ComVest Capital Management LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
December 30, 1999
US Wireless Data, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Re: Commitment Letter
Gentlemen:
Please be advised that in connection with the term sheet (the "Term
Sheet"), dated December 23, 1999 by and between Commonwealth Associates L.P.
("Commonwealth") and US Wireless Data, Inc. (the "Company"), we hereby agree,
subject to the terms and conditions as hereinafter provided or otherwise set
forth in the Term Sheet to make available to the Company a loan (the "Loan"), in
the aggregate principal amount of up to One Million Dollars ($1,000,000)
dollars.
The Loan will be made in separate tranches (each a "Tranche"), within three
(3) business days of receipt by us in accordance with this Letter of a request
for the funding of a Tranche (a "Request Letter") from the Company. Each Request
Letter shall set forth the exact amount of funds requested to be loaned in the
particular Tranche and the intended use of the loan proceeds from such Tranche.
Prior to and as a condition precedent to funding each requested Tranche,
the Company shall provide to us (i) a note (the "Note") executed by an
authorized officer of the Company evidencing the principal amount of funds to be
provided in the Tranche (in substantially the form of the initial $195,000 Note
attached hereto as Exhibit A); (ii) a security agreement (the "Security
Agreement") and related documents securing the loan evidenced by the Note (the
"Security Documents"), executed by an authorized officer of the Company
(substantially in the form of the Security Agreement securing the initial
$195,000 Note annexed hereto as Exhibit B); and (iii) evidence satisfactory to
us that Xxxx Xxxxxxx has advanced funds to the Company in a Proportionate Amount
US Wireless Data, Inc.
December 30, 1999
Page 2
to the amount requested in the Request Letter. "Proportionate Amount" shall mean
the product obtained when the amount of the requested Tranche is multiplied by a
fraction, the numerator of which is 100 and the denominator of which is 805.
Notwithstanding anything to the contrary provided herein or elsewhere, we
shall have no obligation to fund a Tranche if at the time a Request Letter is
received by us and prior to when the funds requested in the Tranche are sent,
one or more of the following events shall have occurred:
1. Xxxx Xxxxxxx is no longer the President, Chief Executive Officer and a
Director of the Company or is unable to effectively act in the capacity required
to perform the required functions of such positions; or
2. The commencement by or against the Company of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, the appointment of a trustee, receiver or other
custodian for the Company or any of its assets, the making of any assignment for
the benefit of creditors or the taking of any corporate or other action
authorizing or initiating any of the foregoing; or
3. The Company shall have been unable to enter into an agreement to
convert, modify or purchase the Company's Series B Preferred Stock and 6%
Convertible Debentures on terms and conditions acceptable to us in our sole
discretion.
Notwithstanding anything to the contrary provided herein or elsewhere, we
may in our sole discretion permit a person other than us, which person must be
reasonably acceptable to the Company, to fund a portion of the Loan to the
Company requested pursuant to a Request Letter for all or a portion of one or
more Tranches on the terms and conditions provided herein, and the Company shall
provide to any such person an executed Note evidencing the principal amount of
funds provided in such Tranche and the requested Security Documents, provided
that such documents may be modified as appropriate to reflect prior security
interests of prior Tranches. The Company agrees that any employee, partner or
shareholder of Commonwealth or any of its affiliates are reasonably acceptable
for purposes of this Commitment Letter.
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without regard to the conflicts of laws
principles thereof. The parties hereto hereby agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this instrument or the
consummation of the transactions contemplated hereby, shall be brought solely in
a federal or state court located in the City, County and State of New York. By
its execution hereof, the parties hereby covenant and irrevocably submit to the
in personam jurisdiction of the federal and state courts located in the City,
County and State of New York and agree that any process in any such action may
be served upon any of them personally, or by certified mail or registered mail
upon them or their agent, return receipt requested, with the same full force and
effect as if personally served upon them in New York City. The parties hereto
waive any claim that any such jurisdiction is not a convenient forum for any
such suit or proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the party
prevailing therein shall be entitled to payment from the other party hereto of
its reasonable counsel fees and disbursements in an amount judicially
determined.
US Wireless Data, Inc.
December 30, 1999
Page 3
Any notice, consent, request, or other communication given hereunder shall
be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested addressed to the Company, at its principal office as
first provided above, Attention: Xxxx Xxxxxxx and to Commonwealth at its address
provided above (or to such other address as either the Company and/or
Commonwealth shall provide in writing to the other party). Notices shall be
deemed to have been given on the date of receipt by the other party.
Very truly yours,
ComVest Capital Management LLC
By:
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Name:
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Title:
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Accepted and agreed as of the
date first appearing above
US WIRELESS DATA, INC.
By:
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Name:
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Title:
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