EXHIBIT 4.1
DEBENTURE AGREEMENT
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NEITHER THE DEBENTURES NOR THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION
OF, OR AS INTEREST ON, THE DEBENTURES, HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE OR FOREIGN LAW. THE DEBENTURES HAVE, AND THE SHARES OF
COMMON STOCK WILL BE, ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED UNLESS (i) THEY SHALL HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE AND FOREIGN SECURITIES ACT OR
OTHER LAW OR (ii) THE CORPORATION SHALL HAVE BEEN FURNISHED WITH AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION, THAT REGISTRATION OR OTHER COMPLIANCE
IS NOT REQUIRED UNDER ANY OF SUCH ACTS OR LAWS.
U.S. WIRELESS DATA, INC.
6% CONVERTIBLE SUBORDINATED
DEBENTURES DUE JULY 21, 2000
This Debenture Agreement is entered into between U. S. Wireless Data,
Inc., a Colorado corporation (the "Corporation") and purchasers of the
Corporation's 6% Convertible Subordinated Debentures Due July 21, 2000 (the
"Debentures"). The Debentures are due in one payment of principal and any and
all accrued but unpaid interest then due, on July 21, 2000 (the "Maturity
Date"), unless earlier converted pursuant to the terms hereof. Interest shall
accrue on the Debentures at the initial rate of six percent (6%) per annum (the
"Applicable Interest Rate").
The Debentures shall be evidenced by Debenture Certificates annexed
hereto as Exhibit 1, which shall be valid only when countersigned by an
authorized representative of the Corporation.
All capitalized terms used in this Agreement are as defined in Article
XII, or from place to place, as indicated, in this Agreement.
The Debentures are issued as part of a series of 6% Convertible
Subordinated Debentures privately issued by the Corporation and known as the "6%
Convertible Subordinated Debentures, Due July 21, 2000" each of which has been
or will be issued to a Holder who has or will represent to the Corporation that
he, she or it is an accredited investor, as that term is defined in Rule 501(a)
of the Securities Act of 1933, as amended (the "1933 Act"). The Holder of a
Debenture hereby re-affirms such representation to the Corporation and each
other Holder of Debentures. The minimum principal dollar amount of the
Debentures is $1,000,000 and the maximum principal amount may be up to
$4,000,000.
Any principal or interest on any Debenture which is payable, but is not
punctually paid or duly provided for at the Maturity Date or any Interest
Payment Record Date (herein called "Default Interest") shall bear compound
interest at a rate of two percent (2%) over the Applicable Interest Rate from
the date of default until paid.
I. Principal and Interest Payments.
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A. The Debentures shall accrue interest from the date of original
issuance by the Corporation at the rate of six percent (6%) per annum, based on
a 360 day year and 90 day quarters.
B. Interest shall be payable quarterly to Debentureholders of
record as of March 31, June 31, September 30 and December 31 of each year (the
"Interest Payment Record Dates"), commencing December 31, 1998. The payment date
for each interest payment shall be on or before the 15th of the month following
each Interest Payment Record Date, or the next Business Day thereafter if such
day is not a Business Day. No interest payment shall be due and owing until the
15th day following December 31, 1998, at which time all interest owing from the
date of issuance until December 31, 1998 shall become due and owing.
C. Unpaid interest due and owing on any Debentures as of the date
of conversion of such debentures into shares of the Corporation's no par value
common stock (the "Common Stock") may be paid by the Corporation in shares of
its Common Stock. The number of shares of Common Stock issuable as interest upon
such conversion shall be the amount of any interest owing as of such date,
divided by the Conversion Price, as hereafter defined.
D. Principal and interest on the Debentures will be payable, and
transfer of the Debentures will be registrable at the Principal Office of the
Corporation. Payment of principal and interest shall be made by delivery of a
check or by wire transfer of funds representing such principal and/or interest
to the registered holder mailed to such holder's address as it appears on the
Debenture Register.
E. Notwithstanding the number of Debenture Certificates which may
be issued to a single Debentureholder, the Corporation shall be entitled to
aggregate the principal amounts of all Debentures held by such Holder for
purposes of calculating interest payable to such Holder and shall be obligated
to issue only one check in payment of principal and/or interest to each such
holder.
II. Events of Default.
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Any one or more of the following shall constitute an "Event of Default"
hereunder:
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A. Default in the payment of any interest or principal upon any
Debenture when the same becomes due and payable, and continuance of such default
for a period of fifteen (15) days; or
B. Default in the performance, or breach, of any other covenant
or warranty of the Corporation in the Debentures, and continuance of such
default or breach for a period of 60 days after notice of such breach or default
has been given by any Debentureholder by registered or certified mail, to the
Corporation; or
C. The entry of a decree or order by a court having proper
jurisdiction adjudging the Corporation a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Corporation under the Bankruptcy Code or any
other applicable Federal or state law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official)
(hereafter a "Trustee") for the Corporation or for any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; or
D. The institution by the Corporation of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under the
Bankruptcy Code or any other applicable Federal or state law, or the consent by
it to the filing of any such petition or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Corporation in furtherance of any such
action.
III. Acceleration.
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Within 45 days after the occurrence of any Event of Default hereunder, the
Corporation shall mail notice of such default to all Debentureholders, unless
such default shall have been cured or waived.
If an Event of Default occurs and is continuing, then the Holder of any
Debenture then Outstanding may declare the principal and all accrued interest on
such Debenture to be immediately due and payable, by a notice in writing to the
Corporation, and upon any such declaration such principal and interest shall
become immediately due and payable.
Upon the happening of an Event of Default described in Sections II.C. and
II.D., all amounts then owing as principal and unpaid interest on the Debentures
shall become
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immediately due and payable in full without any further action or notice on the
part of any Debentureholder or other person.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of money due has been obtained, the
Holder declaring such default and/or any trustee appointed for the Corporation
may, by written notice to the Corporation, rescind and annul such declaration
and its consequences if the Corporation has paid or deposited with such trustee
a sum sufficient to pay all principal and accrued interest, including any
Default Interest, on the Debentures.
IV. Conversion into Shares of Common Stock at Holder's Option.
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A. Holder may, at any time, and from time to time on or after the
earlier of (i) effectiveness of a registration statement with the SEC covering
the shares of Common Stock into which the Debenture is convertible or (ii) the
expiration of 120 days from the initial closing of the offering by which any of
the Debentures were first sold (the "Initial Closing Date"), convert up to fifty
percent (50%) of the Debentures owned by that Holder in any whole number
multiple of at least one thousand dollars ($1000) of the principal amount of
Debentures, plus any accrued but unpaid interest thereon, into whole shares of
the Corporation's Common Stock. The remaining fifty percent (50%) of the
Debentures held by such Holder shall be convertible commencing thirty calendar
days after the first day on which any Debentures become convertible into Common
Stock.
B. The number of shares of Common Stock issuable upon such
conversion shall be the result of dividing (a) the dollar amount of the
principal of, and accrued interest on (which the Holder elects to so convert),
the Debenture being converted by (b) the lesser of (i) $4.25 or (ii) 80% of the
Market Price (the "Conversion Price"). Notwithstanding the foregoing, for the
first 180 days following the Initial Closing Date, the Conversion Price shall
not be less than Two and 125/1000 Dollars ($2.125) per share, which $2.125 price
shall be appropriately adjusted in the event of any capital reorganization,
recapitalization or reclassification of the Corporation by way of stock split
(forward or reverse), dividend, exchange or similar transaction affecting the
Common Stock (the "Minimum Conversion Price"). After such 180 day period, the
Minimum Conversion Price shall be eliminated. In the event the Corporation
issues any securities between the Initial Closing Date and 180 days following
the Initial Closing Date which are convertible to Common Stock of the
Corporation at a price less than the Minimum Conversion Price (other than
options which may be issued to officers, directors, employees and consultants of
the Corporation pursuant to the Corporation's existing stock option plan), then
the Minimum Conversion Price shall be adjusted to match the conversion price of
such other securities.
C. The restrictions set forth in the foregoing Sections A and B
of this Article (including the date and dollar limitation on the amount of
Debentures that may be converted set forth in Section A and the price
restrictions set forth in Section B) shall be eliminated if
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then in effect, upon the public announcement of any merger,
consolidation or other business combination of the Corporation with or into
another corporation, firm or other entity in which the Corporation is not to be
the surviving entity.
D. The Corporation has agreed under terms contained in a separate
agreement entered between the Corporation and the Debentureholders to register
with the SEC the shares of Common Stock issuable by the Corporation upon
conversion of, and if elected by a Holder, as interest on, the Debentures (the
"Registration"). In the event the Registration is not declared effective by the
SEC within 120 calendar days of the Initial Closing Date, the Corporation shall
pay to each Holder of Debentures, in cash, within ten business days of the
applicable date, two percent (2%) of the face amount of Debentures held by each
Holder; the Corporation shall pay an additional three percent (3%) of the face
amount of Debentures held by the Holder for each additional thirty (30) day
period (or any fractional part of such 30-day period) during which the
Registration is not effective. In the event that the Registration is not
effective by the 180th calendar day following the Initial Closing Date, the
Holder shall have the right to require the Corporation to redeem the Debentures
held by such Holder at one hundred and twenty percent (120%) of the face amount
of such Debentures, plus all accrued interest owing on the Debentures to the
date of redemption. The Corporation shall redeem Debentures so tendered for
redemption within seven (7) days of written notice to the Corporation by the
Holder requesting such redemption and accompanied by the Debenture Certificate
for the Debentures to be redeemed.
E. In order to effect conversion, the Holder shall surrender the
Debenture Certificate representing the Debentures being converted to the
Corporation at its principal office, accompanied by written notice (the
"Conversion Notice") to the Corporation that the Holder elects to convert the
Debentures. The Conversion Notice shall be in the form attached to the Debenture
Certificate(s) being converted. The Holder may submit an irrevocable Conversion
Notice to the Corporation in advance of physical delivery of a Debenture
Certificate(s) by transmitting a copy of the completed Conversion Notice
relating to the Debenture Certificate(s) to be tendered to the Corporation by
facsimile (the "Advance Conversion Notice"). Physical delivery of the Debenture
Certificates which are the subject of the Advance Conversion Notice shall be
made to the Corporation within three (3) business days thereafter. The
Debentures tendered for conversion shall be deemed to have been converted on the
date the Corporation receives the Advance Conversion Notice for such Debentures,
provided the Advance Conversion Notice is received by 6:00 p.m. (Eastern Time)
on a Business Day (the "Common Stock Conversion Date"), and provided further,
that the original Debenture Certificate representing the Debentures then being
converted is actually delivered to the Corporation within such three (3)
business day period. If the Advance Conversion Notice is received on a day that
is not a Business Day or after 6:00 p.m. (Eastern Time) on a day that is a
Business Day, then the Common Stock Conversion Date shall be the next day that
is a Business Day. The Corporation will cause its transfer agent to issue
certificates for the shares of Common Stock issuable upon conversion and will
transmit the certificates representing such shares (together with Debenture
Certificates or
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instruments representing the balance of Debentures not being so
converted) to the Holder via express courier, by electronic transfer, or
otherwise, within three (3) business days after receipt by the Corporation of
the Debenture Certificate(s) for the Debentures then being converted (the
"Delivery Date"). On the Common Stock Conversion Date, such Holder shall be
treated for all such purposes as the record Holder of the Common Stock issuable
upon such conversion.
F. Only whole shares of the Corporation's Common Stock will be
issued on any conversion or as interest on the Debentures (when permitted to be
paid in shares of Common Stock pursuant to Section I.C). In the event that a
Holder of Debentures is entitled to a fraction of a share of Common Stock, the
Corporation shall, at its sole option, either (i) pay such holder the cash
equivalent of that fractional share, computed by multiplying the fraction by the
applicable Conversion Price or (ii) the next higher whole number of shares of
Common Stock if the fractional share to which the Debentureholder is otherwise
entitled is equal to 0.5 or greater, or the next lower number of whole shares of
Common Stock if the fractional share to which the Debentureholder is otherwise
entitled is less than 0.5.
G. Subject to the foregoing, no payment or adjustment shall be
made upon any conversion for any dividends on the Common Stock delivered upon
conversion.
H. The Corporation covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock or its issued Common Stock held in its
treasury, or both, for the purpose of effecting conversions of Debentures, the
full number of shares of Common Stock then deliverable upon the conversion of
all Outstanding Debentures not theretofore converted; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all said Outstanding Debentures, the Corporation
will use its best efforts to take such corporate action as may in the opinion of
its counsel be necessary to increase its authorized but unissued Common Stock to
such number of shares as shall be sufficient for that purpose.
I. The Corporation will pay any and all United States Federal,
state or local documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of shares of Common Stock on conversions of
Debentures pursuant hereto; provided, however, that the Corporation shall not be
required to pay any tax which may be payable in respect of any registration of
transfer involved in the issue or delivery of Common Stock in a name other than
that of the Holder of the Debentures to be converted and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
J. The Corporation shall use its best efforts to maintain the
listing of the Common Stock on the OTC Electronic Bulletin Board or such other
quotation service or
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exchange on which the Common Stock may be listed for
trading, and shall not take any action at any time while Debentures are
Outstanding which would result in the delisting of the Common Stock from any
quotation service or exchange upon which the Common Stock may be so listed. The
Corporation shall file all reports required to be filed by it with the SEC
pursuant to the Securities Exchange Act of 1934 (the "1934 Act") and/or the 1933
Act and shall not take any action which would result in the deregistration of
the Common Stock under Section 12(g) of the 1934 Act.
V. Forced Conversion of Debentures by the Corporation.
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A. The Corporation may force the conversion of the Debentures
into fully paid and non-assessable shares of Common Stock of the Corporation, at
the then applicable Conversion Price (a "Forced Conversion"), at any time once
the following conditions have been satisfied:
1. the Common Stock underlying the Debentures has been registered
with the SEC for no less than ninety (90) days; and
2. the Common Stock has traded at a price of at least Eight and
50/100 Dollars ($8.50) for twenty consecutive trading days (based on
the average closing bid price of the Common Stock on such days).
B. The Corporation may effect a Forced Conversion by notice sent
to all of the Debenture Holders (a "Forced Conversion Notice"). The Debentures
will then automatically convert into shares of Common Stock at the then
applicable Conversion Price effective as of the date of the Forced Conversion
Notice. The Conversion Notice shall state the number of shares of Common Stock
issuable to the Holders upon conversion and the basis for the determination of
the number of shares so issuable upon the Forced Conversion.
C. Any accrued but unpaid interest owing on the Debentures to the
date of Forced Conversion will be payable by the Corporation as described in
Article I above, in cash. Accrued interest to the date of conversion will be
paid at the same time as the Common Stock issuable upon conversion of the
Debentures is delivered to the Holder.
D. As soon as practicable after a Forced Conversion, the
Debentureholder shall surrender the Debenture Certificate representing the
shares being converted to the Corporation at the Corporation's Principal Office.
The Debentures shall be deemed to have been converted into Common Stock as of
the date of the Forced Conversion Notice, irrespective of the date upon which
the Debenture Certificate is surrendered to the Corporation in exchange for a
certificate representing the shares of Common Stock issuable upon conversion
(the "Surrender Date"). On the Conversion Date, the Holder shall be treated for
all purposes as the record holder of the Common Stock issuable upon such
conversion. As promptly as practicable on or after the Surrender Date, the
Corporation shall
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issue a certificate or certificates for the number of shares of Common Stock
issuable upon a Forced Conversion.
E. The Corporation shall be entitled to aggregate the principal
amounts of all Debentures owned by such Debentureholder and issue a single
certificate of Common Stock to such Holder upon a Forced Conversion.
F. Notwithstanding the delivery of a Forced Conversion Notice,
such Notice and the Forced Conversion shall be null and void and of no force or
effect if, between the date of the Forced Conversion Notice and the actual date
of delivery of shares of Common Stock issuable upon conversion of the Debentures
(provided such delivery of the Debenture Certificate is actually made by the
Debenture Holder within ten business days of the date of the Forced Conversion
notice), if: (i) the Common Stock is suspended from trading privileges on any
exchange on which the stock may then be listed or from the OTC Electronic
Bulletin for more than one trading day; or (ii) the effectiveness of the
Registration of the Common Stock is suspended by the SEC. In such case, the
Holder may elect to accept shares of the Corporation's Common Stock in
conversion of the Debenture or to rescind the Forced Conversion and obtain the
return of the original Debenture. In either case, the Holder shall be entitled
to receive payment of all interest owing on the Debenture through the date of
the Forced Conversion.
VI. Optional Redemption of the Debentures by the Corporation.
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A. At any time that the Corporation's Common Stock is trading
(based on the last sale price of the Common Stock on a given day) at or above
the Minimum Conversion Price, then the Corporation shall be entitled to redeem
all or any portion of the Debentures (provided it does so in multiples of $1,000
and that any such partial redemption is effected pro rata as to all Debentures
then outstanding) on the following basis:
1. Initial Closing Date to day 60 thereafter: 105% of face value
plus accrued interest to the date of redemption;
2. Day 60 through day 90 following the Initial Closing Date:
112.5% of face value plus accrued interest to the date of redemption;
and
3. Day 91 through day 120 following the Initial Closing Date:
120% of face value plus accrued interest to the date of redemption.
B. The Corporation may effect a redemption pursuant to the
provisions of this Article by delivery of a notice sent to all of the Debenture
Holders (a "Redemption Notice"), stating the amount of Debentures to be so
redeemed and simultaneously depositing the amount needed for such redemption in
escrow with an independent Paying Agent (which shall not be the Corporation),
who or which shall effect redemption of the Debentures so
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called for redemption hereunder. The Redemption Notice shall provide the Holders
with the name, address and telephone number of the Paying Agent and appropriate
instructions as to manner of tendering Debenture Certificates to be redeemed to
the Paying Agent. The redemption shall be completed and payment made to the
Debenture Holders within two business days of the date the Holder tenders the
Debenture Certificate to the Paying Agent. The Paying Agent shall also return
Debenture Certificates to the Holders evidencing the balance of any Debentures
not redeemed pursuant to the Redemption Notice.
C. Upon any redemption of Debentures pursuant to the provisions
of this Article, the Corporation shall issue the holders of Debentures so called
for redemption, warrants to purchase shares, on a pro rata basis, of 50,000
shares of the Corporation's Common Stock for each One Million Dollars
($1,000,000) of Debentures so redeemed. The warrants so issued shall be
exercisable at a per share price equal to the closing bid price of the Common
Stock as quoted on the OTC Electronic Bulletin Board or other quotation system
or exchange upon which the Common Stock is listed for trading, on the day prior
to the Redemption Notice, for three years from such date, and shall include a
cashless exercise provision. The Common Stock issuable upon the exercise of such
warrants shall carry piggyback registration rights entitling the holders to have
the shares included in any registration statement filed by the Corporation with
the SEC (other than registrations done on inappropriate forms or in a firm
commitment underwritten public offering of the Corporation's securities). Such
rights shall be available for so long as (i) the shares issuable upon exercise
of the warrants cannot be resold without limitations as to volume under SEC Rule
144 or any successor or replacement SEC rule or regulation, or (ii) in the event
such volume limitations do apply, that such limitations not materially limit the
number of shares that a Holder may sell under SEC Rule 144 or any successor or
replacement SEC rule or regulation.
VII. Reorganization.
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If any capital reorganization or reclassification of the capital stock of
the Corporation, or consolidation or merger of the Corporation with another
corporation, or the sale of all or substantially all of its assets to another
corporation shall be affected in such a way that holders of Common Stock shall
be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, as a condition of such reorganization,
reclassification, consolidation, merger or sale, lawful and adequate provision
shall be made whereby the Holder of Debentures shall thereafter have the right
to (but not be obligated to) receive upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of the Common Stock of the
Corporation immediately theretofore receivable upon the conversion of
Debentures, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for the outstanding shares of such Common
Stock of the Corporation, and in any such case appropriate provision shall be
made with respect to the rights and interest of the Debentureholders to the end
that the provisions hereof (including without limitation provisions for the
number of shares receivable upon the conversion of the Debentures and the method
for calculation of the Conversion Price) shall thereafter be applicable, as
nearly as may be, in relation to any shares of stock, securities or assets
thereafter receivable upon the conversion of such Debentures. The Corporation
shall
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not effect any such consolidation, merger or sale, unless prior to the
consummation thereof the successor corporation (if other than the Corporation)
resulting from such consolidation or merger or the Corporation purchasing such
assets shall assume by written instrument executed and mailed to the Holders,
the obligation to deliver to such Holders such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such Holders may be
entitled to receive and to assume all obligations (including payment
obligations) of any and all Debentures for which Holders have elected not to
convert or exchange in such transaction.
VIII. Notice of Certain Events. If, at any time:
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A.The Corporation shall declare any cash dividend on its Common Stock;
B. the Corporation shall pay any dividend payable in stock upon
its Common Stock or make any distribution (other than the regular cash
dividends) to the holders of its Common Stock;
C. the Corporation shall offer for subscription (including by
grants of rights or warrants) pro rata to the holders of its Common Stock any
additional shares of stock of any class or other rights;
D. there shall be any capital reorganization, reclassification of
the capital stock of the Corporation (other than a subdivision or combination or
change in the par value of its Common Stock), or consolidation or merger of the
Corporation with, or sale or lease of all or substantially all of its assets to,
another corporation requiring the approval of any shareholders of the
Corporation (in their capacity as shareholders) if such consolidation, merger,
sale or lease will result in a change in the shares held by the holders of
Common Stock; or
E. there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give written
notice, addressed to the Holders of the Debentures, of the date on which (i) the
books of the Corporation shall close or a record shall be taken for such
dividend, distribution or subscription rights, or (ii) such reorganization,
reclassification, consolidation, merger, sale, lease, dissolution, liquidation
or winding up shall take place, as the case may be. Such notice shall also
specify the date as of which the holders of Common Stock of record shall
participate in such dividend distribution or subscription rights, or shall be
entitled to exchange Common Stock for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, sale, lease,
dissolution, liquidation or winding up, as the case may be. Such written notice
shall be at least twenty days prior to the record date or the date on which
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the Corporation's transfer books are closed in respect thereto or the effective
date of such event.
IX. Subordination.
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A. In the event and during the continuation of any default in the
payment of the principal of, or premium or sinking fund installments, if any,
due, with respect to, or interest on, any Superior Indebtedness (as hereinafter
defined in Article XII), or any default, or any event which, with notice or
lapse of time or both, would constitute a default, in any other agreement, term
or condition contained in any agreement under which any Superior Indebtedness is
issued, no cash payment of principal or interest shall be made on the Debentures
unless and until such default shall have been remedied, nor shall any such
payment be made if after giving effect, as if paid, to such payment, any such
default would exist in the performance or observance of any covenant or
agreement of the Corporation contained in any agreement under which any Superior
Indebtedness shall have been issued or pursuant to which Superior Indebtedness
shall have been incurred.
B. Upon any payment by the Corporation, or distribution of assets
of the Corporation of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or total or partial
liquidation or reorganization of the Corporation, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due upon all Superior Indebtedness shall first be paid
in full, or payment thereof provided for, in money or money's worth, in
accordance with its terms, before any payment is made on account of the
principal (and premium, if any) or interest on the Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Corporation, or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, to which the
Debentureholders would otherwise be entitled but for the provisions of this
Article IX, shall be paid by the Corporation or by any receiver, trustee in
bankruptcy, liquidating trustee, custodian, agent or other person making such
payment or distribution directly to the holders of Superior Indebtedness or
their representative or representatives or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Superior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Superior Indebtedness in full, in money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Superior Indebtedness, before any payment or distribution is made to
the Holders of the Debentures.
C. Notwithstanding the preceding paragraphs, in the event that
any payment or distribution of assets of the Corporation of any kind or
character, whether in cash, property or securities, prohibited by the preceding
paragraphs shall be received by the holders of the Debentures, such payment or
distribution shall be paid over or delivered to the holders of Superior
Indebtedness of their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Superior Indebtedness
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may have been issued, as their respective interests may appear, for application
to the payment of all Superior Indebtedness remaining unpaid to the extent
necessary to pay all Superior Indebtedness in full in money or money's worth in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Superior Indebtedness.
D. For purposes of this Article IX, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Corporation as
reorganized or readjusted, or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
IX with respect to the Debentures to the payment of all Superior Indebtedness
which may at the time be outstanding; provided that (i) the Superior
Indebtedness is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the
Superior Indebtedness are not, without the consent of such holders, altered by
such reorganization or readjustment. The consolidation of the Corporation with,
or the merger of the Corporation into, another corporation or the liquidation or
dissolution of the Corporation following the conveyance, lease or transfer of
its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided in Article XI hereof shall
not be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Article if such other corporation shall, as a part of such
consolidation, merger, conveyance, lease or transfer, comply with the conditions
stated in Article XI hereof.
E. Subject to the payment in full of all Superior Indebtedness,
the rights of the holders of the Debentures shall be subrogated to the rights of
the holders of Superior Indebtedness to receive payments or distributions of
cash, property or securities of the Corporation applicable to the Superior
Indebtedness until the principal of (and premium, if any) and interest on the
Debentures shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Superior Indebtedness of any
cash, property or securities to which the Holders of the Debentures or a Trustee
would be entitled except for the provisions of this Article, and no payment over
pursuant to the provisions of this Article to the holders of Superior
Indebtedness by Holders of the Debentures or the Trustee, shall, as between the
Corporation, its creditors other than holders of Superior Indebtedness, and the
Holders of the Debentures, be deemed to be a payment by the Corporation to or on
account of the Superior Indebtedness. It is understood that the provisions of
this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of the Debentures, on the one hand, and the
holders of the Superior Indebtedness, on the other hand.
F. The terms "paid in full" and "payment in full" as used in this
Article with respect to Superior Indebtedness mean the receipt, in cash or
securities (taken at their market value at the time of the receipt thereof), of
the principal amount of the Superior Indebtedness (and any premium due thereon)
and full interest thereon to the date of such payment of
-12-
principal and all other amounts due to holders of Superior Indebtedness pursuant
to the provisions of the instruments providing therefor.
G. Nothing herein shall be construed as preventing a
Debentureholder from converting Debentures to Common Stock during any period of
continuing default respecting Superior Indebtedness, nor shall a Debentureholder
be prohibited from selling any shares of Common Stock issued upon such
conversion which are otherwise saleable.
X. Periodic Reports.
-----------------
Debentureholders shall be sent the same reports of the Corporation as holders of
Common Stock are sent, at the same time as sent to holders of Common Stock.
XI. Debenture Register.
--------------------
The Corporation shall cause to be kept at its principal office a register (the
"Debenture Register") in which, subject to such reasonable regulations as it may
prescribe, the Corporation shall provide for the registration of Debentures and
the registration of transfers of Debentures and in which shall be recorded the
last known name and address of each Debentureholder of record.
At the option of the Holder, Debentures may be exchanged for other
Debentures, of a like aggregate principal amount upon surrender of the
Debentures to be exchanged. Whenever any Debentures are so surrendered for
exchange, the Corporation shall execute the Debentures which the Debentureholder
making the exchange is entitled to receive.
Subject to reasonable bonding, indemnification or other requirements as
the Corporation may determine, the Corporation shall replace lost, stolen or
mutilated Debenture Certificates with replacement Debenture Certificates.
XII. Definitions.
------------
In addition to the terms defined elsewhere in this Debenture Agreement, the
following terms have the meanings stated herein:
"Advance Conversion Notice" means the notice of conversion to be
delivered in advance of actual physical delivery of a Debenture Certificate as
specified in Section IV.E. of this Debenture Agreement.
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" when used with respect to any specified person means the power to
direct the management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
-13-
"Agreement" means this agreement setting forth the terms and conditions
applicable to the Corporation's 6% Convertible Subordinated Debentures Due July
21, 2000.
"Applicable Interest Rate" means the initial rate of interest owing on
the Debentures, which is six percent (6%) per annum.
"Business Day" means each day which is neither a Saturday, Sunday nor
other day on which banking institutions in Emeryville, California are authorized
by law to remain closed.
"Common Stock" means the Common Stock of the Corporation of the class
authorized at the date of issuance of the Debentures and stock of any other
class into which such presently authorized Common Stock may be changed, and any
other shares of stock of the Corporation which do not have any priority in the
payment of dividends or upon liquidation over any other class of stock.
"Common Stock Conversion Date" means the date a Debentureholder
surrenders a Debenture Certificate to the Corporation at its Principal Office,
accompanied by the "Conversion Notice", or the first Business Day thereafter if
such date is not a Business Day.
"Conversion Notice" means a written notice from the Debentureholder
addressed to the Corporation advising the Corporation that a Debentureholder is
converting the Debenture into shares of the Corporation's Common Stock,
accompanied by the Debenture Certificate being so converted.
"Conversion Price" means the per share price of the Common Stock then
applicable to determine the number of shares of Common Stock issuable upon
conversion of the Debenture into Common Stock.
"Corporation" means the person named as the "Corporation" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions hereof, and thereafter "Corporation"
shall mean such successor corporation.
"Debenture Certificate" means a certificate in the form attached to
this Agreement as Exhibit 1, which has been duly issued by the Corporation and
validated by an authorized agent of the Corporation.
"Debenture Register" means the register described in Article XI of this
Agreement.
"Debentureholder" or "Holder" when used with respect to any Debenture
means the person in whose name such Debenture is registered in the Corporation's
books of record.
-14-
"Default Interest" means two percent (2%) per annum over the Applicable
Interest Rate, as defined in the fifth paragraph of this Debenture Agreement.
"Delivery Date" means the date three (3) business days after the date
on which the Corporation receives an original Conversion Notice and Debenture
Certificate as described in Section IV.E. of this Debenture Agreement.
"Event of Default" means any of the events described in Article II of
this Agreement.
"Forced Conversion" means the conversion of Debentures by the
Corporation described in Article V of this Agreement.
"Initial Closing Date" means the date upon which any Debentures were
first sold, and consideration therefor received by, the Corporation.
"Interest Payment Record Dates" mean March 31, June 30, September 30
and December 31 of each year.
"Market Price" means the price of the Common Stock as calculated
pursuant to the following formula: the average closing bid price of the Common
Stock over the last five trading days prior to the date of any transaction for
which such a price is needed, as quoted on the OTC Electronic Bulletin Board or
such other quotation service as is quoting bid and asked prices for the Common
Stock. If the Common Stock is then listed on the NASDAQ Stock Market or any
other national exchange, the five day average of the closing bid price for the
Common Stock for such days as reported on NASDAQ or such other national
securities exchange shall be substituted for the five day average closing bid
price as reported by the OTC Electronic Bulletin Board or other quotation
service. In the event the Common Stock is not quoted on any exchange or
quotation service, then the Board of Directors, acting in good faith, shall
adopt a resolution valuing the Common Stock for purposes of determining the
number of shares of Common Stock issuable upon conversion of, or as interest on,
the Debentures at each applicable date. Absent fraud, the determination of the
Board of Directors of such Market Price shall be binding and conclusive.
"Maturity Date" means July 21, 2000, or the first Business Day
thereafter.
"Minimum Conversion Price" means the minimum Conversion Price
applicable over the first one hundred and eighty (180) days following the
Initial Closing Date, which price shall be not less than $2.125 per share,
subject to appropriate adjustment in the event of any stock splits or other
transactions affecting the Common Stock.
"Outstanding" when used with respect to Debentures means, as of the
date of determination, all the 6% Convertible Subordinated Debentures due July
21, 2000, theretofore authenticated and delivered, except:
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A. Debentures theretofore cancelled or delivered to the
Corporation for cancellation;
B. Debentures for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Paying Agent
in trust for the Holders of such Debentures, provided that, if such
Debentures are to be redeemed, notice of such redemption has been duly
given pursuant to this Debenture Agreement or satisfactory provision
therefor has been made; and
C. Debentures in exchange for or in lieu of which other
Debentures have been authenticated and delivered; provided, however,
that in determining whether the Holders of the requisite principal
amount of Debentures Outstanding have given any request, demand,
authorization, direction, notice, consent or waiver hereunder,
Debentures owned by the Corporation or any other obligor upon the
Debentures or any Affiliate of the Corporation or such other obligor
shall be disregarded and deemed not to be outstanding. Debentures so
owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the
Corporation the pledgee's right so to act with respect to such
Debentures and that the pledgee is not the Corporation or any other
obligor upon the Debentures or any Affiliate of the Corporation or such
other obligor.
"Paying Agent" means any person authorized by the Corporation to pay
the principal of (and premium, if any) or interest on any Debentures on behalf
of the Corporation. Unless specifically prohibited by a provision of this
Agreement in the case of a particular transaction, the Paying Agent may include
the Corporation, and in the case of no outside designated person who is then
acting as the Paying Agent, the Paying Agent shall be the Corporation.
"Place of Payment" means the principal office or agency of the
Corporation, presently located in Emeryville, California, which may be changed
by the Corporation by written notice to Debentureholders.
"Principal Office" means the offices of the Corporation in Emeryville,
California, which, as of the date of execution of this Agreement is located at
0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000-0000, or such other
office as designated by the Corporation through notice to the Debentureholders.
"Redemption Date" when used with respect to any Debenture to be
redeemed means the date fixed for such redemption.
"Redemption Notice" means the written notice of redemption to be sent
to all Debentureholders advising that the Corporation is exercising its right of
redemption and stating the Redemption Date, the Paying Agent with whom funds
sufficient to make the
-16-
redemption have been deposited, and the dollar amount of principal and interest
to be redeemed from each Debentureholder.
"Registration" means registration of the Common Stock issuable upon
conversion of, and as interest on, the Debentures under the United States
securities laws with the SEC.
"SEC" means the United States Securities and Exchange Commission, or
any successor thereto.
"Subsidiary" means any corporation of which the Corporation, and one or
more Subsidiaries, or any one or more Subsidiaries, directly or indirectly own
more than 50% of the outstanding capital stock having under ordinary
circumstances (not dependent upon the happening of a contingency) voting power
in the election of members of the board of directors, managers or trustees of
such corporation.
"Superior Indebtedness" means (a) the principal of, premium, if any,
and accrued and unpaid interest on (i) indebtedness of the Corporation for money
borrowed, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed, (ii) guarantees by the Corporation of
indebtedness for money borrowed by any other person, whether outstanding on the
date of execution of this Indenture or thereafter created, incurred or assumed,
(iii) indebtedness evidenced by notes, Debentures, bonds or other instruments of
indebtedness for the payment of which the Corporation is responsible or liable,
by guarantees or otherwise, whether outstanding on the date of execution of this
Indenture or thereafter created, incurred or assumed, (iv) obligations of the
Corporation under any agreement to lease, or lease of, any real or personal
property, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed, (b) any other indebtedness, liability
or obligation, contingent or otherwise, of the Corporation and any guarantee,
endorsement or other contingent obligation in respect thereof, whether
outstanding on the date of execution of this Indenture or thereafter created,
incurred or assumed, and (c) modifications, renewals, extensions and refundings
of any such indebtedness, liabilities or obligations; unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is provided that such indebtedness, liabilities or obligations, or such
modification, renewal, extension or refunding thereof, or the obligations of the
Corporation pursuant to such a guarantee, are not superior in right of payment
to the Debentures; provided, however, that Superior Indebtedness shall not be
deemed to include (i) the obligation of the Corporation to OMRON SYSTEMS, INC.,
under that certain Secured Installment Note dated March 27, 1995 in the
principal amount of $387,866 (as of June 30, 1997), (ii) any obligation of the
Corporation to any Subsidiary, (iii) obligations in respect of shares of capital
stock of the Corporation (except for obligations to issue capital stock
outstanding as of the date of issuance of the Debentures) and (iv) obligations
specifically subordinate to the Debentures.
-17-
"Surrender Date" means the date upon which Debentures are physically
surrendered to the Corporation in exchange for a certificate representing the
shares of Common Stock issuable upon conversion of the Debenture.
XIII. Miscellaneous.
--------------
A. There is no Indenture or Indenture Trustee in respect of the
Debentures.
B. The terms and conditions of this Debenture Agreement,
including but not limited to the payment of interest hereunder, shall at all
times be construed so as to conform to the laws of the State of Colorado,
without regard to provisions regarding conflict or choice of laws.
C. In the event any term or provision of this Debenture Agreement
or the Debentures is declared to be illegal or invalid, for any reason, this
Debenture Agreement and the Debentures shall remain in full force and effect and
the same shall be interpreted as though such invalid or illegal provision were
not a part thereof.
D. In the event that suit is instituted to enforce any provision
of this Debenture Agreement, the parties agree that the exclusive proper venue
shall be in any court of competent jurisdiction in a judicial district (Federal
or state) in Denver, Colorado. Further, the parties agree that, in the event an
attorney is engaged to enforce the terms of this Debenture Agreement and/or the
Debentures, the prevailing party shall be reimbursed by the other party for all
its reasonable costs and attorney's fees.
E. Except as expressly provided for herein, elections and demands
hereunder are irrevocable. Elections, notices and demands to Debentureholders by
the Corporation are deemed made when sent by the Corporation and election,
notices and demands hereunder by a Holder to the Corporation are deemed made
when received by the Corporation.
F. The principal and the Redemption Price of, and interest on,
the Debentures shall be payable at the Principal Office of the Corporation
("Place of Payment"), provided, that principal and interest may be paid, at the
option of the Corporation, by check or wire transfer, or share certificate (if
applicable), sent to the Person entitled thereto at such Person's address last
appearing on the Corporation's records, or in the case of a wire transfer of
funds, pursuant to instructions provided by the Debentureholder received by the
Corporation pursuant to the notice provisions of this Agreement.
G. All communications and notices provided for in this Agreement
shall be in writing and will be given by telegram, facsimile (with delivery
confirmed by the party giving notice), express courier holding itself out as
able to make delivery within one business day of receipt, hand delivery
receipted by the addressee, or by mail (postage-paid, certified mail, return
receipt requested) to such address and for such attention, as any party may from
time
-18-
to time designate by notice in writing to the Company or to the Holder as the
case may be. Notice will be effective one business day after delivery to a
telegraph company or express courier, three business days after deposit in the
U.S. Mail as provided above, or upon receipt if hand-delivered or
facsimile-delivered, as the case may be. All notices shall be sent to the
Debentureholders at their addresses as they appear on the Debenture Register.
All notices to be sent to the Corporation shall be sent as follows:
U.S. Wireless Data, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
or to: Facsimile (000) 000-0000
Attention: Xxxx X. Xxxxx, President
The address and facsimile number to which any notice is to be sent hereunder may
be changed by the sending of notice to such effect, setting forth the changed
address to which notices should be sent thereafter.
H. Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Debenture shall bind the
Holder of every Debenture issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done or suffered to
be done by the Corporation in reliance thereon, whether or not notation of such
action is made upon such Debenture.
I. In any case where notice to Debentureholders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Debentureholder shall affect the sufficiency of such notice
with respect to other Debentureholders.
J. In any case where the Redemption Date, or the Stated Maturity
of any Debenture shall not be a Business Day, then (notwithstanding any other
provision of this Debenture Agreement) payment of the principal of (and premium,
if any) or interest on, or conversion of, any Debentures need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the nominal date of any such Redemption Date, or
on such last date for conversion, and no interest shall accrue for the period
from and after any such nominal date.
K. No right or remedy herein conferred upon or reserved to the
Debentureholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion
-19-
or employment of any right or remedy hereunder or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or remedy.
L. No recourse under or upon any obligation, covenant or
agreement of this Debenture Agreement or the Debentures, or for any claim based
thereon or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer, director or agent, as such, past, present or future, of
the Corporation or of any successor corporation, either directly or through the
Corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that the obligations hereunder are solely corporate obligations of
the Corporation, and that no such personal liability whatever shall attach to,
or is or shall be incurred by, the incorporators, stockholders, officers,
directors or agents, as such, of the Corporation or of any successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Debenture Agreement or the Debentures or implied therefrom;
and that any and all such personal liability, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director, as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Debenture
Agreement or the Debentures, or implied therefrom, are hereby expressly waived
and released as a condition of and as a consideration for, the issue of such
Debentures.
[Corporate Seal] U.S. WIRELESS DATA, INC.,
a Colorado corporation
ATTEST: By ________________________________
Chief Executive Officer
_____________________________
Secretary Date ________________________________
-20-
EXHIBIT 1
DEBENTURE NUMBER: __________________________
THIS DEBENTURE IS SUBJECT TO ALL TERMS AND CONDITIONS OF THAT CERTAIN DEBENTURE
AGREEMENT DATED AS OF JULY 21, 1998, BETWEEN THE UNDERSIGNED AND THE HOLDERS OF
DEBENTURE CERTIFICATES EVIDENCED HEREBY.
THIS DEBENTURE CERTIFICATE IS NOT VALID UNLESS COUNTERSIGNED BY AN AUTHORIZED
REPRESENTATIVE OF THE CORPORATION.
NEITHER THE DEBENTURES REPRESENTED BY THIS CERTIFICATE NOR THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION OF, OR AS INTEREST ON, THIS DEBENTURE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE OR FOREIGN LAW. THE
DEBENTURES HAVE BEEN, AND SUCH COMMON STOCK WILL BE, ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (i) THEY SHALL HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE AND
FOREIGN SECURITIES ACT OR OTHER LAW OR (ii) THE CORPORATION SHALL HAVE BEEN
FURNISHED WITH AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION, THAT
REGISTRATION OR OTHER COMPLIANCE IS NOT REQUIRED UNDER ANY OF SUCH ACTS OR LAWS.
U.S. WIRELESS DATA, INC.
6% CONVERTIBLE SUBORDINATED
DEBENTURES DUE JULY 21, 2000
Amount: $______________ Emeryville, California
U. S. Wireless Data, Inc., a Colorado corporation (the "Corporation"), for value
received, promises to pay to _______________or registered assigns, the principal
sum of __________________ Dollars ($______________ ), payable in one payment of
principal and all accrued but unpaid interest then due, on July 21, 2000 (the
"Maturity Date"), unless earlier converted pursuant to the terms of this
Debenture.
Interest shall accrue on this Debenture at the initial rate of six percent (6%)
per annum (the "Applicable Interest Rate").
This Debenture is issued as part of a series of 6% Convertible Subordinated
Debentures privately issued by the Corporation and known as the "6% Convertible
Subordinated Debentures, Due July 21, 2000," each of which has been or will be
issued to a Holder who has or will represent to the Corporation that he, she or
it is an accredited investor, as that term is defined in Rule 501(a) of the
Securities Act of 1933, as amended (the "1933 Act"). The Holder of this
Debenture hereby re-affirms such representation to the Corporation and each
other Holder of Debentures. All such Debentures are collectively known as the
"6% Convertible Subordinated Debentures Due July 21, 2000". The minimum
principal dollar amount of the Debentures is $1,000,000 and the maximum
principal amount may be up to $4,000,000.
Any principal or interest on this Debenture which is payable, but is not
punctually paid or duly provided for at the Maturity Date or any Interest
Payment Record Date (herein called "Default Interest") shall bear compound
interest at a rate of two percent (2%) over the Applicable Interest Rate from
the date of default until paid.
Transfers and/or conversions of this Debenture must be accompanied by the form
attached hereto, duly completed by the Holder.
Duly executed, authorized and witnessed by the undersigned authorized officers
of the Corporation:
U.S. WIRELESS DATA, INC.,
[Corporate Seal] a Colorado corporation
ATTEST: By __________________________________
Chief Executive Officer
______________________________
Secretary Date ________________________________
-2-
U.S. WIRELESS DATA, INC.
6% CONVERTIBLE SUBORDINATED
DEBENTURES DUE JULY 21, 2000
FORM REQUIRED FOR TRANSFERS
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS UNTO
_____________________________________________________________________________
WHOSE ADDRESS IS: ___________________________________________________________ ,
_______________________________________________________________________ DOLLARS
OF THE DEBENTURES REPRESENTED BY THE WITHIN CERTIFICATE NO._______ , AND DOES
HEREBY APPOINT THE SECRETARY OF THE CORPORATION ATTORNEY TO TRANSFER THE SAID
DEBENTURES ON THE BOOKS OF THE WITHIN NAMED CORPORATION WITH FULL POWER OF
SUBSTITUTION IN THE PREMISES.
SIGNATURE: __________________________________________________________________
PRINT NAME AND ADDRESS: _____________________________________________________
_____________________________________________________________________________
DATED: ______________________________________________________________________
WITNESS:_____________________________________________________________________
--------------------------------------------------------------------------------
FORM REQUIRED FOR CONVERSION
THE UNDERSIGNED HEREBY CONVERTS A TOTAL OF _____________________________________
DOLLARS OF THE DEBENTURES REPRESENTED BY THE WITHIN CERTIFICATE NO.________ ,
AND DOES HEREBY APPOINT THE SECRETARY OF THE CORPORATION ATTORNEY TO CANCEL THE
DEBENTURES BEING SO CONVERTED AND, IF LESS THAN ALL DEBENTURES REPRESENTED
HEREBY ARE BEING CONVERTED, TO TRANSFER ANY REMAINING PORTIONS OF THE DEBENTURES
OF THE WITHIN NAMED CORPORATION, WITH FULL POWER OF SUBSTITUTION IN THE
PREMISES.
SIGNATURE: __________________________________________________________________
PRINT NAME AND ADDRESS: _____________________________________________________
_____________________________________________________________________________
DATED: ______________________________________________________________________
WITNESS: ____________________________________________________________________
--------------------------------------------------------------------------------
COMPANY USE ONLY:
DATE NOTICE RECEIVED FOR CONVERSION: ________________________________________
DATE ORIGINAL DEBENTURE CERTIFICATE AND NOTICE RECEIVED: ____________________
SIGNATURE OF COMPANY REPRESENTATIVE: ________________________________________
CALCULATION OF CONVERSION PRICE AND NUMBER OF SHARES ISSUABLE UPON CONVERSION:
DATE INSTRUCTION SENT TO TRANSFER AGENT: ____________________________________
DEBENTURE CERTIFICATE REISSUE (CERTIFICATE NUMBER AND AMOUNT): ______________
--------------------------------------------------------------------------------
