SUBSCRIPTION AGREEMENT
This
Subscription Agreement dated as of January 16, 2006 (the “Agreement”)
is
entered into by and among U.S. Wireless Data, Inc., a Delaware corporation
(the
“Company”),
and
the individuals and entities listed on Exhibit A
hereto
(the “Purchasers”).
BACKGROUND
WHEREAS,
the Company is offering in a private placement to “accredited investors” (as
such term in defined in Regulation D (“Regulation
D”)
promulgated under the Securities Act of 1933, as amended (the “Securities
Act”))
$1,000,000 of units consisting of (i) one share of common stock, $0.01 par
value
per share, of the Company (the “Common
Stock”)
and
(ii) one Warrant (the “Warrant”)
to
purchase, at an exercise price of $2.00 per share, one full share of Common
Stock (each unit is being sold at an offering price of $1.00 per unit (the
“Units”))
(the
“Offering”)
(provided that the Company reserves the right to sell up to an additional
1,000,000 Units);
WHEREAS,
the Purchaser desires to purchase that number of Units set forth on the
signature page hereof on the terms and conditions hereinafter set forth and
on
the terms and conditions set forth herein;
NOW,
THEREFORE, in consideration of the premises and the mutual representations
and
covenants hereinafter set forth, the parties hereto agree as
follows:
1. Authorization
and Sale of Units.
1.1 Authorization.
The
Company has, or before the Initial Closing (as defined in Section 2) will
have, duly authorized the sale and issuance, pursuant to the terms of this
Agreement, of (a) up to 2,000,000 shares of its Common Stock; and (b) Warrants
to purchase up to 2,000,000 shares of Common Stock in the form attached hereto
at Exhibit B.
1.2 Sale
of Units; for Units.
Subject
to the terms and conditions of this Agreement, at the applicable Closing, the
Company will sell and issue to each of the Purchasers, and each of the
Purchasers will purchase the number of Units set forth opposite such Purchaser’s
name on Exhibit A
for the
purchase price of $1.00 per Unit. The shares of Common Stock and the Warrants
being sold under this Agreement are sometimes hereinafter collectively referred
to as the “Securities.”
The
Company’s agreement with each of the Purchasers is a separate agreement, and the
sale of Units to each of the Purchasers is a separate sale.
To
subscribe for Units, this Agreement must be properly completed, executed and
delivered to [American Stock Transfer and Trust Company, 00 Xxxxxx Xxxx, Xxx
Xxxx, XX 00000, Attention: _________], accompanied by a check payable to
“American Stock Transfer and Trust Company, Escrow Agent for U.S. Wireless Data,
Inc.” (the “Escrow Agent”). A Purchaser desiring to deliver the purchase price
for the Units in the form of wire transfer shall wire to the Escrow Agent at:
[Name of Bank], [Address], ABA# [_______], Account # [_______], Attention:
[_________]. [The
minimum amount is $________, although, with the consent of the Company,
Purchasers may subscribe for, and the Company, in its sole discretion, may
accept less than the minimum amount.] If the purchase price is paid by wire
transfer, the Purchaser shall (i) include the Purchaser's name in the wire
transfer instructions; and (ii) request from the bank or other financial
institution that is originating the transfer the federal wire number with
respect to the and retain that number for future reference.
1.3 Use
of
Proceeds.
The
Company will use the proceeds from the sale of the Units for working capital
and
general corporate purposes.
2. The
Closing.
The
initial closing of the sale and purchase of 1,000,000 Units under this Agreement
shall take place at such time and place as the Company may designate (the
“Initial Closing,”
and
the date on which the Initial Closing occurs, the “Initial
Closing Date”).
Following the Initial Closing Date, and up to January 16, 2006, the Company
may
hold additional closings (each, with the Initial Closing, a “Closing”,
and
each such date, with the Initial Closing Date, a “Closing
Date”)
at
such places and times as designated by the Company until the earlier of (i)
such
time as the Company has sold up to an additional 1,000,000 Units or (ii) January
16, 2006. There is no assurance that any additional Units will be
sold.
Promptly
following the applicable Closing, the Company shall deliver to each of the
Purchasers a certificate for the number of shares of Common Stock and warrant
agreements for the number Warrants being purchased by such Purchaser, registered
in the name of such Purchaser, against payment to the Company of the purchase
price therefor by check or wire transfer, as specified in Exhibit
A.
The
Purchaser hereby authorizes and directs the Company to deliver the Securities
to
be issued to the Purchaser pursuant to this Agreement directly to the
residential or business address indicated on the signature page
hereto.
3. Representations
of the Purchasers.
Each of
the Purchasers severally represents and warrants to the Company as
follows:
(a) The
Purchaser has received and carefully reviewed such information and documentation
relating to the Company that the Purchaser has requested, including without
limitation, the Company’s filings with the United States Securities and Exchange
Commission (the “Commission”).
(b) The
Purchaser
has had a reasonable opportunity to ask questions of and receive answers from
the Company concerning the Company and the Offering, and all such questions,
if
any, have been answered to the full satisfaction of the Purchaser.
(c) The
Purchaser understands that the Company has determined that the exemption from
the registration provisions of the Securities Act provided by Regulation D
is
applicable to the offer and sale of the Securities, based, in part, upon the
representations, warranties and agreements made by the Purchaser
herein.
(d) Except
as
set forth herein, no representations or warranties have been made to the
Purchaser by the Company or any agent, employee or affiliate of the Company
and
in entering into this transaction, the Purchaser is not relying upon any
information other than the results of independent investigation by the
Purchaser.
2
(e) The
Purchaser has full power and authority to execute and deliver this Agreement
and
to perform the obligations of the Purchaser hereunder and this Agreement is
a
legally binding obligation of the Purchaser in accordance with its
terms.
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(f)
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Regulation D.
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(i) The
Purchaser understands and acknowledges that: (A) the Securities acquired
pursuant to this Agreement have not been registered under the Securities Act
and
are being sold in reliance upon an exemption from registration afforded by
Regulation D; and that such Securities have not been registered with any
state securities commission or authority; (B) pursuant to the requirements
of
Regulation D, the Securities may not be transferred, sold or otherwise
exchanged unless in compliance with the provisions of Regulation D and/or
pursuant to registration under the Securities Act, or pursuant to an available
exemption thereunder; and (C) other than as set forth in Section 5.1 of this
Agreement, the Company is under no obligation to register the Securities under
the Securities Act or any state securities law, or to take any action to make
any exemption from any such registration provisions available.
(ii) The Purchaser is an accredited investor within the meaning of Rule 501 of Regulation D, is knowledgeable, sophisticated and experienced in making, and is qualified to make, decisions with respect to investment shares representing an investment decision like that involved in the purchase of the Securities.
(iii) The
Purchaser is purchasing the Securities for his, her or its own account for
investment only and has no intention of selling or distributing the Securities
and no other person has any interest in or participation in the Securities
or
any right, option, security interest, pledge or other interest in or to the
Securities. The Purchaser recognizes that an investment in the Securities
involves a high degree of risk, including a risk of total loss of the Purchaser.
The Purchaser understands, acknowledges and agrees that it must bear the
economic risk of its investment in the Securities for an indefinite period
of
time and has knowledge and experience in financial and business matters such
that it is capable of evaluating the risks of the investment in the Securities
and the Purchaser understands, acknowledges and agrees that prior to any such
offer or sale, the Company may require, subject to the fulfillment of the
Company’s obligations under Section 6 of this Agreement, as a condition to
effecting a transfer of the Securities, an opinion of counsel, acceptable to
the
Company, as to the registration or exemption therefrom under the Securities
Act
and any state securities acts, if applicable.
(iv) The
Purchaser acknowledges that the Securities will bear a legend in substantially
the following form:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR TNX TELEVISION HOLDINGS, INC. SHALL HAVE RECEIVED
AN
OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES
ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.
3
(g) Neither
the Purchaser, nor
any
affiliate of the Purchaser or any person acting on his, her or its behalf,
has
recently sold shares of unregistered Common Stock of the Company.
4. Condition
to the Obligations of the Company.
The
obligations of the Company under Section 1.2 of this Agreement are subject
to fulfillment, or the waiver, of the following condition on or before the
Closing:
4.1 Accuracy
of Representations and Warranties.
The
representations and warranties of the Purchasers contained in Section 3
shall be true on and as of the Closing Date with the same effect as though
such
representations and warranties had been made on and as of that date (except
that
any representation or warranty expressly stated to have been made or given
as of
a specific date need be true only as of such date).
5.
Covenants
of the Company.
5.1 Piggyback
Registration Rights.
If at
any time the Company shall determine to register under the Securities Act any
of
its securities (other than on Form S-8 or Form S-4 or their then equivalents
and
other than shares to be issued solely (i) in connection with any acquisition
of
any entity or business (ii) upon the exercise of stock options, or (iii)
pursuant to employee benefit plans), it shall send to each holder of Registrable
Shares (as defined below), including each holder who has the right to acquire
Registrable Shares, written notice of such determination and, if within thirty
(30) days after receipt of such notice, such holder shall so request in writing,
the Company shall use its commercially reasonable efforts to include in such
registration statement all or any part of the Registrable Shares such holder
requests to be registered therein; provided that, if, in connection with any
offering involving an underwriting of Common Stock to be issued by the Company,
the managing underwriter shall prohibit the inclusion of shares of Common Stock
by selling holders in such registration statement or shall impose a limitation
on the number of shares of such Common Stock which may be included in any such
registration statement because, in its judgment, such limitation is necessary
to
effect an orderly public distribution, and such limitation is imposed pro rata
with respect to all securities whose holders have a contractual, incidental
(“piggyback”) right to include such securities in the registration statement and
as to which inclusion has been requested pursuant to such right and there is
first excluded from such registration statement all shares of Common Stock
sought to be included therein by (i) any holder thereof not having any such
contractual, incidental registration rights, and (ii) any holder thereof having
contractual, incidental registration rights subordinate and junior to the rights
of the holders of Registrable Shares, the Company shall then be obligated to
include in such registration statement only such limited portion (which may
be
none) of the Registrable Shares with respect to which such holder has requested
inclusion hereunder. “Registrable Shares” means the shares of Common Stock
included in the Units and the shares of Common Stock underlying the Warrants
included in the Units; provided, however, that shares of Common Stock shall
cease to be Registrable Shares upon any sale of such shares pursuant to (i)
a
registration statement filed under the Securities Act, or (ii) Rule 144
promulgated under the Securities Act.
4
5.2 Reservation
of Common Stock.
The
Company shall reserve and maintain a sufficient number of shares of Common
Stock
for issuance upon exercise of all of the outstanding Securities.
6. Transfer
of Securities.
The
Subscriber is aware that the Company will make a notation in its appropriate
records and issue “stop transfer” instructions to its transfer agent with
respect to the restrictions on the transferability of such
Securities.
(a) The
Purchaser understands that this subscription is not binding upon the Company
until the Company accepts it, which acceptance is at the sole discretion of
the
Company and is to be evidenced by the Company’s execution of this Agreement
where indicated. This Agreement shall be null and void if the Company does
not
accept it as aforesaid. In the event the Company does not accept the Offering
proceeds, the Offering will not be completed and all Offering proceeds will
thereafter be promptly returned to the Purchasers without interest or deduction.
The undersigned understands that the Company may, in its sole discretion, reject
this subscription, in whole or in part, and/or reduce this subscription in
any
amount and to any extent, whether or not pro rata reductions are made of any
other investor’s subscription.
(b) Subject
to applicable state securities laws, the subscription delivered to the Company
by the Purchaser pursuant to this Agreement is not subject to revocation by
the
Purchaser, but may be rejected by the Company, in whole or in part, in the
Company’s sole discretion, in which event the purchase price and execution copy
of this Agreement submitted will be returned (by mail) to the undersigned
without interest or deduction within 15 business days thereafter.
7. The
Shares are subject to standard anti-dilution provisions in the event of forward
or reverse stock splits or recapitalizations. For example, if the Company
engages in a two for one reverse stock split, a holder of 100,000 Shares will
be
affected as follows:
Pre-Split
Ownership:
100,000
Shares
Post-Split
Ownership:
50,000
Shares
8. Miscellaneous.
8.1 Successors
and Assigns.
This
Agreement and any rights and obligations hereunder may not be transferred or
assigned by the Purchaser without the prior written consent of the Company.
This
Agreement shall inure to the benefit of, and be binding upon the Company and
the
Purchaser and their respective heirs, legal representatives and permitted
assigns.
8.2 Survival.
All
representations and warranties and all covenants, agreements and obligations
made by the Company or the Purchasers in this Agreement, or in any instrument
or
document furnished in connection with this Agreement or the transactions
contemplated hereby, shall survive the Closing and any investigation at any
time
made by or on behalf of any indemnified party.
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8.3. Indemnification.
The
Purchaser agrees to indemnify the Company and hold it harmless from and against
any and all losses, damages, liabilities, costs and expenses which it may
sustain or incur in connection with the breach by the Purchaser of any
representation, warranty or covenant made by the Purchaser .
8.4 Notices.
All
notices or other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or mailed by certified
or
registered mail, return receipt requested, postage prepaid, as follows:
(a) If
to the
Company, to U.S. Wireless Data, Inc., x/x Xxxxxx Xxxxxxx, 000 Xxxx
00xx
Xxxxxx,
00xx
Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Executive Officer or to such other
address as the Company or the undersigned shall have designated to the other
by
like notice.
(b) If
to a
Purchaser, at his, her or its address set forth on Exhibit A,
or at
such other address or addresses as may have been furnished to the Company in
writing by such Purchaser.
8.5 Entire
Agreement.
This
Agreement and the Warrant embody the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede
all
prior agreements and understandings relating to such subject matter.
8.6 Amendments
and Waivers.
Except
as otherwise expressly set forth in this Agreement, any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the majority of
the
Purchasers. No waivers of or exceptions to any term, condition or provision
of
this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
8.7 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original, but all of which shall be one and the same document.
8.8 Section
Headings.
The
section headings are for the convenience of the parties and in no way alter,
modify, amend, limit, or restrict the contractual obligations of the parties.
8.9 Severability.
The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
8.10 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
[signature
page to follow]
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| SIGNATURE PAGE | Date Signed: __________ , 200_ | |
| Number of Units: | _____________ | |
| Multiplied by Offering Price Per Unit: | x $1.00 | |
| Equals Amount: |
= $____________________
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| Signature |
Second Signature
(if purchasing jointly)
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| Printed Name | Printed Second Name | |
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| Entity Name | Entity Name | |
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| Address | Address | |
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| City, State and Zip Code | City, State and Zip Code | |
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| Telephone-Business | Telephone-Business | |
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| Facsimile-Business | Facsimile-Business | |
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| Tax ID # or Social Security # | Tax ID # or Social Security # | |
| Name in which securities should be issued: | ||
This
Agreement is agreed to and accepted as of January 16, 2006.
| U.S WIRELESS DATA, INC. | ||
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| By: | /s/ Xxxxxx Xxxxx | |
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Name: Xxxxxx Xxxxx |
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| Title: Chief Executive Officer | ||
EXHIBIT
A
List
of Purchasers
|
Name
and Address
of
Purchaser
|
No.
of Units
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Aggregate
Purchase
Price
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$
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$
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$
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$
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$
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$
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$
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$
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$
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TOTALS:
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$
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EXHIBIT
B
Warrant
