SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
Amendment No. 3
[Mark One]
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________________ to_____________________.
Commission file no.: 0-22848
U.S. WIRELESS DATA, INC.
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(Name of small business issuer in its charter)
Colorado 84-1178691
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2200 Powell Street, Suite 450, Emeryville, California 94608
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (510) 596-2050
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered under Section 12(g) of the Exchange Act
No Par Value Class A Common Stock
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(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes _X_ No___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ X ]
The issuer's revenues for the fiscal year ended June 30, 1997 were $1,315,362
The aggregate market value of the issuer's voting stock held as of August 31,
1997 by non-affiliates of the Registrant was approximately $18,581,000 based on
an average price of $3.49 as of August 29, 1997.
As of August 31, 1997, the issuer had 9,113,952 shares of its no par value
common stock outstanding.
The Company's Proxy Statement covering the fiscal year ended June 30, 1997 is
incorporated by reference into Part III of this Form 10-KSB.
Transitional Small Business Disclosure Format (check one):
Yes___ No _X_
<PAGE>
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EXHIBITS AND REPORTS ON FORM 8-K
(a) List of Exhibits Required by Item 601 of Regulation S-B
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Exhibit Description
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<S> <C>
3.1 Copy of Amended Articles of Incorporation (2)
3.2 Copy of Amended Bylaws (2)
4.1 Representative's Warrant Agreement dated as of December 2, 1993(5)
4.2 Common Stock Purchase Warrant issued to James B. Walters on or about April 12, 1993(5)
4.3 Common Stock Purchase Warrant issued to Kenneth DeJohn on or about May 1, 1993(5)
4.4 Consulting Agreement dated August 15, 1992, as amended April 12, 1993, with James B. Walters (1)
4.5 Form of Common Stock Purchase Warrant issued to John Liviakis and Robert Prag
as of August 4, 1997 (This exhibit is included in Exhibit 10.13 filed herewith.)
10.1 License and Volume Purchase Agreement with OMRON Systems of America with Solectron Addendum (1)
10.2 Promissory Note with OMRON Systems, Inc. (2)
10.3 Supply Agreement with Novatel Communications LTD. (2)
10.4 Release Agreement with Richard P. Draper (2)
10.5 Copy of Amended 1992 Stock Option Plan (3)
10.6 Agreement for Manufacture and Purchase between USWD, Uniform Industrial Corp and
Cardservice International, Inc. (2)
10.7 AT&T CDPD Value Added Reseller Agreement dated April 30, 1997*
10.8 Bell Atlantic AIRBRIDGE Packet Service Agreement dated August 12, 1997*
10.9 Engagement Agreement between USWD and entrenet Group, LLC dated June 3, 1997
10.10 GTE Leasing Corporation Promissory Note dated August 6, 1997
10.11 GTE Mobilnet Communications Service and Equipment Agreement dated August 1, 1997*
10.12 Form of Demand Note issued to private investors during the fourth quarter of 1997
10.13 Liviakis Financial Communications, Inc. Consulting Agreement, and Subscription Agreement
for the purchase of U.S. Wireless Data, Inc. Common Stock and Warrants dated July 25, 1997
10.14 Member Service Provider Sales and Service Credit Card Processing Agreement between
U.S. Wireless Data, Inc. and NOVA Information Systems, Inc. dated January 1, 1997*
10.15 Purchase Agreement with Unicard Systems, Inc. dated September 18, 1997*
10.16 Purchase Agreement with Wellex Systems Manufacturing & Distribution Group dated August 7, 1997
10.17 Underwriting Agreement between the Company, RAS Securities Corp., Walford & Company,
Incorporated and Thomas James Associates, Inc. dated December 2, 1993 (4)
21.1 List of Subsidiaries (2)
23.1 Consent of Independent Accountants(6)
27 Financial Data Schedule(6)
<FN>
* Confidential treatment for certain portions of this document has been requested by the Company pursuant to Commission
Rule 24b-2, as identified on the first page of the document, and at the specific item in the document for which such
treatment has been requested. The omitted material has been filed separately with the Commission pursuant to Rule 24b-2.
(1) Incorporated by reference from the like-named exhibit filed with the Company's Registration Statement on Form SB-2,
SEC File No. 33-69776-D.
(2) Incorporated by reference from the like-named exhibit filed with the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1995, filed on October 13, 1995 (Control No. 95201388)
(3) Incorporated by reference from the like-named exhibit filed with the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1996,filed on October 21, 1996. (Control No. 96645557)
(4) Incorporated by reference from the like-named exhibit filed with Amendment No. 5 to the Company's Registration Statement on
Form SB-2, SEC File No. 33-69776-D.
(5) Incorporated by reference from the like-named exhibit filed with Amendment No. 2 to the Company's Annual Report on Form
10-KSB for the fiscal year ended June 30, 1997, filed on January 2, 1998.
(6) Incorporated by reference from the like-named exhibit filed with the Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1997, filed on October 15, 1997.
</FN>
</TABLE>
<PAGE>
(b) Reports on Form 8-K
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There were no reports on Form 8-K that were filed during the last quarter
of the fiscal year ended June 30, 1997.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: October 14, 1997
U.S. WIRELESS DATA, INC.
\s\ Evon A. Kelly Chief Executive Officer October 14. 1997
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Evon A. Kelly
In accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated:
\s\ Evon A. Kelly Chief Executive Officer October 14, 1997
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Michael J. Brisnehan
\s\ Rod L. Stambaugh President October 14, 1997
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Rod L. Stambaugh
Director
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Alan B. Roberts
\s\ Chester N. Winter Director October 14, 1997
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Chester N. Winter
\s\ Caesar Berger Director October 14, 1997
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Caesar Berger
CONFIDENTIAL TREATMENT REQUESTED BY U.S. WIRELESS DATA, INC. FOR CERTAIN
PORTIONS OF EXHIBIT C CONTAINED IN THIS AGREEMENT
CDPD VALUE ADDED RESELLER AGREEMENT
This CDPD Value Added Reseller Agreement (this "Agreement"), dated as of
April 30, 1997, is made between AT&T Wireless Data, Inc., a Delaware corporation
doing business as AT&T Wireless Services, for cellular digital packet data
("CDPD") communications service (defined below) provided by AT&T Wireless Data,
Inc., d/b/a AT&T Wireless Services and its Affiliates, collectively, ("AT&T"),
and U.S. Wireless Data, Inc., a corporation organized under the laws of the
State of Colorado, for itself ("Customer").
RECITALS
A. Customer would like to receive Service from AT&T, in connection with
Customer's provision of certain value-added communications services to its End
Users.
B. AT&T wishes to provide Service to Customer based upon the
value-added communications services provided by Customer to its End Users, in
accordance with the terms and conditions of this Agreement.
AGREEMENTS
In consideration of the mutual promises contained in this Agreement,
the Parties hereby agree as follows:
Section 1. Definitions
1.1 Affiliate means, with respect to any entity, any other entity that
directly Controls, is Controlled by or is under common Control with the
first entity.
1.2 Application means the combination of the Service and Customer's
value-added communications services provided to its End Users. The Appli-
cation is more specifically described in Exhibit A hereto.
1.3 Control (and all conjugations thereof) means, with respect to any
entity, the direct or indirect possession of the power to direct the
management and policies of such entity.
1.4 End User means the individuals or entities obtaining access to
Service from Customer.
1.5 Number means, for each End User, the AT&T network and service
identifier numbers and various other network, equipment and service numbers
assigned to Customer for that End User to obtain access to Service.
1.6 Service means the CDPD communication service and associated
support services provided to Customer by AT&T.
1.7 Service Area means those portions of AT&T's CDPD operating areas
as identified by AT&T from time to time (the "Service Area") and as set
forth in Exhibit B hereto, as amended from time to time.
<PAGE>
Section 2. The Service
2.1 Provision
2.1.1 Service is available to each of Customer's users or units within
AT&T's Service Area as long as Customer's CDPD transmitting and receiving
equipment (the "Equipment") is turned on, programmed with AT&T network and
service identifier numbers (collectively, the "Numbers").
2.1.2 Service provided pursuant to this Agreement will be provided
only upon the request of Customer's authorized representatives, and not by
End Users, and only in connection with the Application.
2.1.3 Customer is not authorized under this Agreement to use the
Service independent of the Application or in conjunction with any other
Application unless such Application is described and attached in Exhibit A
hereto.
2.2 Support Services. AT&T will provide to Customer, and not directly to
End Users, network monitoring, technical assistance and trouble-shooting support
of the Service through AT&T's technical assistance center (the "ATAC"), The ATAC
will be staffed and available to Customer's authorized representatives
twenty-four (24) hours per day, seven (7) days per week to perform these
functions and to address Customer's inquiries. Customer will provide AT&T with
access to contacts and dispatch information to facilitate appropriate response
to Service interruptions.
2.3 Numbers. Customer shall be issued an initial amount of Numbers as set
forth in the Service Plan attached as Exhibit C hereto. Customer may order
additional Numbers by completing a Service Request Form. Additional Numbers will
be issued to Customer provided Customer is not in default hereof, and subject to
any requirements for a security deposit. AT&T may change any of Customer's
Numbers from time to time, by giving Customer written notice thereof. AT&T will
use its best efforts to minimize such changes. Customer will inform its End
Users of the provisions of this Section and agrees that neither it nor its End
Users will acquire any proprietary right in any specific Number provided by
AT&T.
2.4 Use.
2.4.1 Customer will use' the Service only for lawful business purposes
and only in connection with the Application, and may resell the Service
only in connection with the Application and as provided by this Agreement.
2.4.2 AT&T authorizes Customer to provide any or all of the Service to
End Users in connection with End Users' use of the Application,
2.4.3 AT&T is obligated only to Customer, with which it is in privity
of contract, and not to End Users, with whom AT&T is not in privity, End
Users are not to be deemed third-party beneficiaries of this Agreement.
2.4.4 Customer is solely responsible for all risks and expenses
incurred with its actions or omissions in the provision of the Service or
the provision of the Application to End Users, including but not limited to
payment to AT&T for all charges for Service used by Customer or its End
Users or third Parties using a Number assigned to Customer. In connection
with such activities, Customer will act in all respects for its own account
and will be responsible for such things as credit verification, deposits,
billing, collection, bad debts and any unauthorized use of the Service by
End Users or any third Party using a Number assigned to Customer.
<PAGE>
2.4.5 Customer will disclose to End Users the provisions set forth in
Exhibit D.
2.4.6 Customer is responsible for all End User support regarding all
aspects of End Users' use of the Service (whether arising in connection
with hardware, software or Service), including but not limited to issues
relating to modems, protocol stacks, software configuration and setup,
usability issues, Service activation, Service coverage, billing, and any
and all other aspects of technical services and customer care. This
includes, but is not limited to, Customer taking the End Users' calls and
using reasonable commercial efforts to remedy any Customer or End
User-identified problem without AT&T's participation. Customer will report
a problem to AT&T only upon reasonable verification that the problem is due
to reasons other than misuse, malfunction or the failure of the Customer
Equipment to meet the technical standards for compatibility with the
Service, or failure of the End User to understand how to use the Service.
2.4.7 The Service will not be used to transmit any communication where
the message, or its transmission or distribution would involve any local
court order or regulation or would likely be offensive to the recipient or
recipients thereof.
2.5 Continuing Right. AT&T will have the continuing right to market and
sell, the service and any other communications services to any third Parties,
including but not limited to current, future and potential End Users of
Customer.
2.6 Procedures. Customer will comply with AT&T's procedures for obtaining
Numbers and for activating Service with respect to any End User. AT&T may from
time to time modify these procedures by giving Customer written notice of such
modification.
2.7 Service Area. The Service is available only within the Service Area and
is subject to (a) transmission limitations caused by atmospheric, topographical
or other conditions affecting transmission, (b) equipment modifications, repairs
and other similar activities necessary for the proper or improved operation of
the Service, and (c) equipment failures beyond AT&T's reasonable Control. AT&T
will not be responsible for any interruption or inability to use the Service
that results from equipment or systems used in connection with the Service or
the Application. AT&T may amend Exhibit B to add or delete any portion of the
Service Area from time to time by giving written notice to Customer.
2.8 Interruptions and Field Trials. The Service may be temporarily refused,
limited, interrupted or curtailed due to governmental regulations or orders,
system capacity limitations or equipment maintenance, repair, modifications,
upgrades or relocation. AT&T will attempt to notify Customer of scheduled and
unscheduled network outages that are expected to last more than four (4) hours
and that may affect the Service. Customer will cooperate, at AT&T's expense, in
conducting any field tests and trials that AT&T or any Service provider
reasonably determines are necessary or desirable to ensure the performance and
reliability of the Service.
<PAGE>
Section 3. Interconnection
Customer will be required to obtain and pay for any interconnection
services required to connect Customer to AT&T's CDPD network to be used by End
Users. In the event that individual connectivity to End Users is required,
Customer will follow AT&T policies and procedures for such connections.
Section 4. Customer Equipment
Customer will be responsible for the acquisition, programming,
installation, maintenance and repair of all equipment (other than equipment
comprising portions of AT&T's CDPD network) necessary to enable Customer and
its End Users to receive the Service ("Customer Equipment"). Customer will
ensure that all Customer Equipment is technically and operationally compatible
with the Service and meets all applicable federal and state laws, rules and
regulations.
Section 5. Rates
5.1 Customer will pay AT&T for Service provided to Customer and its
End Users in accordance with the Service Plan. Unless the Service Plan
provides otherwise, AT&T shall not increase the rates contained in the
Service Plan within six months from the effective date of this Agreement,
Thereafter, however, AT&T may increase the rates contained in the Service
Plan from time to time on thirty days (30) written notice to Customer;
provided, however, if such increase is unacceptable to Customer, Customer
may terminate this Agreement by providing AT&T with written notice at least
fifteen (15) days in advance of such termination. Notwithstanding the
foregoing, if AT&T rescinds its notice of rate increase within such fifteen
days, this Agreement will not terminate, but will remain in full force and
effect. AT&T may decrease the rates contained in the Service Plan from time
to time upon written notice to Customer, effective, on the date specified
on such notice. To the extent AT&T arranges for Customer to receive Service
from non-AT&T Service providers. Customer will pay AT&T for Service at
Company's regular retail rate for such Service.
5.2 Customer may obtain any rate that is available to a similarly
situated reseller of Company. Customer may at any time notify Company that
it chooses to Obtain Service under a different Rate Sheet, provided that
Company may, upon receipt of notice of Customer's election, either revise
Exhibit C to reflect such election or terminate this Agreement and offer
Customer a new agreement.
Section 6. Invoices, Payments, Taxes and Security Deposits
6.1 Invoices. AT&T will provide Customer written invoices on a monthly
basis.
6.2 Payment. Customer will pay each invoice within thirty (30) days
following its receipt thereof Any payment not received by the due date will
accrue interest at the rate of one and one-half percent (1.5%) per month or
the maximum lawful rate. Additional fees will be assessed for any check
returned for insufficient funds,
6.3. Disputed Charges. If the amount of any invoice is disputed,
Customer will pay the entire amount of the invoice by the due date and will
include with such payment a detailed statement sufficient to allow AT&T to
ascertain the disputed amount and the reasons for the dispute. Any amount
not disputed within ninety (90) days of an invoice due date may not
thereafter be disputed. Customer and AT&T will use good faith efforts to
resolve any dispute within sixty (60) days of receipt of such statement.
6.4 Taxes. Customer will pay all applicable federal, state and local
sales, use, public utilities, gross receipts or other taxes or fees imposed
on AT&T as a result of this Agreement (other than taxes imposed on the net
income of AT&T). Customer will provide certificates of resale required for
the states in which it will resell service, as indicated on Exhibit C.
Customer will reimburse AT&T for any such taxes or fees paid by AT&T on
Customer's behalf.
6.5. Security Deposits. AT&T may from time to time require Customer to
provide it with a cash deposit, irrevocable letter of credit, or other
security acceptable to AT&T based upon AT&T's assessment of Customer's
creditworthiness.
Section 7. Term and Termination
7.1 Term. The initial ten of this Agreement will begin on the date
hereof and, unless earlier terminated in accordance with this Section 7,
will continue for a three (3) year term. This Agreement will automatically
renew for successive one-year renewal terms unless either Party, at least
ninety (90) days prior to the end of the then-current term, notifies the
other Party in writing of its intent to terminate this Agreement.
7.2 Termination
7.2.1 If either Party breaches a material term of this Agreement,
and such Party fails to cure the breach within thirty (30) days
following its receipt of written notice from the non-breaching Party
(or ten days in the event of non-payment of any amounts due
hereunder), then the non-breaching Party, in addition to any other
remedies it may have at law or in equity, may terminate this Agreement
upon written notice to the breaching Party.
7.2.2 This Agreement will automatically terminate in the event of
either Party's dissolution, insolvency, assignment for the benefit of
creditors or filing for relief under the provisions of the bankruptcy
laws or similar creditor protection laws.
7.2.3 AT&T may terminate this Agreement immediately and without
penalty upon written notice to Customer if the Federal Communications
Commission or any other regulatory agency or court promulgates any
rule, regulation, judgment or order that (a) prohibits or
substantially impedes (in effect or Application) AT&T from fulfilling
its obligations hereunder, (b) prohibits or substantially impedes
non-AT&T Service providers from providing Service, or (c) adversely
affects AT&T's ability to conduct business upon terms and conditions
acceptable to it. AT&T will notify Customer promptly following AT&T's
determination that an event permitting termination under this Section
has occurred.
7.2.4 If Customer shall at any time fail to meet the Service Plan
requirements set forth in Exhibit C, Company may provide Customer with
ninety (90) days written notice either 1) that Customer is no longer
eligible to receive Service under this Agreement, or 2) that Company
will modify the Service Plan in accordance with Customer's actual
usage. If Customer is unable, during the sixty (60) day period after
Company's notice is sent, to satisfy the eligibility criteria, Company
and Customer will renegotiate the Service Plan Requirements. If the
parties fail to reach a mutually acceptable agreement regarding the
Service Plan within the following thirty (30) day period, Company may
either, immediately or upon notice to Customer, 1) modify the Service
Plan, or 2) terminate this Agreement without further notice, in its
sole discretion.
7.3 Survival. Sections 8, 9, 10, 11, 12, 16 and 17 (together with all
other provisions of this Agreement that may reasonably be interpreted or
construed as surviving termination) will survive the termination of this
Agreement.
7.4 Payment upon Termination. Upon termination of this Agreement for
any reason, all amounts owing to AT&T hereunder will become due and
payable.
Section 8. Force Majeure
Neither Party will be liable for any loss, damage, cost, delay or
failure to perform resulting from causes beyond its reasonable Control
including, but not limited to, acts of God, fires, floods, earthquakes,
strikes, insurrections, riots, lightening or storms, or delays of suppliers or
subcontractors for the same causes.
Section 9. Indemnification
9.1 MUTUAL INDEMNITY. EACH PARTY WILL DEFEND, INDEMNIFY AND HOLD THE
OTHER, THE OTHER'S SUBSIDIARIES AND AFFILIATES (AND THEIR RESPECTIVE
OWNERS, DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS) AND ANY
UNDERLYING CARRIER ENABLING THE PROVISION OF SERVICE HARMLESS AGAINST ANY
DAMAGES, LOSSES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' AND EXPERT
WITNESS' FEES AND DISBURSEMENTS, WHETHER AT TRIAL OR ON ANY APPEAL) ARISING
OUT OF OR RELATING TO ANY CLAIMS, ACTIONS OR OTHER PROCEEDINGS THAT (A) ARE
BROUGHT BY OR ON BEHALF OF ANY THIRD PARTY, AND (B) RESULT FROM THE
INDEMNIFYING PARTY'S BREACH, FAILURE TO PERFORM OR OTHER MISCONDUCT IN
CONNECTION WITH ITS DUTIES, OR THE EXERCISE OF ITS RIGHTS UNDER THIS
AGREEMENT.
9.2 ADDITIONAL INDEMNITY. CUSTOMER FURTHER AGREES TO DEFEND, INDEMNIFY
AND HOLD AT&T, ITS SUBSIDIARIES AND AFFILIATES, THEIR RESPECTIVE OWNERS,
DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES AND AGENTS AND ANY
UNDERLYING CARRIER ENABLING THE PROVISION OF SERVICE (COLLECTIVELY, AS USED
IN THIS SUBPARAGRAPH, "AT&T") HARMLESS AGAINST ANY DAMAGES, LOSSES AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' AND EXPERT WITNESS' FEES AND
DISBURSEMENTS, WHETHER AT TRIAL OR ON ANY APPEAL) ARISING OUT OF OR
RELATING TO ANY CLAIMS, ACTIONS OR OTHER PROCEEDINGS THAT ARE BROUGHT BY OR
ON BEHALF OF END USERS; PROVIDED THAT CUSTOMER'S OBLIGATIONS TO DEFEND,
INDEMNIFY AND HOLD AT&T HARMLESS WILL NOT APPLY TO THE EXTENT THE CLAIM,
ACTION OR PROCEEDING RESULTS FROM AT&T's GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
Section 10. No Warranties
AT&T SUPPLIES A SERVICE, AND NOT GOODS. AT&T MAKES NO WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICE OR TIE-IN PERFORMANCE OF
ANY OBLIGATIONS HEREUNDER INCLUDING, WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. ALL SUCH WARRANTIES
ARE EXPRESSLY EXCLUDED. AT&T IS NOT THE MANUFACTURER OF ANY CUSTOMER
EQUIPMENT AND MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT
THERETO. AT&T PROVIDES ACCESS TO INFORMATION PROVIDED BY OTHER SOURCES,
HOWEVER AT&T ACCEPTS NO LIABILITY FOR AND MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE CONTENT THEREOF.
<PAGE>
Section 11. Limitation of Liability
11.1 NO CONSEQUENTIAL DAMAGES. NEITHER PARTY WILL BE LIABLE TO THE
OTHER (OR ITS END USERS, CUSTOMERS OR ANY THIRD PARTY) FOR ANY INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF SUCH PARTY'S FAILURE TO
PERFORM UNDER THIS AGREEMENT. NOTHING IN THIS SECTION 11.1 WILL LIMIT A
PARTY'S OBLIGATION TO FULLY INDEMNIFY THE OTHER UNDER SECTION 9 FOR ACTIONS
BROUGHT BY THE INDEMNIFYING PARTY'S CUSTOMERS, END USERS OR BY ANY
THIRD-PARTY, EVEN IF SUCH ACTIONS INCLUDE CLAIMS FOR INDIRECT, INCIDENTAL
OR CONSEQUENTIAL DAMAGES.
11.2 LIMITATION OF ACTIONS. EXCEPT FOR ACTIONS ARISING IN CONNECTION
WITH SECTION 9, NEITHER PARTY MAY BRING AN A LEGAL ACTION WITH RESPECT TO
THIS AGREEMENT MORE THAN TWENTY-FOUR (24) MONTHS AFTER THE CAUSE OF ACTION
ACCRUES.
11.3 LIABILITY CAP. EXCEPT FOR LIABILITIES ARISING UNDER SECTION 9,
THE AGGREGATE LIABILITY OF AT&T TO CUSTOMER FOR CLAIMS RELATING TO THIS
AGREEMENT, WHETHER FOR BREACH OR IN TORT, WILL NOT EXCEED THE AMOUNT PAID
BY CUSTOMER TO AT&T IN THE TWO MONTH PERIOD PROCEEDING THE DATE THE CLAIM
AROSE.
11.4 PARTY. FOR THE PURPOSES OF THIS SECTION I 1, "PARTY" MEANS THE
PARTY, ITS SUBSIDIARIES AND AFFILIATES AND THEIR RESPECTIVE OWNERS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, REPRESENTATIVES, SUBCONTRACTORS AND
SUPPLIERS.
11.5 SECURITY. ALTHOUGH THE SERVICE USES AN ENCRYPTED TECHNOLOGY, AND
THE LAW GENERALLY PROHIBITS THIRD PARTIES FROM MONITORING CELLULAR
TRANSMISSIONS, AT&T CANNOT GUARANTY THE SECURITY OF DATA TRANSMISSIONS.
AT&T SHALL NOT BE LIABLE FOR ANY LACK OF SECURITY RELATING IN ANY WAY TO
USE OF THE SERVICE OR CUSTOMER'S OR ITS END USERS DATA TRANSMISSIONS.
Section 12. Confidentiality
12.1 Confidential Information. As used in this Agreement,
"Confidential Information" means any information of either AT&T or Customer
that is not generally known to the public, whether of a technical, business
or other nature (including, but not necessarily limited to, trade secrets,
know-how and information relating to the technology, customers, business
plans, promotional and marketing activities, finances and other business
affairs of such Party). AT&T's Confidential Information includes, among
other things, the rates, terms and conditions relating to AT&T's provision
of Service to Customer.
<PAGE>
12.2 Use and Disclosure. In the performance of or otherwise in
connection with this Agreement, any Party (the "Receiving Party") may
receive certain Confidential Information of the other Party (the
"Disclosing Party"). The Receiving Party, except as expressly provided in
this Agreement, will not disclose such Confidential Information to anyone
without the Disclosing Party's prior written consent. The Receiving Party
will not use, or permit others to use, Confidential Information for any
purpose other than the purpose for which it was disclosed. The Receiving
Party will take all reasonable measures to avoid disclosure, dissemination
or unauthorized use of Confidential information, including, at a minimum,
those measures it takes to protect its own confidential information of a
similar nature.
12.3 Exceptions. The provisions of Section 12.2 will not 'apply to any
information that (a) is or becomes publicly available without breach of
this Agreement, (b) can be shown by documentation to have been known to the
Receiving Party at the time of its receipt from the Disclosing Party, (c)
is rightfully received from a third Party who did not acquire or disclose
such information by a wrongful or tortuous act, or (d) can be shown by
documentation to have been independently developed by the Receiving Party
without reference to any Confidential Information.
12.4 Disclosure to Governmental Entities. If the Receiving Party
becomes legally obligated to disclose Confidential Information to any
governmental entity with jurisdiction over it, the Receiving Party will
give the Disclosing Party prompt written notice sufficient to allow the
Disclosing Party to seek a protective order or other appropriate remedy.
The Receiving Party will disclose only such information as is required by
the governmental entity and will use its reasonable best efforts to obtain
confidential treatment for any Confidential Information that is so
disclosed.
12.5 Ownership; Return. All Confidential Information will remain the
exclusive property of the Disclosing Party, and the Receiving Party will
have no rights, by license or otherwise, to use the Confidential
Information except as expressly provided herein. The Receiving Party
promptly will return or destroy all tangible material embodying
Confidential Information (in any form and including, without limitation,
all summaries, copies and excerpts of Confidential Information) upon the
earlier of (a) the completion or termination of the dealings between the
Disclosing Party and the Receiving Party, and (b) the Disclosing Party's
written request,
Section 13. Notices
All notices and other communications relating to this Agreement Will be
made in writing and will be deemed to have been duly delivered, effective upon
receipt, if sent to the address set forth below each Party's signature.
Section 14. Assignment
Except as provided in this Section 14, neither Party may assign or
transfer this Agreement, or its rights or obligations hereunder, without the
prior written consent of the other Party. Either Party may assign this
Agreement, without the other's consent, to (a) any Affiliate of the assignor, or
(b) any person or entity that acquires the assignor or substantially all of the
assignor's business through any merger, consolidation or stock or asset
purchase; provided that the assignee agrees in writing to be bound by the
provisions of this Agreement. In addition, AT&T may assign certain of its rights
and obligations under this Agreement without Customer's consent.
Section 15. No Agency
AT&T and Customer are independent contracting Parties. This Agreement
does not create any partnership, joint venture or agency relationship between
the Parties.
<PAGE>
Section 16. Marks
Customer recognizes the right, title and interest of AT&T, the CDPD
Systems and their respective Affiliates in and to all service marks, trademarks
and trade names used by any of them in connection with the Service (the
"Marks"). Customer will not gain any rights to the Marks by virtue of this
Agreement and will not use any Marks without Company's prior written consent.
Section 17. General
17.1 State law/venue. This Agreement will be governed by the laws of
the State of Washington, without reference to its choice of law rules. Any
proceeding to enforce any rights or obligations hereunder shall be brought
in King County, Washington.
17.2 Attorneys' fees. In the event an action is commenced by either
Party to enforce the terms of this Agreement, the substantially prevailing
Party in such action shall be entitled to its reasonable costs and
attorneys' and expert witness' fees incurred therein and on any appeal
thereof.
17.3 Entire agreement. This Agreement, together with its attached
Exhibits, sets forth the entire agreement between the Parties concerning
the subject matter hereof Any amendment or modification to this Agreement
will be effective only if made in writing and signed by both Parties.
Provided, however, this Agreement shall be deemed automatically amended to
the extent inconsistent with any federal, state or local law, regulation,
court order or tariff required to be filed by AT&T.
17.4 Waiver. The waiver of any provision or default of this Agreement
will not constitute a waiver of any other provision or default. If any
provision of this Agreement is deemed to be unenforceable, the remaining
provisions will remain in full force and effect.
17.5 Compliance with laws. AT&T and Customer shall at all times comply
in all material respects with all laws, rules and regulations applicable to
the performance of this Agreement.
The Parties have executed this Agreement on the date first above written.
U.S. Wireless Data, Inc. AT&T Wireless Data, Inc.
By: /s/ Rod Stambaugh By: /s/ C-------- S------------
--------------------- -------------------------------
Title: President & CEO Title: Director of Distribution
- ---------------------- -------------------------------
Address: 1123 Western Avenue Address: 10230 N.E. Points Dr.
Mill Valley, CA 94941 Kirkland, WA 98033
Attn: Rod Stambaugh Attn:
--------------- --------------------------
(With a copy to general counsel)
<PAGE>
EXHIBIT A
Application
<PAGE>
EXHIBIT B
Service Area
Customer is authorized to provide the Service in the following MSAs.
Arizona Phoenix*, Tucson*
California Fresno, Sacramento, San Diego*, San Francisco*,
San Jose*, Bakersfield
Colorado: Denver
Connecticut: Bridgeport*, Hartford*, New Haven*, New London/Norwich*
Delaware Wilmington*, Dover*
Florida Orlando, Tampa/St. Petersburg, West Palm Beach,
Boca Raton, Miami, Ft.Lauderdale,
Lakeland/Winter Havcn*
Illinois* Chicago*
(Gary*, Indianapolis*
Kentucky: Louisville*
Maryland Baltimore*, Frederick*
Massachusetts: Boston*, Worcester*
Michigan Detroit*
Minnesota Minneapolis/St. Paul
Missouri St-Louis*
Nevada Las Vegas, Reno
New Hampshire! Manchester*
New Jersey* Atlantic City*, Trenton*. Long Branch*. New Brunswick*
Ocean City*, Vineland
New Mexico Albuquerque*, Las Cruces*
New York New York
North Carolina: Charlotte*, Raleigh*
Ohio: Cincinnati*. Columbus*. Dayton*, Clcveland*. Akron*,
Canton*
Oklahoma Oklahoma City, Tulsa
<PAGE>
Oregon, Portland
Pennsylvania, Pittsburgh, Allentown*, Philadelphia*
South Carolina: Columbia*, Greenville*,
Tennessee, Memphis*, Nashville*
Texas Austin, Dallas/Ft. Worth, San Antonio, El Paso*,
Houston*, Galveston*
Utah Salt Lake City
Virginia Newport News*, Richmond*, Norfolk*
Washington Seattle/Everett, Tacoma
Washington D.C.*
* These markets are available for Service through an intercarrier arrangement.
<PAGE>
EXHIBIT C
Service Plan
Certificates of Resale provided for the following states: Georgia and California
- ---------------------------------------------------------
Interconnection: Customer will utilize NOVA's back-end connection to the AT&T
Network in accordance with the letter from Danielle Stuckey, NOVA Information
Systems, Inc. dated 4/22/97.
Access Fees: $ ## per month per activated Number. $ ## per month per assigned,
but not activated, Number. On an optional basis, Reseller may request a block of
network addresses prior to activation. AT&T will hold such addresses in a pool
until Reseller requests activation. During any month in which such held Number
is activated, only the $ ## Access Fee plus any applicable usage will be
charged.
Assignment Fee: A one time fee of $ ## will be charged for every new Number.
This reflects AT&T's costs of providing personnel, systems, and completing
paperwork necessary to reserve Numbers to Reseller and to activate them.
Usage Charges*: $ ## per kilobyte*
*Any applicable discount for usage for any given month shall be credited on the
following month's bill.
*Usage Volume Discount:
As Customer's average kilobyte usage per user increases, the price per kilobyte
will be reduced according to the following schedule. The first month of usage
for a newly activated user is not included in the calculation***:
Average Monthly Kilobyte Usage Per Number Price per Kilobyte***
201 - 500 Kilobytes $ ##
501 - 1 mg $ ##
1.1 mg - 2 mg $ ##
2.1 mg - 3 mg $ ##
3.1 mg - 4 mg $ ##
4.1 mg and up $ ##
***Note that usage in non-AT&T markets is not subject to the discount schedule
and will be charged at the rate of $ ## per kilobyte, without exception.
Cancellation Fee: ## cancellation fee will be assessed upon deactivation or
deassignment of Numbers.
## CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS DATA, INC. FOR
THIS PORTION OF THIS DOCUMENT PURSUANT TO COMMISSION RULE 24b-2. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
<PAGE>
Billing Guidelines for Calls.
1. General. AT&T will bill Customer on a monthly basis for Service
furnished under this Agreement, including regular monthly Service charges and
usage charges for all data transmissions processed through the Number. Usage
charges include charges on a per kilobyte basis for transmissions that are sent
or received by Equipment programmed with a Number assigned to Customer. Usage
charges may also include charges for additional services offered by AT&T which
Customer may subscribe to at rates determined by AT&T from time to time.
2. Access Charges. Access charges are billed monthly in arrears. Usage
charges are billed monthly in arrears. If AT&T agrees to provide Service
features to Customer, Company reserves the right to charge a reasonable fee for
adding or deleting Service features.
3. Measurement. The measurement of a transmission is in kilobytes.
4. Loss of Registration. Registration may be "lost"(i.e., involuntarily
disconnected) for a variety of reasons, including atmospheric conditions,
topography, weak batteries, system overcapacity, movement outside a service
area, and gaps in coverage within a service area. Loss of registration may
result in retransmissions and additional usage charges.
Minimum Number Requirements:
1. Customer shall maintain, within one year of the date of this Agreement,
a minimum of 1000 active Numbers,
2. Customer shall maintain, within eighteen months of the date of this
Agreement, a minimum of 3000 active Numbers.
3 Customer shall maintain, within three years of the date of this
Agreement, a minimum number of 4,500 active Numbers.
Failure to Meet Minimum Number Requirements. In the event Customer fails to
achieve the minimum Number requirements set forth in this Exhibit C for any
given month, Customer shall pay to AT&T in addition to all other amounts due the
difference between Customer's actual Numbers and the required minimum Numbers
times the minimum monthly usage set forth in Exhibit C for each month in which
Customer fails to achieve such minimum. Continued failure to meet Minimum Number
Requirements shall give rise to AT&T's right to terminate under section 7.2.4
Promotional Tools. AT&T will provide Customer with up to two Numbers, at no
charge, with unlimited usage in AT&T markets, and up to 10 Numbers at a rate of
$30 per month, with unlimited usage in AT&T markets. Usage outside of AT&T
markets and all taxes on usage relating to such Numbers will remain the
responsibility of Customer.
<PAGE>
EXHIBIT D
End User Disclosures
1. END USER HAS NO PROPERTY RIGHT IN ANY NUMBER ASSIGNED TO IT.
2. [END USER] UNDERSTANDS THAT [CUSTOMER] IS AN AUTHORIZED RE-SELLER OF AT&T
WIRELESS PACKET DATA SERVICE.
3. [END USER] UNDERSTANDS AND AGREES THAT IT HAS NO CONTRACTUAL RELATIONSHIP
WHATSOEVER WITH AT&T WIRELESS SERVICES AND THAT [END USER] IS NOT A THIRD PARTY
BENEFICIARY OF ANY AGREEMENT BETWEEN [CUSTOMER] AND AT&T WIRELESS SERVICES.
4. []END USER] UNDERSTANDS AND AGREES THAT AT&T WIRELESS SERVICES WILL HAVE NO
LEGAL, EQUITABLE OR OTHER LIABILITY OF ANY KIND TO (END USER]. IN ANY EVENT,
AT&T WIRELESS SERVICES' TOTAL LIABILITY ARISING IN CONNECTION WITH THIS
AGREEMENT (REGARDLESS OF THE FORM OF THE ACTION) FOR ANY CAUSE WHATSOEVER
(INCLUDING BUT NOT LIMITED TO ANY FAILURE OR DISRUPTION OF THE CDPD SERVICE
PROVIDED HEREUNDER) IS LIMITED TO PAYMENT OF DAMAGES IN AN AMOUNT EQUAL TO THE
PROPORTIONATE FIXED MONTHLY CHARGE PAYABLE FOR SERVICES PROVIDED TO [END USER]
UNDER THIS AGREEMENT FOR THE PERIOD OF SERVICE DURING WHICH SUCH DAMAGES OCCUR.
5. UNLESS CAUSED BY THE NEGLIGENCE OF [CUSTOMER] OR AT&T WIRELESS SERVICES, [END
USER] WILL INDEMNIFY AND HOLD AT&T WIRELESS SERVICES (AND ITS AFFILIATED
COMPANIES AND ANY OF THEIR OFFICERS, EMPLOYEES AND AGENTS) HARMLESS AGAINST ALL
CLAIMS (INCLUDING, WITHOUT LIMITATION, CLAIMS FOR LIBEL, SLANDER, COPYRIGHT OR
PATENT INFRINGEMENT OR ANY PERSONAL INJURY OR DEATH) ARISING DIRECTLY OR
INDIRECTLY FROM (END USER'S)) USE, FAILURE TO USE, OR INABILITY TO USE THE
NUMBERS ASSIGNED TO IT OR THE CDPD SERVICE. THIS INDEMNITY WILL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
6. ALTHOUGH CDPD SERVICE USES AN ENCRYPTED TECHNOLOGY, AND THE LAWS GENERALLY
PROHIBIT THIRD PARTIES FROM MONITORING CELLULAR TRANSMISSIONS, AT&T WIRELESS
SERVICES CANNOT GUARANTY THE SECURITY OF DATA TRANSMISSIONS. NEITHER AT&T
WIRELESS SERVICES NOR ANY UNDERLYING CARRIER SHALL BE LIABLE FOR ANY LACK OF
SECURITY RELATING IN ANY WAY TO USE OF THE SERVICE OR (END USER'S) DATA
TRANSMISSIONS.
7. [END USER] WILL NOT USE THE SERVICE TO TRANSMIT ANY COMMUNICATION WHERE THE
MESSAGE, OMITS TRANSMISSION OR DISTRIBUTION WOULD VIOLATE ANY LAW, COURT ORDER
OR REGULATION, OR WOULD LIKELY BE OFFENSIVE TO THE RECIPIENT OR RECIPIENTS
THEREOF.
8. [END USER] USES THE INFORMATION ACCESSED BY THE CDPD SERVICE AT ITS OWN RISK.
CONFIDENTIAL TREATMENT REQUESTED BY U.S. WIRELESS DATA, INC. FOR CERTAIN
PORTIONS OF EXHIBIT B CONTAINED IN THIS AGREEMENT
AIRBRIDGE PACKET SERVICE AGREEMENT
BETWEEN
BELL ATLANTIC NYNEX MOBILE
AND
U.S. WIRELESS DATA INC.
Contract No. ###-##-####
AIRBRIDGE PACKET SERVICE AGREEMENT
This Service Agreement is entered into by and between U.S. Wireless Data
Inc., a Colorado corporation, with a principal place of business located at 4851
Independence Street, #189, Wheat Ridge, Colorado 80033 ("Customer") and Cellco
Partnership, a Delaware general partnership, by its managing general partner,
Bell Atlantic NYNEX Mobile, Inc. (hereinafter known as "BANM") with offices at
180 Washington Valley Road, Bedminster, New Jersey 07921 (the "Agreement").
WHEREAS, BANM is either licensed and authorized by the Federal
Communications Commission ("FCC") to provide cellular telecommunications
service, or manages on behalf of the FCC licensee pursuant to a management
agreement, in the Area (defined below); and
WHEREAS, the Customer wishes to establish a mobile data communications
system through a public packet switched network in order to utilize the system
for data communication by Customer and/or its Authorized Users (defined below);
and
WHEREAS, BANM has the capability to provide Cellular Digital Packet Data
("CDPD") Service, known as AirBridges Packet Service; and
WHEREAS, Customer wishes to obtain such AirBridge & Packet Service from
BANM in the Area; and
WHEREAS, BANM wishes to make available AirBridges Packet Service to
Customer on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound, the parties agree as
follows:
TERMS
1. DEFINITIONS,
------------
As used herein the following terms shall have the following respective meaning:
Area. The markets listed in Exhibit A within which BANM either is licensed and
authorized by the FCC to provide commercial mobile service, or manages on behalf
of the FCC licensee pursuant to a management agreement, and in which BANM
currently provides or may provide AirBridge Packet Service.
Authorized User. Individuals or companies authorized by Customer to use the
System established by Customer.
Cellular Digital Packet Data Service ("CDPD") Cellular radio service utilizing
packet switching technology to transmit data over radio frequency channels. The
raw data rate of CDPD is 19.2 Kilobits per second. It is a connectionless
multi-protocol network service providing peer network wireless extension to
existing data networks.
Customer, Customer is U.S. Wireless Data Inc.
Equipment Identifier (EID). An electronic serial number "burned" into a CDPD
radio modem at the time of manufacture.
Fixed End System (FES). A host computer(s) operated by or on behalf of Customer.
<PAGE>
Kilobyte. A kilobyte is 1000 octets of data, measures at the IP packet layer. IP
header and data octets are included in the kilobyte count.
Mobile Data Base Station ("MDBS"), The unit located at BANM cell sites which
serves as the data link relay point. The MDIS communicates with each MES through
the MDBS.
Mobile Service Area. Market areas or combinations of Market areas which Company
establishes to provide Commercial Mobile service.
Mobile Data Intermediate Systems ("MDIS"). The component of the AirBridge Packet
Service network which performs routing and which contains the network control
functions, including the mobility manager, registration and authentication
functions.
Mobile End System ("MES"), A data terminal, CDPD radio modem, and antenna.
Network Entity Identifier ("NEI). A network address assigned to the MES. Each
MES has an NEI and a unique corresponding EID for authentication purposes.
Packet. The continuous sequence of binary digits of information, which is routed
through the AirBridge Packet Service network as an integral unit. Packet sizes
can be flexible within a range of "O" user bytes to a maximum of "2048" bytes.
Service. The Airbridge Packet Service provided pursuant to this Agreement,
2. PROVISION OF SERVICE.
---------------------
BANM hereby undertakes to provide the Service to Customer in order for the
Customer and/or its Authorized Users to transmit and receive data over the
Service network in the Area, pursuant to the terms and conditions specified
in this Agreement. Customer shall purchase CDPD service exclusively from
BANM or its affiliates which provide such Service in the Area. BANM will
issue NEIs to Customer. All such NEI assignments shall be made in
accordance with the CDPD Network Information Center policies in effect from
time to time.
3. PRICING.
--------
The rate for the Service provided by BANM is set forth in Exhibit B. In the
event Customer has selected and is purchasing equipment through BANM, the terms
of payment and price of such equipment are set forth in Exhibit B.
4. INSTALLATION.
-------------
At Customer's request, BANM will provide and/or arrange for installation
services of MES equipment in Area. The rate for such installation services will
be negotiated on a case by case basis and will be included in a separate
attachment to this Agreement.
5. COMMITMENT OF CUSTOMER.
-----------------------
Customer shall, unless otherwise agreed upon in writing and in advance, at its
sole expense:
(i) purchase and maintain any equipment that Customer and/or its Authorized
Users may require to communicate with the Service network; and
(ii) establish and maintain facilities or services for connecting
Customer's and/or its Authorized Users' networks or host processors to the
Service network (such as private line connections and/or frame relay
service); and
(iii) maintain at its sole expense and option, all MES's and ensure that
each is technically and operationally compatible with the Service network
and is in compliance with applicable state and federal laws, rules, and
regulations; and
(iv) procure any other items or services, including, but not limited to,
any applications software or professional services that may be required by
Customer and/or its Authorized Users in connection with the Service and/or
this Agreement; and
(v) submit a completed copy of the form entitled, "AirBridge Packet Service
Request Form", attached hereto as Exhibit C, for modification, addition or
deletion of NEIs/ElDs during the term of this Agreement; and
2
<PAGE>
pay and hereby guarantees the payment of all invoices presented by BANM
under the terms of this Agreement.
6. AVAILABILITY OF THE SERVICE,
----------------------------
The Service is available for Customer and/or its Authorized Users who are
equipped for the Service when they are within the range of cell sites providing
the Service.
6.1 The Service is subject to transmission limitations caused by
atmospheric and like conditions. The Service may be temporarily interrupted
or curtailed due to government regulations, suspected fraudulent
activities, equipment modifications, upgrades, relocations, repairs and
similar activities necessary or appropriate for the proper or improved
operation of the Service.
6.2 The Service, although encrypted, is capable of being intercepted
without knowledge of or permission from Customer by unauthorized third
parties possessing certain types of devices or equipment.
7. TARIFF FILINGS.
---------------
This Agreement and performance hereunder are subject to any required State and
Federal regulatory filings. Where required, BANM shall commence the process for
submission of any such filings upon execution of this Agreement.
8. BILLING.
--------
BANM will provide Customer with a monthly invoice for the Service provided under
this Agreement.
8.1 The invoice will identify charges in accordance with Exhibit B. Terms
of payment shall be net thirty (30) days from the date of the invoice.
8.2 Undisputed payments received more than thirty (30) days after the date
of the invoice will incur a late payment charge in the amount of the
greater of one and one-half percent (11/2%) of the unpaid balance or the
applicable limit (if any) set by law for each month or fraction thereof
that such balance shall remain unpaid.
8.3 Customer will reimburse BANM for court costs, attorney's fees, costs of
investigation or collection and similar expenses incurred by BANM in the
enforcement of any right or privilege hereunder.
8.4 BANM may verify and/or reverify Customer's credit rating at any time
and BANM may require Customer at any time to make a suitable deposit that
BANM shall hold as guarantee of the payment of charges. Upon termination of
Service, BANM may apply Customer's deposit against Customer's bill for all
charges.
9. LIMITATION OF LIABILITY,
------------------------
9.1 IN NO EVENT SHALL BANM BE LIABLE TO CUSTOMER, ITS AUTHORIZED USERS, OR
EMPLOYEES AND/OR AGENTS OF EITHER OF THEM, OR ANY THIRD PARTY, FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, PUNITIVE DAMAGES, OR LOST
PROFITS OR ANY CLAIM OR DEMAND OF ANY NATURE OR KIND, INCLUDING, BUT NOT
LIMITED TO, USE OR INABILITY TO USE/ACCESS THE SERVICE, INCLUDING, BUT NOT
LIMITED TO, RELIANCE BY CUSTOMER AND/OR AN AUTHORIZED USER ON ANY DATA
OBTAINED THROUGH USE OF THE SERVICE, ANY INTERRUPTION, DEFECT, ERROR, VIRUS
OR DELAY IN OPERATION OR TRANSMISSION, ANY FAILURE TO TRANSMIT OR ANY LOSS
OF DATA, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE
PERFORMANCE OR BREACH THEREOF.
10. DISCLAIMER OR WARRANTIES
10.1 DUE TO THE POSSIBILITY OF ERRORS INCIDENT IN THE USE OF CDPD, THE
SERVICE FURNISHED BY BANM IS SUBJECT TO THE TERMS, CONDITIONS AND
LIMITATIONS SPECIFIED HEREIN. BANM MAKES NO WARRANTY, EITHER EXPRESS OR
IMPLIED, CONCERNING THE SERVICE, INCLUDING WITHOUT LIMITATION, WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR USE.
<PAGE>
10.2 CUSTOMER ACKNOWLEDGES IT HAS SELECTED CUSTOMER'S SOFTWARE AND/OR
EQUIPMENT (INCLUDING EQUIPMENT THAT MAY BE PURCHASED BY CUSTOMER THROUGH
BANM). BANM HAS MADE AND MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER,
DIRECTLY OR INDIRECTLY, EXPRESS OR IMPLIED, AS TO THE SUITABILITY,
DURABILITY, FITNESS FOR PARTICULAR PURPOSE OR USE, MERCHANTABILITY,
CONDITION OR QUALITY OF THE CUSTOMER SELECTED EQUIPMENT AND/OR SOFTWARE.
BANM SHALL NOT BE LIABLE TO CUSTOMER AND/OR ANY AUTHORIZED USER FOR ANY
LOSS, DAMAGE OR EXPENSE OF ANY KIND OR NATURE CAUSED DIRECTLY OR INDIRECTLY
BY THE CUSTOMER SELECTED EQUIPMENT AND/OR SOFTWARE, OR BY THE USE OR
MANUFACTURE THEREOF, OR BY ANY REPAIR, SERVICE OR ADJUSTMENT THERETO OR BY
ANY INTERRUPTION OF SERVICE OR LOSS OF USE THEREOF, OR FOR ANY LOSS OF
BUSINESS OR DAMAGE WHATSOEVER AND HOWSOEVER CAUSED. TO THE EXTENT
PERMITTED, BANM AGREES TO ASSIGN TO CUSTOMER ANY OF THE EQUIPMENT
MANUFACTURER'S WARRANTIES RECEIVED BY BANM WITH RESPECT TO THE CUSTOMER
SELECTED EQUIPMENT.
11. CREDIT FOR OUTAGES
-------------------
No credit or adjustment will be made for interruptions of the Service unless the
interruption continues for a period of twenty-four (24) hours or more, measured
from the time the interruption is reported to BANM by Customer. In the event of
an interruption of the Service that continues for a period of twenty-four (24)
hours or more, credit allowance will be made, at Customer's request, for a
pro-rata amount not to exceed the minimum charge per NEI for that month for each
NEI rendered inoperative by the interruption. The credit shall be available only
where the interruption is in no part due to the acts or omissions of Customer or
an Authorized User whether negligent or otherwise or by interruptions caused by
failure of equipment or service not provided by BANM. The foregoing credit shall
be the sole and exclusive remedy to Customer and/or Authorized User for any
interruption of the Service. In order to be eligible for any such credit,
Customer must request the credit within sixty (60) days of the commencement of
the interruption.
12. USE OF THE SERVICE,
-------------------
12.1 The Service furnished hereunder is for use only by Customer or its
Authorized Users.
12.2 Customer will be liable for all usage and administrative charges and
any other losses, damages, charges or expenses arising from or out of the
fraudulent use of Service, including unauthorized use resulting from or
attributable to Customer and/or its Authorized Users. The parties will
actively cooperate in order to minimize the fraudulent or other
unauthorized use and subsequent abuse of the Service provided by BANM.
13. USE OF MARKS,
-------------
13.1 Customer shall not, directly or indirectly, hold itself out as or
otherwise create the impression that it is sponsored, authorized, endorsed
by, affiliated with, or an agent of BANM or an affiliate thereof.
Additionally, Customer shall not use the name "Bell Atlantic NYNEX Mobile",
"Bell Atlantic", "NYNEX" or any mark used by BANM, Bell Atlantic or NYNEX
or any of their affiliates, or any colorable imitation thereof, in or as
part of any company name or trade name or in any other confusing or
misleading manner, without the prior written consent of BANM. Nothing
contained in this Agreement is intended to convey a license to use any such
trademarks, service marks or trade names.
14. INDEMNIFICATION.
---------------
(a) Customer shall defend, indemnify, and save harmless BANM and its
successors and assigns and its employees and agents and their heirs, legal
representatives and assigns from any and all claims or demands whatsoever,
including the costs, expenses and reasonable attorney's fees
4
<PAGE>
incurred on account thereof, that may be made by any person, specifically
including, but not limited to, employees of the Customer, including, but
not limited to, claims for bodily injury (including death to persons) or
damage to property (including theft) occasioned by or alleged to have been
occasioned by the acts or omissions of Customer, its employees or persons
furnished by the Customer whether negligent or otherwise.
(b) Customer shall defend BANM at BANM's request, against any such
liability, claim or demand. The foregoing indemnification shall apply
whether Customer or BANM defends such suit or claims. BANM agrees to notify
Customer promptly of any written claim or demands against BANM for which
Customer is responsible hereunder.
15. TERM OF AGREEMENT,
------------------
15.1 This Agreement shall be effective when executed by an authorized
representative of BANM ("Effective Date"). The term of this Agreement shall
be three (3) years from the Effective Date. This Agreement shall
automatically renew for additional one (1) year terms unless either party
provides at least sixty (60) days written notice prior to the expiration
thereof of its intention not to renew this Agreement.
16. TERMINATION OF THE SERVICE.
---------------------------
16.1 Upon nonpayment of any sum due BANM, or upon a violation by Customer
of any of the provisions of this Agreement, BANM may give Customer written
notice of such nonpayment and/or violation. If Customer fails to rectify
the nonpayment or the violation within thirty (30) days of being given such
written notice, then BANM may immediately, without incurring any liability,
temporarily discontinue or interrupt the furnishing of the Service to
Customer.
16.2 Should Customer or its Authorized User's MES's be used with the
Service provided by BANM in violation of any of the provisions of this
Agreement, BANM may, immediately upon written notice to Customer, without
incurring any liability, take such action as it may reasonably determine is
necessary or appropriate for the provision of the Service to its customers.
Customer shall effect the discontinuance of any use of MES that is in
violation of this Agreement immediately upon notice to it of the violation,
and shall confirm in writing to BANM within five (5) business days that
such use has been discontinued. BANM may, in sole discretion, choose to
restore service to the MES in question when Customer has complied with the
provisions of this Section 17.2.
17. TERMINATION OF AGREEMENT.
-------------------------
17.1 Upon Default by Customer under this Agreement, of which Customer has
been given written notice, and which Customer has not cured within thirty
(30) days of such written notice BANM may, without incurring any liability,
immediately terminate this Agreement.
17.2 For purposes of this Section 19, "Default" shall be defined as:
17.2.1 Failure by Customer to pay any charge when due (i.e. within
thirty (30) days of date of invoice) or to perform or observe any term
or condition of this Agreement; or
17.2.2 Institution by the Customer of any proceeding in bankruptcy,
reorganization, or insolvency; institution against Customer of any
proceeding in bankruptcy, reorganization, or insolvency that is
acquiesced to or not dismissed within ninety (90) days; appointment of
a receiver for any substantial part of Customer assets; the making of
an assignment for the benefit of creditors or an admission in writing
of Customer of its inability to pay its debts as they mature.
18. PROPRIETARY AND CONFIDENTIAL INFORMATION.
-----------------------------------------
In connection with BANM's provision of the Service, certain confidential and
proprietary, technical, financial or business information may be disclosed by
BANM. The term "Information," as used in this Agreement, includes all
specifications, drawings, sketches, models, samples, reports, plans, forecasts,
current or historical data, computer programs or documentation and all other
technical, financial or business data. "Proprietary and/or Confidential
Information" is defined as Information which is in the possession of BANM, is
not generally available to the public, and which BANM desires to protect against
unrestricted disclosure or competitive use. All Information which is disclosed
by BANM to Customer and which is to be protected hereunder as Proprietary and/or
Confidential Information of BANM shall:
a. if in writing or other tangible form, be conspicuously labeled as
proprietary, confidential or the like at the time of delivery; and
b. if oral, be identified as Proprietary and/or Confidential Information
prior to disclosure and be reduced to a writing labeled as indicated
in (a) above within fifteen (15) business days after its disclosure.
BANM shall have the right to correct any inadvertent failure to designate
Information as Proprietary and/or Confidential Information as set forth above
by written notification as soon as practical (but in no event later than five
(5) business days) after such error is determined. After receiving said
notification, Customer shall from that time forward treat such Information as
Proprietary and/or Confidential Information.
c. With respect to Proprietary and/or Confidential Information provided
under this Agreement, Customer shall during the tenrm of this
Agreement and for two (2) years after termination or expiration of
this Agreement:
(1) hold the Proprietary and/or Confidential Information in strictest
confidence; and
(2) restrict disclosure and/or use to solely those
employees of Customer with a need to know and not disclose it to any
other parties; and
(3) advise those employees of their obligations with respect to the
Proprietary and/or Confidential Information and use the Proprietary
and/or Confidential Information only for the purposes hereunder except
as may otherwise be mutually agreed upon in writing.
d. Any Information disclosed by BANM to Customer which BANM holds subject
to an obligation of confidence to a third party, shall be subject to
the same level of protection as Proprietary and/or Confidential
Information of BANM'S, provided BANM advises Customer of the
confidential nature of such third party Information.
e. Customer shall have no obligation to preserve the proprietary nature
of any Information which:
(1) is made public by BANM; or
(2) was previously known to Customer free of any obligation to keep
confidential and is so documented; or
(3) is received by a third party without restriction and without breach of
this Agreement; or
(4) is independently developed by Customer and is so documented; or
(5) which Customer is required to disclose pursuant to a valid order of a
court or other governmental body or any political subdivision thereof-,
provided, however, that Customer shall first have given notice to BANM.
f. All Information shall be deemed the property of BANM. Upon request
Customer shall return all Information in tangible form to BANM or
destroy all such Information.
g. Upon discovery of any disclosure by Customer, its agents, employees,
consultants or contractors, of any Proprietary and/or Confidential
Information, Customer shall notify BANM and, at its own expense, take
all steps necessary to prevent any further disclosure of Proprietary
and/or Confidential Information in violation of this Agreement.
h. Nothing contained in this Agreement shall be construed as granting or
conferring any rights by license or otherwise in any Information
disclosed to Customer.
6
<PAGE>
19. MISCELLANEOUS,
19.1 Entire Agreement: Amendment. This Agreement and the attached Exhibits
constitute the entire agreement between the parties with respect to the
provision of the Service and associated services and supersede all prior
agreements, proposals, and understandings, whether written or oral. Any
modification or waiver of any provision of this Agreement must be in
writing and signed by authorized representatives of the parties.
19.2 Severability. If any provision, or portion thereof, of this Agreement
is invalid or unenforceable under applicable statute or rule of law, it is
only to that extent to be deemed omitted, and such unenforceability shall
not affect any other provision of this Agreement, but this Agreement shall
then be construed as if such unenforceable provision or provisions had
never been contained herein.
19.3 Independent Contractor. No party nor its employees or agents shall be
deemed to be employees or agents of the other party, it being understood
that each party is an independent contractor for all purposes and at all
times, and each party shall be wholly responsible for withholding and
payment of all federal, state, and local income and other payroll taxes
with respect to its employees, including contribution from them as required
by law.
19.4 Waiver. The failure by Customer or BANM at any time to enforce any of
the provisions of this Agreement or any right with respect thereto, will in
no way be construed to be a waiver of such provisions or rights or in any
way to affect the validity of this Agreement. The exercise by a party of
any rights under the terms or provisions of this Agreement shall not
preclude or prejudice the exercising thereafter of the same or any other
right.
19.5 Governing Law. Subject to any tariffs on file with any state or
federal regulatory body, this Agreement shall be governed by the law of the
State of New Jersey regardless of any conflicts of laws or rules which
would require the application of the laws of another jurisdiction.
19.6 Notices. Any notice to be given hereunder by either party to the other
shall be in writing and shall be valid and sufficient if dispatched by: a)
registered or certified mail, postage prepaid in any post office in the
United States; b) hand delivery; or c) overnight courier prepaid.
Notices to BANM shall be addressed to:
Bell Atlantic NYNEX Mobile
180 WashingtonValley Road
Bedminster, New Jersey 07921
Attention: GM Product Management
with a copy to Legal Dept. - same address
Notices to Customer shall be addressed to:
U.S. Wireless Data Inc.
4851 Independence Street, #189
Wheat Ridge, Colorado 80033
Attention:
If either party changes its address during the term hereof, it shall so
advise the other party in writing and any notice thereafter required to be
given shall be sent by certified mail to such new address.
19.7 Captions. The captions in this Agreement are for convenience only and
shall not be construed to define or limit any of the terms herein.
19.8 Publicity and Advertising. Without the prior written consent of the
other party, no party hereto will disclose to any person the terms and
conditions of this Agreement, except as may be required by law and then
only in compliance with Section 18.3(e). Customer shall submit to BANM all
advertising, sales promotion, press releases and other publicity matters
relating to the Service furnished by BANM under this Agreement wherein
BANM's name or marks is mentioned or language from which the connection of
said names or marks therewith may be inferred or implied. Customer shall
not publish or use such advertising, sales promotion, press releases, or
publicity matters without BANM's prior written approval. 7
<PAGE>
19.9 Assignment. Any assignment of this Agreement, in whole or in part, or
any other interest hereunder without BANM's prior written consent shall be
void. It is further agreed that BANM, upon written notice to Customer, may
assign this Agreement, in whole or in part, or any of its rights, duties
and obligations under this Agreement to its parent, an affiliate or
affiliates of BANM, or to a partnership or partnerships in which BANM, its
parent or an affiliate has an BANM interest. This Agreement shall benefit
and be binding upon the parties hereto and their respective successors and
permitted assigns.
19.10 Authorized Signatures. BANM and Customer each represent that the
individual signing this Agreement on its behalf has the power and authority
to enter into this Agreement and that this Agreement constitutes a valid
and binding obligation of each party.
19.11 Compliance with Laws Both parties shall comply with all applicable
local, state, and federal regulations, laws, ordinances, rules, and
decisions.
19.12 Acts of God. In no event shall BANM have any liability for any
failure to comply with this Agreement, if such failure results from the
occurrence of any contingency beyond the reasonable control of BANM,
including without limitation, the cellular provider serving a particular
area, strike or other labor disturbance, riot, theft, flood, fire,
lightning, storm, any act of God, power failure, war, national emergency,
interference by any government or governmental agency, embargo, seizure, or
enactment of any law, statute, ordinance, rule or regulation.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
CELLCO PARTNERSHIP U.S. Wireless Data, Inc.
By Bell Atlantic NYNEX Mobile, Inc.,
By: /s/ Cynthia J. White By: /s/ Rod Stambaugh
-------------------- ---------------------
Name: Cynthia J. White Name: Rod Stambaugh
- ----- ---------------- ----- -------------
Title: Executive Vice President & COO Title: President & CEO
- ------ ------------------------------ ------ ---------------
Date: 8/14/97 Date: 8/12/97
- ----- ------- ----- -------
8
<PAGE>
EXHIBIT A
This Exhibit A sets forth the Area(s), as that term is used in this Agreement,
in which BANM is authorized to provide CRS as described in this Agreement. In
this Exhibit there is described the individual counties of the MSA's and/or
RSA's in which BANM is authorized to conduct its CRS operations
1 . (a) COUNTIES OF THE MSA(S) IN WHICH BANM IS LICENSED:
Bronx NY, Kings NY, New York NY, Queens NY, Richmond NY, Putnam NY, Rockland NY,
Westchester NY, Bergen NJ, Nassau NY, Suffolk NY, Essex NJ, Morris NJ, Somerset
NJ, Union NJ, Hudson NJ and Passaic NJ of the New York MSA; Bucks PA, Chester
PA, Delaware PA, Montgomery PA, Philadelphia PA, Burlington NJ, Camden NJ and
Gloucester NJ of the Philadelphia MSA; Essex MA, Middlesex MA, Plymouth MA,
Suffolk MA and Rockingham NH of the Boston MSA; District of Columbia, Charles
MD, Montgomery MD, Prince Georges MD, Alexandria City VA, Fairfax City VA, Falls
Church City VA, Manassas City VA, Manassas Park City VA, Arlington VA, Fairfax
VA, Loudoun VA and Prince William VA of the Washington DC MSA; Allegheny PA,
Beaver PA, Washington PA and Westmoreland PA of the Pittsburgh MSA; Baltimore
City MD, Anne Arundel MD, Baltimore MD, Carroll MD, Harford MD and Howard MD of
the Baltimore MSA; Hartford CT, Middlesex CT and Tolland CT of the Hartford MSA;
New Haven CT of the New Haven MSA; Madison NY, Worcester MA of the Worcester
MSA; Lackawanna PA, Carbon PA, Lehigh PA, Northampton PA and Warren NJ of the
Allentown MSA; Charles City VA, Chesterfield VA, Goochiand VA, Hanover VA,
Henrico VA, Gaston NC, Meklenburg NC and Union NC of the Charlotte MSA;
Middlesex NJ of the New Brunswick MSA; Hampden MA and Hampshire MA of the
Springfield MSA; Greenville SC, Pickens SC and Spartanburg SC of the Greenville
MSA; New Castle DE, Salem NJ and Cecil MD of the Wilmington MSA; Monmouth NJ of
the Long Branch MSA; Bristol MA of the New Bedford MSA; Lexington SC and
Richland SC of the Columbia MSA; Gloucester VA, Hampden City VA, James City VA,
Poquoson City VA, Berks PA of the Reading MSA; Mercer NJ of the Trenton MSA;
Hillsborough NH of the Manchester MSA; Atlantic NJ and Cape May NJ of the
Atlantic City MSA; Orange NY of the Orange County MSA; Dutchess NY of the
Poughkeepsie MSA; New London CT of the New London MSA; Alexander NC, Burke NC
and Catawba NC of the Hickory MSA; Berkshire MA of the Pittsfield MSA; Anderson
SC of the Anderson MSA; Cumberland NJ of the Vineland MSA; Warren NY and
Washington NY of the Glen Falls MSA; Chittenden VT and Grand Isle VT of the
Burlington MSA.
(b) COUNTIES OF THE RSA(S) IN WHICH BANM IS LICENSED:
Hunterdon in NJ 1-HUNTERDON; Ocean in NJ 2-OCEAN; Sussex in NJ 3-SUSSEX; Kent
and Sussex in DE 1-KENT; Kent, Queen Annes, Talbot, Caroline, Dorchester,
Wicomico, Somerset, Calvert, St. Marys, and Worcester in MD 2-KENT; Frederick in
MD 3-FREDERICK; Lee, Wise, Dickenson, Buchanan, Russell and Norton City in VA
1-LEE; Frederick, Clark, Shenandoah, Page, Rappahannock, Fauquier, Warren and
Winchester City in VA 10-FREDERICK (Bl); Mason, Jackson, Roane, and Calhoun in
WV 1-MASON; Wetzel, Tyler, Doddridge, Ritchie, Gilmer, Lewis, Pleasants in WV
2-WETZEL; McKean, Camerom, and Elk in PA 2-MCKEAN; Butler, Clarion, Lawrence and
Armstrong in PA 6-LAWRENCE (B2); Indiana, Jefferson and Clearfield in PA 7-
JEFFERSON; Greene and Fayette in PA 9-GREENE; Huntingdon, Juniata and Mifflin in
PA 11- HUNTINGDON; Windham in CT 2-WINDHAM; Newport in RL-NEWPORT; Cherokee,
Clay, Graham, Macon, Swain, Haywood, Jackson and Transylvania in NC 1-CHEROKEE;
Anson, Montgomery, Richmond, Scotland in NC 5-ANSON; Cabarrus, Stanly, Rowan,
Iredell, and Davie in NC 15-CABARRUS; Laurens, Greenwood, McCormick, Edgefield,
Saluda, Newberry and Abbeville in SC 2-LAURENS; Calhoun, Orangeburg, Barnwell,
Bamberg and Allendale in SC 7- CALHOUN; Oconee in SC 1-OCONEE; Cherokee,
Chester, Union and Fairfield in SC 3-CHEROKEE; Lancaster and York in SC
9-LANCASTER; Barnstable, Dukes and Nantucket in MA 2- BARNSTABLE; Carroll,
Belknap and Merrimack in NH 2-CARROLL; Franklin, Orleans, Essex, Lamoille,
Washington, Caledonia and Orange in VT 1-FRANKLIN; Addison, Rutland, Windsor,
Bennigton and Windham in VT 2-ADDISON; Dawson, Lumpkin, White, Habersham, Hall,
Banks, Franklin, Stephens, Rabun, Barrow in GA 2-DAWSON.
9
<PAGE>
EXHIBIT B
PRICE SCHEDULE
$ * per month per NEI
$ * per kilobyte
$ * activation fee per NEI
* CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS DATA, INC. FOR THIS
PORTION OF THIS DOCUMENT PURSUANT TO COMMISSION RULE 24b-2. THE OMITTED MATERIAL
HAS BEEN FILED SEPARATELY WITH THE COMMISSION. 10
<PAGE>
EXHIBIT C
AirBridge's Packet Service Request Form
Please fax requests to Jeffrey Pazkiewicz or Patrick Aanstoots at 908-658-4889
Contract Number Date
Customer Number Quantity
MDIS EID's NEI's Activation/Deactivation Date
1. 1. 1. 1.
2. 2. 2. 2.
3. 3. 3. 3.
4. 4. 4. 4.
5. 5. 5. 5.
MDIS EID's NEI's Activation/Deactivation Date
1. 1. 1. 1.
2. 2. 2. 2.
3. 3. 3. 3.
4. 4. 4. 4.
5. 5. 5. 5.
MDIS EID's NEI's Activation/Deactivation Date
1. 1. 1. 1.
2. 2. 2. 2.
3. 3. 3. 3.
4. 4. 4. 4.
5. 5. 5. 5.
MDIS EID's NEI's Activation/Deactivation Date
1. 1. 1. 1.
2. 2. 2. 2.
3. 3. 3. 3.
4. 4. 4. 4.
5. 5. 5. 5.
Authorized Signer:
Print Name and Title
Signature:
ENGAGEMENT AGREEMENT
This Agreement is effective (the "Effective Date") as of the date of execution,
by and between U.S. Wireless Data Inc.. 1123 Western Avenue, Mill Valley,
California 94941 (referred to as "Company"), and entrenet Group, LLC, 5213 El
Mercado Parkway. Suite D, Santa Rosa, California 95403 (referred to as
"entrenet").
In this Agreement, the party who is contracting to receive services shall be
referred to as "Company," and the party who will be providing the services shall
be referred to as "entrenet".
Company desires to have services provided by entrenet.
Therefore, the parties agree as follows:
1 . DESCRIPTION OF SERVICES. Beginning on the Effective Date, entrenet will
provide the services, (collectively, the "Services") as described in
Exhibit A attached hereto and incorporated herein by reference.
2. PERFORMANCE OF SERVICES. The manner in which the Services are to be
performed and the specific hours to be worked by entrenet shall be
determined by entrenet. entrenet shall, and the Company will rely on
entrenet's promise to work as many hours as may be reasonably necessary to
fulfill entrenet's obligations under this Agreement.
3. PAYMENT. Company will pay a fee to entrenet for the Services in an amount
and under terms and conditions as described in Exhibit A.
4. TRANSACTION. For purposes of this agreement, the term "Transaction' shall
mean, whether in one or a series of transactions: Any capital financing,
including without limitation, any financing for debt, equity, capital
stock (common or preferred), convertible instruments, lines of credit and
secured and/or unsecured debt; Any merger/acquisition activity including
without limitation,
(i) the acquisition, directly or indirectly, through purchases, sales,
or otherwise, of any or all portions of the securities of the Company
by an investor or
(ii) any merger, consolidation, reorganization, recapitalization,
restructuring or other business combination involving the Company and
an investor.
5. CONSIDERATION. For purposes of this agreement, the term "Consideration'
means the total proceeds and other consideration paid and to be paid or
contributed directly or indirectly, in connection with a Transaction (which
consideration shall be deemed to include amounts paid or to be paid into
escrow) to the Company and its shareholders, including, without limitation:
(i) cash; (ii) notes, securities, and other property (including all
options, warrants or other instruments or arrangements convertible into or
exercisable for any of the
<PAGE>
foregoing) at the fair market value thereof, (iii) liabilities assumed;
(iv) payments to be made in installments. (v) amounts paid or payable under
management, consulting, supply, service, distribution, technology transfer
or licensing agreements, and real property or equipment lease agreements,
and agreements not to compete, and other similar arrangements (including
such payments to management), entered into other than in the ordinary
course of business; and (vi) contingent payments (whether or not related to
future earnings or operations). The fair market value of non-cash
consideration consisting of securities shall be determined based upon (A)
the closing sale price for such securities on the registered national
securities exchange providing the primary market therein on the last
trading day prior to the date of receipt thereof by the Company or its
shareholders. (B) if such securities are not so traded, the average of the
closing bid and asked prices, as reported by the National Association of
Securities Dealers Automated Quotation System on the last trading day prior
to the date of receipt thereof by the Company or its shareholders, or (C)
if such securities are not so traded or reported, agreement between the
Company and entrenet. The fair market value of any non-cash Consideration
other than securities shall be determined by agreement of the Company and
entrenet. If all or any portion of the Consideration is to be paid over
time, then that portion of the Transaction Fee attributable thereto shall
be payable, in the sole discretion of entrenet, either (i) as and when such
payments are made or (ii) upon consummation of a Transaction, calculated
based on the present value of such Consideration utilizing a discount rate
of 7% per annum.
6. ACCOUNTING AND INSPECTION RIGHTS. For all compensation referred to in
Exhibit A, it is further agreed that Company shall maintain written records
in sufficient detail for purposes of determining the amount of Fees due
entrenet. Company shall provide to entrenet a written accounting that sets
forth the manner in which Fee payments were calculated. Upon 15 days
notice, entrenet or entrenet's agent shall have the right to inspect
Company's records for the limited purpose of verifying the calculation of
Fee payments, subject to such restrictions as Company may reasonably impose
to protect the confidentiality of the records. Such inspections shall be
made at the company's principal place of business during regular business
hours as may be set by the Company.
7. EXPENSE REIMBURSEMENT. entrenet shall be entitled to reimbursement from
Company for the following "out-of-pocket" expenses: travel expenses,
airfare, hotel, meals, postage and delivery, copying, long-distance
telephone calls, or other expenses as shall be mutually agreed upon.
8. TERM/TERMINATION. This Agreement shall be effective upon signing and shall
have an initial term and such renewal terms as shall be described in
Exhibit A- The termination of this engagement is also defined in Exhibit
A.
9. RELATIONSHIP OF PARTIES. It is understood by the parties that entrenet is
an independent contractor with respect to Company, and not an employee of
Company. Company will not provide fringe benefits, such as health
insurance benefits, paid vacation, or any other employee benefit, for the
benefit of entrenet.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) If, in connection with the services or matters that are the subject of this
agreement, entrenet becomes involved in any capacity in any action or legal
proceeding, the Company agrees to reimburse entrenet, its affiliates and
their respective directors, officers, employees, representatives and
controlling persons (each an "Indemnified Person') promptly upon request
for all expenses (including without limitation, fees and disbursements of
legal counsel and the cost of investigation and preparation) as they are
incurred. In the event a determination is made to the effect set forth
below holding that entrenet is not entitled to indemnification hereunder,
entrenet shall promptly refund to the Company all amounts advanced under
this Section in respect of reimbursement of expenses. The Company also
agrees to indemnify and hold each Indemnified Person harmless against all
losses, claims damages or liabilities, joint or several (collectively,
"Damages"), to which such Indemnified Person may become subject
(i) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in any offering
materials or any other written or oral communication provided to any
investor of securities of the Company or arising out of or based upon
the omission or alleged omission to state in any such document or
communication a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; or
(ii) in connection with the services or matters which arc the subject
of this agreement, provided that the Company shall not be liable under
the foregoing indemnity in respect of any Damages to the extent that a
court having jurisdiction shall have determined by a final judgment
(not subject to further appeal) that such damages resulted directly
and primarily from the gross negligence or willful misconduct of
entrenet or any other Indemnified Person. The Company also agrees that
no Indemnified Person shall have any liability to the Company for or
in connection with this engagement, except for any liability which
results directly and primarily from the gross negligence or willful
misconduct of the Indemnified Person.
(b) The Company and entrenet agree that if, for any reason, any
indemnification sought pursuant to this Section is unavailable or is
insufficient to hold any Indemnified Person harmless, then, whether or not
entrenet is the person entitled to indemnification, the Company and
entrenet shall each contribute to amounts paid or payable in respect of the
Damages for which such indemnification is unavailable or insufficient in
such proportion as if appropriate to reflect
(i) the relative benefits to the Company, on the one hand. and
entrenet, on the other and
(ii) their relative fault, in connection with the matters as to which
such Damages relate, as well as any relevant equitable considerations;
provided that in no event shall the amount to be contributed by
entrenet exceed the amount of fees actually received by entrenet
hereunder (excluding any amounts received by entrenet as a
reimbursement of expenses). The Company and entrenet agree to consult
in advance with one another with respect to the terms of any proposed
waiver, release or settlement of any claim
<PAGE>
Engagement
Agreement
action or proceeding to which entrenet or an indemnified Person may be
subject as a result of the matters contemplated by this agreement and
further agree not to enter into any such waiver, release or settlement
without the prior written consent of one another (which consent shall
not be unreasonably withheld), unless such waiver, release or
settlement includes an unconditional release of entrenet or such
indemnified Person, as the case may be, from all liability arising out
of such claim, action or proceeding.
(c) The agreements of the Company under this Section shall be in addition to
any liabilities the Company may otherwise have and shall apply whether or
not entrenet or any other Indemnified Person is a formal party to any claim
action or legal proceedings. ANY RIGHT TO A TRIAL BY JURY WITH RESPECT TO
ANY CLAIM FOR INDEMNIFICATION OR CONTRIBUTION ]HEREUNDER OR IN RESPECT OF
ANY CLAIM ACTION OR LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THE
SERVICES OF entrenet HEREUNDER OR IN ANY OTHER MANNER IS ]HEREBY WAIVED BY
EACH INDEMNIFIED PARTY AND BY THE COMPANY.
11. COOPERATION, CONFIDENTIALITY, ETC.
(a) The Company shall furnish entrenet with all information and data which
entrenet shall reasonably deem appropriate in connection with its
activities on the Company's behalf, and shall provide entrenet full access
to the Company's officers, directors, employees and professional advisors.
The Company recognizes and confirms that entrenet in acting to this
engagement will be using information in public reports and other
information provided by others, including information provided by the
Company, and that entrenet does not assume responsibility for, and may rely
without independent verification upon, the accuracy or completeness of any
such information.
(b) the Company agrees that entrenet's advice is for the use
and information of the Company's management and Board of Directors only and
the Company will not disclose such advice to others (except the Company's
professional advisors and except as required by law) or summarize or refer
to such advice without, in each case, entrenet's prior written consent.
Notwithstanding anything to the contrary contained in the foregoing, in the
event the Company is required by law to make any filings with any
governmental authority (including without limitation the Securities and
Exchange Commission) which mention entrenet or any disclosure to the holder
of its securities concerning entrenet, the Company shall afford entrenet
the opportunity to review such disclosure in advance and to approve the
form thereof, such approval not to be unreasonably withheld or delayed.
entrenet agrees that it will not. without the prior written consent of the
Company, disclose, to any third party any confidential information provided
by the Company to entrenet in connection with this engagement, except to
the extent
(i) such disclosure is required by applicable law, regulation or legal
process,
(ii) such information becomes publicly known other than as a remit of
the breach by entrenet of its obligations set forth in this sentence,
and
(iii) such disclosure is requested or required by any bank regulatory
authority having jurisdiction over entrenet.
12, OTHER TRANSACTIONS. The Company acknowledges that entrenet and its
affiliates may have and may in the future have investment and commercial
banking, trust and other relationships with parties other than the Company,
which parties may have interests with respect to a Transaction. Although
entrenet in the course of such other relationships may acquire information
about the Transaction, potential investors or such other parties, entrenet
shall have no obligation to disclose such information to the Company or to use
<PAGE>
such information on the Company's behalf. Furthemore, the Company acknowledges
that entrenet may have fiduciary or other relationships whereby entrenet may
exercise voting power over royalties of various persons, which securities may
from time to time include securities of the Company, potential investors or to
others with interests with respect to a Transaction. The Company acknowledges
that entrenet may exercise such powers and otherwise perform its functions in
connection with such fiduciary or other relationships without regard to its
relationship to the Company hereunder.
13. ACKNOWLEDGMENT OF SERVICES PROVIDED. entrenet may include descriptions
of services provided by entrenet to the Company in entrenet's
promotional materials. The Company may not otherwise be publicly
referred to by entrenet without Company's prior consent.
14. NOTICES. All notices required or permitted under this Agreement shall be
in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, fire class postage prepaid,
addressed as follows:
<PAGE>
IF for- Company:
U.S. Wireless Data Inc.
Rod Stambaugh
President & CEO
1123 Western Avenue
Mill Valley, California 94941
IF for entrenet:
entrenet Group, LLC
Timothy F. Jaeger
Chief Financial Officer
5213 El Mercado Parkway, Suite D
Santa Rosa, CA 95403
Such addresses may be changed from time to time by either party by
providing written notice to the other the manner set forth above.
15. ARBITRATION AND CONSENT TO JURISDICTION. Any dispute and/or
controversy relating to or arising from the interpretation and/or
application of this Agreement shall be submitted at the request of the
Company or entrenet to a neutral arbitrator selected by the parties
from the J.A.M.S/Endispute panel Of arbitrators for a determination
which shall be @ and binding as to the parties thereto. Arbitration
shall take place in Santa Rosa, located in the county of Sonoma, state
of California for a determination which shall be final and binding as
to the parties thereto. The decision and award of the arbitrator may
include the cost of the arbitration proceedings and may include
reasonable attorney fees for the successful party. The arbitration
shall be conducted in accordance with California Arbitration Act (CCP
Section 1280 et seq.) and not by court action except as provided by
California law for the judicial review of arbitration proceedings.
Nothing herein contained shall be deemed to affect the rights of any
party to serve process in any manner other than as permitted by law.
16. ENTIRE AGREEMENT. This Agreement, along with any Exhibits attached
hereto, contains the entire agreement of the parties with respect to
the subject matter and supersedes any other agreement whether oral or
written which are not fully expressed herein, except for carryover
provisions of any previous executed agreements between entrenet and
Company.
17. AMENDMENT. This Agreement may be modified or amended if the amendment
is made in writing and is signed by both parties.
18. SEVERABILITY. If any provision of this Agreement shall be held to be
invalid or unenforceable for any reason. the remaining provisions shall
continue to be valid and enforceable. If a court finds that any
provision of this Agreement is invalid or unenforceable, but that by
limiting such provision it would become valid and enforceable, then
such provision shall be deemed to be written, construed, and enforced
as so limited.
19. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any
provision of this Agreement shall not be construed as a waiver or
limitation of that party's right to subsequently enforce and compel
strict compliance with every provision of this Agreement.
20. APPLICABLE LAW. This Agreement shall be governed by the laws of the
State of California, excluding that body of law known as conflict of
laws.
Company entrenet Group, LLC
By:/s/ Rod Stambaugh By: /s/ Ted Morgan
-------------------- -----------------
Rod Stambaugh Timothy F. Jaeger
President & CEO Chief Financial Officer
Date Executed : 6/3/97 Date Executed: 6-3-97
------- -------
<PAGE>
Engagement Agreement
Exhibit A
SERVICES PROVIDED BY entrenet
ADVISORY SERVICES. entrenet will act as corporate advisor in providing
services to the management of the Company. Services shall include advice
and counsel in the following areas:
1. Business Plan and Corporate presentation
2. Administrative Systems and Controls
3. Sales and Marketing Strategy and Structure
DIRECT INTRODUCTION OF FINANCING SOURCES. entrenet will use its best
efforts to provide introduction to financing sources for the Company.
OTHER SERVICES. entrenet may provide additional direct consulting services
to the Company beyond its role as corporate advisor (egs. financing
strategies, strategic partnerships, acquisition and merger strategies,
securing placement agents, corporate positioning, option for and
participation in financial meetings ("road show")) at the Company's
request. Such additional direct consulting services would be charged at
entrenet, s prevailing consulting rates at the time of the assignment(s) or
as agreed to separately in the future.
entrenet COMPENSATION.
Advisory Service & At signing of this engagement agreement, entrenet shall
earn compensation of $150,000 for a one-year term. Form of payment shall be
one hundred percent 100 % payable in a 10% Convertible Debenture. The form
of which is attached as Exhibit B except that the conversion price shall be
fixed at $0.50 per share for a total of 300,000 shares for the engagement
and the Debenture shall not be transferable. Payments due entrenet upon
completion of each the following milestones:
1. Business Plan and Corporate presentation:
* Summary Business Plan - Due 6/15/97 $15,000
* Complete Business Plan - Due 6/19/97 $20,000
* Corporate Presentation - Due 6/24/97 $15,000
2. Administrative Systems and Controls $70,000
* Needs analysis - Due 8/l/97
+ Staffing Requirement-Due 8/l/97
+ RFP Preparation - Due 8/l/97
+ Corporate vs. Regional staffing requirements - Due 8/l/97
* Interim staffing requirements - Due 8/l/97
Systems installation, training and vendor oversight -
On going on an agreed upon mutually agreed upon
schedule
3. Sales and marketing strategy Consultation - All due
8/l/97 $30,000
+ Strategy review, analysis, and recommendations
+ Reporting command & control, structure, review, analysis, and
recommendations
+ Sales/Management recruiting
<PAGE>
Engagement
Agreement
Direct Introduction of Financing Sources In addition to fees for successful
Transactions and advisory services, entrenet's fees for direct introduction
of a financing source or referral of principal parties, shall be eight
percent (8%) of the gross consideration provided by such source.
Warrants. For all successful Direct Introduction of Financing Sources,
the Company shall grant to entrenet a five-year warrant to purchase
shares of Company's stock equal to the value of all fees paid to
entrenet in conjunction with all such transactions. These warrants
shall contain all standard provisions, as well as stock split
adjustments and piggy-back registration provisions, and shall have an
exercise price equal to the lower of market or the purchase price of
the stock issued in conjunction with any such transaction.
Reimbursement of Expenses. Entrenet shall be entitled to expense
reimbursement for all pre-approved travel and business expenses as described
in paragraph 7 of this agreement. Additionally, to offset local auto travel.
long-distance telephone calls, postage, delivery, copying, faxing and other
office costs. entrenet shall be advanced a non-accountable $3000 for the
one-year term. Form of payment shall be $750 payable in cash upon signing of
this agreement. The balance of shall be paid quarterly in the amount of $750
on September 1, 1997, December 1, 1997, and March 1, 1998.
TERM
- ----
The term of the Agreement shall be one (1) year from date of signing.
Upon termination of this Agreement, payments under this paragraph shall
cease; provided, however, that entrenet shall be entitled to payments for
periods or partial periods that occurred prior to the date of termination
and for which entrenet has not yet been paid.
GTE LEASING CORPORATION
PROMISSORY NOTE NO. 002
1123 Western Ave
----------------
(Street Address of Maker)
Mill Valley, Marin, CA 94941
---------------------------------
(Town) (County) (State) (zip)
FOR VALUE RECEIVED, U.S. Wireless Data, Inc. (hereafter called "Maker") promises
to pay to the order of GTE Leasing Corporation (hereafter called "Payee") at the
address set forth below or at such other place as Payee or the holder hereof may
designate, the sum of Eighty Thousand and no/100 Dollars ($80,000.00) which sum
comprises both principal and interest at the rate of 11.81% per annum, in 36
consecutive monthly installments of $2,650.00 each. The first installment shall
be due and payable on 15th day of the month following receipt of the certificate
of acceptance with the balance of installments payable on even date of each
succeeding month thereafter until this note is fully paid.
If any installment is not paid within 10 days after due date, Maker agrees to
pay a late charge at the annual rate of 18% on, and in addition to, the amount
of said installment, but not exceeding the maximum lawful charges.
If Maker fails to make payment of any amount due hereunder within 10 days after
same becomes due and payable, then Maker agrees that the entire unpaid balance
of this note shall become due and payable at the option of the holder hereof
together with interest thereon at an annual rate of 18% from such accelerated
maturity until paid, but not exceeding the lawful maximum, if any.
The undersigned and all endorsers or any others who may at any time become
liable for the payment hereof hereby consent to any and all extensions of time,
renewals, waivers, modifications, substitutions or releases of security that may
be granted or consented to by the Payee or holder hereof with regard to time of
payment of this note or any other provision hereof. The undersigned and all
endorsers hereby severally waive presentment, demand for payment, protest and
notice of protest, notice of dishonor and all other notices in connection with
this note and agree to pay, if permitted by law, all expenses incurred in
collection, including reasonable attorneys' fees, if placed with an attorney for
collection, and hereby waive all benefits of valuation and appraisement. The
undersigned and all endorsers authorize, irrevocably, any attorney of any court
of record to appear for the undersigned and all endorsers in said court, and
confess judgment without process in favor of the holder of this note for such
amount as may appear to be unpaid thereon. The undersigned and all endorsers
also expressly waive all benefit under the exemption laws of the state in which
such judgment is sought and waive all errors in any such proceedings and consent
to immediate execution upon such judgment, hereby ratifying and confirming all
that said attorney may do by virtue hereof.
The undersigned authorizes Payee to receive monthly installments on this note
and all other outstanding notes directly from Nova Information Systems,
Inc.("Nova ), as identified on a Member Service Provider Sales and Service
Credit Card Processing Agreement between Nova and Maker signed on February 7,
1997, via ACH to a Bank Account designated by GTE Leasing on the 15 of each
month. Furthermore, under any circumstances should the Agreement be terminated,
Maker, without being relieved of any obligations under this note and any
supplemental documents, authorizes Nova to continue to remit monthly
installments to the Payee and authorizes Payee the right to receive monthly
installments until such time that all obligations are satisfied and paid in
full.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the 6th day of August
1997.
U.S. Wireless Data, Inc.
------------------------
(Type or print name of Maker)
By: Rod Stambaugh
-----------------
(Signature of Authorized Representative
Its:President and CEO
---------------------
(Title)
<PAGE>
GTE LEASING CORPORATION
SECURITY AGREEMENT
Undersigned, U.S. Wireless Data. Inc.
-------------------------------------------
(Print Name of Customer)
1123 Western Avenue, Mill Valley. CA 94941
or
5700 Flatiron Parkway
Boulder, CO 80301
-------------------------------------------
(Address, City, State)
herein called "Customer", hereby agrees with GTE Leasing Corporation herein
called GTELC, of 19845 U.S. Hwy. 31 N., Westfield, IN 46024-as follows:
1. Concurrently herewith, GTELC lent Customer and Customer hereby
acknowledges receipt of $ Eighty Thousand and no/100 Dollars
($80,000.00) evidenced by Promissory Note of even date herewith,
executes by Customer payable to the order of GTELC, with interest as
provided therein (principal and accrued interest are herein referred to
as "Indebtedness").
2. As security for the payment by Customer of the Indebtedness and all
other indebtedness now or hereafter owing by Customer to GTELC, and the
performance by Customer of the covenants, warranties and agreements
contained herein, and any other agreements between GTELC and Customer,
Customer hereby grants, sells, assigns, conveys, warrants, mortgages
and confirms to GTELC and gives and agrees that GTELC does and shall
have a security interest under the Uniform Commercial Code, in all of
the following described personal property (herein called "Collateral"):
DESCRIPTION OF COLLATERAL
200 ea. Tranz Enabler - Wireless CDPD Transmission Devices per attached Schedule
- --------------------------------------------------------------------------------
The right to receive proceeds from the contract by and between Nova
Information Systems and Maker dated February 7,1997
3. Customer warrants that it is or will be the owner of Collateral free
and clear of any liens or encumbrances, except for the security
interest provided for herein; and will keep and maintain the same
free and clear of all encumbrances, charges and liens except as
herein provided.
4. Collateral will not be moved from the state where it is currently
located, nor will it be sold or otherwise disposed of without prior
written consent of GTELC.
5. Customer will keep and maintain Collateral in good order and repair
and working condition at all times.
6. At Customer's own cost and expense, it will have and maintain
insurance at all times against hazards, with companies in amounts and
in form acceptable to GTELC with insurance policies endorsed to make
the same payable first to GTELC, as its interest may appear. In the
event of any loss thereunder, the carriers owned therein hereby are
directed by Customer to make such payment for loss to GTELC and not to
Customer and GTELC jointly. If any insurance losses be paid by check,
draft or other instrument payable to Customer and GTELC jointly, GTELC
may endorse the name of Customer thereon and do such other things as
it may deem desirable in order to reduce the same to cash. All loss
recoveries received by GTELC upon any such insurance may be applied
and credited by GTELC at its discretion, to the indebtedness or to any
other amounts owing from Customer to GTELC.
7. If Customer fails to keep Collateral free and clear of all
encumbrances, liens and charges, except as herein provided, or to pay
tax or public charges thereon, or to keep the same in good order or
repair, or fully insured as herein required, then GTELC, at its
discretion, may discharge such encumbrances, liens or other charges,
or pay such taxes or other public charges, or procure and maintain
such insurance or make such repairs as may deem advisable. All sums of
money thus expended, and all other monies paid by GTELC at its
discretion, to protect its interest in the Collateral shall be
repayable by Customer to GTELC on demand, and if not so repaid, shall
be added to the Indebtedness, bear interest, and be secured in like
manner as the Indebtedness.
8. Customer confirms that the security interest of GTELC in other
equipment, chattels and personal property of Customer under any other
agreements between GTELC and Customer is also security of Customer's
obligations hereunder.
9. None of the terms or conditions herein or any agreements or contracts
between Customer and GTELC are in violation of any provision of the
Certificate of Incorporation or By-Laws of Customer or any agreements
Customer may have with any third party; and the execution and delivery
hereof, and of other agreements or writings with or to GTELC have been
duly authorized by appropriate corporate action. Customer will at all
times comply with all acts, laws, rules and regulations of any
federal, state or public authorities to which Customer is subject.
10. Upon Customer's default in the payment of any principal or interest
under the Note, when due, or default or branch of any of the
provisions hereof, or in the payment performance of any obligations of
Customer to GTELC, or it Customer becomes insolvent, ceases doing
balances as a going concern, or commits an act of bankruptcy, or if a
petition under the Bankruptcy Code or any amendment thereof or any
state insolvency law be filled by Customer or against Customer and be
not dismissed within thirty (30) days, or an attachment or tax lien be
filed against to the satisfaction of GTELC, then as the election of
GTELC, the entire unpaid indebtedness shall immediately become due and
payable without notice, and if not paid, GTELC at any time then or
thereafter, in its discretion, may lawfully enter any of Customer's
premises or other premises on which the Collateral is located and
lawfully remove the Collateral to such place as GTELC may deem
advisable, or require Customer to make any or all such Collateral
available at such place as GTELC may direct, and, upon five (5) days
written notice to Customer, sell the Collateral, or any part thereof,
at public auction, in one or more sales, at such price or prices and
upon such terms either for cash, credit or future delivery as GTELC
may elect, and at any such public sale or sales GTELC may bid for and
become the purchaser of any or all such Collateral, and/or upon five
(5) days written notice to Customer of the date and details of such
sale or sales, sell the Collateral or any part thereof, at private
sale or sales, at any time or place, in one or more sales, at such
price for prices, and upon such terms, either for cash, credit or
future delivery, as GTELC may elect, and/or foreclose its security
interest in the Collateral in any way permitted by law. The proceeds
of such sales may be applied by GTELC, at its discretion, to the
payment of Customer's obligations to GTELC, including interest,
attorneys' reasonable fees and all reasonable cost and expenses
incurred by GTELC in connection therewith. In connection with the
notices given of such sales, it is agreed that in all instances five
(5) days written notice is reasonable notice. GTELC may enforce its
security interest hereunder either alternately or concurrently with
its rights under other agreements between it and Customer and shall
have the full right to realize upon all available collateral,
collecting on the same or instituting procedures in connection
therewith, until GTELC has received payment in full of all amounts
owing to it under any of its agreements with Customer, including
principal, interest, costs and expenses. Any surplus remaining after
payment in full of all Indebtedness of Customer to GTELC shall be paid
by GTELC to Customer along with the reassignment of any remaining
Collateral.
11. Any delay on the part of GTELC in exercising any power, privilege or
right hereunder or under any instrument executed by Customer to GTELC
in connection herewith shall not operate as a waiver thereof and no
single or partial exercise of any power, privilege or right shall
preclude other or further exercise thereof, or the exercise of any
other power, privilege or right. The waiver by GTELC of any default by
Customer shall not constitute a waiver of any subsequent defaults, but
shall be restricted to the default so waived. If any part of this
Agreement shall be contrary to any law which GTELC might seek to apply
or enforce or should otherwise be defective, the other provisions of
this Agreement shall not be affected thereby, but shall continue in
full force and effect. All rights, remedies and powers of GTELC
hereunder are irrevocable and cumulative, and not alternative or
exclusive, and shall be in addition to all rights, remedies and powers
given hereunder or in or by any other instruments or any laws now
existing or hereafter enacted.
12. Customer shall pay all out-of-pocket expenses and all costs of any
nature whatsoever incurred by GTELC in connection with the making of
this loan, including, but not limited to, all filing fees and
recording costs, stamp taxes and attorneys' fees actually incurred.
<PAGE>
13. Customer including any guarantor hereunder, hereby waives presentment,
demand, protest, notice of protest, and non-payment or dishonor,
notice of the sale of any collateral security and all benefits of
valuation, appraisement, and all exemption laws now in force or
hereafter passed, including stay of execution and condemnation.
14. This Agreement shall apply and inure to the benefit of and bind the
successors and assigns of Customer and GTELC, and the terms "Customer"
and "GTELC" include and mean, respectively, the successors and assigns
of Customer and GTELC.
IN WITNESS WHEREOF, Customer has caused this Agreement to be duly executed on
the day and year first above written.
U.S. Wireless Data, Inc.
(Customer)
CONFIDENTIAL TREATMENT REQUESTED BY U.S. WIRELESS DATA, INC. FOR CERTAIN
PORTIONS OF EXHIBIT B CONTAINED IN THIS AGREEMENT
CDPD NATIONAL DATA
SERVICE AND EQUIPMENT
AGREEMENT
PREPARED FOR
U.S. WIRELESS DATA INC.
<PAGE>
NATIONAL CORPORATE CDPD
SERVICE AND EQUIPMENT AGREEMENT
TABLE OF CONTENTS
I. Agreement
II. Exhibit A - GTEMC Markets
III. Exhibit B - Service and Pricing
IV. Exhibit C - Joint Marketing Operating Terms
<PAGE>
U.S. WIRELESS DATA INC.
National Corporate Account CDPD Service and Equipment Agreement
This CDPD Service and Equipment Agreement (this "Agreement") is between GTE
Mobile Communications Service Corporation on its behalf and on behalf of GTE
Mobilnet Incorporated and Contel Cellular Inc. and their respective affiliates
and partnership interests (collectively referred to as "GTEMC") and U.S.
Wireless Data Inc. ("Customer") for the provision of Cellular Digital Packet
Data Services ("CDPD Services") in the those markets (the "Markets") set forth
on Exhibit A hereto, as modified from time to time by GTEMC. The parties agree
as follows:
1. Term. The term of this Agreement shall be for an initial period of two
(2) years, which shall commence as set forth in paragraph 13. Upon the
expiration of the initial period, this Agreement shall automatically
and perpetually renew for additional periods of two (2) years each,
unless canceled by either party upon written notice given to the other
party at least ninety (90) days prior to the expiration of the initial
term and any renewal term then in effect.
2. Service Pricing. Pricing for CDPD Services will be in accordance with
the Pricing Plan which is attached hereto and incorporated herein as
Exhibit B. The parties agree that GTEMC will be the exclusive provider
of CDPD Services in all GTEMC markets listed in Exhibit A. Customer
optionally may purchase GTEMC's CDPD services in markets not owned by
GTEMC using the same pricing shown in Exhibit B. It is specifically
acknowledged and agreed by the parties that GTEMC cannot and will not
attempt to set, influence or determine the service rates or pricing of
other carriers.
3. Minimum Requirement. In consideration for the CDPD Services provided
herein, Customer is required to meet the revenue commitments as defined
in Exhibit B.
4. Specification of Service. GTEMC or an affiliate company will provide
and procure for Customer CDPD Services for Customers application in the
Markets. The areas effectively served may be subject to transmission
limitations caused by atmospheric and other natural or artificial
conditions, including the type and condition of Customers equipment.
GTEMC assumes no responsibility to Customer or its CDPD Services users
for marginal transmissions arising from or related to interruptions or
limitations caused by any natural, atmospheric or artificial causes.
The names assigned to GTEMC's CDPD Services, "Coverage" and "Local,
State, Regional and National" are representative terms that do not
<PAGE>
imply or denote that actual CDPD Services coverage is coterminous with
these respective geographical areas. In any geographical area there may
be sections in which CDPD Services coverage does not exist.
5. NEls. In connection with its provision of CDPD Services hereunder,
GTEMC shall provide Customer with an NEI for each user device. Customer
shall acquire no proprietary interest in any such NEI designated for
its use, and GTEMC reserves the right to change such NEls or to
re-assign such NEls to other customers.
6. Equipment. GTEMC may, but shall not be obligated to, make available
CDPD equipment (the "Equipment") for purchase by Customer. In such
event, GTEMC will provide to Customer the terms and conditions for the
purchase of such Equipment.
7. Data Services Reporting and Billing. For CDPD Services charges,
payment terms are as follows:
Payment for CDPD Services is due within thirty (30) days of the date of invoice.
Overdue balances shall accrue a late payment fee equal to the lesser of one and
one-half percent (1.5%) per month on any amount not paid when due, or the
highest amount allowable by applicable state law or tariff. The fee shall be
paid every month on all outstanding overdue balances, and shall be prorated for
each day that the payment is overdue. Such late payment fee will not be
compounded monthly. If timely payment is not received in full, GTEMC may, at its
sole option and without limiting any other remedy available under law or in this
Agreement, disconnect CDPD Services, subject to a reconnection charge for
service restoration. Customer must meet GTEMC's established credit criteria in
order to receive CDPD Services hereunder.
8. Taxes. Prices are exclusive of all federal, state, municipal or other
government, excise, sales, use, occupational, or like taxes. The amount
of any present or future tax applicable to the sale of the Equipment or
CDPD Services shall be paid by the Customer or, in lieu thereof, the
Customer shall furnish GTEMC with a tax-exemption certificate
acceptable to the appropriate tax authorities.
9. Limitation of Liability. GTEMC shall not be liable to Customer or to
CDPD Services users for interruptions caused by failure of equipment
or CDPD Services, failure of communications, power outages, or other
interruptions not within the complete control of GTEMC. There shall be
no credits, reductions, or setoff against the charges for CDPD
Services for downtime or interruption of CDPD Services unless such
CDPD Services interruption exceeds twenty-four (24) hours in duration.
GTEMC shall provide Customer with a credit equal to one thirtieth
(1/30) of the recurring monthly charge for CDPD Services for each
twenty-four (24) hour period from the time of notice of interruption
until CDPD Services restoration, provided that Customer timely
notifies GTEMC of the CDPD Services interruptions.
2
<PAGE>
The liability of GTEMC for any cause whatsoever, including but not
limited to any failure or disruption of CDPD Services provided under
this Agreement, regardless of the form of action, whether in contract
or tort or otherwise, shall be limited to an amount equivalent to
charges payable by Customer under this contract 'for the services or
products furnished hereunder during the period such claim arose.
Notwithstanding any provision contained herein, GTEMC shall not be
liable to Customer, or to its users of CDPD Services, for any special,
incidental, consequential or punitive damages of any kind, including,
but not limited to, loss of business opportunity, loss of profits, or
loss of use of the Equipment.
10. General Provisions.
A. Service Disclaimer. Except as expressly set forth herein, GTEMC make
no warranties or representations, either express or implied, concerning
the CDPD Services and GTEMC expressly disclaims warranties of fitness
for a particular use or purpose, the warranty of merchantability and any
other warranty implied by law.
B. Force Majeure. Neither party shall be liable for any delays or
failure to perform resulting directly or indirectly from acts of God,
any governmental authority, accidents and disruptions, including fires,
explosions, war, insurrection, riots, labor disputes and strikes. In
addition to such causes, neither party shall in any event be liable for
delay or failure to perform resulting directly or indirectly from any
cause which is beyond that party's reasonable control.
C. Regulations. This Agreement shall at all times be subject to the
decisions, orders, statutes and rules of the federal and state
regulatory authorities having jurisdiction over the CDPD Services
provided under this Agreement.
D. Events of Default.
1. It shall be a Customer default under this Agreement if
Customer is sixty (60) days overdue on any undisputed payments
under Exhibit B.
2. Any one of the following events shall constitute a default
by either party under this Agreement:
a. Either party becomes insolvent or makes an assignment for
the benefit of creditors;
b. A receiver, trustee, conservator, or liquidator of all or
a substantial part of either party's assets is appointed
with or without said party's application or consent;
c. A petition is filed by or against (without dismissal
within 60 days) either party under the Bankruptcy Code or
any amendment
3
<PAGE>
thereto or under any other insolvency law or laws providing
for the relief of debtors; or
d. Either party assigns or attempts to assign this contract
to a third party, except as set forth in Section 1OF.
E. Remedies and Termination. Either party may terminate this Agreement
in the event of the other party's material default, as set forth in
Section 10, which remains unresolved for a period of sixty (60) days
following written notice by the non-defaulting party. GTEMC may
terminate this Agreement, without liability to Customer, in any of the
areas set forth on Exhibit A, wherein GTEMC or an affiliate company
sells, ceases to own, manage or operate the network therein. Should
GTEMC terminate this Agreement, the Customer shall be entitled to a
refund of any payment made in advance of the actual provision of
services.
F. Non-assignment. Neither party may assign this Agreement, except to
an affiliate company or upon GTEMC's sale of any market as provided
hereinafter, without the other's prior written consent, and such
consent shall not be unreasonably withheld. However, in the event of
the sale of any market or the cessation of ownership, management or
control by GTEMC, GTEMC may seek the assignment of this Agreement to
its successor without the requirement of Customers consent. However,
nothing contained herein shall be construed as an obligation or
requirement by GTEMC to obtain any such assignment or as a condition
of sale of any market or customer base.
G. Non-waiver. Failure of either party to this Agreement to enforce
any right shall not constitute a waiver of such right or any other
right, whether of a similar or dissimilar nature, and shall not
prohibit the exercise of the same right at a future date.
H. Severability. In the event that any provision of this Agreement
shall be found to be void or unenforceable, such finding shall not be
construed to render any other provision of this Agreement either void
or unenforceable, and all other provisions which are invalid or
unenforceable shall not substantially affect the rights or obligations
granted to or undertaken by either party.
I. Headings. The headings of the provisions of this Agreement are
inserted for convenience only and shall not constitute a part hereof.
J. Law Governing. This Agreement is entered into under the laws of the
State of Georgia and shall be construed thereunder.
11. Notice. Any notice to be given hereunder by either party to the other shall
be in writing and shall be deemed given when sent by postage prepaid certified
or registered United States mail.
4
<PAGE>
Notices to GTEMC shall be addressed to:
GTE Mobile Communications Service Corporation
Data Products Department
245 Perimeter Center Parkway 2NLA
Atlanta, Georgia 30346
Attn.: William Warford (770-391-8467)
Attn.: Ed Huelsman (972) 527-3268
cc: Business Development/Contracts Counsel (same address)
Notices to Customer shall be addressed to:
Rod Stambaugh
U.S. Wireless Data Inc.
1123 Western Avenue
Mill Valley, CA 94941
Phone: (415) 389-1755
If either party changes its address during the term hereof, it shall so
advise the other party in writing and any notice thereafter required to
be given shall be given to such new address.
12. Entire Agreement. This Agreement, including all Exhibits, constitutes
the entire and only agreement between the parties with regard to the
subject matter hereof, and any representation, promise or condition,
whether oral or in writing, including prior or contemporaneous
representations of sales representatives or other personnel of GTEMC,
which is not fully set forth herein or expressly incorporated herein by
reference shall not be binding upon either party. Any addition to or
waiver, alteration or modification of the foregoing conditions shall not
be valid or binding upon either party unless made in writing, and signed
on behalf of both parties by an authorized representative.
13. Term. The term of this Agreement is from August 1, 1997 to
August 1, 1999.
5
<PAGE>
The parties hereto have executed this Agreement through duly authorized
representatives and wishing to be legally bound hereto are so bound as of this
first day of August, 1997.
U.S. WIRELESS DATA INC. GTE MOBILE COMMUNICATIONS SERVICE CORPORATION
By: Rod Stambaugh By: Byron W. Smith
---------------- -------------------
(Signature) (Signature)
Name:Rod Stambaugh Name: ________________________
Title: President Title:________________________
Reviewed by legal
8/18/97 DSV
- ------- ---
Date Initial
6
<PAGE>
Exhibit A
GTEMC MARKETS
GTE Markets
City State
Akron OH
Austin TX
Bakersfield CA
Brandenton FL
Canton OH
Cleveland OH
Frankfort KY
Fresno CA
Honolulu HI
Houston TX
Galveston TX
Greensboro NC
Greenville VA
Indianapolis IN
Lakeland-Winter Haven FL
Lorain-Elyria OH
Louisville KY
Memphis TN
Nashville TN
Newport News VA
Norfolk VA
Petersburg-Colonial Heights VA
Raleigh-Durham NC
Richmond VA
San Diego CA
San Francisco-Oakland CA
San Jose CA
Tampa FL
Visalia-Tulare CA
7
<PAGE>
GTE Mobilnet
8
<PAGE>
Exhibit A
(continued)
Non-GTE Markets
AMERITECH
Chicago IL
Cincinnati OH
Dayton OH
Aurora-Elgin IL
Joliet IL
Gary IN
Detroit-Ann Arbor MI
Flint MI
St. Louis MO
9
<PAGE>
Exhibit A
(continued)
Non-GTE Markets
BELL ATLANTIC/NYNEX
Allentown PA
Atlantic City NJ
Baltimore MD
Boston MA
Bridgeport/Stamford CT
Norwalk/Danbury CT
Charlotte NC
Frederick MD
Hartford CT
Hunterdon NJ
Long Branch-Asbury Park NJ
Manchester-Nashua NH
New Brunswick NJ
New Haven CT
New London/Norwich CT
NYC NY
Petersburg-Colonial Heights PA
Philadelphia PA
Pittsburgh PA
Trenton NJ
Washington DC
Wilmington DE
Worchester-Fitchburg MA
<PAGE>
GTE Mobilnet
11
<PAGE>
Exhibit A
(continued)
Non-GTE Markets
AT&T WIRELESS
Dallas TX
Denver co
Jacksonville FL
Las Vegas NV
Miami-Ft Lauderdale FL
Minneapolis-St. Paul MN
Modesto CA
Oklahoma City OK
Orlando FL
Portland OR
Reno NV
Sacramento CA
Salt Lake UT
San Antonio TX
Seattle-Everett WA
Stockton CA
Tulsa OK
West Palm Beach FL
SOUTHWESTCO
Albuquerque NM
Cococino AZ
El Paso TX
Las Cruces NM
Phoenix AZ
Tucson AZ
<PAGE>
GTE Mobilnet
13
<PAGE>
Exhibit B
PRICE PLANS & TERMS
1. Primary Service Rate Plan:
- -----------------------------
Activation Monthly Included Price Above
Fee Minimum Kbytes Included Kybtes
* * * *
2. Minimum Cumulative Revenue Commitments To GTF-MC:
- ---------------------------------------------------------
Year 1 Year 2
Ql Q2 Q3 Q4 Q1 Q2 Q3 Q4
$20K $140K $380K $700K $1.1M $1.5M $2.0M $2.75M
3. Penalty Terms & Fees:
- --------------------------
At the end of each quarter, should Customer not generate the minimum schedule
revenue shown above, GTEMC will invoice the Customer the difference between
actual revenue generated and the minimum schedule revenue. Customer will be
required to submit payment to GTEMC within 30 days of receipt of invoice.
* CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS DATA, INC. FOR THIS
PORTION OF THIS DOCUMENT PURSUANT TO COMMISSION RULE 24b-2. THE OMITTED MATERIAL
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
14
<PAGE>
GTE Mobilnet
15
<PAGE>
Exhibit B
(continued)
4. Alternate Service Rate Plan Selection:
At any time during this agreement term, Customer will be allowed the option once
to change to the service rate plan listed below along with the associated
committed revenue schedule.
Activation Monthly Included Price Above
Fee Minimum Kbytes Included Kybtes
* * * *
Year 1 Year 2
01 Q2 Q3 Q4 Ql Q2 Q3 Q4
$15K $75K $200K $400K $500K $700K $800K $1 M
If Customer exercises this option, GTEMC will re-compute all revenue generated
from the beginning of the agreement according to this rate plan. Also GTEMC will
invoice the customer for any penalty fees associated with this schedule
according to penalty fee calculations defined in 3 above. Customer will not be
allowed additional changes to rate plans once this option is exercised.
* CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS DATA, INC. FOR THIS
PORTION OF THIS DOCUMENT PURSUANT TO COMMISSION RULE 24b-2. THE OMITTED MATERIAL
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
16
<PAGE>
EXHIBIT C
JOINT MARKETING OPERATING TERMS
The parties to the Agreement agree to jointly market the US Wireless Data (USWD)
Solution (as defined below) pursuant to the following terms and conditions:
1) USWD SOLUTION. The "USWD Solution" includes:
a) A USWD Tranz Enabler product; and
b) A GTE CDPD NEI address; and
c) A USWD provided credit/debit card transaction payment service with a
competitive rate to that paid by a fixed location retail merchant who
currently uses a VeriFone T330 or T380.
2) GTE RESPONSIBILITIES
a) The GTE sales representatives will utilize appropriate sales
channels to solicit retail merchants that meet the criteria set forth
in Section l.c) above to convert their existing dial line credit card
merchant service to a wireless credit card merchant service offered
from USWD.
b) Should the retail merchant wish to convert its present service, the
GTE sales representative will provide the merchant with an application
to filled out. The GTE sales representative will submit the completed
application, along with the merchant application fee and any
additional activation fees, to USWD.
c) The GTE "Wireless Merchant Program" encompasses a variety of retail
merchant solutions, one of which is the USWD Solution offering. As
other retail merchant solutions become available in the industry, GTE
will incorporate them into the "Wireless Merchant Program" provided
they do not violate terms of this agreement with USWD.
d) GTE will make available the USWD retail merchant solution in the
"Wireless Merchant Program" to all GTE commercial sales
representatives in GTE CDPD markets using dedicated CDPD channels for
service.
e) In each selected GTE CDPD market, GTE will purchase, lease, or rent
fully operational demonstration units through USWD for the GTE sales
18
<PAGE>
representatives who are participating in this program. The local CDPD
market will provide the IP addresses for their respective
demonstration units.
f) GTE will provide GTE sales trainers to attend and learn the USWD
program for future training of GTE sales representatives
g) The responsibilities of the GTE sales representative will be the
following:
i) Make good faith efforts to attend scheduled training sessions
conducted by USWD;
ii) Solicit the USWD specified type of retail business merchant;
iii) Collect the merchant application fee and any additional
activation fees for each retail merchant who submits a merchant
application for the USWD wireless service. Should there be a
negotiated fees with the retail merchant other than the standard
rate, it must first be approved by GTE and USWD.
iv) Deliver completed application to the USWD representative
along with the merchant application fee.
Optionally, participate with the USWD representative in the deployment
of all approved retail merchants in this program
h) GTE will fund promotional programs that may include but not limited
to the following elements for marketing this solution in the "Wireless
Merchant Program":
i) Development of joint collateral material (data slicks, 4 color
brochures, etc.) using both GTE and USWD logos;
ii) Direct mail campaign and local advertising to generate leads
for GTE sales representatives;
iii) Sales incentives/contests for GTE sales representatives;
iv) Press releases on this solution for the "Wireless Merchant
Program";
19
<PAGE>
v) Printing of all USWD developed sales materials to the GTE
sales representatives.
3) USWD RESPONSIBILITIES
a) USWD will process the application for the merchant service and, if
approved according to Visa & Mastercard regulations, will implement
the wireless merchant service using GTE CDPD services as the
communications transport of the USWD merchant service.
b) USWD will order GTE CDPD NEls for all merchants under this program
offering. The minimum revenue generated for each merchant will be as
defined in Exhibit B of the contract.
c) For each GTE CDPD market identified to participate in the "Wireless
Merchant Program", USWD will provide the following:
i) Development and distribution of all sales training material
for each GTE sales representative who will be soliciting retail
merchants;
ii) A minimum of one USWD sales representative residing in the
GTE selected market to coordinate all USWD responsibilities for
this program; and
iii) Delivery of a fully operational demonstration unit that will
be purchased, leased, or rented by the GTE sales office at a
discounted rate.
d) The USWD sales representative will perform the following functions
in the selected GTE market:
i) Full training of each GTE sales representative, which includes
classroom training and joint sales calls;
ii) Provide each GTE sales representative with all retail
merchant application paperwork, procedures and checklists
necessary for the GTE sale representative to execute a successful
solicitation;
iv) Process all merchant applications according to USWD internal
procedures;
v) Negotiate any non-standard price quotations with the retail
merchant; and
20
<PAGE>
vi) Timely provision and deploy the terminal device for the
merchant upon approval of the application.
e) USWD will order all CDPD NEls for approved retail merchants from
GTE. The process for this procedure will be jointly developed by USWD
& GTE.
f) USWD will pay GTE $45 each for the first 2 NEI activated for each
approved retail merchant that is solicited by the GTE sales
representative in this program. For any additional activation's for
the same retail merchant, USWD will pay GTE $30 for each NEI. GTE will
invoice USWD on a monthly basis for such fees; in all other respects,
billing shall be carried out as set forth in the Agreement. Should
there be a negotiated application fee that is less than the standard
USWD application fee, USWD and GTE must both approve the decrease if
it means that GTE will receive less than the stated activation fees.
g) USWD will provide GTE with weekly sales reports indicating approved
retail merchants as well as identification of each GTE sales
representative who solicited that approved merchant.
h) USWD will be responsible for all retail merchant operational
training, either directly or indirectly.
i) USWD will be responsible, either directly or indirectly, for all
first level help desk (24x7) support of the retail merchant for this
program.
j) USWD agrees to deploy a fully configured merchant system within a
period of 10 business days following the approval of the merchant
application by the credit card processor used by USWD provided the
quantity of hardware is less that 25 units. for any quantity above 25,
USWD agrees to schedule deployment in a timely manner with the retail
merchant.
k) USWD agrees to submit the completed merchant application to the
credit card processing company within 2 days of the submission of the
application from the GTE sales representative.
4) EXCLUSIVITY. USWD agrees to use GTE CDPD services exclusively in all GTE CDPD
markets for the duration of this agreement except for those customers referred
to USWD by an alternative CDPD service provider.
GTE agrees to distribute the USWD retail merchant solution exclusively as one of
the offerings in the "Wireless Merchant Program" for the term of this
agreement." Other offerings in the "Wireless Merchant Program" will not be the
21
<PAGE>
same as the USWD offering as defined in section 1 of the USWD solution above.
This exclusivity is limited to GTE's distribution of USWD's hardware only as
described in section 1A above. It does not preclude GE from entering into other
3rd party services agreements.
5) EVENTS OF DEFAULT. It shall be an event of default for either party to fail
to comply with such party's responsibilities as set forth hereinabove.
6) REMEDIES OF DEFAULT. The party in default will be required to submit to the
other party a mutually agreed plan within 10 days to resolve the default. If no
plan is presented or agreed upon, the other party may terminate this agreement
without liability.
22
DEMAND NOTE
$__________________ __________, 1997
On demand, U.S. Wireless Data, Inc. ("Borrower), for value received, jointly and
severally promises to pay to the order of ____________________ ("Holder") the
sum of _______________________ ($___________) together with interest thereon
from the date hereof until paid at the rate of 10% per annum.
The holder, in lieu of cash payment, may exercise on or after November 1, 1997,
the right to purchase -shares of the common stock of U.S. Wireless Date, Inc. at
a price of $_______ per share for any or all of the outstanding principal and
accrued interest.
If, by April 11, 1998, the Holder have not exercised their aforementioned rights
to purchase shares of common stock In U.S. Wireless Data, Inc. and has not
previously been paid in full, the outstanding principal and interest due the
issuer will be paid in full no later than April 11, 1998.
This note shall be construed and enforced in accordance with the laws of the
State of Colorado.
Borrower:
- -------------------------------
U.S. Wireless Data, Inc.
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), dated and effective as of July 25,
1997 is entered into by and between U.S. WIRELESS DATA, INC., a Colorado
corporation (herein referred to as the "Company") and LIVIAKIS FINANCIAL
COMMUNICATIONS, INC., a California corporation (herein referred to as the
"Consultant").
RECITALS
WHEREAS, Company is a publicly held corporation with its common stock
traded through the OTC Bulletin Board; and
WHEREAS, Consultant has experience in the area of corporate finance,
investor communications and financial and investor public relations; and
WHEREAS, Company desires to engage the services of Consultant to assist
and consult with the Company in matters concerning corporate finance and to
represent the company in investors' communications and public relations with
existing shareholders, brokers, dealers and other investment professionals as to
the Company's current and proposed activities;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree as follows
1. Term of Consultancy . Company hereby agrees to retain the Consultant to act
in a consulting capacity to the Company, and the Consultant hereby agrees to
provide services to the Company commencing July 31, 1997 and ending on July 31,
1998.
2. Duties of Consultant. The Consultant agrees that it will generally provide
the following specified consulting services through its officers and employees
during the term specified in Section 1.:
(a)Advise and assist the Company in developing and implementing
appropriate plans and materials for presenting the Company and its business
plans, strategy and personnel to the financial community, establishing an image
for the Company in the financial community, and creating the foundation for
subsequent financial public relations efforts;
(b) Introduce the Company to the financial community;
(c) With the cooperation of the Company, maintain an awareness during the
term of this Agreement of the Company's plans, strategy and personnel, as they
may evolve during such period, and advise and assist the Company in
communicating appropriate information regarding such plans, strategy and
personnel to the financial community;
(d) Assist and advise the Company with respect to its (i) stockholder and
investor relations, (ii) relations with brokers, dealers, analysts and other
investment professionals, and (iii) financial public relations generally;
(e)Perform the functions generally assigned to investor/stockholder
relations and public relations departments in major corporations, including
responding to telephone and written
<PAGE>
inquiries (which may be referred to the Consultant by the Company); preparing
press releases for the Company with the Company's involvement and approval or
reviewing press releases, reports and other communications with or to
shareholders, the investment community and the general public; advising with
respect to the timing, form, distribution and other matters related to such
releases, reports and communications; and consulting with respect to corporate
symbols, logos, names, the presentation of such symbols, logos and names, and
other matters relating to corporate image;
(f)Upon the Company's approval, disseminate information regarding the
Company to shareholders, brokers, dealers, other investment community
professionals and the general investing public;
(g) Upon the Company's approval, conduct meetings, in person or by
telephone, with brokers, dealers, analysts and other investment professionals to
advise them of the Company's plans, goals and activities, and assist the Company
in preparing for press conferences and other forums involving(, the media,
investment professionals and the general investment public;
(h) At the Company's request, review business plans, strategies, mission
statements budgets, proposed transactions and other plans for the purpose of
advising the Company of the investment community implications thereof, and,
(i) Otherwise perform as the Company's financial relations and public
relations consultant.
3. Allocation of Time and Energies. The Consultant hereby promises to perform
and discharge well and faithfully the responsibilities which may be assigned to
the Consultant from time to time by the officers and duty authorized
representatives of the Company in connection with the conduct of its financial
and investor public relations and communications activities, so long as such
activities are in compliance with applicable securities laws and regulations.
Consultant shall diligently and thoroughly provide the consulting services
required hereunder. Although no specific hours-per-day requirement will be
required, Consultant and the Company agree that Consultant will perform the
duties set forth herein above in a diligent and professional manner. The parties
acknowledge and agree that a disproportionately large amount of the effort to be
expended and the costs to be incurred by the Consultant and the benefits to be
received by the Company are expected to occur upon and shortly after, and in any
event, within two months of the effectiveness of this Agreement. It is
explicitly understood that Consultant's performance of its duties hereunder will
in no way be measured by the price of the Company's common stock, nor the
trading volume of the Company's common stock. It is also understood that the
Company is entering into this Agreement with Liviakis Financial Communications,
Inc. ("LFC"), a corporation and not any individual member of LFC, and with such,
Consultant will not be deemed to have breached this Agreement if any member,
officer or director of LFC leaves the firm or dies or becomes physically unable
to perform any meaningful activities during the term of the Agreement, provided
the Consultant otherwise performs its obligations under this Agreement.
4. Remuneration. As full and complete compensation for services described in
this Agreement, the Company shall compensate Consultant as follows:
4.1 For undertaking this engagement and for other good and valuable
consideration , the Company agrees to issue and deliver to the
Consultant and Robert B. Prag, its Senior Vice President, herein after
referred to as "Prag", an aggregate of Ten Thousand Dollars
($10,000,00) cash and 300,000 unregistered, restricted shares of the
Company's common
2.
<PAGE>
stock (the "Common Stock"). Said shares will be delivered to
Consultant on the following basis'.
150,000 shares on November 15, 1997 for specific services to be
rendered in the first 60 days of the Consulting Agreement which
include assisting the company in the recruitment of officers and
directors, assisting the company in formulating its business plan and
introducing the company to investment bankers, such shares being fully
paid and nonassessable when delivered to Consultant and Prag. The
remaining 150,000 shares of Company common stock and the Ten Thousand
Dollars ($10,000.00) in cash will be delivered in 10 equal consecutive
monthly installments of 15,000 shares and One Thousand Dollars
($1,000.00) each, such shares being fully paid and nonassessable when
delivered to Consultant and Prag, with the installments due on the
following dates:
15,000 shares and $1,000.00 on November 15, 1997;
15,000 shares and $1,000.00 on December 1, 1997;
15,000 shares and $1,000.00 on January 1, 1998;
15,000 shares and $1,000.00 on February 1, 1998;
15,000 shares and $1,000.00 on March 1, 1998;
15,000 shares and $1,000.00 on April 1, 1998;
15,000 shares and $1,000.00 on May, 1, 1998;
15,000 shares and $1,000.00 on June 1, 1998;
15,000 shares and $1,000.00 on July 1, 1998; and,
15,000 shares and $1,000.00 on August 1, 1998.
This Compensation shall be delivered to the Consultant and Prag
promptly on the dates outlined above and shall, when issued and
delivered to Consultant and Prag, be fully paid and non-assessable.
The Company understands and agrees that Consultant has foregone
significant opportunities to accept this engagement and that the
Company derives substantial benefit from the execution of this
Agreement and the ability to announce its relationship with
Consultant. If the Company decides to terminate this Agreement prior
to July 31, 1998 for any reason whatsoever, it is agreed and
understood that Consultant or Prag will not be requested or demanded
by the Company to return any of the shares or cash paid and delivered
to it hereunder, and the Company agrees to accelerate and pay the
Consultant and Prag in full the entire balance of the 300,000 shares
of Common Stock and Ten Thousand Dollars ($10,000.00) due hereunder.
One hundred (100%) percent of the cash payable to Consultant hereunder
shall be paid to Liviakis Financial Communications, Inc. Seventy-five
percent (75%) of each increment of the Common Stock issued pursuant to
this Agreement shall be evidenced by a stock certificate(s) issued in
the name of Liviakis Financial Communications, Inc. and twenty-five
percent (25%) of the Common Shares issued pursuant to this Agreement
shall be evidenced by a stock certificate(s) issued in the name of
Robert B. Prag. The Common Stock issued to the Consultant and Prag
hereunder shall have "piggyback" registration rights and will be
included in the next appropriate registration done by the Company. All
registration costs shall be borne solely by the Company. In the event
the Company for any reason, including without limitation the
unavailability of authorized but unissued shares, does not deliver
certificates
3.
<PAGE>
representing shares of the Company's Common Stock as and when required
hereunder, the Company shall, unless the time for performance is
extended in writing by the Consultant, pay to Consultant and Prag in
lieu of delivery of the shares of Common Stock with respect to which the
Company is in default, an amount per undelivered share equal to the
average closing asked price per share of Common Stock during the five
trading days ending with the day on which the Company was required
hereunder to deliver but failed to deliver such shares of Common Stock.
4.2 Consultant and Prag (hereinafter referred to as "Consultants")
acknowledge that the shares of Common Stock to be issued pursuant to
this Agreement (collectively, the "Shares") have not been registered
under the Securities Act of 1933, and accordingly are "restricted
securities" within the meaning of Rule 144 of the Act. As such, the
Shares may not be resold or transferred unless the Company has received
an opinion of counsel reasonably satisfactory to the Company that such
resale or transfer is exempt from the registration requirements of that
Act.
4.3 In connection with the acquisition of Shares hereunder, the Consultants
represent and warrant to the Company as follows:
(a) Consultants acknowledge that the Consultants have been afforded the
opportunity to ask questions of and receive answers from duly
authorized officers or other representatives of the Company concerning
an investment in the Shares, and any additional information which the
Consultants have requested.
(b) Consultants' investment in restricted securities is reasonable in
relation to the Consultants' net worth, which is in excess of ten (10)
times the Consultants' cost basis in the Shares. Consultants have had
experience in investments in restricted and publicly traded
securities, and Consultants have had experience in investments in
speculative securities and other investments which involve the risk of
loss of investment. Consultants acknowledges that an investment in the
Shares is speculative and involves the risk of loss. Consultants have
the requisite knowledge to assess the relative merits and risks of
this investment without the necessity of relying upon other advisors,
and Consultants can afford the risk of loss of his entire investment
in the Shares. Consultants are (i) accredited investors, as that term
is defined in Regulation D promulgated under the Securities Act of
1933, and (ii) a purchaser described in Section 25102 (f) (2) of the
California Corporate Securities Law of 1968, as amended.
(c) Consultants are acquiring the Shares for the Consultants' own
account for long-term investment and not with a view toward resale or
distribution thereof except in accordance with applicable securities
laws.
5. Financing "Finder's Fee". It is understood that in the event Consultant
introduces Company, or its nominees, to a lender or equity purchaser, not
already having a preexisting relationship with the Company, with whom Company,
or its nominees, ultimately finances or causes the completion of such financing,
Company agrees to compensate Consultant for such services with a "finder's fee"
in the amount of 2.5% of total gross funding provided by such
4.
<PAGE>
tender or equity purchaser, such fee to be payable in cash. This will be in
addition to any fees payable by Company to any other intermediary, if any, which
shall be per separate agreements negotiated between Company and such other
intermediary.
5,1 It is further understood that Company, and not Consultant, is
responsible to perform any and all due diligence on such lender or
equity purchaser introduced to it by Consultant under this Agreement,
prior to Company receiving funds. However, Consultant will not
introduce any parties to Company about which Consultant has any prior
knowledge of questionable, unethical or illicit activities.
5.2 Company agrees that said compensation to Consultant shall be paid in
full at the time said financing is closed. Moreover, said
compensation, will be a condition precedent to the closing,, of such
funding or financing and Company shall execute any and all documents
necessary to effect said compensation.
5.3 As further consideration to Consultant, Company, or its nominees,
agrees to pay with respect to any financing provided directly or
indirectly to the Company by any lender or equity purchaser covered
by this Section 5. during the period of five years from the date of
this Agreement, a fee to Consultant equal to that outlined in Section
"5" herein.
5.4 Consultant will notify Company of introductions it makes for
potential sources of financing in a timely manner (within
approximately 3 days of introduction) via facsimile memo. If Company
has a preexisting relationship with such nominee and believes such
party should be excluded from this Agreement, then Company will
notify Consultant immediately of such circumstance via facsimile
memo.
6. Expenses. Consultant agrees to pay for all its expenses (phone, mailing,
labor, etc.), other than extraordinary items (travel required by/or specifically
requested by the Company, luncheons or dinners to large groups of investment
professionals, mass faxing to a sizable percentage of the Company's
constituents, investor conference calls, print advertisements in publications,
etc.) approved by the Company prior to its incurring an obligation for
reimbursement.
7. Indemnification. The Company warrants and represents that all oral
communications, written documents or materials furnished to Consultant by the
Company with respect to financial affairs, operations, profitability and
strategic planning of the Company are accurate and Consultant may rely upon the
accuracy thereof without independent investigation. The Company will protect,
indemnify and hold harmless Consultant against any claims or litigation
including any damages, liability, cost and reasonable attorney's fees as
incurred with respect thereto resulting from Consultant's communication or
dissemination of any said information, documents or materials not designated by
the Company to the Consultant as "confidential" or "Company private", excluding
any such claims or litigation resulting from Consultant's communication or
dissemination of information not provided or authorized by the Company. To the
extent feasible, the Company agrees to make Consultant an additional insured on
any and all commercial liability and directors and officers liability insurance
policies and to provide Consultant with current Certificates of Insurance
reflecting the same.
5.
<PAGE>
8. Representations. Consultant represents that it is not required to maintain
any licenses and registrations under federal or any state regulations necessary
to perform the services set forth herein. Consultant acknowledges that, to the
best of its knowledge, the performance of the services set forth under this
Agreement will not violate any rule or provision of any regulatory agency having
'jurisdiction over Consultant. Consultant acknowledges that, to the best of its
knowledge, Consultant and its officers and directors are not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws. Consultant further acknowledges that it is not a securities
Broker Dealer or a registered investment advisor. Company acknowledges that, to
the best of its knowledge, that it has not violated any rule or provision of any
regulatory agency having jurisdiction over the Company. Company acknowledges
that, to the best of its knowledge, Company is not the subject of any
investigation, claim, decree or judgment involving any violation of the SEC or
securities laws.
9. Legal Representation. The Company acknowledges that it has been represented
by independent legal counsel in the preparation of this Agreement. Consultant
represents that they have consulted with independent legal counsel and/or tax,
financial and business advisors, to the extent the Consultant deemed necessary.
10. Status as Independent Contractor. Consultant's engagement pursuant to this
Agreement shall be as independent contractor, and not as an employee, officer or
other agent of the Company. Neither party to this Agreement shall represent or
hold itself out to be the employer or employee of the other. Consultant further
acknowledges the consideration provided hereinabove is a gross amount of
consideration and that the Company will not withhold from such consideration any
amounts as to income taxes, social security payments or any other payroll taxes.
All such income taxes and other such payment shall be made or provided for by
Consultant and the Company shall have no responsibility or duties regarding such
matters. Neither the Company or the Consultant possess the authority to bind
each other in any agreements without the express written consent of the entity
to be bound.
11. Attorney's Fee. If any legal action or any arbitration or other proceeding
is brought for the enforcement or interpretation of this Agreement, or because
of an alleged dispute, breach, default or misrepresentation in connection with
or related to this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs in connection
with that action or proceeding, in addition to any other relief to which it or
they may be entitled.
12. Waiver. The waiver by either party of a breach of any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by such other party.
13. Notices. All notices, requests, and other communications hereunder shall be
deemed to be duly given if sent by U.S. mail, postage prepaid, addressed to the
other party at the address as set forth herein below:
6.
<PAGE>
To the Company-.
U.S. Wireless Data, Inc.
Mr. Rod Stambaugh, President
4851 Independence Street- Suite 189
Wheat Ridge, CO 80033
To the Consultant-.
Liviakis Financial Communications, Inc.
John M. Liviakis, President
2420 "K" Street, Suite 220
Sacramento, CA 95816.
It is understood that either party may change the address to which
notices for it shall be addressed by providing notice of such change to the
other party in the manner set forth in this paragraph.
14. Choice of Law, Jurisdiction and Venue. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of California.
The parties agree that Sacramento County, CA. will be the venue of any dispute
and will have jurisdiction over all parties.
15. Arbitration. Any controversy or claim arising out of or relating to this
Agreement, or the alleged breach thereof, or relating to Consultant's activities
or remuneration under this Agreement, shall be settled by binding arbitration in
California, in accordance with the applicable rules of the American Arbitration
Association, and judgment on the award rendered by the arbitrator(s) shall be
binding on the parties and may be entered in any court having jurisdiction
thereof The provisions of Title 9 of Part 3 of the California Code of Civil
Procedure, including section 1283.05, and successor statutes, permitting
expanded discovery proceedings shall be applicable to all disputes that are
arbitrated under this paragraph.
16. Miscellaneous Conditions. Company and Consultant each agree to the follow
terms and conditions:
a.) The Company shall arrange that all insiders and large shareholders
agree to a one year lockup agreement, which would include all officers and
directors- and,
b.) Company will provide an Opinion Letter from the Company's Corporate
Counsel that there are no "Opt Outs" in the class action lawsuit settlement
and further that there are no other outstanding or pending(, legal actions
against the Company 7.
<PAGE>
17. Complete Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof. This Agreement and its terms may
not be changed orally but only by an agreement in writing signed by the party
against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
AGREED TO:
"Company" U.S. Wireless Data, Inc.
Date 8/6/97 By: /s/Rod Stambaugh
----------- ---------------------
Rod Stambaugh, CEO
& Its Duly Authorized Officer
"Consultant" Liviakis Financial Communication, Inc.
Date 8/4/97 By: /s/ John Liviakis
----------- -------------------
John M. Liviakis
President
/s/ Robert B. Prag
--------------------
Robert B. Prag
Sr. Vice President
8.
<PAGE>
U.S. WIRELESS DATA, INC.
SUBSCRIPTION AGREEMENT
For the Purchase of Units
Each Consisting of
875,000 Shares of Common Stock
and
400,000 Stock Purchase Warrants
U.S. Wireless Data, Inc.
1123 Western Avenue
Mill Valley, California 94914
Ladies and Gentlemen:
1. General. U.S. Wireless Data, Inc., a Colorado corporation (the
"Company"), is offering, pursuant to Regulation D ("Regulation D") promulgated
under the-Securities Act of 1933, as amended (the "Securities Act"), an
aggregate of up to four (4) units (the "Units"), each consisting of eight
hundred seventy-five thousand (875,000) share of the Company's Common Stock
("Common Stock"), and warrants ("Warrants") expiring August 1, 2002,
substantially in the form of warrant attached hereto as Exhibit A, to purchase
up to four hundred thousand (400,000) shares of Common Stock at an exercise
price of One Cent ($0.01) per share. The Units are being offered at a price of
One Hundred Twenty-Five Thousand Dollars ($125,000) per Unit.
2. Subscription. The undersigned subscriber (the "Purchaser") hereby
irrevocably subscribes for and agrees to purchase three (3) Unit(s) for an
aggregate purchase price of Three-Hundred Seventy-Five Thousand Dollars
($375.000.00.) (the "Subscription Price") Funds representing the Subscription
Price shall be paid by the Purchaser to the Company against issuance of the
securities constituting the Units.
3. Representations. Warranties and Covenants of Purchaser. The Purchaser
hereby acknowledges, represents and warrants to and covenants and agrees with
the company that:
(a) Purchaser is an "accredited investor", as defined in Rule 501 of
Regulation D promulgated under the Securities Act. Purchaser is acquiring the
Units for Purchaser's own account and not for the account or benefit of any
other person. The Units, and the shares of Common Stock and the Warrants
constituting the Units and the shares of Common Stock for which the Warrants
may be exercised (collectively, the "Securities") will be acquired by the
Subscriber in good faith for investment and not with a view to the
distribution thereof. The Purchaser does not presently intend to sell or
otherwise dispose of all or any part of the Securities upon the occurrence or
nonoccurrence of any predetermined event;
<PAGE>
(b) The Purchaser is willing and able to bear the economic risk of an investment
in the Units in an amount equal to the amount the Purchaser has subscribed to
purchase, and the Purchaser has adequate means of providing for current needs
and reasonably anticipated contingencies and has no need for liquidity in such
investment. In making these statements, the Purchaser has taken into account
(i) that Purchaser may have to hold the Securities for an indefinite period
and (ii) that the Purchaser could experience a complete loss of Purchaser's
investment in the Units;
(c) Purchaser:
(i) has been provided with copies of all of the reports and
other documents filed by the Company with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the past twelve months;
(ii) has been given the opportunity to ask questions of the
Company and its management concerning the Company, the Units, the
terms and conditions of the offering and other matters pertaining to
this investment, in order for Purchaser to evaluate the merits and
risks of an investment in the Units, and Purchaser has received
satisfactory responses to all such questions; and
(iii) acknowledges that the Units were not offered to
Purchaser by way of any general solicitation or advertising and at no
time was the Purchaser presented with or solicited by means of any
leaflet, public promotional meeting, circular, radio or television
advertisement, newspaper or magazine article;
(d) Since the offer and sale of the Units and of the Common Stock
issuable upon exercise of the Warrants have not been registered under the
Securities Act in reliance upon Regulation D among other provisions, Purchaser
will only offer or resell the Securities in compliance with the provisions of
all applicable securities laws and regulations. Purchaser will offer or resell
the Securities only if the Securities are registered under the Securities Act
or an exemption from such registration, including without limitation the
exemption afforded under Rule 144, is available. Unless such registration has
been effected or such an exemption is available, the Company shall not permit
the transfer of the Securities.
The Purchaser understands and agrees that the company may
take such reasonable steps as it deems appropriate to ensure compliance with
the offer, resale and other restrictions on transfer and conversion contained
in this Subscription Agreement
2
<PAGE>
(the "Agreement") or arising under applicable securities laws, including
instituting "stop transfer" instructions with respect to the Securities and
endorsing restrictive legends, such as the following, on certificates
representing the Securities:
" The securities represented by this Certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") and are "restricted securities" as that term is
defined in Rule 144 under the Securities Act. The securities may not
be offered for sale, sold or otherwise transferred except pursuant to
an effective registration statement under the Securities Act or
pursuant to an exemption from registration under the Securities Act."
(e) The execution and delivery of this Agreement by Purchaser and the
consummation by Purchaser of the transactions contemplated by this Agreement
will not violate any statute or law or any judgment, decree, order, regulation
or rule of any court or governmental authority by which Purchaser is bound or,
if Purchaser is other than a natural person, the charter, bylaws or other
instruments under, which Purchaser is formed and its activities are governed.
4. Representations and Warranties of The Company. The Company hereby
represents and warrants to the Purchaser as follows:
(a) The Company has filed all reports and other materials required by
the Exchange Act to be filed with the Securities and Exchange Commission
during the past 12 months. All such reports and materials have been
complete and accurate and have complied with the requirements of the
Exchange Act in all material respects and did not contain any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
existing at such dates, not misleading.
(b) The Company is, and at the time of the issuance and sale of the
Units will be, a corporation duly organized, validly existing and in good
standing under the laws of Colorado. The Company has, and at the Closing
Date will have, full power and authority to conduct all the activities
conducted by it, to own or lease all the assets owned or leased by it and
to conduct its business as described in the reports referred to in
paragraph (a) above.
(c) The Company has full corporate power and authority to enter into
this Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding agreement of
the Company and is enforceable against the Company in accordance with the
terms hereof.
3
<PAGE>
(d) The Securities to be delivered at the Closing have been duly
authorized and when issued for consideration as contemplated in this
Agreement will be validly issued and outstanding, fully paid and
non-assessable.
5. Covenants of Company. The Company covenants and agrees with the
Purchaser as follows:
(a) Following an exercise of the Warrants, the Company will cause its
transfer agent promptly, at the Company's expense, to issue certificates
evidencing the shares of Common Stock being purchased through such
exercise. In the event the Company for any reason, including without
limitation the unavailability of authorized but unissued shares, does not
cause the prompt issuance of such certificates, the Company shall upon the
written demand of the Purchaser redeem from the Purchaser the Warrants the
Purchaser attempted to exercise or otherwise pay to the Purchaser by way of
liquidated damages for such breach against cancellation of such Warrants an
amount per warrant equal to the remainder calculated by subtracting (i) the
Warrant exercise price from (ii) average closing asked price per share of
Common Stock during the five trading days ending with the day on which the
Purchaser exercises or attempts to exercise the Warrant.
(b) Promptly following the written request of the purchasers of a
majority of the Units, the Company, at its expense, will prepare, file and
prosecute diligently to effectiveness a registration statement under the
Securities Act, which registration statement shall provide for the resale
by the Purchaser of the shares of Common Stock (i) constituting part of the
Units, (ii) for which the Warrants had been or may be exercised, (iii)
which are otherwise held by Purchaser, or (iv) which Purchaser then has the
right to acquire. The Company shall also prepare and file such amendments
and 'supplements to such registration statement and the prospectus
contained therein as may be necessary to make available a prospectus
meeting the requirements of the Securities Act on as continuous a basis as
practicable for such period as any Warrants issued pursuant hereto remain
outstanding and for two years thereafter.
(c) So long as any Warrants issued pursuant hereto remain outstanding
and for two years thereafter, the company (i) will timely file all reports
and other materials it is required to file pursuant to the Exchange Act and
(ii) will not take any action to terminate the registration of its common
Stock pursuantto the Exchange Act.
(d) Diligently seek qualified candidates to serve as (i) chief
executive officer, (ii) chief financial officer, (iii) vice
president-sales, and (iv) at least two non-employee directors for the
Company; afford Purchaser an opportunity to meet with any candidate to whom
the Company proposes to offer such a position;
4
<PAGE>
and offer such a position (or nomination therefore) to such a candidate
only if such candidate is approved by purchasers of a majority of the
Units.
(e) Extend the registration rights provided in the Warrants to all
shares of Common Stock which the Purchaser at the time of any such
registration owns or has the right to acquire.
6. Survival. The representations and warranties contained in this Agreement
shall remain operative and in full force and effect regardless of any
investigation made by any party hereto, or acceptance of any of the Units and
Payment therefor.
7. Acceptance. It Is understood and agreed that the Company shall have the
right to accept or reject this subscription, in whole or in part, for any reason
and that this Agreement shall not be binding upon the Company until so accepted.
Purchaser understands that the Company will notify it promptly upon acceptance
or rejection of this subscription.
8. Closing. Following acceptance of this subscription, the Units subscribed
for hereunder shall be delivered to the Purchaser against payment of the
aggregate Subscription Price therefor at a Closing which shall be held no later
than August 8, 1997.
9. Irrevocability. The Purchaser hereby agrees that this Subscription is
irrevocable.
10. Miscellaneous.
(a) All notices or other communications given or made
hereunder shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the Purchaser at
its address set forth on the signature page below and to the Company at its
principal executive office.
(b) This Agreement may be amended only by a writing executed by all
parties.
(c) This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective heirs, successors and assigns.
(d) All pronouns contained herein and any variations thereof shall be
deemed to refer to the masculine, feminine, or neuter, singular or plural, as
the identity of the parties hereto may require.
<PAGE>
(e) This Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
(f) This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
ALTERNATIVE SIGNATURE--PAGES FOLLOW
-----------------------------------
The Purchaser should complete and sign one of the following signature
pages. One signature page is for use by individuals and the other is for use by
entities (e.g., corporation, partnership, trust).
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE
MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED
BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY.
FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY
OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION FROM. INVESTORS
SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
<PAGE>
U.S. Wireless Data, Inc.
offering of Units Consisting of
875,000 Shares of Common stock and
warrants to Purchase up to 400, 000 Shares of Common Stock
(Signature Page for Subscription by Individuals)
(Check One)
INDIVIDUAL OWNERSHIP
(one signature Required Below)
JOINT TENANTS
(TWO Signatures Required Below)
TENANTS IN COMMON
(Two Signatures Required Below)
<PAGE>
EXHIBIT "A"
WARRANT TO PURCHASE SHARES OF COMMON STOCK OF
U.S. WIRELESS DATA, INC., A COLORADO CORPORATION.
THE WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES OF COMMON
STOCK ISSUABLE UPON THE EXERCISE OF THE WARRANT HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATES AND THUS MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THAT ACT AND REGISTERED OR
QUALIFIED UNDER APPLICABLE SECURITIES LAW OR UNLESS AN EXEMPTION FROM SUCH
REGISTRATION OR QUALIFICATION IS AVAILABLE.
This Common Stock Purchase Warrant, made as of the 4th day of August,
1997, by and between U.S. WIRELESS DATA, Inc., a Colorado corporation, having-
its principal executive offices at 4851 Independence Street; Suite 189; Wheat
Ridge, CO 80033 (the "Company"), and I having a principal business address at
2420 "K" Street; Suite 220, Sacramento, California 95816.
WITNESSETH:
This Warrant is exercisable at any time, or from time to time, from
January 15, 1998 up to and including 5:00 p.m. Pacific daylight time, on August
4, 2002.
I . Warrant.
---------------
This certifies that, _____________________________or assigns ("Warrant
Holder"), is entitled, subject to the terms set forth below, to purchase from
the Company up to ___________________Thousand fully paid and nonassessable
shares of Common Stock of the Company ("Common Stock") at an exercise price of
One Cent ($0.01) per share ("Exercise Price"). The Exercise Price and number of
shares of Common Stock issuable upon exercise hereof shall be subject to
adjustment as provided in this Warrant.
2. Exercise Price.
----------------------
The exercise price shall be One Cent ($.01) per share of Common Stock. The
Company shall pay all original issue or transfer taxes on the exercise of this
Warrant and all other fees and expenses incurred by the Company in connection
herewith.
<PAGE>
3. Exercise of Warrant.
-------------------------
All of the Warrants granted hereby shall first become exercisable on
January 15, 1998. Subject to the provisions of Paragraph 4 hereof, such Warrants
shall be exercisable in whole or in part at any time and from time to time from
January 15, 1998 through 5:00 p.m. Pacific daylight time on August 4, 2002.
In order to exercise the purchase right represented by this Warrant in
whole or in part, the Warrant Holder shall deliver to the Company a written
notice substantially in the form of Notice of Exercise of Warrants to Purchase
Shares attached hereto, delivery to be effected by personal delivery, by
overnight courier or by registered or certified mail, return receipt requested,
addressed to the Company at Its principal office. Such notice shall specify the
number of shares which Warrant Holder is purchasing under this Warrant Agreement
and shall be accompanied by the Warrant certificate and payment (in the form of
cash or certified or bank cashier's check) for the shares so being,, purchased
at the Exercise Price of One Cent ($0.01) per share of Common Stock.
As soon as practicable thereafter but in any event within five (5) business
days, Company shall cause to be delivered to the Warrant Holder certificates
issued in the Warrant Holder's name evidencing, the full number of Shares as to
which this Warrant was exercised by the Warrant Holder. Warrant Holder shall be
considered to be the holder and owner of the Shares to be evidenced by such
certificates as of the close of business on the date Company received the notice
of exercise accompanied by payment, as contemplated herein, without regard to
the date of actual issuance of the certificate(s) representing such Shares.
4. Divisibility and Assignability of the Warrant.
-------------------------------------------------------
(a) The Warrant Holder may elect to exercise the right to purchase
shares under this Warrant in whole or in part at any time and from time to time,
subject to the provisions of Paragraph 3 above, with respect to any whole number
of Shares included therein, but in no event may an election be may to purchase
less than ten thousand (10,000) shares at any one time, unless the remaining
shares covered by this Warrant number less than ten thousand (I 0,000), in which
case this Warrant may be exercised for such remaining balance.
(b) This Warrant can be transferred or assigned in whole or in part in
increments of no less rights to purchase ten thousand (10,000) shares if the
transferor delivers an opinion of counsel reasonably acceptable to the Company
(which counsel may be the counsel for the Company), stating,, that such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and the registration and qualification requirements under applicable
state law.
Upon due presentment for transfer or exchange of this Warrant certificate at the
principal office of the Company, a new Warrant certificate or certificates of
like tenor and evidencing in the aggregate a like number of Warrants shall be
issued in exchange for this Warrant certificate. Subject to the terms hereof,
the Company shall deliver Warrant certificates in required whole number
denominations to Warrant Holders in connection with any transfer, exchange or
partial exercise permitted hereunder.
2
<PAGE>
5 . Stock as Investment.
-----------------------------
By accepting this Warrant, the Warrant Holder agrees that it is
Warrant Holder's intention to purchase Shares hereunder for investment and
without any view towards the resale or distribution thereof. In the event Shares
to be issued upon the election to purchase shares Lender this Warrant have not
been registered at the time of proposed issuance under the Securities Act of
1933, as amended (the "Securities Act"), the Warrant Holder shall deliver to
the Company at the time of such issuance a written representation that warrant
holder is acquiring such Shares in good faith for investment purposes only and
not for resale or distribution. Company may place a "stop transfer" order with
respect to such Shares with its transfer agent and place an appropriate
restrictive legend on the stock certificate(s) evidencing such Shares, in order
to prevent transfers unless such Shares are registered under the Securities Act
or an exemption from the registration requirements of the Securities Act is
applicable.
6. Conditions to Issuance of Shares,
-----------------------------------------
The Company shall issue and deliver certificates for Shares purchased
upon the exercise of any portion of the Warrant granted hereunder.
7. Registration Rights.
-----------------------------
(a) If, at any time during the exercise period hereof and the three
years following any exercise hereunder, the Company proposes to file a
registration statement with respect to any class of securities (other than
pursuant to a registration statement on Forms S-4 or S-8 or any successor form)
under the Securities Act, the Company shall notify the Warrant Holder at least
twenty (20) days prior to the filing of such registration statement and will
offer to include in such registration statement all or any portion of the shares
of Common Stock then owned by the Warrant Holder or which the Warrant Holder
then has the right to acquire, weather pursuant to this Warrant or otherwise
(collectively the "Shares"). In a written notice to be delivered to the Company
within twenty (20) days after receipt of any such notice from Company, the
Warrant Holder shall state the number of Shares that it wishes to register for
resale and distribution publicly under the proposed registration statement. The
Company will use its best efforts, through its officers, directors, auditors and
counsel in all matters necessary or advisable, to file at least one (1) such
registration statement by May 15, 1998. The Company will also use its best
efforts, through its officers, directors, auditors and counsel in all matters
necessary or advisable, to include within the coverage of each such registration
statement (except as hereinafter provided) the Shares that Warrant Holder has
advised company that Warrant Holder wishes to register pursuant to such
registration statement for resale and distribution, to prosecute each such
registration statement diligently to effectiveness, and to cause such
registration statement to become effective as promptly as practicable In that
regard, the company makes no representation or warranties as to its ability to
have any registration statement declared effective.
All registrations requested pursuant to this Paragraph 7 (a) are
referred to herein as "Piggyback Registrations." In the event the Company is
advised by the staff of the SEC, NASDAQ or any self-regulatory or state
securities agency that the inclusion of the Shares will prevent, preclude or
materially delay the effectiveness of a registration statement filed, the
<PAGE>
Company, in good faith, may amend such registration statement to exclude the
Shares without otherwise affecting the Warrant Holder's rights to any other
registration statement herein.
(i)Primary Registrations. If a Piggyback Registration is an underwritten
primary registration on behalf of the Company, and if the underwriter thereof
advises the Company in writing, that in Its opinion the number of Shares
requested to be included in such registration statement exceeds the number that
can be sold in such offering without materially adversely affecting the
distribution of such securities by the company, then the Company will include in
such registration statement first, the securities that the Company proposes to
sell and second, the securities requested to be included in such registration
statement by selling Securityholders, such right to inclusion being apportioned
pro rata among the Warrant Holder and the other holders of any other securities
requesting registration according to the market value of Shares and other
securities requested to be registered.
Notwithstanding the above, if any such underwriter shall advise the
Company in writing that the distribution of the Shares being included in the
registration statement concurrently with the securities being registered by the
Company would materially adversely affect the distribution of such securities by
the Company, then the Warrant Holder shall delay its offering and sale for such
period ending on the earliest of (a) 180 days following the effective date of
the Company's registration statement, (b) the earliest date that, in the opinion
of such underwriter, such adverse effect would no longer be caused, or (c) such
date as the Company, managing underwriter and Warrant Holder shall otherwise
agree. In the event of such delay, the Company shall file such supplements and
post-effective amendments and take any such other actions as may be necessary or
appropriate to permit such Warrant Holder to make its proposed offering and sale
for a period of at least ninety (90) days commencing immediately following the
end of such period of delay. If any party disapproves of the terms of any such
underwriting, it may elect to withdraw therefrom by written notice to the
Company, the underwriter and the Warrant Holder. Notwithstanding the
foregoing, the Company shall not be required to include Shares within the
coverage of a registration statement being filed pursuant to this Paragraph 7
(a) (i) if, in the opinion of counsel for both the Company and Warrant Holder,
all of the Shares proposed to be registered may be immediately transferred
pursuant to the provisions of Rule 144 under the Securities Act.
(ii) Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of securities of the
Company, and the underwriter thereof advises the Company in writing that it its
opinion the number of Shares requested to be included in such registration
statement exceeds the number which can be sold in such offering without
materially adversely affecting the distribution of such securities, then the
Company will include in such registration statement the securities requested to
be included in Such registration statement by selling securityholders on a pro
rata basis, with such rights to inclusion being apportioned among the
Warrant Holder and the other holders of any other securities requesting
registration according to the market value of Shares and other securities
requested by them, respectively, to be registered. Notwithstanding the
foregoing, the Company shall not be required to include Shares within the
coverage of a registration statement being filed pursuant to this Paragraph 9
(a) (ii) if, in the opinion of counsel for both the Company and
4
<PAGE>
Warrant Holder, all of the Shares proposed to be registered may be immediately
transferred pursuant to the provisions of Rule 144 under the Securities Act.
(b) If at any time after August 4, 1998 and prior to the third (3rd)
anniversary of the earlier of the expiration of the Warrant herein granted and
the purchase of the final Shares remaining subject to such Warrant Shares
issued or issuable upon exercise of the Warrant herein granted are not then
registered under one or more Piggyback Registrations and then covered by a
prospectus complying with the requirements of the Securities Act, the Warrant
Holder may by written notice to the Company require Company to file a
registration statement under the Securities Act covering such Shares as Warrant
Holder may specify in such notice. Warrant Holder shall be entitled so to
require Company to file a registration statement pursuant to this Paragraph 7
(b) on only one ( 1) occasion. The Company will file such a registration
statement within ninety (90) days of receipt of such notice, and thereafter will
prosecute such registration statement diligently to effectiveness, will cause
such registration statement to become effective as promptly as practicable; will
promptly file all such supplements and post-effective amendments to such
registration statement and take any such other actions as may be necessary or
appropriate to make available to Warrant Holder on as continuous a basis as is
practicable a prospectus meeting the requirements of the Securities Act through
the earliest of (a) the date on which the final Shares have been sold and
distributed by Warrant Holder, (b) the date on which, in the opinion of counsel
for both the Company and Warrant Holder, all of the Shares which Warrant Holder
then holds may be immediately transferred pursuant to the provisions of Rule 144
under the Securities Act, and (c) August 4, 2004. In that regard, the Company
makes no representations or warranties as to its ability to have any
registration statement or post-effective amendment thereto declared effective.
(c) In the event of any registration of a security pursuant to this
Paragraph 7, the Company shall indemnify the Warrant Holder and its officers and
directors against all losses, claims, damages and liabilities caused by any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus (and as amended or supplemented) relating
to such registration, or caused by any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statement
therein not misleading in light of the circumstances under which they are made
unless such statement or omission was made in reliance upon and in conformity
with information furnished to the Company by the Warrant Holder with expressly
for use therein. The Warrant Holder shall also indemnify the Company, its
officers and directors and each underwriter of the Shares so registered with
respect to losses, claims damages and Shares so registered with respect to
losses, claims damages and liabilities caused by an untrue statement or omission
made in reliance upon and in conformity with information furnished by the
Warrant Holder to the Company in writing expressly for use in such registration
statement or prospectus.
(d) All expenses of any registration referred to in this Paragraph 7,
except the fees and disbursement of counsel to the Warrant Holder, underwriting
commissions or discounts and any transfer or other taxes applicable to the
transfer of Shares by the Warrant Holder, shall be borne by the Company.
5
<PAGE>
(e) Following the exercise of the Warrant hereunder, the Warrant Holder
shall promptly advise the Company when Warrant Holder no longer holds any shares
acquired through the exercise of Warrants granted hereunder, and upon the
request of the Company, the Warrant Holder shall advise the Company from time to
time of the number of Shares then held by Warrant Holder which were acquired
through the exercise of Warrants granted hereunder.
8. Adjustments Upon Changes in Capitalization.
(a) In the event of changes in the outstanding Common Stock of the
Company by reason of stock dividends, stock splits, reverse stock splits,
recapitalization's, consolidations, combinations, exchanges of shares,
separations, reorganizations, liquidation's or any similar events or events
having similar consequences, the number and class of Shares as to which the
Warrant may be exercised shall be correspondingly adjusted so that for the same
aggregate exercise price the Warrant Holder shall be entitled to acquire the
securities and other property Warrant Holder would have held if Warrant Holder
had exercised its rights to purchase shares under this Warrant Agreement for
the number of Shares under consideration prior to the first of such events to
occur and continued to hold such Shares and all other securities and other
property issued with respect thereto in connection with such events. No
adjustment shall be made with respect to cash dividends or non-liquidating
dividends payable in property other than cas, so long as Company provides
Warrant Holder with written notice of any such proposed dividend at least
fifteen (15) days prior to the record date for such dividend. Company shall
also give Warrant Holder prompt written notice of any event resulting in an
adjustment under this Paragraph 8 (a), including a detailed computation of such
adjustment.
(b) Any adjustment in the number and kind of Shares and other
securities shall apply proportionately to only the unexercised portion of the
Warrant at the time of the event given rise to the adjustment. If fractions of a
Share would result from any such adjustment, the adjustment shall be revised to
the next higher whole number of Shares so long as such increase does not
result in the holder of the Warrant being deemed to own more than 5% of the
total combined voting power or value of all classes of stock of the Company or
its subsidiaries, in which case the adjustment shall be revised to the next
lower whole number of Shares.
9. Effect of Mergers, consolidations or Sales of Assets.
In the event Company should propose to merge or consolidate with, or
engage in some other form of business combination with, any other corporation or
entity on a basis in which Company is not to be the surviving entity, then as a
condition precedent to proceeding with such merger, consolidation or other
business combination, the Company shall require the surviving entity to assume
and perform all of Company's obligations under the right to acquire the same
securities and property for the Warrant exercise price specified herein as
Warrant Holder would have received if Warrant Holder had exercised the Warrant
immediately prior to such merger, consolidation or other business combination.
To the extent the above may be inconsistent with Sections 424 (a) ( 1) and (2)
of the Code, the above shall be deemed interpreted so as to comply therewith.
6
<PAGE>
10, No Rights in Warrant Stock.
Warrant Holder shall have no rights as a shareholder in respect of
Shares as to which the Warrant hereunder shall not have been exercised and
payment made as herein provided.
11. Effect Upon Employment.
This Agreement does not give the Warrant Holder any right to employment
by, or any other relationship with, the Company.
12. Binding Effect.
Except as herein otherwise expressly provided, this Agreement shall be
binding upon and inure to the benefit of the parties hereto, their successors,
legal representatives and assigns.
13. Miscellaneous.
This Agreement shall be construed under the laws of the State of
California applied to agreements made and to be performed entirely within such
State. Headings have been included herein for convenience of reference only and
shall not be deemed a part of this Agreement. The Company shall pay any and all
documentary, stamp or other transactional taxes attributable to the issuance or
delivery of shares of Common Stock of the Company upon exercise of all or part
of this Warrant.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
"Company" U.S. WIRELESS DATA, Inc.
"Warrant Holder"
<PAGE>
NOTICE OF EXERCISE OF WARRANT TO PURCHASE SHARES
------------------------------------------------
TO U.S. WIRELESS DATA, INC.
The undersigned hereby elects to exercise the purchase right represented by
that Warrant dated as of August 4, 1997, between U.S. Wireless Data, Inc. and
the undersigned with an exercise price of One Cent ($0.01), and to purchase
under that Warrant, ( ____________________________ ) shares of Common Stock of
U.S. Wireless Data, Inc., and hereby makes payment in the form of cash or
certified or bank cashier's check for the Shares so being purchased at the
exercise price of One Cent ($0.01) therefor as specified in Paragraph 2 of the
Warrant Agreement, and requests that the certificates for those shares be issued
in the name of, and delivered to _______________________________ .
Signature
Social Security or Taxpayer I.D. Number:
Instructions for issuance of stock:
Name
Street Address
City State Zip Code
8
CONFIDENTIAL TREATMENT REQUESTED BY U.S. WIRELESS DATA, INC. FOR CERTAIN
PORTIONS OF SCHEDULE B TO THIS AGREEMENT
MEMBER SERVICE PROVIDER SALES AND SERVICE
CREDIT CARD PROCESSING AGREEMENT
THIS MEMBER SERVICE PROVIDER CREDIT CARD PROCESSING AGREEMENT (this
"Agreement') is made and entered into 1 day of January, 1997. by and among NOVA
Information Systems, Inc.,. a Georgia corporation with its principal place of
business at One Concourse Parkway, Suite 300, Atlanta, Georgia 30328, ("NOVA!'),
REGIONS BANK, a principal member of VISA U.S.A.,, Inc., and Mastercard
International Incorporated and a bank chartered under the laws of the State of
Alabama with its principal place of business at 25 Washington Avenue, Suite 600,
Montgomery, Alabama 36104, ("Member") and U.S. Wireless Data, Inc. a Colorado
corporation with its principal place of business at 1123 Western Ave., Mill
Valley, CA 94941("MSP").
PURPOSE OF AGREEMENT; The purpose of this agreement is to set forth the
terms and conditions under which MSP shall refer to NOVA and Member prospective
merchants meeting the qualifications of NOVA and Member for the purpose of
providing to such merchants credit card processing services, and to set forth
the referral fees NOVA and Member shall, from time to time. pay to MSP for such
referrals and other services, as described herein.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged and intending to be legally bound hereby, MSP, NOVA and
Member agree as follows;
1. DEFINITIONS As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
A. "Acceptable Merchant" shall mean a merchant who does not performing
the services or sales described in Schedule A-Exhibit I, and who is
acceptable to NOVA 'and Member, as determined in their sole
discretion, based upon a credit card of the merchant.
B. "Assessment Fee" shall mean the fee that is collected from a
Referred Merchant on behalf of the Credit Card issuer for a
Transaction.
C. "Cardholder" shall mean (i) the person in whose name a Credit Card
has been issued, and shall also mean (ii) any person who possesses and
uses a Credit Card and who purports to be the person in whose name the
Credit Card was issued or whose signature appears on the Credit Card
as an authorized user.
D. "Cause" shall mean the occurrence of any one or more of the
following: (i) any failure by MSP to comply in all material respects
with the provisions of this Agreement; (ii) any failure by MSP to
follow the credit policies and procedures established by NOVA and
Member from time to time; (iii) any failure by MSP to comply with the
Rules and all applicable laws and regulatory requirements, whether
Federal or state, (iv) any intentional misrepresentation by an
employee, officer or director of MSP in connection with the referral
of a prospective merchant or an application by a prospective merchant
for services hereunder, (v) any failure by MSP to advise NOVA and
Member of adverse or material changes in any Merchant's financial
condition of which MSP becomes aware during the Merchant's association
with NOVA. and Member; (vi) the financial insolvency or bankruptcy of
MSP; (vii) the occurrence of any event or any action by MSP which NOVA
or Member determine in good faith to constitute unsound business
practices or which might impose a risk of financial loss to NOVA or
Member; and (viii) any failure by MSP to provide appropriate sales
agent support (including without limitation merchant application
review, site inspection, monthly reporting, terminal support,
commission payment, etc.).
<PAGE>
E. "Chargeback" shall mean a Transaction charged back by a Cardholder
pursuant to the Rules.
F. "Credit-Card" shall mean a (i) VISA card or other card bearing the
symbol(s) of VISA U.S.A. Inc. or VISA International Inc. (including
VISA Gold cards) or (ii) a MasterCard card or other card bearing the
symbol(s) of MasterCard International Incorporated (including
MasterCard Gold cards).
G. "Credit Card Associations" shall mean VISA U.S.A. Inc., VISA
International Inc., MasterCard International Incorporated and any
successor organization or association.
H. "Interchange Fee" shall mean the charge levied and collected in
accordance with the Rules with respect to Credit Card transactions.
I. "MasterCard" shall mean MasterCard International, Incorporated (a
Delaware corporation).
J. "Member" shall mean Regions Bank (or a successor financial
institution and principal member of VISA and MasterCard to whom the
rights and obligations of Member hereunder may be assigned by Regions
Bank).
K. "Merchant Agreement" shall mean a written contractual agreement (in
a form approved by NOVA and Member and unaltered) executed among NOVA,
Member and a Referred Merchant, as referenced in Section 2.D hereof,
for services related to Credit Cards and Transactions. The initial
form of Merchant Agreement shall be the form attached hereto as
Exhibit 1; provided, however, the form of Merchant Agreement may be
changed by NOVA and Member in their sole discretion.
L. "Merchant Services" shall mean the credit card processing services
offered or provided by NOVA and Member (or their designees) pursuant
to Merchant Agreements.
M. "Merchant Operating Account" shall mean a deposit account
maintained by a Referred Merchant at a FDIC-insured financial
institution which is acceptable to NOVA and Member and is a member of
Automated Clearing House ("ACH")').
N. "Referred Merchant" shall mean any seller of goods, services, or
both, referred to NOVA and Member by MSP, and which is a party to a
Merchant Agreement. During the term and subject to the provisions of
this Agreement, MSP shall provide to all Referred Merchants the
services described in Section 2. H below.
0. "Rules" shall mean the bylaws, rules, regulations and procedures
issued by a Credit Card Association or other card issuer/licensor
similar to MasterCard or VISA, as such bylaws, rules, regulations and
procedures may be amended or supplemented from time to time.
P. "Sales Draft" shall mean a charge form or draft evidencing the
purchase by a Cardholder of goods or services at a Referred Merchant
location, by use of a Credit Card.
Q. "Transaction" shall mean the purchase or credit by a Cardholder of
goods or services at a Referred Merchant's location, by use of a
Credit Card.
R. "VISA" shall mean VISA U.S.A. Inc. (a Delaware corporation).
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2. MERCHANTS AND MERCHANT AGREEMENTS
A. Recruitment of Merchants. In accordance with the policies and
procedures set forth on Schedule A hereto, MSP shall use its best
efforts to locate, investigate and refer merchants MSP believes
to be likely candidates for Credit Card processing relationships
with NOVA and Member. MSP will market the Merchant Services
offered by NOVA and Member at its own expense, in accordance with
all Rules relating to third party service providers and in
accordance with all policies and procedures of Member and NOVA
(including without limitation the pricing terms for Referred
Merchants) as such policies and procedures may be amended from
time to time. Merchants referred to NOVA and Member by MSP which
enter into a Merchant Agreement will have a direct business
relationship with NOVA and Member, and will be subject to the
terms of the applicable Merchant Agreement entered into by and
among NOVA, Member and Merchant. MSP shall not be a party to any
Merchant Agreement and MSP shall have no additional obligations
imposed upon it by any Merchant Agreement.
B. Trademarks and Logos. MSP will not use the name, trademarks,
service marks or logos of NOVA or Member without the express
prior written consent of such party. MSP acknowledges and agrees
that MasterCard and VISA are the sole and exclusive owners of
these respective trademarks and service marks, and that MSP will
not contest the ownership of such marks. Additionally, MSP will
use the VISA and MasterCard trademarks and service marks only in
accordance with the Rules and after prior written approval of
NOVA and Member (and the Credit Card Associations, if required).
MSP acknowledges and agrees that the Credit Card Associations may
at any time immediately and without advance notice prohibit MSP
from using the marks of the Credit Card Association for any
reason. Member must be prominently identified by name and city on
any program materials describing the Merchant Services. MSP shall
have no authority to permit use of the VISA or MasterCard program
marks by any third party. Any solicitation material used by MSP
must clearly disclose that the merchant agreement is by and among
NOVA, Member and the individual merchant.
C. Approval of Merchants. Member, or NOVA acting as its agent, shall
review all applications submitted by prospective merchants
referred by MSP. Member and NOVA each reserve the right in their
sole discretion to refuse to sign a Merchant Agreement with any
merchant referred by MSP.
D. Merchant Agreements. Merchant Agreements shall be on forms
provided by NOVA and Member and shall define the terms upon which
NOVA and Member will provide Merchant Services to Merchant.
E. Merchant Reserves. Upon request MSP will assist NOVA and Member
in coordinating the implementation of such safeguards as NOVA or
Member determine is prudent or necessary to create or require,
with respect to any Referred Merchant, reserves, holdbacks,
deposits or other safeguards against merchant losses. Without
limitation as to additional or different safeguards, NOVA or
Member may require a Referred Merchant to pay up to 100% of the
funds deposited by a Referred Merchant for up to six months or
more.
F. Services Provided by NOVA. NOVA shall provide the following
services on behalf of Member, to MSP and the Referred Merchants:
i. NOVA Network Authorization 24 x 7 x 365 toll-free Network
Help Desk;
ii. Merchant Enrollment Service, including new merchant
set-up and administration of credit policy;
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iii. Chargeback and Retrieval Processing;
iv. Collections and Fraud Monitoring Service; and
v. Merchant Settlement Service, including Referred Merchant
statement processing and ACH file preparation (provided,
however, Member shall be responsible for effecting all
settlements of Transactions).
G. Optional Services Provided by NOVA. Upon the written election of MSP, NOVA
shall also provide and charge for (in accordance with Schedule B) any one or
more of the following services to the Referred Merchants:
i. Referred Merchant Set-Up Service, including new merchant
set-up kit, telephone training and re-programming
assistance;
ii. Equipment Repair Service, including emergency swap-outs
and deployment and repair service;
iii. Merchant Supply Fulfillment Service and equipment
fulfillment service;
iv. 24 x 7 x 365 Customer Support, including full Point of
Sale ("POS") Help Desk and Settlement Support;
V. Training Support, including MSP sales representative
training, product and service overviews and competitive
selling tips; and
vi. Collateral and Marketing Materials, including merchant
user guides, newsletters, product brochures and equipment
templates.
H. Services Provided by MSP. In addition to the duties of MSP described
elsewhere in this Agreement, MSP shall provide the following services
on behalf of NOVA and Member to the Referred Merchants:
i. Training. MSP shall provide to each Referred Merchant
necessary training in the procedures and Rules applicable to
the acceptance of Credit Cards, the operation of terminal
equipment and the use of NOVA products and services. MSP
shall initially train the Referred Merchants, including,
when appropriate, distribution of a merchant set-up kit. MSP
shall also train new employees of the Referred Merchant as
necessary.
ii. Merchant Support. MSP shall provide reasonable ongoing
support to ensure Referred Merchants are continually
apprised of their customer service requirements and to
remedy any customer service problems encountered by such
Referred Merchants. MSP shall supervise such personnel it
may engage as employees or agents in activities hereunder.
The responsibility for all such personnel it may be that of
MSP only, including the responsibility of assuring full
compliance by all such personnel with the terms and
provisions of this Agreement.
I. Excluded Types of Merchants. MSP agrees that it or its designee
will not market the Merchant Services to any existing NOVA or Member
merchant, any existing merchant of a NOVA agent or any customer of
NOVA. MSP also agrees to follow the guidelines set forth on Schedule A
with respect to soliciting and referring merchants. If MSP has any
uncertainty as to whether a particular merchant is covered by these
restrictions or by
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Schedule A, MSP will discuss the matter in good faith with NOVA prior
to proposing that such Merchant enter into a Merchant Agreement with
NOVA and Member.
J. Adverse Information. During the term of this Agreement, MSP agrees to
notify NOVA and Member promptly in writing if MSP becomes aware of any
information about the insolvency or bankruptcy (voluntary or
involuntary) or change in ownership or business of any Referred
Merchant, or if MSP becomes aware of any other significant adverse
information about noncompliance with the Rules by a Referred Merchant,
or any information indicating that any Referred Merchant's acceptance
of Credit Cards is other than the bona fide sale of products or
services by such Referred Merchant.
K. Advertising/Sales Materials. All advertising and/or sales materials
used by MSP shall be in compliance with the Rules. NOVA and Member
shall give MSP notice of any noncompliance that comes to the attention
of such party.
L. Information. MSP shall distribute to its sales representatives, in
a timely fashion, changes in operating mode, and Rules received from
NOVA or Member, that would affect the manner in which the Merchant
Services are marketed by such representatives. MSP shall keep accurate
records with respect to Referred Merchants' inquiries, orders,
transactions and contacts which MSP makes pursuant to this Agreement.
On behalf of NOVA and Member, MSP will request and use reasonable
efforts to obtain and provide latest fiscal year business balance
sheet and profit and loss statement on Referred Merchants and personal
financial statements on principals, if requested by NOVA or Member.
3. COMPLIANCE WITH RULES
A. Registration. In connection with the services provided by MSP
under this Agreement, MSP has registered and executed all
applicable documents and agreements with VISA and MasterCard
and is in full compliance with the Rules. MSP further agrees
to the following:
i. maintain its registration with VISA and MasterCard and
fully comply with the terms of any documents and agreements
executed therewith;
ii. comply with all reporting requirements of MasterCard and
VISA; and
iii. promptly give written notice to NOVA and Member of the
identity and location of all sales locations of MSP. MSP
acknowledges and agrees it may not delegate any of its
rights or obligations hereunder to any other person or
entity, except pursuant to a valid assignment complying with
the requirements set forth in Section 9 below
B. Compliance with MasterCard Rules. In accordance with the
MasterCard Rules regarding member service providers, MSP
acknowledges and agrees as follows:
i. MSP understands and agrees to comply in all respects with
the MasterCard Rules (including without limitation the Rules
regarding member service providers);
ii. MSP acknowledges and agrees that MasterCard has the
right to enforce any provision of the MasterCard Rules and
to prohibit any conduct by MSP that creates a risk of injury
to MasterCard or that may adversely affect the integrity of
MasterCard's systems, information or both. MSP agrees to
refrain from taking any action that would have the effect of
interfering with or preventing an exercise of such right by
MasterCard; and
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in the event of any inconsistency between any provision of
this Agreement and the MasterCard Rules, the MasterCard
Rules will be afforded precedence and shall apply.
4. CONDENSATION TO MSP
A. Processing Rates and Fees. NOVA, acting on its own behalf and as
Member's agent, shall pay to MSP as full consideration and
compensation for the performance of all MSP's duties and
obligations under this Agreement, any Referred Merchant discount
revenues and/or fees collected in excess of NOVA's fees and other
charges as set forth on Schedule B. Such payments shall be made
within thirty (30) days following the end of each month;
provided, however, NOVA shall use its best efforts to make such
payments within fifteen (15) days following the end of each
month. For example, amounts payable to MSP for Referred Merchant
revenues collected for March Transactions shall be paid to MSP by
April 30, but NOVA will attempt to pay such revenues by April
15).
B. Pass-Through of Certain Fees. NOVA and Member reserve the right
to pass through to MSP certain fees or penalties imposed by any
Credit Card Association as a result of the activities, acts or
omissions of MSP. Additionally, MSP agrees to pay promptly any
fees or penalties imposed by the Credit Card Associations with
respect to MSP's registration as a service provider for Member.
MSP acknowledges that NOVA and Member, in their discretion and in
accordance with the terms of the Merchant Agreements, may pass
through to Referred Merchants any fees or expenses related to
implementing changes to software/hardware requirements deemed
necessary by the Credit Card Associations or other service
providers.
5. DUE CARE AND LIABILITY
MSP hereby agrees to indemnify and hold NOVA, Member, the Credit Card
Associations, the Referred Merchants and the members of the Credit Card
Associations harmless from and against any claim, demand, loss, financial or
otherwise, damage, liability or cost (including reasonable legal fees and
expenses), caused by or in any way arising from: (i) any failure by MSP to fully
comply with the Rules and all other rules, regulations, policies and procedures
of NOVA, Member, MasterCard, VISA and any other similar Credit Card licensor;
(ii) any breach or default by MSP of this Agreement or any other agreement
between MSP and (a) NOVA, (b) Member or (c) any Referred merchant; (iii) any
negligent or wrongful act of MSP in performing or failing to perform the
obligations hereunder; or (iv) any termination of this Agreement pursuant to
Section 8 hereunder. The obligations of MSP hereunder are not intended to cover
typical credit losses (including chargebacks) incurred by NOVA or Member as a
result of Referred Merchants' refusal or inability to pay, unless such credit
losses are incurred by NOVA or Member as a result of any act or omission or MSP
described in (i) - (iv) above.
6. GENERAL
A. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia.
B. Entire Agreement. All Schedules and Exhibits attached to this
Agreement and the Rules are hereby made a part of this Agreement
for all purposes. This Agreement represents the entire
understanding among NOVA, MSP and Member with respect to the
matters contained herein and, except as otherwise provided in
this Agreement, it may be amended only by an instrument in
writing signed by each of the parties hereto.
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<PAGE>
C. No Partnership or Agency. Nothing in this Agreement shall be
deemed to constitute a partnership or joint venture between the
parties hereto or be deemed to constitute MSP as an agent for
NOVA or Member for any purpose whatsoever. MSP is an independent
contractor and not an employee of NOVA or Member.
D. Third Party Rights. This Agreement is solely for the benefit of
the parties hereto and nothing herein, express or implied, shall
be deemed to be for the benefit of any third party or create any
third party rights or standing to sue.
E. Notices. Any notice required or permitted under this Agreement
shall be in writing and may be delivered by personal service
or by U.S. certified mail, return receipt requested and
postage prepaid, to the addresses of the parties set forth
below, or such other addresses as may be provided by written
notice to the other parties in accordance with the terms of
this notice provisions. Any such notice shall be effective
upon the earlier of (i) five days after deposit in the mail
properly addressed and postage prepaid, or (ii) actual
receipt.
If to NOVA: NOVA Information Systems, Inc.
One Concourse Parkway, Suite 300
Atlanta, Georgia 30328
Attn.: James M. Bahin, Chief Financial Officer
Facsimile No.: (404) 698-1046
With a copy to: NOVA Information Systems, Inc.
One Concourse Parkway, Suite 300
Atlanta, Georgia 30328
Attn.: Cathy A. Harper, General Counsel
Facsimile No.: (404) 698-1046
If to Member: Regions Bank
25 Washington Avenue, Suite 600
Montgomery, Alabama 36104
Attention: Jackie D. Oliver
With a copy to: Steiner, Crum & Baker
8 Commerce Street, 8th Floor
Montgomery, Alabama 36104
Attention: Debra L. Loard, Esquire
If to MSP: U.S. Wireless Data, Inc.
1123 Western Ave.
Mill Valley, CA 94941
Attention: Rod L. Stambaugh
F. Dispute Resolution. Any controversy, dispute or claim arising out
of, or in connection with this Agreement must be settled by final
and binding arbitration to be held in Atlanta, Georgia in
accordance with the rules of the American Arbitration Association
("AAA"), as may be amended from time to time (the "AAA Rules").
Judgment upon award rendered by the arbitrators may be entered in
any court: (i) having jurisdiction thereof, (ii) having
jurisdiction over the party against whom enforcement thereof is
sought, or (iii) having jurisdiction over any such party's
assets. The procedures and law applicable during the arbitration
of any controversy, dispute or claim will be both the AAA Rules
and the internal substantive laws of the State of Georgia
(excluding, and without regard to, its or any other
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jurisdiction's rules concerning any conflict of laws). In any
arbitration pursuant to this Agreement, the award of decision
must be rendered by at least a majority of the members of an
arbitration panel consisting of three (3) members, one of whom
will be appointed by each of the parties hereto. All arbitrators
must be persons who are not employees, agents or former employees
or agents of any party. In the event that any of the parties
hereto fails to appoint an arbitrator within thirty (30) days
after submission of the dispute to arbitration, such arbitrator
will be appointed by the AAA in accordance with the AAA Rules.
G. Force Majeure. Neither party shall be liable to the other for
any failure or delay in its performance of this Agreement in
accordance with its terms if such failure or delay arises out
of causes beyond the control and without the fault or
negligence of such party.
H. Waiver. Any waiver or delay by any party hereto in asserting
or exercising any right, shall not constitute a waiver of any
further or other rights of said party. If any part of this
Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the
remainder of the Agreement shall not in any way be affected or
impaired thereby.
1. Attorney's Fees. In the event any party hereto is determined,
in connection with a final and binding arbitration pursuant to
Section 6.F above, to have breached this Agreement, then the
non-defaulting party shall be entitled to recover expenses
incurred in enforcing the provisions of this Agreement,
including reasonable attorneys' fees and costs.
J. Severability, If any provision of this Agreement is found
illegal, invalid or unenforceable, such finding will not
affect any other provision hereunder. This Agreement shall be
deemed modified to the extent necessary to render enforceable
the provisions hereunder, and to comply with the Rules.
7. TERM OF AGREEMENT The term of this Agreement shall be for a period of
three (3) years commencing from the date of this Agreement. Thereafter,
this Agreement shall renew automatically for additional successive
one-year terms, unless any party hereto provides the other parties
written notice of intent not to renew this Agreement at least ninety
(90) days prior to the expiration of the then current term. The terms
of this Agreement shall remain in force with respect to all
Transactions processed hereunder and all Chargebacks, fees and
liabilities relative thereto.
8. TERMINATION
A. Termination for Cause. Any party hereto may terminate this
Agreement upon a material default hereunder by another party if
such default is not cured within (30) days of receipt of written
notice thereof from the non-breaching party. NOVA or Member may
also terminate this Agreement at any time for Cause. This
Agreement shall terminate automatically upon the occurrence of
either of the following: (i) the termination of Member's
MasterCard and VISA licenses and membership; (ii) the termination
of the NOVA/Member Agreement (provided, NOVA will attempt to
give, MSP at least sixty (60) days notice prior to termination);
or (iii) the termination by MasterCard or VISA of MSP's
registration as a third party service provider for Member.
B. Other Termination. NOVA or Member may, at its option,
terminate this Agreement immediately without notice to MSP in
the event of any one of the following events:
i. the filing of a bankruptcy petition, insolvency,
inability to meet its debts (in the ordinary course of
business) or dissolution of MSP;
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ii. MSP making an assignment by MSP for the benefit of its
creditors or an offer of settlement or extension to its
creditors generally;
iii, the appointment of a trustee, conservator, receiver or
similar fiduciary for MSP or for substantially all of MSP's
assets;
iv. the occurrence of any material adverse change in ft
nature or conduct of the business of MSP as carried on at
the date hereof-, or
v. failure by MSP to perform its obligations under this
Agreement.
Certain Post-Termination Rights. In the event of termination
of this Agreement, NOVA and Member shall have the right in
addition to the other rights and remedies under this
Agreement and at law and in equity, to exercise a right of
set-off such funds and payments otherwise due to MSP
pursuant to Section 4. A., for any amounts due to NOVA or
Member hereunder pursuant to Section 4.B., and, in the event
of termination of this Agreement for cause, any damages
suffered by NOVA or Member hereunder and at law, then owing
or which may thereafter become owing. No termination of this
Agreement shall affect any Merchant Agreement that is in
effect as of the time of termination, After termination, MSP
agrees to cooperate in all reasonable respects with NOVA and
Member throughout the remaining term of each Merchant
Agreement, MSP agrees not to solicit or encourage any
Referred Merchant to terminate a Merchant Agreement in force
with NOVA or Member for any reason after the termination of
this Agreement. Sections 5, 6.F, 8.C and 10 shall survive
termination of this Agreement.
Upon request of MSP, NOVA shall offer to enter into a
servicing only agreement following the termination of this
Agreement to enable MSP to continue servicing the Referred
Merchants and receiving fees for such servicing
responsibilities, provided this Agreement has not been
terminated for cause by NOVA or Member.
9. ASSIGNMENT This Agreement shall inure to the benefit of and be
binding upon the parties and their respective successors and
assigns. Notwithstanding the foregoing sentence, however, this
Agreement may not be assigned by MSP without the prior written
consent of NOVA and Member, and the receipt of all required
consents from the Credit Card Associations.
10. CONFIDENTIALITY - MSP, NOVA and Member each agree that it will
retain in strictest confidence all information and data belonging
to or relating to the business of the other parties to this
Agreement, which is designated confidential by the party to which
such information or data belongs or relates (including without
Limitation the terms of this Agreement and information related to
Referred Merchants), and that each party will safeguard such
information and data by using the same degree of care and
discretion that it uses with its own data that such party regard
as confidential.
Accepted this _7_ day of _Feb._ 1997 MSP: U.S. Wireless Data, Inc.
By: Rod Stambaugh
-----------------
Title: President & CE$O
Date: 2-7-97
Accepted this _7_ day of _Feb. _ 1997 Nova Information Systems, Inc.
By: Cathy A. Harper
--------------------
Title: Vice President
Date: 2-7-97
<PAGE>
Credit Card Processing Agreement
Schedule A - Credit Policy
--------------------------
INTRODUCTION
The following documentation represents the current NOVA and Member new merchant
Credit Policy. These guidelines are intended to govern the circumstances under
which new merchant applications will be approved or declined.
APPLICATION APPROVAL
The following represents the minimum review requirements for new merchant
applications generated by MSP and its representatives. These are minimum
requirements and additional information may be requested by NOVA and Member. Any
changes or exceptions to the following guidelines must be approved by NOVA and
Member. Every new merchant application submitted for approval by MSP must
include or comply with the following requirements:
The type of business on the merchant application must not appear on the
"Prohibited Products" or "Prohibited Methods of Selling" categories of the
"Restricted Merchant List" (See Exhibit I). Certain types of businesses
that appear in the "Restricted Business List" category of the "Restricted
Merchant List" may be considered for approval when Additional Documentation
Required for Exceptional Merchants as listed below is provided.
The new merchant application must be completed, including: type of
business; officer/owner information including ownership structure;
VISA/MasterCard volumes and average ticket; signatures of the
officers/owners; site survey; percentage of the Mail Order/Telephone Order
("MO/TO") volume.
A properly executed, unaltered NOVA/Member Merchant Processing Agreement.
Execution of the Agreement should be witnessed by an authorized
representative of MSP.
A properly executed receipt for Referral Merchant funds, if applicable.
A completed debit/credit authorization form signed by an authorized
officer/owner of the merchant, together with voided check with the complete
transit and routing and demand deposit account numbers attached.
Completed site survey report which designates the correct type of business
and inventory sufficient to support the projected VISA/MasterCard sales.
The site survey report must be signed by a MSP representative or an
independent third party inspection service acceptable to NOVA.
Adequate personal information to allow NOVA and Member to perform a credit
review. A negative credit review (for example, prior or outstanding tax
liens, judgments, collection accounts, multiple slow pay accounts, etc.) or
lack of personal credit may result in the application being declined. NOTE:
At least two of the following credit bureaus must be used to provide credit
information: CBI Equifax; TRW; TransUnion; Dun & Bradstreet Report;
Acceptable Combined Terminated Merchant File inquiry.
One month current merchant statements from previous processor.
<PAGE>
Credit Card Processing Agreement
Schedule A - Credit Policy (continued)
In cases where the disposition of the merchant application is not apparent
based on the above information, the following information may be required
by NOVA/Member:
- Audited Financial Statements,
- Corporate Tax Returns;
- Personal Tax Returns (Principals);
- Copy of Printed Sales Material;
- Copy of Return Policy;
- Copy of Articles of Incorporation or Business License;
- Detailed description of how merchant conducts business relative
to deliveries, deposits and telephone sales;
- Six months of most recent VISA/MasterCard processing statements OR
six months of most recent business checking statements.
Derogatory Background Information:
- In general, payments now current that were past due will not be
questioned unless they are the norm for the report
- In general, payments past due of 30-60 days will not hold up the
application unless they exceed $500 or are the norm for the report
- Proof of satisfaction will be requested for any outstanding judgment or
lien over $500
- Further explanation and possibly proof of satisfaction will be requested
for any legal item with a dollar amount attached in excess of $500
- Any charge off in excess of $500 will be viewed as a substantially
derogative piece of the overall report
- Any single negative item in excess of $1,000 will be viewed as seriously
derogative
- Foreclosure and repossessions are considered seriously derogative
Exceptional Merchants Include the Following:
- Merchants processing greater than 25% MO/TO
- Merchant processing Out of Home Sales
- Merchants with bankcard volume greater than $2.5 million annually
- Merchants with type of business appearing in "Restricted Business List"
category of "Restricted Merchant List"
The following Additional Documentation will be required in order for
Exceptional Merchants to be considered for approval:
- Most recent audited Balance Sheet & Income Statement OR 2 years of
corporate tax returns (personal if business in not incorporated)
- Copy of [ ] Business Certification, OR [ ] Business License, OR [ ]
Articles of Incorporation
- Detailed description of how merchant conducts business relative to
deliveries, deposits and telephone sales
- 6 months of recent processing statements OR, if processor statements not
available, 6 months most recent checking account statements
- 2 photographs of merchant location: Outside displaying signage and Inside
displaying inventory
<PAGE>
Credit Card Processing Agreement
Schedule A - Credit Policy (continued)
SCHEDULE A
Exhibit I
Restricted Merchant List
Restricted Business List
Apartment Houses
Auctions
Bail Bond Service
Bars/Taverns (not serving food)
Car Rental Agencies
Card Rooms
Cellular Telephone Companies
Charitable Organizations
Check Cashing Institutions
Collection Agencies
Companion or Escort Services
Computer Hardware and Software
Cooperative Consumer Discount Groups
Credit Restoration/Repair Agencies
Dating Services
Employment Agencies
Gambling Establishments
General Contractors/Home Improvement/ Home Repairs
Health Spas/Clubs (except country clubs)
Income Tax Services
Insurance Agencies
Lawyers/Law Firms Engaged in Bankruptcy
Limousine or Taxi Service
Long Distance Providers (blocks of phone time)
Mall Kiosks
Massage Parlors
Modeling Agencies/Star Search
Monthly recurring billing by MO/TO
Professional Billing Services
Resort Land Promotions
Resume Preparers
Restricted Business List (con't)
Sexual Encounter Firms
Software Vendors
Sports Forecasting
Talent Booking Agencies
Third Party Hotel Reservation Services
Towing Services
Travel Agencies/Clubs
Used Car Lots/Sales
Prohibited Products
Drug Paraphernalia
Investment Opportunities
Lotteries or Raffles
Pawn Shops
Phone Cards
Pornographic/Adult Materials
Real Estate Services
Time Share Condo Sales
Water Purification
Prohibited Methods of Selling
Door to Door
Flea Markets
Membership Type Business Pyramid/Multi Level Sales Sales Out of Home
Neighborhood Party Type Sales Future Services
This list is not meant to be all inclusive and applications for businesses not
on this list may be declined for type of business.
<PAGE>
SCHEDULE B
All Settled Items:
Interchange and Assessments (including Debit Network Interchange)
Credit Card Processing Fees
Monthly Items Processed Per Item Fee
----------------------- ------------
First Year MSP's *
1 to 100,000 *
100,001 to 400,000 *
400,001 to 1,000,000 *
1,000,001 plus *
Authorization Fees Bankcards Other Cards
- ------------------ --------- -----------
NOVA Network * *
Visanet - Local * *
Visanet - 950 * *
Visanet - Watts * *
Voice Authorization *
AVS *
Monthly Statement Fee
Monthly Items Processed Per Merchant
----------------------- ------------
1 to 100,000 *
100,001 to 400,000 *
400,001 to 1,000,000 *
1,000,001 plus *
Other Fees
Debit Cards *
Scan check Authorization *
Chargebacks *
ACH Account Changes or Returns *
Site Survey *
Application Fees
With Complete Credit Package *
(includes 2 credit bureau reports)
Without Complete Credit Package *
Optional Services
Customer Service (24x7x365) *
Equipment Deployment *
Merchant Setup and Training *
Reprogramming of Terminals *
Supply Fulfillment *
Equipment Fulfillment *
Equipment Replacement *
NOTE: Mail/Telephone Order Merchants, who meet our credit criteria,
will be assessed a 35 Basis Point High Risk Assessment (in
addition to any applicable interchange surcharges).
* CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS DATA, INC. FOR THIS
PORTION OF THIS DOCUMENT PURSUANT TO COMMISSION RULE 24b-2. THE OMITTED MATERIAL
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT REQUESTED BY U.S. WIRELESS DATA, INC. FOR CERTAIN
INFORMATION CONTAINED IN PARAGRAPH 4 OF THIS AGREEMENT
U.S. WIRELESS DATA(R) INC.
Delivering The New Standard In Transaction Processing
September 18, 1997
Mr. David Ivy, Sr.
Unicard Systems, Inc.
13800 Montfort #155
Dallas, TX 75240
Dear David,
I am writing this letter of understanding to outline the terms of an agreement
between U.S. Wireless Data and Unicard Systems, Inc. The execution of a final
agreement will result in a high speed, efficient and cost effective solution for
providing both Unicard processing and credit card transaction processing for the
current and future customers of Unicard Systems, Inc.
I have outlined below the basic terms and conditions of an agreement between
U.S. Wireless Data ("USWD") and Unicard Systems, Inc. ("USI") for your review
and acceptance:
1. Unicard desires to incorporate U.S. Wireless Data's TRANZ Enabler
and CDPD wireless services to speed up the Unicard authorization process for its
current and future customers.
2. USI agrees to utilize USWD's TRANZ Enabler and CDPD wireless
services as its exclusive wireless product and service offering. The TRANZ
Enabler is compatible for use with the Verifone Zon Jr., TRANZ 330 and 380
terminals.
3. USI and USWD also desire to offer credit card transaction processing
services to USI's current and future customers.
4. USWD will provide its TRANZ Enabler and wireless services to USI at
a rental rate of * per month. This rental fee includes the TRANZ Enabler, and
CDPD wireless services (includes IP address, monthly service fee and air time
usage up to 20 KB per month). The first * monthly rental charge will be due 30
days after receipt of shipment of the units with subsequent monthly rental
payments due on the first day of each month.
5. USWD has developed a CDPD version of the USI terminal application
software and has certified it for use on the USI host. The application software
is jointly owned by USWD and USI and may not be licensed for use to any other
customers without the written consent of both parties.
6. USWD will provide USI with detailed CDPD coverage maps to determine
CDPD coverage at all proposed deployment sites.
7. USWD will provide warranty and support services for its TRANZ
Enabler under normal wear and tear conditions. USWD will provide USI with a
replacement pool (5 units) to swap out damaged units. Any damaged or
malfunctioning units will be repaired by USWD and put back into the replacement
pool. The replacement pool will be provided to USI on a no cost basis and may
only be used for replacing defective or damaged units.
8. In the event that a unit is lost, stolen or part of a "midnight
move", then USWD would apply 50% of the rental payments made to date by USI
towards a $500 replacement cost. Units damaged due to abuse will be repaired on
a time and materials basis.
9. USI will become a registered agent of USWD for the purpose of
offering credit card transaction processing services to its current and future
customers.
* CONFIDENTIAL TREATMENT HAS BEEN REQUESTED BY U.S. WIRELESS DATA, INC. FOR THIS
PORTION OF THIS DOCUMENT PURSUANT TO COMMISSION RULE 24b-2. THE OMITTED MATERIAL
HAS BEEN FILED SEPARATELY WITH THE COMMISSION.
-4-
<PAGE>
10. USWD will develop and certify a single USI and Credit Card terminal
application for use with a Verifone TRANZ 330 or 380 terminal. This terminal
application will allow a merchant to process membership cards with USI or credit
cards with USWD's credit card processor. USWD will develop this application
software at its own expense and will retain 100% ownership of the code. USWD
will license the hybrid application software to USI free of charge for
utilization only with USI's current and future customer base.
11. USI and USWD agree to split any recurring revenue earned from
credit card transaction processing on an equal (50/50) basis. Recurring revenue
is defined as the margin between USWD's "buy rate" and the discount rate quoted
to the merchant net of any fixed monthly costs. USWD will fund USI for its
portion of recurring revenue earned on the 20th of each month. The recurring
revenue fees only apply to Visa and Mastercard transactions. American Express
and Discover quote discount rates to the merchant directly, and we cannot
participate in any recurring discount rate fees for AMEX or Discover Card
transactions.
12. USI will provide USWD with an initial purchase order for 400 units
with specified delivery dates upon the acceptance of this letter of
understanding.
13. Upon the signing of the acceptance of this letter of understanding,
USI agrees to allow USWD to issue a press release describing the general nature
of this agreement.
* #14 below
I believe this outline covers the basic terms of an agreement that can make this
relationship a mutual success for our respective companies. If agreeable, please
indicated by signing below and return it to me with a purchase order for the
first 400 units at your earliest convenience. Upon receiving your acceptance, I
will have our legal firm draft a formal agreement to be executed that
incorporates the terms and conditions stated above.
Sincerely, Accepted this 18th day of September, 1997
By: /s/ Rod Stambaugh By: /s/ David M. Ivy
----------------- -----------------------
Name: Rod Stambaugh Name: David M. Ivy
Title:President Title: President
cc: Evon Kelly, CEO
14. The parties agree that certain trade secrets, customer lists and/or
other techniques used in the present business of USI will or may be disclosed to
USWD. Therefore, USWD agrees that it will not offer the same services covered by
this agreement to any other company for purposes of private club membership
management in Texas.
<PAGE>
UNICARD SYSTEMS, INC.
- ---------------------
13800 MONTFORT #155
DALLAS, TEXAS 75240
OFFICE (972) 385-4000
FAX (972) 991-8114
TO: U.S. WIRELESS DATA
4851 INDEPENDENCE ST. #189
WHEAT RIDGE, COLORADO 80033
PURCHASE ORDER
DATE: SEPTEMBER 18, 1997
NUMBER: 97-155-HW
AUTHORIZED BY: /s/ David M. Ivy, President
AMOUNT ORDERED ITEM UNIT COST SHIPPING DATE
400 TRANZ Enabler * **
* Per contract agreement
** 100 Units ASAP
300 Units as directed prior to 6-1-98
SATELLITE UNICARD NETWORK
THE SUN SYSTEM
WELLEX
THIS PURCHASE AGREEMENT is entered into as of this 7th day of August-1997, by
and between Wellex CORPORATION, a California corporation, whose principal place
of business is located at 44141 S. Grimmer Blvd., Fremont CA 94538 (hereinafter
referred to as ("Manufacturer") and, U. S. Wireless Data Inc. a Colorado (state
whether a corporation, partnership or proprietorship), and if a corporation,
incorporated under the laws of the State of Colorado having its principal.
office at 4851 Independence St. #189, Wheat Ridge, CO 80033 (hereinafter
referred to as "PURCHASER").
1. TERM
----
This Agreement shall become effective on the date hereof and the body
of the AGREEMENT shall nominally be in effect for one year; however,
MANUFACTURER, reserves the right to automatically extend the term of
the AGREEMENT, unless notified in writing by PURCHASER. Prior to
anniversary. dates, MANUFACTURER will provide revised volume pricing
for the next year.
2. SPECIFICATION COMMENTS
----------------------
All items covered under this Agreement shall be in accordance with
Purchaser's specifications AND drawings and approval.
3. SHIPPING
--------
All shipments shall be made by Wellex,-, F.O.B. Manufacturer's
manufacturing- facility in California.
4. PAYMENT TERMS
-------------
Net 30 days from date of invoice.
5. COMMODITY LIST
--------------
Items listed in Attachment A may be added to or deleted from, providing such
additions or deletions meet all of the terms and conditions of this contract.
<PAGE>
6. REQUIREMENT FOR PURCHASING
--------------------------
All purchase orders issued shall contain the following information:
a) PURCHASER'S part number, description and revision level of product to
be shipped.
b) The delivery or completion schedule.
c) The unit price.
7. PURCHASE ORDERS/FORECASTS
-------------------------
a) PURCHASER will provide to MANUFACTURER firm purchase orders for a minimum
of three (3) months in advance of delivery, Further, Purchaser, will
provide to MANUFACTURER an additional six (6) month forecast to be updated
monthly, MANUFACTURER, will purchase materials per purchase order and
forecast based on lead-times, minimum buys, and inventory class buy
policy. PURCHASER is responsible for material purchased in case of
schedule reduction or cancellation.
b) PURCHASER reserves the right to reschedule deliveries on orders that are
due sixty (60) days or more, from the date such change notice is given to
MANUFACTURER. If such reschedule represents a delay in shipment, the
reschedule cannot be for more than sixty (60) days from the original
delivery date and PURCHASER will be responsible for a one percent (1%) per
month carrying charge on, material acquired pursuant to the original
delivery date that MANUFACTURER cannot mitigate.
If such reschedule represents an acceleration or increase, MANUFACTURER will
make best effort to meet the request, subject to material and capacity
availability. Any extra or unrecoverable costs incurred to meet the Request will
be the liability of PURCHASER.
c) PURCHASER may cancel any order scheduled for delivery more than ninety
(90) days from the date such cancellation notice is given to Manufacturer.
Upon cancellation, Purchaser is liable to Manufacturer for' all material
and return charges plus handling charges acquired pursuant to Paragraph I
for canceled or non-returnable products.,
Notwithstanding PURCHASER'S liability, MANUFACTURER, will attempt to mitigate
any such liability. Any costs incurred to make such mitigation are the liability
of the PURCHASER and will be reviewed and approved by the PURCHASER prior to
their incurrance.
<PAGE>
8. WARRANTY
--------
(a) MANUFACTURER. Warrants that the PRODUCT sold hereunder will be free
from defects in material and workmanship according to IPC-61O
Workmanship Standards. Wellex Corporation for a period of ninety (90)
days from the date of shipment Of PURCHASER, provided that. (i)
MANUFACTURER is notified in writing by PURCHASER within thirty (30)
days after Purchaser's discovery of such failure or (ii) the defective
PRODUCT is returned to MANUFACTURER no longer than ten (10) days
following the last day of the warranty period. MANUFACTURER shall
include serial numbers and/or date stamps, as designated by PURCHASER,
on each PRODUCT to facilitate warranty tracking. PURCHASER shall
forward defective product to MANUFACTURER freight prepaid, and
MANUFACTURER will make best effort to return the repaired or replaced
product freight prepaid by MANUFACTURER to PURCHASER no later than
thirty (30) days from the date MANUFACTURER receives the defective
PRODUCT.
(b) The foregoing warranty shall not be valid if the PRODUCT or component
parts have been subjected to abuse, misuse, accident, alteration,
neglect, unauthorized repair or installation. MANUFACTURER shall make
the final determination as to the existence or cause of any alleged
defect.
(c) The foregoing warranty provisions set forth the MANUFACTURER'S sole
liability and the Purchaser's exclusive remedies for claims (except as
to title) based on defects in, or failure of, any PRODUCT sold
hereunder when the claim is based in warranty, Upon the expiration of
the applicable warranty for any PRODUCT sold hereunder, all such
liability shall terminate.
(b) The above warranty periods shall not be extended by the repair or
replacement of PRODUCT pursuant to any of the above warranties. The
above warranties shall apply to PURCHASER, its successors, assigns and
those who purchase or use said PRODUCT. PURCHASER shall deal directly
with MANUFACTURER for returns and repairs.
<PAGE>
(e) EXCEPT AS HFREIN ABOVE PROVIDED, THE FOREGOING WARRANTIES ARE
EXCLUSIVF AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, OR
STATUTORY, INCLUDING THE IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.
9. DELIVERY
--------
a:) Product shall be delivered to PURCHASER in accordance with required
delivery dates as specified on PURCHASER'S purchase orders that have
been agreed to by MANUFACTURER.
b) Upon learning of any potential delays, MANUFACTURER will immediately
notify PURCHASER in writing as to the cause and extent of such delay.
10. TERMINATION
-----------
a) For Cause -- This Agreement may be terminated by either party at any
time upon the occurrence of any one or more of the following Events of
Default:
(1) failure of the other party: a) to perform pursuant to the terms
and conditions of this Agreement; and b) to me such performance
deficiency within sixty (60) days after receiving written notice
thereof given by the aggrieved party;
(2) the entering into or filing, by the other party of a petition,
arrangement or proceeding seeking an order for relief under the
bankruptcy laws of the United States, a receivership for any of
the assets of the other party; a composition with or assignment
for the benefit of its creditors; a readjustment of debt or the
dissolution or liquidation of the other party;
(3) or the insolvency of the other party.
b) For Convenience - Either party may terminate this Agreement for convenience
upon ninety (90) day written notice to the other party. If Manufacturer
doesn't have sufficient material to cover material leadtime, MANUFACTURER'S
notice to PURCHASER must be at least as far in advance as the longest
leadtime item.
Upon termination, PURCHASER shall be liable for any material acquired plus
handling charge pursuant to purchase orders minimum buys and long lead
items purchased to forecast. Any such material shall be shipped promptly to
PURCHASER upon termination and shall be subject to the then-current pricing
and payment terms PURCHASER shall also be liable for any unamoritized
investment incurred by MANUFACTURER at the time of termination, as
specified on Attachment B.
11. INSPECTION
----------
a) Source Inspection
Upon request from PURCHASER, MANUFACTURER agrees to allow PURCHASER'S
source inspector to inspect and review the work being performed under this
Agreement, including materials and supplies being used. However, shipments
will not be delayed if PURCHASER fails to effect such source inspection.
Source inspection does not constitute acceptance. Final acceptance shall be
at PURCHASER'S facility.
<PAGE>
11.
a) Source Inspection (continued)
PURCHASER shall have ten (10) days, after actual receipt of the goods,
within which to inspect prior to PURCHASER'S acceptance thereof.
PURCHASER'S acceptance of each type of Goods shall be based on PURCHASER'S
standard test procedures for such Goods, including the Goods satisfying the
AQL established by PURCHASER.
b) Approved Manufacturers
In the course of purchasing component parts on behalf of PURCHASER,
MANUFACTURER must follow PURCHASER'S Approved Vendors List for all
component parts. If MANUFACTURER offers alternative to PURCHASER'S AVL, the
alternative must be approved in writing by PURCHASER prior to any
production at MANUFACTURER'S facility.
12. ENGINEERING CHANGE ORDERS
-------------------------
It is recognized that from time to time MANUFACTURER will be asked to
implement ECOS. The following delineates the proper procedures,
a) PURCHASER to notify MANUFACTURER in writing of proposed ECO. This
notification should include the documentation of the change to
effectively support MANUFACTURER'S investigation of the impact of
this proposal.
b) Upon notice of a change, MANUFACTURER'S will make best effort to
review all costs impacted within one (1) week. All cost impacts
and material availability issues will be mutually reviewed and
agreed to with PURCHASER prior to implementation.
c) Emergency ECOs will be immediately implemented at PURCHASER'S
request.
d) PURCHASER will be liable for costs associated with emergency ECO
implementation.
13. CONFIDENTIALITY
---------------
Both parties acknowledge that, by reason of their relationship, they, may have
access to certain information and materials concerning the other's business,
plans, and products (including, but not limited to, information and materials
contained in technical data provided to the other party) which is confidential
and of substantial value to the other party, which value would be impaired if
such information were disclosed to third parties. Both parties agree that they
shall not use in any way, for their own account or the account of any third
party, nor disclose to any third party, any such confidential information which
is revealed to it by the other party hereto,
<PAGE>
13. CONFIDENTIALITY (continued)
--------------- -----------
without written authorization from the other party. Each party will take every
reasonable precaution to protect the confidentiality of such information
consistent with the efforts exercised by it with respect to its own Confidential
information. Each party shall advise the other if it considers any particular
information or materials to be confidential. This provision shall survive
termination of this Agreement.
14. INDEMNIFICATION
---------------
Each party shall indemnify and defend the other party against all claims, suits,
losses, expenses and liabilities for bodily injury, personal injury, death and
property damage directly or indirectly caused by any Products or through the
intentional acts or negligence of a party or of any person for whose actions
said party, is legally liable. Both parties shall carry and maintain liability
insurance coverage to satisfactorily cover its obligations under this Agreement.
15. COMPLIANCE WITH APPLICABLE LAWS
-------------------------------
Manufacture has been, and shall continue to be, in material compliance with the
provisions of all applicable federal, state and local laws, regulations, rules
and ordinances applicable to the transactions governed by this Agreement.
16. FORCE MAJEURE
-------------
In the event that performance by either party of its obligations under this
Agreement is prevented due to any Act of God, fire, casualty, flood,
earthquake, war, strike, lockout, epidemic, destruction of production
facilities, riot, insurrection, material unavailability, or any other cause
beyond the reasonable control of the party, invoking this section and if such
party shall give prompt written notice to the other party its performance
shall be excused, and the time or the performance shall be, extended for the
period of delay or inability to perform due to such occurrences.
17. MISCELLANEOUS
-------------
a) Severability - In the event that one or more of the provision, or
parts thereof, contained in the Agreement shall for any reason be
held to be invalid, illegal, or unenforceable by a court of
competent jurisdiction, the same shall not invalidate or
otherwise affect any other provision in the Agreement, and the
Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained therein.
<PAGE>
17. MISCELLANEOUS (continued)
------------- -----------
b) Entire Agreement: Modification - The Agreement constitutes the
entire and exclusive statement by PURCHASER and ,MANUFACTURER
of the terms of their agreement, notwithstanding any additional
or different terms that may be contained in any quotation,
acknowledgment, confirmation, purchase order, invoice or other
form of PURCHASER or MANUFACTURER. All prior and contemporaneous
proposals, negotiations. representations and agreements are
merged in the Agreement. These terms of the Agreement may not be
altered, modified, superseded, amended or rescinded and no
additional terms shall become a part of the Agreement, except
pursuant to a writing specifically referencing the Agreement and
signed by a representative of the party against whom enforcement
is sought.
c) Notice - Unless otherwise specified in the Agreement, all notices
and other communications permitted or required by the provisions
of those documents shall be in writing and shall be mailed,
telecopied, telegraphed, telexed or delivered to the other party
at the address set forth below (or at such other address as
either party shall designate in writing to the other party during
the term of this Agreement) and shall be effective and deemed
received-. i) if mailed, when actually received; ii) if
telecopied, when actually received; iii) if telegraphed, when
actually received; iv) if telexed, when dispatched; or v) if
personally delivered, when delivered. Each notice to MANUFACTURER
or PURCHASER shall be addressed, until notice of change thereof,
as follows:
i) If intended for MANUFACTURER, to:
Wellex Corporation
44141 S. Grimmer Blvd
Fremont, CA 94538
ii) If intended for PURCHASER, to:
U. S. Wireless Data Inc.
4851 Independence St. # 189
Wheat Ridge, Colorado 80033
d) Assignment- This Agreement shall not be assignable by either
party without the prior written consent of the other party.
e) Waiver - No failure or delay on the part of either party hereto
in exercising any right or remedy under the Agreement shall
operate as a waiver thereof; nor shall any single or partial
exercise of any such right or remedy, No provision of the
Agreement may be waived except in writing signed by the party
granting such waiver.
<PAGE>
17. MISCELLANEOUS (continued)
------------- -----------
f) Governing Law: Interpretation - The Agreement shall be governed
by and construed in accordance with the laws of the State of
California. Acceptance or acquiescence in a course of performance
rendered under the Agreement shall not be relevant to determining
the meaning of the Agreement, even though the accepting or
acquiescing party had knowledge of the nature of the performance
and an opportunity for objection. No course of prior dealing
between the parties and usage of the trade shall be relevant to
supplement or explain any terms used in the Agreement.
g) Consequential Damages - In no event shall PURCHASER or
MANUFACTURER be liable for any special, incidental or
consequential damages including without limitations loss of
profits, even if advised of the possibility thereof
18. PRICING
-------
1. Prices and commitments for Products sold under this Agreement
are defined in Attachment A.
2. Every three (3) months, PURCHASER and MANUFACTURER will review
the actual volume purchased. If actual volume purchased, is >10%
less of the annualized volume assumptions in Attachment A,
prices will be increased to the actual lower volume purchased
and be effective retroactively.
1
3. Notwithstanding Part 2 of this section, if significant
fluctuations occur at any time in the material cost of components
required under this Agreement, PURCHASER and MANUFACTURER will
review the impact of such fluctuations and mutually agree to any
pricing changes arising therefrom. (Significant fluctuation is
defined to mean +/- 3% of the quoted Bill of Material cost.)
19. RETURN MATERIAL AUTHORIZATION
-----------------------------
If product is found to be defective per Section 8 or 11 of this Agreement,
PURCHASER will notify MANUFACTURER and MANUFACTURER will provide a Return
Material Authorization number prior to PURCHASER returning the Product.
MANUFACTURER will make best effort to provide an RMA number within forty eight
(48) hours.
20. Notwithstanding Paragraph 18, PURCHASER and MANUFACTURER will jointly work
towards process improvements in the following areas:
Total Price
Quality
Cycle Time
On-time Delivery
Design improvements on manufacturability, quality and price PURCHASER and
MANUFACTURER will meet every three (3) to six (6) months to review current
worldwide material prices for high dollar components and make changes with
mutual agreement to procurement strategy to achieve best total pricing.
Accepted for Accepted for
U.S. Wireless Data, Inc. Wellex Corporation
By: /s/ Evon A. Kelly By: /s/ Ronald Mah/Chern Lee
- --------------------- ----------------------------
Print: Evon A. Kelly Print: Ronald Mah/Chern Lee
Title: CEO Title: Director/President & CEO
Date: 9/26/97 Date: 9/20/97
