EXHIBIT 4.19.2
SECOND AMENDMENT TO SHAREHOLDER AGREEMENT
This SECOND AMENDMENT TO SHAREHOLDER AGREEMENT (this "Amendment") made
as of December 8, 1999, by and among VALUESTAR CORPORATION, a Colorado
corporation (the "Company"), 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") (individually and collectively,
"Purchaser"), and Jim Stein ("Stein"), James A. Barnes ("Barnes"), and Jerry E.
Polis ("Polis") (individually and collectively, the "Shareholder").
WHEREAS, the Company, Purchaser and Shareholder have entered into that
certain Shareholder Agreement, dated as of March 31, 1999, as amended on July
22, 1999 (the "Original Agreement" and, as further amended hereby, the
"Agreement")
WHEREAS, in connection with a Series B Preferred Stock financing of the
Company, the Company and certain investors in the Series B Preferred Stock have
requested that Purchaser and Shareholder make certain amendments to the Original
Agreement, and Purchaser and Shareholder are willing to do so upon the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
1. DEFINITIONS. All capitalized terms used but not otherwise defined in
this Amendment shall have the meanings ascribed to them in the Agreement. Unless
otherwise specified, all section references herein refer to sections of the
Original Agreement.
2. Amendment to ARTICLE ii. Article II is hereby amended and restated
to terminate all the provisions thereof and read as follows in its entity:
"Article II
Holders' Preemptive Rights
Reserved."
3. Amendment to ARTICLE IV. Article IV is hereby amended and restated
to terminate all the provisions thereof and read as follows in its entity:
"Article IV
Drag Along Rights and Call Option Upon Exercise of Drag Along Rights
Reserved."
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4. Amendment to ARTICLE VII. Article VII is hereby amended and restated
to terminate all the provisions thereof and read as follows in its entity:
"Article VII
Liquidity
Reserved."
5. AMENDMENT TO SECTION 8.02. Section 8.02 is hereby amended and
restated to read as follows in its entity:
"8.02 Board of Directors. Until the expiration of the
agreement to vote in this Article VIII, subject to applicable state
law, Seacoast shall be entitled to designate one (1) member to the
Company's Board of Directors (the "Purchaser Director"). Seacoast shall
not have the obligation to designate a member to the Company's Board of
Directors. The Shareholder shall (i) vote all shares of Capital Stock
now owned or later acquired by such Shareholder to the extent such
Shareholder then owns such Capital Stock (the "Voting Shares") at all
regular and special meetings of the stockholders of the Company called
or held for the purpose of filling positions on the Board of Directors,
and in each written consent executed in lieu of such a meeting of
stockholders, and each Shareholder shall take all actions otherwise
necessary, to ensure (to the extent within such Shareholder's
collective control) the election to the Board of Directors of the
Purchaser Director and (ii) not vote their Voting Shares for the
removal of the Purchaser Director unless requested by Seacoast. Any
Purchaser Director vacancy created or existing on the Company's Board
of Directors shall be filled by a successor Purchaser Director who
shall be elected in a manner by which his or her predecessor was
elected or entitled to be elected as provided above if so requested by
Seacoast.
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 materials 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 permit each Purchaser to designate one (1) person to
attend all meetings of the Company's Board of Directors (including
executive committee meetings) as follows: 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, Pacific or Tangent they
have a representative as a member of the Board of Directors. The
Company will also: (a) provide such designees not less than fourteen
(14) calendar days' actual notice of all regular meetings and of all
special meetings of the Company's Board of Directors (including the
executive committee thereof) or shareholder, (b) permit such designees
to attend such meetings as an observer and (c) provide to such
designees a copy of all materials distributed at such meetings or
otherwise to the Board of Directors of the Company. Such meetings shall
be held in person at least quarterly, and the Company will cause its
Board of Directors to call a meeting at any time upon the request of
either Seacoast or Pacific not more than two (2) occasions per calendar
year upon fourteen (14) calendar days' actual notice to the Company.
The Company agrees to reimburse each individual referred to in
Subsection (b) 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
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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."
4. MISCELLANEOUS.
4.1 Survival of Representations and Warranties. All representations and
warranties made in the Original Agreement, including, without limitation, any
document furnished in connection with this Amendment, shall survive the
execution and delivery of this Amendment and the Other Agreements, and no
investigation by Purchaser or any closing shall affect the representations and
warranties or the right of Purchaser to rely upon them.
4.2 Reference to Original Agreement. The Original Agreement and any and
all other agreements, documents or instruments now or hereafter executed and
delivered pursuant to the terms hereof or pursuant to the terms of the Original
Agreement, as amended hereby, are hereby amended so that any reference in the
Original Agreement and such other Agreements to the Original Agreement shall
mean a reference to the Original Agreement as amended hereby.
4.3 Expenses of Purchaser. As provided in the Original Agreement, the
Company agrees to pay on demand all costs and expenses incurred by Purchaser in
connection with the preparation, negotiation and execution of this Amendment and
any other agreements executed pursuant hereto, including, without limitation,
the reasonable costs and fees of Purchaser's legal counsel.
4.4 Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
4.5 Successors and Assigns. This Amendment will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
permitted assigns.
4.6 Headings. The headings of the sections and subsections of this
Amendment are inserted for convenience only and do not constitute a part of this
Amendment.
4.7 Counterparts. This Amendment may be executed in any number of
counterparts, which shall collectively constitute one agreement.
4.8 Law Governing. THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN
SUBSTANTIALLY NEGOTIATED AND MADE IN THE STATE OF CALIFORNIA AND SHALL BE
INTERPRETED AND THE RIGHTS OF THE PARTIES DETERMINED IN ACCORDANCE WITH THE LAWS
OF THE UNITED STATES APPLICABLE THERETO AND THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA APPLICABLE TO AN AGREEMENT EXECUTED, DELIVERED AND PERFORMED THEREIN,
WITHOUT GIVING EFFECT TO THE CHOICE-OF-LAW RULES THEREOF OR ANY OTHER PRINCIPLE
THAT COULD REQUIRE THE APPLICATION OF THE SUBSTANTIVE LAW OF ANY OTHER
JURISDICTION.
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4.9 Waiver; Modification. NO PROVISION OF THIS AMENDMENT MAY BE WAIVED,
CHANGED OR MODIFIED, OR THE DISCHARGE THEREOF ACKNOWLEDGED, ORALLY, BUT ONLY BY
AN AGREEMENT IN WRITING SIGNED BY THE PARTY AGAINST WHOM THE ENFORCEMENT OF ANY
WAIVER, CHANGE, MODIFICATION OR DISCHARGE IS SOUGHT.
4.10 Final Agreement. THE ORIGINAL AGREEMENT, AS AMENDED HEREBY,
REPRESENTS THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND THEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE ORIGINAL
AGREEMENT, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the Company, Purchaser and Shareholder have caused
this Amendment to be executed and delivered as of the date first written.
COMPANY:
VALUESTAR CORPORATION
By: /s/ JAMES STEIN
---------------
Name: James Stein
Its: President and Chief Executive Officer
SHAREHOLDER:
/s/ JAMES STEIN
---------------
James Stein
/s/ JAMES A. BARNES
-------------------
James A. Barnes, individually, as President
of Sunrise Capital, Inc. and General Partner
of Tiffany Investments, and as General
Partner of Tiffany Investments Limited
Partnership
/s/ JERRY E. POLIS
------------------
Jerry E. Polis, individually, as President
of Davric Corporation and Trustee of the
Jerry E. Polis Family Trust
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PURCHASER:
SEACOAST CAPITAL PARTNERS LIMITED
PARTNERSHIP
By: Seacoast Capital Corporation,
its general partner
By: /s/ JEFFREY J. HOLLAND
----------------------
Name: Jeffrey J. Holland
Its: Vice President
PACIFIC MEZZANINE FUND, L.P.
By: Pacific Private Capital
its general partner
By: /s/ ANDREW DUMKE
----------------
Name: Andrew Dumke
Its: General Partner
TANGENT GROWTH FUND, L.P.
By: Tangent Fund Management, LLC
its general partner
By: /s/ MARK P. GILLES
------------------
Name: Mark P. Gilles
Its: Vice President