EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
AMONG
GOLF SOCIETY INTERNATIONAL, INC.
AND
VISUAL DATA CORPORATION
January 10, 2002
STOCK PURCHASE AGREEMENT
This Agreement entered into on January 10, 2002, by and among GOLF
SOCIETY INTERNATIONAL, INC., a Nevada corporation (the "Buyer"), and VISUAL DATA
CORPORATION (the "Seller"). The Buyer and the Seller are referred to
collectively herein as the "Parties."
The Seller owns all of the outstanding capital stock of Golf Society of
the U.S., Inc., a Florida corporation (the "Target").
This Agreement contemplates a transaction in which the Buyer will
purchase from the Seller, and the Seller will sell to the Buyer, all of the
outstanding capital stock of the Target in return for the Buyer's Note.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. DEFINITIONS.
"ADVERSE CONSEQUENCES" means all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
liabilities, obligations, taxes, liens, losses, expenses, and fees, including
court costs and reasonable attorneys' fees and expenses.
"AFFILIATE" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act.
"AFFILIATED GROUP" means any affiliated group within the
meaning of Code ss.1504(a).
"BUYER" has the meaning set forth in the preface above.
"BUYER NOTE" has the meaning set forth in ss.2(b) below.
"CASH" means cash and cash equivalents (including marketable
securities and short term investments) calculated in accordance with GAAP
applied on a basis consistent with the preparation of the Financial Statements.
"CLOSING" has the meaning set forth in ss.2(d) below.
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"CLOSING DATE" has the meaning set forth in ss.2(d) below.
"COBRA" means the requirements of Part 6 of Subtitle B of
Title I of ERISA and Code ss.4980B.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONFIDENTIAL INFORMATION" means any information concerning
the businesses and affairs of the Target and its Subsidiaries that is not
already generally available to the public.
"DISCLOSURE SCHEDULE" has the meaning set forth in ss.4 below.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation or retirement plan or arrangement, (b) qualified defined
contribution retirement plan or arrangement which is an Employee Pension Benefit
Plan, (c) qualified defined benefit retirement plan or arrangement which is an
Employee Pension Benefit Plan (including any Multiemployer Plan), or (d)
Employee Welfare Benefit Plan.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in
ERISA ss.3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in
ERISA ss.3(1).
"ENVIRONMENTAL, HEALTH, AND SAFETY REQUIREMENTS" shall mean
all federal, state, local and foreign statutes, regulations, and ordinances
concerning public health and safety, worker health and safety, and pollution or
protection of the environment, including without limitation all those relating
to the presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing,
discharge, release, threatened release, control, or cleanup of any hazardous
materials, substances or wastes, as such requirements are enacted and in effect
on or prior to the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"FINANCIAL STATEMENT" has the meaning set forth in ss.4(g)
below.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time.
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"INCOME TAX" means any federal, state, local, or foreign
income tax, including any interest, penalty, or addition thereto, whether
disputed or not.
"INCOME TAX RETURN" means any return, declaration, report,
claim for refund, or information return or statement relating to Income Taxes,
including any schedule or attachment thereto.
"INDEMNIFIED PARTY" has the meaning set forth in ss.8(d)
below.
"INDEMNIFYING PARTY" has the meaning set forth in ss.8(d)
below.
"KNOWLEDGE" means actual knowledge without independent
investigation.
"MOST RECENT FINANCIAL STATEMENTS" has the meaning set forth
in ss.4(g) below.
"MOST RECENT FISCAL MONTH END" has the meaning set forth in
ss.4(g) below.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of
business consistent with part custom and practice.
"PARTY" has the meaning set forth in the preface above.
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"PURCHASE PRICE" has the meaning set forth in ss.2(b) below.
"REPORTABLE EVENT" has the meaning set forth in ERISA ss.4043.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended.
"SECURITY INTEREST" means any mortgage, pledge, lien,
encumbrance, charge, or other security interest, other than (a) mechanic's,
materialman's, and similar liens, (b) liens for taxes not yet due and payable
[or for taxes that the taxpayer is contesting in good faith through appropriate
proceedings], (c) purchase money liens and liens securing rental payments under
capital lease arrangements, and (d) other
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liens arising in the Ordinary Course of Business and not incurred in connection
with the borrowing of money.
"SELLER" has the meaning set forth in the preface above.
"SUBSIDIARY" means any corporation with respect to which a
specified Person (or a Subsidiary thereof) owns a majority of the common stock
or has the power to vote or direct the voting of sufficient securities to elect
a majority of the directors.
"TARGET" has the meaning set forth in the preface above.
"TARGET SHARE" means any share of the Common Stock, par value
$.0001 per share, of the Target.
"THIRD PARTY CLAIM" has the meaning set forth in ss.8(d)
below.
2. PURCHASE AND SALE OF TARGET SHARES.
(a) BASIC TRANSACTION. On and subject to the terms and
conditions of this Agreement, the Buyer agrees to purchase from the Seller, and
the Seller agrees to sell to the Buyer, all of its Target Shares for the
consideration specified below in this ss.2.
(b) PURCHASE PRICE. The Buyer agrees to pay to the Seller at
the Closing (the "Purchase Price") by delivery of a convertible promissory note
(the "Buyer Note") in the form of Exhibit A attached hereto in the aggregate
principal amount of $6,500,000.
(c) THE CLOSING. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Atlas
Xxxxxxxx, P.A. in Fort Lauderdale, Florida, commencing at 9:00 a.m. local time
on the second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) or such other date as the
Buyer and the Seller may mutually determine (the "Closing Date"); PROVIDED,
HOWEVER, that the Closing Date shall be no later than January 31, 2002.
(d) DELIVERIES AT THE CLOSING. At the Closing, (i) the Seller
will deliver to the Buyer the various certificates, instruments, and documents
referred to in ss.7(a) below, (ii) the Buyer will deliver to the Seller the
various certificates, instruments, and documents referred to in ss.7(b) below,
(iii) the Seller will deliver to the Buyer stock certificates representing all
of its Target Shares, endorsed in blank or accompanied by
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duly executed assignment documents, and (iv) the Buyer will deliver to the
Seller the consideration specified in ss.2(b) above.
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE TRANSACTION.
(a) REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller
represents and warrants to the Buyer that the statements contained in this
ss.3(a) are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss.3(a)) with respect to himself or itself, except as set forth in Annex I
attached hereto.
(i) ORGANIZATION OF CERTAIN SELLER. The Seller is
duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(ii) AUTHORIZATION OF TRANSACTION. The Seller has
full power and authority (including, if the Seller is a corporation, full
corporate power and authority) to execute and deliver this Agreement and to
perform its obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of the Seller, enforceable in accordance with its
terms and conditions. The Seller need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.
(iii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Seller is subject
or, if the Seller is a corporation, any provision of its charter or bylaws or
(B) conflict with, result in a breach of, constitute a default under, result in
the acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any agreement, contract, lease,
license, instrument, or other arrangement to which the Seller is a party or by
which he or it is bound or to which any of his or its assets is subject.
(iv) BROKERS' FEES. The Seller has no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the Buyer
could become liable or obligated.
(v) INVESTMENT. The Seller (A) understands that the
Buyer Note and shares of Buyer's common stock to be issued upon conversion have
not been, and
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will not be, registered under the Securities Act, or under any state securities
laws, and are being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, (B) is acquiring
the Buyer Note and shares of Buyer's common stock to be issued upon conversion
solely for its own account for investment purposes, and not with a view to the
distribution thereof, (C) is a sophisticated investor with knowledge and
experience in business and financial matters, (D) has received certain
information concerning the Buyer and has had the opportunity to obtain
additional information as desired in order to evaluate the merits and the risks
inherent in holding the Buyer Note, and (E) is able to bear the economic risk
and lack of liquidity inherent in holding the Buyer Note and shares of Buyer's
common stock to be issued upon conversion.
(vi) TARGET SHARES. The Seller holds of record and
owns beneficially all of the number of Target Shares set forth in ss.4(b), free
and clear of any restrictions on transfer (other than restrictions under the
Securities Act and state securities laws), taxes, Security Interests, options,
warrants, purchase rights, contracts, commitments, equities, claims, and
demands. The Seller is not a party to any option, warrant, purchase right, or
other contract or commitment that could require the Seller to sell, transfer, or
otherwise dispose of any capital stock of the Target (other than this
Agreement). The Seller is not a party to any voting trust, proxy, or other
agreement or understanding with respect to the voting of any capital stock of
the Target.
(b) REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer
represents and warrants to the Seller that the statements contained in this
ss.3(b) are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout this
ss.3(b)), except as set forth in Annex II attached hereto.
(i) ORGANIZATION OF THE BUYER. The Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation.
(ii) AUTHORIZATION OF TRANSACTION. The Buyer has full
power and authority (including full corporate power and authority) to execute
and deliver this Agreement and the Pledge Agreement and to perform its
obligations hereunder and thereunder. This Agreement and the Pledge Agreement
constitute the valid and legally binding obligation of the Buyer, enforceable in
accordance with its terms and conditions. The Buyer need not give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order to consummate the transactions
contemplated by this Agreement.
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(iii) NONCONTRAVENTION. Neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which the Buyer is subject
or any provision of its charter or bylaws or (B) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Buyer is a party or by which it is bound or to which
any of its assets is subject.
(iv) BROKERS' FEES. The Buyer has no liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which any Seller
could become liable or obligated.
(v) INVESTMENT. The Buyer is not acquiring the Target
Shares with a view to or for sale in connection with any distribution thereof
within the meaning of the Securities Act.
(vi) CAPITALIZATION. The entire authorized capital
stock of the Buyer consists of 10,000,000 Buyer common shares and 1,000,000
shares of Buyer's preferred stock, of which 1,000,000 Buyer common shares and
1,000,000 preferred shares are issued and outstanding. All of the issued and
outstanding Buyer Shares have been duly authorized, are validly issued, fully
paid, and nonassessable. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, conversion rights, exchange
rights, or other contracts or commitments that could require the Buyer to issue,
sell, or otherwise cause to become outstanding any of its capital stock. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Buyer.
(vii) BUYER SHARES. The shares of Buyer's common
stock issued to Seller as part of the Purchase Price and, when issued, will be
validly issued, fully paid and nonassessable, free and clear of any restrictions
on transfer (other than restrictions under the Securities Act and State
Securities Laws).
4. REPRESENTATIONS AND WARRANTIES CONCERNING THE TARGET AND ITS
SUBSIDIARIES. The Seller represents and warrants to the Buyer that the
statements contained in this ss.4 are correct and complete as of the date of
this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this ss.4), except as set forth in the disclosure
schedule delivered by the Seller to the Buyer on the date hereof and initialed
by the Parties (the "DISCLOSURE SCHEDULE").
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(a) ORGANIZATION, QUALIFICATION, AND CORPORATE POWER. Each of
the Target is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation. Target is duly
authorized to conduct business and is in good standing under the laws of each
jurisdiction where such qualification is required, except where the lack of such
qualification would not have a material adverse effect on the financial
condition of the Target. The Target has full corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it. Section 4(a) of the Disclosure Schedule lists the
directors and officers of each of the Target and its Subsidiaries.
(b) CAPITALIZATION. The entire authorized capital stock of the
Target consists of 100 Target Shares, all of which are issued and outstanding.
All of the issued and outstanding Target Shares have been duly authorized, are
validly issued, fully paid, and nonassessable, and are held of record by the
Seller. There are no outstanding or authorized options, warrants, purchase
rights, subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require the Target to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There are no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to the Target.
(c) NONCONTRAVENTION. To the Knowledge of the Seller, neither
the execution and the delivery of this Agreement, nor the consummation of the
transactions contemplated hereby, will (i) violate any statute, regulation,
rule, injunction, judgment, order, decree, ruling, or charge, of any government,
governmental agency, or court to which Target is subject or any provision of the
charter or bylaws of any of the Target and its Subsidiaries or (ii) conflict
with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which any of the Target and its Subsidiaries
is a party or by which it is bound or to which any of its assets is subject,
except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Security
Interest] would not have a material adverse effect on the financial condition of
the Target or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. To the Knowledge of the Seller, the Target does
not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government or governmental agency in
order for the Parties to consummate the transactions contemplated by this
Agreement, except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse effect on
the financial condition of the Target and its Subsidiaries taken as a whole or
on the ability of the Parties to consummate the transactions contemplated by
this Agreement. [Any consents].
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(d) BROKERS' FEES. The Target does not have any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
(e) TITLE TO TANGIBLE ASSETS. The Target and its Subsidiaries
have good title to, or a valid leasehold interest in, the material tangible
assets they use regularly in the conduct of their businesses.
(f) FINANCIAL STATEMENTS. Attached hereto as Exhibit B are the
following financial statements (collectively the "Financial Statements"): (i)
audited consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flow as of and for the fiscal year ended December
31, 2000, for the Target; and (ii) unaudited consolidated balance sheets and
statements of income (the "Most Recent Financial Statements") as of and for the
months ended September 30, 2001 (the "Most Recent Fiscal Month End") for the
Target and its Subsidiaries. The Financial Statements (including the note
thereto) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby and present fairly the financial
condition of the Target as of such dates and the results of operations of the
Target for such periods.
(g) EVENTS SUBSEQUENT TO MOST RECENT FISCAL MONTH END. Since
the Most Recent Fiscal Month End, there has not been any material adverse change
in the financial condition of the Target. Without limiting the generality of the
foregoing, since that date the Target has not engaged in any practice, taken any
action, or entered into any transaction outside the Ordinary Course of Business.
(h) LEGAL COMPLIANCE. To the Knowledge of the Seller, the
Target has complied with all applicable laws (including rules, regulations,
codes, plans, injunctions, judgments, orders, decrees, rulings, and charges
thereunder) of federal, state, local, and foreign governments (and all agencies
thereof), except where the failure to comply would not have a material adverse
effect upon the financial condition of the Target.
(i) TAX MATTERS. Except as set forth on the Seller Disclosure
Schedule:
(i) Since December 31, 2000 the Target has filed all
Income Tax Returns that it was required to file, and has paid all Income Taxes
shown thereon as owing, except where the failure to file Income Tax Returns or
to pay Income Taxes would not have a material adverse effect on the financial
condition of the Target and its Subsidiaries taken as a whole.
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(ii) None of the Target and its Subsidiaries has
waived any statute of limitations in respect of Income Taxes or agreed to any
extension of time with respect to an Income Tax assessment or deficiency.
(j) REAL PROPERTY.
(i) Target owns no real property.
(ii) 4(k)(ii) of the Disclosure Schedule lists all
real property leased or subleased to the Target. The Seller has delivered to the
Buyer correct and complete copies of the leases and subleases listed in
ss.4(k)(ii) of the Disclosure Schedule (as amended to date). To the Knowledge of
the Seller, each lease and sublease listed in ss.4(k)(ii) of the Disclosure
Schedule is legal, valid, binding, enforceable, and in full force and effect,
except where the illegality, invalidity, nonbinding nature, unenforceability, or
ineffectiveness would not have a material adverse effect on the financial
condition of the Target and its Subsidiaries taken as a whole.
(k) INTELLECTUAL PROPERTY. Section 4(l) of the Disclosure
Schedule identifies each patent or registration which has been issued to the
Target with respect to any of its intellectual property, identifies each
application for registration which the Target has made with respect to any of
its intellectual property, and identifies each mutual license or mutual
agreement, which the Target has granted to any third party with respect to any
of its intellectual property.
(l) CONTRACTS. Section 4(m) of the Disclosure Schedule lists
all written contracts and other written agreements to which any of the Target
and its Subsidiaries is a party the performance of which will involve
consideration in excess of $30,000.00. The Seller has delivered to the Buyer a
correct and complete copy of each contract or other agreement listed in ss.4(m)
of the Disclosure Schedule (as amended to date).
(m) LITIGATION. Section 4(n) of the Disclosure Schedule sets
forth each instance in which any of the Target and its Subsidiaries (i) is
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge or (ii) is a party to any action, suit, proceeding, hearing, or
investigation of, in, or before any court or quasi-judicial or administrative
agency of any federal, state, local, or foreign jurisdiction, except where the
injunction, judgment, order, decree, ruling, action, suit, proceeding, hearing,
or investigation would not have a material adverse effect on the financial
condition of the Target.
(n) EMPLOYEE BENEFITS. Section 4(n) of the Disclosure Schedule
lists each Employee Benefit Plan that any of the Target and its Subsidiaries
maintains or to
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which any of the Target and its Subsidiaries contributes. All contributions
(including all employer contributions and employee salary reduction
contributions) which are due have been paid to each such Employee Benefit Plan
which is an Employee Pension Benefit Plan.
(o) ENVIRONMENTAL, HEALTH, AND SAFETY MATTERS.
(i) To the Knowledge of the Seller, the Target is in
compliance with Environmental, Health, and Safety Requirements, except for such
noncompliance as would not have a material adverse effect on the financial
condition of the Target.
(ii) To the Knowledge of the Seller, the Target has
not received any written notice, report or other information regarding any
actual or alleged material violation of Environmental, Health, and Safety
Requirements, or any material liabilities or potential material liabilities
(whether accrued, absolute, contingent, unliquidated or otherwise), including
any investigatory, remedial or corrective obligations, relating to the Target or
its Subsidiaries or their facilities arising under Environmental, Health, and
Safety Requirements, the subject of which would have a material adverse effect
on the financial condition of the Target.
(iii) Thisss.4(o) contains the sole and exclusive
representations and warranties of the Seller with respect to any environmental,
health, or safety matters, including without limitation any arising under any
Environmental, Health, and Safety Requirements.
5. PRE-CLOSING COVENANTS. The Parties agree as follows with
respect to the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will use his or its
reasonable best efforts to take all action and to do all things necessary,
proper, or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in ss.7 below).
(b) NOTICES AND CONSENTS. The Seller will cause each of the
Target to give any notices to third parties, and will cause the Target to use
its reasonable best efforts to obtain any third party consents in connection
with the matters referred to in ss.4(c) above. Each of the Parties will (and the
Seller will cause each of the Target and its Subsidiaries to) give any notices
to, make any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with the matters referred to in ss.3(a)(ii) and ss.4(c) above.
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(c) OPERATION OF BUSINESS. The Seller will not cause the
Target to engage in any practice, take any action, or enter into any transaction
outside the Ordinary Course of Business.
(d) FULL ACCESS. The Seller will permit, and the Seller will
cause the Target to permit, representatives of the Buyer to have full access at
all reasonable times, and in a manner so as not to interfere with the normal
business operations of the Target, to all premises, properties, personnel,
books, records (including tax records), contracts, and documents of or
pertaining to each of the Target and its Subsidiaries. The Buyer will treat and
hold as such any Confidential Information it receives from the Seller, and the
Target, in the course of the reviews contemplated by this ss.5(d), will not use
any of the Confidential Information except in connection with this Agreement,
and, if this Agreement is terminated for any reason whatsoever, will return to
the Seller, and the Target, all tangible embodiments (and all copies) of the
Confidential Information which are in its possession.]
(e) NOTICE OF DEVELOPMENTS.
(i) The Seller may elect at any time to notify the
Buyer of any development causing a breach of any of the representations and
warranties in ss.4 above. Unless the Buyer has the right to terminate this
Agreement pursuant to ss.9(a)(ii) below by reason of the development and
exercises that right within the period of 10 business days referred to in
ss.9(a)(ii) below, the written notice pursuant to this ss.5(e)(i) will be deemed
to have amended the Disclosure Schedule, to have qualified the representations
and warranties contained in ss.4 above, and to have cured any misrepresentation
or breach of warranty that otherwise might have existed hereunder by reason of
the development.
(ii) Each Party will give prompt written notice to
the others of any material adverse development causing a breach of any of his or
its own representations and warranties in ss.3 above. No disclosure by any Party
pursuant to this ss.5(e)(ii), however, shall be deemed to amend or supplement
Annex I, Annex II, or the Disclosure Schedule or to prevent or cure any
misrepresentation or breach of warranty.
(f) EXCLUSIVITY. The Seller will (and the Seller will not
cause or permit the Target to) solicit, initiate, or encourage the submission of
any proposal or offer from any Person relating to the acquisition of all or
substantially all of the capital stock or assets of the Target (including any
acquisition structured as a merger, consolidation, or share exchange); PROVIDED,
HOWEVER, that the Seller, the Target, and their directors and officers will
remain free to participate in any discussions or negotiations regarding, furnish
any information with respect to, assist or participate in, or facilitate in any
other
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manner any effort or attempt by any Person to do or seek any of the foregoing to
the extent their fiduciary duties may require.
6. POST-CLOSING COVENANTS. The Parties agree as follows with
respect to the period following the Closing.
(a) GENERAL. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under ss.8 below).
(b) BUYER NOTE AND COMMON STOCK. Each Buyer Note and shares of
stock issued thereunder will be imprinted with a legend substantially in the
following form:
This security was originally issued on ____, 2002, and has not been
registered under the Securities Act of 1933, as amended.
(c) BOARD REPRESENTATION. At Closing, Buyer shall appoint a
representative of Seller to its Board of Directors. If Buyer's Board has more
than five directors, Seller shall be entitled to two board seats. Buyer
covenants to appoint Seller directors so long as the Buyer Note remains
outstanding.
7. CONDITIONS TO OBLIGATION TO CLOSE.
(a) CONDITIONS TO OBLIGATION OF THE BUYER. The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth
inss.3(a) andss.4 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) the Seller shall have performed and complied
with all of its covenants hereunder in all material respects through the
Closing;
(iii) there shall not be any injunction, judgment,
order, decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
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(iv) the Seller shall have delivered to the Buyer a
certificate to the effect that each of the conditions specified above
inss.7(a)(i)-(iii) is satisfied in all respects;
(v) all authorizations, consents, and approvals
referred to in ss.3(a)(ii),ss.3(b)(ii), andss.4(c ) above shall have been
obtained; and
(vi) all actions to be taken by the Seller in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Buyer.
The Buyer may waive any condition specified in this ss.7(a) if it executes a
writing so stating at or prior to the Closing.
(b) CONDITIONS TO OBLIGATION OF THE SELLER. The obligation of
the Seller to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth
inss.3(b) above shall be true and correct in all material respects at and as of
the Closing Date;
(ii) the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the Closing;
(iii) there shall not be any injunction, judgment,
order, decree, ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above
inss.7(b)(i)-(iii) is satisfied in all respects;
(v) all other authorizations, consents, and approvals
of governments and governmental agencies referred to inss.3(a)(ii),ss.3(b)(ii),
andss.4(c) above shall have been obtained;
(vi) the Buyer shall have at least $500,000 in
unrestricted cash available and will make its best efforts to raise another $1.0
million in additional equity or debt through a public or private offering;
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(vii) the Buyer shall have paid the Purchase Price
and delivered the Buyer Notes; and
(viii) all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents required to effect the
transactions contemplated hereby will be reasonably satisfactory in form and
substance to the Seller.
The Seller may waive any condition specified in this ss.7(b) if they execute a
writing so stating at or prior to the Closing.
8. REMEDIES FOR BREACHES OF THIS AGREEMENT.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Seller contained in ss.4 above shall
survive the Closing hereunder (unless the Buyer knew or had reason to know of
any misrepresentation or breach of warranty at the time of Closing) and continue
in full force and effect for a period of one year thereafter. All of the
representations and warranties of the Parties contained in ss.3 above shall
survive the Closing (unless the damaged Party knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect forever thereafter (subject to any applicable statutes of
limitations).
(b) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE BUYER. In
the event the Seller breaches any of its representations, warranties, and
covenants contained herein, and, if there is an applicable survival period
pursuant to ss.8(a) above, provided that the Buyer makes a written claim for
indemnification against the Seller pursuant to ss.10(g) below within such
survival period, then the Seller agrees to indemnify the Buyer from and against
any Adverse Consequences the Buyer shall suffer through and after the date of
the claim for indemnification (but EXCLUDING any Adverse Consequences the Buyer
shall suffer after the end of any applicable survival period) caused by the
breach; PROVIDED, HOWEVER, that the Seller shall not have any obligation to
indemnify the Buyer from and against any Adverse Consequences caused by the
breach of any representation or warranty or covenant of the Seller contained in
ss.4 above: (A) until the Buyer has suffered Adverse Consequences by reason of
all such breaches in excess of a $50,000.00 aggregate deductible (after which
point the Seller will be obligated only to indemnify the Buyer from and against
further such Adverse Consequences) or thereafter (B) to the extent the Adverse
Consequences the Buyer has suffered by reason of all such breaches exceeds a
$3,000,000.00 aggregate ceiling (after which point the Seller will have no
obligation to indemnify the Buyer from and against further such Adverse
Consequences).
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(c) INDEMNIFICATION PROVISIONS FOR BENEFIT OF THE SELLER. In
the event the Buyer breaches any of its representations, warranties, and
covenants contained herein, and, if there is an applicable survival period
pursuant to ss.8(a) above, provided that the Seller makes a written claim for
indemnification against the Buyer pursuant to ss.10(h) below within such
survival period, then the Buyer agrees to indemnify the Seller from and against
the entirety of any Adverse Consequences the Seller shall suffer through and
after the date of the claim for indemnification (but EXCLUDING any Adverse
Consequences the Seller shall suffer after the end of any applicable survival
period) caused [proximately] by the breach.
(d) MATTERS INVOLVING THIRD PARTIES.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") which
may give rise to a claim for indemnification against any other Party (the
"Indemnifying Party") under this ss.8, then the Indemnified Party shall promptly
(and in any event within [five business days] after receiving notice of the
Third Party Claim) notify each Indemnifying Party thereof in writing.
(ii) Any Indemnifying Party will have the right at
any time to assume and thereafter conduct the defense of the Third Party Claim
with counsel of his or its choice [reasonably satisfactory to the Indemnified
Party; PROVIDED, HOWEVER, that the Indemnifying Party will not consent to the
entry of any judgment or enter into any settlement with respect to the Third
Party Claim without the prior written consent of the Indemnified Party (not to
be withheld unreasonably) unless the judgment or proposed settlement involves
only the payment of money damages and does not impose an injunction or other
equitable relief upon the Indemnified Party].
(iii) Unless and until an Indemnifying Party assumes
the defense of the Third Party Claim as provided in ss.8(d)(ii) above, however,
the Indemnified Party may defend against the Third Party Claim in any manner he
or it reasonably may deem appropriate.
(iv) In no event will the Indemnified Party consent
to the entry of any judgment or enter into any settlement with respect to the
Third Party Claim without the prior written consent of each of the Indemnifying
Parties.
(e) OFFSET. Notwithstanding anything to the contrary contained
in this Section 8, Buyer agrees that any claim it may have for Adverse
Consequences under this Agreement shall first be offset against either the
shares of Buyer's common stock issued to Buyer as part of the Purchase Price of
the Buyer Note. Upon final determination of a claim for Adverse Consequences,
Buyer shall notify Seller of the final
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amount of such claim and Seller shall, within five business days thereafter,
repay such claim or alternatively, advise Buyer whether the offset shall occur
against the Buyer Note. In the event of an offset against the common stock, the
shares shall be valued at the closing price of Buyer's common stock for the five
trading days prior to the final determination of the claim. In the event of an
offset against the Buyer Note, is against the principal amount thereof in
inverse order of maturity.
9. TERMINATION.
(a) TERMINATION OF AGREEMENT. Certain of the Parties may
terminate this Agreement as provided below:
(i) the Buyer and the Seller may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing in the event (A)
the Seller has within the then previous [5 business days] given the Buyer any
notice pursuant to ss.5(e)(i) above and (B) the development that is the subject
of the notice has had a material adverse effect upon the financial condition of
the Target and its Subsidiaries taken as a whole;
(iii) the Buyer may terminate this Agreement by
giving written notice to the Requisite Seller at any time prior to the Closing
(A) in the event the Seller has breached any material representation, warranty,
or covenant contained in this Agreement (other than the representations and
warranties in ss.4 above) in any material respect, the Buyer has notified the
Requisite Seller of the breach, and the breach has continued without cure for a
period of [10 days] after the notice of breach or (B) if the Closing shall not
have occurred on or before January 31, 2002, by reason of the failure of any
condition precedent under ss.7(a) hereof (unless the failure results primarily
from the Buyer itself breaching any representation, warranty, or covenant
contained in this Agreement); and
(iv) the Seller may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing (A) in the
event the Buyer has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Seller has notified the
Buyer of the breach, and the breach has continued without cure for a period of
[10 days] after the notice of breach or (B) if the Closing shall not have
occurred on or before January 31, 2002, by reason of the failure of any
condition precedent under ss.7(b) hereof (unless the failure results primarily
from the Seller itself breaching any representation, warranty, or covenant
contained in this Agreement).
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(b) EFFECT OF TERMINATION. If any Party terminates this
Agreement pursuant to ss.9(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach).
10. MISCELLANEOUS.
(a) PRESS RELEASES AND PUBLIC ANNOUNCEMENTS. No Party shall
issue any press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior written approval
of the Buyer and the Seller; PROVIDED, HOWEVER, that any Party may make any
public disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
(b) NO THIRD-PARTY BENEFICIARIES. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they have related in any way to the
subject matter hereof.
(d) SUCCESSION AND ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his or its rights, interests, or obligations hereunder without the prior
written approval of the Buyer and the Seller; PROVIDED, HOWEVER, that the Buyer
may (i) assign any or all of its rights and interests hereunder to one or more
of its Affiliates and (ii) designate one or more of its Affiliates to perform
its obligations hereunder (in any or all of which cases the Buyer nonetheless
shall remain responsible for the performance of all of its obligations
hereunder).
(e) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) HEADINGS. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
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(g) NOTICES. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
IF TO THE SELLER: COPY TO:
Visual Data Corporation Atlas Xxxxxxxx, P.A.
0000 Xxxxxxxxx 00xx Xxxxxx 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000 Xxxx Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx Attention: Xxxx X. Xxxxxxxxx, Esq.
IF TO THE BUYER: COPY TO:
Golf Society International, Inc.
----------------------------------
----------------------------------
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(h) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Florida without
giving effect to any choice or conflict of law provision or rule.
(i) AMENDMENTS AND WAIVERS. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Buyer and the Seller. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
(j) SEVERABILITY. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or
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enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction.
(k) EXPENSES. Each of the Buyer, and the Target, will bear its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby. The
Target will also bear all of the Seller's costs and expenses (including all of
their legal fees and expenses) incurred in connection with this Agreement and
the transactions contemplated hereby.
(l) CONSTRUCTION. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation.
(m) INCORPORATION OF EXHIBITS, ANNEXES, AND SCHEDULES. The
Exhibits, Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on
the date first above written.
GOLF SOCIETY INTERNATIONAL, INC.
By:
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Title:
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VISUAL DATA CORPORATION
By:
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Title:
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