CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), dated and effective as of July 25,
1997 is entered into by and between U.S. WIRELESS DATA, INC., a Colorado
corporation (herein referred to as the "Company") and LIVIAKIS FINANCIAL
COMMUNICATIONS, INC., a California corporation (herein referred to as the
"Consultant").
RECITALS
WHEREAS, Company is a publicly held corporation with its common stock
traded through the OTC Bulletin Board; and
WHEREAS, Consultant has experience in the area of corporate finance,
investor communications and financial and investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to assist
and consult with the Company in matters concerning corporate finance and to
represent the company in investors' communications and public relations with
existing shareholders, brokers, dealers and other investment professionals as to
the Company's current and proposed activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as follows
1. Term of Consultancy . Company hereby agrees to retain the Consultant to act
in a consulting capacity to the Company, and the Consultant hereby agrees to
provide services to the Company commencing July 31, 1997 and ending on July 31,
1998.
2. Duties of Consultant. The Consultant agrees that it will generally provide
the following specified consulting services through its officers and employees
during the term specified in Section 1.:
(a)Advise and assist the Company in developing and implementing
appropriate plans and materials for presenting the Company and its business
plans, strategy and personnel to the financial community, establishing an image
for the Company in the financial community, and creating the foundation for
subsequent financial public relations efforts;
(b) Introduce the Company to the financial community;
(c) With the cooperation of the Company, maintain an awareness during the
term of this Agreement of the Company's plans, strategy and personnel, as they
may evolve during such period, and advise and assist the Company in
communicating appropriate information regarding such plans, strategy and
personnel to the financial community;
(d) Assist and advise the Company with respect to its (i) stockholder and
investor relations, (ii) relations with brokers, dealers, analysts and other
investment professionals, and (iii) financial public relations generally;
(e)Perform the functions generally assigned to investor/stockholder
relations and public relations departments in major corporations, including
responding to telephone and written
inquiries (which may be referred to the Consultant by the Company); preparing
press releases for the Company with the Company's involvement and approval or
reviewing press releases, reports and other communications with or to
shareholders, the investment community and the general public; advising with
respect to the timing, form, distribution and other matters related to such
releases, reports and communications; and consulting with respect to corporate
symbols, logos, names, the presentation of such symbols, logos and names, and
other matters relating to corporate image;
(f)Upon the Company's approval, disseminate information regarding the
Company to shareholders, brokers, dealers, other investment community
professionals and the general investing public;
(g) Upon the Company's approval, conduct meetings, in person or by
telephone, with brokers, dealers, analysts and other investment professionals to
advise them of the Company's plans, goals and activities, and assist the Company
in preparing for press conferences and other forums involving(, the media,
investment professionals and the general investment public;
(h) At the Company's request, review business plans, strategies, mission
statements budgets, proposed transactions and other plans for the purpose of
advising the Company of the investment community implications thereof, and,
(i) Otherwise perform as the Company's financial relations and public
relations consultant.
3. Allocation of Time and Energies. The Consultant hereby promises to perform
and discharge well and faithfully the responsibilities which may be assigned to
the Consultant from time to time by the officers and duty authorized
representatives of the Company in connection with the conduct of its financial
and investor public relations and communications activities, so long as such
activities are in compliance with applicable securities laws and regulations.
Consultant shall diligently and thoroughly provide the consulting services
required hereunder. Although no specific hours-per-day requirement will be
required, Consultant and the Company agree that Consultant will perform the
duties set forth herein above in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the effort to be
expended and the costs to be incurred by the Consultant and the benefits to be
received by the Company are expected to occur upon and shortly after, and in any
event, within two months of the effectiveness of this Agreement. It is
explicitly understood that Consultant's performance of its duties hereunder will
in no way be measured by the price of the Company's common stock, nor the
trading volume of the Company's common stock. It is also understood that the
Company is entering into this Agreement with Liviakis Financial Communications,
Inc. ("LFC"), a corporation and not any individual member of LFC, and with such,
Consultant will not be deemed to have breached this Agreement if any member,
officer or director of LFC leaves the firm or dies or becomes physically unable
to perform any meaningful activities during the term of the Agreement, provided
the Consultant otherwise performs its obligations under this Agreement.
4. Remuneration. As full and complete compensation for services described in
this Agreement, the Company shall compensate Consultant as follows:
4.1 For undertaking this engagement and for other good and valuable
consideration , the Company agrees to issue and deliver to the
Consultant and Xxxxxx X. Xxxx, its Senior Vice President, herein after
referred to as "Prag", an aggregate of Ten Thousand Dollars
($10,000,00) cash and 300,000 unregistered, restricted shares of the
Company's common
2.
stock (the "Common Stock"). Said shares will be delivered to
Consultant on the following basis'.
150,000 shares on November 15, 1997 for specific services to be
rendered in the first 60 days of the Consulting Agreement which
include assisting the company in the recruitment of officers and
directors, assisting the company in formulating its business plan and
introducing the company to investment bankers, such shares being fully
paid and nonassessable when delivered to Consultant and Prag. The
remaining 150,000 shares of Company common stock and the Ten Thousand
Dollars ($10,000.00) in cash will be delivered in 10 equal consecutive
monthly installments of 15,000 shares and One Thousand Dollars
($1,000.00) each, such shares being fully paid and nonassessable when
delivered to Consultant and Prag, with the installments due on the
following dates:
15,000 shares and $1,000.00 on November 15, 1997;
15,000 shares and $1,000.00 on December 1, 1997;
15,000 shares and $1,000.00 on January 1, 1998;
15,000 shares and $1,000.00 on February 1, 1998;
15,000 shares and $1,000.00 on March 1, 1998;
15,000 shares and $1,000.00 on April 1, 1998;
15,000 shares and $1,000.00 on May, 1, 1998;
15,000 shares and $1,000.00 on June 1, 1998;
15,000 shares and $1,000.00 on July 1, 1998; and,
15,000 shares and $1,000.00 on August 1, 1998.
This Compensation shall be delivered to the Consultant and Prag
promptly on the dates outlined above and shall, when issued and
delivered to Consultant and Prag, be fully paid and non-assessable.
The Company understands and agrees that Consultant has foregone
significant opportunities to accept this engagement and that the
Company derives substantial benefit from the execution of this
Agreement and the ability to announce its relationship with
Consultant. If the Company decides to terminate this Agreement prior
to July 31, 1998 for any reason whatsoever, it is agreed and
understood that Consultant or Prag will not be requested or demanded
by the Company to return any of the shares or cash paid and delivered
to it hereunder, and the Company agrees to accelerate and pay the
Consultant and Prag in full the entire balance of the 300,000 shares
of Common Stock and Ten Thousand Dollars ($10,000.00) due hereunder.
One hundred (100%) percent of the cash payable to Consultant hereunder
shall be paid to Liviakis Financial Communications, Inc. Seventy-five
percent (75%) of each increment of the Common Stock issued pursuant to
this Agreement shall be evidenced by a stock certificate(s) issued in
the name of Liviakis Financial Communications, Inc. and twenty-five
percent (25%) of the Common Shares issued pursuant to this Agreement
shall be evidenced by a stock certificate(s) issued in the name of
Xxxxxx X. Xxxx. The Common Stock issued to the Consultant and Prag
hereunder shall have "piggyback" registration rights and will be
included in the next appropriate registration done by the Company. All
registration costs shall be borne solely by the Company. In the event
the Company for any reason, including without limitation the
unavailability of authorized but unissued shares, does not deliver
certificates
3.
representing shares of the Company's Common Stock as and when required
hereunder, the Company shall, unless the time for performance is
extended in writing by the Consultant, pay to Consultant and Prag in
lieu of delivery of the shares of Common Stock with respect to which the
Company is in default, an amount per undelivered share equal to the
average closing asked price per share of Common Stock during the five
trading days ending with the day on which the Company was required
hereunder to deliver but failed to deliver such shares of Common Stock.
4.2 Consultant and Prag (hereinafter referred to as "Consultants")
acknowledge that the shares of Common Stock to be issued pursuant to
this Agreement (collectively, the "Shares") have not been registered
under the Securities Act of 1933, and accordingly are "restricted
securities" within the meaning of Rule 144 of the Act. As such, the
Shares may not be resold or transferred unless the Company has received
an opinion of counsel reasonably satisfactory to the Company that such
resale or transfer is exempt from the registration requirements of that
Act.
4.3 In connection with the acquisition of Shares hereunder, the Consultants
represent and warrant to the Company as follows:
(a) Consultants acknowledge that the Consultants have been afforded the
opportunity to ask questions of and receive answers from duly
authorized officers or other representatives of the Company concerning
an investment in the Shares, and any additional information which the
Consultants have requested.
(b) Consultants' investment in restricted securities is reasonable in
relation to the Consultants' net worth, which is in excess of ten (10)
times the Consultants' cost basis in the Shares. Consultants have had
experience in investments in restricted and publicly traded
securities, and Consultants have had experience in investments in
speculative securities and other investments which involve the risk of
loss of investment. Consultants acknowledges that an investment in the
Shares is speculative and involves the risk of loss. Consultants have
the requisite knowledge to assess the relative merits and risks of
this investment without the necessity of relying upon other advisors,
and Consultants can afford the risk of loss of his entire investment
in the Shares. Consultants are (i) accredited investors, as that term
is defined in Regulation D promulgated under the Securities Act of
1933, and (ii) a purchaser described in Section 25102 (f) (2) of the
California Corporate Securities Law of 1968, as amended.
(c) Consultants are acquiring the Shares for the Consultants' own
account for long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable securities
laws.
5. Financing "Finder's Fee". It is understood that in the event Consultant
introduces Company, or its nominees, to a lender or equity purchaser, not
already having a preexisting relationship with the Company, with whom Company,
or its nominees, ultimately finances or causes the completion of such financing,
Company agrees to compensate Consultant for such services with a "finder's fee"
in the amount of 2.5% of total gross funding provided by such
4.
tender or equity purchaser, such fee to be payable in cash. This will be in
addition to any fees payable by Company to any other intermediary, if any, which
shall be per separate agreements negotiated between Company and such other
intermediary.
5,1 It is further understood that Company, and not Consultant, is
responsible to perform any and all due diligence on such lender or
equity purchaser introduced to it by Consultant under this Agreement,
prior to Company receiving funds. However, Consultant will not
introduce any parties to Company about which Consultant has any prior
knowledge of questionable, unethical or illicit activities.
5.2 Company agrees that said compensation to Consultant shall be paid in
full at the time said financing is closed. Moreover, said
compensation, will be a condition precedent to the closing,, of such
funding or financing and Company shall execute any and all documents
necessary to effect said compensation.
5.3 As further consideration to Consultant, Company, or its nominees,
agrees to pay with respect to any financing provided directly or
indirectly to the Company by any lender or equity purchaser covered
by this Section 5. during the period of five years from the date of
this Agreement, a fee to Consultant equal to that outlined in Section
"5" herein.
5.4 Consultant will notify Company of introductions it makes for
potential sources of financing in a timely manner (within
approximately 3 days of introduction) via facsimile memo. If Company
has a preexisting relationship with such nominee and believes such
party should be excluded from this Agreement, then Company will
notify Consultant immediately of such circumstance via facsimile
memo.
6. Expenses. Consultant agrees to pay for all its expenses (phone, mailing,
labor, etc.), other than extraordinary items (travel required by/or specifically
requested by the Company, luncheons or dinners to large groups of investment
professionals, mass faxing to a sizable percentage of the Company's
constituents, investor conference calls, print advertisements in publications,
etc.) approved by the Company prior to its incurring an obligation for
reimbursement.
7. Indemnification. The Company warrants and represents that all oral
communications, written documents or materials furnished to Consultant by the
Company with respect to financial affairs, operations, profitability and
strategic planning of the Company are accurate and Consultant may rely upon the
accuracy thereof without independent investigation. The Company will protect,
indemnify and hold harmless Consultant against any claims or litigation
including any damages, liability, cost and reasonable attorney's fees as
incurred with respect thereto resulting from Consultant's communication or
dissemination of any said information, documents or materials not designated by
the Company to the Consultant as "confidential" or "Company private", excluding
any such claims or litigation resulting from Consultant's communication or
dissemination of information not provided or authorized by the Company. To the
extent feasible, the Company agrees to make Consultant an additional insured on
any and all commercial liability and directors and officers liability insurance
policies and to provide Consultant with current Certificates of Insurance
reflecting the same.
5.
8. Representations. Consultant represents that it is not required to maintain
any licenses and registrations under federal or any state regulations necessary
to perform the services set forth herein. Consultant acknowledges that, to the
best of its knowledge, the performance of the services set forth under this
Agreement will not violate any rule or provision of any regulatory agency having
'jurisdiction over Consultant. Consultant acknowledges that, to the best of its
knowledge, Consultant and its officers and directors are not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws. Consultant further acknowledges that it is not a securities
Broker Dealer or a registered investment advisor. Company acknowledges that, to
the best of its knowledge, that it has not violated any rule or provision of any
regulatory agency having jurisdiction over the Company. Company acknowledges
that, to the best of its knowledge, Company is not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws.
9. Legal Representation. The Company acknowledges that it has been represented
by independent legal counsel in the preparation of this Agreement. Consultant
represents that they have consulted with independent legal counsel and/or tax,
financial and business advisors, to the extent the Consultant deemed necessary.
10. Status as Independent Contractor. Consultant's engagement pursuant to this
Agreement shall be as independent contractor, and not as an employee, officer or
other agent of the Company. Neither party to this Agreement shall represent or
hold itself out to be the employer or employee of the other. Consultant further
acknowledges the consideration provided hereinabove is a gross amount of
consideration and that the Company will not withhold from such consideration any
amounts as to income taxes, social security payments or any other payroll taxes.
All such income taxes and other such payment shall be made or provided for by
Consultant and the Company shall have no responsibility or duties regarding such
matters. Neither the Company or the Consultant possess the authority to bind
each other in any agreements without the express written consent of the entity
to be bound.
11. Attorney's Fee. If any legal action or any arbitration or other proceeding
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
or related to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in connection
with that action or proceeding, in addition to any other relief to which it or
they may be entitled.
12. Waiver. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.
13. Notices. All notices, requests, and other communications hereunder shall be
deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the
other party at the address as set forth herein below:
6.
To the Company-.
U.S. Wireless Data, Inc.
Xx. Xxx Xxxxxxxxx, President
0000 Xxxxxxxxxxxx Xxxxxx- Xxxxx 000
Xxxxx Xxxxx, XX 00000
To the Consultant-.
Liviakis Financial Communications, Inc.
Xxxx X. Xxxxxxxx, President
0000 "X" Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000.
It is understood that either party may change the address to which
notices for it shall be addressed by providing notice of such change to the
other party in the manner set forth in this paragraph.
14. Choice of Law, Jurisdiction and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California.
The parties agree that Sacramento County, CA. will be the venue of any dispute
and will have jurisdiction over all parties.
15. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
California, in accordance with the applicable rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator(s) shall be
binding on the parties and may be entered in any court having jurisdiction
thereof The provisions of Title 9 of Part 3 of the California Code of Civil
Procedure, including section 1283.05, and successor statutes, permitting
expanded discovery proceedings shall be applicable to all disputes that are
arbitrated under this paragraph.
16. Miscellaneous Conditions. Company and Consultant each agree to the follow
terms and conditions:
a.) The Company shall arrange that all insiders and large shareholders
agree to a one year lockup agreement, which would include all officers and
directors- and,
b.) Company will provide an Opinion Letter from the Company's Corporate
Counsel that there are no "Opt Outs" in the class action lawsuit settlement
and further that there are no other outstanding or pending(, legal actions
against the Company 7.
17. Complete Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
AGREED TO:
"Company" U.S. Wireless Data, Inc.
Date 8/6/97 By: /s/Xxx Xxxxxxxxx
----------- ---------------------
Xxx Xxxxxxxxx, CEO
& Its Duly Authorized Officer
"Consultant" Liviakis Financial Communication, Inc.
Date 8/4/97 By: /s/ Xxxx Xxxxxxxx
----------- -------------------
Xxxx X. Xxxxxxxx
President
/s/ Xxxxxx X. Xxxx
--------------------
Xxxxxx X. Xxxx
Xx. Vice President
8.
U.S. WIRELESS DATA, INC.
SUBSCRIPTION AGREEMENT
For the Purchase of Units
Each Consisting of
875,000 Shares of Common Stock
and
400,000 Stock Purchase Warrants
U.S. Wireless Data, Inc.
0000 Xxxxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
1. General. U.S. Wireless Data, Inc., a Colorado corporation (the
"Company"), is offering, pursuant to Regulation D ("Regulation D") promulgated
under the-Securities Act of 1933, as amended (the "Securities Act"), an
aggregate of up to four (4) units (the "Units"), each consisting of eight
hundred seventy-five thousand (875,000) share of the Company's Common Stock
("Common Stock"), and warrants ("Warrants") expiring August 1, 2002,
substantially in the form of warrant attached hereto as Exhibit A, to purchase
up to four hundred thousand (400,000) shares of Common Stock at an exercise
price of One Cent ($0.01) per share. The Units are being offered at a price of
One Hundred Twenty-Five Thousand Dollars ($125,000) per Unit.
2. Subscription. The undersigned subscriber (the "Purchaser") hereby
irrevocably subscribes for and agrees to purchase three (3) Unit(s) for an
aggregate purchase price of Three-Hundred Seventy-Five Thousand Dollars
($375.000.00.) (the "Subscription Price") Funds representing the Subscription
Price shall be paid by the Purchaser to the Company against issuance of the
securities constituting the Units.
3. Representations. Warranties and Covenants of Purchaser. The Purchaser
hereby acknowledges, represents and warrants to and covenants and agrees with
the company that:
(a) Purchaser is an "accredited investor", as defined in Rule 501 of
Regulation D promulgated under the Securities Act. Purchaser is acquiring the
Units for Purchaser's own account and not for the account or benefit of any
other person. The Units, and the shares of Common Stock and the Warrants
constituting the Units and the shares of Common Stock for which the Warrants
may be exercised (collectively, the "Securities") will be acquired by the
Subscriber in good faith for investment and not with a view to the
distribution thereof. The Purchaser does not presently intend to sell or
otherwise dispose of all or any part of the Securities upon the occurrence or
nonoccurrence of any predetermined event;
(b) The Purchaser is willing and able to bear the economic risk of an investment
in the Units in an amount equal to the amount the Purchaser has subscribed to
purchase, and the Purchaser has adequate means of providing for current needs
and reasonably anticipated contingencies and has no need for liquidity in such
investment. In making these statements, the Purchaser has taken into account
(i) that Purchaser may have to hold the Securities for an indefinite period
and (ii) that the Purchaser could experience a complete loss of Purchaser's
investment in the Units;
(c) Purchaser:
(i) has been provided with copies of all of the reports and
other documents filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the past twelve months;
(ii) has been given the opportunity to ask questions of the
Company and its management concerning the Company, the Units, the
terms and conditions of the offering and other matters pertaining to
this investment, in order for Purchaser to evaluate the merits and
risks of an investment in the Units, and Purchaser has received
satisfactory responses to all such questions; and
(iii) acknowledges that the Units were not offered to
Purchaser by way of any general solicitation or advertising and at no
time was the Purchaser presented with or solicited by means of any
leaflet, public promotional meeting, circular, radio or television
advertisement, newspaper or magazine article;
(d) Since the offer and sale of the Units and of the Common Stock
issuable upon exercise of the Warrants have not been registered under the
Securities Act in reliance upon Regulation D among other provisions, Purchaser
will only offer or resell the Securities in compliance with the provisions of
all applicable securities laws and regulations. Purchaser will offer or resell
the Securities only if the Securities are registered under the Securities Act
or an exemption from such registration, including without limitation the
exemption afforded under Rule 144, is available. Unless such registration has
been effected or such an exemption is available, the Company shall not permit
the transfer of the Securities.
The Purchaser understands and agrees that the company may
take such reasonable steps as it deems appropriate to ensure compliance with
the offer, resale and other restrictions on transfer and conversion contained
in this Subscription Agreement
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(the "Agreement") or arising under applicable securities laws, including
instituting "stop transfer" instructions with respect to the Securities and
endorsing restrictive legends, such as the following, on certificates
representing the Securities:
" The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") and are "restricted securities" as that term is
defined in Rule 144 under the Securities Act. The securities may not
be offered for sale, sold or otherwise transferred except pursuant to
an effective registration statement under the Securities Act or
pursuant to an exemption from registration under the Securities Act."
(e) The execution and delivery of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated by this Agreement
will not violate any statute or law or any judgment, decree, order, regulation
or rule of any court or governmental authority by which Purchaser is bound or,
if Purchaser is other than a natural person, the charter, bylaws or other
instruments under, which Purchaser is formed and its activities are governed.
4. Representations and Warranties of The Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) The Company has filed all reports and other materials required by
the Exchange Act to be filed with the Securities and Exchange Commission
during the past 12 months. All such reports and materials have been
complete and accurate and have complied with the requirements of the
Exchange Act in all material respects and did not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at such dates, not misleading.
(b) The Company is, and at the time of the issuance and sale of the
Units will be, a corporation duly organized, validly existing and in good
standing under the laws of Colorado. The Company has, and at the Closing
Date will have, full power and authority to conduct all the activities
conducted by it, to own or lease all the assets owned or leased by it and
to conduct its business as described in the reports referred to in
paragraph (a) above.
(c) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of
the Company and is enforceable against the Company in accordance with the
terms hereof.
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(d) The Securities to be delivered at the Closing have been duly
authorized and when issued for consideration as contemplated in this
Agreement will be validly issued and outstanding, fully paid and
non-assessable.
5. Covenants of Company. The Company covenants and agrees with the
Purchaser as follows:
(a) Following an exercise of the Warrants, the Company will cause its
transfer agent promptly, at the Company's expense, to issue certificates
evidencing the shares of Common Stock being purchased through such
exercise. In the event the Company for any reason, including without
limitation the unavailability of authorized but unissued shares, does not
cause the prompt issuance of such certificates, the Company shall upon the
written demand of the Purchaser redeem from the Purchaser the Warrants the
Purchaser attempted to exercise or otherwise pay to the Purchaser by way of
liquidated damages for such breach against cancellation of such Warrants an
amount per warrant equal to the remainder calculated by subtracting (i) the
Warrant exercise price from (ii) average closing asked price per share of
Common Stock during the five trading days ending with the day on which the
Purchaser exercises or attempts to exercise the Warrant.
(b) Promptly following the written request of the purchasers of a
majority of the Units, the Company, at its expense, will prepare, file and
prosecute diligently to effectiveness a registration statement under the
Securities Act, which registration statement shall provide for the resale
by the Purchaser of the shares of Common Stock (i) constituting part of the
Units, (ii) for which the Warrants had been or may be exercised, (iii)
which are otherwise held by Purchaser, or (iv) which Purchaser then has the
right to acquire. The Company shall also prepare and file such amendments
and 'supplements to such registration statement and the prospectus
contained therein as may be necessary to make available a prospectus
meeting the requirements of the Securities Act on as continuous a basis as
practicable for such period as any Warrants issued pursuant hereto remain
outstanding and for two years thereafter.
(c) So long as any Warrants issued pursuant hereto remain outstanding
and for two years thereafter, the company (i) will timely file all reports
and other materials it is required to file pursuant to the Exchange Act and
(ii) will not take any action to terminate the registration of its common
Stock pursuantto the Exchange Act.
(d) Diligently seek qualified candidates to serve as (i) chief
executive officer, (ii) chief financial officer, (iii) vice
president-sales, and (iv) at least two non-employee directors for the
Company; afford Purchaser an opportunity to meet with any candidate to whom
the Company proposes to offer such a position;
4
and offer such a position (or nomination therefore) to such a candidate
only if such candidate is approved by purchasers of a majority of the
Units.
(e) Extend the registration rights provided in the Warrants to all
shares of Common Stock which the Purchaser at the time of any such
registration owns or has the right to acquire.
6. Survival. The representations and warranties contained in this Agreement
shall remain operative and in full force and effect regardless of any
investigation made by any party hereto, or acceptance of any of the Units and
Payment therefor.
7. Acceptance. It Is understood and agreed that the Company shall have the
right to accept or reject this subscription, in whole or in part, for any reason
and that this Agreement shall not be binding upon the Company until so accepted.
Purchaser understands that the Company will notify it promptly upon acceptance
or rejection of this subscription.
8. Closing. Following acceptance of this subscription, the Units subscribed
for hereunder shall be delivered to the Purchaser against payment of the
aggregate Subscription Price therefor at a Closing which shall be held no later
than August 8, 1997.
9. Irrevocability. The Purchaser hereby agrees that this Subscription is
irrevocable.
10. Miscellaneous.
(a) All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the Purchaser at
its address set forth on the signature page below and to the Company at its
principal executive office.
(b) This Agreement may be amended only by a writing executed by all
parties.
(c) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, successors and assigns.
(d) All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, singular or plural, as
the identity of the parties hereto may require.
(e) This Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
(f) This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
ALTERNATIVE SIGNATURE--PAGES FOLLOW
-----------------------------------
The Purchaser should complete and sign one of the following signature
pages. One signature page is for use by individuals and the other is for use by
entities (e.g., corporation, partnership, trust).
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION FROM. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
U.S. Wireless Data, Inc.
offering of Units Consisting of
875,000 Shares of Common stock and
warrants to Purchase up to 400, 000 Shares of Common Stock
(Signature Page for Subscription by Individuals)
(Check One)
INDIVIDUAL OWNERSHIP
(one signature Required Below)
JOINT TENANTS
(TWO Signatures Required Below)
TENANTS IN COMMON
(Two Signatures Required Below)
EXHIBIT "A"
WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
U.S. WIRELESS DATA, INC., A COLORADO CORPORATION.
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON
STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATES AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
This Common Stock Purchase Warrant, made as of the 4th day of August,
1997, by and between U.S. WIRELESS DATA, Inc., a Colorado corporation, having-
its principal executive offices at 0000 Xxxxxxxxxxxx Xxxxxx; Xxxxx 000; Xxxxx
Xxxxx, XX 00000 (the "Company"), and I having a principal business address at
2420 "K" Street; Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx 00000.
WITNESSETH:
This Warrant is exercisable at any time, or from time to time, from
January 15, 1998 up to and including 5:00 p.m. Pacific daylight time, on August
4, 2002.
I . Warrant.
---------------
This certifies that, _____________________________or assigns ("Warrant
Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company up to ___________________Thousand fully paid and nonassessable
shares of Common Stock of the Company ("Common Stock") at an exercise price of
One Cent ($0.01) per share ("Exercise Price"). The Exercise Price and number of
shares of Common Stock issuable upon exercise hereof shall be subject to
adjustment as provided in this Warrant.
2. Exercise Price.
----------------------
The exercise price shall be One Cent ($.01) per share of Common Stock. The
Company shall pay all original issue or transfer taxes on the exercise of this
Warrant and all other fees and expenses incurred by the Company in connection
herewith.
3. Exercise of Warrant.
-------------------------
All of the Warrants granted hereby shall first become exercisable on
January 15, 1998. Subject to the provisions of Paragraph 4 hereof, such Warrants
shall be exercisable in whole or in part at any time and from time to time from
January 15, 1998 through 5:00 p.m. Pacific daylight time on August 4, 2002.
In order to exercise the purchase right represented by this Warrant in
whole or in part, the Warrant Holder shall deliver to the Company a written
notice substantially in the form of Notice of Exercise of Warrants to Purchase
Shares attached hereto, delivery to be effected by personal delivery, by
overnight courier or by registered or certified mail, return receipt requested,
addressed to the Company at Its principal office. Such notice shall specify the
number of shares which Warrant Holder is purchasing under this Warrant Agreement
and shall be accompanied by the Warrant certificate and payment (in the form of
cash or certified or bank cashier's check) for the shares so being,, purchased
at the Exercise Price of One Cent ($0.01) per share of Common Stock.
As soon as practicable thereafter but in any event within five (5) business
days, Company shall cause to be delivered to the Warrant Holder certificates
issued in the Warrant Holder's name evidencing, the full number of Shares as to
which this Warrant was exercised by the Warrant Holder. Warrant Holder shall be
considered to be the holder and owner of the Shares to be evidenced by such
certificates as of the close of business on the date Company received the notice
of exercise accompanied by payment, as contemplated herein, without regard to
the date of actual issuance of the certificate(s) representing such Shares.
4. Divisibility and Assignability of the Warrant.
-------------------------------------------------------
(a) The Warrant Holder may elect to exercise the right to purchase
shares under this Warrant in whole or in part at any time and from time to time,
subject to the provisions of Paragraph 3 above, with respect to any whole number
of Shares included therein, but in no event may an election be may to purchase
less than ten thousand (10,000) shares at any one time, unless the remaining
shares covered by this Warrant number less than ten thousand (I 0,000), in which
case this Warrant may be exercised for such remaining balance.
(b) This Warrant can be transferred or assigned in whole or in part in
increments of no less rights to purchase ten thousand (10,000) shares if the
transferor delivers an opinion of counsel reasonably acceptable to the Company
(which counsel may be the counsel for the Company), stating,, that such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and the registration and qualification requirements under applicable
state law.
Upon due presentment for transfer or exchange of this Warrant certificate at the
principal office of the Company, a new Warrant certificate or certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall be
issued in exchange for this Warrant certificate. Subject to the terms hereof,
the Company shall deliver Warrant certificates in required whole number
denominations to Warrant Holders in connection with any transfer, exchange or
partial exercise permitted hereunder.
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5 . Stock as Investment.
-----------------------------
By accepting this Warrant, the Warrant Holder agrees that it is
Warrant Holder's intention to purchase Shares hereunder for investment and
without any view towards the resale or distribution thereof. In the event Shares
to be issued upon the election to purchase shares Lender this Warrant have not
been registered at the time of proposed issuance under the Securities Act of
1933, as amended (the "Securities Act"), the Warrant Holder shall deliver to
the Company at the time of such issuance a written representation that warrant
holder is acquiring such Shares in good faith for investment purposes only and
not for resale or distribution. Company may place a "stop transfer" order with
respect to such Shares with its transfer agent and place an appropriate
restrictive legend on the stock certificate(s) evidencing such Shares, in order
to prevent transfers unless such Shares are registered under the Securities Act
or an exemption from the registration requirements of the Securities Act is
applicable.
6. Conditions to Issuance of Shares,
-----------------------------------------
The Company shall issue and deliver certificates for Shares purchased
upon the exercise of any portion of the Warrant granted hereunder.
7. Registration Rights.
-----------------------------
(a) If, at any time during the exercise period hereof and the three
years following any exercise hereunder, the Company proposes to file a
registration statement with respect to any class of securities (other than
pursuant to a registration statement on Forms S-4 or S-8 or any successor form)
under the Securities Act, the Company shall notify the Warrant Holder at least
twenty (20) days prior to the filing of such registration statement and will
offer to include in such registration statement all or any portion of the shares
of Common Stock then owned by the Warrant Holder or which the Warrant Holder
then has the right to acquire, weather pursuant to this Warrant or otherwise
(collectively the "Shares"). In a written notice to be delivered to the Company
within twenty (20) days after receipt of any such notice from Company, the
Warrant Holder shall state the number of Shares that it wishes to register for
resale and distribution publicly under the proposed registration statement. The
Company will use its best efforts, through its officers, directors, auditors and
counsel in all matters necessary or advisable, to file at least one (1) such
registration statement by May 15, 1998. The Company will also use its best
efforts, through its officers, directors, auditors and counsel in all matters
necessary or advisable, to include within the coverage of each such registration
statement (except as hereinafter provided) the Shares that Warrant Holder has
advised company that Warrant Holder wishes to register pursuant to such
registration statement for resale and distribution, to prosecute each such
registration statement diligently to effectiveness, and to cause such
registration statement to become effective as promptly as practicable In that
regard, the company makes no representation or warranties as to its ability to
have any registration statement declared effective.
All registrations requested pursuant to this Paragraph 7 (a) are
referred to herein as "Piggyback Registrations." In the event the Company is
advised by the staff of the SEC, NASDAQ or any self-regulatory or state
securities agency that the inclusion of the Shares will prevent, preclude or
materially delay the effectiveness of a registration statement filed, the
Company, in good faith, may amend such registration statement to exclude the
Shares without otherwise affecting the Warrant Holder's rights to any other
registration statement herein.
(i)Primary Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and if the underwriter thereof
advises the Company in writing, that in Its opinion the number of Shares
requested to be included in such registration statement exceeds the number that
can be sold in such offering without materially adversely affecting the
distribution of such securities by the company, then the Company will include in
such registration statement first, the securities that the Company proposes to
sell and second, the securities requested to be included in such registration
statement by selling Securityholders, such right to inclusion being apportioned
pro rata among the Warrant Holder and the other holders of any other securities
requesting registration according to the market value of Shares and other
securities requested to be registered.
Notwithstanding the above, if any such underwriter shall advise the
Company in writing that the distribution of the Shares being included in the
registration statement concurrently with the securities being registered by the
Company would materially adversely affect the distribution of such securities by
the Company, then the Warrant Holder shall delay its offering and sale for such
period ending on the earliest of (a) 180 days following the effective date of
the Company's registration statement, (b) the earliest date that, in the opinion
of such underwriter, such adverse effect would no longer be caused, or (c) such
date as the Company, managing underwriter and Warrant Holder shall otherwise
agree. In the event of such delay, the Company shall file such supplements and
post-effective amendments and take any such other actions as may be necessary or
appropriate to permit such Warrant Holder to make its proposed offering and sale
for a period of at least ninety (90) days commencing immediately following the
end of such period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Warrant Holder. Notwithstanding the
foregoing, the Company shall not be required to include Shares within the
coverage of a registration statement being filed pursuant to this Paragraph 7
(a) (i) if, in the opinion of counsel for both the Company and Warrant Holder,
all of the Shares proposed to be registered may be immediately transferred
pursuant to the provisions of Rule 144 under the Securities Act.
(ii) Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of securities of the
Company, and the underwriter thereof advises the Company in writing that it its
opinion the number of Shares requested to be included in such registration
statement exceeds the number which can be sold in such offering without
materially adversely affecting the distribution of such securities, then the
Company will include in such registration statement the securities requested to
be included in Such registration statement by selling securityholders on a pro
rata basis, with such rights to inclusion being apportioned among the
Warrant Holder and the other holders of any other securities requesting
registration according to the market value of Shares and other securities
requested by them, respectively, to be registered. Notwithstanding the
foregoing, the Company shall not be required to include Shares within the
coverage of a registration statement being filed pursuant to this Paragraph 9
(a) (ii) if, in the opinion of counsel for both the Company and
4
Warrant Holder, all of the Shares proposed to be registered may be immediately
transferred pursuant to the provisions of Rule 144 under the Securities Act.
(b) If at any time after August 4, 1998 and prior to the third (3rd)
anniversary of the earlier of the expiration of the Warrant herein granted and
the purchase of the final Shares remaining subject to such Warrant Shares
issued or issuable upon exercise of the Warrant herein granted are not then
registered under one or more Piggyback Registrations and then covered by a
prospectus complying with the requirements of the Securities Act, the Warrant
Holder may by written notice to the Company require Company to file a
registration statement under the Securities Act covering such Shares as Warrant
Holder may specify in such notice. Warrant Holder shall be entitled so to
require Company to file a registration statement pursuant to this Paragraph 7
(b) on only one ( 1) occasion. The Company will file such a registration
statement within ninety (90) days of receipt of such notice, and thereafter will
prosecute such registration statement diligently to effectiveness, will cause
such registration statement to become effective as promptly as practicable; will
promptly file all such supplements and post-effective amendments to such
registration statement and take any such other actions as may be necessary or
appropriate to make available to Warrant Holder on as continuous a basis as is
practicable a prospectus meeting the requirements of the Securities Act through
the earliest of (a) the date on which the final Shares have been sold and
distributed by Warrant Holder, (b) the date on which, in the opinion of counsel
for both the Company and Warrant Holder, all of the Shares which Warrant Holder
then holds may be immediately transferred pursuant to the provisions of Rule 144
under the Securities Act, and (c) August 4, 2004. In that regard, the Company
makes no representations or warranties as to its ability to have any
registration statement or post-effective amendment thereto declared effective.
(c) In the event of any registration of a security pursuant to this
Paragraph 7, the Company shall indemnify the Warrant Holder and its officers and
directors against all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus (and as amended or supplemented) relating
to such registration, or caused by any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statement
therein not misleading in light of the circumstances under which they are made
unless such statement or omission was made in reliance upon and in conformity
with information furnished to the Company by the Warrant Holder with expressly
for use therein. The Warrant Holder shall also indemnify the Company, its
officers and directors and each underwriter of the Shares so registered with
respect to losses, claims damages and Shares so registered with respect to
losses, claims damages and liabilities caused by an untrue statement or omission
made in reliance upon and in conformity with information furnished by the
Warrant Holder to the Company in writing expressly for use in such registration
statement or prospectus.
(d) All expenses of any registration referred to in this Paragraph 7,
except the fees and disbursement of counsel to the Warrant Holder, underwriting
commissions or discounts and any transfer or other taxes applicable to the
transfer of Shares by the Warrant Holder, shall be borne by the Company.
5
(e) Following the exercise of the Warrant hereunder, the Warrant Holder
shall promptly advise the Company when Warrant Holder no longer holds any shares
acquired through the exercise of Warrants granted hereunder, and upon the
request of the Company, the Warrant Holder shall advise the Company from time to
time of the number of Shares then held by Warrant Holder which were acquired
through the exercise of Warrants granted hereunder.
8. Adjustments Upon Changes in Capitalization.
(a) In the event of changes in the outstanding Common Stock of the
Company by reason of stock dividends, stock splits, reverse stock splits,
recapitalization's, consolidations, combinations, exchanges of shares,
separations, reorganizations, liquidation's or any similar events or events
having similar consequences, the number and class of Shares as to which the
Warrant may be exercised shall be correspondingly adjusted so that for the same
aggregate exercise price the Warrant Holder shall be entitled to acquire the
securities and other property Warrant Holder would have held if Warrant Holder
had exercised its rights to purchase shares under this Warrant Agreement for
the number of Shares under consideration prior to the first of such events to
occur and continued to hold such Shares and all other securities and other
property issued with respect thereto in connection with such events. No
adjustment shall be made with respect to cash dividends or non-liquidating
dividends payable in property other than cas, so long as Company provides
Warrant Holder with written notice of any such proposed dividend at least
fifteen (15) days prior to the record date for such dividend. Company shall
also give Warrant Holder prompt written notice of any event resulting in an
adjustment under this Paragraph 8 (a), including a detailed computation of such
adjustment.
(b) Any adjustment in the number and kind of Shares and other
securities shall apply proportionately to only the unexercised portion of the
Warrant at the time of the event given rise to the adjustment. If fractions of a
Share would result from any such adjustment, the adjustment shall be revised to
the next higher whole number of Shares so long as such increase does not
result in the holder of the Warrant being deemed to own more than 5% of the
total combined voting power or value of all classes of stock of the Company or
its subsidiaries, in which case the adjustment shall be revised to the next
lower whole number of Shares.
9. Effect of Mergers, consolidations or Sales of Assets.
In the event Company should propose to merge or consolidate with, or
engage in some other form of business combination with, any other corporation or
entity on a basis in which Company is not to be the surviving entity, then as a
condition precedent to proceeding with such merger, consolidation or other
business combination, the Company shall require the surviving entity to assume
and perform all of Company's obligations under the right to acquire the same
securities and property for the Warrant exercise price specified herein as
Warrant Holder would have received if Warrant Holder had exercised the Warrant
immediately prior to such merger, consolidation or other business combination.
To the extent the above may be inconsistent with Sections 424 (a) ( 1) and (2)
of the Code, the above shall be deemed interpreted so as to comply therewith.
6
10, No Rights in Warrant Stock.
Warrant Holder shall have no rights as a shareholder in respect of
Shares as to which the Warrant hereunder shall not have been exercised and
payment made as herein provided.
11. Effect Upon Employment.
This Agreement does not give the Warrant Holder any right to employment
by, or any other relationship with, the Company.
12. Binding Effect.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors,
legal representatives and assigns.
13. Miscellaneous.
This Agreement shall be construed under the laws of the State of
California applied to agreements made and to be performed entirely within such
State. Headings have been included herein for convenience of reference only and
shall not be deemed a part of this Agreement. The Company shall pay any and all
documentary, stamp or other transactional taxes attributable to the issuance or
delivery of shares of Common Stock of the Company upon exercise of all or part
of this Warrant.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
"Company" U.S. WIRELESS DATA, Inc.
"Warrant Holder"
NOTICE OF EXERCISE OF WARRANT TO PURCHASE SHARES
------------------------------------------------
TO U.S. WIRELESS DATA, INC.
The undersigned hereby elects to exercise the purchase right represented by
that Warrant dated as of August 4, 1997, between U.S. Wireless Data, Inc. and
the undersigned with an exercise price of One Cent ($0.01), and to purchase
under that Warrant, ( ____________________________ ) shares of Common Stock of
U.S. Wireless Data, Inc., and hereby makes payment in the form of cash or
certified or bank cashier's check for the Shares so being purchased at the
exercise price of One Cent ($0.01) therefor as specified in Paragraph 2 of the
Warrant Agreement, and requests that the certificates for those shares be issued
in the name of, and delivered to _______________________________ .
Signature
Social Security or Taxpayer I.D. Number:
Instructions for issuance of stock:
Name
Street Address
City State Zip Code
8
