EXHIBIT 10.1
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VISUAL DATA CORPORATION
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LOAN AGREEMENT
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Dated as of December 5, 2001
with
Xxxxxxxxx X. XxXxxx
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LOAN AGREEMENT
This LOAN AGREEMENT (this "Agreement") is dated as of December 5, 2001
between VISUAL DATA CORPORATION, a Florida corporation (the "Borrower"), and
Xxxxxxxxx X. XxXxxx (the "Lender").
Recitals
WHEREAS, the Borrower desires to borrow a total principal amount of $3,000,000
from the Lender to be used for the purposes set forth herein, and the Lender is
prepared to lend such amount upon the terms and conditions hereof; NOW,
THEREFORE, for the consideration described above and for other good and valuable
consideration, the parties hereto 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 banks 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.
"Key Executive(s)" shall mean Xxxxx X. Xxxxxx, Xxxx Xxxxxxxxxx, Xxxx
Xxxxxx, Xxxxxx Xxxxxxx and Xxxxx Xxxxxxxxx.
"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).
"Loan" shall mean the loan made to the Borrower by the Lender pursuant
to Section 2 hereof.
"Loan Documents" shall mean, as in effect at any time, this Agreement,
the Warrant and the
Note. "Material Adverse Effect" shall have the meaning set forth in
Section 4.01 hereof.
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"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.
"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 Loan or any other amount payable by the Borrower under this
Agreement or the 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 eight percent (8%).
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities" shall mean the shares of Common Stock issued pursuant to
Section 2.03 hereof and the shares of Common Stock issuable upon exercise of the
Warrant.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Warrants" shall mean the warrants substantially in the form of Exhibit
C hereto.
Section 2. The Loan.
2.01 Loan. On the terms and conditions hereof, the Lender hereby
agrees to make the Loan in the principal amount of $3,000,000. A $1,500,000
advance shall be made on the Closing Date and the remaining principal amount
shall be advanced as provided in this Agreement.
2.02 Note. The Loan shall be evidenced by a secured promissory note
of the Borrower in the form of Exhibit A hereto, dated 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 advanced principal amount of the Note, from and including
the date of advance but excluding the Maturity Date, at a rate per annum equal
to twelve percent (12%). The Borrower shall pay interest monthly on or before
the 5th day of each month, beginning January 5, 2002. Interest shall be paid, at
Borrower's option in cash or Borrower's restricted Common Stock. For purposes of
this Section 2.03, Borrower's Common Stock shall be valued at $.58 per share.
Notwithstanding the foregoing, Borrower shall prepay all interest due on the
initial advance on the Note. Borrower shall deliver 500,000 shares of Borrower's
restricted Common Stock to the Lender as such prepayment of interest.
2.04 Principal. The Borrower hereby promises to pay the principal
amount of the Loan as follows:
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(a) On or before the 5th day of each month beginning on
January 5, 2002, the Borrower shall deliver to Lender an amount equal to 50% of
the revenue collected (the "Collected Revenue") by the Borrower for the prior
month (the "50% Payment"), with a minimum payment of $100,000 each month. The
50% Payment will continue until such time as $750,000 in aggregate principal
amount of the Note has been repaid. Thereafter, the Borrower shall be obligated
to repay on each monthly payment date $100,000 until all principal amounts due
have been paid. Any remaining principal amount shall be due on the Maturity
Date.
(b) Beginning with the first principal payment and
through the Maturity Date, Borrower shall deliver to the Lender 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. If it is determined that Lender is to receive an
additional principal payment, Borrower shall, within five (5) business days
after determination of the accounting firm, remit such sum to Lender. If it is
determined that Borrower has over-paid such monthly principal payment, Borrower
at its option, may either credit such amount against the next month's principal
payment or apply such amount to reduce the principal amount outstanding under
the Note.
(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 $1,500,000 (other than the $1,500,000 private
placement offering), 30% of the net proceeds of such funds raised or received by
Borrower shall be used to pay the principal amount then outstanding on the Note.
In the event that Borrower shall receive in excess of $5,000,000 (other than the
$1,500,000 private placement offering), then the entire remaining principal
amount of the Note shall be repaid from the proceeds of such financing.
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2.05 Prepayments. The Borrower may prepay all or any part of the
principal amount of the 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 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 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.
3.03 Registration. No later than six (6) months from the date
hereof, the Borrower shall file a Registration for the shares of Borrower's
Common Stock issued to Lender under this Agreement, including any shares which
may be issued as a payment of interest (the "Registrable Securities") in
accordance with the provisions of the Securities Act of 1933 (the "Act"). The
Borrower shall use its reasonable best efforts to have such registration
statement declared effective as promptly as practicable and to use its
reasonable best efforts to cause it to remain effective for at least two years,
or such shorter time as the Borrower and Lender may mutually agree in writing.
3.04 Piggyback Registration. At any time following the date hereof
and prior to the repayment of the Note, and subject to the other provisions of
this Agreement, the Borrower shall advise Lender by written notice at least ten
(10) days prior to the filing of any registration statement under the Act by the
Borrower (other than a registration statement on Form X-0, Xxxx X-0 or
subsequent similar forms), and will upon the provision of written notice from
Lender as described below include in any such registration statement such
information as may be required to permit a public offering of the Registrable
Securities desired to be registered by Lender. If Lender desires to have its
Registrable Securities included in such registration statement, it must so
advise the Borrower in writing within ten (10) days after the date of receipt of
the Borrower's notice of registration, setting forth the amount of Registrable
Securities for which registration is requested; provided, however, that if the
sole underwriter or managing underwriters advise the Borrower that the inclusion
in the offering of securities proposed to be sold by Lender would adversely
affect the ability of the Borrower to complete the offering, then the Borrower
shall have the right to reduce the number of shares for which Lender is seeking
registration on a pro rata basis with all other selling shareholders seeking
registration in any such registration statement.
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3.05 Information to be Furnished by Lender. Lender shall furnish to
the Borrower in writing all information within its possession or knowledge
required by the applicable rules and regulations of the commission and by any
applicable state securities or blue sky laws concerning Lender, the proposed
method of sale or other disposition of the shares of Common Stock being sold by
Lender in such offering, and the identity of and compensation to be paid to any
proposed underwriter or underwriters to be employed in connection with such
Offering.
3.06 Costs and Expenses. The Borrower shall pay all costs and
expenses in connection with the Registration under this Agreement; provided,
however, that Lender shall bear any transfer taxes, selling expenses,
underwriting discounts or commissions.
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. The Borrower is not a participant in any
joint venture, partnership or similar arrangement.
4.03 Capitalization; Voting Rights. The authorized capital stock of
the Borrower consists of 50,000,000 shares of Common Stock, 15,645,692 shares of
which are issued and outstanding at November 26, 2001, and 5,000,000 shares of
Preferred Stock, none of which are issued and outstanding. 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. The shares of Borrower's Common Stock
issuable and exercise of the Warrant have been duly and validly reserved for
issuance. When issued in compliance with the provisions of this Agreement and
the Warrant, the shares of Borrower's Common Stock issuable as payment for the
interest due under the Note and upon exercise of the Warrant 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 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 shares of Common Stock issuable upon exercise of the Warrant has been
taken or will be taken prior to the Closing, except as set forth on the Borrower
Disclosure Schedule. Each of the 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 at September 30, 2000 and as at June 30, 2001 (the
"Statement Date") heretofore furnished to the Lender or made available to the
Lender (collectively, the "Financial Statements") are 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.
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.
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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, and good title to its leasehold estates, in each case subject to no
Liens, 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 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, 1998, 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.
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
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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 Loan Documents and the issuance of the
Note or the shares of Common Stock issuable upon exercise of the Warrant. 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.
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, 1999 (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 are registered
pursuant to the Securities Act, or an exemption from registration is available.
The Lender understands that, unless 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 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 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) The Note, duly completed and executed.
(b) The Warrants to purchase an aggregate of 1,000,000
shares of Borrower's common stock, duly completed and executed.
(c) A stock certificate, duly completed and executed,
representing the shares of restricted Common Stock issued to the Borrower as
prepayment of interest.
(d) Certified copies of the articles of incorporation and
bylaws of the Borrower.
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(e) A Certificate of Good Standing of the Borrower
certified by the appropriate governmental officer.
(f) The Key Executives shall execute the employment
holdback agreement, the form of which is described on Exhibit D.
(g) Evidence that Xxxxx X. Xxxxxx and Xxxx Xxxxxxxxxx
have each agreed to cancel an aggregate of 750,000 options owned by them as set
forth in Schedule 6.01(g).
(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
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 Loan or immediately
after the making of the 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 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 Loan Documents (except for such as may
be properly obtained subsequent to the Closing).
(e) The shares of Borrower's Common Stock issuable upon
exercise of the Warrant 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 Loan, all interest thereon and all
other amounts payable by the Borrower under the 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
(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.
(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.
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(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.
(d) On or before the 5th day of each month, beginning on
Januar 5, 2002, Borrower will furnish Lender with a monthly consolidated balance
sheet of the Borrower as of the end of such monthly period and such other
financial statements as Borrower may reasonably request for such period and the
for current fiscal year to date.
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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 exercise
of the Warrant, all Common Stock issuable from time to time upon such exercise.
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.
7.06 Negative Covenants. The Borrower shall not:
(a) Except as set forth on the Borrower Disclosure
Schedule, not enter into any merger, consolidation or amalgamation or
liquidation, wind up or dissolve itself, or convey, sell, lease, sign, transfer
or otherwise dispose of all or substantially all of its property, business or
assets; or
(b) Except as set forth on the Borrower Disclosure
Schedule, purchase any business or significant assets (the above referred to as
a "Acquisition Transaction") without the consent of Lender, which consent shall
not be unreasonably withheld. Lender shall have a period of seven (7) days after
receipt of a complete due diligence package and term sheet describing the
Acquisition Transaction signify in writing its acceptance or rejection of such
Acquisition Transaction. In the event Borrower does not receive notice of
rejection within such five (5) day period, Borrower shall be permitted to
proceed with such Acquisition Transaction.
Section 8. Events of Default. If one or more of the following events or
conditions (an "Event of Default") shall occur and be continuing:
(a) The Borrower shall be in default for more than
fifteen (15) days in the payment when due of any principal of or interest on the
Loan;
13
(b) Any representation or warranty made in any of the 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;
(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
(f) Any event or events shall occur which, in the reasonable
judgement of Lender, has a material adverse effect on the business, properties,
assets, prospects or the financial condition of Borrower;
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
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.
14
Section 9. Miscellaneous.
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 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 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:
Visual Data Corporation
0000 X.X. 00xx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to:
Atlas Xxxxxxxx, P.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
Tele: (000) 000-0000
If to the Lender:
Xxxxxxxxx X. XxXxxx
c/o Doctor's Associates, Inc.
000 Xxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx, Controller
Fax: (000) 000-0000
Tele: (000) 000-0000, ext 1195
15
With a copy to:
Legal Department
Doctor's Associates, Inc.
000 Xxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000
Tele: (000) 000-0000 (ext. 1470)
9.03 Expenses, Etc. Except as set forth in this Section 9.03, all
costs and expenses incurred in connection with the 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 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 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 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:
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
-------------------------------
Name: Xxxxxxxxx X. XxXxxx
17
Exhibit A
Promissory Note
Exhibit B
Borrower Disclosure Schedule
Investments, excluding wholly owned subsidiaries:
XxxXxxxxXxxx.xxx - the Borrower has a majority position of this
subsidiary. Refer to statements filed with the SEC for disclosure regarding the
sale of the minority position in December 2000. The conversion of the minority
position of XxxXxxxxXxxx.xxx into Visual Data Corporation common stock will
result in approximately 1.4 million additional shares.
CuraSpan, Inc. - The Borrower owns a minority position as a result
of the sale of the assets of CareView to CuraSpan in December 2000.
Pending transactions:
The Borrower has a pending Letter of Intent for the acquisition of
XxxxxxxXxxxxx.xxx.
The Borrower has a pending Letter of Intent for the divestiture of Golf
Society of the U.S.
Exhibit C
Form of Warrant
Exhibit D
Form of Employment Holdback Letter
Option Cancellation
Xxxxx X. Xxxxxx
Share Number Exercise Price Termination Date
------------ -------------- ----------------
315,000 16.00 9/22/2003
125,000 8.875 1/9/2006
125,000 8.875 1/9/2007
12,000 10.00 3/1/2004
173,000 2.125 1/1/2002
Xxxx Xxxxxxxxxx
Share Number Exercise Price Termination Date
------------ -------------- ----------------
315,000 16.00 9/22/2003
125,000 8.875 1/9/2006
125,000 8.875 1/9/2007
12,000 10.00 3/1/2004
173,000 2.125 1/1/2002
