LETTER OF INTENT
Cardservice International, Inc. (CSI) and U.S. Wireless Data, Inc. (USWD) intend
to form a non-exclusive strategic partnership for the purpose of jointly
exploiting payment system opportunities using wireless technologies. This
document outlines the terms of the planned partnership agreement and constitutes
a non-binding Letter of Intent (LOI).
1. CSI will purchase $1,000,000 of USWD restricted stock through a private
placement. Shares of this stock will be priced at 3.0208 less 10 percent.
This price is based on the average market closing price for the three days
prior to Friday, September 25, 1998. The price is contingent on issuing a
joint announcement on Wednesday, September 30, 1998, and the completion of
a definitive agreement by October 31, 1998.
2. USWD and CCSI will simultaneously issue a press release regarding our
agreement to become strategic partners based on this LOI.
3. CSI agrees to promote the joint products and services within its own
markets and within other FDC organizations.
4. USWD agrees to aggressively promote joint products and services, such as
LinkPoint terminals, with other acquirers, and to enable referrals
originating from USWD's carrrier relationships (e.g., GTE). Historically,
carrier referrals have generated a large number of merchant contracts
without normal levels of selling expense.
5. CSI agrees to produce LinkPoint terminals using USWD's Wireless Express
Payment Service. Payment for the Wireless Express Payment Service includes
monthly service fees, one-time set-up fees, and transaction fees along the
lines previously discussed.
6. USWD agrees to give CSI "most favored" pricing with respect to the Wireless
Express Payment Service. CSI agrees give USWD "most favored" pricing for
its LinkPoint terminals.
7. In the definitive agreements, USWD will provide CSI with sufficient
protection provisions with respect to insuring that processing services
provided by USWD and its vendors to the strategic partnership will continue
without interruption. As such, USWD contemplates addressing the following
issues: 1) conveying intellectual property rights to CSI for the purposes
of manufacturing CDPD modems and wireless terminals: 2) assumption of USWD
communication contracts and facilities by CSI; 3) failure of USWD to meet
its financial obligations; and 4) the assignability of USWD's agreements
with certain telecommunication carriers to CSI.
8. USWD will present a plan, acceptable to CSI, for dealing with the convertible
preferred shares.
9. USWD and CSI will use best efforts to finalize and implement a definitive
agreement.
U.S. WIRELESS DATA Inc. Cardservice International, Inc.
By: By:
/s/ Xxxxx X. Xxxxxx /s/ Xxxxx Xxxxxxxxx
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Chairman and CEO President and CEO
Dated: September 30, 1998 Dated: September 30, 1998
