THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NEITHER THIS WARRANT NOR SUCH SECURITIES MAY BE TRANSFERRED
EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR (B) UPON RECEIPT BY THE ISSUER OF AN OPINION
OF COUNSEL, WHICH OPINION OF COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE
ISSUER, TO THE EFFECT THAT SUCH TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE
ACT AND SUCH STATE SECURITIES LAWS.
WARRANT AGREEMENT
FOR UNITS OF
U.S. WIRELESS DATA, INC.
Warrant No. ___
THIS CERTIFIES that, for value received, Xxxxx X. Xxxxxxx Securities
Company Limited, or its permitted assigns registered on the books of the Company
(collectively, the "Holder"), is entitled to purchase from U.S. Wireless Data,
Inc., a Colorado corporation (the "Company"), at any time, and from time to
time, during the exercise period referred to in Section 1 hereof, 6.4 Units of
the Company. Each Unit initially consists of (i) 10,000 shares of the Company's
Series C Convertible Preferred Stock (the "Shares"), each Share convertible into
shares of the Company's common stock, no par value (the "Common Stock"), and
(ii) seven-year warrants (the "Unit Warrants") to purchase a number of shares of
Common Stock equal to 25% of the number of shares of Common Stock into which the
Shares are convertible. The Shares and Unit Warrants underlying this Warrant are
identical to the shares and unit warrants (the "Investor Shares" and the
"Investor Warrants," respectively) included in the Units sold pursuant to the
Company's Confidential Private Placement Memorandum, dated February 14, 2000, as
amended. The Investor Shares and the Investor Warrants are subject to call as
provided therein and, if this Warrant is exercised after the date that such call
is given (the "Call Date"), it shall only be exercisable for Common Stock. The
purchase price for each Unit is one hundred thousand dollars ($100,000) (the
"Exercise Price"), provided that if the Holder elects, after the Call Date, to
receive the Common Stock which would have been issuable upon exercise of the
Unit Warrants, the Exercise Price shall be increased by an amount equal to the
exercise price of such Unit Warrants (the "Underlying Warrant Exercise Price").
Securities issuable upon exercise of this Warrant are subject to adjustment from
time to time as hereinafter set forth. As used herein, the term "Warrant" shall
include any warrant or warrants hereafter issued in consequence of the exercise
of this Warrant in part or transfer of this Warrant in whole or in part.
1. Exercise; Payment for Ownership Interest.
(b) Upon the terms and subject to the conditions set forth herein, this Warrant
may be exercised in whole or in part by the Holder hereof at any time, or from
time to time, on or after the date hereof and prior to 5 p.m. San Francisco time
on ___________, 2007, by presentation and surrender of this Warrant to the
principal offices of the Company, together with the Purchase Form annexed
hereto, duly executed, and accompanied by payment to the Company of an amount
equal to the Exercise Price multiplied by the number of Units as to which this
Warrant is then being exercised or, if this Warrant is exercised after the Call
Date, by payment of an amount equal to the number of shares of Common Stock as
to which this Warrant is being issued multiplied by the Post-Call Exercise Price
(as defined below). Any transfer of Units obtained by the Holder in exercise of
this Warrant is subject to the requirement that such securities be registered
under the Securities Act of 1933, as amended (the "1933 Act"), and applicable
state securities laws or exempt from registration under such laws. The Holder of
this Warrant shall be deemed to be the holder of the Units, or, if exercised
after the Call Date, Common Stock, as to which this Warrant is exercised in
accordance herewith effective immediately after the close of business on the
date on which the Holder shall have delivered to the Company this Warrant in
proper form for exercise and payment by certified or official bank check or wire
transfer of the cash purchase price for the number of Units or shares of Common
Stock as to which the exercise is being made, or by delivery to the Company of
securities of the Company having a value equal to the cash purchase price for
such number of Units or Common Stock determined as of the date of delivery.
(c) All or any portion of the Exercise Price may be paid by surrendering
Warrants effected by presentation and surrender of this Warrant to the Company
with a Cashless Exercise Form annexed hereto duly executed (a "Cashless
Exercise"). Such presentation and surrender shall be deemed a waiver of the
Holder's obligation to pay all or any portion of the aggregate Exercise Price.
In the event of a Cashless Exercise, the Holder shall exchange its Warrant for
that number of shares of Common Stock determined by multiplying the number of
Shares for which the Holder desires to exercise this Warrant by a fraction, the
numerator of which shall be the difference between the then current market price
per share of the Common Stock and the Exercise Price, and the denominator of
which shall be the then current market price per share of Common Stock. For
purposes of any computation under this Section 1(b), the then current market
price per share of Common Stock at any date shall be deemed to be the average
for the ten consecutive business days immediately prior to the Cashless Exercise
of the daily closing prices of the Common Stock on the principal national
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securities exchange on which the Common Stock is admitted to trading or listed,
or if not listed or admitted to trading on any such exchange, the closing prices
as reported by the Nadaq National Market, or if not then listed on the Nasdaq
National Market, the average of the highest reported bid and lowest reported
asked prices as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("Nasdaq") or if not then publicly traded, the fair
market price of the Common Stock as determined by the Board of Directors of the
Company.
(d) If this Warrant shall be exercised in part only, the Company shall, upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant
evidencing the rights of the Holder thereof to purchase the balance of the Units
purchasable hereunder as to which the Warrant has not been exercised. If this
Warrant is exercised in part, such exercise shall be for a whole number of
Units. Upon any exercise and surrender of this Warrant, the Company will issue
and deliver to the Holder a certificate or certificates in the name of the
Holder for the number of Shares to which the Holder shall be entitled and a
certificate representing the Unit Warrants, or, if exercised after the Call
Date, the shares of Common Stock, to which the Holder shall be entitled or the
proportionate part thereof if this Warrant is exercised in part, pursuant to the
provisions of this Warrant.
2. Adjustments.
2.1 The Holder of the Warrant shall receive upon exercise hereof prior to
the Call Date Shares and Unit Warrants that will reflect all adjustments to such
securities as would have occurred from the date of this Warrant through the date
of exercise of the Warrant and which shall be identical to Investor Shares and
Investor Warrants. For purposes of clarity, the Holder of the Warrant, whenever
exercised prior to the Call Date, shall have the right to receive that amount of
securities of the Company had the Holder exercised this Warrant on the date
hereof and received the benefit of all adjustments (for anti-dilution, or
changes in capitalization, or a merger or other transaction effecting the
capitalization of the Company) to such securities as if the Holder had held such
securities from the date hereof until the date of exercise of this Warrant.
After the Call Date, the Holder of this Warrant shall be entitled to receive the
number of shares of Common Stock which such Holder would have received had such
Holder exercised this Warrant and the Unit Warrants in full immediately prior to
the Call Date, as adjusted equitably for any stock splits, stock dividends,
mergers or recapitalization occurring after the Call Date at an exercise price
equal to the conversion or exercise price, as the case may be, of the Shares and
Unit Warrants as of the Call Date, as appropriately adjusted for any stock
dividends, mergers or recapitalization occurring after the Call Date. By way of
illustration, if this Warrant was initially exercisable for one Unit and if on
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the Call Date one unit consisted of 10,000 Shares convertible into 66,666 shares
of Common Stock at $1.50 per share and Warrants exercisable for 25% of 66,666 at
$1.50 per share and subsequent to the Call Date the Company declared a 2-for-1
stock split, the Holder would be entitle to exercise this Warrant for 166,665
shares of Common Stock at $.75 per share (representing 133,332 shares in respect
of the Shares included in the Unit originally underlying the Warrant and 33,333
shares of Common Stock in respect of the Unit Warrants included in the Unit
originally underlying the Warrant).
2.2 Notice of Adjustments. Upon the occurrence of each adjustment or
readjustment of the Units pursuant to Section 2.1, the Company at its expense
will promptly compute such adjustment or readjustment and prepare a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company will forthwith
mail, by first class mail, postage prepaid, a copy of each such certificate to
the Holder of this Warrant at the address of such Holder as shown on the books
of the Company.
2.3 Other Notices. If at any time:
(a) the Company shall (i) offer for subscription pro rata to the
holders of shares of the Common Stock any additional equity in the Company or
other rights; (ii) pay a dividend in additional shares of the Common Stock or
distribute securities or other property to the holders of shares of the Common
Stock (including, without limitation, evidences of indebtedness and equity and
debt securities); or (iii) issue securities convertible into, or rights or
Warrants to purchase, securities of the Company;
(b) there shall be any capital reorganization or reclassification or
consolidation or merger of the Company with, or sale, transfer or lease of all
or substantially all of its assets to, another entity; or
(c) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, to the Holder of this Warrant at the address of such
Holder as shown on the books of the Company, (a) at least 15 days' prior written
notice of the date on which the books of the Company shall close or a record
shall be taken for such subscription rights, dividend, distribution or issuance,
and (b) in the case of any such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, at least 15 days' prior
written notice of the date when the same shall take place if no stockholder vote
is required and at least 15 days' prior written notice of the record date for
stockholders entitled to vote upon such matter if a stockholder vote is
required. Such notice in accordance with the foregoing clause (a) shall also
specify, in the case of any such subscription rights, the date on which the
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holders of shares of Common Stock shall be entitled to exercise their rights
with respect thereto, and such notice in accordance with the foregoing clause
(b) shall also specify the date on which the holders of shares of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, as the case
may be. Failure to give the notice referred to herein shall not affect the
validity or legality of the action which should have been the subject of the
notice.
3. No Voting Rights. Except as otherwise provided herein, this Warrant shall not
be deemed to confer upon the Holder any right to vote or to consent to or
receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a stockholder, prior
to the exercise hereof.
4. Warrants Transferable. This Warrant and all rights hereunder are
transferable, in whole or in part, at the principal offices of the Company by
the Holder hereof, upon surrender of this Warrant properly endorsed; provided,
however, that without the prior written consent of the Company, this Warrant and
all rights hereunder may be transferred only (i) to an affiliate of the initial
Holder hereof or successor in interest to any such person; or (ii) pursuant to
the registration of this Warrant under the 1933 Act or subsequent to one year
from the date hereof under Rule 144 or other exemption from such registration.
5. Warrants Exchangeable; Loss, Theft, Destruction, Etc. This Warrant is
exchangeable, upon surrender hereof by the Holder hereof at the principal
offices of the Company, for new Warrants of like tenor representing in the
aggregate the right to subscribe for and purchase the Units or Common Stock
which may be subscribed for and purchased hereunder, each such new Warrant to
represent the right to subscribe for and purchase such Units or Common Stock
(not to exceed the maximum aggregate Units or shares of Common Stock which may
be purchased hereunder) as shall be designated by such Holder hereof at the time
of such surrender. Upon receipt of evidence satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant and, in the case of any
such loss, theft or destruction, upon delivery of a bond or indemnity
satisfactory to the Company, or, in the case of any such mutilation, upon
surrender or cancellation of this Warrant, the Company will issue to the Holder
hereof a new Warrant of like tenor, in lieu of this Warrant, representing the
right to subscribe for and purchase the Units or Common Stock which may be
subscribed for and purchased hereunder.
6. Legends; Investment Representations. Any certificate evidencing the
securities issued upon exercise of this Warrant shall bear a legend in
substantially the following form:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). SUCH SECURITIES MAY
NOT BE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR (B) UPON RECEIPT BY
THE ISSUER OF AN OPINION OF COUNSEL, WHICH OPINION OF COUNSEL SHALL BE
REASONABLY SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT SUCH TRANSFER IS
EXEMPT FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS.
7. Miscellaneous. The Company shall pay all expenses and other charges payable
in connection with the preparation, issuance and delivery of this Warrant and
all substitute Warrants other than as set forth in this Section 7. The Holder
shall pay all taxes (other than any issuance taxes, including, without
limitation, documentary stamp taxes, transfer taxes and other governmental
charges, which shall be paid by the Company) in connection with such issuance
and delivery of the Warrants and the Units.
The Company shall maintain, at the office or agency of the Company
maintained by the Company, books for the registration and transfer of the
Warrant.
8. Descriptive Headings and Governing Law. The descriptive headings of the
several paragraphs of this Warrant are inserted for convenience only and do not
constitute a part of this Warrant. This Warrant shall be construed and enforced
in accordance with the laws of the State of New York, and the rights of the
parties shall be governed by, the law of such State.
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IN WITNESS WHEREOF, this Warrant Agreement has been executed as of the
_____ day of March, 2000.
U.S. WIRELESS DATA, INC.
By:
-------------------------------------
Its:
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PURCHASE FORM
Dated:__________, ____
Prior to Call Date
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _____ Units and hereby makes payment of $_____________
in payment of the exercise price thereof.
After the Call Date
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _____ shares of Common Stock (including _____ shares
which would have been issuable pursuant to the Unit Warrants) and hereby makes
payment of $_____ in payment of the exercise price thereof.
-----------------------------------------
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CASHLESS EXERCISE FORM
Dated:__________, ____
Prior to Call Date
The undersigned irrevocably elects to exercise the within Warrant for Units
and hereby makes payment pursuant to the Cashless Exercise provision of the
within Warrant, and directs that the payment of the Exercise Price be made by
cancellation as of the date of exercise of a portion of the within Warrant in
accordance with the terms and provisions of Section 1(b) of the within Warrant.
After the Call Date The undersigned irrevocably elects to exercise the within
Warrant to the extent of purchasing shares of Common Stock (including shares
which would have been issuable pursuant to the Unit Warrants) and hereby makes
payment pursuant to the Cashless Exercise provision of the within Warrant, and
directs that the payment of the Exercise Price be made by cancellation as of the
date of exercise of a portion of the within Warrant in accordance with the terms
and provisions of Section 1(b) of the within Warrant.
-----------------------------------------
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