THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAWS OF ANY STATE (THE "ACTS") AND MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACTS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
No. ____ March 31, 2000
WARRANT TO PURCHASE COMMON STOCK
OF
U.S. WIRELESS DATA, INC.
This certifies that, for value received, Bold Street, LLC ("Holder"), with
an address c/o Thomson Kernaghan & Co., 365 Bay Street, Suite 1000, 10th Floor,
Toronto, Ontario M5H 2V2, is entitled, subject to the terms set forth below, to
purchase from U.S. WIRELESS DATA, INC. (the "Company"), a Colorado corporation,
150,000 fully paid and non-assessable shares (the "Shares") of the Common Stock
of the Company ("Common Stock"), as constituted on the date hereof (the "Warrant
Issue Date"), with the Notice of Exercise attached hereto duly executed, and
simultaneous payment therefor in lawful money of the United States, or, as
provided in Section 3, Common Stock, at the Exercise Price as set forth in
Section 2 below. The number, character and Exercise Price of such shares of
Common Stock are subject to adjustment as provided below.
1. Term of Warrant. This Warrant shall be exercisable, in whole or in
part, during the term commencing the date hereof and ending at 5:00 p.m. (New
York City time) on April 30, 2004.
2. Exercise Price and Number of Shares.
2.1 Exercise Price. The exercise price at which this Warrant may
be exercised shall be $2.28 per share of Common Stock, as adjusted from time to
time pursuant to Section 10 hereof (the "Exercise Price").
2.2 Number of Shares. The number of shares of Common Stock which
may be purchased pursuant to this Warrant shall be 150,000 shares, as adjusted
from time to time pursuant to Section 10 hereof.
3. Exercise of Warrant.
(a) The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part at any time during the term of
this Warrant, or from time to time, by the surrender of this Warrant and the
Exercise Form, annexed hereto duly completed and executed on behalf of the
Holder, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company) upon payment in cash or by
check acceptable to the Company. In lieu of the payment of the Exercise Price,
the Holder shall have the right (but not the obligation), during the exercise
period, to require the Company to convert this Warrant, in whole or in part,
into the Warrant Shares as provided for in this Section (the "Conversion
Right"). Upon exercise of the Conversion Right, the Company shall deliver to the
Holder (without payment by the Holder of the Exercise Price) that number of
shares of Common Stock equal to (i) the number of Shares issuable upon exercise
of the portion of the Warrant being converted, multiplied by (ii) the quotient
obtained by dividing (x) the value of the Warrant on a per Share basis) at the
time the Conversion Right is exercised (determined by subtracting the Exercise
Price from the Current Market Price (as determined pursuant to Section 3(d)
below), for the shares of Common Stock issuable upon exercise of the Warrant
immediately prior to the exercise of the Conversion Right) by (y) the Current
Market Price of one share of Common Stock immediately prior to the exercise of
the Conversion Right. The Conversion Rights provided under this Section may be
exercised in whole or in part and at any time and from time to time while any
Warrants remain outstanding. In order to exercise the Conversion Right, the
Holder shall surrender to the Company, at its offices, this Warrant accompanied
by the Cashless Exercise Form duly filled in and signed. The presentation and
surrender shall be deemed a waiver of the Holder's obligation to pay all or any
portion of the aggregate purchase price payable for the Shares being issued upon
such exercise of this Warrant. This Warrant (or so much thereof as shall have
been surrendered for conversion) shall be deemed to have been converted
immediately prior to the close of business on the day of surrender of this
Warrant for conversion in accordance with the foregoing provisions. As promptly
as practicable on or after the conversion date, the Company shall issue and
shall deliver to the Holder (i) a certificate or certificates representing the
largest number of Shares which the Holder shall be entitled as a result of the
conversion, and (ii) if such Warrant is being converted in part only, a new
Warrant exercisable for the number of Shares equal to the unconverted portion of
the Warrant.
(b) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of its surrender for
exercise and the person entitled to receive the shares of Common Stock issuable
upon such exercise shall be treated for all purposes as the holder of record of
such shares as of the close of business on such date. As promptly as practicable
on or after such date, the Company at its expense shall issue and deliver to the
person or persons entitled to receive the same a certificate or certificates for
the number of shares issuable upon such exercise. In the event that this Warrant
is exercised in part, the Company at its expense will execute and deliver a new
Warrant of like tenor exercisable for the number of shares for which this
Warrant may then be exercised.
(c) If this Warrant is exercised in part this Warrant must be
exercised or converted, as the case may be, for a number of whole shares of the
Common Stock.
(d) The Current Market Price per Share on any date shall be
deemed to be the average of the daily closing bid prices for the five (5)
consecutive trading days immediately preceding the date in question. The closing
price for each day shall be the last reported sales price regular way or, in
case no such reported sale takes place on such day, the closing bid price
regular way, in either case on the principal national securities exchange on
which the Common Stock is listed or admitted to trading or, if the Common Stock
is not listed or admitted to trading on any national securities exchange, the
highest reported bid price for the Common Stock as furnished by the National
Association of Securities Dealers, Inc. through NASDAQ or a similar organization
if NASDAQ is no longer reporting such information. If on any such date the
Common Stock is not listed or admitted to trading on any national securities
exchange and is not quoted by NASDAQ or any similar organization, the fair value
of a share of Common Stock on such date, as determined in good faith by the
Board of Directors of the Company, whose determination shall be conclusive
absent manifest error, shall be used.
4. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft destruction or mutilation of this
Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement reasonably satisfactory in form and substance to the Company
or, in the case of mutilation, on surrender and cancellation of this Warrant,
the Company at its expense shall execute and deliver, in lieu of this Warrant, a
new warrant of like tenor and amount.
5. Rights of Stockholders. The Holder shall not be entitled to vote or
receive dividends or be deemed the holder of Common Stock, nor shall anything
contained herein be construed to confer upon the Holder, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, or change of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have been exercised as
provided herein.
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6. Transfer of Warrant.
6.1 Exchange of Warrant Upon a Transfer. Upon delivery by the
transferee of a written agreement to be bound by the terms of this Warrant and
surrender of this Warrant for exchange, properly endorsed and transferred in
accordance with this Section 6, the Company at its expense shall issue to or on
the order of the Holder a new warrant or warrants of like tenor, in the name of
the Holder or as the Holder (on payment by the Holder of any applicable transfer
taxes) may direct, of the number of shares issuable upon exercise hereof.
6.2 Restrictions on Transfer; Compliance with Securities Laws.
(a) The Holder of this Warrant, by acceptance hereof,
acknowledges that this Warrant and the shares of Common Stock to be issued upon
exercise hereof are being acquired solely for the Holder's own account and not
as a nominee for any other party, and for investment and agrees to comply with
the transfer restrictions contained in this Section 6.2. The Holder will not
offer, sell or otherwise dispose of this Warrant or any shares of Common Stock
to be issued upon exercise hereof ("Shares"), except under circumstances that
will not result in a violation of applicable federal and state securities laws.
Prior to offering, selling or otherwise disposing of the Warrants or Shares, the
holder hereof or thereof will give the Company a written notice describing the
manner and circumstances of the transfer accompanied by, if requested by the
Company, a written opinion of legal counsel satisfactory to the Company to the
effect, as amended, that the proposed transfer may be effected without
registration under the Securities Act of 1933 or any state blue sky law. Any
Warrant or Shares transferred in violation of applicable federal and state
securities laws shall be void and not recognized by the Company. Any transferee
of this Warrant or Shares shall execute an agreement agreeing to be bound by the
terms of this Section 6.
(b) All shares of Common Stock issued upon exercise hereof shall
be stamped or imprinted with a legend in substantially the following form (in
addition to any legend required by state securities laws):
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED
STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR
INDIRECTLY, NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF THE
COMPANY, WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE
UNITED STATES FEDERAL SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
EXEMPTION THEREFROM, SUCH COMPLIANCE AT THE OPTION OF THE COMPANY, TO BE
EVIDENCED BY AN OPINION OF SHAREHOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE
COMPANY, THAT NO VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT
FROM ANY PROPOSED TRANSFER OR ASSIGNMENT."
7. Reservation of Stock. The Company covenants that during the term
that this Warrant is exercisable, the Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the exercise of this Warrant and, from time to
time, will take all steps necessary to amend its Certificate of Incorporation
(the "Certificate") to provide sufficient reserves of shares of Common Stock
issuable upon the exercise of the Warrant. The Company further covenants that
all shares that may be issued upon the exercise of rights represented by this
Warrant, upon exercise of the rights represented by this Warrant and payment of
the Exercise Price, all as set forth herein, will be free from all taxes, liens
and charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously or otherwise specified herein), and will be
validly issued, fully paid and nonassessable.
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8. Notices. Whenever the Exercise Price or number of shares
purchasable hereunder shall be adjusted pursuant to Section 10 hereof, the
Company shall issue a certificate signed by its Chief Financial Officer setting
forth, in reasonable detail, the event requiring the adjustment, the amount of
the adjustment, the method by which such adjustment was calculated, and the
Exercise Price and number of shares purchasable hereunder after giving effect to
such adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Warrant.
9. Amendments.
(a) Any term of this Warrant may be amended with the written
consent of the Company and the Holder. Any amendment effected in accordance with
this Section 9 shall be binding upon the Holder, each future Holder and the
Company.
(b) No waivers of, or exceptions to, any term, condition or
provision of this Warrant, 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.
10. Adjustments. The number of shares purchasable hereunder is subject
to adjustment from time to time as follows:
10.1 Reorganization, Merger or Sale of Assets. If at any time
while this Warrant, or any portion thereof, is outstanding and unexpired there
shall be (i) a reorganization (other than a combination, reclassification,
exchange or subdivision of shares otherwise provided for herein), (ii) a merger
or consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or a reverse triangular merger in which the
Company is the surviving entity but the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, or (iii) a sale or transfer of the Company's properties and assets
as, or substantially as, an entirety to any other person, then, as a part of
such reorganization, merger, consolidation, sale or transfer, lawful provision
shall be made so that the holder of this Warrant shall thereafter be entitled to
receive upon payment of the Exercise Price then in effect, the number of shares
of stock or other securities or property of the successor corporation resulting
from such reorganization, merger, consolidation, sale or transfer that a holder
of the shares deliverable upon exercise of this Warrant would have been entitled
to receive in such reorganization, consolidation, merger, sale or transfer if
this Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 10. The foregoing provisions of this Section 10.1 shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation that are
at the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
value of such consideration shall be determined in good faith by the Company's
Board of Directors. In all events, appropriate adjustment (as determined in good
faith by the Company's Board of Directors) shall be made in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.
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10.2 Reclassification. If the Company, at any time while this
Warrant, or any portion thereof, remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 10.
10.3 Dividend, Split, Subdivision or Combination of Shares. If
the Company at any time while this Warrant, or any portion thereof, remains
outstanding and unexpired shall (i) declare a dividend or make a distribution on
the securities as to which purchase rights under this Warrant exist payable in
shares of its capital stock or securities convertible into or exchangeable for
capital stock or (ii) split, subdivide or combine the securities as to which
purchase rights under this Warrant exist, then, in each case, the Exercise Price
in effect, and the number of shares issuable upon exercise of the Warrant, at
the time of the record date for such dividend or at the effective date of such
split, subdivision or combination, shall be proportionately adjusted so that the
holders of the Warrant after such time shall be entitled to receive upon
exercise of the Warrant the aggregate number and kind of shares which, if such
Warrant had been exercised immediately prior to such time, such holders would
have owned upon such exercise and immediately thereafter been entitled to
receive by virtue of such dividend, split, subdivision or combination. Such
adjustment shall be made successively whenever any event listed above shall
occur, subject to further adjustment as provided in this Section 10.
11. Registration Rights. Holder shall have unlimited "piggyback"
registration rights as to the Shares, provided that Holder shall not be entitled
to "piggyback" on a registration statement with respect to an underwritten
public offering if (a) the underwriter advises the Company that the inclusion of
the Shares would adversely affect the contemplated public offering and (b) no
affiliates of the Company are selling stockholders in such offering. The Company
shall bear the expenses related to any such registration, except for commissions
or discounts payable to broker-dealers in respect of the sale of the Shares. The
registration rights referred to herein shall terminate if the Shares are
saleable without restriction under Rule 144(k) promulgated under the Securities
Act of 1933.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officers thereunto duly authorized.
Dated March 31, 2000
U.S. WIRELESS DATA, INC.
By: /s/
---------------------------------
Charles I. Leone
Chief Financial Officer
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CASH EXERCISE FORM
TO: U.S. WIRELESS DATA, INC.
805 Third Avenue, 8th Floor
New York, New York 10022
Attention: Chief Executive Officer
(1) The undersigned hereby elects to purchase _______ shares of Common
Stock of U.S. WIRELESS DATA, INC. pursuant to the terms of the attached Warrant
and tenders herewith payment of the purchase price for such shares in full.
(2) In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock are being acquired solely for the
account of the undersigned and not as a nominee for any other party, and for
investment, and that the undersigned will not offer, sell or otherwise dispose
of any such shares of Common Stock except under circumstances that will not
result in a violation of the Securities Act of 1933, as amended, or any state
securities laws.
(3) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:
------------------------------------
(Name)
------------------------------------
(Signature)
(4) Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
------------------------------------
(Name)
- ----------------------- ------------------------------------
(Date) (Signature)
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To:
CASHLESS EXERCISE FORM
(To be executed upon conversion of the attached Warrant)
The undersigned hereby irrevocably elects to surrender its Warrant for the
number of Shares as shall be issuable pursuant to the cashless exercise
provisions of Section 1 of the within Warrant, in respect of ________ Shares
underlying the within Warrant, and requests that certificates for such Shares be
issued in the name of and delivered to:
(Print Name, Address and Social Security
or Tax Identification Number)
and, if such number of Shares shall not be all the shares exchangeable or
purchasable under the within Warrant, that a new Warrant for the balance of the
Shares covered by the within Warrant be registered in the name of, and delivered
to, the undersigned at the address stated below.
Date:
------------------------------
Name: (Print)
------------------------------
Address:
-----------------------------------------------------------------
- ---------------------------------- (Signature)
Signature
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