U.S. WIRELESS DATA, INC.
SUBSCRIPTION AGREEMENT made as of this ____ day of _____________, 2000
between U.S. Wireless Data, Inc., a corporation organized under the laws of the
State of Colorado with offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), and the undersigned (the "Subscriber").
WHEREAS, the Company desires to issue a maximum of 250 units ("Units") in a
private placement (the "Offering"), each Unit consisting of: (i) 10,000 shares
of Series C Convertible Preferred Stock (the "Preferred Shares"), each Preferred
Share convertible into shares of the Company's common stock, no par value (the
"Common Stock") as described in the Confidential Private Placement Memorandum
(the "Memorandum") and the Articles of Amendment to the Articles of
Incorporation including the Designation of Series C Convertible Preferred Stock;
and (ii) seven-year warrants (the "Warrants") to purchase a minimum of 100,000
shares of Common Stock, pursuant to the form of a Warrant Agreement, on the
terms and conditions hereinafter set forth; and
WHEREAS, the Subscriber desires to acquire the number of Units set forth on
the signature page hereof.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
I. SUBSCRIPTION FOR UNITS AND REPRESENTATIONS BY AND COVENANTS OF
SUBSCRIBER
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby subscribes for and agrees to purchase from the Company such
number of Units as is set forth upon the signature page hereof at a price equal
to $100,000 per Unit and the Company agrees to sell such Units to the Subscriber
for said purchase price, subject to the Company's right to sell to the
Subscriber such lesser number of Units as the Company may, in its sole
discretion, deem necessary or desirable. The purchase price is payable by
certified or bank check made payable to "American Stock Transfer & Trust
Company, as escrow agent for U.S. Wireless Data, Inc." or by wire transfer of
funds, contemporaneously with the execution and delivery of this Subscription
Agreement. This Agreement shall not be binding on the Company until it is
accepted by the Subscriber's offer in writing. The Preferred Shares and Warrants
will be delivered by the Company within 10 days following the consummation of
this offering as set forth in Article III hereof.
1.2 The Subscriber recognizes that the purchase of Units involves a
high degree of risk in that (i) the Company has incurred substantial losses from
operations; (ii) an investment in the Company is highly speculative and only
investors who can afford the loss of their entire investment should consider
investing in the Company and the Units; (iii) an investment in the Units is
illiquid; and (iv) transferability of the securities comprising the Units is
extremely limited, as well as other risk factors as more fully set forth in the
Memorandum.
1.3 The Subscriber represents and warrants that it is an "accredited
investor" as such term in defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933, as amended (the "Act"), as indicated by its
responses to the confidential investor questionnaire (the "Questionnaire"), and
that it is able to bear the economic risk of an investment in the Units. The
Subscriber further represents and warrants that the information furnished in the
Investor Questionnaire is accurate and complete in all material respects.
1.4 The Subscriber represents and warrants that the Subscriber did not
learn of the Offering directly or indirectly through any general solicitation or
advertising, including, but not limited to, learning of the Company or the
Offering as a result of viewing any press releases or similar types of publicly
available information which directly or indirectly resulted in the subscriber
subscribing for Units in the Offering. The Subscriber further understands that
the Company is relying, in part, on this representation to ensure compliance
with the federal securities laws.
1.5 The Subscriber acknowledges that it has prior investment
experience, including investment in non-listed and non-registered securities and
that it recognizes the highly speculative nature of this investment.
1.6 The Subscriber acknowledges receipt and careful review of the
Memorandum and all other documents furnished in connection with this transaction
(collectively, the "Offering Documents") and hereby represents that it has been
furnished by the Company during the course of this transaction with all
information regarding the Company which it has requested or desires to know; and
that such information and documents have, in its opinion, afforded the
Subscriber all of the same information that would be provided him in a
registration statement filed under the Act; that it has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers or other representatives of the Company concerning the terms and
conditions of the Offering, and any additional information which it had
requested. The Subscriber represents and warrants that it is relying solely on
the information contained in the Memorandum and obtained through its own due
diligence.
1.7 The Subscriber acknowledges that this offering of Units may
involve tax consequences and that the contents of the Memorandum do not contain
tax advice or information. The Subscriber acknowledges that it must retain its
own professional advisors to evaluate the tax and other consequences of an
investment in the Units.
1.8 The Subscriber acknowledges that the Units are being offered and
sold in reliance upon the exemption from registration provided by Section 4(2)
of the Act and provisions of Regulation D of the Act, and the Offering has not
been reviewed by the United States Securities and Exchange Commission ("SEC").
The Subscriber represents that the Preferred Shares and Warrants comprising its
Units are being purchased for its own account, for investment and not for
distribution or resale to others. The Subscriber agrees that it will not sell or
otherwise transfer the Preferred Shares or the Warrants unless they are
registered under the Act or unless an exemption from such registration is
available.
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1.9 The Subscriber understands that, except for the Common Stock,
there is no public market for the Company's securities. The Subscriber
understands that Rule 144 (the "Rule") promulgated under the Act requires, among
other conditions, a one year holding period prior to the resale (in limited
amounts) of securities acquired in a non-public offering without having to
satisfy the registration requirements under the Act. The Subscriber understands
that the Company makes no representation or warranty regarding its fulfillment
in the future of any reporting requirements under the Securities Exchange Act of
1934, as amended, or its dissemination to the public of any current financial or
other information concerning the Company, as is required by the Rule as one of
the conditions of its availability. The Subscriber understands and hereby
acknowledges that the Company is under no obligation to register the securities
comprising the Units under the Act, with the exception of certain registration
rights set forth in Article IV herein. The Subscriber agrees that the Company
may, if it desires, permit the transfer of the Preferred Shares, the shares of
Common Stock issuable upon conversion of the Preferred Shares (the "Conversion
Shares"), the Warrants or the shares of Common Stock issuable upon exercise of
the Warrants (the "Warrant Shares") (collectively, the "Securities") out of its
name only when its request for transfer is accompanied by an opinion of counsel
reasonably satisfactory to the Company that neither the sale nor the proposed
transfer results in a violation of the Act or any applicable state "blue sky"
laws (collectively "Securities Laws").
1.10 The Subscriber hereby agrees that, without the prior written
consent of Commonwealth Associates, L.P. (the "Placement Agent"), it will not
sell, transfer or otherwise dispose of the Securities for one year after the
final closing of the Offering and thereafter will not dispose of more than 25%
of the Securities on a cumulative basis during each subsequent 90 day period
thereafter (the "Lock-Up Period"); provided, however, that if the Company
undertakes any public offering within the first 12 months of the Lock-Up Period,
the Subscriber will not sell, transfer or otherwise dispose of the Securities
for such period of time after the closing of such offering (not to exceed six
months) as the managing underwriter or placement agent may request in writing
and the Placement Agent may agree to. This restriction on transfer will apply to
any securities issued in exchange for the Securities in any merger.
1.11 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Securities stating that they have
not been registered under the Act and setting forth or referring to the
restrictions on transferability and sale thereof, and to the issuance of stop
transfer instructions with respect thereto.
1.12 The Subscriber acknowledges that if it is a Registered
Representative of an NASD member firm, it must give such firm the notice
required by the NASD's Rules of Fair Practice, receipt of which must be
acknowledged by such firm on the signature page hereof.
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1.13 If the undersigned Subscriber is a partnership, corporation,
trust or other entity, such partnership, corporation, trust or other entity
further represents and warrants that: (i) it was not formed for the purpose of
investing in the Company; (ii) it is authorized and otherwise duly qualified to
purchase and hold the Units; and (iii) that this Subscription Agreement has been
duly and validly authorized, executed and delivered and constitutes the legal,
binding and enforceable obligation of the undersigned.
1.14 The Subscriber hereby represents that the address of Subscriber
furnished by him at the end of this Subscription Agreement is the undersigned's
principal residence if it is an individual or its principal business address if
it is a corporation or other entity.
1.15 The Subscriber hereby represents that, except as set forth in the
Offering Documents, no representations or warranties have been made to the
Subscriber by the Company or any agent, employee or affiliate of the Company,
including the Placement Agent, and in entering into this transaction, the
Subscriber is not relying on any information, other than that contained in the
Offering Documents and the results of independent investigation by the
Subscriber.
1.16 The Subscriber acknowledges that at such time as the Reserved
Shares (as defined below) are registered, sales of such securities will be
subject to state securities laws, including those of states which may require
any securities sold therein to be sold through a registered broker-dealer or in
reliance upon an exemption from registration.
1.17 The Subscriber acknowledges that there is no minimum number of
Units that must be sold in the Offering and that the Maximum Offering may be
increased by up to 250 Units ($25,000,000) without notice to Subscribers.
1.18 The Subscriber acknowledges that the Placement Agent and a
committee to be designated by the Placement Agent whose members hold in the
aggregate not less than 20% of the outstanding Preferred Shares or Warrants (the
"Committee") may consent to any amendments, modifications or waivers with
respect to the Preferred Shares or Warrants, thereby binding the Subscriber to
any such amendment, modification or waiver; provided, however, that no such
amendment, modification or waiver which would decrease the number of Conversion
Shares issuable upon the conversion of the Preferred Shares, or increase the
Conversion Price therefor (other than as a result of the waiver or modification
of any anti-dilution provisions) may be made without the approval of the holders
of at least 50% of the outstanding Preferred Shares. The Subscriber hereby
authorizes the Placement Agent and the Committee to act on the Subscriber's
behalf and grants the Placement Agent and the Committee an irrevocable proxy to
vote for any amendment or waiver to the Articles of Amendment to the Company's
Articles of Incorporation to effect the foregoing. The Subscriber agrees that
neither the Placement Agent nor any of its directors, officers, employees or
agents nor the Committee or any of its members shall be liable to any Subscriber
for any action taken or omitted to be taken by it in connection therewith,
except for willful misconduct or gross negligence. The Subscriber acknowledges
that one or more members of the Committee may be affiliated with the Placement
Agent. Any transferee of the Preferred Shares or Warrants shall agree to be
bound by this Section 1.18.
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1.19 The Subscriber agrees that unless written instructions from a
majority of the holders of the Preferred Shares is received instructing
otherwise, the Placement Agent will act on behalf of the holders of the
Preferred Shares in appointing and removing directors representing the Preferred
Shares.
1.20 The Subscriber acknowledges that the Company does not have
sufficient authorized shares of Common Stock to permit conversion of the
Preferred Shares or exercise of the Warrants. As a result, the Subscriber agrees
that it may not convert the Preferred Shares or exercise the Warrants until such
time the Company has sufficient authorized shares of Common Stock to permit
conversion or exercise of all the Preferred Shares and Warrants and that the
inability to convert the Preferred Shares or exercise the Warrants will deprive
the Subscriber of the value of the Preferred Shares or Warrants.
II. REPRESENTATIONS BY THE COMPANY
2.1 The Company represents and warrants to the Subscriber that prior
to the consummation of this Offering and at the Termination Date:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Colorado and has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this Subscription
Agreement by the Company will have been duly approved by the Board of Directors
of the Company and all other actions required to authorize and effect the offer
and sale of the Units and the securities contained therein will have been duly
taken and approved.
(c) The Preferred Shares and Warrants have been duly and validly
authorized and when issued and paid for in accordance with the terms hereof,
will be duly and validly issued and fully paid and non-assessable.
(d) The Company has, to the best of its knowledge, obtained, or
is in the process of obtaining, all licenses, permits and other governmental
authorizations necessary to the conduct of its business; such licenses, permits
and other governmental authorizations obtained are in full force and effect; and
the Company is in all material respects complying therewith; except where such
failure to obtain such licenses, permits and other governmental authorizations
necessary to the conduct of its business would not have a material adverse
effect on the Company's business or financial condition.
(e) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company is a party which could materially
adversely affect the business, property, financial condition or operations of
the Company.
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(f) The financial information contained in the Memorandum
presents fairly the financial condition of the Company as of the dates and for
the periods indicated.
III. TERMS OF SUBSCRIPTION
3.1 The subscription period will begin as of February 14, 2000 and
will terminate at 11:59 PM Eastern time on March 31, 2000, unless extended by
the Company and the Placement Agent for up to an additional 30 days (the
"Termination Date"). Such extension may be effected without notice to the
Subscribers. All of the Units will be offered on a "best efforts" basis.
3.2 As compensation for its services, the Placement Agent will
receive: (i) a commission equal to 7% of the aggregate purchase price of the
Units sold; (ii) a structuring fee equal to 3% of the aggregate purchase price
of the Units sold; (iii) reimbursement of up to $150,000 of accountable expenses
(including expenses incurred in connection with the Bridge Financing); and (iv)
seven-year warrants (the "Agent's Warrants") to purchase 25% of the Units to be
issued to investors, at the same price as paid by such investors. The Company
shall also pay all expenses in connection with the qualification of the Units
under the Securities Laws of the states which the Placement Agent shall
designate, including legal fees and filing fees.
3.3 Pending the sale of the Units, all funds paid hereunder shall be
deposited by the Company in escrow with American Stock Transfer & Trust Company.
3.4 The Subscriber hereby authorizes and directs the Company to
deliver certificates representing the securities to be issued to such Subscriber
pursuant to this Subscription Agreement either (a) to the residential or
business address indicated in the Questionnaire or (b) directly to the
Subscriber's account maintained with the Placement Agent, if any.
3.5 The Subscriber hereby authorizes and directs the Company to return
any funds for unaccepted subscriptions to the same account from which the funds
were drawn, including any customer account maintained with the Placement Agent.
3.6 If the Subscriber is not a United States person, such Subscriber
hereby represents that it has satisfied itself as to the full observance of the
laws of its jurisdiction in connection with any invitation to subscribe for the
Securities or any use of this Subscription Agreement, including (i) the legal
requirements within its jurisdiction for the purchase of the Units, (ii) any
foreign exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and (iv) the income
tax and other tax consequences, if any, that may be relevant to the purchase,
holding, redemption, sale or transfer of the securities comprising the Units.
Such Subscriber's subscription and payment for, and its continued beneficial
ownership of the Units, will not violate any applicable securities or other laws
of the Subscriber's jurisdiction.
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IV. REGISTRATION
4.1 Registration. The Company agrees to file a registration statement
under the 1933 Act, which shall include the Conversion Shares and the Warrant
Shares (collectively, the "Reserved Shares") on Form SB-2 or another available
form within nine months of the final closing of the Offering and shall use its
reasonable best efforts to have such registration statement declared effective
as soon as practicable thereafter.
4.2 Registration Procedures. The Company will:
(a) prepare and file with the SEC a registration statement with
respect to such securities, and use its best efforts to cause such registration
statement to become and remain effective;
(b) prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus contained therein as
may be necessary to keep such registration statement effective;
(c) furnish to the holders (the "Holders") participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities;
(d) use its best efforts to register or qualify the securities
covered by such registration statement under such state securities or blue sky
laws of such jurisdictions as the Holders may reasonably request in writing
within 20 days following the original filing of such registration statement,
except that the Company shall not for any purpose be required to execute a
general consent to service of process or to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified;
(e) notify the Holders, promptly after it shall receive notice
thereof, of the time when such registration statement has become effective or a
supplement to any prospectus forming a part of such registration statement has
been filed;
(f) notify the Holders promptly of any request by the SEC for the
amending or supplementing of such registration statement or prospectus or for
additional information;
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(g) prepare and file with the SEC, promptly upon the request of
any Holders, any amendments or supplements to such registration statement or
prospectus which, in the opinion of counsel for such Holders (and concurred in
by counsel for the Company), is required under the Act or the rules and
regulations thereunder in connection with the distribution of Common Stock by
such Holders;
(h) prepare and promptly file with the SEC and promptly notify
such Holders of the filing of such amendment or supplement to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at the time when a prospectus relating to such securities is
required to be delivered under the Act, any event shall have occurred as the
result of which any such prospectus or any other prospectus as then in effect
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and
(i) advise the Holders, promptly after it shall receive notice or
obtain knowledge thereof, of the issuance of any stop order by the SEC
suspending the effectiveness of such registration statement or the initiation or
threatening of any proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its withdrawal if such
stop order should be issued.
The Holders shall cooperate with the Company in providing the information
necessary to effect the registration of their Reserved Shares, including
completion of customary questionnaires. Failure by any Holder to cooperate in
providing information necessary to effect such registration shall result in such
Holder's securities being ineligible for inclusion in such registration
statement.
4.3 Expenses.
(a) With respect to the registration required pursuant to Section
4.1 hereof, all fees, costs and expenses of and incidental to such registration,
inclusion and public offering (as specified in paragraph (b) below) in
connection therewith shall be borne by the Company, provided, however, that the
Holders shall bear their pro rata share of the underwriting discount and
commissions and transfer taxes and the cost of their own counsel.
(b) The fees, costs and expenses of registration to be borne by
the Company as provided in paragraph (a) above shall include, without
limitation, all registration, filing, and NASD fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in 4.3(a) above). Fees and
disbursements of counsel and accountants for the Holders and any other expenses
incurred by the Holders not expressly included above shall be borne by the
Holders.
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4.4 Indemnification.
(a) The Company will indemnify and hold harmless each Holder of
Reserved Shares which are included in a registration statement pursuant to the
provisions of Section 4.1 hereof, its directors and officers, and any
underwriter (as defined in the Act) for such Holder and each person, if any, who
controls such Holder or such underwriter within the meaning of the Act, from and
against, and will reimburse such Holder and each such underwriter and
controlling person with respect to, any and all loss, damage, liability, cost
and expense to which such Holder or any such underwriter or controlling person
may become subject under the Act or otherwise, insofar as such losses, damages,
liabilities, costs or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any prospectus contained therein or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, damage, liability, cost or expenses
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission so made in conformity with information furnished
by or on behalf of such Holder, such underwriter or such controlling person in
writing specifically for use in the preparation thereof.
(b) Each Holder of Reserved Shares included in a registration
pursuant to the provisions of Section 4.1 hereof will indemnify and hold
harmless the Company, its directors and officers, any controlling person and any
underwriter from and against, and will reimburse the Company, its directors and
officers, any controlling person and any underwriter with respect to, any and
all loss, damage, liability, cost or expense to which the Company or any
controlling person and/or any underwriter may become subject under the Act or
otherwise, insofar as such losses, damages, liabilities, costs or expenses are
caused by any untrue statement or alleged untrue statement of any material fact
contained in such registration statement, any prospectus contained therein or
any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was so made in reliance upon and in
strict conformity with written information furnished by or on behalf of such
Holder specifically for use in the preparation thereof, or if the Holder sells
after receiving a notice as contemplated by Section 4.1(h) or (i) hereof.
(c) Promptly after receipt by an indemnified party pursuant to
the provisions of paragraph (a) or (b) of this Section 4.4 of notice of the
commencement of any action involving the subject matter of the foregoing
indemnity provisions such indemnified party will, if a claim thereof is to be
made against the indemnifying party pursuant to the provisions of said paragraph
(a) or (b), promptly notify the indemnifying party of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
hereunder. In case such action is brought against any indemnified party and it
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notifies the indemnifying party of the commencement thereof, the indemnifying
party shall have the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party,
provided, however, if counsel for the indemnifying party concludes that a single
counsel cannot under applicable legal and ethical considerations, represent both
the indemnifying party and the indemnified party, the indemnified party or
parties have the right to select separate counsel to participate in the defense
of such action on behalf of such indemnified party or parties. After notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of said paragraph (a) or (b) for
any legal or other expense subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation, unless (i) the indemnified party shall have employed counsel in
accordance with the provisions of the preceding sentence, (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the indemnified
party to represent the indemnified party within a reasonable time after the
notice of the commencement of the action or (iii) the indemnifying party has, in
its sole discretion, authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party.
V. MISCELLANEOUS
5.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Company, at its registered office ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Executive Officer and to the Subscriber at its address indicated on the last
page of this Subscription Agreement. Notices shall be deemed to have been given
on the date of mailing, except notices of change of address and notices sent
from outside the continental United States, which shall be deemed to have been
given when received.
5.2 This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Subscription Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged.
5.3 This Subscription Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
5.4 Notwithstanding the place where this Subscription Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of New York without regard to such states laws
regarding conflicts of laws. The parties hereby agree that any dispute which may
arise between them arising out of or in connection with this Subscription
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Agreement shall be adjudicated before a court located in New York City and they
hereby submit to the exclusive jurisdiction of the courts of the State of New
York located in New York, New York and of the federal courts in the Southern
District of New York with respect to any action or legal proceeding commenced by
any party, and irrevocably waive any objection they now or hereafter may have
respecting the venue of any such action or proceeding brought in such a court or
respecting the fact that such court is an inconvenient forum, relating to or
arising out of this Subscription Agreement or any acts or omissions relating to
the sale of the securities hereunder, and consent to the service of process in
any such action or legal proceeding by means of registered or certified mail,
return receipt requested, in care of the address set forth below or such other
address as the undersigned shall furnish in writing to the other.
5.5 This Subscription Agreement may be executed in counterparts. Upon
the execution and delivery of this Subscription Agreement by the Subscriber,
this Subscription Agreement shall become a binding obligation of the Subscriber
with respect to the purchase of Units as herein provided; subject, however, to
the right hereby reserved to the Company to enter into the same agreements with
other subscribers and to add and/or to delete other persons as subscribers.
5.6 The holding of any provision of this Subscription Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
5.7 It is agreed that a waiver by either party of a breach of any
provision of this Subscription Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.
5.8 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
5.9 Words that denote any gender are deemed to include the other
gender and words that denote a natural person are deemed to include an
artificial person. The singular is deemed to include plural and vice versa.
VI. BLUE SKY LEGENDS
California. The sale of securities which are the subject of this
agreement has not been qualified with the Commissioner of Corporations of the
State of California and the issuance of such securities or the payment or
receipt of any part of the consideration for such securities prior to such
qualification is unlawful, unless the sale of securities is exempt from
qualification by Section 25100, 25102 or 25105 of the California Corporations
Code. The rights of all parties to this agreement are expressly conditioned upon
such qualification being obtained, unless the sale is so exempt.
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Connecticut. The undersigned acknowledges that the Securities have not
been registered under the Connecticut Uniform Securities Act, as amended (the
"Connecticut Act") and are subject to restrictions on transferability and sale
of securities as set forth herein. The undersigned hereby agrees that such
Securities will not be transferred or sold without registration under the
Connecticut Act or exemption therefrom.
Pennsylvania. The undersigned hereby acknowledges that the Issuer is
relying upon the exemption from registration of securities set forth in Section
203(d) of the Pennsylvania Securities Act of 1972, as amended (the "Pennsylvania
Act") in connection with the sale of the Securities to the undersigned.
In accordance with the requirements of Section 203(d) of the
Pennsylvania Act, the undersigned hereby agrees not to sell its Securities
within twelve (12) months from the date of purchase except pursuant to Section
204.01 of the Blue Sky Regulations of the Pennsylvania Securities Act of 1972.
Additionally, the undersigned is aware of the right of withdrawal under Section
207(m) of the Act described in the cover pages of the Memorandum.
Texas. The undersigned hereby acknowledges that the Securities cannot
be sold unless they are subsequently registered under the Act, and the Texas
Securities Act, or an exemption from registration is available. The undersigned
further acknowledges that because the Securities are not readily transferable,
it must bear the economic risk of its investment for an indefinite period of
time.
12
IN WITNESS WHEREOF, the parties have executed this Subscription Agreement
as of the day and year first written above.
------------------------------ -----------------------------------
Signature of Subscriber Signature of Co-Subscriber
------------------------------ -----------------------------------
Name of Subscriber Name of Subscriber
(please print) (please print)
------------------------------ -----------------------------------
Address of Subscriber Address of Co-Subscriber
------------------------------ -----------------------------------
Social Security or Taxpayer Social Security or Taxpayer
Identification Number of Subscriber Identification Number of Subscriber
------------------------------
Subscriber's Account Number
at Commonwealth Associates, L.P.
--------------------------------
Dollar Amount of Units Subscribed For
*If Subscriber is a Registered Representative
with an NASD member firm, have the
following acknowledgment signed by the
appropriate party:
The undersigned NASD member firm Subscription Accepted:
acknowledges receipt of the notice required
by Rule 3050 of the NASD Conduct Rules. U.S. WIRELESS DATA, INC.
By:
-------------------------------------- ------------------------------
Name of NASD Member Firm Name:
----------------------------
Title:
By: --------------------------------- ----------------------------
Authorized Officer
----------------------------------
Dollar Amount of Unit Subscription
Accepted
13
