SECURITIES PURCHASE AGREEMENT
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SECURITIES PURCHASE AGREEMENT (the "Agreement"), effective as of June
20, 1998, between Visual Data Corporation, a Florida corporation, with
headquarters located at 0000 Xxxxxxxxx 00xx Xxxxxx, Xxxxxxx Xxxxx, Xxxxxxx 00000
(the "Buyer"), and EDNET, Inc., a Colorado corporation with headquarters at Xxx
Xxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (the "Company").
WHEREAS:
A. The Company and the Buyer are executing and delivering this
Agreement in reliance upon an exemption from securities registration under the
Securities Act of 1933, as amended (the "1933 Act");
B. The Company has authorized the issuance of up to 15,106,139 shares
of Common Stock, par value $0.001 per share (the "Common Stock");
C. The Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, an aggregate of 8,563,417 of the shares of Common Stock on
the Closing Date (as defined below); and
D. Subject to the terms and conditions set forth in this Agreement, the
Buyer shall be granted options to purchase up to an additional 6,542,722 shares
of Common Stock.
NOW THEREFORE, the Company and the Buyer hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK.
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(a) Purchase of Common Stock. Subject to satisfaction (or
waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to Buyer and Buyer agrees to purchase from the Company 8,563,417
Shares of Common Stock (the "Closing"). The purchase price (the "Purchase
Price") of each share of Common Stock at the Closing shall be $0.164.
(b) The Closing Date. The date and time of the Closing (the
"Closing Date") shall be 10:00 a.m. Daylight Savings Time, within two (2)
business days following the date hereof, subject to notification of satisfaction
(or waiver) of the conditions to the Closing set forth in Sections 6 and 7 below
(or such later date as is mutually agreed to by the Company and the Buyer). The
Closing shall occur on the Closing Date at the offices of Atlas, Xxxxxxxx, Trop
& Borkson, P.A., 000 Xxxx Xxx Xxxx Xxxxxxxxx, 00xx Xxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000 or such other place as the parties shall agree.
(c) Form of Payment. On the Closing Date, (i) Buyer shall pay
the Purchase Price to the Company for the Common Stock to be issued and sold to
Buyer at the Closing, by
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(w) wire transfer of $320,225.52 of immediately available funds in accordance
with the Company's written wire instructions (prior to Closing the Buyer has
wired $201,546.29 to the Escrow Agent established for the payment of certain
Company creditors and otherwise advanced to the Company a total of $176,232.51,
(x) a secured promissory note of Buyer in the aggregate principal amount of
$283,745.68 (the "Promissory Note") in the form of Exhibit 1(c) attached hereto,
(y) five year warrants to purchase 50,000 shares of Buyer's restricted common
stock, valued at $2.74 per warrant and (z) 75,000 shares of restricted common
stock of Buyer having a value of $3.75 per share; and (ii) the Company shall
deliver to Buyer, stock certificates (in the denominations as Buyer shall
request) (the "Stock Certificates") representing such number of the shares of
Common Stock which Buyer is purchasing. Such Stock Certificates shall bear the
restrictive legends required pursuant to Section 2(f).
(d) The Options. Upon the Closing Date, the Buyer shall be
granted Options of Company to acquire, at the exercise price of $0.10 per share,
the number of shares actually purchased upon exercise of each option, warrant
and other convertible securities ("Outstanding Option") set forth on Schedule
3(c) of the Company. The Buyer's rights to effect such exercise shall accrue on
the date of exercise of the corresponding Outstanding Option and shall expire
upon the first anniversary of the exercise date of such Outstanding Option.
Pursuant to the Options and subject to the prior exercise of the outstanding
Options, Buyer shall be granted the right to purchase up to an aggregate of
6,542,722 shares of Common Stock, subject to the anti-dilutive provision in the
Stock Option Agreement. The form of the option agreement shall be as set forth
on Exhibit 1(d) attached hereto.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
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Buyer represents and warrants with respect to only itself
that:
(a) Investment Purpose. Buyer (i) is acquiring the Common
Stock and (ii) upon exercise of the Options, will acquire the shares of Common
Stock (the "Option Shares") then issuable (the Common Stock and the Option
Shares collectively are referred to herein as the "Securities"), for its own
account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to
sales registered or exempted under the 1933 Act; provided, however, that by
making the representations herein, the Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the right to
dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
(b) Reliance on Exemptions. The Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of Buyer to
acquire such securities.
(c) Information. Buyer has been furnished with all materials
relating to the
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business, finances and operations of the Company and materials relating to the
offer and sale of the Securities which have been requested by Buyer. Buyer has
been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by Buyer or its
advisors, if any, or its representatives shall modify, amend or affect Buyer's
right to rely on the Company's representations and warranties contained in
Section 3 below. Buyer understands that its investment in the Securities
involves a high degree of risk.
(d) No Governmental Review. Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor have such
authorities passed upon or endorsed the merits of the offering of the
Securities.
(e) Transfer or Resale. Buyer understands that: (i) the
Securities have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, (B) Buyer shall have
delivered to the Company an opinion of counsel, in a form reasonably acceptable
to the Company, to the effect that such Securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration, or (C) Buyer provides the Company with assurance reasonably
acceptable to the Company that such Securities can be sold, assigned or
transferred pursuant to Rule 144 promulgated under the 1933 Act (or a successor
rule thereto) ("Rule 144"); (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the 0000 Xxx) may require
compliance with some other exemption under the 1933 Act or the rules and
regulations of the Securities and Exchange Commission ("SEC") thereunder; and
(iii) neither the Company nor any other person is under any obligation to
register such Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.
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(f) Legends. Buyer understands that the certificates or other
instruments representing the Common Stock, Options and, the stock certificates
representing the Option Shares, except as set forth below, shall bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE
SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for sale under the 1933 Act, (ii) in connection with a
sale transaction, such holder provides the Company with an opinion of counsel,
in a generally acceptable form, to the effect that a public sale, assignment or
transfer of such Securities may be made without registration under the 1933 Act,
or (iii) such holder provides the Company with reasonable assurances that such
Securities can be sold pursuant to Rule 144 without any restriction as to the
number of securities acquired as of a particular date that can then be
immediately sold.
(g) Authorization; Enforcement. This Agreement has been duly
and validly authorized, executed and delivered on behalf of Buyer and is a valid
and binding agreement of Buyer enforceable against such Buyer in accordance with
its terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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The Company represents and warrants to the Buyer that:
(a) Organization and Qualification. The Company and its
"Subsidiaries" (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns capital stock or holds an equity or
similar interest) (a complete list of which is set forth in Schedule 3(a)) are
corporations duly organized and validly existing in good standing under the laws
of the jurisdiction in which they are incorporated, and have the requisite
corporate power and authorization to own their properties and to carry on their
business as now
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being conducted. Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership of property or the nature of the business conducted by it
makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, "Material Adverse Effect" means any material adverse
effect on the business, properties, assets, operations, results of operations,
prospects or financial condition of the Company and its Subsidiaries, if any,
taken as a whole, or on the transactions contemplated hereby or by the
agreements and instruments to be entered into in connection herewith, or on the
authority or ability of the Company to perform its obligations under the
Transaction Documents (as defined below).
(b) Authorization; Enforcement; Compliance with Other
Instruments. (i) The Company has the requisite corporate power and authority to
enter into and perform this Agreement, the Options and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "Transaction
Documents"), and to issue the Common Stock, Options and Option Shares in
accordance with the terms hereof and thereof, (ii) the execution and delivery of
the Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without limitation the
issuance of the Common Stock and the reservation for issuance and the issuance
of the Option Shares issuable upon conversion of the Options, have been duly
authorized by the Company's Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors or its
stockholders to carry-out the Agreement and the Transaction contemplated hereby,
(iii) the Transaction Documents have been duly executed and delivered by the
Company, and (iv) the Transaction Documents constitute the valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms.
(c) Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 50,000,000 shares of Common Stock, of
which as of the date hereof, 8,227,591 shares were issued and outstanding,
5,000,000 shares of Preferred Stock authorized, of which as of the date hereof
none were outstanding, 4,304,979 shares are issuable and reserved for issuance
pursuant to the Company's stock option plan(s) and 2,237,743 shares are issuable
and reserved for issuance pursuant to securities exercisable or exchangeable
for, or convertible into, shares of Common Stock. All of such outstanding shares
have been, or upon issuance will be, validly issued and are fully paid and
nonassessable. Schedule 3(c) sets forth a list of all outstanding options,
warrants or convertible securities, the holder thereof, the conversion or
exercise price and the date of expiration. Except as disclosed in Schedule 3(c),
(i) no shares of the Company's capital stock are subject to preemptive rights or
any other similar rights or any liens or encumbrances suffered or permitted by
the Company, (ii) there are no outstanding debt securities, (iii) there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
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character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, (iv) there
are no agreements or arrangements under which the Company or any of its
Subsidiaries is obligated to register the sale of any of their securities under
the 1933 Act, (v) there are no outstanding securities of the Company or any of
its Subsidiaries which contain any redemption or similar provisions, and there
are no contracts, commitments, understandings or arrangements by which the
Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries, (vi) there are no securities or
instruments containing anti-dilution or similar provisions that will be
triggered by the issuance of the Securities as described in this Agreement, and
(vii) the Company does not have any stock appreciation rights or "phantom stock"
plans or agreements or any similar plan or agreement. The Company has furnished
to the Buyer true and correct copies of the Company's Articles of Incorporation,
as amended and as in effect on the date hereof (the "Articles of
Incorporation"), and the Company's By-laws, as in effect on the date hereof (the
"By-laws"), Schedule 3(c) contains the terms of all securities convertible into
or exercisable for Common Stock and the material rights of the holders thereof
in respect thereto.
(d) Issuance of Securities. The Common Stock is duly
authorized and, upon issuance in accordance with the terms hereof, shall be
validly issued, fully paid and non-assessable, free from all taxes, liens and
charges with respect to the issue thereof. A number of shares of Common Stock
equal to the number of Option Shares issuable upon conversion of the Outstanding
Options (assuming all such Outstanding Options were fully exercisable on the
Closing Date regardless of any limitation on the timing or amount of such
options) initially have been duly authorized and reserved for issuance (subject
to adjustment pursuant to the Company's covenant set forth in Section 4(f)
below) upon conversion of the Options. Upon exercise of the Outstanding Options,
the Option Shares will be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issue thereof, with the
holders being entitled to all rights accorded to a holder of Common Stock.
(e) No Conflicts. Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company,
and the consummation by the Company of the transactions contemplated hereby and
thereby will not (i) result in a violation of the Articles of Incorporation, or
the By-laws or (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any material agreement, indenture or material instrument to which the Company or
any of its Subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the principal market or
exchange on which the Common Stock is traded or listed) applicable to the
Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected. Except as disclosed in
Schedule 3(e), neither the Company nor its Subsidiaries is in violation of any
term of or in default under the Articles of Incorporation, or the By-laws or
their organizational charter or by-laws, respectively, or any contract,
agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or
order or any statute, rule or regulation applicable to the Company or its
Subsidiaries. The business of the Company and its Subsidiaries is not being
conducted in violation of any law, ordinance, regulation of any
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governmental entity having authority or jurisdiction over the Company. Except as
specifically contemplated by this Agreement, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or self
regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents in accordance
with the terms hereof or thereof. Except as disclosed in Schedule 3(e), all
consents, authorizations, orders, filings and registrations which the Company is
required to obtain pursuant to the preceding sentence have been obtained or
effected on or prior to the date hereof.
(f) SEC Documents; Financial Statements. Except as disclosed
on Schedule 3(f), since June 30, 1996, the Company has timely filed all reports,
schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Securities Exchange Act of
1934, as amended (the "1934 Act") (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein being hereinafter
referred to as the "SEC Documents"). The Company has delivered to the Buyer or
their respective representatives true and complete copies of the SEC Documents.
Except as disclosed on Schedule 3(f), as of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents and the Company's unaudited consolidated balance sheet, statement
of income and changes in stockholders' equity, and cash flow as of and for the
eleven (11) months ended May 31, 1998, have been prepared in accordance with
generally accepted accounting principles, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present the financial position of the Company as
of the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments). No other information provided by or on behalf of
the Company to the Buyer which is not included in the SEC Documents, including,
without limitation, information referred to in Section 2(c) of this Agreement,
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.
(g) Absence of Certain Changes. Except as disclosed in
Schedule 3(g) or in the SEC Documents, there has been no material adverse change
and no material adverse development in the business, properties, operations,
financial condition, prospects, or results of operations of the Company or its
Subsidiaries. The Company has not taken any steps, and does not currently expect
to take any steps, to seek protection pursuant to any bankruptcy law nor does
the Company or its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings.
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(h) Absence of Litigation. There is no action, suit,
proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company, the common stock or any of the Company's Subsidiaries or
any of the Company's or the Company's Subsidiaries' officers or directors in
their capacities as such, except as set forth in Schedule 3(h).
(i) Acknowledgment Regarding Buyer' Purchase of Common Stock.
The Company acknowledges and agrees that the Buyer is acting solely in the
capacity of arm's length purchaser with respect to the Transaction Documents and
the transactions contemplated thereby. The Company further acknowledges that
Buyer is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by the Buyer or any of
their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to
Buyer's purchase of the Common Stock and Options. The Company further represents
to Buyer that the Company's decision to enter into the Transaction Documents has
been based solely on the independent evaluation by the Company and its
representatives.
(j) No Undisclosed Events, Liabilities, Developments or
Circumstances. No event, liability, development or circumstance has occurred or
exists with respect to the Company or its Subsidiaries or their respective
business, properties, operations or financial condition, that would be required
to be disclosed by the Company under applicable securities laws on a
registration statement filed with the SEC relating to an issuance and sale by
the Company of its Common Stock and which has not been publicly announced.
(k) No General Solicitation. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the 0000 Xxx) in connection with the offer or sale of the
Common Stock and Options.
(l) No Integrated Offering. The Company has not, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Common Stock, Options and Option Shares under the 1933 Act or cause this
offering to be integrated with prior offerings by the Company for purposes of
the 1933 Act or any applicable stockholder approval provisions, nor will the
Company or any of its Subsidiaries take any action or steps that would require
registration of the Common Stock, Options and Option Shares under the 1933 Act
or cause this offering to be integrated with other offerings.
(m) Employee Relations. Neither the Company nor any of its
Subsidiaries is involved in any union labor dispute nor, to the knowledge of the
Company or any of its Subsidiaries, is any such dispute threatened. Neither the
Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that
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relations with their employees are good. No executive officer (as defined in
Rule 501(f) of the 0000 Xxx) has notified the Company that such officer intends
to leave the Company or otherwise terminate such officer's employment with the
Company.
(n) Intellectual Property Rights. The Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service xxxx registrations, service names, patents,
patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. Schedule 3(n) contains a description of all the
agreement referred to in the foregoing sentence. Except as set forth on Schedule
3(n), none of the Company's trademarks, trade names, service marks, service xxxx
registrations, service names, patents, patent rights, copyrights, inventions,
licenses, approvals, government authorizations, trade secrets or other
intellectual property rights necessary to conduct its business as now or as
proposed to be conducted have expired or terminated, or are expected to expire
or terminate within two years from the date of this Agreement. The Company and
its Subsidiaries do not have any knowledge of any infringement by the Company or
its Subsidiaries of trademark, trade name rights, patents, patent rights,
copyrights, inventions, licenses, service names, service marks, service xxxx
registrations, trade secret or other similar rights of others, or of any such
development of similar or identical trade secrets or technical information by
others and, except as set forth on Schedule 3(n), there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company or its Subsidiaries regarding trademark, trade
name, patents, patent rights, invention, copyright, license, service names,
service marks, service xxxx registrations, trade secret or other infringement;
and the Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties.
(o) Environmental Laws. The Company and its Subsidiaries (i)
are in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval where, in each of the three
foregoing cases, the failure to so comply would have, individually or in the
aggregate, a Material Adverse Effect.
(p) Title. The Company and its Subsidiaries have good and
marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its Subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in Schedule 3(p). Any real
property and facilities held under lease by the Company or any of its
Subsidiaries are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company and its
Subsidiaries.
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(q) Insurance. Neither the Company nor any such Subsidiary has
been refused any insurance coverage sought or applied for and neither the
Company nor any such Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely affect
the condition, financial or otherwise, or the earnings, business or operations
of the Company and its Subsidiaries, taken as a whole.
(r) Regulatory Permits. The Company and its Subsidiaries
possess all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses and neither the Company nor any such Subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.
(s) No Materially Adverse Contracts, Etc. Neither the Company
nor any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company's officers has a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries is a party to any contract or agreement
which in the reasonable judgment of the Company's officers has or is expected to
have a Material Adverse Effect.
(t) Tax Status. Except as set forth on Schedule 3(t), the
Company and each of its Subsidiaries has made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) and has
paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.
(u) Certain Transactions. Except as set forth on Schedule 3(u)
and in the SEC Documents filed at least ten days prior to the date hereof and
except for arm's length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less favorable than
the Company could obtain from third parties and other than the grant of stock
options disclosed on Schedule 3(c), none of the officers or directors of the
Company is presently a party to any transaction with the Company or any of its
Subsidiaries (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer or
director or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer or director has a substantial
interest or is an officer, director, trustee or partner.
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(v) Dilutive Effect. The Company understands and acknowledges
that the number of Option Shares issuable upon exercise of the Options will
increase in certain circumstances. The Company further acknowledges that,
subject to such limitations as are expressly set forth in the Transaction
Documents, its obligation to issue Option Shares upon exercise of the Options in
accordance with this Agreement is absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other
stockholders of the Company.
(w) No Other Agreements. The Company has not, directly or
indirectly, made any agreements with Buyer relating to the terms or conditions
of the transactions contemplated by the Transaction Documents except as set
forth in the Transaction Documents.
(x) Accounts Receivable. All accounts receivable of the
Company are reflected properly on their books and records, are valid receivables
subject to no setoffs or counterclaims, are current and collectible, and will be
collected in accordance with their terms at their recorded amounts, subject only
to the reserve for bad debts set forth on the face of the most recent balance
sheet as adjusted for the passage of time through the Closing Date in accordance
with the past custom and practice of the Company.
(y) Disclosure. The representations and warranties contained
in this Section 3 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. COVENANTS.
---------
(a) Best Efforts. Each party shall use its best efforts timely
to satisfy each of the conditions to be satisfied by it as provided in Sections
6 and 7 of this Agreement.
(b) Reporting Status. Until the earlier of (i) the date which
is one year after the date as of which the Buyer or any transferee thereof may
sell all of the Common Stock and the Option Shares without restriction pursuant
to Rule 144(k) promulgated under the 1933 Act (or successor thereto), or (ii)
the date on which the Buyer shall have sold all the Option Shares and the
Company shall file all reports required to be filed with the SEC pursuant to the
1934 Act, and the Company shall not terminate its status as an issuer required
to file reports under the 1934 Act even if the 1934 Act or the rules and
regulations thereunder would otherwise permit such termination.
(c) Use of Proceeds. The Company will use the proceeds from
the sale of the Common Stock for substantially the same purposes and in
substantially the same amounts as indicated in Schedule 4(c).
(d) Change in Direction. The Company agrees to send to its
shareholders of record the information required by Securities and Exchange Act
Rule 14f-1 upon execution of this Agreement.
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(e) Reservation of Shares. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance, no less than the number of shares of Common Stock needed to provide
for the issuance of the Option Shares.
(f) No Violation of Law. The Company and its Subsidiaries
shall conduct their business in accordance with all laws, ordinances,
regulations of any governmental entity having authority or jurisdiction over the
Company, except for possible violations the sanctions for which either
individually or in the aggregate would not have a Material Adverse Effect.
5. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
----------------------------------------------
(a) Closing Date. The obligation of the Company hereunder to
issue and sell the Common Stock and Option Shares to Buyer at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole discretion by
providing Buyer with prior written notice thereof:
(i) Buyer shall have executed each of the Transaction
Documents and delivered the same to the Company.
(ii) Buyer shall have delivered to the Company the
Purchase Price for the Common Stock being purchased by Buyer at the
Closing by (w) wire transfer of $320,225.52 of immediately available
funds pursuant to the wire instructions provided by the Company,
$201,546.29 which has been previously delivered to the Escrow Account
at Xxxx & Xxxxx LLP and $176,232.51 which has also been previously paid
to the Company), (x) delivery of a secured Promissory Note as set forth
on Exhibit 1(c), (y) 75,000 shares of the Buyer's restricted Common
Stock valued at $3.75 per share and (z) 50,000 warrants of Buyer valued
at $2.74.
(iii) The representations and warranties of Buyer
shall be true and correct as of the date when made and as of the
Closing Date as though made at that time (except for representations
and warranties that speak as of a specific date), and Buyer shall have
performed, satisfied and complied with the covenants, agreements and
conditions required by the Transaction Documents to be performed,
satisfied or complied with by Buyer at or prior to the Initial Closing
Date.
6. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE.
--------------------------------------------
Closing Date. The obligation of Buyer hereunder to purchase
the Common Stock and Option Shares at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for Buyer's sole benefit and may
be waived by Buyer at any time in its sole discretion:
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(a) The Company shall have executed each of the Transaction
Documents, and delivered the same to Buyer.
(b) The Company shall have complied with the provisions of
Exchange Act 14f-1.
(c) Company shall have delivered in a form reasonably
satisfactory to Buyer, evidence of satisfaction of indebtedness and payables as
set forth on Exhibit 6(c) hereto.
(d) The representations and warranties of the Company shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date) and the Company shall have performed, satisfied and complied with
the covenants, agreements and conditions required by the Transaction Documents
to be performed, satisfied or complied with by the Company at or prior to the
Closing Date. The Buyer shall have received a certificate, executed by the Chief
Executive Officer of the Company, dated as of the Closing Date, to the foregoing
effect and as to such other matters as may be reasonably requested by Buyer
including, without limitation, an update as of the Initial Closing Date
regarding the representation contained in Section 3(c) above.
(e) Company shall have delivered, in a form reasonably
satisfactory to Buyer, evidence of revisions of the agreement with T-Bar Ranch
Investments to remove any anti-dilution rights and the exchange of the stock
held by T-Bar Ranch Investments in the amount of 3,750,000 for a certificate
representing 738,000 shares.
(f) Buyer shall have received the opinion of the Company's
counsel dated as of the Initial Closing Date, in form, scope and substance
reasonably satisfactory to Buyer and in substantially the form of Exhibit 6(f)
attached hereto.
(g) The Company shall have executed and delivered to Buyer (a)
the Stock Certificates (in such denominations as Buyer shall request) for the
Common Stock being purchased by Buyer at the Closing and (b) Option Certificates
for the Options.
(h) The Board of Directors of the Company shall have adopted
resolutions in a form reasonably acceptable to Buyer.
(i) As of the Closing Date, the Company shall have reserved
out of its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Options, a number of shares of Common Stock
equal to at least the number of Option Shares issuable upon conversion of the
Options outstanding on the Closing Date (assuming all such Options were fully
convertible or exercisable on such date regardless of any limitation on the
timing or amount of such conversions or exercises).
(j) The Company shall have delivered to Buyer a certificate
evidencing the incorporation and good standing of the Company and each
Subsidiary in such corporation's state of incorporation issued by the Secretary
of State of such state of incorporation as of a date within 10 days of the
Closing.
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(k) The Company shall have delivered to Buyer a certified copy
of its Articles of Incorporation as certified by the Secretary of State of the
State of Colorado within ten days of the Closing Date.
(l) The Company shall have delivered to Buyer a secretary's
certificate, dated as the Closing Date, as to (i) the resolutions described in
Section 6(h), (ii) the Articles of Incorporation and (iii) the Bylaws, each as
in effect at the Closing.
(m) The Company shall have delivered to Buyer, in a form
reasonably acceptable to Buyer, evidence appointing four (4) individuals
designated by Buyer, as directors of the Company upon the Closing.
(n) The Company shall have modified the employment contracts
with Xxx Xxxxxxxxx, Xxxxx Xxxxxxxxx, Xxx Xxxxx and Xxxx Xxxxxx in form and
substance reasonably satisfactory to the Buyer.
(o) The Company shall have delivered to Buyer such other
documents relating to the transactions contemplated by this Agreement as Buyer
or its counsel may reasonably request.
7. INDEMNIFICATION. In consideration of Buyer's execution and delivery
of the Transaction Documents and acquiring the Common Stock, Options and Option
shares thereunder and in addition to all of the Company's other obligations
under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless Buyer and all of their stockholders, officers, directors,
employees and direct or indirect investors and any of the foregoing person's
agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "Indemnitees") from and against any and all actions, causes
of action, suits, claims, losses, costs, penalties, fees, liabilities and
damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys' fees and disbursements (the
"Indemnified Liabilities"), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents, instrument or document contemplated hereby or thereby, or
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby or (d) the status of Buyer as an
investor in the Company. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
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8. GOVERNING LAW; MISCELLANEOUS.
----------------------------
(a) Governing Law. The corporate laws of the State of Colorado
shall govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Florida without regard to the principles of
conflict of laws. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting the County of Broward, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, 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 brought in an inconvenient forum or that the
venue of 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 to such
party at the address for such 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. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(b) Counterparts. This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
(d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
(e) Entire Agreement; Amendments. This Agreement supersedes
all other prior oral or written agreements between the Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and Buyer, and no provision hereof may be waived other than by an
instrument in writing signed by the party against whom enforcement is sought.
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(f) Notices. Any notices consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered (i) upon
receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically generated and kept on
file by the sending party); or (iii) one (1) day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be:
If to the Buyer:
Visual Data Corporation
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
With a copy to:
Atlas Xxxxxxxx Trop & Borkson, P.A.
000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
If to the Company:
EDNET, Inc.
Xxx Xxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxxxxxx
With a copy to:
Xxxxxx Xxxxxx
Xxxxxx & Diamond
90 New Xxxxxxxxxx Street, 9th Floor
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
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Each party shall provide five (5) days' prior written notice to the
other party of any change in address or facsimile number.
(g) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors and
assigns. No party may assign its rights hereunder without the consent of the
other party.
(h) No Third Party Beneficiaries. This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
(i) Survival. Unless this Agreement is terminated under
Section 9(l), the representations and warranties of the Company and the Buyer
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4, 5 and 9, and the indemnification provisions set forth in Section 8,
shall survive the Closing. Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
(j) Publicity. The Company and Buyer shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Buyer shall be entitled, without the prior approval of Company, to make any
press release or other public disclosure with respect to such transactions as is
required by applicable law and regulations (although Company shall be consulted
by the Company in connection with any such press release or other public
disclosure prior to its release and shall be provided with a copy thereof).
(k) Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l) Termination. In the event that the Closing shall not have
occurred with respect to a Buyer on or before July 31, 1998 (21) days from the
date hereof due to the Company's or Buyer's failure to satisfy the conditions
set forth in Sections 6 and 7 above (and the nonbreaching party's failure to
waive such unsatisfied condition(s)), the nonbreaching party shall have the
option to terminate this Agreement with respect to such breaching party at the
close of business on such date without liability of any party to any other
party; provided, however, that if this Agreement is terminated pursuant to this
Section 9(l), the Company shall remain obligated to reimburse the Buyer for the
expenses described in Section 4(i) above.
(m) No Strict Construction. The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against
any party.
* * * * * *
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IN WITNESS WHEREOF, the Buyer and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.
Buyer: Company:
VISUAL DATA CORPORATION EDNET, INC.
By:/s/ Xxxxx X. Xxxxxx By:/s/Xxx Xxxxxxxxx
------------------- ----------------
Name: Xxxxx X. Xxxxxx Name: Xxx Xxxxxxxxx
Its: President Its: CEO
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