Exhibit 10.3
U.S. WIRELESS DATA, INC.
--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
RELATING TO THE
8% ADJUSTABLE RATE
CONVERTIBLE SUBORDINATED DEBENTURES
DUE DECEMBER 31, 1999
--------------------------------------------------------------------------------
December 8, 1997
TABLE OF CONTENTS
1. REGISTRATION UNDER THE SECURITIES ACT OF 1933...................... 1
Section 1.1 Certain Definitions.............................. 1
Section 1.2 Proposed Transfers............................... 3
Section 1.3 Company Registration............................. 4
Section 1.4 Mandatory Registration .......................... 5
Section 1.5 Expenses of Registration......................... 7
Section 1.6 Registration Procedures.......................... 8
Section 1.7 Indemnification.................................. 9
Section 1.8 Information by Holder............................ 12
Section 1.9 No Transfer of Registration Rights............... 12
Section 1.10 Termination of Registration Rights............... 12
Section 1.11 Lockup........................................... 12
2. MISCELLANEOUS...................................................... 12
Section 2.1 Survival of Covenants; Successors and Assigns.... 12
Section 2.2 Assignability of Rights.......................... 12
Section 2.3 Communications and Notices....................... 12
Section 2.4 Law Governing.................................... 13
Section 2.5 Subsequent Instruments and Acts.................. 13
Section 2.6 Severability..................................... 13
Section 2.7 Entire Agreement; Amendments..................... 13
Section 2.8 Delays, Omissions, and Waivers................... 13
Section 2.9 Authorization.................................... 14
Section 2.10 Gender, Number and Tense......................... 14
Section 2.11 Headings......................................... 14
Section 2.12 Counterparts..................................... 14
Section 2.13 Remedies......................................... 14
i
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of this
8th day of December, 1997, among U.S. WIRELESS DATA, INC., a Colorado
corporation (the "Company"), and the purchaser of the Company's 8% Adjustable
rate Convertible Subordinated Debentures Due December 31, 1999 (the
"Debentures") who has signed the signature page of this Agreement (the
"Holder").
RECITALS
A. The Holder and the Company are parties to the Subscription Agreement
of even date herewith (the "Agreement") whereby Holder has been issued
$________________ of Debentures in exchange for cash paid to the Company in like
amount.
B. The Debenture automatically converts into shares of the Company's
Series A Cumulative Convertible Preferred Stock (the "Preferred Stock") at the
rate of one share of Preferred Stock per $1.00 of Debenture at such time as the
Preferred Stock has been legally authorized by the Company.
C. Upon satisfaction of certain conditions: the Debenture and the
Preferred Stock into which it may convert are convertible into shares of the
Company's no par value Common Stock (the "Conversion Stock"); interest due on
the Debenture and dividends payable on the Preferred Stock are payable in shares
of Common Stock (the "I/D Stock"), all pursuant to the formulas stated in the
Debenture and Designation of Preferred Stock, respectively.
D. The Holder is willing to have all of its rights with respect to
registration of their Registrable Securities (as defined below) under the
Securities Act of 1933 governed by this Agreement.
TERMS
NOW, THEREFORE, in consideration of the promises and covenants and the
mutual obligations of the parties hereto, as stated herein, the parties agree as
follows:
1. REGISTRATION UNDER THE SECURITIES ACT OF 1933.
Section 1.1 Certain Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
"Blue Sky Laws" shall mean the securities regulation laws of
any political subdivision of the United States.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Holder" shall mean the holder of outstanding Registrable Securities.
The terms "register", "registered," and "registration" refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement by the Commission.
"Potential Material Event" shall mean any of the following:
(a) possession by the Company of material information not ripe for disclosure in
a registration statement, which shall be evidenced by a determination made in
good faith by the Board of Directors of the Company that disclosure of such
information in the registration statement would be seriously detrimental to the
business and affairs of the Company; (b) any material engagement or activity of
the Company which would, in the good faith determination of the Board of
Directors of the Company, be adversely affected by disclosure in a registration
statement at such time, which determination shall be accompanied by a good faith
determination by the Board of Directors of the Company that the registration
statement would be materially misleading absent inclusion of such information.
"Registrable Securities" means (i) the Conversion Stock (ii)
the I/D Stock; and (iii) any other securities issued with respect to any of the
above securities by way of dividends, stock-splits, recapitalization,
adjustments or the like. Registrable Securities do not include any of the above
securities which have been registered pursuant to a registration statement under
the Act and sold pursuant thereto or which have otherwise become eligible for
sale.
"Registration Expenses" shall mean all expenses incurred by
the Company in complying with Section 1.6 below, including, by way of
illustration only and without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company,
underwriting expenses not included in Selling Expenses, and the expense of any
audits or financial statement reviews incident to or required by any such
registration (including the expense of any cold comfort letters), and Blue Sky
fees and expenses (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company).
"Restricted Securities" shall mean the securities of the
Company required to bear the legend substantially the same as the legend set
forth in Section 1.2(D) of this Agreement.
-2-
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Selling Expenses" shall mean the underwriting discounts and
selling commissions applicable to the sale of Registrable Securities and any
fees of any counsel or other advisors retained by or to represent any Holder.
Section 1.2 Proposed Transfers. The Holder, by entering into this
Agreement, agrees to comply in all respects with the following provisions:
(A) Prior to any proposed transfer of any Registrable
Securities (other than under circumstances described in Section 1.3 and Section
1.4 below), Holder shall give written notice to the Company of Holder's
intention to effect the transfer, together with a detailed statement of the
circumstances surrounding the proposed transfer; provided, however, that the
Holder need not provide such notice with respect to Registrable Securities for
which the Company has previously issued unlegended certificates.
(B) Except with respect to transactions not involving a change
in beneficial ownership, such notice shall, if reasonably requested by the
Company, also be accompanied by a written opinion of legal counsel (which shall
be reasonably satisfactory to the Company and its counsel) stating that the
proposed transfer of the Registrable Securities may be effected without
registration under the Securities Act and without Blue Sky qualification, and
which opinion may be "reasoned" and/or based upon (i) no action letters issued
by the Commission which are based on similar facts or circumstances and/or (ii)
telephone conversations or written correspondence with the staff of the
Commission.
(C) Having satisfied Subsection 1.2(B) above, the Holder shall
be entitled to transfer the Registrable Securities in accordance with the terms
of the notice delivered by the Holder to the Company.
(D) Each certificate evidencing Registrable Securities shall
(unless otherwise permitted by the provisions of this Agreement) be stamped or
otherwise imprinted with a legend in substantially the following form in
addition to any legend acquired under applicable state securities laws:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT AND SUCH LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
-3-
The Company shall remove such restrictive legend upon the request of Holder if
(1) the Company has received an opinion of counsel who is reasonably acceptable
to it and its counsel to the effect that registration of any and all future
transfers is not required, (2) an appropriate registration statement with
respect to such Registrable Securities has been filed by the Company with the
Commission and declared effective by the Commission and the shares of
Registrable Securities to be sold under the registration statement have been
sold thereunder and in compliance with the applicable plan of distribution
contained therein and any qualifications required under any Blue Sky Laws, (3)
such transfer shall be made in compliance with the requirements of Rule 144 or
its successor, or (4) Holder has met the requirements of subparagraph (k) of
Rule 144 or its successor. Under any of these circumstances, the Company shall
cause new certificates without the above legend to be issued promptly to the
Holder or the Holder's designee in exchange for outstanding legended
certificates.
Section 1.3 Company Registration.
(A) Notice and Piggyback Rights. If at any time the Company
shall decide to register any of its securities, the Company will:
(1) promptly give to Holder written notice of the registration (which
shall include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable Blue Sky laws); and
(2) include in such registration (and any related Blue Sky
qualification or other compliance reasonably requested by Holder in order
to sell such securities), and in any underwriting involved, all the
Registrable Securities specified in a written request, made within 30 days
after receipt of such written notice from the Company, by the Holder,
except as set forth in Subsection 1.3(B) below.
The provisions of this Subsection 1.3(A) do not apply to any
of the following: (i) a registration on any registration form which would not
permit secondary sales by Holder, (ii) a registration which relates solely to
employee benefit plans, or (iii) a registration which relates solely to a
Commission Rule 145 transaction.
(B) Underwriting; Limits. If the registration of which the
Company gives notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holder as a part of the written
notice given pursuant to Subsection 1.3(A). If Holder proposes to distribute its
Registrable Securities through such underwriting, it shall enter into an
underwriting agreement in customary form with the underwriters selected by the
Company. Notwithstanding any other provision of this Section 1.3, if the
underwriter determines that marketing factors require a limitation of the amount
of securities to be registered, the Company may exclude from such registration
any Registrable Securities requested to be included. If Holder disapproves of
the terms of any such underwriting, it may elect to withdraw therefrom by
written notice to the Company and the underwriter
-4-
within five (5) days after receipt of such notice, and any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn from
registration.
(C) Waiver. The Holder's rights under this Section 1.3 may be
waived as to any particular offering by the Holder.
Section 1.4 Mandatory Registration upon Issuance of Debentures
(A) Mechanics. On or after the initial date of issuance of the
Debentures to the Holder, the Company shall use its best efforts to prepare and
file a shelf registration statement and other qualifications or compliances with
respect to all Registrable Securities requested to be included therein by the
Holder. Holder shall only be entitled to have included in such registration
statement that number of shares which Holder reasonably expects to sell within
sixteen months of June 30, 1998. Holder shall advise the Company of the number
of shares intended to be sold during such period and shall further advise the
Company as to those specific jurisdictions in which Holder reasonably expects to
offer the Registrable Securities for sale during such period. Holder shall not
be entitled to fulfill the requirements of this designation by stating "all
states" or by listing each and every state in the United States. Holder shall
further advise the Company of any plan of distribution for the Registrable
Securities and shall enter such further agreements as the Company shall
reasonably request setting forth additional terms applicable to the distribution
of Registrable Securities.
The Company will:
(1) Use its diligent best efforts to file as soon as practicable, but
in any event within ninety days (90) days after the initial closing of the
offering by which the Debentures were first sold, all such registrations,
qualifications and compliances as may be so requested and as would
facilitate the sale and distribution of all or such portion of such
Holder's Registrable Securities as are specified in the request.
(2) Use its diligent best efforts to prepare, file and obtain
effectiveness of the registration statement under this Section 1.4 on no
more than one (1) occasion, excluding offerings by Holder pursuant to
Section 1.3 above. If any proceeds of the offering are received by the
Company, the offering will be deemed to be pursuant to Section 1.3 above.
(3) The Company shall use its best efforts to keep the registration
statement effective continuously for no less than sixteen (16) months from
June 30, 1998, subject to the right of the Company to suspend sales under
the registration statement during such period as described in Subsection
1.6(E). Any suspension of sales during such period of effectiveness shall
not toll the sixteen month period, unless the Company shall suspend the
period during which sales may be made for greater than a total of 90 days
in the aggregate during such period. In that case, the period during which
the registration statement shall be
-5-
maintained as effective shall be extended for a like number of days in excess of
such 90 days during which suspension(s) of sales was required by the Company. By
way of example, if the Company suspends sales of Registrable Securities for a
total of 120 days during the sixteen month period, then the Company shall be
obligated to extend the period for which a registration statement is effective
for 30 additional days.
(B) Exceptions. The Company shall not be obligated to effect
any registration, qualification, or compliance requested by Holder with respect
to a proposed distribution of Registrable Securities by Holder under this
Section 1.4:
(1) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting
such registration, qualification or compliance or where such registration,
qualification or compliance would be legally unattainable or unreasonably
expensive or onerous for the Company, in light of all circumstances and
other avenues available to the Holder for disposing of Registrable
Securities; or
(2) if the Company has effected one (1) such registration pursuant to
this Section 1.4 and such registration has been declared and ordered
effective.
If the Company shall furnish to Holder a certificate signed by
the President of the Company stating that there exist a Potential Material
Event, then the Company's obligation to use its best efforts to file a
registration statement under this Section 1.4 shall be deferred for a period
during which such Material Potential Event exists, provided that this period
will not exceed ninety (90) days after the expiration of the initial ninety (90)
days within which to file such registration statement, and provided further that
the Company shall not defer its obligations in this manner more than once in any
twelve-month period. Nothing done by the Company pursuant to this paragraph
shall in any way prevent application of the penalty provisions contained in the
Debentures and/or the Designation of Preferred Stock that effect a decrease in
the conversion price applicable to conversions of such instruments into Common
Stock should the effectiveness of the registration statement be delayed beyond
150 days from the date of the initial closing of the offering by which the
Debentures were first sold.
(C) Underwriting. If the Holder intends to distribute the
Registrable Securities covered by its request by means of an underwriting, it
shall so advise the Company as a part of its request made pursuant to Section
1.4.
(1) The Holder shall negotiate with an underwriter selected by Holder
and reasonably approved by the Company with regard to the underwriting of
the requested registration.
(2) The right of Holder to include its Registrable Securities in a
registration pursuant to Section 1.4 shall be conditioned upon the Holder's
participation in
-6-
such underwriting on the terms and conditions of such underwriting and upon
the inclusion of the Holder's Registrable Securities sought to be
registered in the underwriting.
(3) The Company shall (together with Holder) enter into an
underwriting agreement in customary form with the underwriter or
underwriters selected for the underwriting by the Holder.
(4) Notwithstanding any other provision of this Section l.4, if the
underwriter advises the Holder in writing that marketing factors require a
limitation of the number of shares to be underwritten, the Company will
then include in such registration, prior to the inclusion of any other
securities which are not Registrable Securities, the number of shares of
Registrable Securities that the underwriter believes may be included in the
registration. A registration will not count as the registration request
permitted under this Section 1.4 unless the Holder is able to register and
sell at least 75% of the Registrable Securities requested to be included in
such registration.
(D) Holder understands and agrees that other securityholders
of the Company may have registration rights that will be activated by the
Company's obligations to register Registrable Securities hereunder. Holder
agrees that such rights may be honored by the Company and that such other
securities may be included in the registration(s) filed pursuant to Sections 1.3
and 1.4 of this Agreement. The Company agrees that it shall not grant any
additional rights to any person which would entitle such person to have shares
of the Company's Common Stock (or other securities exercisable for or
convertible into Common Stock) included in any registration statement filed
hereunder.
(E) Holder agrees to advise the Company in writing of each and
every sale of Registrable Securities made by Holder under any registration
statement within 10 days following the date of each sale. Holder understands and
agrees that any Registrable Securities remaining unsold by Holder at the time
the Registration Statement expires will be deregistered and cannot thereafter be
sold absent reregistration or compliance with Section 1.2 of this Agreement.
Section 1.5 Expenses of Registration.
(A) Registration Expenses. All Registration Expenses incurred
in connection with registration, qualification or compliance under Section 1.3
and Section 1.4 shall be borne by the Company; provided that with respect to
securities being registered pursuant to Section 1.3, Holder agrees that it will
pay all Blue Sky fees associated with the registration of Registrable Securities
in those states in which the Company is not otherwise registering or qualifying
shares of its stock for sale in such registration.
(B) Selling Expenses. All Selling Expenses incurred in
connection with these transactions shall be borne by the Holder.
-7-
(C) Legal Expenses. Holder shall bear its own expenses, if
any, for the fees and disbursements of counsel or other advisors to such Holder
incurred in connection with these transactions.
(D) Ineffective Requested Registration. The Company shall not
be required to pay any Registration Expenses if the registration statement does
not become effective as a result of the withdrawal of the request for
registration by the Holder pursuant to Subsection 1.4(A), which withdrawal was
not caused by the Company's failure to comply with applicable registration
requirements and regulations. In such a case, the Holder shall bear such
Registration Expenses and such registration shall not be counted as a
registration pursuant to Subsection 1.4(A), or the Holder will not bear such
expenses and such registration shall be counted as a registration pursuant to
Subsection 1.4(A).
Section 1.6 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep Holder advised in writing as to the initiation of each
registration, qualification and compliance and as to the completion thereof. At
its expense the Company will:
(A) Advise the Holder within forty eight (48) hours of the
effectiveness with the SEC of any registration statement which includes shares
eligible for sale by the Holder thereunder.
(B) Keep such registration, qualification or compliance
effective until the Holder has completed the distribution described in the
registration statement), but for not more than sixteen months from June 30, 1998
(or if the registration is underwritten, 90 days from the date of
effectiveness).
(C) Furnish such number of prospectuses (including preliminary
prospectuses, sticker supplements and amendments) and other documents incident
to the registration as Holder from time to time may reasonably request.
(D) At the time when any registration statement becomes
effective, and at the time when any post-effective amendment becomes effective,
request counsel to furnish to the Holder an opinion of counsel in customary form
and reasonably satisfactory to the Holder.
(E) Notify Holder, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in such registration
statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and at the request of
Holder, the Company will prepare a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or omit
to state any fact necessary to make the statements therein not misleading.
Between such time as the
-8-
Company notifies a Holder pursuant to this Subsection and the time any such
supplement or amendment is effective and available for use, the registration
shall be suspended and no sales by Holder shall be made of Registrable Shares
thereunder during such period.
(F) Cause all such Registrable Securities to be listed on each
securities exchange, quotation system or other market on which similar
securities issued by the Company are then listed.
(G) Provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such registration
statement.
(H) Obtain a cold comfort letter from the Company's
independent public accountants in customary form and covering such matters of
the type customarily covered by cold comfort letters as the Holder may
reasonably request.
(I) Furnish an opinion of the counsel representing the Company
for the purposes of such registration, in form and substance as is customarily
given to underwriters in an underwritten public offering.
Section 1.7 Indemnification.
(A) Company's Obligation to Indemnify.
(1) Generally. Subject to subparagraph (3) below, with respect to any
registration, qualification or compliance which has been effected pursuant
to this Agreement, the Company will indemnify Holder, its officers,
directors, and partners and each person controlling Holder, each legal
counsel, and each underwriter, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue or alleged untrue statement of, or omission or alleged omission of a
material fact contained in, or required to be stated in any registration
statement, including any preliminary or final prospectus, offering circular
or other document incident to any such registration, qualification, or
compliance. The Company will further indemnify such persons against any
violation or alleged violation by the Company of any rule or regulation
promulgated under the Securities Act or any applicable state securities law
in connection with any such registration, qualification or compliance.
(2) Reimbursement. The Company will promptly reimburse Holder, and
each of its officers, directors, partners and controlling persons, each
legal counsel and each such underwriter, for any legal and any other
expenses reasonably incurred, as such expenses are incurred, in connection
with investigating or defending any such claim, loss, damage, liability or
action.
(3) Limitation. The Company will not be liable in any such case to the
extent that any claim, loss, damage, liability or expense arises out of any
untrue
-9-
statement (or alleged untrue statement) or omission (or alleged omission) made
in such registration statement, including any preliminary or final prospectus,
offering circular or other document, is based upon written information furnished
to the Company by an instrument duly executed by Holder or underwriter and which
is stated to be specifically for use therein.
(4) Survival of Obligation. The obligations of the Company under this
Section 1.7 shall survive the completions of the offerings of Registrable
Securities under the registration statements, and otherwise.
(B) Holder's Obligation to Indemnify.
(1) Generally. Subject to subparagraph (3) below, Holder will
indemnify the Company, each legal counsel and independent accountant of the
Company, each underwriter of the Company's securities covered by such a
registration statement, and each person who controls the Company within the
meaning of the Securities Act, and all of their respective officers,
directors and partners, against all claims, losses, damages and liabilities
(or actions in respect thereof) arising out of or based on any untrue or
alleged untrue statement of, or omission or alleged omission of a material
fact contained in, or required to be stated in, any registration statement,
including any preliminary or final prospectus, offering circular or other
document.
(2) Reimbursement. Furthermore, Holder will promptly reimburse the
Company, underwriters, legal counsel and independent accountants and all of
their respective officers, directors, partners, and controlling persons for
any legal or any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or
action.
(3) Limitation. In any case, Holder's obligation under this Subsection
1.7(B) shall extend only so far as the untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement (including any preliminary or final prospectus), offering
circular, or other document in reliance upon written information furnished
to the Company by an instrument duly executed by Holder and which is stated
to be specifically for use therein.
(4) Survival of Obligation of the Holder. The obligations of Holder
under this Section 1.7 shall survive the redemption and conversion, if any,
of the Purchased Stock, the completions of the offerings of Registrable
Securities under the registration statements, and otherwise.
(C) Indemnifying Party May Assume Defense.
(1) Generally. Each party entitled to indemnification under this
Section 1.7 (the "Indemnified Party") shall give notice to the party
required to provide
-10-
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. Unless in
such Indemnified Party's reasonable judgment a conflict of interest between such
Indemnified and Indemnifying Parties may exist with respect to such claim, the
Indemnified Party shall permit the Indemnifying Party to assume the defense of
any such claim or any resulting litigation. But counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at its own
expense. Failure by the Indemnified Party to provide such written notice shall
not relieve the Indemnifying Party from its obligation under this Section 1.7.
In the event that the Indemnifying Party does not assume the defense of any such
claim or any resulting litigation within a reasonable period of time, or in the
event disparate interests of the Indemnified and Indemnifying Parties require
the Indemnified Party to seek separate counsel, the Indemnified Party may assume
the defense with counsel of its choice, and the Indemnifying Party will pay the
reasonable expense of such counsel; provided, however, that the Indemnifying
Party will be required to assume the expense of only one single counsel for all
Indemnified Parties in connection with any given claim or litigation.
(2) Settlement Approval, Release Required. No Indemnifying Party, in
the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term the giving
by the claimant or plaintiff to the Indemnified Party of a release from all
liability in respect to such claim or litigation. Furthermore, the failure
of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this Section 1.7.
(D) Contribution. If recovery is not available under the
foregoing indemnification provisions of this section for any reason other than
as specified therein, the parties entitled to indemnification by the terms
thereof shall be entitled to contribution for liabilities and expenses, except
to the extent that contribution is not permitted under the Securities Act. In
determining the amount of contribution to which the respective parties are
entitled, there shall be considered the relative benefits received by each party
from the offering of the securities (taking into account the portion of the
proceeds of the offering realized by each), the parties' relative knowledge and
access to information concerning the matter with respect to which the claim was
asserted, the party who supplied or failed to supply the information as to which
the claim is asserted, the opportunity to correct and prevent any statement or
omission, and any other equivalent considerations appropriate under the
circumstances.
Section 1.8 Information by Holder. The Holder shall furnish to the
Company such information regarding the Holder and the distribution proposed by
the Holder, as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Agreement.
-11-
Section 1.9 No Transfer of Registration Rights. The right to cause the
Company to register Registrable Securities pursuant to this Section may not be
assigned by Holder without the express written consent of the Company, which may
be withheld by the Company at its reasonable discretion.
Section 1.10 Termination of Registration Rights. The registration
rights granted pursuant to this Section 1 shall terminate with respect to any
particular Registrable Securities upon the earlier to occur of: (i) two (2)
years from the date of this Agreement; or (ii) the date on which such
Registrable Securities are eligible for resale pursuant to the provisions of
Rule 144(k) of the Commission
Section 1.11 Lockup. In the event the Company files a registration
statement with the Commission in connection with a public offering of the
Company's securities, Holder agrees, if so requested by the Company or the
underwriter of such offering, that Holder will not effect, or permit to be
effected on Holder's behalf, any public sale or distribution of any shares of
capital stock of the Company (except as part of such registration and public
offering, if so permitted) during the 30-day period beginning on the first date
of the effectiveness of such registration.
2. MISCELLANEOUS.
Section 2.1 Survival of Covenants; Successors and Assigns. All
covenants, agreements, representations and warranties made by the parties in
this Agreement shall survive the closing of the transactions contemplated by
this Agreement. All such covenants, agreements, representations and warranties
will inure to the benefit of, and be binding upon, any successors, assigns,
heirs, transferees, executors, and administrators of the parties hereto.
Section 2.2 Assignability of Rights. The Company may not assign any of
its rights or delegate any of its duties under this Agreement without the
written consent of Holder.
Section 2.3 Communications and Notices. Except as otherwise provided
for in this Agreement, 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 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.
-12-
Section 2.4 Law Governing. This Agreement shall be governed by the Laws
of the State of Colorado in all respects, as such laws are applied to agreements
among Colorado residents entered into and to be performed entirely within
Colorado.
Section 2.5 Subsequent Instruments and Acts. The parties agree that
they will execute any further instruments and perform any acts that may become
necessary to carry out this Agreement.
Section 2.6 Severability. If any term, provision, covenant, or
condition of this Agreement, or its application to any person or circumstance,
shall be held by a court of competent jurisdiction to be invalid, unenforceable,
or void, the remainder of this Agreement and such term, provision, covenant, or
condition as applied to other persons or circumstances shall remain in full
force and effect.
Section 2.7 Entire Agreement; Amendments.
(A) This Agreement and the other documents and agreements
delivered pursuant hereto constitute the full and entire agreement and
understanding among the parties with regard to the subjects hereof and thereof.
(B) This Agreement may not be amended orally. Amendment to
this Agreement, or of any supplement, and of the rights and obligations of the
Company and of the Holder, may be made only by the Company and Holder in
writing.
Section 2.8 Delays, Omissions, and Waivers. No delay or omission to
exercise any right, power or remedy (with the exception of a delay by an
Indemnified Party in providing notice to the Indemnifying Party pursuant to
Section 1.7(C) hereof) accruing to the Company or Holder, upon any breach or
default of any party hereto under this Agreement, will impair any such right,
power or remedy of the Company or Holder nor will it be construed to be a waiver
of any such breach or default, or an acquiescence therein, nor will any similar
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring; nor will any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of the Company or Holder of any provision or conditions of this
Agreement, must be in writing and will be effective only to the extent
specifically set forth in such writing. No waiver by the Holder of any provision
of this Agreement will be effective without a written consent signed by Holder.
Section 2.9 Authorization. Each of the undersigned representatives of
the parties warrants and represents that he is duly authorized to execute this
Agreement on behalf of the respective party for which he signs, and that the
organization on whose behalf he signs is currently in good standing in the
jurisdiction where organized.
-13-
Section 2.10 Gender, Number and Tense. Throughout this Agreement, as the
context may require:
(A) The masculine gender includes the feminine and neuter; and
the neuter gender includes the masculine and feminine; and
(B) The singular number includes the plural, and the plural
number includes the singular.
Section 2.11 Headings. The headings of the Sections and Subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part of this Agreement.
Section 2.12 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 2.13 Remedies. No remedy herein conferred upon the parties
hereto is intended to be exclusive of any other remedy herein or provided by
law, but each shall be cumulative and shall be in addition to every other remedy
set forth in this Agreement or existing at law, in equity, or by statute. The
parties specifically acknowledge that under certain circumstances the parties
may be entitled to specific performance and/or injunctive relief where without
such remedies the damage to the injured parties may be irreparable and money
damages inadequate. Moreover, in any suit between or among the parties hereto
for such breach of the provisions hereof, the prevailing party in such suit
shall be entitled to receive from the breaching party, reasonably attorneys'
fees and disbursements incurred in the prosecution of such suit.
[The remainder of this page has been left intentionally blank.]
-14-
Signature Page to Registration Rights Agreement - 8% Debentures
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
THE COMPANY:
U.S. WIRELESS DATA, INC., a Colorado corporation
By:________________________
Its:_______________________
THE HOLDER:
____________________________
[Print or Type Name]
____________________________
[Signature]
____________________________
____________________________
[Address for Notices]
____________________________
[Telephone Number, including area codes]
____________________________
[FAX Number, including area codes]
[Date]_____________________
-15-
