificate, executed by the Chief Executive
Officer of the Company, dated as of the First Closing Date, certifying to the
fulfillment of the conditions set forth in Sections 4(a)(ii), (iii), (iv), (v)
and (vi) and such other matters as the Purchasers shall reasonably request.
(vi) Registration Rights Agreement. The Company shall
have executed and delivered a Registration Rights Agreement with such Purchasers
in form and substance attached hereto as Exhibit B and incorporated herein by
reference.
(b) Second Closing. The obligation of each Purchaser
purchasing Shares at the Second Closing to purchase such Shares shall be subject
to the fulfillment on or prior to the Second Closing Date of the following
conditions, any of which may be waived by such Purchaser:
(i) Certificates. The Company shall have delivered to
each such Purchaser a duly executed certificate representing the Shares and the
Warrants issuable to such Purchaser.
(ii) Representations and Warranties; Performance of
Obligations. The representations and warranties of the Company set forth in this
Agreement shall be true and correct when made. The Company shall have performed,
satisfied and complied with all obligations and conditions required to be
performed or observed by it under this Agreement on or prior to the Second
Closing Date.
(iii) Consents and Waivers. The Company shall have
made all filings and obtained any and all consents (including, without
limitation, all governmental or regulatory consents), approvals or
authorizations, permits and waivers necessary or appropriate for consummation of
the transactions contemplated by this Agreement.
(iv) No Litigation or Legislation. No statute, rule,
regulation, decree, ruling or injunction shall have been enacted or entered, and
no litigation, proceeding, government inquiry or investigation shall be pending,
which challenges, prohibits or restricts, or seeks to prohibit or restrict, the
consummation of the transactions contemplated by this Agreement, or restricts or
impairs the ability of the Purchasers to own an equity interest in the Company.
(v) Compliance Certificate. The Company shall have
delivered to each such Purchaser a certificate, executed by the Chief Executive
Officer of the Company, dated as of the Second Closing Date, certifying to the
fulfillment of the conditions set forth in Sections 7(b)(ii),(iii), (iv), (v)
and (vi) and such other matters as the Purchasers shall reasonably request.
(vi) Registration Rights Agreement. The Company shall
have executed and delivered the Registration Rights Agreement with such
Purchasers.
5. Conditions to Obligation of the Company at the Closings.
(a) First Closing. The obligation of the Company to sell and
issue the Shares and the Warrants to the Purchasers at the First Closing shall
be subject to the fulfillment on or prior to the First Closing Date of the
following conditions, any of which may be waived by the Company:
(i) Purchase Price. Each such Purchaser shall have
delivered the purchase price for the Shares to be purchased by such Purchaser
hereunder.
(ii) Representations and Warranties. The
representations and warranties made by such Purchasers in this Agreement shall
be true and correct when made, and shall be true and correct on the First
Closing Date with the same force and effect as if they had been made on and as
of said date.
(iii) No Litigation or Legislation. No Federal, State
or local statute, rule, regulation, decree, ruling or injunction shall have been
enacted or entered, and no litigation, proceeding, government inquiry or
investigation shall be pending, which challenges, prohibits, restricts, or seeks
to prohibit or restrict, the consummation of the transactions contemplated by
this Agreement or the other agreements referred to herein, or restricts or
impairs the ability of any Purchaser to own an equity interest in the Company.
(b) Second Closing. The obligation of the Company to sell and
issue the Shares and the Warrants to each Purchaser at the Second Closing shall
be subject to the fulfillment on or prior to the Second Closing Date of the
following conditions, any of which may be waived by the Company:
(i) Purchase Price. Each such Purchaser shall have
delivered the purchase price for the Shares to be purchased by such Purchaser
hereunder.
(ii) Representations and Warranties. The
representations and warranties made by such Purchasers in this Agreement shall
be true and correct when made, and shall be true and correct on the Second
Closing Date with the same force and effect as if they had been made on and as
of said date.
(iii) No Litigation or Legislation. No Federal, State
or local statute, rule, regulation, decree, ruling or injunction shall have been
enacted or entered, and no litigation, proceeding, government inquiry or
investigation shall be pending, which challenges, prohibits, restricts, or seeks
to prohibit or restrict, the consummation of the transactions contemplated by
this Agreement or the other agreements referred to herein, or restricts or
impairs the ability of any Purchaser to own an equity interest in the Company.
6. Miscellaneous.
(a) Remedies. Any person having any rights under any provision
of this Agreement will be entitled to enforce such rights specifically, to
recover damages by reason of any breach of any provision of this Agreement, and
to exercise all other rights granted by law, which rights may be exercised
cumulatively and not alternatively.
(b) Consent to Amendments. Except as otherwise expressly
provided herein, the provisions of this Agreement and any exhibit attached
hereto may be amended and the Company take any action herein prohibited, or omit
to perform any act herein required to be performed by it, only if it has
obtained the written consent of Purchasers holding at least sixty-six and
two-thirds percent (66-2/3%) or more of the outstanding Shares. No course of
dealing between the Company and any Purchaser or any delay in exercising any
rights hereunder or under the Corporation's Articles of Incorporation will
operate as a waiver of any rights of any such Purchaser.
(c) Successors and Assigns. Except as otherwise expressly
provided herein, all covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto whether so expressed
or not.
(d) Severability. Each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
(e) Counterparts. This Agreement may be executed in two or
more counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts when taken together shall constitute one
and the same Agreement.
(f) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(g) Notices. Except as otherwise expressly provided herein,
all communications provided for hereunder shall be in writing and delivered or
mailed by the United States mails, certified mail, return receipt requested, (a)
if to Purchaser, addressed to each Purchaser at the address specified on
Schedule I hereto or to such other address as such Purchaser may in writing
designate, or (b) if to the Company, addressed to the Company at the address set
forth below or to such other address as the Company may in writing designate.
Notices shall be deemed to have been validly served, given or delivered (and
"the date of such notice or words of similar effect shall mean the date) five
(5) days after deposit in the United States mails, certified mail, return
receipt requested, with proper postage prepaid, or upon actual receipt thereof
(whether by noncertified mail, telecopy, telegram, facsimile, express delivery
or otherwise), whichever is earlier.
If to Purchasers:
To the Addresses set forth on the
Signature Pages
If to the Corporation
Valuestar Corporation
Attn: Xxx Xxxxx
000 - 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
FAX: (000) 000-0000
With a Copy to:
Bay Venture Counsel, LLP
Attn: Xxxxxx X. Xxxxxx, Esq.
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
FAX: (000) 000-0000
(h) Governing Law. The validity, meaning and effect of this
Agreement shall be determined in accordance with the laws of California
applicable to contracts made and to be performed entirely in California as if by
and between California residents.
(i) Schedules and Exhibits. All schedules and exhibits are an
integral part of this Agreement.
(j) Litigation Costs. If any legal action, arbitration or
other proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in connection with any
of the provisions of this Agreement, the successful or prevailing party or
parties therein shall be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.
(k) Final Agreement. This Agreement and the exhibits and
schedules attached hereto constitute the only agreement of the parties
concerning the matters herein, and supersedes, merges and renders void all prior
written/oral, and/or contemporaneous agreements and understandings related
thereto.
(l) Confidentiality. Each Purchaser agrees to keep
confidential any information delivered by the Company or Subsidiary to such
Purchaser under this Agreement that the Company or Subsidiary clearly indicates
in writing to be confidential information; provided, however, that nothing in
this Section 6(l) will prevent such Purchaser from disclosing such information
(a) to any affiliate of such Purchaser or any actual or potential purchaser,
participant, assignee, or transferee of such Purchaser's rights or obligations
hereunder that agrees to be bound by the terms of this Section 6(l), (b) upon
order of any court or administrative agency, (c) upon the request or demand of
any regulatory agency or authority having jurisdiction over such Purchaser, (d)
that is in the public domain, (e) that has been obtained from any Person that is
not a party to this Agreement or an affiliate of any such party without breach
by such Person of a confidentiality obligation known to such Purchaser, (f) if
necessary and only to the extent necessary for the exercise of any remedy under
this Agreement, or (g) to the certified public accountants for such Purchaser.
The Company agrees that such Purchaser will be presumed to have met its
obligations under this Section 6(l) to the extent that it exercises the same
degree of care with respect to information provided by the Corporation or
Subsidiary as it exercises with respect to its own information of similar
character.
(m) Public Disclosure. Except as may be required to comply
with applicable law, no Purchaser shall make or cause to be made any press
release or similar public announcement
(SIGNATURES FOLLOW ON NEXT PAGE)
Signature Page to Securities Purchase Agreement between ValueStar
Corporation and the Undersigned Purchaser
IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the respective Closing dates.
VALUESTAR CORPORATION
By: /s/ XXXXX XXXXX
(Signature)
Xxxxx Xxxxx, President and CEO
Print Name and Title
Signature Page to Securities Purchase Agreement between ValueStar
Corporation and the Undersigned Purchaser
(Individual Pages Differ as to Holder's Name, Personal Information and Amount
of Investment)
PURCHASER
By: ___________________________________
(Signature)
_______________________________________
Print Name and Title
ADDRESS
_______________________________________
_______________________________________
_______________________________________
_______________________________________
TELEPHONE AND FAX NUMBERS
TEL: __________________________________
FAX: __________________________________
AGGREGATE INVESTMENT AMOUNT
$ _____________________________________
