EXHIBIT 10.1
AMENDED AND RESTATED LOAN AGREEMENT
This AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is dated as
of this 7TH day of May, 2003 between VISUAL DATA CORPORATION, a Florida
corporation (the "Borrower"), and Xxxxxxxxx X. XxXxxx (the "Lender").
RECITALS
A. Borrower and Lender entered into that certain Loan Agreement, dated
as of December 5, 2001, (the "First Loan Agreement"), pursuant to which Lender
has made a loan of $3,000,000 to Borrower.
B. The loan under the First Loan Agreement (the "Loan") is evidenced by
a Promissory Note in the principal amount of Three Million Dollars ($3,000,000)
made by Borrower in favor of Lender (the "First Note") pursuant to the terms and
conditions of the First Loan Agreement.
C. In connection with the Loan, Borrower and Lender also entered into a
security agreement and UCC-1 financing statement (the First Loan Agreement, the
First Note, the security agreement and UCC-1 financing statement, and all other
documents, instruments, certificates and agreements executed and/or delivered by
Borrower in connection with the First Loan Agreement, are sometimes hereinafter
collectively referred to as the "First Loan Documents").
D. As of the date of this Agreement, the aggregate unpaid aggregate
principal balance of the First Note is $1,050,000, which amount, plus all
accrued and unpaid interest as of the date hereof, and any and all other amounts
payable under the First Loan Documents, are outstanding without setoff,
counterclaim, dispute, defense or right of recoupment (the "Borrower
Obligations"). The outstanding amount under the First Note shall be applied to
the New Note and become part of the obligations under the New Note and the New
Loan Documents.
E. On the 4th day of April, 2003, Lender advanced to Borrower $250,000
pursuant to a promissory note which was secured pursuant to the security
agreement under the First Loan Documents, the Lender has also advanced to
Borrower $200,000 pursuant to a promissory note which was secured pursuant to
the security agreement under the First Loan Documents and additionally Lender
has advanced to Borrower $150,000 pursuant to a promissory note which was
secured pursuant to the security agreement under the First Loan Documents
(collectively the "Bridge Loan"). The outstanding obligation under the Bridge
Loan shall be applied to the New Note and become part of the obligations under
the New Note and the New Loan Documents.
F. Borrower acknowledges that the obligations under the First Loan
Documents and the Bridge Loan are enforceable according to their respective
terms and constitute binding obligations of the respective parties thereto for
which there is no setoff, counterclaim, dispute, defense or right of recoupment,
that Lender holds valid liens upon, and/or valid perfected security interests
in, the Collateral pledged to secure the obligations under the First Loan
Documents and Bridge Loan (collectively, the "Existing Collateral"), and that
such liens and
security interests are enforceable against Borrower, are of first priority and
secure the Borrower Obligations.
G. The Borrower has requested that Lender renew and modify the
agreements represented by the First Loan Documents and the Bridge Loan, and
extend a new loan to the Borrower in the amount of One Million Three Hundred
Fifty Thousand Dollars ($1,350,000) (the "New Loan"). The outstanding balance of
the First Note, the outstanding balance of the Bridge Loan and the New Loan
amount shall be evidenced by the New Note, in the principal amount of Three
Million Dollars ($3,000,000), which is attached hereto as Exhibit A.
H. In order to induce Lender to renew and modify the agreements
represented by the First Loan Documents and the Bridge Loan and to extend the
New Loan to the Borrower, Borrower is willing to enter into and perform this
Agreement and certain other New Loan Documents (as such term is hereinafter
defined) with the understanding that the Existing Collateral and the New
Collateral (as such term is hereinafter defined) will secure not only Borrower's
present and future obligations under the First Loan Documents, the Bridge Loan
and this Agreement, but also (i) all present and future obligations of the
Borrower with respect to the New Loan, and (ii) all present and future
obligations of the Borrower with respect to the New Loan Documents.
I. On this date and in connection with the New Loan, the Borrower will
execute and deliver to Lender: (i) an Amended and Restated Loan Agreement (the
"New Loan Agreement"), (ii) a Pledge and Security Agreement (the "New Security
Agreement"), (iii) a Promissory Note (the "New Note"), (iv) an Escrow Agreement
(the "Escrow Agreement"), (v) an Account Control Agreement (the "Control
Agreement"), (vi) a certificate representing 250,000 shares of Class A-8
Preferred Stock (the "Preferred Shares") and (vii) such other documents as
Lender may reasonably request (the New Loan Agreement, the New Security
Agreement, the New Note, the Escrow Agreement, the Preferred Shares and such
other documents are sometimes hereinafter collectively referred to in this
Agreement as the "New Loan Documents"). The New Loan Documents are attached
hereto and shall each be incorporated by reference into this New Loan Agreement.
J. On this date and in connection with the New Loan, the Lender will
exchange all of its common stock which is presently owned by Lender and deliver
to Borrower certificates representing same.
K. This Agreement amends, restates and renews the First Loan Agreement,
but does not terminate, release or discharge the Existing Borrower Obligations
or operate as a novation with respect thereto. This Agreement and the New Loan
Documents to which Borrower is a party amend and restate in their entirety the
First Loan Documents, except as otherwise provided in the New Loan Documents,
but do not terminate, release or discharge any of the obligations under the
First Loan Documents or the Bridge Loan, or any right, remedy, lien or security
interest created thereunder.
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L. Borrower will obtain benefits as a result of Lender renewing and
modifying the First Loan Agreement. Accordingly, Borrower desires to execute and
deliver this Agreement and the other New Loan Documents to which it is a party
in order to satisfy the conditions described in the preceding paragraphs.
NOW THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties do hereby covenant and agree as
follows:
Section 1. Definitions.
"Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq.
"Business Day" shall mean any day on which commercial Lenders are not
authorized or required to close in the State of Florida.
"Closing Date" or "Closing" shall mean the date of this Agreement.
"Common Stock" shall mean shares of the Borrower's Common Stock, par
value $.0001.
"Default" shall mean any Event of Default or any event or condition
specified in Section 8 hereof, which with the giving of notice or lapse of time
or both would constitute an Event of Default.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, and the
filing of or agreement to give any financing statement or other similar form of
public notice under the laws of any jurisdiction).
"Material Adverse Effect" shall have the meaning set forth in Section
4.01 hereof.
"Maturity Date" shall mean the date that is thirty-six (36) months from
the Closing Date or, if such date shall not be a Business Day, the Maturity Date
shall be the next Business Day after such date.
"New Note" shall mean the secured promissory note provided for in
Section 2 hereof and in substantially the form of Exhibit A hereto, and any note
or notes issued in exchange or substitution therefor.
"Post-Default Rate" shall mean, in respect of any principal of or
interest on the New Loan or any other amount payable by the Borrower under this
Agreement or the New Note that is not paid when due (whether at stated maturity,
by acceleration or otherwise), a rate per annum during the period from and
including the due date to but excluding the date such amount is paid in full,
equal to twelve percent (12%).
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities" shall mean the shares of Preferred Stock issued pursuant
to Section 6.01 hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
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Section 2. The New Loan.
2.01 New Loan. On the terms and conditions hereof, the Lender
hereby agrees to make the New Loan in the principal amount of $1,350,000.
$1,000,000 shall be made payable to the Escrow Account on the Closing Date and
the remaining principal amount shall be advanced to the Borrower at such time.
2.02 New Note. The New Loan, the Bridge Loan and the outstanding
balance of the First Note collectively shall be evidenced by the New Note of the
Borrower in the form of Exhibit A hereto, secured by the New Security Agreement,
dated as of the Closing Date, payable to the order of the Lender in the
principal amount set forth thereon and otherwise duly completed.
2.03 Interest. The Borrower hereby promises to pay to the Lender
interest on the unpaid principal amount of the New Note, from and including the
Closing Date but excluding the Maturity Date, at a rate per annum equal to Five
and one-quarter percent (5 1/4 %). The Borrower shall pay interest quarterly on
or before the 15th day of the month following the end of the quarter, beginning
with the first payment on July 15, 2003. Interest shall be paid in cash.
2.04 Principal. The Borrower hereby promises to pay the principal
amount of the New Note as follows:
(a) All principal shall be payable, in full, at the Maturity
Date (subject to subsections (d) and (e) below.
(b) Beginning with the first interest payment and continuing
through the Maturity Date, Borrower shall deliver to the Lender (on a quarterly
basis and independent of whether a payment is made by the Borrower) a statement,
signed by an executive officer of Borrower, setting forth the collected revenue
collected for the prior month (the "Collection Statement").
(c) The Collection Statement shall be final and binding on the
Lender unless, within thirty (30) days following date of delivery to the Lender
of the Collection Statement, the Lender shall have notified Borrower in writing,
including the basis of contestation (the "Notice of Objection") that Lender does
not accept as correct any calculation reflected in the Collection Statement. If
the Lender timely delivers the Notice of Objection to Borrower, then the
Borrower and Lender shall attempt to reach a mutual agreement as to the disputed
calculation made in the Collection Statement. If such parties fail to reach
agreement to the disputed calculation within fifteen (15) days after the Notice
of Objection has been received, then Borrower's accounting firm shall be
instructed by Borrower and the Lender to make, as soon as practical after the
matter is referred to such firm, all calculations that were in dispute and the
determination of such accounting firm shall be final and binding on the parties.
The cost of the accounting firm to be paid one-half (1/2) by Borrower and
one-half (1/2) by Lender.
(d) Notwithstanding anything to the contrary contained in this
Section 2.04, in the event Borrower receives equity or strategic financing, in
an amount in excess of
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$2,000,000, 35% of the net proceeds of such funds raised or received by
Borrower, above such $2,000,000, shall be used to pay the principal amount then
outstanding on the New Note.
(e) Notwithstanding anything to the contrary contained in this
Section 2.04, in the event Borrower is EBITDA positive, 35% of EBITDA shall be
used to pay the principal amount then outstanding on the New Note.
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2.05 Prepayments. The Borrower may prepay all or any part of
the principal amount of the New Note before the Maturity Date without penalty,
except no credit shall be given for prepaid interest.
Section 3. Payments; Computations; Etc.
3.01 Payments. All payments of principal, interest and other
amounts to be made by the Borrower under this Agreement or the New Note shall be
made, in immediately available funds, to the Lender no later than 3:00 p.m.
Florida time on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). If a Default has occurred and is continuing,
the Lender may apply any such payment to interest and principal, and then fees
and expenses. If the due date of any payment under this Agreement or the New
Note would otherwise fall on a day that is not a Business Day, such date shall
be extended to the next succeeding Business Day and interest shall be payable
for any principal so extended for the period of such extension. Any amount of
principal not paid when due hereunder shall accrue interest at the Post-Default
Rate.
3.02 Computations. Interest shall be computed on the basis of
the actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable, relative to a year of 365 or 366
days, as the case may be.
Section 4. Representations and Warranties of the Borrower. Except as set forth
on the Borrower Disclosure Schedule attached hereto as Exhibit B, (the "Borrower
Disclosure Schedule"), the Borrower represents and warrants to the Lender, as of
the Closing Date and at any time reaffirmed pursuant to the terms hereof, that:
4.01 Organization, Good Standing and Qualification. The Borrower
is a corporation duly organized, validly existing and in good standing under the
laws of the state of Florida. The Borrower has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
each of the Loan Documents, to issue the Note and to carry out the provisions of
each of the Loan Documents and to carry on its business as presently conducted.
The Borrower is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in all jurisdictions in which the nature of
its activities and of its properties makes such qualification necessary, except
for those jurisdictions in which failure to do so could not have, individually
or in the aggregate, a material adverse effect on the business, properties,
assets, financial condition, or operations of the Borrower (a "Material Adverse
Effect").
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4.02 Subsidiaries. The Borrower Disclosure Schedule contains a
list of each other corporation, limited partnership or similar entity in which
the Borrower owns equity securities of any kind, with a brief description of the
nature of each such equity interest.
4.03 Capitalization; Voting Rights. The authorized capital
stock of the Borrower consists of 75,000,000 shares of Common Stock (the
"Borrower's Common Stock"), 34,600,000 shares of which are issued and
outstanding as of March 31, 2003, and 5,000,000 shares of Preferred Stock (the
"Borrower's Preferred Stock"), 116,832 of which are issued and outstanding as of
March 31, 2003. All issued and outstanding shares of the Borrower's Preferred
Stock have been duly authorized and validly issued and are fully paid and
non-assessable. All issued and outstanding shares of the Borrower's Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. The rights, preferences, privileges and restrictions of the
Borrower's Common Stock are as stated in the Borrower's articles of
incorporation, as amended. The shares of Borrower's Common Stock issuable upon
conversion of the Preferred Shares have been duly and validly reserved for
issuance. When issued in compliance with the provisions of this Agreement and
the Borrower's articles of incorporation, as amended,, the shares of Borrower's
Common Stock issuable upon conversion of the Preferred Shares will be duly
authorized, validly issued, fully paid and nonassessable, and will be free of
any restrictions, limitations, claims or other encumbrances (except those
imposed by federal and state securities laws).
4.04 Authorization; Binding Obligations. All actions on the
part of the Borrower, its officers, directors and shareholders necessary for the
authorization, execution and delivery of each of the New Loan Documents, the
performance of all obligations of the Borrower hereunder and thereunder at the
Closing and after the Closing and the authorization, sale, issuance and delivery
of the Preferred Shares issuable herein and the authorization, sale, issuance
and delivery of the shares of Common Stock issuable upon conversion of the
Preferred Shares has been taken or will be taken prior to the Closing, except as
set forth on the Borrower Disclosure Schedule. Each of the New Loan Documents,
when executed and delivered, will be valid and binding obligations of the
Borrower enforceable in accordance with their respective terms, except (a) as
limited by applicable Bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights;
and (b) general principles of equity that restrict the availability of equitable
remedies.
4.05 Financial Condition. The balance sheets and financial
statements of the Borrower as of December 31, 2002 (the "Statement Date")
heretofore furnished to the Lender or made available to the Lender
(collectively, the "Financial Statement") is correct in all material respects
and fairly present the financial condition of the Borrower at such date.
4.06 Liabilities. The Borrower has no material liabilities
and, to the best of its knowledge, knows of no material contingent liabilities
not disclosed in the Financial Statements, except liabilities incurred in the
ordinary course of business subsequent to the Statement Date.
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4.07 Obligations to Related Parties. Except as set forth in
the SEC Documents (as defined in Section 4.15 hereof) or the Borrower Disclosure
Schedule, there are no obligations of the Borrower to executive officers, or
directors of the Borrower other than (a) for payment of salary for services
rendered, (b) reimbursement for reasonable expenses incurred on behalf of the
Borrower, (c) for other reasonable and customary employee benefits (including
stock option agreements outstanding), and (d) reasonable and customary directors
fees.
4.08 Changes. Since the Statement Date, except as disclosed in
the Borrower's Schedule, there has not been to the Borrower's knowledge:
(a) Any change in the assets, liabilities, financial
condition or operations of the Borrower from that reflected in the Financial
Statements, other than changes in the ordinary course of business;
(b) Any resignation or termination of any executive
officers of the Borrower; and the Borrower, to the best of its knowledge, does
not know of the impending resignation or termination of employment of any such
officer;
(c) Any material change in the contingent obligations of
the Borrower by way of guaranty, endorsement, indemnity or warranty;
(d) Any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting the properties, or
financial condition of the Borrower; or
(e) Any sale, assignment or transfer of any material
patents, trademarks, copyrights, trade secrets or other material intangible
assets.
4.09 Title to Properties and Assets; Liens, Etc. The Borrower
has good and marketable title to its properties and assets, including the
properties and assets reflected in the most recent balance sheet included in the
Financial Statements, other than (a) those resulting from taxes which have not
yet become due and payable, (b) minor Liens and encumbrances which do not
materially detract from the value of the property subject thereto or materially
impair the use thereof or the operations of the Borrower and (c) Liens set forth
on the Borrower's Disclosure Schedule.
4.10 Litigation. Except as disclosed in the SEC Documents or
Borrower's Schedule, there is no action, suit, proceeding or investigation
pending or, to the Borrower's knowledge, threatened against the Borrower that
questions the validity of any of the New Loan Documents or the right of the
Borrower to enter into any of such agreements, or to consummate the transactions
contemplated hereby or thereby, or which could have a Material Adverse Effect.
4.11 Tax Returns and Payments. Since December 31, 2002,
Borrower has timely filed all tax returns (federal, state and local) required to
be filed by it. All taxes shown to be due and payable on such returns, any
assessments imposed, and to the Borrower's knowledge all other taxes due and
payable by the Borrower on or before the Closing have been paid or will be paid
prior to the time they become delinquent.
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4.12 Employees. The Borrower has no collective bargaining
agreements with any of its employees. There is no labor union organizing
activity pending or, to the Borrower's knowledge, threatened with respect to the
Borrower. To the Borrower's knowledge, no employee of the Borrower, nor any
consultant with whom the Borrower has contracted, is in material violation of
any term of any employment contract, proprietary information agreement or any
other agreement relating to the right of any such individual to be employed by,
or to contract with, the Borrower because of the nature of the business to be
conducted by the Borrower; and to the Borrower's knowledge the continued
employment by the Borrower of its present employees, and the performance of the
Borrower's contracts with its independent contractors, will not result in any
such violation. The Borrower has not received any notice alleging that any such
violation has occurred. The Borrower is not aware that any executive officer
intends to terminate their employment with the Borrower.
4.13 Compliance with Laws; Permits. To the best of its
knowledge, the Borrower is not in violation of any applicable statute, rule,
regulation, order or restriction of any domestic government or any
instrumentality or agency thereof in respect of the conduct of its business or
the ownership of its assets or properties which violation could have a Material
Adverse Effect. Except as set forth on Borrower Disclosure Schedule, no
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to be
filed in connection with the execution and delivery of each of the New Loan
Documents and the issuance of the New Note or the shares of the Preferred Stock
or Common Stock issuable upon conversion of the Preferred Stock. The Borrower
has all franchises, permits, licenses, rights and any similar authority and
approvals necessary for the conduct of its business as now being conducted, the
lack of which could have a Material Adverse Effect.
4.14 Environmental and Safety Laws. To its knowledge, the
Borrower is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, the violation of
which could have a Material Adverse Effect, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
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4.15 SEC Reports and Filings. The Borrower has made available to
the Lender through publicly available sources a complete and accurate copy of
each Annual Report on Form 10-KSB, Quarterly Report on Form 10-QSB, Form 8-K,
definitive proxy statement, registration statement and annual report filed by
the Borrower with the SEC on or after January 1, 2000 (collectively, the "SEC
Documents"), and all amendments and supplements to each of the foregoing. The
SEC Documents, including the financial statements contained therein, (i)
complied with the requirements of the Securities Act or the Exchange Act, as the
case may be, at and as of the times they were filed (or, if amended,
supplemented or superseded by a filing prior to the date of this Agreement, then
on the date of such filing) in all material respects and (ii) did not at and as
of the time they were filed (or, if amended, supplemented or superseded by a
filing prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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Section 5. Representations and Warranties of the Lender. The Lender represents
and warrants to the Borrower, as of the Closing Date and at any time reaffirmed
pursuant to the terms hereof, that:
5.01 Authority. The Lender has all requisite power and
authority to execute and deliver this Agreement, to own and hold the Note and
the Securities and to carry out the provisions of this Agreement and the Note.
5.02 Investment Representations. The Lender understands that
the Securities have not been registered under the Securities Act. The Lender
also understands that the Securities are being offered and sold pursuant to an
exemption from registration contained in the Securities Act based in part upon
the Lender's representations contained in this Agreement. The Lender hereby
represents and warrants as follows:
(a) The Lender Bears Economic Risk. The Lender has
substantial experience in evaluating and investing in private placement
transactions of securities in companies similar to the Borrower so that it is
capable of evaluating the merits and risks of its investment in the Borrower and
has the capacity to protect its own interests. The Lender must bear the economic
risk of this investment indefinitely unless the Securities (or the shares of
Borrower's Common Stock underlying the Securities) are registered pursuant to
the Securities Act, or an exemption from registration is available. The Lender
understands that, unless the Securities (or the shares of Borrower's Common
Stock underlying the Securities) are registered under the Securities Act, there
is no assurance that any exemption from registration under the Securities Act
will be available and that, even if available, such exemption may not allow the
Lender to transfer all or any portion of the Securities (or the shares of
Borrower's Common Stock underlying the Securities) under the circumstances, in
the amounts or at the times the Lender might propose.
(b) Acquisition for Own Account. The Lender is acquiring
the Securities for the Lender's own account for investment only, and not with a
view towards their distribution within the meaning of the Securities Act.
(c) Accredited Investor. The Lender represents that it is
an accredited investor within the meaning of Regulation D under the Securities
Act.
Section 6. Conditions Precedent.
6.01 Conditions to the Loan. The obligation of the Lender to
make the New Loan hereunder is subject to the receipt by the Lender of the
following documents on the Closing Date, each of which shall be satisfactory in
form and substance to the Lender:
a (a) The New Note, duly completed and executed.
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(b) The Pledge and Security Agreement, duly completed and
executed.
(c) The Escrow Agreement, duly completed and executed.
(d) The Account Control Agreement, duly completed and
executed.
2 (e) A stock certificate, duly completed and executed,
representing 250,000 shares of Class A-8 Preferred Stock issued to the Borrower
(140,000 of which shall be in consideration for entering into this Agreement and
110,000 of which shall be in consideration of Lender's exchange of all of its
presently held common stock.
3 (f) Certified copies of the articles of incorporation, as
amended, and bylaws of the Borrower.
(g) A Certificate of Good Standing of the Borrower
certified by the appropriate governmental officer.
(h) A UCC-1 shall have been filed in the jurisdictions
determined by Lender.
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6.02 General Conditions. The obligation of the Lender to make
the New Loan is further subject to all of the following additional conditions
precedent:
(a) No Event of Default shall have occurred and be
continuing either immediately prior to the making of the New Loan or immediately
after the making of the New Loan.
(b) The representations and warranties made by the
Borrower in Section 4 hereof shall be true and correct in all material respects
as of the Closing Date with the same force and effect as if they had been made
pursuant to this Agreement as of the Closing Date (except for those
representations and warranties which refer to dates other than the Closing Date,
which representations and warranties relate only to the referred dates).
(c) On the Closing Date, the issuance of the New Note
shall be legally permitted by all laws and regulations to which the Borrower and
the Lender are subject.
(d) The Borrower shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by each of the New Loan Documents (except for such as
may be properly obtained subsequent to the Closing).
(e) The shares of Borrower's Preferred Stock issued shall
have been duly authorized and reserved for issuance upon such conversion.
(f) The Borrower shall have delivered to the Lender a
compliance certificate, executed by the President of the Borrower, dated the
Closing Date, to the effect that the conditions specified in subsections (a),
(b), (d) and (e) in this Section 6.02 have been satisfied.
(g) All corporate and other proceedings in connection
with the transactions contemplated at the Closing hereby and all documents and
instruments incident to such transactions shall be reasonably satisfactory in
substance and form to the Lender, and the Lender shall have received all such
counterpart originals or certified or other copies of such documents as it may
reasonably request. Section 7. Covenants of the Borrower. The Borrower agrees
that from the date hereof, until payment in full of the New Loan, all interest
thereon and all other amounts payable by the Borrower under the New Loan
Documents:
7.01 Information. The Borrower shall deliver to the Lender:
(a) Promptly after the Borrower knows that any Event of
Default has occurred, a notice of such Event of Default, describing the same in
detail; and
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(b) From time to time such other information regarding
the business, affairs or financial condition of the Borrower as the Lender may
reasonably request.
7.02 Basic Financial Information and Reporting.
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(a) The Borrower will maintain true books and records of
account in which true and correct entries will be made of all its business
transactions pursuant to a system of accounting established and administered in
accordance with generally accepted accounting principles consistently applied.
(b) As soon as practicable after the end of each fiscal
year of the Borrower, and in any event within one hundred five (105) days
thereafter, the Borrower will furnish the Lender with a consolidated balance
sheet of the Borrower, as at the end of such fiscal year, and a consolidated
statement of income and a consolidated statement of cash flows of the Borrower,
for such year, all prepared in accordance with generally accepted accounting
principles consistently applied and setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail. Such
financial statements shall be accompanied by a report and opinion thereon by
independent public accountants selected by the Borrower's Board of Directors.
(c) The Borrower will furnish the Lender, as soon as
practicable after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Borrower, and in any event within fifty (50)
days thereafter, a consolidated balance sheet of the Borrower as of the end of
each such quarterly period, and a consolidated statement of income and a
consolidated statement of cash flows of the Borrower for such period and for the
current fiscal year to date, prepared in accordance with generally accepted
accounting principles, with the exception that no notes need be attached to such
statements and normal year-end audit adjustments may not have been made.
7.03 SEC Filings. The Borrower shall deliver to the Lender (or
make available to the Lender through publicly available sources) a complete and
accurate copy of each report, schedule, registration statement and definitive
proxy statement filed by the Borrower with the SEC on or after the Closing Date
and all amendments and supplements to each of the foregoing (collectively, the
"Borrower SEC Reports"). The Borrower SEC Reports (i) will constitute all the
forms, reports and documents required to be filed by the Borrower with the SEC
under the Securities Act and the Exchange Act, as applicable, and the rules and
regulations promulgated thereunder from and after the Closing Date, (ii) will
comply with the requirements of the Securities Act the Exchange Act, as the case
may be, at and as of the times they are filed, and (iii) will not at and as of
the time they are filed contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading.
7.04 Reservation of Common Stock. The Borrower will at all
times reserve and keep available, solely for issuance and delivery upon the
conversion of the Preferred Shares, all Common Stock issuable from time to time
upon such exercise.
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7.05 Compliance with Laws. The Borrower shall use its
reasonable best efforts to preserve and maintain its existence and all of its
material rights and privileges; comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or regulatory authorities if
failure to comply with such requirements could result in a Material Adverse
Effect; and pay and discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of its property prior
to the date on which penalties attach thereto, except for any such tax,
assessment, charge or levy the payment of which is being contested in good faith
and by proper proceedings.
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Section 8. Events of Default. If one or more of the following events or
conditions shall occur and be continuing, it shall be deemed to be an event of
default under this Agreement (an "Event of Default"):
(a) The Borrower shall be in default for more than fifteen
(15) days in the payment when due of any principal of or interest under the New
Note;
(b) Any representation or warranty made in any of the New Loan
Documents or in any document furnished in connection herewith or therewith by
the Borrower shall prove to have been false or misleading as of the time made or
furnished in any material respect;
(c) The Borrower shall default in the performance of any of
its obligations under Section 7 hereof;
(d) The Borrower shall (i) apply for or consent to the
appointment of, or the taking of a position by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property; (ii)
make a general assignment for the benefit of its creditors; (iii) commence a
voluntary case under the Bankruptcy Code (as now or hereafter in effect); (iv)
file a petition seeking to take advantage of any other law relating to
Bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts; (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in any
involuntary case under the Bankruptcy Code; or (vi) take any action for the
purpose of effecting any of the foregoing; and
(e) A proceeding or case shall be commenced, without the
application or consent of the Borrower in any court of competent jurisdiction,
seeking (i) liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of debts of the Borrower; (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of the Borrower or of all
or any substantial part of any of the Borrower's assets; or (iii) similar relief
in respect of the Borrower under any law relating to Bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed for a period of forty-five (45)
days, or an order, judgment or decree approving or ordering any of the foregoing
shall be entered or an order for relief against the Borrower shall be entered in
an involuntary case under the Bankruptcy Code and such order a judgment shall be
final and non-appealable; and
THEREUPON in the case of an Event of Default, the Lender may, by notice
to the Borrower, declare the principal amount then outstanding of, and the
interest on all amounts payable by the Borrower under this Agreement and the New
Note to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby waived by the Borrower.
Section 9. Miscellaneous.
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9.01 Waiver. No failure on the part of the Lender to exercise
and no delay in exercising, and no course of dealing with respect to any right,
power or privilege under any of the New Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under any of the New Loan Documents preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
9.02 Notices. All notices and other communications provided
for herein shall be in writing and shall be delivered to the intended recipient
at the "Address for Notices" specified below or at such other address as shall
be designated by a party in a notice to each other party. All notices and other
communications hereunder shall be deemed to have been duly given, in the case of
hand delivery, when received, or in the case of mail, three Business Days after
the date deposited in the mail, addressed as aforesaid. Addresses for Notices:
If to the Borrower: with a copy to:
Visual Data Corporation Xxxxxx & Xxxx, P.A.
0000 X.X. 00xx Xxxxxx 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxx 00000 Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx Attn: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000 Fax: (000) 000-0000
Phone: (000) 000-0000 Tele: (000) 000-0000
If to the Lender: With a copy to:
Xxxxxxxxx X. XxXxxx Xxx Xxxxxxxx, Esq.
c/o Doctor's Associates, Inc. Legal Department
000 Xxx Xxxxx Doctor's Associates, Inc.
Xxxxxxx, Xxxxxxxxxxx 00000 000 Xxx Xxxxx
Xxxx: Xxxxx Xxxxxxx, Controller Xxxxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Tele: (000) 000-0000, ext 1195 Tele: (000) 000-0000 (ext. 1468)
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9.03 Expenses, Etc. Except as set forth in this Section 9.03,
all costs and expenses incurred in connection with the New Loan Documents shall
be paid by the party incurring such costs and expenses. The Borrower agrees to
promptly pay on demand (a) all costs and expenses of the Lender, including
counsels' fees, in connection with the enforcement of the New Loan Documents;
(b) all expenses of the Lender, including counsels' fees, in connection with any
actual or proposed waiver or amendment requested by the Borrower to any of the
foregoing, whether or not such waiver or amendment shall become effective; and
(c) all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of any of the
foregoing or any other document referred to herein.
9.04. Amendments, Etc. Any provision of this Agreement may be
modified or waived by an instrument or instruments in writing signed by the
Borrower and the Lender.
9.05. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns except that the Borrower may not assign its rights or
delegate its obligations hereunder or under the Note without the prior written
consent of Lender.
9.06. Survival of Representations and Warranties. The
representations, warranties, covenants and agreements made herein shall survive
any investigation made by the Lender and the closing of the transactions
contemplated hereby.
9.07. Confidentiality. Other than as required by law (and
then, only upon advance notice with a reasonably opportunity for the other party
to comment), without the prior written consent of the other party, no party to
this Agreement shall make, or cause to be made, any press release or public
announcement in respect of this Agreement, the transactions contemplated hereby
or any other discussions or negotiations between the parties, or otherwise
communicate with any news media regarding this Agreement or the transactions
contemplated hereby or any other discussions or negotiations between the
parties. The parties shall cooperate as to the timing and contents of any such
press release, public announcement or other communication.
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9.08. Counterparts. This Agreement may be executed in
counterparts.
9.09. GOVERNING LAW. THE NEW LOAN DOCUMENTS SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE FLORIDA.
9.10 Jurisdiction and Consent to Suit. Any proceeding to
enforce any of the New Loan Documents may be brought in any state or federal
court of competent jurisdiction in the State of Florida. The Borrower hereby
irrevocably waives any present and future objection to any such venue, and
irrevocably consents and submits unconditionally to the non-exclusive
jurisdiction for itself and in respect of any of its property in such court.
9.11 Severability. If any terms or provisions of this
Agreement or application thereof to any person or circumstance shall to any
extent be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected thereby,
and each term and provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.
9.12 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Convertible Loan Agreement to be duly executed as of the day and year first
above written.
VISUAL DATA CORPORATION
By: /S/ Xxxxx X. Xxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
/s/ Xxxxxxxxx X. XxXxxx
--------------------------------
Name: Xxxxxxxxx X. XxXxxx
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