NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS. NOTWITHSTANDING THE FOREGOING, THESE
SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES MAY
BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY SUCH SECURITIES.
No. [ ] $[ ]
Date: December 15, 2004
VISUAL DATA CORPORATION
8.0% SENIOR SECURED CONVERTIBLE NOTE DUE 2008
THIS NOTE is one of a series of duly authorized and issued Notes of Visual
Data Corporation, a Florida corporation (the "COMPANY"), designated as its 8.0%
Senior Secured Convertible Notes due 2008, in the aggregate principal amount of
$6,500,000 (the "NOTES"), subject to increase pursuant to the terms of a certain
Additional Investment Right of even date herewith.
FOR VALUE RECEIVED, the Company promises to pay to the order of [Holder]
or its registered assigns (the "HOLDER"), the principal sum of [__________]
$(__________), on December 14, 2008 (the "MATURITY DATE"), or such earlier date
as the Notes are required or permitted to be repaid as provided hereunder, and
to pay interest to the Holder on the unconverted and then outstanding principal
amount of this Note in accordance with the provisions hereof. The principal
amount of this Note may be increased as set forth in Section 2(c) below.
Notwithstanding the foregoing, the Company hereby unconditionally promises to
pay to the order of the Holder interest on any principal or interest payable
hereunder that shall not be paid in full when due, whether at the time of any
stated interest payment date or maturity or by prepayment, acceleration or
declaration or otherwise, for the period from and including the due date of such
payment to but excluding the date the same is paid in full, at a rate of 18% per
annum (but in no event in excess of the maximum rate permitted under applicable
law).
Interest payable under this Note shall be computed on the basis of a year
of 360 days and actual days elapsed (including the first day but excluding the
last day) occurring in the period for which interest is payable.
Payments of principal and interest shall be made in lawful money of the
United States of America to the Holder at its address as provided in Section 14
or by wire transfer to such account specified from time to time by the Holder
hereof for such purpose as provided in Section 14.
The holder of this Note is entitled to the benefits of the Security
Agreement and the Pledge Agreement.
1. Definitions. In addition to the terms defined elsewhere in this Note,
(a) capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Securities Purchase Agreement, dated as of June 8,
2004, among the Company and the Purchasers identified therein (the "PURCHASE
AGREEMENT"), and (b) the following terms have the meanings indicated:
"COMPANY PREPAYMENT PRICE" for any Notes which shall be subject to
prepayment pursuant to Section 8(a), shall equal the sum of: (i) the
principal amount of Notes to be prepaid, plus all accrued and unpaid
interest thereon, and (ii) all other amounts, costs, expenses and
liquidated damages due in respect of such Notes.
"CONVERSION DATE" means the date a Conversion Notice is delivered to
the Company together with the Conversion Schedule pursuant to Section
6(a).
"CONVERSION NOTICE" means a written notice in the form attached
hereto as Schedule 1.
"CONVERSION PRICE" means $1.00, subject to adjustment from time to
time pursuant to Section 12.
"EQUITY CONDITIONS" means, with respect to a specified issuance of
Common Stock, that each of the following conditions is satisfied: (i) the
number of authorized but unissued and otherwise unreserved shares of
Common Stock is sufficient for such issuance; (ii) such shares of Common
Stock are registered for resale by the Holder and may be sold by the
Holders pursuant to an effective Registration Statement covering the
Underlying Shares or all such shares may be sold without volume
restrictions pursuant to Rule 144(k) under the Securities Act; (iii) the
Common Stock generally is listed or quoted (and is not suspended from
trading) on an Eligible Market and such shares of Common Stock are
approved for listing upon issuance; (iv) such issuance would be permitted
in full without violating Section 6(c) hereof or the rules or regulations
of any Trading Market; (v) no Bankruptcy Event has occurred; (vi) the
Company is not in default with respect to any material obligation
hereunder or under any other Transaction Document; and (vii) no public
announcement of a pending or proposed Change of Control transaction has
occurred that has not been consummated.
"EVENT EQUITY VALUE" means 115% of the average of the Closing Prices
for the five Trading Days preceding the date of delivery of the notice
requiring payment of the Event Equity Value, provided that if the Company
does not make such required payment (together with any other payments,
expenses and liquidated damages then due and payable under the Transaction
Documents) when due or, in the event the Company disputes in good faith
the occurrence of the Triggering Event pursuant to which such notice
relates, does not instead deposit such required payment (together with
such other payments, expenses and liquidated damages then due) in escrow
with an independent third-party escrow agent within five Trading Days of
the date such required payment is due, then the Event Equity Value shall
be 115% of the greater of (a) the average of the Closing Prices for the
five Trading Days preceding the date of delivery of the notice requiring
payment of the Event Equity Value and (b) the average of the Closing
Prices for the five Trading Days preceding the date on which such required
payment (together with such other payments, expenses and liquidated
damages) is paid in full.
2
"HOLDER PREPAYMENT PRICE" for any Notes required to be prepaid
pursuant to Section 8(b) shall equal the sum of: (i) the principal amount
of Notes to be prepaid, plus all accrued and unpaid interest thereon and
(ii) all other amounts, costs, expenses and liquidated damages due in
respect of such Notes.
"ORIGINAL ISSUE DATE" means the date of the first issuance of any
Notes, regardless of the number of transfers of any particular Note.
"PRINCIPAL PAYMENT DATE" means any date on which payment of a
principal amount of this Note shall be due and payable by the Company in
accordance with Section 9.
"TRIGGERING EVENT" means any of the following events: (a) the Common
Stock is not listed or quoted, or is suspended from trading, in each case,
on an Eligible Market for a period of 20 or more Trading Days (which need
not be consecutive Trading Days); (b) the Company fails for any reason to
deliver a certificate evidencing any Securities to a Purchaser within five
Trading Days after delivery of such certificate is required pursuant to
any Transaction Document or the exercise or conversion rights of the
Holders pursuant to any Transaction Document are otherwise suspended for
any reason; (c) the Company fails to have available a sufficient number of
authorized but unissued and otherwise unreserved shares of Common Stock
available to issue Underlying Shares upon any exercise of the Note; (d)
the Company effects or publicly announces its intention to effect any
exchange, recapitalization or other transaction that effectively requires
or rewards physical delivery of certificates evidencing the Common Stock;
(e) the effectiveness of the Registration Statement lapses for any reason
or the Holder shall not be permitted to resell any Underlying Shares under
the Registration Statement, in either case, for 20 or more consecutive
days in any 12 month period or for more than twice any 12 month period;
(f) the Company fails to make any cash payment required under the
Transaction Documents and such failure is not cured within five days after
notice of such default is first given to the Company by a Purchaser; or
(g) the Company defaults in the timely performance of any other obligation
under the Transaction Documents and such default continues uncured for a
period of 20 days after the date on which notice of such default is first
given to the Company by a Purchaser (it being understood that no prior
notice need be given in the case of a default that cannot reasonably be
cured within 20 days).
2. Principal and Interest.
(a) The Company shall pay interest to the Holder on the
aggregate unconverted and then outstanding principal amount of this Note at the
rate of 8.0% per annum, payable quarterly in arrears on each June 30, September
30, December 31 and March 31, except if such date is not a Trading Day, in which
case such interest shall be payable on the next succeeding Trading Day (each, an
"INTEREST PAYMENT DATE"). The first Interest Payment Date shall be September 30,
2004.
3
(b) Subject to the conditions and limitations set forth below,
the Company may pay interest or principal on this Note in (i) cash or (ii)
shares of Common Stock. The Company must deliver written notice to the Holder
indicating the manner in which it intends to pay interest and principal at least
15 Trading Days prior to each Interest Payment Date or the Principal Payment
Date, respectively, but the Company may indicate in any such notice that the
election contained therein shall continue for subsequent Interest Payment Dates
or Principal Payment Dates until revised. Failure to timely provide such written
notice shall be deemed an election by the Company to pay the amount of any
interest or principal in cash.
(c) Notwithstanding the foregoing, the Company may not pay
interest or principal by issuing shares of Common Stock unless all of the Equity
Conditions have been satisfied; provided, however, that prior to the Effective
Date, the Company shall be permitted to pay the interest due on September 30,
2004 in shares of unregistered Common Stock to the extent such shares will be
included in the Registration Statement. If the Company is required to pay
interest in cash on any Interest Payment Date but fails to do so, the Holder may
(but shall not be required to) treat such interest as if it had been added to
the principal amount of this Note as of such Interest Payment Date or accept any
number of shares of Common Stock in lieu of such interest payment.
(d) In the event that the Company elects to pay interest on
any Interest Payment Date or Principal Payment Date in shares of Common Stock,
the number of shares of Common Stock to be issued to each Holder as such
interest or principal shall be (i) with respect to interest, determined by
dividing the aggregate amount of interest then payable to such Holder by the
Market Price (as defined below) as of the applicable Interest Payment Date, and
rounding up to the nearest whole share, (ii) with respect to principal,
determined as set forth in Section 9(c) hereof, and (iii) paid to such Holder in
accordance with Section 2(e) below. The term "MARKET PRICE" shall mean 85% of
the arithmetic average of the VWAP for the 20 Trading Days prior to the
applicable Interest Payment Date or Principal Payment Date, as the case may be
(not including such date).
(e) In the event that any interest or principal are paid in
Common Stock, the Company shall on such Interest Payment Date or Principal
Payment Date (i) issue and deliver to such Holder a certificate, registered in
the name of the Holder or its designee, for the number of shares of Common Stock
to which the Holder shall be entitled or (ii) at all times after the Holder has
notified the Company that this clause (ii) shall apply, credit the number of
shares of Common Stock to which the Holder shall be entitled to the Holder's or
its designee's balance account with The Depository Trust Company through its
Deposit Withdrawal Agent Commission System.
3. Ranking and Covenants.
(a) Except as set forth in Schedule 3.1(dd) or as otherwise permitted in
Section 4.10(a) of the Purchase Agreement (the "EXISTING INDEBTEDNESS"), no
indebtedness of the Company is senior to this Note in right of payment, whether
with respect to interest, damages or upon liquidation or dissolution or
otherwise. Other than the Existing Indebtedness and any renewal, refinancing or
replacement thereof that does not exceed the aggregate amount of the Existing
Indebtedness and the borrowing availability under the related credit or loan
agreements on the date hereof, the Company will not, and will not permit any
Subsidiary to, directly or indirectly, enter into, create, incur, assume or
suffer to exist any indebtedness of any kind, on or with respect to any of its
property or assets now owned or hereafter acquired or any interest therein or
any income or profits therefrom, that is senior in any respect to the Company's
obligations under the Notes, other than indebtedness secured by purchase money
security interests (which will be senior only as to the underlying assets
covered thereby) and indebtedness under capital lease obligations (which will be
senior only as to the assets covered thereby).
4
(b) Except as set forth on Schedule 3(b), so long as any Notes are
outstanding, neither the Company nor any Subsidiary shall, directly or
indirectly, (i) redeem, purchase or otherwise acquire any capital stock or set
aside any monies for such a redemption, purchase or other acquisition or (ii)
issue variable priced equity securities or variable priced equity linked
securities.
(c) The Company covenants that it will at all times reserve and keep
available out of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Underlying Shares as
required hereunder, the number of Underlying Shares which are then issuable and
deliverable upon the conversion of (and otherwise in respect of) this entire
Note (taking into account the adjustments set forth in Section 12 and
disregarding any limitations set forth in Section 6(b)), free from preemptive
rights or any other contingent purchase rights of Persons other than the Holder.
The Company covenants that all Underlying Shares so issuable and deliverable
shall, upon issuance in accordance with the terms hereof, be duly and validly
authorized and issued and fully paid and nonassessable.
(d) The Company covenants that it will not redeem, repurchase or otherwise
acquire all or any portion of the Series A-10 Preferred Stock or any other
preferred stock, common stock or other equity equivalent of the Company, on or
prior to the earlier of (i) the Maturity Date hereof or (ii) the date on which
all of the Notes shall have been converted into Common Stock, without the prior
written consent of the holders of 51% of the aggregate principal value of the
then outstanding Notes (the "MAJORITY HOLDERS").
4. Registration of Notes. The Company shall register the Notes upon
records to be maintained by the Company for that purpose (the "NOTE REGISTER")
in the name of each record holder thereof from time to time. The Company may
deem and treat the registered Holder of this Note as the absolute owner hereof
for the purpose of any conversion hereof or any payment of interest or principal
hereon, and for all other purposes, absent actual notice to the contrary.
5. Registration of Transfers and Exchanges. The Company shall register the
transfer of any portion of this Note in the Note Register upon surrender of this
Note to the Company at its address for notice set forth herein. Upon any such
registration or transfer, a new Note, in substantially the form of this Note
(any such new Note, a "NEW NOTE"), evidencing the portion of this Note so
transferred shall be issued to the transferee and a New Note evidencing the
remaining portion of this Note not so transferred, if any, shall be issued to
the transferring Holder. The acceptance of the New Note by the transferee
thereof shall be deemed the acceptance by such transferee of all of the rights
and obligations of a holder of a Note. This Note is exchangeable for an equal
aggregate principal amount of Notes of different authorized denominations, as
requested by the Holder surrendering the same. No service charge or other fee
will be imposed in connection with any such registration of transfer or
exchange.
5
6. Conversion.
(a) At the Option of the Holder. All or any portion of this Note shall be
convertible into shares of Common Stock (subject to the limitations set forth in
Section 6(c)), at the option of the Holder, at any time and from time to time
from and after the Original Issue Date. The number of Underlying Shares issuable
upon any conversion hereunder shall equal the outstanding principal amount of
this Note to be converted, plus the amount of any accrued but unpaid interest on
this Note through the Conversion Date, divided by the Conversion Price on the
Conversion Date. The Holder shall effect conversions under this Section 6(a) by
delivering to the Company a Conversion Notice together with a schedule in the
form of Schedule 2 attached hereto (the "CONVERSION Schedule"). If the Holder is
converting less than all of the principal amount of this Note, or if a
conversion hereunder may not be effected in full due to the application of
Section 6(c), the Company shall honor such conversion to the extent permissible
hereunder and shall promptly deliver to the Holder a Conversion Schedule
indicating the principal amount (and accrued interest) which has not been
converted.
(b) Automatic Conversion.
At any time following the Original Issue Date, the Company shall
have the right to cause an amount (the "CONVERTED AMOUNT") of this Note
then outstanding equal to the lesser of (A) the principal amount
outstanding under this Note and (B) 20% of the product of (x) the total
volume of Common Stock traded on the company's Trading Market for the 30
day period preceding the Automatic Conversion Date (as defined below), (y)
the arithmetic average of the VWAP for such 30 day period and (z) the
quotient of (I) the outstanding principal amount of this Note on the
Automatic Conversion Date and (II) the outstanding principal amount of all
of the Notes issued pursuant to the Transaction Documents on the Automatic
Conversion Date (such amount being the Holder's "PRO RATA AMOUNT"), to be
automatically converted into fully paid non-assessable shares of Common
Stock (such conversion, an "AUTOMATIC CONVERSION") at the Conversion Price
(subject to the limitations set forth in Sections 6(c)), by delivery of a
10 day advance written notice (the "AUTOMATIC CONVERSION NOTICE") to the
Holder.
Notwithstanding anything to the contrary, the Company may not cause
an Automatic Conversion unless each of the following conditions are
satisfied: (A) as of the Automatic Conversion Date (as defined below), no
Triggering Event has occurred (after giving effect to any addition to
principal under the Notes); (B) each of the Equity Conditions are
satisfied with respect to all of the Common Stock issuable on the
Automatic Conversion Date; and (C) the Closing Price of the Common Stock
on each of the 20 out of any 30 consecutive days preceding the Automatic
Conversion Notice is greater than $1.63 per share (as adjusted for stock
splits, stock combinations or other similar recapitalization or event).
6
Upon an Automatic Conversion in accordance with the procedures
specified in this Section 6(b), and effective as of the close of business
on the Automatic Conversion Date, the Converted Amount shall be converted
into fully paid and non-assessable shares of Common Stock automatically
without the need for any further action by the Holder. Upon the occurrence
of such Automatic Conversion of the Converted Amount, there shall be (A)
issued and delivered to the Holder a certificate or certificates for the
number of shares of Common Stock into which this the Converted Amount was
convertible on the Automatic Conversion Date or (B) at all times after the
Holder has notified the Company that this clause (ii) shall apply,
credited the number of shares of Common Stock to which the Holder shall be
entitled to the Holder's or its designee's balance account with The
Depository Trust Company through its Deposit Withdrawal Agent Commission
System. For purposes of this Section 6(b), the "AUTOMATIC CONVERSION DATE"
shall mean the 10th day following the date on which the Automatic
Conversion Notice is either: (x) delivered to the Holder by personal
delivery, or (y) delivered to the Holder by facsimile transmission to the
facsimile telephone number of such Holder appearing on the signature page
to the Purchase Agreement (with confirmation of receipt), or (z) deposited
with a recognized express courier for express delivery, fees prepaid,
addressed to such registered holder at the address of such holder
appearing on the signature page to the Purchase Agreement.
(c) Certain Conversion Restrictions.
Relating to the Number of Shares.
(A) Subject to Section 6(c)(i)(B), the number of shares of Common Stock
that may be acquired by a Holder upon any conversion of Notes (or
otherwise in respect hereof) shall be limited to the extent necessary to
insure that, following such conversion (or other issuance), the total
number of shares of Common Stock then beneficially owned by such Holder
and its Affiliates and any other Persons whose beneficial ownership of
Common Stock would be aggregated with such Holder's for purposes of
Section 13(d) of the Exchange Act, does not exceed 9.999% (the "MAXIMUM
PERCENTAGE") of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock
issuable upon such conversion). For such purposes, beneficial ownership
shall be determined in accordance with Section 13(d) of the Exchange Act
and the rules and regulations promulgated thereunder. Each delivery of a
Conversion Notice hereunder will constitute a representation by the
applicable Holder that it has evaluated the limitations set forth in this
Section 6(c)(i)(A) and has determined that issuance of the full number of
Underlying Shares issuable in respect of such Conversion Notice does not
violate the restrictions contained in this Section 6(c)(i)(A). If at any
time the limits in this Section 6(c) make this Note inconvertible in whole
or in part, the Company shall not by reason thereof be relieved of its
obligation to issue shares of Common Stock at any time or from time to
time thereafter but prior to the Maturity Date upon conversion of this
Note as and when shares of Common Stock may be issued in compliance with
such restrictions.
(B) Notwithstanding the provisions of Section 6(c)(i)(A), by written
notice to the Company, the Holder shall have the right (x) at any time and
from time to time to reduce its Maximum Percentage immediately upon notice
to the Company in the event and only to the extent that Section 16 of the
Exchange Act or the rules promulgated thereunder (or any successor statute
or rules) is changed to reduce the beneficial ownership percentage
threshold thereunder to a percentage less than 9.999%.
7
7. Mechanics of Conversion.
(a) Upon conversion of this Note, the Company shall promptly (but in no
event later than three Trading Days after the Conversion Date) issue or cause to
be issued and cause to be delivered to or upon the written order of the Holder
and in such name or names as the Holder may designate a certificate for the
Underlying Shares issuable upon such conversion, free of restrictive legends
unless a registration statement covering the resale of the Underlying Shares and
naming the Holder as a selling stockholder thereunder is not then effective and
such Underlying Shares are not then freely transferable without volume
restrictions pursuant to Rule 144 under the Securities Act. The Holder, or any
Person so designated by the Holder to receive Underlying Shares, shall be deemed
to have become holder of record of such Underlying Shares as of the Conversion
Date. The Company shall, upon request of the Holder, use its best efforts to
deliver Underlying Shares hereunder electronically through the Depository Trust
Corporation or another established clearing corporation performing similar
functions.
(b) The Holder shall not be required to deliver the original Note in order
to effect a conversion hereunder. Execution and delivery of the Conversion
Notice shall have the same effect as cancellation of the original Note and
issuance of a New Note representing the remaining outstanding principal amount.
Upon surrender of this Note following one or more partial conversions, the
Company shall promptly deliver to the Holder a New Note representing the
remaining outstanding principal amount.
(c) The Company's obligations to issue and deliver Underlying Shares upon
conversion of this Note in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any set-off, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of such Underlying Shares.
(d) If by the third Trading Day after a Conversion Date the Company fails
to deliver to the Holder such Underlying Shares in such amounts and in the
manner required pursuant to Section 7(a), then the Holder will have the right to
rescind such conversion.
(e) If by the third Trading Day after a Conversion Date the Company fails
to deliver to the Holder such Underlying Shares in such amounts and in the
manner required pursuant to Section 7(a), and if after such third Trading Day
the Holder purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by such Holder of the
Underlying Shares which the Holder anticipated receiving upon such conversion (a
"BUY-IN"), then the Company shall either (i) pay cash to such Purchaser in an
amount equal to such Purchaser's total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased (the "BUY-IN
PRICE"), at which point the Company's obligation to deliver such certificate
(and to issue such Common Stock) shall terminate, or (ii) promptly honor its
obligation to deliver to such Purchaser a certificate or certificates
representing such Common Stock and pay cash to such Purchaser in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such number
of shares of Common Stock, times (B) the Closing Price on the date of the event
giving rise to the Company's obligation to deliver such certificate. In the
event the Holder elects to effectuate a Buy-In and the Company complies with the
provisions of this Section 7(e), the failure of the Company to deliver to the
Holder the Underlying Shares required to be issued on the Conversion Date
pursuant to Section 7(a) shall not result in a Triggering Event.
8
8. Prepayment.
(a) At the Option of the Company.
(i) At any time following the Original Issue Date, upon delivery of
a written notice to the Holder (a "COMPANY PREPAYMENT NOTICE" and the date
such notice is delivered by the Company, the "COMPANY NOTICE DATE"), the
Company shall be entitled to prepay all or any portion of the outstanding
principal amount of this Note plus any accrued and unpaid interest thereon
for an amount in cash equal to the Company Prepayment Price.
Notwithstanding anything to the contrary, the Company shall only be
entitled to deliver a Company Prepayment Notice pursuant to the terms
hereof if the Equity Conditions are satisfied with respect to all shares
of Common Stock issuable pursuant to the Transaction Documents on the
Company Notice Date. If any of the Equity Conditions shall cease to be in
effect during the period between the Company Notice Date and the date the
Company Prepayment Price is paid in full, then the Holder subject to such
prepayment may elect, by written notice to the Company given at any time
after any of the Equity Conditions shall cease to be in effect, to
invalidate ab initio such optional prepayment, notwithstanding anything
herein contained to the contrary. The Holder may, within 5 Trading Days of
its receipt of the Company Prepayment Notice, convert any portion of the
outstanding principal amount of this Note and any accrued and unpaid
interest thereon subject to a Company Prepayment Notice. Once delivered,
the Company shall not be entitled to rescind a Company Prepayment Notice.
(ii) The Company Prepayment Price shall be due on the 5th Trading
Day immediately following the Company Notice Date. Any such prepayment
shall be free of any claim of subordination. If any portion of the Company
Prepayment Price shall not be timely paid by the Company, interest shall
accrue thereon at the rate of 18% per annum (or the maximum rate permitted
by applicable law, whichever is less) until the Company Prepayment Price
plus all such interest is paid in full, which payment shall constitute
liquidated damages and not a penalty. In addition, if any portion of the
Company Prepayment Price remains unpaid after such date, the Holder
subject to such prepayment may elect by written notice to the Company to
invalidate ab initio such Company Prepayment Notice with respect to the
unpaid amount, notwithstanding anything herein contained to the contrary
and no interest shall be owed to the Holder in respect thereof. If the
Holder makes such an election, the principal amount of this Note, together
with the accrued and unpaid interest thereon shall be reinstated with
respect to such unpaid amount and the Company shall no longer have any
prepayment rights under this Section 8.
9
(iii) Notwithstanding anything to the contrary herein, the Company
may not elect a prepayment pursuant to Section 8(a)(i) unless the Company
makes such prepayment election to all of the Holders on a pro rata basis,
based on such Holders then outstanding principal amount of Notes.
(iv) At any time the Company shall prepay any amount due under this
Note, the Company shall issue to the Holder warrants substantially in the
same form as the Warrants, except the number of shares of Common Stock
issuable upon the exercise of such warrants shall equal 50% of the
quotient of (1) the portion of the outstanding principal amount of this
Note prepaid by the Company in accordance with this Section 8(a) and (2)
the Conversion Price on the date the prepayment shall take place.
(b) At the Option of the Holder.
(i) At any time following the one year anniversary of the Original
Issue Date, each Holder shall have the right, exercisable at the sole
option of such Holder, and by delivery of a written notice (a "HOLDER
PREPAYMENT NOTICE" and the date such notice is delivered by such Holder,
the "HOLDER NOTICE DATE") to the Company, to require the Company to prepay
all or a portion of the Holder Prepayment Amount (as defined below) for an
amount in cash, equal to the Holder Prepayment Price which shall be due
and payable on the 15th Trading Day following the delivery of the Holder
Prepayment Notice by the Holder. Notwithstanding anything herein to the
contrary, a Holder shall only be entitled to deliver a Holder Prepayment
Notice pursuant to the terms hereof if: (x) on the one year anniversary of
the Original Issue Date, such Holder or the Company have not converted
more than an aggregate of $500,000 of the original principal amount of
Notes issued to such Holder on the Original Issue Date, or (y) on the date
occurring eighteen months following the Original Issue Date, such Holder
or the Company have not paid or converted more than an aggregate of
$1,000,000 of the original principal amount of Notes issued to such Holder
on the Original Issue Date. For the purposes of this Section 8, "HOLDER
PREPAYMENT AMOUNT" shall mean (x) from the 12 month anniversary of the
Original Issue Date to the 18 month anniversary, $500,000 less the
principal amount of any Notes converted or paid during such period, and
(y) on or after 18 month anniversary of the Original Issue Date,
$1,000,000 less the principal amount of any Notes converted or paid.
(ii) Any obligation to pay any Holder Prepayment Price shall be free
of any claim of subordination. If any portion of the Holder Prepayment
Price shall not be timely paid by the Company, interest shall accrue
thereon at the rate of 18% per annum (or the maximum rate permitted by
applicable law, whichever is less) until the Holder Prepayment Price plus
all such interest is paid in full, which payment shall constitute
liquidated damages and not a penalty. In addition, if any portion of the
Holder Prepayment Price remains unpaid after such date, the Holder subject
to such prepayment may elect by written notice to the Company to
invalidate ab initio such Holder Prepayment Notice with respect to the
unpaid amount, notwithstanding anything herein contained to the contrary.
If the Holder makes such an election, this Note shall be reinstated with
respect to such unpaid amount. For purposes of this Section 8, the
principal amount of Notes shall remain outstanding until such date as the
Holder shall have received payment in cash therefor or Underlying Shares
upon a conversion (or attempted conversion) thereof that meets the
requirements hereof. The Holder may convert any portion of the outstanding
principal amount of the Notes subject to a prepayment hereunder prior to
the date that the Holder Prepayment Price is due and paid in full.
10
(iii) Notwithstanding anything to contrary herein, no warrants shall
be issued to the Holders pursuant to a prepayment in connection with a
Holder Prepayment Notice.
9. Principal Repayment.
(a) On and after the 21st month following the Original Issue Date, the
principal face amount of any Notes then outstanding shall be paid in 9 equal
quarterly installments on the last day of such quarter (each a "Principal
Payment"), except if such date is not a Trading Day, in which case such
Principal Payment shall be payable on the next succeeding Trading Day, each a
"Principal Payment Date", with the first Principal Payment Date to occur on
September 30, 2006.
(b) The Company shall have the option to make any Principal Payments in
cash or in Common Stock; provided, however, that the Company may only make such
payments in Common Stock if (i) the arithmetic average of the VWAP for the
quarter ending on the applicable Principal Payment Date is greater than $1.18
per share (as adjusted for stock splits, stock combinations or other similar
recapitalization or event), (ii) the Equity Conditions are satisfied with
respect to all shares of Common Stock issuable by the Company on the Principal
Payment Date, and (iii) to the extent such payment may be made in accordance
with subsection (c) below.
(c) In the event the Company elects to pay all or part of any Principal
Payment in Common Stock, such Principal Payment shall be satisfied first through
the issuance of Common Stock in an amount equal to the quotient of (i) the
lesser of (A) the product of (1) 20% of the total volume of Common Stock traded
on the Company's Trading Market in such quarter and (2) the arithmetic average
of the VWAP for such quarter (such amount, the "MAXIMUM PRINCIPAL PAYMENT") and
(B) the Principal Payment amount and (ii) the Conversion Price on such date. To
the extent that such calculation results in an insufficient amount to satisfy
the then due Principal Payment, at the option of the Holder, the balance may be
paid in cash or otherwise in Common Stock issued at the Conversion Price on such
Principal Payment Date. Further, in the event such amount shall exceed the
Principal Payment then due, at the option of a majority of the Holders of the
Notes, an additional amount of Common Stock up to an amount equal to the
quotient of (x) the Maximum Principal Payment on such date minus the Principal
Payment then due and (y) the Conversion Price may be converted and applied to
the 9th and final Principal Payment (or other Principal Payments in an order
starting with last Principal Payment that has not yet been satisfied in
accordance with this Section 9(c) (i.e. the Principal Payment due on the 8th
Principal Payment Date) once the last Principal Payment shall have been paid in
full). Any other conversions that occur after the 21st month following the
Original Issue Date shall apply to the 9th and final Principal Payment or prior
Principal Payments as set forth in the preceding sentence.
11
10. Events of Default.
(a) "EVENT OF DEFAULT" means any one of the following events (whatever the
reason and whether it shall be voluntary or involuntary or effected by operation
of law or pursuant to any judgment, decree or order of any court, or any order,
rule or regulation of any administrative or governmental body):
(i) any default in the payment (free of any claim of subordination)
of principal, interest or liquidated damages in respect of any Notes, as
and when the same becomes due and payable (whether on a date specified for
the payment of interest or the date on which the obligations under the
Note mature or by acceleration, redemption, prepayment or otherwise);
(ii) the Company or any Subsidiary defaults in any of its
obligations under any other note or any mortgage, credit agreement or
other facility, indenture agreement, factoring agreement or other
instrument under which there may be issued, or by which there may be
secured or evidenced, any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement of the Company or any
Subsidiary in an amount exceeding $1,000,000, whether such indebtedness
now exists or is hereafter created, and such default results in such
indebtedness becoming or being declared due and payable prior to the date
on which it would otherwise become due and payable;
(iii) the occurrence of a Triggering Event; or
(iv) the occurrence of a Bankruptcy Event.
(b) At any time or times following the occurrence of an Event of Default,
the Holder shall have the option to elect, by notice to the Company (an "EVENT
NOTICE"), to require the Company to repurchase all or any portion of (i) the
outstanding principal amount of this Note, at a repurchase price equal to the
greater of (A) 115% of such outstanding principal amount, plus all accrued but
unpaid interest thereon through the date of payment, or (B) the Event Equity
Value of the Underlying Shares issuable upon conversion of such principal amount
and all such accrued but unpaid interest thereon, provided this remedy shall not
be available upon an Event of Default set forth in Section 10(a)(ii) hereof, and
(ii) any Underlying Shares issued to such Holder upon conversion of Notes and
then owned by the Holder, at a price per share equal to the Event Equity Value
of such issuable and issued Underlying Shares. The aggregate amount payable
pursuant to the preceding sentence is referred to as the "EVENT PRICE." The
Company shall pay the Event Price to the Holder no later than the third Trading
Day following the date of delivery of the Event Notice, and upon receipt thereof
the Holder shall deliver this Note and certificates evidencing any Underlying
Shares so repurchased to the Company (to the extent such certificates have been
delivered to the Holder).
12
(c) Upon the occurrence of any Bankruptcy Event, all amounts pursuant to
Section 10(b) shall immediately become due and payable in full in cash, without
any further action by the Holder.
(d) In connection with any Event of Default, the Holder need not provide
and the Company hereby waives any presentment, demand, protest or other notice
of any kind, and the Holder may immediately enforce any and all of its rights
and remedies hereunder and all other remedies available to it under applicable
law. Any such declaration may be rescinded and annulled by the Holder at any
time prior to payment hereunder. No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereto.
11. Charges, Taxes and Expenses. Issuance of certificates for Underlying
Shares upon conversion of (or otherwise in respect of) this Note shall be made
without charge to the Holder for any issue or transfer tax, withholding tax,
transfer agent fee or other incidental tax or expense in respect of the issuance
of such certificate, all of which taxes and expenses shall be paid by the
Company; provided, however, that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the registration
of any certificates for Underlying Shares or Notes in a name other than that of
the Holder. The Holder shall be responsible for all other tax liability that may
arise as a result of holding or transferring this Note or receiving Underlying
Shares in respect hereof.
12. Certain Adjustments. The Conversion Price is subject to adjustment
from time to time as set forth in this Section 12.
(a) Stock Dividends and Splits. If the Company, at any time while this
Note is outstanding, (i) pays a stock dividend on its Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of
Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, or (iii) combines outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
Section 12(a) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution,
and any adjustment pursuant to clause (ii) or (iii) of this Section 12(a) shall
become effective immediately after the effective date of such subdivision or
combination.
(b) Pro Rata Distributions. If the Company, at any time while this Note is
outstanding, distributes to all holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
described in Section 12(c)), (iii) rights or warrants to subscribe for or
purchase any security, or (iv) cash or any other asset (in each case,
"DISTRIBUTED PROPERTY"), then, at the request of the Holder delivered before the
90th day after the record date fixed for determination of stockholders entitled
to receive such distribution, the Company will deliver to the Holder, within
five Trading Days after such request (or, if later, on the effective date of
such distribution), the Distributed Property that the Holder would have been
entitled to receive in respect of the Underlying Shares for which this Note
could have been converted immediately prior to such record date. If such
Distributed Property is not delivered to the Holder pursuant to the preceding
sentence, upon any conversion of this Note that occurs after such record date,
the Holder shall be entitled to receive, in addition to the Underlying Shares
otherwise issuable upon such conversion, the Distributed Property that the
Holder would have been entitled to receive in respect of such number of
Underlying Shares had the Holder been the record holder of such Underlying
Shares immediately prior to such record date.
13
(c) Fundamental Changes. If, at any time while this Note is outstanding,
(i) the Company effects any merger or consolidation of the Company with or into
another Person in which it is not the surviving entity, (ii) the Company effects
any sale of all or substantially all of its assets in one or more transactions,
(iii) any tender offer or exchange offer (whether by the Company or another
Person) is completed pursuant to which holders of Common Stock are permitted to
tender or exchange their shares for other securities, cash or property, or (iv)
the Company effects any reclassification of the Common Stock or any compulsory
share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (other than as a result of a
subdivision or combination of shares of Common Stock described in Section 12(a))
(in any such case, a "FUNDAMENTAL CHANGE"), then upon any subsequent conversion
of this Note, the Holder shall have the right to receive, for each Underlying
Share that would have been issuable upon such conversion absent such Fundamental
Change, the same kind and amount of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental Change if
it had been, immediately prior to such Fundamental Change, the holder of one
share of Common Stock (the "ALTERNATE CONSIDERATION"). If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Change, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this Note
following such Fundamental Change. In the event of a Fundamental Change, the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Holder a written agreement providing that:
(x) this Note shall thereafter entitle the Holder to purchase the
Alternate Consideration,
(y) in the case of any such successor or purchasing Person, upon
such consolidation, merger, statutory exchange, combination, sale or
conveyance such successor or purchasing Person shall be jointly and
severally liable with the Company for the performance of all of the
Company's obligations under this Warrant and the Purchase Agreement, and
(z) if registration or qualification is required under the Exchange
Act or applicable state law for the public resale by the Holder of shares
of stock and other securities so issuable upon exercise of this Warrant,
such registration or qualification shall be completed prior to such
reclassification, change, consolidation, merger, statutory exchange,
combination or sale.
14
If, in the case of any Fundamental Change, the Alternate Consideration includes
shares of stock, other securities, other property or assets of a Person other
than the Company or any such successor or purchasing Person, as the case may be,
in such Fundamental Change, then such written agreement shall also be executed
by such other Person and shall contain such additional provisions to protect the
interests of the Holder as the Board of Directors of the Company shall
reasonably consider necessary by reason of the foregoing. At the Holder's
request, any successor to the Company or surviving Person in such Fundamental
Change shall issue to the Holder a new Note consistent with the foregoing
provisions and evidencing the Holder's right to convert such Note into Alternate
Consideration. The terms of any agreement pursuant to which a Fundamental Change
is effected shall include terms requiring any such successor or surviving Person
to comply with the provisions of this Section 12(c) and insuring that this Note
(or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Change. If any Fundamental
Change constitutes or results in a Change of Control, then at the request of the
Holder delivered before the 90th day after such Fundamental Change, the Company
(or any such successor or surviving entity) will purchase this Note from the
Holder for a purchase price, payable in cash within five Trading Days after such
request (or, if later, on the effective date of the Fundamental Transaction),
equal to the Black Scholes value of the remaining unexercised portion of this
Note on the date of such request.
(d) Subsequent Equity Sales.
(i) If, at any time while this Note is outstanding, the Company or
any Subsidiary issues additional shares of Common Stock or rights,
warrants, options or other securities or debt convertible, exercisable or
exchangeable for shares of Common Stock or otherwise entitling any Person
to acquire shares of Common Stock (collectively, "COMMON STOCK
EQUIVALENTS") at a price (exclusive of commissions payable by the Company
in connection therewith) per share of Common Stock (the "EFFECTIVE PRICE")
less than the Conversion Price (as adjusted hereunder to such date), then
the Conversion Price shall be reduced to equal the Effective Price. For
purposes of this paragraph, in connection with any issuance of any Common
Stock Equivalents, (A) the maximum number of shares of Common Stock
potentially issuable at any time upon conversion, exercise or exchange of
such Common Stock Equivalents (the "DEEMED NUMBER") shall be deemed to be
outstanding upon issuance of such Common Stock Equivalents, (B) the
Effective Price applicable to such Common Stock shall equal the minimum
dollar value of consideration payable to the Company to purchase such
Common Stock Equivalents and to convert, exercise or exchange them into
Common Stock (net of any discounts, fees, commissions and other expenses),
divided by the Deemed Number, and (C) no further adjustment shall be made
to the Conversion Price upon the actual issuance of Common Stock upon
conversion, exercise or exchange of such Common Stock Equivalents.
(ii) If, at any time while this Note is outstanding, the Company or
any Subsidiary issues Common Stock Equivalents with an Effective Price or
a number of underlying shares that floats or resets or otherwise varies or
is subject to adjustment based (directly or indirectly) on market prices
of the Common Stock (a "FLOATING PRICE SECURITY"), then for purposes of
applying the preceding paragraph in connection with any subsequent
conversion, the Effective Price will be determined separately on each
Conversion Date and will be deemed to equal the lowest Effective Price at
which any holder of such Floating Price Security is entitled to acquire
Common Stock on such Conversion Date (regardless of whether any such
holder actually acquires any shares on such date).
15
(iii) Notwithstanding the foregoing, no adjustment will be made
under this paragraph (d) in respect of (A) the issuance of Common Stock
upon exercise or conversion of any Common Stock Equivalents described in
Schedule 3.1(g) to the Purchase Agreement (provided that such exercise or
conversion occurs in accordance with the terms thereof, without amendment
or modification, and that the applicable exercise or conversion price or
ratio is described in such schedule); (B) to officers, directors or
employees of, or advisers, consultants or independent contractors acting
in a similar capacity to, the Company pursuant to restricted stock
issuances, stock grants, stock options or similar employee stock
incentives, in each case approved by the Board of Directors of the
Company; (C) the issuance of securities in connection with a bona fide
joint venture or development agreement or strategic partnership or similar
agreement approved by the Company's board of directors, the primary
purpose of which is not to raise equity capital; or (D) in connection with
a transaction involving a merger or acquisition of an entity, business or
assets (not principally for the purpose of obtaining cash).
(e) Calculations. All calculations under this Section 12 shall be made to
the nearest cent or the nearest 1/100th of a share, as applicable. The number of
shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.
(f) Notice of Adjustments. Upon the occurrence of each adjustment pursuant
to this Section 12, the Company at its expense will promptly compute such
adjustment in accordance with the terms hereof and prepare and deliver to the
Holder a certificate describing in reasonable detail such adjustment and the
transactions giving rise thereto, including all facts upon which such adjustment
is based.
(g) Notice of Corporate Events. If the Company (i) declares a dividend or
any other distribution of cash, securities or other property in respect of its
Common Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Change or (iii) authorizes the
voluntary dissolution, liquidation or winding up of the affairs of the Company,
then the Company shall deliver to the Holder a notice describing the material
terms and conditions of such transaction, at least 20 Trading Days prior to the
applicable record or effective date on which a Person would need to hold Common
Stock in order to participate in or vote with respect to such transaction, and
the Company will take all steps reasonably necessary in order to insure that the
Holder is given the practical opportunity to convert this Note prior to such
time so as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall not
affect the validity of the corporate action required to be described in such
notice.
16
13. No Fractional Shares. The Company shall not issue or cause to be
issued fractional Underlying Shares on conversion of this Note. If any fraction
of an Underlying Share would, except for the provisions of this Section 13, be
issuable upon conversion of this Note, the number of Underlying Shares to be
issued will be rounded up to the nearest whole share.
14. Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile (facsimile confirmed) at
the facsimile number specified in this Section prior to 5:30 p.m. (New York City
time) on a Trading Day, (ii) the Trading Day after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Agreement later than 5:30 p.m. (New York City time) on any
date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the
Trading Day following the date of mailing, if sent by nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications
shall be as follows:
If to the Company: Visual Data Corporation
0000 XX 00 Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attn:
Fax No.:
With a copy to: With a copy to:
Xxxxxx & Xxxx, P.A.
000 Xxxx Xxx Xxxx Xxxx., Xxxxx 0000
Xxxx Xxxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx
Fax No.:
If to the Purchasers: To the address set forth under such Purchaser's
name on the signature pages attached hereto.
15. Miscellaneous.
(a) This Note shall be binding on and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. The Company shall
not be permitted to assign this Note.
17
(b) Subject to Section 15(a), nothing in this Note shall be construed to
give to any person or corporation other than the Company and the Holder any
legal or equitable right, remedy or cause under this Note.
(C) GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL. ALL QUESTIONS CONCERNING
THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF
MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN
(INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS),
AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY
HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS
BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF
VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF
DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS
AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT
SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED
TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.
THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.
(d) The headings herein are for convenience only, do not constitute a part
of this Note and shall not be deemed to limit or affect any of the provisions
hereof.
(e) In case any one or more of the provisions of this Note shall be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Note shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Note.
(f) In the event of any stock split, subdivision, dividend or distribution
payable in shares of Common Stock (or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event
occurring after the date hereof, each reference in this Note to a price shall be
amended to appropriately account for such event.
18
(g) No provision of this Note may be waived or amended except in a written
instrument signed, in the case of an amendment, by the Company and Majority
Holders, or, in the case of a waiver, by the Holder; provided that no amendment
shall, without the consent of the Holder (i) extend the scheduled final maturity
of this Note, or reduce the rate or extend the time of payment of principal or
of interest (other than as a result of waiving the applicability of any
post-default increase in interest rates) hereon or reduce the principal amount
hereof or reduce or change the form or relative amounts of the components of the
Company Prepayment Price, the Holder Prepayment Price or the Event Price, (ii)
increase the Conversion Price, (iii) amend, modify or waive any provision of
this Section 15(g), including, without limitation, the definition of Majority
Holders or (v) change the method of calculating the Market Price in a manner
adverse to the Holder. No waiver of any default with respect to any provision,
condition or requirement of this Note shall be deemed to be a continuing waiver
in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of
either party to exercise any right hereunder in any manner impair the exercise
of any such right.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS]
19
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
by a duly authorized officer as of the date first above indicated.
VISUAL DATA CORPORATION
By_______________________________
Xxxxx X. Xxxxxx
Chief Executive Officer
20
SCHEDULE 1
FORM OF CONVERSION NOTICE
(To be executed by the registered Holder
in order to convert Note)
The undersigned hereby elects to convert the specified principal amount of 8.0%
Senior Secured Convertible Notes (the "NOTES") into shares of common stock, no
par value (the "COMMON STOCK"), of Visual Data Corporation, a Florida
corporation, according to the conditions hereof, as of the date written below.
_________________________________________________________
Date to Effect Conversion
_________________________________________________________
Principal amount of Notes owned prior to conversion
_________________________________________________________
Principal amount of Notes to be converted
(including accrued but unpaid interest thereon)
_________________________________________________________
Number of shares of Common Stock to be Issued
_________________________________________________________
Applicable Conversion Price
_________________________________________________________
Principal amount of Notes owned subsequent to Conversion
_________________________________________________________
Name of Holder
By_______________________________________________________
Name:
Title:
SCHEDULE 2
CONVERSION SCHEDULE
This Conversion Schedule reflects conversions of the 8.0% Senior Secured
Convertible Notes issued by Visual Data Corporation.
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Aggregate Principal Amount Remaining
Date of Conversion Amount of Conversion Subsequent to Conversion
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