EXHIBIT 10.26
U.S. WIRELESS DATA, INC.
NOTE AND WARRANT PURCHASE AND SECURITY AGREEMENT
1. General. This Note and Warrant Purchase Agreement sets
forth the terms under which the undersigned ("Investor") agrees to purchase a
$250,000 principal amount, 8.5% Promissory Note (the "Note") of U.S. Wireless
Data, Inc., a Colorado corporation (the "Company") due September 9, 1998 (the
"Due Date"), together with warrants (the "Warrants") to purchase 20,000 shares
of the no par value Common Stock of the Company (the "Common Stock"),
exercisable until September 9, 2001 at a per share price equal to the closing
last sale price of the Common Stock as reported on the OTC Electronic Bulletin
Board as of the business day immediately preceding the date of purchase of the
Note and Warrants.
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.
2. Subscription Amount and Payment. Investor tenders $250,000
in full payment for the Note and Warrants.
3. Security Interest. The Company hereby grants the Investor a
security interest in the assets of the Company as described on Exhibit A to this
Agreement, and subject to the exceptions stated therein. The security interest
granted hereby is restricted to only so much collateral as may be necessary to
allow Investor to recover the amounts owed to it by the Company under the Note.
4. Company Need for Additional Financing; Investor's
Right of First Refusal.
a. Need for Additional Financing. Investor understands and agrees
that the Company is presently engaged in several negotiations aimed at
raising substantial additional equity financing in an amount of at
least $1,000,000, but may require additional bridge financing in the
form of Company debt in the immediate future, and prior to the time
when the Company is able to complete a more substantial equity or debt
financing (such intermediate funding being referred to hereafter as
the "Bridge Financing"). Investor agrees that the Company shall be
entitled to seek and obtain such Bridge Financing and may, as a part
of such financing, be required to grant a security interest to the
purchaser of that debt. Investor agrees that the Company may grant
such a security interest in and to Company assets to such bridge
financier and may modify the security interest granted hereby to allow
for the successful consummation of such Bridge Financing, provided
that any such security interest does not diminish the security
interest granted to Investor hereunder to the point where Investor is
not fully secured for the amount of the indebtedness owing to Investor
under the Note.
b. First Right of Refusal. Investor is hereby given a right of
first refusal to fund any such additional Bridge Financing. Upon
receipt by the Company of any bona fide proposal for such Bridge
Financing from any person, the Company shall provide a copy of the
proposal and/or a summary of the terms of such proposed financing to
Investor, which shall have one business day from receipt of such
information to determine whether to exercise its first right of
refusal, and fund the Bridge Financing on the same terms and
conditions as have been offered by the other party. If Investor
rejects such offer, or fails to respond within the applicable period,
the Company shall be free to accept such proposal from the other
party. Any substantial change in the terms of such proposal by the
other party subsequent to a rejection by Investor and prior to funding
shall reactivate Investor's first right of refusal, which shall be
presented to Investor on the revised terms.
5. Prepayment and/or Conversion of the Note. Investor
understands that the Company has been engaged in discussions with various
parties, including Investor, regarding the possible issuance by the Company of
additional debt or equity securities (apart from the Bridge Financing described
in Section 4 above), including the possible issuance of a Series B Preferred
Stock to be authorized and issued by the Company upon final agreement as to the
terms of such Series B Preferred Stock. The Company and Investor agree that at
any time prior to the Due Date of the Note, the Note shall be paid in full (as
to all amounts of unpaid principal and interest then owing) from the proceeds of
the sale of any equity or debt securities of the Company (including shares of
the Series B Preferred Stock), provided the Company has received gross proceeds
in the minimum amount of U.S. One Million Dollars ($1,000,000) from the sale of
such equity or debt securities (but from which amount any proceeds from a Bridge
Financing shall be excluded).
6. Investor's Representations and Warranties. Investor
represents, warrants and covenants to the Company that:
a. Investor has carefully reviewed the information contained in
the Company's Form SB-2 Registration Statement (the "Registration
Statement") filed by the Company with the United States Securities and
Exchange Commission (the "SEC") on May 14, 1998 and the Company's most
recent Quarterly Report on Form 10-QSB for the fiscal quarter ended
March 31, 1998. Investor acknowledges Investor has received, read,
understood and become thoroughly familiar with the Registration
Statement and the Form 10-QSB (including, without limitation, the
"Risk Factors" section set forth therein). Investor has not relied on
any information or statement not contained in the Memorandum. Investor
understands that an investment in the Company's securities is one of
high risk and that no person has been authorized to give any
information or to make any statement concerning the Company that in
any way contradicts what is stated in the Registration Statement.
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.
c. By reason of Investor's business and financial experience or
of those persons Investor has retained to advise Investor with respect
to Investor's investment in the Company, Investor, together with
Investor's advisors, has the capacity to evaluate the merits and risks
of the prospective investment.
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 said attorney and/or accountant have reviewed and
analyzed the Registration statement and Form 10-QSB.
f. Investor is able to bear the economic risk of this investment
and could afford a complete loss of such investment.
g. Investor is the sole party in interest as to Investor's Note
and is acquiring the Note for Investor's own account, for investment
only and not with a view toward the resale or distribution thereof.
h. Investor understands that neither the Note nor the shares of
Series B Preferred Stock that may be issued upon conversion of the
Note have been registered under the Securities Act of 1933 (the "Act")
and may not be resold unless registered or an exemption from such
registration is available. Investor agrees that Investor will not
attempt to dispose of the Note or, if applicable, the shares that may
be issued upon conversion of the Note, except in compliance with the
Act.
i. Investor has the authority to purchase the Note and to execute
any other instruments or documents required to be executed in
connection with a purchase of Note.
7. Indemnification. The Investor shall indemnify and hold
harmless the Company, the officers, directors, employees and/or agents of the
Company 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.
8. Events of Default. The Note will be considered in default
immediately upon the happening of any of the following events:
a. Failure to pay any installment of principal and interest
within ten (10) days of its due date; or
b. the Company (I) admits in writing its inability to pay its
debts generally as they become due, (II) files a petition in
bankruptcy or petition to take advantage of any insolvency act, (III)
makes an assignment for the benefit of its creditors, (IV) consents to
the appointment of a receiver of itself or of the whole or any
substantial part of its property, (V) on a petition in bankruptcy
filed against it, has an order for relief entered against it, and/or
(VI) files a petition or answer seeking reorganization or arrangement
under the federal bankruptcy laws or any state insolvency law, or
(VII) distributes any of its assets upon any dissolution, winding
up-or liquidation of the Company.
9. 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 with respect to its subject matter. The provisions of this
Agreement may not be modified or waived except in writing signed by
the party to be bound by any which modification or waiver.
10. Investor's Status. 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 accreditedinvestors within the meaning of Rule 501(a)
under the Act.
_X_ 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.
IN WITNESS WHEREOF, Investor has executed this Note Purchase
Agreement the 25th day of June, 1998.
RBB Bank Aktiengesellschaft ACCEPTED:
(Print Name)
/s/ Xxxxxxx Xxxxxxx, Headtrader U.S. WIRELESS DATA, INC.
(Signature)
Social Security or Tax I.D. Number: By: /s/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx, President
Address: Date: June 26, 1996
Burgring 16
8010 Graz
Austria
EXHIBIT A
COLLATERAL SUBJECT TO INVESTOR'S SECURITY INTEREST
The Company is currently in the process of financing the Tranz ENABLER which are
and will continue to be deployed with merchants subscribing to the Company's
credit card processing service. The Tranz Enabler asset and/or portion of the
monthly credit card processing revenue related to the repayment of the equipment
financing is excluded from the Security Interest defined in the following
paragraph.
(a) All receivable accounts, including present and future rights to payments for
goods and services; (b) all inventory accounts excluding Omron inventory related
to an Installment Note with Omron Systems (see Company's annual report or
quarterly financial statement); (c) all fixed assets; (d) all deposit accounts
and intangible assets recorded on the Company's financial statements.
