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EXHIBIT 10(p)
PROMISSORY NOTE
$1,000,000 December 11, 2000
Needham, Massachusetts
FOR VALUE RECEIVED, CuraSpan, Inc., a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with a principal place of business in Needham, Massachusetts (the "Company"),
promises to pay One Million Dollars ($1,000,000) to the order of Visual Data
Corporation ("Holder"), four years from the date hereof ("Maturity"), payable
semi-annually in arrears in accordance with the payment schedule set forth
herein, with the first payment commencing six months from the date hereof, with
no interest to be paid on the principal balance.
Principal not paid within ten (10) days of the date when due hereunder
shall bear interest at the rate of thirteen (13%) percent per annum from the
date due until so paid. In case this Note shall not be paid in accordance with
its terms, the Company agrees to pay all costs and expenses of collection,
including court costs and reasonable attorneys' fees.
The Company may prepay at any time the whole or any part of the
principal amount due hereunder without penalty. All unpaid indebtedness
evidenced by this Note (and any and all other sums which may become due
hereunder), if not sooner paid, shall be due and payable on Maturity.
1. PAYMENT SCHEDULE. Each semi-annual payment shall be equal to the lesser of
$125,000 or 50% of the renewal fees collected by the Company in the previous six
months from the post-acute facilities with which the Holder had a contract as of
the date set forth above; provided that the first and second payments to be made
hereunder shall not be less than $50,000 each, the third and fourth payments to
be made hereunder shall not be less than $75,000 each, and each payment
thereafter shall not be less than $100,000.
2. MANNER OF PAYMENT. All payments hereunder shall be made in lawful money of
the United States of America in immediately available funds by crediting such
payments to such account in the United States or by delivery to such address in
the United States as the Holder may designate for payments hereunder, by notice
given to the Company.
3. DEFAULT; REMEDY. Upon the occurrence of an Event of Default (as hereinafter
defined), the unpaid balance of the principal of this Note shall immediately
become due and payable. For the purpose of this Note, an Event of Default shall
consist of one or more of the following:
3.1 The Company shall fail to make any payment of principal payable
hereunder, and such nonpayment shall continue for fifteen (15) days after
written notice of such nonpayment has been given to the Company by the Holder;
or
3.2 The Company shall make an assignment for the benefit of creditors,
be dissolved, file a petition in bankruptcy, be adjudicated insolvent or
bankrupt, petition or apply to any tribunal for the appointment of a receiver or
any trustee for it or a substantial part of its assets, or shall commence any
proceedings under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; or there shall have been filed any such petition or
application or any such proceeding shall have been
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commenced against it, which remains undismissed for a period of ninety (90) days
or more; or the Company by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
the appointment of a receiver of or any trustee for it or any substantial part
of any of its properties or shall suffer any such receivership or trusteeship to
continue undischarged for a period of ninety (90) days or more; or
3.3 The Company shall breach any of the other material terms of this
Note, or the material terms of the Security Agreement referred to below, and
such breach shall continue for thirty (30) business days after written notice
thereof has been given to the Company by the Holder.
4. SUBORDINATION
4.1 The Company, for itself, its successors and assigns, covenants and
agrees, and the Holder, by its acceptance of this Note, likewise covenants and
agrees, that the payment of the principal of this Note is hereby expressly
subordinated, to the extent and in the manner hereinafter in this Section 4 set
forth, in right of payment, to the prior payment in full of all Senior Debt.
The term "Senior Debt" shall mean the principal of, premium,
if any, interest on, and any other payment due pursuant to any of the following,
whether outstanding at the date hereof or hereafter incurred or created:
(a) all indebtedness of the Company for money borrowed
(including any indebtedness secured by a mortgage or other lien which
is (i) given to secure all or part of the purchase price of property
subject thereto, whether given to the vendor of such property or to
another or (ii) existing on property at the time of acquisition
thereof);
(b) all indebtedness of the Company evidenced by notes,
debentures, bonds or other securities of the Company issued to any
national bank, savings and loan association or similar institution
which is supervised and examined by state or federal authority having
supervision over any such institution, or to any institutional
investor;
(c) all lease obligations of the Company which are capitalized
on the books of the Company in accordance with generally accepted
accounting principles;
(d) all indebtedness of others of the kinds described in
either of the preceding clauses (a) or (b) and all lease obligations of
others of the kind described in the preceding clause (c) assumed by or
guaranteed in any manner by the Company or in effect guaranteed by the
Company through an agreement to purchase, contingent or otherwise; and
(e) all renewals, extensions or refundings of indebtedness of
the kinds described in any of the preceding clauses (a), (b) and (d)
and all renewals or extensions of lease obligations of the kinds
described in either of the preceding clauses (c) and (d);
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is subordinate to any other indebtedness
of the Company or that such indebtedness, lease, renewal, extension or refunding
is not superior in right of payment to this Note.
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4.2 Upon any distribution of assets of the Company upon any
dissolution, winding up, liquidation or reorganization of the Company, whether
in bankruptcy, insolvency, reorganization or receivership proceedings, or upon
any assignment for the benefit of creditors or any other marshaling of the
assets and liabilities of the Company or otherwise:
(a) all principal, premium, if any, and interest due upon all
Senior Debt shall first be paid in full, or payment thereof provided
for in money or money's worth, before the holder of this Note shall be
entitled to receive any payment upon the principal of indebtedness
evidenced by this Note;
(b) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities (other
than shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a
plan of reorganization or readjustment, the payment of which is
subordinated to the payment of all Senior Debt which may at the time be
outstanding on terms not less favorable to the holder thereof than
those of this Section) to which the holder of this Note would be
entitled except for the provisions of this Section 4 shall be paid by
the liquidating Company or agent or other person making such payment or
distribution, whether a debtor in bankruptcy, a receiver or liquidating
debtor or otherwise, directly to the holders of Senior Debt (pro rata
to each such holder on the basis of the respective amounts of Senior
Debt held by each such holder), to the extent necessary to pay in full
all Senior Debt remaining unpaid after giving effect to any prior or
concurrent payment or distribution, or provision therefor, to the
holders of Senior Debt on the Senior Debt; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than shares
of stock of the Company as reorganized or readjusted, or securities of
the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated to
the payment of all Senior Debt which may at the time be outstanding on
terms not less favorable to the holders thereof than those of this
Section) shall be received by the holder of this Note before all Senior
Debt is paid in full, or provisions made for its payment, such payment
or distribution shall be paid over to holders of Senior Debt (pro rata
to each such holder on the basis of the respective amounts of Senior
Debt held by such holder), for application to the payment of all Senior
Debt remaining unpaid until all such Senior Debt shall have been paid
in full, or provision made for its payment, after giving effect to any
prior or concurrent payment or distribution to the holders of the
Senior Debt on the Senior Debt.
4.3 In the event and during the continuance of any default by the
Company with respect to the payment of any Senior Debt when due (whether at a
stated maturity date, upon acceleration or otherwise), no payment of principal
or interest on this Note shall be made by the Company without the written
consent of the holders of Senior Debt.
4.4 Subject to the payment in full of all Senior Debt, the holder of
this Note shall be subrogated to the rights of the holders of the Senior Debt to
receive payments or distributions of assets of the Company applicable to the
Senior Debt until the principal of and interest on this Note shall be paid in
full. No such payments or distributions applicable to the Senior Debt shall, as
between the Company, its creditors other than the holders of the Senior Debt,
and the holder of this Note, be deemed to be a payment by the Company to or on
account of this Note.
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4.5 The provisions of this Section 4 are solely for the purposes of
defining the rights of the holder of this Note, on the one hand, relative to the
rights of the holders of the Senior Debt, on the other hand, and nothing
contained in this Section 4 or elsewhere in this Note is intended to or shall
(i) impair, as between the Company, its creditors other than the holders of the
Senior Debt, and the holder of this Note, the obligation of the Company, which
is unconditional and absolute, to pay to the holder of this Note the principal
of and interest on this Note, as and when the same shall become due and payable
in accordance with the terms of this Note, or (ii) affect the rights of the
holder of this Note relative to creditors of the Company other than the holders
of the Senior Debt, nor shall anything herein prevent the holder of this Note
from exercising all remedies otherwise permitted by applicable law upon default
under this Note, subject to the rights, if any, under this Section 4 of the
holders of the Senior Debt in respect of assets of the Company received upon the
exercise of any such remedy.
4.6 Upon any payment or distribution of assets of the Company referred
to in this Section 4, the holder of this Note shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending
or upon a certificate of the liquidating debtor or agent or other person making
any distribution to the holder of this Note on this Note for the purpose of
ascertaining the amount of the Senior Debt, the holders thereof, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Section 4.
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5. MISCELLANEOUS.
5.1 BINDING EFFECT. This Note shall be binding upon and inure to the
benefit of the Holder hereof and its successors, heirs and assigns. This Note
shall be binding upon the Company and any successor to the principal business
interest of the Company, whether by merger or otherwise; provided that, in the
event of a Change of Control of the Company, Company shall promptly notify
Holder of such Change of Control and the Holder shall have the option, upon
written notice to the Company received within ten (10) days of the Holder's
receipt of the Company's notice of such Change of Control, to cancel this Note
and receive a one-time payment of $250,000, such payment to be made within
fifteen days of the receipt of such notice.
A Change of Control shall be deemed to occur if (A) the Company sells,
conveys, or otherwise disposes of all or substantially all of its assets or
property or (B) a merger or consolidation of the Company or sale or other
transfer of capital stock of the Company occurs, in each case, in one
transaction or series of related transactions, resulting in more than fifty
percent (50%) of the voting power of the Company or of the surviving or
acquiring corporation, as the case may be, being held by persons or entities
other than the persons or entities that beneficially held more than fifty
percent (50%) of the voting power of the Company immediately prior to such sale,
merger, consolidation or transfer.
5.2 NOTICES. Any notice, request or other communication under this Note
shall be given by hand delivery or by certified mail, postage prepaid,
If to the Holder:
Visual Data Corporation
Attn: Chief Financial Officer
1291 SW 29th Avenue
Pompano Beach, FL 33069
If to the Company:
CuraSpan, Inc.
Attn: President
368 Hillside Avenue
Needham, MA 02494
or in either case to such other address as shall have been identified in writing
in accordance with this Section 5.2.
5.3 WAIVER OF DEMAND. Except as otherwise provided in Section 3.1 and
3.3 above, the Company waives presentment, demand, protest and notice of every
kind in connection with the enforcement and collection of this Note.
5.4 GOVERNING LAW. The execution, delivery and performance of this Note
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (regardless of the laws that might otherwise
govern under the applicable principles of conflicts of law). Any dispute,
controversy or claims arising out of or in connection with this Note or the
performance hereof shall be determined and settled by binding arbitration before
a single arbitrator who shall be selected by the Company and the Holder provided
that if the parties have not selected an arbitrator within ten (10) days after
written demand has been given either party hereto by the other party then the
arbitrator shall be
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selected by the American Arbitration Association in accordance with its then
effective Commercial Arbitration Rules (the "Rules"). The arbitration shall be
conducted in accordance with the Rules. Any award rendered shall be final and
conclusive upon the parties and judgment thereon may be entered in a court
having competent jurisdiction hereunder. The arbitrator in any dispute which is
determined by arbitration pursuant to this Section 5.4 shall be authorized to
apportion the costs of arbitration, including attorneys' fees, as part of the
award, taking into consideration which, if either, party is the prevailing party
in such arbitration. All arbitration proceedings hereunder shall be held in
Boston, Massachusetts.
5.5 RIGHTS OF SETOFF. The Company may set-off against amounts owed
hereunder any payments tendered by it which arise or result from or relate to
any material breach of, or failure of Holder to perform, any of his
representations and warranties, commitments, obligations, covenants or
conditions set forth in the Asset Purchase Agreement executed of even date
between the Holder and the Company.
5.6 SECURITY AGREEMENT. This Note is secured by a certain Security
Agreement of even date between the Company and the Holder.
IN WITNESS WHEREOF, the undersigned has executed this Promissory Note
as of the day and year first written above.
CuraSpan, Inc.
By:
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Name:
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Title:
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