Exhibit 10.4
8% ADJUSTABLE RATE CONVERTIBLE DEBENTURES
of
U.S. WIRELESS DATA, INC.
(A Colorado Corporation)
SUBSCRIPTION AGREEMENT
1. General. This Agreement sets forth the terms under which
the undersigned ("Investor") agrees to purchase 8% Adjustable Rate Convertible
Debentures (the "Debentures") of U.S. Wireless Data, Inc., a Colorado
corporation (the "Company") in the amount set forth below. This Agreement is
delivered in connection with the offering being made pursuant to the Private
Offering Memorandum dated November 3, 1997 (the "Memorandum"). Execution of this
Agreement by the Investor shall constitute an offer by the Investor to subscribe
for Debentures, in the amount and on the terms and conditions specified herein.
The Company shall have the right to reject this subscription offer, or to accept
such offer by executing a copy of this Agreement. If the Investor's offer is
accepted, the Company will execute a copy of this Agreement and return it to
Investor.
By execution hereof, Investor acknowledges that Investor
understands that the Company is relying upon the accuracy of the representations
and warranties of Investor contained herein. Unless otherwise stated herein,
capitalized terms shall have the same meaning as stated in the Memorandum.
2. Subscription Amount and Payment. Investor hereby subscribes
for $___________________ of Debentures and hereby submits to the Company, c/o of
its escrow agent, Xxxxxx & Associates, Attorneys at Law, full payment for the
Debentures.
3. Investor's Representations and Warranties. Investor represents,
warrants and covenants to the Company that:
(a) Investor has been advised that no person is authorized to
give any information or to make any statement concerning the Company
that is not contained in the Memorandum. Investor acknowledges
Investor has received, read, understood and become thoroughly familiar
with the Memorandum (including, without limitation, the "Risk Factors"
section set forth therein). Investor has not relied on any information
or statement not contained in the Memorandum.
(b) Investor has had an adequate opportunity to discuss the
Company's business, management and financial affairs with the
Company's management and has received satisfactory responses to such
inquiries.
U.S. Wireless Data, Inc.
Subscription Agreement for 8%
Adjustable Rate Convertible Debentures
Page 2
(c) By reason of Investor's business and financial experience,
Investor has the capacity to evaluate the merits and risks of the
prospective investment in the Debentures.
(d) Investor has been informed that all documents, records and
books pertaining to the Company and this investment were at all times
available to Investor. Investor has utilized such access to Investor's
satisfaction for the purpose of obtaining information regarding the
investment. All documents, records and books pertaining to this
investment requested by Investor have been made available to Investor
and the persons Investor has retained to advise Investor with respect
to this investment. Investor and such persons have been supplied with
such additional information concerning this investment as they have
requested.
(e) To the extent Investor deemed necessary, Investor has
consulted with Investor's attorney and/or Investor's accountant
regarding all aspects of the proposed investment, including the tax
aspects thereof, and if requested by Investor, said attorney and/or
accountant have reviewed and analyzed the Memorandum on Investor's
behalf.
(f) Investor has adequate means of providing for Investor's
current needs and possible financial contingencies, and has no need,
and anticipates no need in the foreseeable future, to sell the
Debentures. Investor is able to bear the economic risks of this
investment and, consequently, without limiting the generality of the
foregoing, is able to hold the Debentures for an indefinite period of
time and has a sufficient net worth to sustain a loss of the entire
investment in the Company in the event such loss should occur.
(g) Investor is the sole party in interest as to Debentures being
acquired by the Investor and is acquiring the Debentures for
Investor's own account, for investment only and not with a view toward
the resale or distribution thereof.
(h) Investor understands that the Debentures, the shares of
Series A Preferred Stock into which the Debentures are convertible and
the shares of Common Stock issuable as interest on the Debentures,
dividends on the Preferred Stock and into which the Debentures and/or
the shares of Series A Preferred Stock are convertible (collectively
the Debentures, Series A Preferred Stock and the Common Stock are
referred to as the "Securities") are not registered under the
Securities Act of 1933 (the "1933 Act") and may not be resold unless
registered under the 1933 Act or
U.S. Wireless Data, Inc.
Subscription Agreement for 8%
Adjustable Rate Convertible Debentures
Page 3
an exemption from such registration is available. Investor agrees that
Investor will not attempt to dispose of Investor's Securities except in
compliance with the Act. The certificates representing the Securities
shall bear appropriate legends describing the restricted character of
the Securities.
(i) Investor has not distributed the Memorandum to anyone other
than Investor's advisors, accountant and/or attorney, and no one other
than Investor's advisors, accountant and/or attorney and Investor have
used the Memorandum.
(j) Investor has the authority to purchase the Debentures and to
execute any other instruments or documents required to be executed in
connection with a purchase of Debentures.
(k) Except as Investor has specifically advised the Company in
writing, a copy of which has been attached to this Subscription
Agreement, neither Investor, nor any immediate relative of Investor
(closer than a first cousin) is affiliated with any company,
partnership or firm that is registered as a broker/dealer with the
national Association of Securities Dealers, Inc. and/or under the
Securities Exchange Act of 1934, or as an investment advisor under the
Investment Advisor's Act.
(l) The Investor represents and warrants that Investor is an
accredited investor because (please initial all that are applicable):
___ The Investor is a director or executive
officer of the Company.
___ The Investor and Investor's spouse (if any)
have an aggregate net worth exceeding
$1,000,000.
___ The Investor has had an individual income in
excess of $200,000 or joint income with
Investor's spouse in excess of $300,000 in
each of the two most recent years and
reasonably expects the same income in the
current year.
___ The Investor is an entity in which all of
the equity owners are accredited investors
within the meaning of Rule 501(a) under the
Act.
U.S. Wireless Data, Inc.
Subscription Agreement for 8%
Adjustable Rate Convertible Debentures
Page 4
___ The Investor is a bank, savings and loan
association, broker or dealer, insurance
company, investment company, business
development company, small business
investment company, employee benefit plan,
non-profit organization, or trust meeting
the requirements of Rule 501(a) under the
Act.
4. Prohibited Transactions. The Investor agrees that he, she
or it shall not effect any short sales of the Company's Common Stock at any time
while the Investor holds any Debentures or Preferred Stock (into which the
Debentures are convertible) at any time while such securities are convertible
into shares of the Company's Common Stock.
5. Indemnification. The Investor shall indemnify and hold
harmless the Company and any selling broker/dealers, any corporation or entity
affiliated with any of the above, the officers, directors and employees of any
of the foregoing and any professional advisors thereto, from and against any and
all loss, damage, liability or expense, including costs and reasonable
attorneys' fees, to which they may be put or which they may incur by reason of
or in connection with any failure of the Investor's representations and
warranties to be fully true, correct, and complete or Investor's failure to
fulfill any of Investor's covenants or agreements under this Agreement.
6. Representations and Warranties of the Company.
(a) The Company has full power and authority to enter into the
transactions contemplated by this agreement.
(b) Debentures are duly authorized obligations of the Company,
enforceable per their terms.
(c) The Company shall not conduct any private offerings of its equity
securities in reliance upon the registration exemptions contained in
Regulations D or S under the 1933 Act or otherwise for 150 days from the
date of the initial closing of this offering, without the written consent
of the Investor. After such period, and continuing until the Company has
obtained the effectiveness of a registration statement registering the
shares of Common Stock issuable upon conversion of the Debentures and/or
the Series A Preferred Stock (unless such registration has been made
impossible by failure of the Investor to cooperate in such registration),
the Company shall not conduct any private offerings of its equity
securities in reliance upon the registration exemptions contained in
Regulations D or S under the 1933 Act or otherwise without first giving a
first right of refusal to the Investor to
U.S. Wireless Data, Inc.
Subscription Agreement for 8%
Adjustable Rate Convertible Debentures
Page 5
meet any bona fide offer which the Company has for such financing. The
Investor shall have two business days from the date notice of any such
offer (including the specific terms thereof) is first provided to the
Investor, to meet any such offer. Should the Investor fail to respond to
the offer within such time, or determine not to meet such offer, then the
Company shall be free to accept and complete such financing, provided it is
on terms no less favorable to the third party than those offered to the
Investor. In the event there is a material change in the terms of such
financing which results in terms more favorable to the third party as
compared to those offered to the Investor, or if the Company fails not
complete the financing on terms no less favorable to third party than those
offered to the Investor, within sixty (60) days of the date it became able
to do so free of the rights granted to the Investor hereunder, then the
Company shall again offer such financing to the Investor, and a new right
of first refusal period shall commence to run in favor of the Investor.
7. Conditions to be Met by the Company On or Before Closing. At or before
the closing of the offering the Investor shall receive:
(a) an opinion of Ireland Xxxxxxxxx Xxxxx and Xxxxxx, P.C., counsel to
the Company, in the form attached hereto as Exhibit A hereto;
(b) copies of the Shareholder Voting Agreement executed by management
of the Company and certain significant shareholders, in the form of Exhibit
B hereto; and
(c) copies of a Lock-up Agreement executed by Liviakis Financial
Communications, Inc., Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxx, in the form of
Exhibit C hereto.
8. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance
with the laws of the State of Colorado, excluding, however, so much of said
law as relates to conflict of laws and/or choice of law.
(b) This Agreement contains the entire agreement between the parties
regarding the purchase of the Debentures. The provisions of this Agreement
may not be modified or waived except in writing.
U.S. Wireless Data, Inc.
Subscription Agreement for 8%
Adjustable Rate Convertible Debentures
Page 6
IN WITNESS WHEREOF, Investor has executed this Subscription
Agreement the ____ day of ____________________, 1997.
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(Print Name)
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(Signature)
Social Security or Tax I.D. Number:
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Address:
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ACCEPTED:
U.S. WIRELESS DATA, INC.
By:________________________
Xxxx X. Xxxxx,
Chief Executive Officer
Date:______________________
