EXHIBIT 10.1
SECURITIES PURCHASE AGREEMENT, dated as of June ___, 2003, by and among
CHARTER CAPITAL, RESOURCES INC., a Delaware limited liability company with
offices at 0000 Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000 ("Charter
Capital") and TRINHTT XXX, an individual residing at 000 Xxxx 00xx Xxxxxx, #0X,
Xxx Xxxx, XX 00000 ("Xxx" and together with Charter Capital, the "Purchasers")
and VISUAL DATA CORPORATION, a Florida corporation with executive offices at
0000 XX 00 Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000 (the "Company").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Purchasers desire to acquire from the Company, and the
Company desires to sell to Purchaser, an aggregate of Fifty Thousand (50,000)
shares (the "Shares") of Series A-9 Convertible Preferred Stock, par value
$0.0001 per share, of the Company having the rights, designations and
preferences set forth on EXHIBIT A hereto ("Series A-9 Preferred") in two
tranches in accordance with, and subject to, the terms and conditions
hereinafter set forth; and
WHEREAS, in order to induce the Purchaser to execute this Agreement and
to purchase the Shares, the Company desires to issue to the Purchasers warrants
(the "Warrants"), the form of which is attached hereto as EXHIBIT B, exercisable
for an aggregate of Sixteen Thousand Six Hundred Sixty Six (16,666) shares (the
"Warrant Shares") of Common Stock, par value $.0001 per share of the Company
(the "Common Stock"), and the Company desires to issue such securities, in each
case in accordance with, and subject to the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of respective covenants, promises, and
obligations contained herein, the parties hereto hereby agree as follows:
I. DEFINITIONS
CLOSINGS. As defined in Section 4.02(b) hereof.
CODE. The Internal Revenue Code of 1986, as amended.
COMMON STOCK. As defined in the recitals hereto.
COMPANY. As defined in the introductory paragraph hereto.
CONVERSION SHARES. The shares of Common Stock issuable upon conversion
of the Shares and such other shares of Class A-9 Preferred Stock hereafter
acquired by the Purchasers.
EMPLOYEE BENEFIT PLAN. As defined in Section 3(3) of ERISA.
ERISA. Employee Retirement Income Security Act of 1974, as amended.
EXCHANGE ACT. Securities Exchange Act of 1934, as amended.
INDEMNITEES. As defined in Section 4.04 hereof.
PURCHASER. As defined in the introductory paragraph hereto.
SEC MATERIALS. The Definitive Proxy Statement of the Company on
Schedule 14A dated May 20, 2003, Annual Report on Form 10-KSB for the year ended
September 30, 2002, the Quarterly Report on Form 10-QSB of the Company for the
six ended March 31, 2003, the Quarterly Report on Form 10-QSB of the Company for
the three months ended December 31, 2002, Current Reports on Form 8-K of the
Company dated March 26, 2003, May 12, 2003, May 19, 2003, May 29, 2003 and June
23, 2003, collectively, as filed with the United States Securities and Exchange
Commission.
SECURITIES ACT. Securities Act of 1933, as amended.
SHARES. As defined in the recitals hereof.
SUBSIDIARIES. Entertainment Digital Network, Inc.,
Hotelview(R)Corporation, ResortView Corporation, MediaOnDemand, Inc.,
XxxXxxxxXxxx.xxx, Inc.
TRANCHE 1 CLOSING. As defined in Section 4.2(a).
TRANCHE 1 CLOSING DATE. As defined in Section 4.2(a).
TRANCHE 2 CLOSING. As defined in Section 4.2(b).
TRANCHE 2 CLOSING DATE. As defined in Section 4.2(b).
TRANCHE 1 SHARES. 30,000 Shares.
TRANCHE 2 SHARES. 20,000 Shares.
TRANCHE 1 WARRANT. A Warrant to purchase 10,000 shares of Common Stock
dated as of the Tranche 1 Closing Date.
TRANCHE 2 WARRANT. A Warrant to purchase 6,666 shares of Common Stock
dated as of the Tranche 2 Closing Date.
TRANSACTION AGREEMENTS. This Agreement and the Warrants collectively.
WARRANTS. As defined in the recitals hereof and collectively the
Tranche 1 Warrant and the Tranche 2 Warrant.
WARRANT SHARES. As defined in the recitals hereof.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser as follows:
SECTION 2.01 ORGANIZATION AND QUALIFICATION.
Each of the Company and each Subsidiary has been duly organized and is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to
own its properties and conduct its business as described in the SEC Materials
and is duly qualified or licensed to do business as a foreign corporation and is
2
in good standing in each other jurisdiction in which the nature of its business
or the character or location of its properties requires such qualification,
except where the failure to so qualify will not materially affect the financial
condition, business, properties, net worth or results of operations of the
Company and the Subsidiaries, taken as a whole. Except for the stock of its
subsidiaries and as set forth in the SEC Materials, the Company does not
control, directly or indirectly, any corporation, partnership, joint venture,
association or other business organization.
SECTION 2.02 CAPITALIZATION.
The authorized capital stock of the Company consists of 75,000,000
shares of Common Stock, par value $.0001 per share, of which 2,467,608 shares
are outstanding, and 5,000,000 shares of preferred stock, par value $.0001 per
share, of which (i) 300,000 shares of Class A-6 Preferred Stock are authorized
of which none are outstanding, (ii) 162,500 shares of Class A-7 Preferred Stock
are authorized, of which 86,832 shares are outstanding, (iii) 300,000 shares of
Class A-8 Preferred Stock are authorized, of which 268,000 shares are
outstanding, (iv) 100,000 shares of Class A-9 Preferred Stock are authorized, of
which none are outstanding. Each of such outstanding shares of Common Stock and
Preferred Stock is validly authorized, validly issued, fully paid, and
nonassessable, has not been issued and is not owned or held in violation of any
preemptive or similar right of stockholders, and is owned, to the knowledge of
the Company, free and clear of all liens, security interests, pledges, charges,
encumbrances, stockholders' agreements, and voting trusts. Except as set forth
in the SEC Materials, there is no commitment, plan, or arrangement to issue, and
no outstanding option, warrant, or other right calling for the issuance of, any
share of capital stock of the Company or any security or other instrument
convertible into, exercisable for, or exchangeable for capital stock of the
Company. There is outstanding no security or other instrument convertible into
or exchangeable for capital stock of the Company.
SECTION 2.03 ENFORCEABILITY; VALIDITY.
The Warrants, when executed and delivered pursuant to this Agreement,
will constitute the valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as enforceability may
be limited by applicable bankruptcy, insolvency or other laws affecting the
rights of creditors generally and the discretion of the courts in granting
equitable remedies. The Conversion Shares and the Warrant Shares, when issued
and delivered pursuant to, and upon exercise or conversion, as the case may be,
of, the Shares or the Warrants, as the case may be, will be duly authorized and
issued, fully-paid, and nonassessable and free of preemptive rights of any
security holder of the Company. The Shares and the Warrants when executed and
delivered in accordance with the terms hereof will be duly authorized and
issued, fully-paid, and nonassessable and free of preemptive rights of any
security holder of the Company.
SECTION 2.04 AUTHORIZATION.
Each of the Transaction Agreements has been duly and validly
authorized. Each of the Transaction Agreements has been executed and delivered
by the Company and, assuming due execution by the other party hereto and
thereto, as applicable, each constitutes the valid and binding obligation of the
Company enforceable against the Company in accordance with its respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency or
other laws affecting the rights of creditors generally and the discretion of the
courts in granting equitable remedies. The Company has full corporate power and
lawful authority to authorize, execute, and deliver the Shares and the
Conversion Shares upon the conversion thereof, the Warrants and the Warrant
Shares upon the exercise thereof on the terms and conditions set forth herein.
No consent, approval, authorization or order of, or any filing or declaration
with, any governmental authority is required for the consummation of the
transactions contemplated by this Agreement or in connection with the execution
and delivery of the Shares, the Conversion Shares, the Warrants or the Warrant
Shares by the Company, except such as may be required under Federal or state
securities or Blue Sky laws.
3
SECTION 2.05 NO CONFLICTS.
Except as described in the SEC Materials, neither the Company nor any
of its Subsidiaries is in violation, breach, or default (which includes any
event that has occurred which, with notice or lapse of time or both, would
constitute a default) of or under, and consummation of the transactions herein
contemplated and the fulfillment of the terms of the Transaction Agreements will
not conflict with, or result in a breach of, any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of the Company or
any of its Subsidiary pursuant to the terms of any material indenture, mortgage,
deed of trust, loan agreement, or other material agreement or material
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary may be bound or to which any of the material property
or assets of the Company or any Subsidiary is subject, nor will such action
result in any violation of the provisions of the articles of incorporation or
other constitutive documents or any order, rule, or regulation applicable to the
Company or any Subsidiary of any court or any regulatory authority or other
governmental body having jurisdiction over the Company or any Subsidiary.
SECTION 2.06 PROPERTIES.
Subject to the qualifications set forth in the SEC Materials, each of
the Company and each Subsidiary has good and marketable title to all properties
and assets described in the SEC Materials as owned by them, free and clear of
all liens, charges, encumbrances or restrictions, except such as are not
materially significant or important in relation to its business; all of the
material leases and subleases under which the Company or any Subsidiary is the
lessor or sublessor of properties or assets or under which the Company or any
Subsidiary holds properties or assets as lessee or sublessee as described in the
SEC Materials are in full force and effect, and, except as described in the SEC
Materials, neither the Company nor any Subsidiary is in default in any material
respect with respect to any of the terms or provisions of any of such leases or
subleases, and, to the Company's knowledge, no claim has been asserted by anyone
adverse to rights of the Company or any Subsidiary as lessor, sublessor, lessee
or sublessee under any of the leases or subleases mentioned above, or affecting
or questioning the right of the Company or a Subsidiary to continued possession
of the leased or subleased premises or assets under any such lease or sublease,
except as described or referred to in the SEC Materials.
SECTION 2.07 FINANCIAL CONDITION; FINANCIAL MATTERS.
(a) The consolidated financial statements and the related
notes of the Company set forth in the SEC Materials present fairly the
consolidated financial position and results of operations and changes in
stockholders' equity and cash flows of the Company on a consistent basis at the
respective dates and for the respective periods to which they apply. Said
financial statements and notes have been prepared in accordance with generally
accepted accounting principles applied on a basis which is consistent during the
periods involved. There has been no material adverse change in the condition
(financial or otherwise), business, properties, net worth or results of
operations of the Company and its subsidiaries, taken as a whole, from the
latest information set forth in the SEC Materials, except as properly described
in the SEC Materials.
(b) Subsequent to the respective dates as of which information
is given in the SEC Materials and except as described therein, the Company has
not paid or declared any dividends or other distributions of any kind on any
class of its capital stock, other than amounts due under the Company's Series
A-7 Preferred which amounts to approximately $29,000 as of the date of this
Agreement and is expected to be paid primarily in Common Stock, nor has it
incurred any liabilities or obligations, direct or contingent, not in the
ordinary course of business, or entered into any transaction not in the ordinary
course of business, which is material to the business of the Company, and there
has not been any material change in the capital stock of, or any material
4
incurrence of long-term debt by the Company or its Subsidiaries or any material
issuance of options, warrants, or other rights to purchase the capital stock of
the Company or its Subsidiaries or any material adverse change or any material
development involving, so far as the Company or any Subsidiary can now
reasonably foresee, a prospective adverse change in the financial condition, net
worth, results of operations, business, key personnel, or properties of the
Company or its Subsidiaries which would be material to the business or financial
condition of the Company and its Subsidiaries, taken as a whole, and neither the
Company nor its Subsidiaries has become a party to, and neither the business nor
the property of the Company or its subsidiaries has become the subject of, any
material litigation whether or not in the ordinary course of business.
(c) The books, records and accounts and systems of internal
accounting controls of the Company currently comply in all material respects
with the requirements of Section 13(b)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The Company maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
SECTION 2.08 LITIGATION.
Except as set forth in the SEC Materials, there is not now pending or,
to the knowledge of the Company, threatened, any action, suit, or proceeding to
which the Company or any Subsidiary is a party before or by any court or
governmental agency or body, which would result in any material adverse change
in the financial condition, business, properties, net worth, or results of
operations of the Company and its subsidiary, taken as a whole, nor are there
any actions, suits, or proceedings related to environmental matters or related
to discrimination on the basis of age, sex, religion, or race; and no labor
disputes involving the employees of the Company or any Subsidiary exist or, to
the Company's knowledge, are threatened which might be expected to materially
adversely affect the condition (financial or otherwise), business, properties,
net worth, or results of operations of the Company and its Subsidiaries, taken
as a whole.
SECTION 2.09 PERMITS; COMPLIANCE WITH LAWS.
Except as disclosed in the SEC Materials, each of the Company and the
Subsidiaries has sufficient licenses, permits, certificates, and other
governmental authorizations as are reasonably required for the conduct of its
business or the ownership of its property as described in the SEC Materials and
are in all material respects complying therewith. Neither the Company nor any
Subsidiary has received any written notice of proceedings relating to the
revocation or modification of any such material certificate, authorization, or
permit nor, to the knowledge of the Company or the Subsidiaries, do any of the
activities or business of the Company or any Subsidiary cause the Company or any
Subsidiary to be in violation of, or cause the Company or any Subsidiary to
violate, any law, rule, regulation, or order of the United States, any state,
county, or locality, or of any agency or body of the United States or of any
state, county, or locality, the violation of which would have a material adverse
impact upon the financial condition, business, properties, net worth, or results
of operations of the Company and the Subsidiaries, taken as a whole.
Except as set forth in the SEC Materials, the business and operations
of the Company and each of its Subsidiaries have been operated in compliance
with all laws applicable thereto, except for any instances of non-compliance
which, individually or in the aggregate, have not had and would not be
reasonably likely in the future to have a material adverse effect on the
business prospects, financial condition or results of operations of the Company
and its Subsidiaries, taken as a whole.
5
SECTION 2.10 QUESTIONABLE PAYMENTS.
Neither the Company nor any Subsidiary has directly or indirectly, at
any time (i) made any contributions to any candidate for political office, or
failed to disclose fully any such contribution in violation of law or (ii) made
any payment to any state, federal, or foreign governmental officer or official,
or other person charged with similar public or quasi-public duties, other than
payments or contributions required or allowed by applicable law. The Company's
internal accounting controls and procedures are sufficient to cause the Company
to comply in all material respects with the Foreign Corrupt Practices Act of
1977, as amended.
SECTION 2.11 TRANSFER TAXES.
At the date of this Agreement, all transfer or other taxes (including
franchise, capital stock, or other tax, other than income taxes, imposed by any
jurisdiction), if any, which are required to be paid in connection with the
execution and delivery of the Shares and the Warrants to the Purchaser hereunder
will have been fully paid or provided for by the Company and all laws imposing
such taxes will have been fully complied with in all material respects.
SECTION 2.12 BROKERS; FINDERS.
Except as set forth in Schedule 2.12, the Company has not entered into
any agreement pursuant to which any person is entitled, either directly or
indirectly, to compensation from the Company for services as a finder in
connection with the offering referred to herein.
SECTION 2.13 EMPLOYMENT MATTERS.
(a) The Company has entered into employment contracts with its
principal executive officers, including Xxxxx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxx
Xxxxxxx and Xxxx Xxxxxx, and the description of such employment agreements in
the SEC Materials is true, correct, and complete in all material respects.
(b) No labor dispute with the employees of the Company or its
Subsidiaries exists or is threatened or imminent that could result in a material
adverse change in the financial condition, business, properties, net worth or
results of operations of the Company, except as described in or contemplated by
the SEC Materials.
SECTION 2.14 INTELLECTUAL PROPERTY.
The Company owns or possesses, or can acquire on reasonable terms, all
material patents, patent applications, trademarks, service marks, trade names,
licenses, copyrights and proprietary or other confidential information currently
employed by them in connection with their respective businesses, and the Company
has not received any written notice of infringement of or conflict with asserted
rights of any third party with respect to any of the foregoing, which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or funding,
would result in a material adverse change in the financial condition, business,
properties, net worth or results of operations of the Company and the
Subsidiaries, taken as a whole, except as described in or contemplated by the
SEC Materials.
SECTION 2.15 INSURANCE.
The Company is insured against such losses and risks and in such amount
as the Company believes are prudent.
SECTION 2.16 INVESTMENT COMPANY.
The Company is not and will conduct its operations in a manner that it
will not be subject to registration as an investment company under the
Investment Company Act of 1940, as amended.
6
SECTION 2.17 TAX RETURNS.
The Company has filed all foreign, federal, state, and local tax
returns that are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file would not have a material
adverse effect on the Company and the Subsidiary, taken as a whole) and has paid
all taxes required to be paid and any other assessment, fine, or penalty levied,
to the extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good faith or
as described in or contemplated by the SEC Materials.
SECTION 2.18 QUOTATION OF COMMON STOCK.
The Common Stock is listed on the Nasdaq SmallCap Market under the
symbol "VDATC". Other than as dislcosed in the SEC Materials, the Company has
not received any communication (written or oral) regarding its continued listing
eligibility on the Nasdaq SmallCap Market.
SECTION 2.19 SECURITIES FILINGS.
The Company, and to the extent applicable, each of its Subsidiaries,
has filed all forms, reports, statements and documents required to be filed with
the Securities and Exchange Commission since May 2000, each of which has
complied in all material respects with the applicable requirements of the
Securities Act or the Exchange Act. As of their respect dates, or as of the date
of the last amendment thereof, if amended after filing, none of the SEC
Materials contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
III. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Each Purchaser, severally but not jointly, represents and warrants to
the Company as follows:
SECTION 3.01 ORGANIZATION AND QUALIFICATION.
The Purchaser is an individual or a limited liability company duly
organized, validly existing, and in good standing under the laws of its state of
formation, as the case may be, with all requisite power and authority (limited
liability company and otherwise), and all necessary consents, authorizations,
approvals, orders, licenses, certificates, and permits of and from, and
declarations and filings with, all federal, state, local, and other governmental
authorities and all courts and other tribunals, to own, lease, license, and use
its properties and assets and to carry on the business in which it is now
engaged and the respective business in which it contemplates engaging. The
Purchaser is duly qualified to transact the respective business in which it is
engaged and is, if not an individual, in good standing as a foreign limited
liability company in every jurisdiction in which its ownership, leasing,
licensing, or use of property or assets or the conduct of its business makes
such qualification necessary.
SECTION 3.02 AUTHORIZATION.
Each of the Transaction Agreements have been duly and validly
authorized by the Purchaser. Each of the Transaction Agreements has been
executed and delivered by the Purchaser, as appropriate, and, assuming due
execution by the other party hereto and thereto, as applicable, each constitutes
the valid and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency or other laws affecting the
rights of creditors generally and the discretion of the courts in granting
equitable remedies. No consent, approval, authorization or order of, or any
filing or declaration with, any governmental authority is required for the
consummation of the transactions contemplated by the Transaction Agreements,
except such as may be required under Federal or state securities or Blue Sky
laws.
7
SECTION 3.03 NON-DISTRIBUTIVE INTENT.
The Purchaser is acquiring the Shares, the Conversion Shares issuable
upon conversion thereof, the Warrants, and the Warrant Shares issuable upon the
exercise thereof, for its own account (and not for the account of others) for
investment and not with a view to the distribution thereof. The Purchaser will
not sell or otherwise dispose of such securities without registration under the
Securities Act or an exemption therefrom, and registration or qualification
under applicable state securities or "blue sky" laws, or an exemption therefrom,
and the certificate or certificates representing such securities may contain a
legend to the foregoing effect. By virtue of its position, the Purchaser has
access to the kind of financial and other information about the Company as would
be contained in a registration statement filed under the Securities Act. The
Purchaser understands that it may not sell or otherwise dispose of such
securities in the absence of either a registration statement under the
Securities Act and compliance with such state securities or "blue sky" laws or
an exemption from the registration provisions of the Securities Act and the
registration or qualification provisions of such state securities or "blue sky"
laws.
SECTION 3.04 COMPLETENESS OF DISCLOSURE.
No representation or warranty by the Purchaser in any Transaction
Agreement contains an untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
made therein not misleading.
SECTION 3.05 ACCREDITED INVESTOR.
The Purchaser is an "accredited investor" as defined in Rule 501 under
the Securities Act.
SECTION 3.06 NO CONFLICTS.
The Purchaser is not in violation, breach, or default (which includes
any event that has occurred which, with notice or lapse of time or both, would
constitute a default) of or under, and consummation of the transactions herein
contemplated and the fulfillment of the terms of the Transaction Agreements will
not conflict with, or result in a breach of, any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the property or assets of the Purchaser
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
or other agreement or instrument to which the Purchaser is a party or by which
the Purchaser may be bound or to which any of the property or assets of the
Purchaser is subject, nor will such action result in any violation of the
provisions of the articles of incorporation or other constitutive documents or
any order, rule, or regulation applicable to the Purchaser of any court or any
regulatory authority or other governmental body having jurisdiction over the
Purchaser.
IV. PURCHASE AND SALE
SECTION 4.01 PURCHASES OF THE SHARES AND WARRANTS.
On the basis of the representations, warranties, covenants, and
agreements contained in this Agreement and subject to the terms and conditions
of this Agreement:
(a) TRANCHE 1 PURCHASE
(i) Simultaneous with the execution hereof, the Company shall
(i) issue to the Purchasers the Tranche 1 Shares and the Tranche 1 Warrants in
such numbers set forth opposite each Purchaser's name on SCHEDULE 1 hereto, and
(ii) each of the Transaction Agreements.
8
(ii) Simultaneous with the execution hereof, each Purchaser
shall execute and deliver to the Company (i) the portion of the Tranche 1
Purchase Price set forth opposite such Purchaser's name on SCHEDULE 1 hereto, by
bank check or wire transfer of immediately available funds to such account as
the Company may designate in writing in advance to such Purchaser, and (ii) each
of the Transaction Agreements.
(b) TRANCHE 2 PURCHASE
(i) Subject to satisfaction or waiver of the conditions to
closing set forth in Section 4.03, on the Tranche 2 Closing Date, the Company
shall issue to each Purchaser the Tranche 2 Shares and the Tranche 2 Warrants in
such numbers set forth opposite each Purchaser's name on SCHEDULE 1 hereto.
(ii)Subject to the satisfaction or waiver of the conditions to
closing set forth in Section 4.03, on the Tranche 2 Closing Date, each Purchaser
shall deliver to the Company the portion of the Tranche 2 Purchase Price set
forth opposite such Purchaser's name on SCHEDULE 1 hereto by bank check or wire
transfer of immediately available funds.
SECTION 4.02 THE CLOSINGS.
(a) The closing (the "Tranche 1 Closing") of the Tranche 1 transactions
contemplated by Section 4.01 shall take place at the offices of Reitler Xxxxx
LLC, 000 Xxxxx Xxxxxx, 00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m.,
local time, on the date of this Agreement or at such different place, such
different time, or such different date or a combination thereof as the Company
and the Purchasers agree in writing (the "Tranche 1 Closing Date").
(b) The closing (the "Tranche 2 Closing") of the Tranche 2 transactions
contemplated by Section 4.01 shall take place at the offices of Reitler Xxxxx
LLC, 000 Xxxxx Xxxxxx, 00xx xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m.,
local time, on the date which is 5 business days after the conditions in Section
4.3 have been satisfied (the "Tranche 2 Closing Date"). The Tranche 1 Closing
and the Tranche 2 Closing are herein collectively referred to as the "Closings."
SECTION 4.03 CONDITIONS TO TRANCHE 2 CLOSING.
(a) The Purchasers' obligation to purchase the Tranche 2 Shares and the
Tranche 2 Warrants is conditioned upon:
(i) the representations and warranties of the Company set
forth herein being true and correct in all material respects as of the Tranche 2
Closing Date; provided, however that, for purposes of such condition, the
definition of SEC Materials shall be automatically amended to include any
quarterly report on Form 10-Q, any Current report on Form 8-K or any other
filing by the Company with the Securities and Exchange Commission filed by the
Company after the date hereof;
(ii) there having been no material adverse change in the
business prospects, financial condition or results of operations of the Company
and its Subsidiaries taken as a whole since the Tranche 1 Closing Date; and
(iii) the Company being in full compliance with its covenant
obligations under this Agreement.
(b) The Company's obligation to sell the Tranche 2 Shares and the
Tranche 2 Warrants to each Purchaser shall be at the Company's sole discretion
and is further conditioned upon:
9
(i) the representations and warranties of such Purchaser set
forth herein being true and correct in all material respects as of the Tranche 2
Closing Date; and
(ii) such Purchaser being in full compliance with its covenant
obligations under this Agreement. Notwithstanding the foregoing, if the
conditions set forth in (i) and (ii) above are met and the closing of the sale
of the Tranche 2 Shares shall not have occurred within 5 business days thereof,
the Company, in any event, shall issue the Tranche 2 Warrants to the Purchasers
pro rata according to the amounts the Purchasers were willing to purchase of the
Tranche 2 Shares (to be set forth in a writing signed by the Purchasers) or, in
the absence of such writing, pro rata based on the Purchasers' respective
investments in the Tranche 1 Shares, which Tranche 2 Warrants shall be dated as
of such date 5 business days after the fulfillment of such conditions (which
date shall be deemed, for purposes of determining the issue date of the Tranche
2 Warrant, the "Tranche 2 Closing Date").
SECTION 4.04 INDEMNITY AGAINST LIABILITIES
Each party hereto agrees to indemnify and hold harmless the other and
their respective officers, directors, employees, counsel, agents, and
stockholders, in each case past, present, or as they may exist at any time after
the date of this Agreement, and each person, if any, who controls, controlled,
or will control any of them within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act (the "Indemnitees"), against any and
all losses, liabilities, damages, and expenses whatsoever (which shall include,
for all purposes of this Section 4.04, but not be limited to, reasonable counsel
fees and any and all reasonable expenses whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced or threatened, or any
claim whatsoever, and any and all amounts paid in settlement of any claim or
litigation) as and when incurred arising out of, based upon, or in connection
with any breach of any representation, warranty, covenant, or agreement of the
indemnifying party contained in this Agreement.
The foregoing agreement to indemnify shall be in addition to any
liability the parties hereto may otherwise have, including liabilities arising
under this Agreement.
V. COVENANTS AND AGREEMENTS OF THE COMPANY
The Company covenants and agrees as follows:
SECTION 5.01 PUBLIC STATEMENTS.
Before the Company shall release any information concerning this
Agreement or the transactions contemplated by this Agreement which is intended
for or may result in public dissemination thereof, it shall cooperate with the
Purchaser, shall furnish drafts of all documents or proposed oral statements to
the Purchaser, for comments, and shall not release any such information without
the prior written consent of the Purchaser. Nothing contained herein shall
prevent the Company from releasing any information to any governmental authority
if required to do so by law.
SECTION 5.02 REGISTRATION OF CONVERSION SHARES AND WARRANT SHARES.
The Company has granted certain registration rights to the Purchasers
set forth in its Articles of Amendment to the Articles of Incorporation of the
Company, filed with the Secretary of State of the State of Florida on or about
the date hereof, relating to the registration of the Conversion Shares, which
provisions are hereby incorporated by reference herein. In addition, the Company
agrees to use its best efforts to cause a registration statement on Form S-3
(or, if not eligible to use Form S-3, such other form for which the Company may
be eligible) covering the resale of (i) the Conversion Shares underlying the
Tranche 1 Shares, (ii) the Warrant Shares underlying the Tranche 1 Warrants, and
(iii) such other shares of Common Stock held directly or underlying equity
securities acquired directly from the Company prior to the effective date of
10
such registration statement (collectively, the "Registrable Securities"), to be
filed with the Securities and Exchange Commission within thirty days of the
Tranche 1 Closing Date and declared effective as soon as practicable thereafter;
provided, however, to the extent such registration statement is not filed within
60 days of the date hereof, the Company shall be obligated to issue additional
shares of Common Stock in an amount equal to 4% of the Registrable Securities
(or pro rata amount thereof) for each month (or pro rata portion thereof) after
such 60-day period in which no such filing is made, issuable on the earlier of
the last day of each such month and the filing date of such registration
statement. The Company further agrees to use its best efforts to maintain the
effectiveness of such registration statement until the earlier to occur of (i)
the sale of all of the Registrable Securities under such registration statement
and (ii) such time as the Registrable Securities are all eligible for resale
pursuant to Rule 144 promulgated under the Securities Act without being subject
to the limitations of Rule 144(e). As provided in the Articles of Amendment, the
Purchasers shall have a demand registration right and piggy-back rights if and
to the extent not all of the Conversion Shares are registered pursuant to the
above-referenced registration statement, which demand registration right shall
be exercisable by the holders of a majority of the shares of unregistered
Preferred Stock purchased under this Agreement from and after the earlier to
occur of (i) the date which is 180 days from the date of this Agreement and (ii)
the date which is 90 days from any subsequent tranches.
VI. COVENANTS AND AGREEMENTS OF THE PURCHASER
Each Purchaser covenants and agrees as follows:
SECTION 6.01 CONFIDENTIALITY.
Such Purchaser shall insure that all confidential information which
such Purchaser, any of its respective officers, directors, employees, counsel,
agents, investment bankers, or accountants may now possess or may hereafter
create or obtain relating to the financial condition, results of operations,
business, properties, assets, liabilities, or future prospects of the Company,
any affiliate thereof, or any customer or supplier thereof or any such affiliate
shall not be published, disclosed, or made accessible by any of them to any
other person or entity at any time or used by any of them. Notwithstanding the
foregoing, the restrictions of the immediately preceding sentence shall not
apply (a) as may otherwise be required by law, (b) as may be necessary or
appropriate in connection with the enforcement of this Agreement, or (c) to the
extent such information shall have otherwise become publicly available.
SECTION 6.02 PUBLIC STATEMENTS.
Before such Purchaser shall release any information concerning this
Agreement or the transactions contemplated by this Agreement which is intended
for or may result in public dissemination thereof, they shall cooperate with the
Company shall furnish drafts of all documents or proposed oral statements to the
Company for comments. Nothing contained herein shall prevent such Purchaser from
releasing any information to any governmental authority if required to do so by
law.
VII. MISCELLANEOUS
SECTION 7.01 FURTHER ACTIONS
At any time and from time to time, each party agrees, at its or his
expense, to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this Agreement.
SECTION 7.02 AVAILABILITY OF EQUITABLE REMEDIES.
Since a breach of the provisions of this Agreement could not adequately
be compensated by money damages, any party shall be entitled, either before or
after a Closing, in addition to any other right or remedy available to it, to an
11
injunction restraining such breach or a threatened breach and to specific
performance of any such provision of this Agreement, and in either case no bond
or other security shall be required in connection therewith, and the parties
hereby consent to the issuance of such an injunction and to the ordering of
specific performance.
SECTION 7.03 SURVIVAL.
The covenants, agreements, representations, and warranties contained in
or made pursuant to this Agreement shall survive the Closings and any delivery
of Shares, Conversion Shares, Warrants or Warrant Shares to the Purchasers,
irrespective of any investigation made by or on behalf of any party. The
statements contained in any statement, certificate, or other instrument executed
by the Company and relating hereto or delivered to the Purchasers in connection
with the transactions contemplated hereby or thereby shall be deemed
representations and warranties, covenants and agreements, or conditions, as the
case may be, of the Company hereunder for all purposes of this Agreement
(including all statements, certificates, or other instruments delivered pursuant
hereto or thereto or delivered in connection with the transactions contemplated
hereby or thereby). The statements contained in any statement, certificate, or
other instrument executed by a Purchaser and relating hereto or delivered to the
Company in connection with the transactions contemplated hereby or thereby shall
be deemed representations and warranties, covenants and agreements, or
conditions, as the case may be, of such Purchaser hereunder for all purposes of
this Agreement (including all statements, certificates, or other instruments
delivered pursuant hereto or thereto or delivered in connection with the
transactions contemplated hereby or thereby).
SECTION 7.04 MODIFICATION.
This Agreement and the Schedules and Exhibits hereto (together with the
other Transaction Agreements) set forth the entire understanding of the parties
with respect to the subject matter hereof (except as provided in Section 7.03),
supersede all existing agreements among them concerning such subject matter, and
may be modified only by a written instrument duly executed by each party with
the approval of an authorized officer or partner of each party.
SECTION 7.05 NOTICES.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested (or by the most nearly comparable method if mailed from or to
a location outside of the United States) or by Federal Express, Express Mail, or
similar overnight delivery or courier service or delivered (in person or by
telecopy, telex, or similar telecommunications equipment) against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 7.05)
with a copy to each of the other parties hereto. Any notice given to any
corporate party shall be addressed to the attention of the Corporate Secretary.
Notice to the estate of any party shall be sufficient if addressed to the party
as provided in this Section 7.05. Any notice or other communication given by
certified mail (or by such comparable method) shall be deemed given at the time
of certification thereof (or comparable act), except for a notice changing a
party's address which will be deemed given at the time of receipt thereof. Any
notice given by other means permitted by this Section 7.05 shall be deemed given
at the time of receipt thereof. A copy of any and all notices to the Purchasers
shall be delivered in accordance with this section to Reitler Xxxxx LLC, 000
Xxxxx Xxxxxx, 00xx xxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxx Xxxxxx Xxxxx.
12
SECTION 7.06 WAIVER.
Any waiver by any party of a breach of any term of this Agreement shall
not operate as or be construed to be a waiver of any other breach of that term
or of any breach of any other term of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or more
occasions will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing.
Section 7.07 BINDING EFFECT; SEPARATE AGREEMENTS.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the Company and the Purchasers and their respective successors and
assigns. Notwithstanding anything herein to the contrary, a breach by one
Purchaser shall not affect the obligation of the other Purchaser and the Company
to effect either the Tranche 1 Closing or the Tranche 2 Closing or the
enforceability of this Agreement as between the non-breaching parties.
SECTION 7.08 NO THIRD PARTY BENEFICIARIES.
This Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement.
SECTION 7.09 SEPARABILITY.
If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
SECTION 7.10 HEADINGS.
The headings in this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
SECTION 7.11 Counterparts; Governing Law.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. It shall be governed by and construed in accordance
with the laws of the State of New York.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
13
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first written above.
VISUAL DATA CORPORATION
By: /s/
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
CHARTER CAPITAL RESOURCES, INC.
By: /s/
---------------------------------------
Name:
Title:
14
