SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) July 1 1999
U.S. Wireless Data, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 0-22848 84-1178691
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
2200 Powell Street, Suite 800, Emeryville, California 94608
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 596-2025
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(Former name or former address, if changed since last report.)
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This Amendment includes Exhibit 10.1, not available for the original filing. All
other content is unchanged.
Item 2. Acquisition or Disposition of Assets.
On July 7, 1999 U.S. Wireless Data, Inc. (USWD) closed on the sale of a merchant
credit card portfolio to PMT Services Inc., a wholly owned subsidiary of Nova
Corporation. The transaction resulted in a cash payment to USWD of $450,000 and
was based on a forward-looking analysis of the portfolio's cash flow. In January
1997, USWD signed a Member Service Provider (MSP) agreement with Nova whereby
USWD enrolled merchants to process credit card transactions with Nova. The
Company was compensated for its services by retaining a portion of the credit
card revenue stream. In the second quarter of fiscal year 1999, USWD changed its
focus from building direct credit card portfolios via the acquisition of
merchant accounts, to providing services directly to the merchant acquirers and
card processors. USWD intends to provide these services to Nova under its
Wireless Express Payment ServiceSM for the merchant base Nova acquired in this
transaction, although an agreement to do so has not yet been signed.
The sale included approximately 450 installed USWD owned TRANZ Enabler
point-of-sale devices deployed with a portion of the respective merchants. The
net book value of these assets will be charged against the proceeds of the
transaction, which will be recorded in the Company's fiscal quarter ending
September 30, 1999.
Item 5. Other Events.
On July 1, 1999 USWD entered into an agreement with Liviakis Financial
Communications, Inc. (LFC), a California based investor relations and consulting
firm, to provide the Company with public relations and investor relations
services through March 15, 2000. The Company will issue 690,000 shares of Common
Stock to LFC for its services under this agreement. LFC has provided these
services to USWD under past agreements and has also provided financing to the
Company. LFC is affiliated with the Company through its ownership of the
Company's stock and the stock ownership of Mr. John Liviakis, an officer and
principal owner of LFC. Together, Mr. Liviakis and LFC hold approximately 37% of
the Company's outstanding Common Stock.
Item 7. Financial Statements and Exhibits.
The following Exhibits are filed as part of this report:
Exhibit
Number Description of Exhibit
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10.1 Purchase Agreement, dated as of June 30, 1999 and closed on July
7, 1999, between U.S. Wireless Data, Inc. and PMT Services Inc.,
a wholly owned subsidiary of Nova Corporation.
10.2 Consulting Agreement, effective as of July 1, 1999, between U.S.
Wireless Data, Inc. and Liviakis Financial Communications, Inc.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
U.S. Wireless Data, Inc.
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(Registrant)
July 23, 1999 By /s/ Robert E. Robichaud
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(Date) (Signature)
Robert E. Robichaud
Chief Financial Officer
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement"), dated as of June 30, 1999
between U.S. Wireless Data, Inc., a California corporation whose principal
address is 2200 Powell Street, Suite 800, Emeryville, CA 94608, ("Seller"), and
PMT Services, Inc., a Tennessee corporation and a wholly-owned subsidiary of
Nova Corporation, a Georgia corporation ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller has solicited merchants for credit card processing under
the Member Service Provider Sales and Service Credit Card Processing Agreement,
dated January 1, 1997 (the "ISO/MSP Agreement" attached as Exhibit A), pursuant
to which Seller acquired certain rights and assumed obligations with respect to
those merchants processing credit card transactions under the ISO/MSP Agreement
processing system and under which Seller provided point of sale equipment to
merchants. The portfolio and rights related thereto consists of only those
merchants (the "Merchants") identified on Schedule 1.01 attached (the "Seller
Portfolio"). The point of sale equipment and rights related thereto consists of
that Equipment also identified on Schedule 1.01 attached (the "Equipment").
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller the Seller Portfolio and Equipment;
NOW, THEREFORE, IN CONSIDERATION of the premises and of the mutual
representations, warranties and covenants which are made and to be performed by
the respective parties, it is agreed as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.01 Purchase and Sale of Assets. Subject to the terms and conditions of
this Agreement, and effective as of the "Closing Date" (as defined in Section
1.07 hereof), Seller hereby sells, assigns, delivers and transfers ("Transfer")
to Purchaser, and Purchaser hereby purchases, acquires, and accepts from Seller,
all of Seller's rights, obligatons, and interests which relate to certain
merchants (each Merchant which is identified in Schedule 1.01), under the
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ISO/MSP Agreement or otherwise, including but not limited to the right to all
residual income (the "Residual Rights") arising on or after the Closing Date and
all contract rights whatsoever with the Merchants identified in Schedule 1.01,
the point of sale Equipment as set forth in Schedule 1.01 in Merchant's
possession, computer printouts, papers and other documents in the possession of
Seller exclusively relating to the Equipment and Seller's Portfolio (the
"Assets"). Except as expressly set forth in this Section 1.01, Purchaser is not
acquiring any other assets of Seller, including but not limited to agreements
with merchants not listed on Schedule 1.01, cash on hand, accounts receivable,
machinery, fixtures, contract rights, and other business equipment not
identified on Schedule 1.01.
1.02. Non-Assumption of Liabilities. Except for liabilities specifically
assumed hereby and liabilities arising after the Closing (as defined in Section
1.06 hereof) related to the Assets, Purchaser will not assume any debts,
liabilities, obligations, expenses, taxes, contracts or commitments of Seller of
any kind, character or description, whether accrued, absolute, contingent or
otherwise, no matter whether arising before or after the Closing, and whether or
not reflected or reserved against in Seller's financial statements, books of
accounts or records. Seller hereby indemnifies Purchaser against and holds
Purchaser harmless from any and all obligations relating to the Assets that
accrue at or before Closing. Purchaser hereby indemnifies Seller against and
holds Seller harmless from any and all obligations relating to the Assets that
accrue after Closing.
1.03. Purchase Price. The purchase price for the Assets shall be
$450,000.00, in cash, due and payable by Purchaser to Seller at Closing. The
Purchase price shall be payable by immediate available funds via Federal Funds
wire transfer to an account designated by Seller.
1.04. Instruments of Conveyance and Transfer, Etc. Simultaneously with the
payment of the purchase price, Seller is delivering to Purchaser herewith the
assignment and Bill of Sale of conveyance and transfer, substantially in the
form annexed hereto as Exhibit 1, to complete the Transfer and be effective to
vest in Purchaser all right and interest in the Assets, free of all liens or
encumbrances or other claims of third parties. Purchaser is delivering to Seller
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such acknowledgments or assumption agreements herewith as may be required to
assume the obligation to perform service on the Assets under the ISO/MSP
Agreement subsequent to the Closing Date. The documents delivered pursuant to
this section shall be dated and effective as of the Closing Date.
1.05.Other Covenants Seller and Purchaser covenants and agrees that they
will, from and after the Closing Date, promptly pay all amounts due and owing to
the other party under the ISO/MSP Agreement or any other agreements or
arrangements with one another, whether written or oral, and whether currently
existing or arising in the future and; (ii) that each party will fully comply
with the other's internal procedures and controls regarding the prevention of
fraudulent merchant applications.
1.06. Further Assurances. From time to time after the Closing, without
further consideration, each party will execute and deliver such other reasonable
instruments of conveyance, assignment, transfer and delivery and take such other
action as the other party reasonably may request in order to more effectively
carry out the parties covenants hereunder, including such action to transfer,
convey, assign and deliver to Purchaser, and to place Purchaser as owners in
operating control of, the Assets.
1.07. Closing Date. The purchase and sale of the Assets pursuant to this
Agreement (the "Closing") shall take place on the date of the delivery of this
Agreement at the offices of Purchaser and the receipt of the purchase price by
Seller. The date of Closing is referred to in this Agreement as the Closing
Date. Irrespective of the actual time of Closing, for all economic purposes the
Closing will be deemed to have taken place and shall be effective as of June 30,
1999; provided, however, that all representations, warranties and covenants (to
the extent any covenants are to be performed after Closing) shall be measured
and determined as of the Closing Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as follows:
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2.01. Corporate Organization; Etc. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has full corporate power and authority to carry on the business as it is now
being conducted and to own the properties and assets it now owns, including the
Assets.
2.02. Authorization. Seller has full corporate power and authority to enter
into this Agreement and carry out the transactions contemplated hereby. The
Board of Directors of Seller has duly authorized the execution and delivery by
Seller of this Agreement, the performance by Seller of its obligations hereunder
and the consummation of the transactions contemplated hereby.
2.03. No Violation. Neither the execution and delivery of this Agreement,
nor the performance by Seller of its obligations hereunder nor the consummation
of the transactions contemplated hereby will (a) violate any provision of the
Articles of Incorporation or Bylaws of Seller; (b) would require a filing, or
the approval or consent of any other party to, constitute a breach of, or result
in the creation or imposition of any lien upon the Assets under, any agreement
or commitment to which Seller is a party or by which Seller is bound; or (c)
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or governmental authority to which Seller is subject.
2.04. Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with, any
governmental or regulatory authority is required to be made or obtained by
Seller in connection with the execution, delivery and performance of this
Agreement by Seller, or, if required, the requisite filing has been accomplished
and all necessary approvals obtained.
2.05. No Undisclosed Liabilities; Etc. Seller has no material liabilities
or obligations of any nature, absolute, accrued, contingent or otherwise, that
adversely impact the Assets.
2.06. Litigation. There is no action, proceeding or investigation pending
or to the knowledge threatened against Seller, or any properties or rights of
Seller, before any court, arbitrator or administrative or governmental body that
would involve the Assets in any manner.
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2.07. Assets. The items which make up the Assets are identified in Schedule
1.01 which is attached hereto. Schedule 1.01 sets forth (a) the name of the
individual Merchant, (b) and the business Equipment associated with such
Merchant. Schedule 1.01 is accurate and complete in all material respects.
Seller is the owner of all rights, title and interest in and to the Assets, free
and clear of all title defects or objections, assignments, liens, encumbrances
of any nature whatsoever, restrictions, security interests, rights of third
parties, or other liabilities, and has good and valid title to the Assets sold.
2.08. Agreements, Contracts and Commitments. Except for those ISO/MSP
Agreements with Merchants, Seller has no agreement, contract, commitment or
relationship, whether written or oral, related to the solicitation of merchant
business, by which Purchaser could be bound with respect to the Assets. With
respect to the solicitation of merchant business, there is no contract,
agreement or other arrangement entitling any person or other entity to any
profits, revenues, cash flows or assets of Seller or requiring any payments or
other distributions based upon such profits, revenues, cash flows or asset
accretion to which Purchaser could be bound.
2.09. Licenses, Permits and Authorizations. Seller has all approvals,
authorizations, consents, licenses, franchises, orders and other permits of all
governmental or regulatory agencies, whether federal, state, local or foreign,
relevant to the Assets, the absence of which would impair the Assets.
2.10. Disclosure. No representations or warranties by Seller in this
Agreement contains or will contain any untrue statement of a material fact, or
omits or will omit to state any material fact necessary to make the statements
herein not misleading. There is no fact or development known to Seller which
materially adversely affects, or which might in the future, in Seller's
reasonable judgment, materially adversely affect the Assets or Purchaser's
continuing business relationship with the Merchants (excluding natural
attrition), which has not been set forth in this Agreement; provided however,
Seller is not making any representations as to, nor is Purchaser relying on any
such representation as it relates to the Merchants compliance with their
merchant processing agreements from and after the Closing; except that Seller
represents and warrants that Seller has received no notice, actual or
constructive, that any Merchant listed on Schedule 1.01 attached hereto is
currently in default or otherwise in violation of its ISO/MSP Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.01. Corporate Organization; Etc. Purchaser is at the date hereof, and
will be on the Closing Date, a corporation duly organized, validly existing and
in good standing under the laws of the State of Tennessee and has corporate
power and authority to carry on its business as now being conducted.
3.02. Authorization, Etc. Purchaser has full corporate power and authority
to enter into this Agreement and carry out the transactions contemplated hereby.
The performance by Purchaser of its obligations hereunder and the consummation
of the transactions contemplated hereby does not violate any of Purchaser's
organizational documents including its Articles of Incorporation and by-laws,
each as amended as the case may be, or result in any breach or be in conflict
with, or default under, any judgement, decree, mortgage, agreement, law or other
instrument to which purchaser or its assets are bound or subject to.
3.03. Litigation. There is no action, proceeding or investigation pending
or, to the best knowledge and belief of Purchaser, threatened against Purchaser,
or any properties or rights of Purchaser, before any court, arbitrator or
administrative or governmental body or otherwise, which questions or challenges
the validity of this Agreement or any action taken or to be taken by Purchaser
pursuant to this Agreement or in connection with the transactions contemplated
by this Agreement.
3.04. Portfolio. Purchaser acknowledges and agrees that on and after the
Closing Date Purchaser shall have the obligation to perform those services that
are required to be performed by Seller to merchants identified on Schedule 1.01,
as may be required under the ISO/MSP Agreement. In addition, Purchaser
acknowledges that it is acquiring the equipment identified in Schedule 1.01 in
its as is, where is, condition and that the Purchaser shall be responsible from
and after the Closing Date for the repair, replacement and maintenance of the
equipment as may be required. As such, the Purchaser hereby agrees that the
Seller shall not be responsible for, nor shall the Purchaser have any claim
against the Seller due to claims, losses, expenses or liabilities arising from
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Purchaser or Merchants failure to fulfill responsibilities under the ISO/MSP
Agreement or the equipment on or after the Closing Date.
ARTICLE IV
COVENANT NOT-TO-COMPETE; CONFIDENTIALITY
4.01. Seller Covenant Not-to-Compete. During the period of five (5) years
following the Closing Date, Seller, its successors in interest and assigns, and
its affiliates (defined as an entity controlled by or under common control with
Seller, or an entity 10% or more of the equity of which is owned by Seller, or
by any one shareholder of the Seller holding 10% or more of Seller's equity,
directly or indirectly) shall not (i) compete with Purchaser or any other PMT
parent or subsidiary to provide credit card authorization and related services
to any of the Merchants identified in Schedule 1.01, wherever located, or (ii)
interfere with, disrupt or attempt to disrupt any past, present or prospective
business relationship, contractual or otherwise, related to credit card
authorization and related services, with those Merchants which make up Seller's
Portfolio, where the relationship exists between Purchaser and any Merchant,
client, supplier, consultant, agent or employee of Purchaser; provided, however,
nothing herein shall prevent Seller from contracting with any such Merchant,
client, supplier, consultant, agent or employee for purposes other than credit
card authorization and related services in a manner that does not interfere
with, disrupt or attempt to disrupt any contractual relationship existing
between such person and Purchaser. Notwithstanding the foregoing, neither Seller
nor its affiliates (as defined above) shall be prohibited from contracting with
any Merchant, who/which terminated service under the processing agreement
through Purchaser at least six months prior to such Merchant entering into a
contract with Seller for the same service, so long as Seller was not in breach
of this covenant with respect to such Merchant prior to entering into such
contract.
4.02. Confidentiality. Seller agrees that during the period of five (5)
years following the Closing Date, it will not voluntarily at any time, directly
or indirectly, communicate, furnish, divulge or disclose to any individual,
firm, association, partnership or corporation any proprietary information with
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respect to or concerning or relating to the Assets, including but not limited
to, copies or originals of any such information supplied to Purchaser.
Notwithstanding the foregoing the restrictions set forth herein shall not apply
if such disclosure is required by law or necessary to enforce the terms of this
agreement. Furthermore, proprietary information shall not include that
information which is already in the public domain or marketplace, disclosed by a
third party under no confidentiality obligation or information which is not
sufficiently unique to be deemed proprietary.
4.03. Right to Injunctive Relief. Seller agrees and acknowledges that the
violation of the foregoing covenants set forth in Sections 4.01 and 4.02 would
cause irreparable injury to Purchaser and that the remedy at law for any
violation or threatened violation would be inadequate and that Purchaser,
provided that Purchaser is in compliance with this Agreement, shall be entitled
to temporary and permanent injunctive relief or other equitable relief without
the necessity of proving actual damages.
4.04. Notice of Merchant Conversion. If Seller discovers that it has
accepted the application for credit card authorization services from a Merchant,
except as permitted in Section 4.01 above, for a five (5) year period from the
date hereof, it shall promptly notify Purchaser. Purchaser agrees that in the
event that Seller takes "immaterial" processing applications from any of the
Merchants, except as permitted in Section 4.01 above, Purchaser shall, prior to
taking the actions permitted in Section 4.03 above, give written notice to the
Seller and Seller shall then have 30 days thereafter in which to assign such
processing application to Purchaser or to cancel the processing agreement
between Seller and such Merchant. For purposes of this Section 4.04, Seller's
acceptance of the processing applications shall be deemed to be "immaterial"
only if all such applications accepted by Seller constitute less than 5% of the
total Merchants, and less than 5% of the annualized processing volume of the
merchants taken as a whole. If the Seller fails to take such action within the
30 day period, Purchaser shall then be entitled to pursue any remedies against
Seller, including without limitation, the remedies provided in Section 4.03.
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ARTICLE V
DELIVERY OF DOCUMENTS AT OR PRIOR TO CLOSING
5.01. Delivery of Documents by Seller. At or prior to the Closing, Seller
shall deliver to Purchaser, unless waived by Purchaser, the following documents
and instruments:
(a) all consents from government agencies and third parties necessary
to complete the Transfer and otherwise to consummate the transactions
contemplated hereby, if any;
(b) the bill of sale and assignments, substantially in form and
substance annexed hereto as Exhibit 1 to (1) vest all rights and interest in,
and title to, the Assets in Purchaser and otherwise to consummate the
transactions contemplated hereby; and (2) grant Purchaser the Residual Rights
from and after the June 30, 1999 Closing Date, such that Seller will have no
continuing interest in such Residual Rights with respect to the Assets;
(c) Seller shall deliver to Purchaser originals of all documents that
exclusively relate to the Assets, and shall not retain copies of any such
documents without the express written consent of Purchaser, other than previous
printouts and schedules provided by Purchaser that related to the Assets and
Seller's other merchant accounts combined;
ARTICLE VI
PUBLIC STATEMENTS
Neither Seller nor Purchaser will, through any of its officers, employees
or agents, make any defamatory comments about the other party, its officers,
shareholders or employees, other than truthful statements required by law or
under the terms of this Agreement.
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ARTICLE VII
MISCELLANEOUS PROVISIONS
7.01. No Brokerage. Each party hereto represents and warrants to the other
party hereto that it has not dealt with any broker or finder in connection with
this transaction, nor incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other like
payment in connection with this Agreement or the transactions contemplated
hereby, and the party who is in breach of this representation agrees to
indemnify and hold the other party harmless against any such obligation or
liability due a broker, finder or agent who claims to have dealt with such party
making such misrepresentation. This indemnity includes the costs to defend any
such claim including legal fees.
7.02. Survival. Each party hereto covenants and agrees that (i) its
representations and warranties contained in this Agreement and in any instrument
of sale, assignment, conveyance and transfer executed and delivered pursuant to
this Agreement shall survive closing for a period expiring twelve (12) months
from the Closing Date, (ii) the provisions of Sections 1.02, 1.03, 1.04, 1.05,
1.06 and 7.02 shall survive the Closing Date, and (iii) the covenants of the
Seller in Article IV, shall survive the Closing Date for the time period
proscribed in sections 4.01 and 4.02 of Article IV.
7.03. Amendments. Purchaser and Seller may amend, modify or supplement this
Agreement only by an instrument in writing signed on behalf of Purchaser and
Seller.
7.04. Waivers. Either party to this Agreement may, by written notice to the
other, (a) extend the time for the performance of any of the obligations or
other actions of the other party; (b) waive any inaccuracies in the
representations or warranties of the other party contained in this Agreement or
in any document delivered pursuant to this Agreement; (c) waive compliance with
any of the covenants of the other party contained in this Agreement; and (d)
waive or modify performance of any of the obligations of the other party. No
action taken pursuant to this Agreement, including without limitation any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by such party unless such waiver is evidenced by a writing signed by the
party charged with the waiver. The waiver by either party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
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7.05. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated, each of the parties hereto shall pay its own fees and
expenses incident to the negotiation, preparation, execution and performance of
this Agreement including counsel and accountant's fees. Notwithstanding the
foregoing, in any litigation to resolve a dispute between the parties arising
out of or in connection with this Agreement and the transactions contemplated
hereby, including but not limited to the covenants in Article IV hereof, the
prevailing party shall be entitled to recover from the other party all
reasonable legal fees, expenses and costs relating to, or incurred in connection
with, such litigation, including expenses and costs relating to the
investigation of matters in anticipation of any such litigation.
7.06. Notices. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been given if mailed, certified mail, return receipt requested, with postage
prepaid:
(a) If to Seller, to:
U.S. Wireless Data, Inc.
2200 Powell Street, Suite 800
Emeryville, CA 94608
Attention: Chairman and CEO
with a copy to:
Glen S. Edelman, Esq
Mandell, Mandell, Okin & Edelman LLP
3000 Marcus Avenue
Lake Success, NY 11042
(b) If to Purchaser, to:
Nova Corporation
c/o PMT Services, Inc.
One Concourse Parkway, Suite 300
Atlanta, GA 30328
Attention: Chief Financial Officer
Facsimile No.: (770) 698-1046
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with a copy to:
Nova Corporation
One Concourse Parkway, Suite 300
Atlanta, GA 30328
Attention: General Counsel
Facsimile No.: (770) 698-1046
or to such other person or address as either party shall furnish the other party
in writing.
7.07. Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by Seller without the prior
written consent of Purchaser.
7.08. GOVERNING LAW. THE PROVISIONS OF THIS AGREEMENT AND THE LEGAL
RELATIONS BETWEEN THE PARTIES ARISING THEREFROM SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
7.09. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The parties hereto agree
to accept facsimile copies as originals.
7.10. Schedules and Headings. Information set forth in the Schedules hereto
is deemed to have been disclosed for all purposes of this Agreement. The
headings contained in this Agreement are inserted for convenience only and shall
not constitute a part hereof.
7.11. Severability. In the event any portion of this Agreement may be
determined by any Court of competent jurisdiction to be unenforceable, the
balance of the Agreement shall be severed therefrom and shall continue in full
force and effect unless a failure of consideration would thereby result.
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7.12. Entire Agreement. This Agreement, including the Schedules and other
documents referred to herein which form a part hereof, embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
ARTICLE VIII
INDEMNIFICATION
8.01 Indemnification of Purchaser. Seller shall indemnify, defend and hold
Purchaser ("Indemnitees"), harmless of and from any claim, proceeding, suit,
damages, liability, loss, cost, charge or expense (including, without
limitation, reasonable attorneys' fees and expenses) or any other liability of
every nature, kind and description whatsoever ("Losses") incurred or suffered by
any Indemnitee, by reason of or resulting from or arising directly or indirectly
out of:
(i) the breach by Seller of any representation, warranty or covenant set
forth in this agreement;
(ii) any chargebacks or credit, fraud or other losses or claims relating to
the Merchants resulting from transactions occurring prior to the
Closing Date;
(iii)any obligation relating to Assets relative to the Merchants as a
result of an event, act or omission occurring on or prior to the
Closing Date; and
(iv) any liability for any taxes of the Seller.
8.02 Indemnification of Seller. Purchaser agrees to indemnify, defend and
hold the Seller harmless of and from any and all Losses (as defined above)
incurred or suffered by the Seller, by reason of or resulting from or arising
directly or indirectly out of:
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(i) any claims of any Merchant asserted against Seller by reason of the
equipment identified on Schedule 1.01 or Purchaser's failure to
service and/or process such Merchant accounts on and after the Closing
Date;
(ii) the failure of the Purchaser to assume the obligations of the Seller
as expressly provided for herein;
(iii)Any chargebacks or credit, fraud or other losses or claims relative
to the Merchant Agreements resulting from transactions occurring after
the Closing Date; and
(iv) Any liability for any taxes of the Purchaser arising out of or
resulting from the transaction contemplated hereby, including sales
tax on the Equipment being conveyed hereunder which occurs as a direct
result of this transaction only.
(v) the breach by Purchaser of any representation, warranty or covenant
set forth in this agreement
8.03 Threshold Amount. Neither party hereto shall be required to indemnify,
defend or hold the other party hereto harmless from and against any Losses under
Section 8.01 or 8.02 hereof, as applicable, with respect to any breach of any
representation, warranty or covenant unless and until the amount of Losses of
such party hereunder equals at least $5,000 in the aggregate (the "Threshold
Amount").
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ARTICLE IX
PURCHASER'S BOOKS AND RECORDS
9.01 Access to Books and Records of Purchaser. In connection with any tax
audit or any other governmental investigation of Seller, Purchaser shall, if
requested by Sellers, permit Sellers and its representatives, at Sellers expense
to have access to the books and records of Seller delivered to Purchaser
hereunder for all periods up to and including the Closing Date as the same may
relate to the Merchant Agreements being conveyed hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
SELLER
U.S. Wireless Data, Inc.
By: /s/
-------------------------------------
Title: Chairman and CEO
PURCHASER
PMT Services, Inc.
By: /S/ Nicholae Logan
-------------------------------------
Title: President
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EXHIBIT A
ISO/MSP AGREEMENT
Attached hereto.
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SCHEDULE 1.01
LIST OF ASSETS
Attached hereto.
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement"), effective as of July 1, 1999 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 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 investor relations 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 1, 1999 and ending on March 15,
2000.
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;
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(e) Perform the functions generally assigned to investor/stockholder
relations and public relations departments in major corporations, including
responding to telephone and written 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 duly 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. The
Company shall have the right to request that any of Consultant's employees or
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outside independent contractors, if any, not perform any services for the
Company contemplated hereunder on behalf Consultant.
4. Remuneration. As full and complete compensation for services described in
this Agreement, the Company shall compensate LFC (herein referred to as
"Consultants") as follows:
4.1 For undertaking this engagement and for other good and valuable
consideration, the Company agrees to issue and deliver to the
Consultants a "Commencement Bonus" payable in the form of 690,000 shares
of the Company's Common Stock ("Common Stock"). This Commencement Bonus
shall be issued to the Consultants immediately following execution of
this Agreement and shall, when issued and delivered to Consultants, be
fully paid and nonassessable. The Company understands and agrees that
Consultants 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 Consultants. The 690,000 shares of Common Stock issued as a
Commencement Bonus, therefore, constitute payment for Consultants'
agreement to represent the Company and are a nonrefundable,
non-apportionable, and non-ratable retainer; such shares of Common Stock
are not a prepayment for future services. If the Company decides to
terminate this Agreement prior to March 15, 2000 for any reason
whatsoever, it is agreed and understood that Consultants will not be
requested or demanded by the Company to return any of the shares of
Common Stock paid to it hereunder, however if the Consultant terminates
the Agreement prior to March 15, 2000, the Consultant agrees to prorate
the amount of shares for its services. The 690,000 shares of Common
Stock issued pursuant to this Agreement shall be issued in the name of
Liviakis Financial Communications, Inc. The Company agrees that all
shares issuable to Consultants hereunder shall carry "piggyback
registration rights" whereby such shares will be included in the next
appropriate registration statement filed by the Company.
4.2 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. In addition, Consultant agrees that, during
the term hereof neither it, nor its officers or affiliates shall
directly or indirectly, acquire or dispose of any securities of Company
without the Company's written consent. Further, the Consultant agrees to
a "lock-up" period where it will not sell any shares while engaged by
the Company.
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.
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(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 lender 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. It
is also understood that in the event Consultant introduces Company, or its
nominees, to an acquisition candidate, either directly or indirectly through
another intermediary, not already having a preexisting relationship with the
Company, with whom Company, or its nominees, ultimately acquires or causes the
completion of such acquisition, Company agrees to compensate Consultant for such
services with a "finder's fee" in the amount of 2% of total gross consideration
provided by such acquisition, 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. It is specifically understood that Consultant is not nor does it
hold itself out be a Broker/Dealer, but is rather merely a "Finder" in reference
to the Company procuring financing sources and acquisition candidates.
5.1 It is further understood that Company, and not Consultant, is
responsible to perform any and all due diligence on such lender, equity
purchaser or acquisition candidate introduced to it by Consultant under
this Agreement, prior to Company receiving funds or closing on any
acquisition.
5.2 Company agrees that said compensation to Consultant shall be paid in
full at the time said financing or acquisition is closed. Moreover, said
compensation, will be a condition precedent to the closing of such
financing or acquisition and Company shall execute any and all documents
necessary to effect said compensation.
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5.3 As further consideration to Consultant, Company, or its nominees, agrees
to pay with respect to any financing or acquisition candidate provided
directly or indirectly to the Company by any lender or equity purchaser
covered by this Section 5. during the period of one year 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 or acquisitions 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.
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.
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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 herein above 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:
To the Company: U.S. Wireless Data, Inc.
Dean Leavitt, Chairman and CEO
2200 Powell Street, Suite 450
Emeryville, CA 94608
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.
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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 Alameda 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. 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: 7/1/99 By: /s/ Dean Leavitt
------------ ------------------------------------
Dean Leavitt
Chairman and CEO
"Consultant" LIVIAKIS FINANCIAL COMMUNICATIONS, INC.
Date: 7/1/99 By: /s/ John M. Liviakis
------------ ------------------------------------
John M. Liviakis
President
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