<PAGE> 1
EXHIBIT 4.4
[FIVE YEAR WARRANT]
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR OTHERWISE. THIS WARRANT SHALL NOT
CONSTITUTE AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE RESOLD OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
COMMON STOCK PURCHASE WARRANT
No. DW2
To Purchase Shares of $.0001 Par Value Common Stock of
VISUAL DATA CORPORATION
THIS CERTIFIES that, for value received, PALLADIN OPPORTUNITY FUND,
L.L.C. (the "PURCHASER") is entitled, upon the terms and subject to the
conditions hereinafter set forth, at any time on or after the date hereof and on
or prior to 5:00 p.m. New York City Time on December 8, 2005 (the "TERMINATION
DATE"), but not thereafter, to subscribe for and purchase from VISUAL DATA
CORPORATION, a Florida corporation (the "COMPANY"), 100,000 shares of Common
Stock of the Company (the "WARRANT SHARES"). The "EXERCISE PRICE" is $2.13 per
share. The Exercise Price and the number of shares for which the Warrant is
exercisable shall be subject to adjustment as provided herein. This Warrant is
being issued in connection with the Purchase Agreement dated December 8, 2000
(the "AGREEMENT") entered into between the Company and the Purchaser.
1. Title of Warrant. Prior to the expiration hereof and subject to
compliance with applicable laws, this Warrant and all rights hereunder
are transferable, in whole or in respect of the right to purchase any
part of the Warrant Shares, at the office or agency of the Company by
the holder hereof in person or by duly authorized attorney, upon
surrender of this Warrant together with (a) the Assignment Form annexed
hereto properly endorsed, and (b) any other documentation reasonably
necessary to satisfy the Company that such transfer is in compliance
with all applicable securities laws.
2. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights
represented by this Warrant will, upon exercise of the rights
represented by this Warrant and payment of the Exercise Price as set
forth herein will be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of
the issue thereof (other than taxes in respect
<PAGE> 2
of any transfer occurring contemporaneously with such issue or
otherwise specified herein).
3. Exercise of Warrant.
(a) Exercise of the purchase rights represented by this Warrant may be made
at any time or times, in whole or in part before the close of business
on the Termination Date, by the surrender on any business day of this
Warrant and the Notice of Exercise annexed hereto duly completed and
executed, at the principal office of the Company (or such other office
or agency of the Company as it may designate by notice in writing to
the registered holder hereof at the address of such holder appearing on
the books of the Company), together with delivery to the Company by
such holder of all certifications or documentation reasonably necessary
to establish, to the satisfaction of the Company, that any such
exercise has been undertaken in compliance with all applicable federal
and state securities laws, and upon payment of the full Exercise Price
of the shares thereby purchased; whereupon the holder of this Warrant
shall be entitled to receive a certificate for the number of shares of
Common Stock so purchased. Certificates for shares purchased hereunder
shall be delivered to the holder hereof within three (3) Trading Days
after the date on which this Warrant shall have been exercised as
aforesaid. Payment of the Exercise Price of the shares shall be by
certified check or cashier's check or by wire transfer (of same day
funds) to an account designated by the Company in an amount equal to
the Exercise Price multiplied by the number of shares being purchased.
(b) Alternatively[, AND ONLY IN THE EVENT THE WARRANT SHARES ARE NOT
COVERED BY AN EFFECTIVE REGISTRATION STATEMENT,] the Warrant holder may
exercise this Warrant, in whole or in part in a "cashless" or
"net-issue" exercise by delivering to the offices of the Company or any
transfer agent for the Common Stock this Warrant, together with a
Notice of Exercise specifying the number of Warrant Shares to be
delivered to such Warrant holder ("DELIVERABLE SHARES") and the number
of Warrant Shares with respect to which this Warrant is being exercised
("EXERCISED SHARES").
The number of Deliverable Shares shall be calculated as follows:
# of Deliverable Shares = # of
Exercised Shares x Fair Market Value of Common Stock
less Exercise Price
----------------------------------
Fair Market Value of Common Stock
"FAIR MARKET VALUE" shall have the meaning specified in Section 12(c)
In the event that the Warrant is not exercised in full, the number of
Warrant Shares shall be reduced by the number of such Warrant Shares
for which this Warrant is exercised and/or surrendered, and the
Company, at its expense, shall within three (3) Trading Days issue and
deliver to or upon the order of the Warrant holder a new Warrant of
like tenor in the name of Warrant holder or as Warrant holder (upon
payment by Warrant holder of any applicable transfer taxes) may
request, reflecting such adjusted Warrant Shares.
2
<PAGE> 3
All exercises will be deemed to occur as of the date of the Notice of
Exercise, and certificates for shares of Common Stock purchased
hereunder shall be delivered to the holder hereof within three (3)
Trading Days after the date on which this Warrant shall have been
exercised as aforesaid. The Warrant holder may withdraw its Notice of
Exercise under Section 3(a) or 3(b) at any time thereafter if the
Company fails to timely deliver the applicable certificates to the
Warrant holder as provided in this Agreement.
(c) In lieu of delivering physical certificates representing the Common
Stock issuable upon exercise, provided the Company's transfer agent is
participating in the Depository Trust Company ("DTC") Fast Automated
Securities Transfer ("FAST") program, upon request of the Warrant
Holder, the Company shall use its best efforts to cause its transfer
agent to electronically transmit the Common Stock issuable upon
exercise to the Warrant Holder by crediting the account of Warrant
Holder's prime broker with DTC through its Deposit Withdrawal Agent
Commission ("DWAC") system. The time periods for delivery described in
the immediately preceding paragraph shall apply to the electronic
transmittals described herein.
The term "TRADING DAY" means (x) if the Common Stock is listed on the
New York Stock Exchange or the American Stock Exchange, a day on which
there is trading on such stock exchange, or (y) if the Common Stock is
not listed on either of such stock exchanges but sale prices of the
Common Stock are reported on an automated quotation system, a day on
which trading is reported on the principal automated quotation system
on which sales of the Common Stock are reported, or (z) if the
foregoing provisions are inapplicable, a day on which quotations are
reported by National Quotation Bureau Incorporated.
4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of
this Warrant.
5. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without
charge to the holder hereof for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all
of which taxes and expenses shall be paid by the Company, and such
certificates shall be issued in the name of the holder of this Warrant
or in such name or names as may be directed by the holder of this
Warrant; provided, however, that in the event certificates for shares
of Common Stock are to be issued in a name other than the name of the
holder of this Warrant, this Warrant when surrendered for exercise
shall be accompanied by the Assignment Form attached hereto duly
executed by the holder hereof; and provided further, that the Company
shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issuance of any Warrant
certificates or any certificates for the Warrant Shares other than the
issuance of a Warrant Certificate to the Purchaser in connection with
the Purchaser's surrender of a Warrant Certificate upon the exercise of
less than all of the Warrants evidenced thereby, and the Company shall
not be required to issue or deliver such certificates unless or until
the person or persons requesting the issuance thereof shall have paid
to the Company
3
<PAGE> 4
the amount of such tax or shall have established to the satisfaction of
the Company that such tax has been paid.
6. Closing of Books. The Company will at no time close its shareholder
books or records in any manner which interferes with the timely
exercise of this Warrant.
7. No Rights as Shareholder until Exercise. Subject to Section 12 of this
Warrant and the provisions of any other written agreement between the
Company and the Purchaser, the Purchaser shall not be entitled to vote
or receive dividends or be deemed the holder of Warrant Shares or any
other securities of the Company that may at any time be issuable on the
exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Purchaser, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification
of stock, change of par value, or change of stock to no par value,
consolidation, merger, conveyance or otherwise) or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise
until the Warrant shall have been exercised as provided herein.
However, at the time of the exercise of this Warrant pursuant to
Section 3 hereof, the Warrant Shares so purchased hereunder shall be
deemed to be issued to such holder as the record owner of such shares
as of the close of business on the date on which this Warrant shall
have been exercised.
8. Assignment and Transfer of Warrant. This Warrant may be assigned in
whole or in part by the surrender of this Warrant and the Assignment
Form annexed hereto duly executed at the office of the Company (or such
other office or agency of the Company as it may designate by notice in
writing to the registered holder hereof at the address of such holder
appearing on the books of the Company); provided, however, that this
Warrant may not be resold or otherwise transferred except (i) in a
transaction registered under the Securities Act of 1933, as amended
(the "ACT"), or (ii) in a transaction pursuant to an exemption, if
available, from registration under the Act and whereby, if requested by
the Company, an opinion of counsel reasonably satisfactory to the
Company is obtained by the holder of this Warrant to the effect that
the transaction is so exempt.
9. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of any Warrant or stock certificate
representing the Warrant Shares, and in case of loss, theft or
destruction, of indemnity reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental
thereto. Upon surrender and cancellation of such Warrant or stock
certificate, if mutilated, the Company will make and deliver a new
Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of this Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted
herein shall be a Saturday,
4
<PAGE> 5
Sunday or a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a legal holiday.
11. Effect of Certain Events. If at any time while this Warrant or any
portion thereof is outstanding and unexpired there shall be (i) a sale
or conveyance of all or substantially all of the Company's assets or
(ii) a transaction (by merger or otherwise) in which more than 50% of
the voting power of the Company is disposed of (collectively, a "SALE
OR MERGER TRANSACTION"), in which the consideration to be received by
the Company or its shareholders consists solely of cash, and in case
the Company shall at any time effect a Sale or Merger Transaction in
which the consideration to be received by the Company or its
shareholders consists in part of consideration other than cash, the
holder of this Warrant shall have the right thereafter to purchase, by
exercise of this Warrant and payment of the aggregate Exercise Price in
effect immediately prior to such action, the kind and amount of shares
and other securities and property which it would have owned or have
been entitled to receive after the happening of such transaction had
this Warrant been exercised immediately prior thereto, subject to
further adjustment as provided in Section 12. Notwithstanding the
above, a Sale or Merger Transaction shall not be deemed to occur in the
event the Company is the acquiring entity in connection with an
acquisition by the Company.
12. Adjustments of Exercise Price and Number of Warrant Shares.
The number of and kind of securities purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
(a) Subdivisions, Combinations and other Issuances. If the Company shall at
any time after the date hereof but prior to the expiration of this
Warrant subdivide its outstanding securities as to which purchase
rights under this Warrant exist, by split-up, spin-off, or otherwise,
or combine its outstanding securities as to which purchase rights under
this Warrant exist, the number of Warrant Shares as to which this
Warrant is exercisable as of the date of such subdivision, split-up,
spin-off or combination shall forthwith be proportionately increased in
the case of a subdivision, or proportionately decreased in the case of
a combination. Appropriate proportional adjustments (decrease in the
case of subdivision, increase in the case of combination) shall also be
made to the Exercise Price payable per share, so that the aggregate
Exercise Price payable for the total number of Warrant Shares
purchasable under this Warrant as of such date shall remain the same as
it would have been before such subdivision or combination.
(b) Stock Dividend. If at any time after the date hereof the Company
declares a dividend or other distribution on Common Stock payable in
Common Stock or other securities or rights convertible into Common
Stock ("COMMON STOCK EQUIVALENTS") without payment of any consideration
by holders of Common Stock for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon exercise or conversion thereof), then the number of
shares of Common Stock for which this Warrant may be exercised shall be
increased as of the
5
<PAGE> 6
record date (or the date of such dividend distribution if no record
date is set) for determining which holders of Common Stock shall be
entitled to receive such dividends, in proportion to the increase in
the number of outstanding shares (and shares of Common Stock issuable
upon conversion of all such securities convertible into Common Stock)
of Common Stock as a result of such dividend, and the Exercise Price
shall be proportionately reduced so that the aggregate Exercise Price
for all the Warrant Shares issuable hereunder immediately after the
record date (or on the date of such distribution, if applicable), for
such dividend shall equal the aggregate Exercise Price so payable
immediately before such record date (or on the date of such
distribution, if applicable).
(c) Other Distributions. If at any time after the date hereof the Company
distributes to all holders of its Common Stock, other than as part of
its dissolution, liquidation or the winding up of its affairs, any
shares of its capital stock, any evidence of indebtedness or any of its
assets (other than Common Stock), then the number of Warrant Shares for
which this Warrant is exercisable shall be increased to equal: (i) the
number of Warrant Shares for which this Warrant is exercisable
immediately prior to such event, (ii) multiplied by a fraction, (A) the
numerator of which shall be the Fair Market Value (as defined below)
per share of Common Stock on the record date for the dividend or
distribution, and (B) the denominator of which shall be the Fair Market
Value price per share of Common Stock on the record date for the
dividend or distribution minus the amount allocable to one share of
Common Stock of the value (as jointly determined in good faith by the
Board of Directors of the Company and the Warrant holder) of any and
all such evidences of indebtedness, shares of capital stock, other
securities or property, so distributed. For purposes of this Warrant,
"FAIR MARKET VALUE" shall equal the 10 Trading Day average closing
trading price of the Common Stock on the Principal Market for the 10
Trading Days preceding the date of determination or, if the Common
Stock is not listed or admitted to trading on any Principal Market, the
average of the closing bid and asked prices on the over-the-counter
market as furnished by any New York Stock Exchange member firm
reasonably selected from time to time by the Company for that purpose
and reasonably acceptable to the Holder, or, if the Common Stock is not
listed or admitted to trading on the Principal Market or traded
over-the-counter and the average price cannot be determined as
contemplated above, the Fair Market Value of the Common Stock shall be
as reasonably determined in good faith by the Company's Board of
Directors with the concurrence of the Holder. The Exercise Price shall
be reduced to equal: (i) the Exercise Price in effect immediately
before the occurrence of any event (ii) multiplied by a fraction, (A)
the numerator of which is the number of Warrant Shares for which this
Warrant is exercisable immediately before the adjustment, and (B) the
denominator of which is the number of Warrant Shares for which this
Warrant is exercisable immediately after the adjustment.
(d) Merger, etc. If at any time after the date hereof there shall be a
merger or consolidation of the Company with or into or a transfer of
all or substantially all of the assets of the Company to another
entity, then the Warrant Holder shall be entitled to receive upon or
after such transfer, merger or consolidation becoming effective, and
upon payment of the Exercise Price then in effect, the number of shares
or other securities or property of the
6
<PAGE> 7
Company or of the successor corporation resulting from such merger or
consolidation, which would have been received by Warrant Holder for the
shares of stock subject to this Warrant had this Warrant been exercised
just prior to such transfer, merger or consolidation becoming effective
or to the applicable record date thereof, as the case may be. The
Company will not merge or consolidate with or into any other
corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless
the corporation resulting from such merger or consolidation (if not the
Company), or such transferee corporation, as the case may be, shall
expressly assume in writing the due and punctual performance and
observance of each and every covenant and condition of this Warrant to
be performed and observed by the Company.
(e) Reclassification, etc. If at any time after the date hereof there shall
be a reorganization or reclassification of the securities as to which
purchase rights under this Warrant exist into the same or a different
number of securities of any other class or classes, then the Warrant
Holder shall thereafter be entitled to receive upon exercise of this
Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares or other securities
or property resulting from such reorganization or reclassification,
which would have been received by the Warrant Holder for the shares of
stock subject to this Warrant had this Warrant at such time been
exercised.
(f) Exercise Price Adjustment. In the event that the Company issues or
sells any Common Stock or securities which are convertible into or
exchangeable for its Common Stock or any convertible securities, or any
warrants or other rights to subscribe for or to purchase or any options
for the purchase of its Common Stock or any such convertible securities
(other than shares or options issued or which may be issued pursuant to
(i) the Company's current or future employee, director or bona fide
consultant options; (ii) shares issued upon exercise of options,
warrants or rights outstanding on the date of the Agreement; provided
that during the first year following the Closing Date (as defined in
the Agreement) the total number of such shares and options which are
vested and to be issued from the date hereof shall not exceed 1.5
million; (iii) strategic corporate alliances not undertaken principally
for financing purposes; (iv) arrangements with the Purchaser, (v)
acquisitions of other entities by the Company; and (vi) warrants issued
on customary terms in traditional bank financings) at an effective
price per share which is less than the Exercise Price or the Fair
Market Value, as the case may be, then in effect, then the Exercise
Price in effect immediately prior to such issue or sale shall be
reduced effective concurrently with such issue or sale to an amount
determined by multiplying the Exercise Price then in effect by a
fraction, (x) the numerator of which shall be the sum of (1) the number
of shares of Common Stock outstanding immediately prior to such issue
or sale, plus (2) the number of shares of Common Stock which the
aggregate consideration received by the Company for such additional
shares would purchase at such Exercise Price or Fair Market Value, as
the case may be, then in effect; and (y) the denominator of which shall
be the number of shares of Common Stock of the Company outstanding
immediately after such issue or sale. In the event that the effective
price per share referred to above is less than both the Exercise Price
is less than both the Exercise Price and the Fair Market Value, then
whichever adjustment leads to the largest decrease in the Exercise
Price shall be made.
7
<PAGE> 8
For the purposes of the foregoing adjustment, in the case of the
issuance of any convertible securities, warrants, options or other
rights to subscribe for or to purchase or exchange for, shares of
Common Stock ("CONVERTIBLE SECURITIES"), the maximum number of shares
of Common Stock issuable upon exercise, exchange or conversion of such
Convertible Securities shall be deemed to be outstanding, provided that
no further adjustment shall be made upon the actual issuance of Common
Stock upon exercise, exchange or conversion of such Convertible
Securities.
The number of shares which may be purchased hereunder shall be
increased proportionately to any reduction in Exercise Price pursuant
to this paragraph 12(f), so that after such adjustments the aggregate
Exercise Price payable hereunder for the increased number of shares
shall be the same as the aggregate Exercise Price in effect just prior
to such adjustments.
13. Voluntary Adjustment by the Company. The Company may at its option, at
any time during the term of this Warrant, reduce but not increase the
then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number
or kind of securities or other property purchasable upon the exercise
of this Warrant or the Exercise Price is adjusted, the Company shall
promptly mail to the holder of this Warrant a notice setting forth the
number of Warrant Shares (and other securities or property) purchasable
upon the exercise of this Warrant and the Exercise Price of such
Warrant Shares after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.
15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding and exercisable, it will reserve from its
authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of the Warrant Shares upon the exercise of any
purchase rights under this Warrant. The Company further covenants that
its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for the Warrant Shares
upon the exercise of the purchase rights under this Warrant. The
Company will take all such reasonable action as may be necessary to
assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any
requirements of the American Stock Exchange or any domestic securities
exchange upon which the Common Stock may be listed.
16. 9.9% Limitation.
(a) Notwithstanding anything to the contrary contained herein, the number
of shares of Common Stock that may be acquired by the Purchaser upon
exercise pursuant to the terms hereof shall not exceed a number that,
when added to the total number of shares of Common Stock deemed
beneficially owned by such holder (other than by virtue of the
ownership of securities or rights to acquire securities (including the
Warrant) that have
8
<PAGE> 9
limitations on the Purchaser's right to convert, exercise or purchase
similar to the limitation set forth herein), together with all shares
of Common Stock deemed beneficially owned (other than by virtue of the
ownership of securities or rights to acquire securities (including the
Warrant) that have limitations on the right to convert, exercise or
purchase similar to the limitation set forth herein) by the holder's
"affiliates" (as defined Rule 144 of the Act) ("AGGREGATION PARTIES")
that would be aggregated for purposes of determining whether a group
under Section 13(d) of the Securities Exchange Act of 1934, as amended,
exists, would exceed 9.99% of the total issued and outstanding shares
of the Company's Common Stock (the "RESTRICTED OWNERSHIP PERCENTAGE").
Each Holder shall have the right (w) at any time and from time to time
to reduce its Restricted Ownership Percentage immediately upon notice
to the Company and (x) at any time and from time to time, to increase
its Restricted Ownership Percentage immediately in the event of the
announcement as pending or planned of an event of:
(i) any consolidation or merger of the Company with or into any
other corporation or other entity or person (whether or not
the Company is the surviving corporation), or any other
corporate reorganization or transaction or series of related
transactions in which in excess of 50% of the Company's voting
power is transferred through a merger, consolidation, tender
offer or similar transaction,
(ii) any person (as defined in Section 13(d) of the Exchange Act),
together with its affiliates and associates (as such terms are
defined in Rule 405 under the 1933 Act), beneficially owns or
is deemed to beneficially own (as described in Rule 13d-3
under the Exchange Act without regard to the 60-day exercise
period) in excess of 50% of the Company's voting power,
(iii) there is a replacement of more than one-half of the members of
the Company's Board of Directors which is not approved by
those individuals who are members of the Company's Board of
Directors on the date thereof, in one or a series of related
transactions, or
(iv) a sale or transfer of all or substantially all of the assets
of the Company, determined on a consolidated basis.
(b) The Purchaser covenants at all times on each day (each such day being
referred to as a "COVENANT DAY") as follows: During the balance of such
Covenant Day and the succeeding sixty-one (61) days (the balance of
such Covenant Day and the succeeding 61 days being referred to as the
"COVENANT PERIOD") such Purchaser will not acquire shares of Common
Stock pursuant to any right (including the exercise of the Warrant)
existing at the commencement of the Covenant Period to the extent the
number of shares so acquired by such holder and its Aggregation Parties
(ignoring all dispositions) would exceed:
(x) the Restricted Ownership Percentage of the total number of
shares of Common Stock outstanding at the commencement of the
Covenant Period,
9
<PAGE> 10
minus
(y) the number of shares of Common Stock owned by such holder and
its Aggregation Parties at the commencement of the Covenant
Period.
A new and independent covenant will be deemed to be given by
the holder as of each moment of each Covenant Day. No covenant will
terminate, diminish or modify any other covenant. The holder agrees to
comply with each such covenant. This Section 16 controls in the case of
any conflict with any other provision of the Transaction Documents.
The Company's obligation to issue shares of Common Stock which
would exceed such limits referred to in this Section 16 shall be
suspended to the extent necessary until such time, if any, as shares of
Common Stock may be issued in compliance with such restrictions.
17. Compliance with Securities Laws.
(a) The holder hereof acknowledges that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered (or if no exemption
from registration exists), will have restrictions upon resale imposed
by state and federal securities laws. Each certificate representing the
Warrant Shares issued to the Holder upon exercise (if not registered or
if no exemption from registration exists) will bear the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT 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, TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF 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 ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS,
BASED ON AN OPINION LETTER OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY OR A NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION.
(b) Without limiting the Purchaser's right to transfer, assign or otherwise
convey the Warrant or Warrant Shares in compliance with all applicable
securities laws, the Purchaser of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the Warrant Shares to be issued upon
exercise hereof are being acquired solely for the Purchaser's own
account and not as a nominee for any other party, and that the
Purchaser will not offer, sell or otherwise dispose of this Warrant or
any Warrant Shares to be issued upon exercise hereof except under
circumstances that will not result in a violation of applicable federal
10
<PAGE> 11
and state securities laws. Upon exercise of this Warrant, the Purchaser
shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares of Common Stock so
purchased are being acquired solely for the Purchaser's own account and
not as a nominee for any other party, and not with a view toward
distribution or resale in violation of applicable securities laws.
(c) Neither this Warrant nor any Share of Common Stock issued upon exercise
of this Warrant may be offered for sale or sold, or otherwise
transferred or sold in any transaction which would constitute a sale
thereof within the meaning of the Act, unless (i) such security has
been registered for sale under the Act and registered or qualified
under applicable state securities laws relating to the offer an sale of
securities, or (ii) exemptions from the registration requirements of
the Act and the registration or qualification requirements of all such
state securities laws are available and the Company shall have received
an opinion of counsel that the proposed sale or other disposition of
such securities may be effected without registration under the Act,
such counsel and such opinion to be reasonably satisfactory to the
Company.
(d) Purchaser recognizes that investing in the Warrant and the Warrant
Shares involves a high degree of risk, and Purchaser is in a financial
position to hold the Warrant and the Warrant Shares indefinitely and is
able to bear the economic risk and withstand a complete loss of its
investment in the Warrant and the Warrant Shares. The Purchaser is a
sophisticated Purchaser and is capable of evaluating the merits and
risks of investing in the Company. The Purchaser has had an opportunity
to discuss the Company's business, management and financial affairs
with the Company's management, has been given full and complete access
to information concerning the Company, and has utilized such access to
its satisfaction for the purpose of obtaining information or verifying
information and have had the opportunity to inspect the Company's
operation. Purchaser has had the opportunity to ask questions of, and
receive answers from, the management of the Company (and any person
acting on its behalf) concerning the Warrant and the Warrant Shares and
the agreements and transactions contemplated hereby, and to obtain any
additional information as Purchaser may have requested in making its
investment decision. The initial Purchaser in this Warrant is an
"Accredited Investor", as defined by Regulation D promulgated under the
Act.
18. Miscellaneous.
(a) Issue Date; Choice Of Law; Venue; Jurisdiction. THE PROVISIONS OF THIS
WARRANT SHALL BE CONSTRUED AND SHALL BE GIVEN EFFECT IN ALL RESPECTS AS
IF IT HAD BEEN ISSUED AND DELIVERED BY THE COMPANY ON THE DATE HEREOF.
THIS WARRANT SHALL BE BINDING UPON ANY SUCCESSORS OR ASSIGNS OF THE
COMPANY. THIS WARRANT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, EXCEPT FOR MATTERS
ARISING UNDER THE ACT, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF
LAW. EACH OF THE PARTIES CONSENTS TO THE EXCLUSIVE JURISDICTION
11
<PAGE> 12
OF THE U.S. DISTRICT COURT SITTING IN THE STATE OF CITY OF NEW YORK IN
THE STATE OF NEW YORK IN CONNECTION WITH ANY DISPUTE ARISING UNDER THIS
WARRANT AND HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION BASED ON FORUM NON CONVENIENS, TO
THE BRINGING OF ANY SUCH PROCEEDING IN SUCH JURISDICTION. EACH PARTY
HEREBY AGREES THAT IF THE OTHER PARTY TO THIS WARRANT OBTAINS A
JUDGMENT AGAINST IT IN SUCH A PROCEEDING, THE PARTY WHICH OBTAINED SUCH
JUDGMENT MAY ENFORCE SAME BY SUMMARY JUDGMENT IN THE COURTS OF ANY
COUNTRY HAVING JURISDICTION OVER THE PARTY AGAINST WHOM SUCH JUDGMENT
WAS OBTAINED, AND EACH PARTY HEREBY WAIVES ANY DEFENSES AVAILABLE TO IT
UNDER LOCAL LAW AND AGREES TO THE ENFORCEMENT OF SUCH A JUDGMENT. EACH
PARTY TO THIS WARRANT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
ANY SUCH PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS IN
ACCORDANCE WITH SECTION 18(C). NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH
PARTY WAIVES ITS RIGHT TO A TRIAL BY JURY.
(b) Modification and Waiver. This Warrant and any provisions hereof may be
changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is
sought. Any amendment effected in accordance with this paragraph shall
be binding upon the Purchaser, each future holder of this Warrant and
the Company. No waivers of, or exceptions to, any term, condition or
provision of this Warrant, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.
(c) Notices. Any notice, request or other document required or permitted to
be given or delivered to the Purchaser or future holders hereof or the
Company shall be personally delivered or shall be sent by certified or
registered mail, postage prepaid, to the Purchaser or each such holder
at its address as shown on the books of the Company or to the Company
at the address set forth in the Agreement. All notices under this
Warrant shall be deemed to have been given when received.
A party may from time to time change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance with
the provisions of this Section 18(c).
(d) Severability. Whenever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant is held to be
invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Warrant in such
12
<PAGE> 13
jurisdiction or affect the validity, legality or enforceability of any
provision in any other jurisdiction, but this Warrant shall be
reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained
herein.
(e) No Impairment. The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or reasonably appropriate
in order to protect the rights of the Warrant Holder against
impairment. Without limiting the generality of the foregoing, the
Company (a) will not increase the par value of any Warrant Shares above
the amount payable therefor on such exercise, and (b) will take all
such action as may be reasonably necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable
Warrant Shares on the exercise of this Warrant.
13
<PAGE> 14
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officers thereunto duly authorized.
Dated: December 8, 2000
VISUAL DATA CORPORATION
By:
----------------------------------------
Name:
Title:
Agreed and Accepted
this 8th day of December, 2000
PALLADIN OPPORTUNITY FUND, L.L.C.
By:
------------------------------------
Name:
Title:
14
<PAGE> 15
NOTICE OF EXERCISE
To: VISUAL DATA CORPORATION
(1) The undersigned hereby elects:
(A) to purchase ________ shares of Common Stock of Visual Data
Corporation pursuant to the terms of the attached Warrant, and tenders herewith
payment of the Exercise Price in full, together with all applicable transfer
taxes, if any.
(B) in a "cashless" or "net-issue exercise" for, and to purchase
thereunder, ______ shares of Common Stock, and herewith makes payment therefor
with _______ Surrendered Shares.
(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
(3) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
Other Name:
--------------------
-----------------------------------
(Name)
-------------------- -----------------------------------
(Date) (Signature)
-----------------------------------
(Address)
<PAGE> 16
ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant of Visual Data
Corporation and all rights evidenced thereby are hereby assigned to
_______________________________________________ whose address is
_______________________________________________________________.
_______________________________________________________________
Dated: ______________,
Holder's Signature: _____________________________
Holder's Address:_____________________________
_____________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in an fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
