SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
U.S. Wireless Corporation
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(Name of issuer)
Common Stock, par value $0.01 per share
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(title of class of securities)
90339C106
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(CUSIP number)
Albert S. Dandridge, III, Esquire
Mesirov Gelman Jaffe Cramer & Jamieson, LLP
1735 Market Street
Philadelphia, PA 19103
215-994-1257
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(Name, address and telephone number of persons authorized to
receive notices and communications)
March 3, 1999
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(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-l(b)(3) or (4), check the
following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-l(a) for other parties to whom copies are to
be sent.
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* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
SCHEDULE 13D
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CUSIP No. 90339C106 13D Page 2 of 8
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1 | NAME OF REPORTING PERSON
| S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
|
| Global Technologies, Ltd.
|
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2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_|
| (b) |X|
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3 | SEC USE ONLY
|
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4 | SOURCE OF FUNDS
| WC
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5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
| PURSUANT TO ITEMS 2(d) OR 2(e) |_|
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6 | CITIZENSHIP OR PLACE OF ORGANIZATION
| DELAWARE
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| 7 | SOLE VOTING POWER
| 2,000,000*|
| |
NUMBER OF SHARES |-----------|--------------------------------
BENEFICIALLY | 8 | SHARED VOTING POWER
OWNED BY EACH | -0- |
REPORTING PERSON | |
WITH |-----------|--------------------------------
| 9 | SOLE DISPOSITIVE POWER
| 2,000,000*|
| |
|-----------|--------------------------------
| 10 | SHARED DISPOSITIVE POWER
| -0- |
| |
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11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| 2,000,000*
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12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
| SHARES |_|
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13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| 11.15%*
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14 | TYPE OF REPORTING PERSON
| CO
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*The Series B Preferred Stock of the Company held by the Reporting Person is
convertible until March 2000 into 2,000,000 shares of Common Stock of the
Company. Thereafter, the Series B Preferred Stock is convertible into 3,000,000
shares of Common Stock. Assuming no further issuances of equity by the Company
until that date, the 3,000,000 shares of Common Stock will represent
approximately 15.25% of the outstanding Common Stock of the Company.
<PAGE>
Item 1. Security and Issuer
This statement on Schedule 13D relates to the Common Stock, par value $0.01
per share (the "Common Stock") of U.S. Wireless Corporation, a Delaware
corporation (the "Company"). The principal executive offices of the Company are
located at 2303 Camino Ramon, Suite 200, San Ramon, California 94583.
Item 2. Identity and Background
(a) This statement is being filed by Global Technologies, Ltd. (formerly
Interactive Flight Technologies, Inc.) herein referred to as the "Reporting
Person." The Reporting Person is a Delaware corporation.
(b) The business address of the Reporting Person is 1811 Chestnut Street,
Suite 120, Philadelphia, Pennsylvania 19103.
(c) The Reporting Person is a publicly held diversified technology-based
company. For information required by instruction C to Schedule 13D with respect
to the executive officers and directors of the Reporting Person, reference is
made to Exhibit I annexed hereto and incorporated herein by reference.
(d) The Reporting Person has not, during the last five (5) years, been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors).
(e) The Reporting Person has not, during the last five (5) years, been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which the Reporting Person was subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
(f) Not Applicable.
Item 3. Source and Amount of Funds or Other Consideration
Pursuant to a Securities Purchase Agreement dated as of March 3, 1999 and
amended as of March 23, 1999 and July 20, 1999 (the "Securities Purchase
Agreement") by and among the Company and Interactive Flight Technologies, Inc.,
Liberty Ventures I, L.P. and WT Holding, Inc. (the "Investors"), the Investors
were entitled, subject to compliance with the terms and conditions set forth
therein to purchase 50,000 shares of Series B Preferred Stock (the "Series B
Preferred Stock"), of the Company for an aggregate consideration of $5,000,000.
Pursuant to the Securities Purchase Agreement, the Reporting Person purchased an
aggregate of 30,000 shares of Series B Preferred Stock for an aggregate cash
purchase price of $3,000,000. The Reporting Person obtained funds to make its
purchase from its working capital.
<PAGE>
Item 4. Purpose of Transaction
The Reporting Person purchased the Series B Preferred Stock for general
investment purposes and retains the right to change its investment intent.
Subject to market conditions and other factors, including the provisions of
Securities Purchase Agreement and the registration rights provisions included
therein, the Reporting Person may acquire or dispose of securities of the
Company from time to time in future open-market, privately negotiated or other
transactions.
Each share of Series B Preferred Stock is convertible, at the option of the
holder, into approximately 67 shares of Common Stock until March 2000, after
which each such share is convertible into 100 shares of Common Stock. The Series
B Preferred Stock is subject to mandatory conversion into Common Stock at any
time after 12 months has elapsed from issuance at a conversion rate of 100
shares of Common Stock in the event the closing price from the Common Stock as
reported on NASDAQ is at least $5.00 per share for 30 consecutive trading days.
The Series B Preferred Stock entitles the holder to receive $100 per share
liquidation preference before any distributions to holders of Common Stock in
the event of a liquidation of the Company. In addition, the Reporting Person and
the other Investors have, as a separate class, elected one member to the
Company's Board of Directors and one additional individual as an observer to the
Board. The Reporting Person elected Irwin L. Gross, the Reporting Person's
Chairman and Chief Executive Officer, to serve on the Company's Board. As a
condition to making the investment, the Reporting Person also obtained certain
registration rights relating to the acquisition under the Securities Act of 1933
of those shares of Common Stock into which the Series B Preferred Stock held by
the Reporting Person is convertible. Pursuant to an amendment of the
Subscription Agreement, the Reporting Person temporarily waived these
registration rights. The waiver period has ended and, pursuant to the amendment,
the Reporting Person currently has both demand and piggyback registration
rights.
Item 5. Interest in Securities of the Issuer
(a) The Reporting Person currently beneficially owns 11.15% of the Common
Stock (based on a conversion rate of 67 shares of Common Stock per share of
Series B Preferred Stock) and, assuming no further share issuances until March
2000, will beneficially own 15.25% of the Common Stock at that time (based on a
conversion rate of 100 shares of Common Stock per share of Series B Preferred
Stock). Both percentages assume full conversion of the Company's Series A
Preferred Stock (into 560,000 shares of Common Stock) and the Series B Preferred
Stock (into 3,350,000 and 5,000,000 shares based on conversion at the 67 share
rate and 100 share rate, respectively).
(b) The Reporting Person has sole investment and voting power with respect
to the Common Stock. Neither the filing of this Schedule 13D nor any of its
contents shall be deemed to constitute an admission that the Reporting Person is
the beneficial owner of any shares of Common Stock other than those which the
Reporting Person has acquired pursuant to the Securities Purchase Agreement.
(c) No transactions in the shares were effected by the Reporting Person
during the past 60 days except as set forth in this statement on Schedule 13D.
(d) Not Applicable.
(e) Not Applicable.
<PAGE>
Item 6. Contracts, Agreements, Understandings or Relationships with Respect to
Securities of the Issuer
See Items 3 and 4 which are incorporated herein by reference.
Item 7. Material to be Filed as Exhibits
Exhibit 1 - Securities Purchase Agreement dated as of March 3, 1999 and
amended as of March 23, 1999 and July 20, 1999, by and among U.S. Wireless
Corporation, Interactive Flight Technologies, Inc., Liberty Ventures I, L.P. and
WT Holding, Inc.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
GLOBAL TECHNOLOGIES, LTD.
Dated: February 8, 2000 By: /s/ Irwin L. Gross
--------------------------------
Irwin L. Gross, Chairman
<PAGE>
Schedule I
Information with Respect to Executive
Officers and Directors of the Undersigned
The following sets forth as to each of the executive officers and directors
of the undersigned: his name; his business address; and his present principal
occupation or employment and the name, principal business and address of any
corporation or other organization in which such employment is conducted. Unless
otherwise specified, the principal employer of each such individual is Global
Technologies, Ltd., the business address of each of which is 1811 Chestnut
Street, Suite 120, Philadelphia, Pennsylvania 19103, and each such individual
identified below is a citizen of the United States. To the knowledge of the
undersigned, during the last five years, no such person has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) , and
no such person was a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction as a result of which he was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws except as reported in Item 2(d) of this
Schedule 13D.
<PAGE>
Corporate Officers
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Irwin L. Gross
Chief Executive Officer
James W. Fox
President and Chief Operating Officer
Patrick J. Fodale
Vice President and Chief Financial Officer
David N. Shevrin
Vice President and Secretary
S. Lance Silver
General Counsel
Board of Directors
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Irwin L. Gross
Chairman of the Board and
Chief Executive Officer of
Global Technologies, Ltd.
Charles T. Condy 244 California Street, Suite 510
Chairman and Chief Executive Officer of San Francisco, California 94111
Next Century Restaurants, Inc.
Stephen Schachman 19 W. Lancaster Avenue
Owner, Public Affairs Management Ardmore, Pennsylvania 19003
Dr. M. Moshe Porat 111 Speakman Hall
Dean of the School of Business Philadelphia, Pennsylvania 19122
and Management at Temple University
James W. Fox
President and Chief Operating Officer of
Global Technologies, Ltd.
<PAGE>
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PURCHASE OF SERIES B PREFERRED STOCK OF
U.S. WIRELESS CORPORATION
BY
INTERACTIVE FLIGHT TECHNOLOGIES, INC.,
LIBERTY VENTURES I, L.P.
AND
WT HOLDING, INC.
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<PAGE>
TABLE OF CONTENTS
Document Description Tab
- -------------------- ---
Subscription Agreement 1
Amendment No. 1 to Subscription Agreement 2
Addendum to Subscription Agreement 3
Amended and Restated Certificate of Incorporation 4
Certificate of Amendment of Certificate of Incorporation 5
Risk Factors 6
Escrow Agreement 7
Letter Agreement Re Voting of Oliver Hilsenrath's Shares
of Common Stock 8
U.S. Small Business Administration Documents 9
Letter from David Klarman re Notification of Stockholder
Approval of the Transaction 10
Stock Certificates 11
<PAGE>
SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED PURSUANT TO THIS SUBSCRIPTION AGREEMENT, INCLUDING THE
APPENDICIES ATTACHED HERETO (COLLECTIVELY, THE "OFFERING MATERIALS"), HAVE NOT
BEEN FILED OR REGISTERED WITH OR APPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION (THE "COMMISSION"), NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THE OFFERING MATERIALS. NO STATE SECURITIES LAW ADMINISTRATOR HAS
PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR THE
ADEQUACY OF THE OFFERING MATERIALS. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
THE SECURITIES OFFERED HEREBY ARE BEING OFFERED PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), AND APPLICABLE STATE SECURITIES LAWS FOR NON-PUBLIC OFFERINGS. SUCH
EXEMPTIONS LIMIT THE TYPES OF INVESTORS TO WHICH THE OFFERING WILL BE MADE AND
RESTRICT SUBSEQUENT TRANSFER OF THE INTERESTS.
THE OFFERING MATERIALS HAVE NOT BEEN FILED WITH OR REVIEWED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER COMMISSION OR REGULATORY
AUTHORITY AND HAVE NOT BEEN FILED WITH OR REVIEWED BY THE ATTORNEY GENERALS OF
THE STATES OF NEW YORK OR NEW JERSEY OR ANY OTHER STATE; NOR HAS ANY SUCH
COMMISSION, AUTHORITY OR ATTORNEY GENERAL DETERMINED WHETHER THEY ARE ACCURATE
OR COMPLETE OR PASSED UPON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK. ONLY THOSE WHO
CAN BEAR THE RISK OF LOSS OF THEIR ENTIRE INVESTMENT SHOULD INVEST. SEE "RISK
FACTORS."
STATEMENTS CONTAINED IN THE OFFERING MATERIALS WHICH ARE NOT HISTORICAL FACTS
MAY BE CONSIDERED FORWARD LOOKING INFORMATION WITH RESPECT TO PLANS, PROJECTIONS
OR FUTURE PERFORMANCE OF THE COMPANY, AS DEFINED UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. THESE FORWARD LOOKING STATEMENTS ARE SUBJECT TO
RISKS AND UNCERTAINTIES, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE PROJECTED.
THE SECURITIES OFFERED HEREBY WILL BE ISSUED PURSUANT TO A CLAIM OF EXEMPTION
FROM THE REGISTRATION OR QUALIFICATION PROVISIONS OF FEDERAL AND STATE
SECURITIES LAWS AND MAY NOT BE SOLD OR
<PAGE>
TRANSFERRED WITHOUT COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE EXEMPTIONS
THEREFROM.
INVESTMENT IN THE COMPANY INVOLVES A HIGH DEGREE OF RISK AND ONLY PERSONS WHO
ARE ABLE TO BEAR THE FINANCIAL RISK OF A COMPLETE LOSS OF THEIR INVESTMENT
SHOULD CONSIDER PURCHASING THE SECURITIES (SEE "RISK FACTORS"). RISKS INVOLVED
IN THE PURCHASE OF THE SECURITIES OFFERED HEREBY INCLUDE, AMONG OTHERS, THE RISK
THAT THERE IS A LIMITED PUBLIC TRADING MARKET FOR THE COMMON STOCK OF THE
COMPANY AND THAT THERE IS NO MARKET FOR THE SECURITIES OFFERED HEREBY. THERE CAN
BE NO ASSURANCES THAT A TRADING MARKET WILL DEVELOP OR THAT, IF DEVELOPED, IT
WILL BE SUSTAINED FOR ANY PERIOD OF TIME. THE SECURITIES MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT PURSUANT TO A REGISTRATION UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION THEREFROM. FOR THESE REASONS, AN INVESTOR MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT AND TO RETAIN HIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. ACCORDINGLY, IN DETERMINING WHETHER
AN INVESTOR CAN BEAR THE ECONOMIC RISK OF THIS INVESTMENT, AN INVESTOR SHOULD
CONSIDER, AMONG OTHER FACTORS, WHETHER SUCH INVESTOR CAN AFFORD TO HOLD SUCH
SECURITIES FOR AN INDEFINITE PERIOD AND WHETHER AT THE TIME OF INVESTMENT SUCH
INVESTOR CAN AFFORD A COMPLETE LOSS OF HIS INVESTMENT.
IF ANY PERSON ELECTS NOT TO MAKE AN OFFER TO ACQUIRE THE SECURITIES OFFERED
HEREBY OR SUCH OFFER IS REJECTED IN WHOLE BY THE COMPANY, SUCH PERSON, BY
ACCEPTING DELIVERY OF THE OFFERING MATERIALS, AGREES TO RETURN THE OFFERING
MATERIALS AND ALL RELATED DOCUMENTS ENCLOSED HEREWITH OR FURNISHED SUBSEQUENTLY
TO THE COMPANY AT ITS OFFICES AT 2303 CAMINO RAMON, SAN RAMON, CALIFORNIA 94583.
THE CONTENTS OF THE OFFERING MATERIALS ARE NOT TO BE CONSTRUED AS PROVIDING TAX,
LEGAL, INVESTMENT OR OTHER ADVICE. EACH INVESTOR SHOULD CONSULT HIS OWN COUNSEL,
ACCOUNTANT OR TAX OR BUSINESS ADVISOR AS TO TAX, LEGAL AND RELATED MATTERS
CONCERNING THIS INVESTMENT.
SALES OF THE SECURTIES CAN ONLY BE CONSUMMATED BY ACCEPTANCE BY THE COMPANY OF
OFFERS, WHICH ARE TENDERED TO THE COMPANY BY PROSPECTIVE INVESTORS, TO PURCHASE
SUCH SECURITIES. NO SOLICITATION OF ANY SUCH OFFER (INCLUDING ANY SOLICITATION
WHICH MAY BE CONSTRUED AS AN "OFFER" UNDER FEDERAL AND/OR STATE
2
<PAGE>
SECURITIES LAWS) TO SUCH PROSPECTIVE INVESTORS IS AUTHORIZED WITHOUT THE PRIOR
APPROVAL BY THE COMPANY. THE COMPANY RESERVES THE RIGHT TO REVOKE THE OFFER MADE
HEREBY AND TO REJECT ANY OFFER TO PURCHASE THE SECURITIES BY ANY PROSPECTIVE
INVESTOR, IN WHOLE OR IN PART.
THE COMPANY SHALL, PRIOR TO THE SALE OF ANY SECURITIES, ALLOW EACH INVESTOR OR
HIS AGENT, REPRESENTATIVE, ACCOUNTANT AND/OR ATTORNEY THE OPPORTUNITY TO ASK
QUESTIONS OF AND RECEIVE ANSWERS FROM ANY PERSON AUTHORIZED TO ACT ON BEHALF OF
THE COMPANY CONCERNING ANY ASPECT OF THE INVESTMENT AND TO OBTAIN ANY ADDITIONAL
INFORMATION (TO THE EXTENT THE COMPANY POSSESSES SUCH INFORMATION OR CAN ACQUIRE
IT WITHOUT UNREASONABLE EFFORT OR EXPENSE) NECESSARY TO VERIFY THE ACCURACY OF
THE INFORMATION CONTAINED IN THE OFFERING MATERIALS. INVESTORS OR THEIR
REPRESENTATIVES HAVING QUESTIONS OR DESIRING ADDITIONAL INFORMATION SHOULD
CONTACT THE COMPANY AT ITS EXECUTIVE OFFICES.
BLUE SKY LEGENDS
INVESTORS AND/OR THEIR REPRESENTATIVES SHOULD REVIEW THE FOLLOWING LEGENDS
REQUIRED BY CERTAIN JURISDICTIONS AND BE AWARE OF THEIR CONTENTS. PLEASE REVIEW
THE FOLLOWING MATERIAL CAREFULLY TO DETERMINE WHETHER ANY OF THESE LEGENDS
APPLY.
NOTICE TO RESIDENTS OF ALL STATES
THESE SECURITES 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 THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY WILL BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD
OF TIME.
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.
3
<PAGE>
NOTICE TO CALIFORNIA RESIDENTS
THE COMMISSIONER OF THE STATE OF CALIFORNIA DOES NOT RECOMMEND OR ENDORSE THE
PURCHASE OF THE SECURITIES.
NOTICE TO CONNECTICUT RESIDENTS
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER SECTION 36-485 OF THE CONNECTICUT
UNIFORM SECURITIES ACT BUT WILL BE SOLD IN RELIANCE ON AN EXEMPTION FROM SUCH
REGISTRATION SET FORTH IN SECTION 36-490(B)(9)(A) OF SAID ACT AND REGULATIONS
PROMULGATED THEREUNDER. THE SECURITIES CANNOT BE RESOLD WITHOUT REGISTRATION
UNDER SECTION 36-485 OF SAID ACT OR AN EXEMPTION FROM REGISTRATION PURSUANT TO
SECTION 36-490 OF SAID ACT.
NOTICE TO FLORIDA RESIDENTS
PURSUANT TO SECTION 517.061(11)(a)(5) OF THE FLORIDA STATUTE, FLORIDA INVESTORS
HAVE A THREE DAY RIGHT OF RECISSION. IF A FLORIDA RESIDENT HAS EXECUTED A
SUBSCRIPTION AGREEMENT, HE MAY ELECT, WITHIN THREE BUSINESS DAYS AFTER SIGNING
THE SUBSCRIPTION AGREEMENT, TO WITHDRAW FROM THE SUBSCRIPTION AGREEMENT AND
RECEIVE A FULL REFUND AND RETURN (WITHOUT INTEREST) OF ANY MONEY PAID BY HIM. A
FLORIDA RESIDENT'S WITHDRAWAL WILL BE WITHOUT ANY FURTHER LIABILITY TO ANY
PERSON. TO ACCOMPLISH SUCH WITHDRAWAL, A FLORIDA RESIDENT NEED ONLY SEND A
LETTER OR TELEGRAM TO THE PARTNERSHIP AT THE ADDRESS SET FORTH IN THIS
INVESTMENT SUMMARY INDICATING HIS INTENTION TO WITHDRAW. SUCH LETTER OR TELEGRAM
MUST BE SENT AND POSTMARKED PRIOR TO THE END OF THE AFOREMENTIONED THIRD
BUSINESS DAY. IF A FLORIDA RESIDENT SENDS A LETTER, IT IS PRUDENT TO SEND IT BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED AND ALSO
TO EVIDENCE THE TIME AND DATE WHEN IT IS MAILED. SHOULD A FLORIDA RESIDENT MAKE
THIS REQUEST ORALLY, HE SHOULD ASK FOR WRITTEN CONFIRMATION THAT HIS REQUEST HAS
BEEN RECEIVED.
NOTICE TO GEORGIA RESIDENTS
THE SECURITIES OFFERED HEREBY MAY BE ISSUED OR SOLD IN RELIANCE ON PARAGRAPH
(13) OF CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973 AND MAY NOT BE
SOLD OR TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT.
4
<PAGE>
FOR CANADIAN RESIDENTS
SECURITIES LEGISLATION IN CERTAIN OF THE PROVINCES OF CANADA PROVIDES INVESTORS
WITH, IN ADDITION TO ANY OTHER RIGHTS THEY MAY HAVE AT LAW, RIGHTS OF RECISSION
OR TO DAMAGES, OR BOTH, WHERE THE FINAL CANADIAN OFFERING MEMORANDUM TO BE
DELIVERED TO PURCHASERS, DESCRIBING, AMONG OTHER THINGS, THE DETAILS OF THE
SECURITIES TO BE OFFERED, CONTAINS A MISREPRESENTATION (AS SUCH TERM MAY BE
DEFINED IN THE APPLICABLE STATUTES). HOWEVER, SUCH RIGHTS MUST BE EXERCISED
WITHIN PRESCRIBED TIME LIMITS AND ARE SUBJECT TO THE DEFENSES CONTAINED IN
APPLICABLE SECURITIES LEGISLATION. INVESTORS SHOULD REFER TO THE APPLICABLE
PROVISIONS OF THE SECURITIES LEGISLATION OF THEIR RESPECTIVE PROVINCES OR
CONSULT WITH A LEGAL ADVISOR FOR THE PARTICULARS OF THESE RIGHTS. THE FOLLOWING
IS A SUMMARY OF THE RIGHTS OF RECISSION OR TO DAMAGES, OR BOTH, AVAILABLE TO
INVESTORS UNDER THE SECURITIES LEGISLATION OF CERTAIN OF THE PROVINCES OF CANADA
OR PROVIDED BY CONTRACT. THE FOLLOWING CONTRACTUAL RIGHTS OF ACTION FOR
RESCISSION AND/OR DAMAGES SHALL BE GRANTED TO PURCHASERS BY THEIR PURCHASE OF
THE SECURITIES OFFERED HEREBY.
FOR UNITED KINGDOM RESIDENTS
NO PROSPECTUS HAS BEEN OR WILL BE REGISTERED IN THE UNITED KINGDOM IN RESPECT OF
THE SECURITIES OFFERED HEREBY, AND ACCORDINGLY, THIS DOCUMENT MUST NOT BE
DISTRIBUTED, NOR MAY THE SECURITIES BE OFFERED, IN THE UNITED KINGDOM EXCEPT TO
PERSONS WHOSE ORDINARY BUSINESS IT IS TO BUY OR SELL SECURITIES OR DEBENTURES,
WHETHER AS PRINCIPAL OR AGENT. THIS DOCUMENT MAY NOT BE PASSED TO ANY PERSON IN
THE UNITED KINGDOM UNLESS THAT PERSON IS OF A KIND DESCRIBED IN ARTICLE 9(3) OF
THE FINANCIAL SERVICE ACT OF 1986 (INVESTMENT ADVERTISEMENTS) (EXEMPTIONS) ORDER
1988 (AS AMENDED).
5
<PAGE>
U.S. WIRELESS CORPORATION
March, 1999
Re: Private Placement of the Company's Securities
Dear Subscriber:
U.S. Wireless Corporation (the "Company") is offering to sell to certain
"Accredited Investors," as described under "Suitability Standards" below (the
"Offering"), shares of the Company's common stock, par value $.01 per share (the
"Common Stock"), or in the alternative shares of a Series B Preferred Stock,
through its officers and directors. The shares of Common Stock and Series B
Preferred Stock are referred to as the "Shares" or "Securities". The Company is
offering up to an aggregate of 10,000,000 shares of Common Stock or 50,000
shares of Series B Preferred Stock which are convertible into 5,000,000 shares
of Common Stock as provided herein, or a combination thereof which, through the
sales of shares of Common Stock or shares of Common Stock issuable upon
conversion of the shares of Series B Preferred Stock sold in the Offering, does
not exceed 10,000,000 shares of Common Stock in the aggregate. Investors may
purchase either shares of Common Stock or shares of a Series B Preferred Stock,
with the rights and preferences described below. Annexed hereto as Appendix B is
a copy of the Company's restated certificate of incorporation to be filed upon
consummation of this Offering, authorizing the shares of Series B Preferred
Stock. All references herein to the sale of shares of Common Stock in this
Offering also reflect shares of Common Stock issuable upon the conversion of the
shares of Series B Preferred Stock.
Inasmuch as the shares of Common Stock issued in the offering are being
issued at a discount to the current market price and shall be dilutive on the
stockholders' interests in an aggregate of more than 20%, the Corporation is
seeking stockholder approval of the offering in compliance with Rule
4310(c)(25)(H)(i)(d)(2) of the NASDAQ Stock Market, Marketplace Rules. The rule
states that stockholder approval is required for transactions, other than public
offerings, which involve the sale or issuance by a company of common stock (or
securities convertible into or exercisable for common stock) of 20% or more of
the common stock (or voting power) outstanding, before the issuance, at less
than the greater of market or book value. Currently, the Corporation has
13,556,188 shares of Common Stock issued and outstanding, and, therefore, the
Company can only issue 2,700,000 shares of Common Stock, or shares of Series B
Preferred Stock convertible into 2,700,000 shares of Common Stock, without
stockholder approval. In order to consummate the sale of additional shares of
Common Stock the Company has scheduled a special meeting of its stockholders for
March 26, 1999. The stockholders are only being asked to approve the sale of
shares of Common Stock or Series B Preferred Stock convertible into Common Stock
in excess of 2,700,000 shares. Upon execution of this subscription agreement, a
portion of the funds shall be escrowed, as described below, in an interest
bearing escrow account, until the meeting, at which time if the stockholders
approve the Offering the shares of Common Stock or Series B Preferred Stock
convertible into Common Stock subscribed for shall be issued against
disbursement from the escrow account. In the event that the stockholders do not
approve the Offering the funds held in escrow shall be returned to the
investors, with interest but without any deductions. The portion of the
investment which has not been escrowed may not be rescinded, revoked or
withdrawn by the undersigned, in the event that the stockholders do not approve
the Offering.
6
<PAGE>
THE OFFERING
Securities Offered: 50,000 shares of Series B Preferred
Stock, at $100.00 per share.
10,000,000 shares of Common Stock,
at $1.00 per share or a combination
thereof not to exceed 10,000,000
shares of Common Stock
Terms of the Series B Preferred Stock:
Conversion Each share of Series B Preferred
Stock is convertible into 100
shares of the Company's Common
Stock, at the option of each
individual holder, at any time,
commencing 90 days after the
closing date at a conversion rate
equal to $1.00 per share, subject
to adjustment upon the occurrence
of certain events as described in
the Company's Restated Certificate
of Incorporation, including,
without limitation, the issuance of
shares of the Company's Common
Stock as a dividend and any
recapitalization, reclassification
or split-up or reverse split of the
Company's Common Stock. The shares
of Series B Preferred Stock shall
be automatically converted into
shares of Common Stock at such time
as the closing price for the shares
of Common Stock as reported on
NASDAQ has been at least $5.00 for
30 consecutive trading days.
Liquidation Preference Upon the liquidation, dissolution
or winding up of the Company,
holders of the Series B Preferred
Stock will be entitled to receive,
on a ratable basis, out of assets
of the Company legally available
for distribution to its
stockholders before making any
payment to holders of the Company's
Common Stock, on an equal priority,
pari passu basis, with the holders
of the then outstanding shares of
Series A Preferred Stock, an amount
per share equal to the original
issuance price of $100.00 per
share.
Voting Rights The holders of Series B Preferred
Stock, voting as a separate voting
group, shall be entitled to vote
(i) to elect one member to the
Company's Board of Directors and
one additional individual as an
observer to such Board, until the
earlier of such time as (1) 50% of
the shares of Series B Preferred
Stock have been voluntarily
converted into shares of Common
Stock, and (2) in the event of a
mandatory conversion of the Series
B Preferred Stock, an aggregate of
50% of the total number of shares
of Common Stock issued upon
conversion of the Series B
Preferred Stock, whether through
voluntary or mandatory conversion,
have been resold; (ii) on the
issuance of capital stock ranking
senior to or on a parity with the
Series B Preferred Stock
(including, without limitation, the
authorization of any additional
shares of Series B Preferred
Stock); and (iii) on any change in
the terms of the Series B Preferred
Stock, in each case with each share
of Series B Preferred Stock having
one vote.
7
<PAGE>
General Provisions:
Transfer Restrictions The Securities offered
hereby have not been registered
under the Securities Act of 1933,
as amended (the "Act"), and are
subject to restrictions on
transfer.
Registration Rights The Company shall file a
registration statement to register
for resale all of the shares of
Common Stock underlying the Series
B Preferred Stock within 90 days
following the special meeting of
stockholders to approve the
issuance of certain of the Shares,
and use all reasonable efforts to
cause the registration statement to
become effective as soon as
possible and remain effective for
two years. Shares of Common Stock
in excess of 835,000 shares sold
under the registration statement
shall be subject to certain volume
restrictions in accordance with the
"Holdback" provisions described
herein. Suitability Standards Sales
of the Series B Preferred Stock
will be made only to (i) "Qualified
Institutional Buyers," as defined
in Rule 144A under the Act, and
(ii) "accredited investors," as
such term is defined in Rule 501(a)
of Regulation D promulgated under
the Act ("Regulation D").
Escrow and Stockholder Approval Subscription funds received in the
Offering in excess of $2,700,000
shall be placed in the attorney
trust interest bearing account (the
"Escrow Account") of Mesirov Gelman
Jaffe Cramer & Jamieson, LLP, 1735
Market Street Philadelphia, PA
19103-7598, as escrow agent
("Escrow Agent"), pending the
special meeting of the stockholders
of the Company scheduled for March
26, 1999, as may be adjourned, but
not later than April 30, 1999. In
the event that the stockholders
approve the Offering, the funds,
together with the interest thereon,
shall be released from the Escrow
Account to the Company against the
issuance of shares of Series B
Preferred Stock. If the
stockholders do not approve the
Offering then the escrowed funds
shall be returned to the investors,
with interest but without
deduction. The shares of Series B
Preferred Stock issued prior to the
special meeting for proceeds of
$2,700,000 shall not be affected by
the vote of the stockholders.
Risk Factors Investment in the Company involves
a high degree of risk including
those set forth in Appendix C
hereto and in the Company's
periodic reports and registration
statements as filed by the Company
with the Securities and Exchange
Commission (the "SEC"). The Shares
have not been registered under the
Act or any foreign or state
securities laws. The Shares may not
be resold until registration under
the Act in accordance with the
registration rights described
herein or otherwise, or pursuant to
an exemption from registration.
Use of Proceeds The use of proceeds from the
Offering of Shares shall be for
general working capital purposes.
8
<PAGE>
NASDAQ Small Cap Stock Market Symbol Common Stock - USWC; there shall be
no public market Small Cap Stock
Market Symbol established for the
shares of Series B Preferred Stock.
See "Risk Factors" in Appendix C.
The Company incorporates by reference, which subscribers acknowledge access
to, all reports filed by the Company with the SEC including, but not limited to,
the Company's 10-KSB Annual Report for the year ended March 31, 1998 and the
Company's Form 10-QSB quarterly report for the quarter ended December 31, 1998,
which subscribers have reviewed.
At the initial closing of the sale of an aggregate of 27,000 shares of
Series B Preferred Stock to the investors, the undersigned shall deliver to the
Company the following:
(A) two (2) fully executed copies of this Subscription Agreement
(including the completion of Appendix A hereto);
(B) one (1) fully executed Investor Questionnaire;
(C) one (1) fully executed Escrow Agreement (in the form attached as
Appendix D hereto); and
(D) payment for the Shares as provided below.
At each closing of the sale of shares of Series B Preferred Stock to the
investors, the Company shall deliver to the undersigned the following:
(A) one (1) fully executed copy of this Subscription Agreement
(including the completion of Appendix A hereto), countersigned by the Company;
(B) one (1) fully executed copy of the Escrow Agreement (in the form
attached as Appendix A hereto); and
(C) stock certificates evidencing the Shares registered in the name of
the undersigned, in form satisfactory to the undersigned.
Payments made hereunder should be made by wire transfer or by certified
check, as follows:
(i) Funds not to be escrowed should be delivered to the order of U.S.
WIRELESS CORPORATION in the amount equal to the purchase price for the
number of Shares being subscribed. Wires should be directed as
follows:
To: Citibank, N.A.
ABA: 021000089
For the Account of: Dean Witter
Account No. 40611172
For Further credit to: U.S. Wireless Corporation
Account No. 686-22771-82
9
<PAGE>
(ii) Funds to be escrowed should be delivered to the order of Mesirov
Gelman Jaffe Cramer & Jamieson, LLP, attorney trust account, in the
amount equal to the purchase price for the number of Shares being
subscribed.
The Securities issuable hereof have not been registered in accordance with
the registration provisions of the Act, and are being offered and sold by the
Company in reliance upon an exemption from registration under Sections 4(2) of
the Act and Regulation D.
You have indicated your desire to participate in this private offering and
to subscribe to and purchase such number of Securities in the amount provided in
the acknowledgment below, receipt of which the Company acknowledges.
As an inducement to the Company to accept your subscription, you represent
and warrant as follows:
(A) You acknowledge and understand that the offering and sale of the
Securities are intended to be exempt from registration under the Act, by virtue
of Sections 4(2) and 4(6) of the Act, and Regulation D and, in accordance
therewith and in furtherance thereof, you represent and warrant to and agree
with the Company as follows [Please check statements applicable to you]:
The undersigned is an "accredited investor" as defined under the Act,
confirmation of which is provided in Appendix A to this Subscription Agreement.
In addition to the above criteria, if you are a resident of the State of
California, [Please check each item]:
-- You confirm that you have the capacity to protect your own interests
in connection with this transaction by reason of your business and
financial experience.
-- You are able to bear the financial and economic risk of your
investment and bear the risk of the loss of your entire investment.
-- Your investment does not exceed 10% of your net worth or joint net
worth with that of your spouse.
(B) You have such knowledge and experience in financial and business
matters as is required for evaluating the merits and risks of making this
investment, and you or your representatives have received such information
requested by you concerning the business, management and financial affairs of
the Company in order to evaluate the merits and risks of making this investment.
Further, you acknowledge that you have had the opportunity to ask
10
<PAGE>
questions of, and receive answers from, the officers of the Company concerning
the terms and conditions of this investment and to obtain information relating
to the organization, operation and business of the Company and of the Company's
contracts, agreements and obligations. Except as specifically set forth herein,
no representation or warranty is made by the Company to induce you to make this
investment, and any representation or warranty not made herein is specifically
disclaimed.
(C) You are making this investment for your own account and are purchasing
the Securities for investment purposes only and not with a present view to the
resale or other distribution thereof.
(D) You are making the foregoing representations and warranties with the
intent that they may be relied upon by the Company in determining the
suitability of the sale of the Securities to you for purposes of federal and
state securities laws.
(E) You further acknowledge that you have been advised that the Securities
have not been registered under the provisions of the Act and that the Company
has represented to you that the Securities have been offered and sold by the
Company in reliance upon an exemption from registration provided in Sections
4(2) and 4(6) of the Act.
(F) In entering into this Subscription Agreement and in purchasing the
Securities, you further acknowledge that:
(i) The Company has informed you that the Securities have not been
offered for sale by means of general advertising or solicitation.
(ii) If the undersigned is purchasing the Shares subscribed for hereby
in a representative or fiduciary capacity, the representations and warranties
contained herein shall be deemed to have been made on behalf of the person or
persons for whom such Shares are being purchased;
(iii) The undersigned has not entered into any agreement to pay
commissions to any persons with respect to the purchase or sale of the Shares,
except commissions for which the undersigned will be responsible;
(iv) The Securities may not be resold by you in absence of registration
under the Act or an available exemption from registration;
(v) The following legends shall be placed on the Certificate(s)
evidencing the Securities:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR AN OPINION OF
11
<PAGE>
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE FURTHER RESTRICTED FROM
BEING SOLD OR TRANSFERRED PURSUANT TO CERTAIN HOLDBACK RESTRICTIONS SET FORTH IN
A SUBSCRIPTION AGREEMENT BETWEEN THE HOLDER AND THE CORPORATION."
(iv) The Company may place a stop transfer order on its transfer books
against the Securities. Such stop orders will be removed, and further
transfer of the Securities will be permitted, as limited by the Holdback
provisions described below, upon an effective registration of the
Securities, or the receipt by the Company of an opinion of counsel that
such further transfer may be effected pursuant to an applicable exemption
from registration; and
(v) The purchase of the Securities involves risks which you have
evaluated, and you are able to bear the economic risk of the purchase of
the Securities. You have been advised of the current financial condition of
the Company and of the possible adverse effects of such financial condition
on the Company's general business. You have reviewed in detail the
Company's reports as filed with the SEC within the last year and have had
an opportunity to discuss same with the Company. In addition, you have had
an opportunity to obtain information regarding the industry in which the
Company operates and have had an opportunity to evaluate the Company's
potential success in such industry.
(G) The undersigned is a resident of the state, or if a corporation,
limited partnership, partnership, limited liability company or other entity,
than in the state of such company's formation or principal place of business, as
listed below, and a citizen of the United States.
(H) The undersigned has relied only on the information otherwise provided
to him or her in writing by the Company relating to this investment and the
Company's filings with the SEC all of which are available at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. The SEC maintains a World Wide Web site that contains reports, proxy, and
information statements, and other information regarding registrants, including
the Company, that file electronically with the SEC. The address of the SEC site
is http://www.sec.gov.
(I) The undersigned understands that all documents, records and books
pertaining to this investment have been made available for inspection by him or
her, his or her attorney and/or his or her accountant.
(J) The undersigned has had a reasonable opportunity to ask questions of
and receive answers from a person acting on behalf of the Company concerning the
offering of the Securities and all such questions have been answered to the full
satisfaction of the undersigned.
12
<PAGE>
(K) The undersigned is not purchasing the Securities as a result of or
subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio, any seminar or meeting, or any solicitation of a
subscription by a person not previously known to the undersigned in connection
with investments in securities generally.
(L) The undersigned has reached the age of majority in the state in which
the undersigned resides, has adequate means of providing for the undersigned's
current needs and personal contingencies, is able to bear the substantial
economic risks of an investment in the Securities for an indefinite period of
time, has no need for liquidity in such investment, and is prepared to lose his
or her entire investment in the Securities.
(M) The undersigned's overall commitment to investments that are not
readily marketable is not, and his acquisition of the Securities will not cause
such overall commitment to become, disproportionate to his or her net worth. You
acknowledge that you have made your own investigation concerning the business
and affairs of the Company and, in that connection, you acknowledge the previous
receipt of the Offering Materials.
(N) (i) The undersigned agrees to indemnify and hold harmless the Company,
the officers, directors and affiliates of the Company, and each other
person, if any, who controls the Company, within the meaning of
Section 15 of the Act, against any and all loss, liability, claim,
damage and all expenses reasonably incurred in investigating,
preparing or defending against any litigation commenced or threatened
or any claim whatsoever arising out of or based upon any false
representation or warranty, breach or failure by the undersigned to
comply with any covenant or agreement made by the undersigned herein
or in any other document furnished by the undersigned to any of the
foregoing in connection with this transaction.
(ii) In the event of a registration of any of the Restricted Stock (as
defined below) under the Act pursuant to the terms of this
Subscription Agreement, each seller of such Restricted Stock
thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company
within the meaning of the Act, each officer of the Company who signs
the Registration Statement (as defined below), each director of the
Company, each underwriter and each person who controls any underwriter
within the meaning of the Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such officer,
director, underwriter or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement under which such
Restricted Stock was registered for resale under the Act pursuant to
the terms of this Subscription Agreement, any preliminary prospectus
or final prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and will reimburse the Company and each such officer, director,
underwriter and
13
<PAGE>
controlling person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that such
seller will be liable hereunder in any such case if and only to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or omission made in reliance upon
and in conformity with information pertaining to such seller,
furnished in writing to the Company by such seller specifically for
use in such Registration Statement or prospectus; and, provided,
further, that the liability of each seller hereunder shall be limited
to the proceeds received by such seller from the sale of Restricted
Stock covered by such Registration Statement.
(O) The undersigned hereby acknowledges and agrees, subject to any
applicable state securities law and except as contemplated by the escrowing of a
portion of the subscription pursuant to this Subscription Agreement and the
Escrow Agreement, a copy of which is attached as Appendix D, that the
subscription and application hereunder are irrevocable, that the undersigned is
not entitled to cancel, terminate or revoke this Subscription Agreement or any
agreements of the undersigned hereunder and that this Subscription Agreement and
such other agreements shall survive the death or disability of the undersigned
and shall be binding upon and inure to the benefit of the parties and their
heirs, executors, administrators, successors, legal representatives and assigns.
If the undersigned is more than one person, the obligations of the undersigned
hereunder shall be joint and several, and the agreements, representations,
warranties and acknowledgments herein contained shall be deemed to be made by
and be binding upon each such person and his heirs, executors, administrators,
successors, legal representatives and assigns. Neither this Subscription
Agreement nor any provisions hereof shall be waived, modified, discharged or
terminated except by an instrument in writing signed by the party against whom
any such waiver, modification, discharge or termination is sought. Any notice,
demand or other communication which any party hereto may be required, or may
elect, to give to anyone interested hereunder shall be sufficiently given if (a)
deposited, postage prepaid, in a United States mail box, stamped, registered or
certified mail, return receipt requested, addressed to such address as may be
listed on the books of the Company or (b) delivered personally at such address.
As an inducement to the undersigned to enter into this Subscription
Agreement and to purchase the Shares, the Company hereby represents and warrants
to the undersigned as follows:
(A) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to issue the Shares and to perform its obligations
under this Subscription Agreement.
(B) The Shares, when issued and delivered against payment therefore
pursuant to terms of this Subscription Agreement, and shares of Common Stock,
when issued and delivered upon conversion of the Series B Preferred Stock, will
be duly authorized, validly issued, fully paid and enforceable in accordance
with their respective terms and the terms of this Subscription Agreement.
(C) The execution, delivery and performance of this Subscription Agreement
by the Company, and the consummation by the Company of the transactions
contemplated hereby
14
<PAGE>
(including, without limitation, the issuance or reservation for issuance of the
Conversion Shares) will not (i) result in a violation of the Certificate of
Incorporation or Bylaws of the Company or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company is a party, or to the Company's knowledge result in a violation of
any law, rule, regulation, order, judgment or decree (including U.S. federal and
state securities laws and regulations) applicable to the Company or by which any
property or asset of the Company is bound or affected. Except as specifically
contemplated by this Subscription Agreement and as required under the Act and
any applicable state securities laws, to its knowledge the Company is not
required to obtain any consent, approval, authorization or order of, or make any
filing or registration with, any court or governmental agency or any regulatory
or self regulatory agency in order for it to execute, deliver or perform any of
its obligations under this Subscription Agreement in accordance with the terms
hereof. To its knowledge, (i) the Company is not in violation of the listing
requirements of the NASDAQ Small Cap Market ("NASDAQ"), (ii) no event or
circumstance has occurred or presently exists which could result in the Company
being in violation of the listing requirements, and (iii) the Company does not
reasonably anticipate that the Common Stock will be delisted by NASDAQ for the
foreseeable future.
(D) This Subscription Agreement and the Offering have been duly authorized
by all necessary corporate action on behalf of the Company, except for
stockholder approval of the offering of Shares in excess of 2,700,000 shares of
Common Stock. This Subscription Agreement has been duly executed and delivered
by authorized officers of the Company, is a valid and binding agreement on the
part of the Company and is enforceable against the Company in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium, and other similar laws and equitable principles relating to or
limiting creditors' rights generally. All corporate actions necessary for the
authorization, issuance and delivery of the Shares against payment therefore,
and shares of Common Stock upon conversion of the Series B Preferred Stock in
accordance with the Offering, shall have been taken by the Company upon the
closing.
(E) As of the date of this Subscription Agreement, the authorized capital
stock of the Company consists of (i) 40,000,000 shares of Common Stock, par
value $.01 per share, of which 13,556,188 shares are validly issued and
outstanding, fully paid and nonassessable, a portion of which is subject to
certain vesting schedules, and (ii) 1,000,000 shares of Preferred Stock, par
value $.01 per share, of which 300,000 shares are designated Series A Preferred
Stock. The rights, preferences, restrictions and privileges in respect of each
class and series of authorized capital stock of the Company are as set forth in
the Certificate of Incorporation, and all such rights, preferences and
privileges are valid, binding and enforceable and in accordance with all
applicable laws. All of the outstanding securities of the Company were issued in
compliance with all applicable Federal and state securities laws.
15
<PAGE>
(F) Since the date of the Company's filing of its report on Form 10-QSB for
the quarter ended December 31, 1998, there have not been any material changes in
the business, or financial condition or operations of the Company.
(G) Since March, 1998, the Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
pursuant to the reporting requirements of the Securities Exchange Act of 1934,
as amended (the "34 Act") (all of the foregoing filed prior to the date hereof
and after March, 1998, and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference
therein, being referred to as the "SEC Documents"). The Company has made
available to the undersigned true and complete copies of the SEC Documents,
except for the exhibits and schedules thereto and the documents incorporated
therein. As of their respective dates, the SEC Documents complied as to form in
all material respects with the requirements of the 34 Act, or the Act, as the
case may be, and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the SEC, contained any untrue statement of a material fact or
omitted to state 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.
(H) Except as disclosed in the SEC Documents, the Company has not received
notice of any action, suit, proceeding, inquiry or investigation before or by
any court, public board, government agency, self-regulatory organization or body
including, without limitation, the SEC or NASDAQ, pending nor, to the knowledge
of the Company, is any such action threatened against or affecting the Company,
or any of their respective directors or officers in their capacities as such
which will have a material adverse effect on the Company. There are no facts
which, if known by a potential claimant or governmental authority, could give
rise to a claim or proceeding which, if asserted or conducted with results
unfavorable to the Company, could have a material adverse effect on the Company,
its business or its financial condition or operations.
(I) All information relating to or concerning the Company set forth in this
Subscription Agreement, incorporated in this Subscription Agreement by
reference, or provided to the undersigned in connection with the transactions
contemplated hereby is true and correct in all material respects and the Company
has not omitted to state any material fact necessary in order to make the
statements made herein or therein, in light of the circumstances under which
they were made, not misleading. No event or circumstance has occurred or exists
with respect to the Company or its respective businesses, properties, prospects,
operations or financial conditions, which has not been publicly disclosed but,
under applicable law, rule or regulation, would be required to be disclosed by
the Company in a registration statement filed on the date hereof by the Company
under the Act with respect to a primary issuance of the Company's securities.
(J) The Company is currently eligible to register the resale of its Common
Stock on a registration statement on Form S-3 under the Act. To the best of its
knowledge, there exist no facts or circumstances that would prohibit or delay
the preparation and filing of a registration
16
<PAGE>
statement on Form S-3 with respect to the shares of Common Stock issued or
issuable upon conversion of the Series B Preferred Stock and any other
securities issued with respect thereto by way of dividends, stock splits,
recapitalization, merger, consolidation or otherwise (the "Restricted Stock").
(K) Except as disclosed in the SEC Documents, since March, 1998, the
Company has not (i) borrowed any amount or incurred any liability (absolute or
contingent), except current liabilities incurred and liabilities under contracts
entered into in the ordinary course of business, (ii) entered into any contract,
agreement, transaction or other arrangement with any officer, director, employee
or other affiliate of the Company, (iii) declared or made any payment or
distribution to stockholders or purchased or redeemed any shares of its capital
stock or other security, (iv) mortgaged, pledged or subjected to lien any of its
assets, tangible or intangible, other than liens of current real property taxes
not yet due and payable, (v) sold, assigned or transferred any of its tangible
assets except in the ordinary course of business, or canceled any debt or claim,
(vi) sold, assigned, or transferred any patents, trademarks, trade names,
copyrights, trade secrets or other intangible assets, (vii) suffered any loss of
property or waived any right of substantial value, (viii) made any change in
officer compensation, (ix) made any material change in the manner of business or
operations of the Company, or (x) entered into any commitment to do any of the
foregoing.
(L) To the best of its knowledge, the Company owns or is licensed to use
all patents, patent applications, trademarks, trademark applications, trade
names, service marks, service mark applications, copyrights, copyright
applications, licenses, permits, inventions, discoveries, processes, scientific,
technical, engineering and marketing data, object and source codes, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, the "Intellectual Property") necessary for
the conduct of its business as now being conducted. To the best knowledge of the
Company, the Company is not infringing on or in conflict with any right of any
other person with respect to any Intellectual Property which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse effect on the Company. The Company has not
received notice of any pending conflict with or infringement upon such third
party Intellectual Property. The Company has not entered into any consent,
indemnification, forbearance to sue or settlement agreement with respect to the
validity of the Company's ownership or right to use its Intellectual Property
and, to the best knowledge of the Company, there is no reasonable basis for any
such claim to be successful. To the best of the Company's knowledge, the
Intellectual Property is valid and enforceable and no registration relating
thereto has lapsed, expired or been abandoned or canceled or is the subject of
cancellation or other adversarial proceedings, and all applications therefor are
pending and in good standing. The Company has complied in all material respects
with its contractual obligations relating to the protection of the Intellectual
Property used pursuant to licenses. To the best knowledge of the Company, no
person is infringing on or violating the Intellectual Property owned or used by
the Company.
(M) The Company warrants that all of its Intellectual Property, as
applicable ("Software"), is Millennium Compliant. For the purposes of this
Subscription Agreement,
17
<PAGE>
"Millennium Compliant" means that:
(i) The functions, calculations, and other computing processes of the
Company's Software (collectively, "Processes") perform in an accurate
manner regardless of the date in time on which the Processes are actually
performed and regardless of the date input to the Company's Software,
whether before, on or after January 1, 2000 and whether or not the dates
are affected by leap years;
(ii) The Company's Software accepts, stores, sorts, extracts,
sequences, and otherwise manipulates date inputs and date values, and
returns and displays date values, in an accurate manner regardless of the
dates used, whether before, on or after January 1, 2000;
(iii) The Company's Software will function without interruptions
caused by the date in time on which the Processes are actually performed or
by the date input to the Company's Software, whether before, on, or after
January 1, 2000;
(iv) The Company's Software accepts and responds to two digit year and
four digit year date input in a manner that resolves any ambiguities as to
the century in a defined, predetermined and accurate manner; and
(v) The Company's Software displays, prints and provides electronic
output of date information in ways that are unambiguous as to the
determination of the century.
The Company represents that the Company's Software in and of itself does
not function in a manner that is dependent on date and time values, therefore,
by its nature it is Millennium Compliant. The Company makes no representation or
warranty that another entity's failure to be Millennium Compliant will not have
an adverse effect on the Company.
(N) (i) The Company agrees to indemnify and hold harmless the undersigned,
the officers, directors and affiliates of the undersigned, and each other
person, if any, who controls the undersigned, within the meaning of Section
15 of the Act, against any and all loss, liability, claim, damage and all
expenses reasonably incurred in investigating, preparing or defending
against any litigation commenced or threatened or any claim whatsoever
arising out of or based upon any false representation or warranty, breach
or failure by the Company to comply with any covenant or agreement made by
the Company herein or in any other document furnished by the Company to any
of the foregoing in connection with this transaction.
(ii) In the event of a registration of any of the Restricted Stock under
the Act pursuant to this Subscription Agreement, the Company will indemnify
and hold harmless each seller of such Restricted Stock thereunder, and the
directors, officers, partners, members, employees and agents of each such
seller, each underwriter of such Restricted Stock thereunder and each other
person, if any, who controls such sellers or underwriters within the
meaning of the Act, against any losses, claims, damages or liabilities,
joint or
18
<PAGE>
several, to which such sellers, underwriters or controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) (i) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such
Restricted Stock was registered under the Act pursuant to Sections 4 or 5,
any preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, (ii) arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, or (iii) arise out of any violation or alleged violation by the
Company of any rule or regulation promulgated under the Act or any
applicable states securities law in connection with any such registration,
and will reimburse each such seller, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the Company will not
be liable to any seller in any such case if and to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or omission so made in conformity with information furnished by
any such seller in writing specifically for use in such Registration
Statement or prospectus, or any amendment or supplement thereof.
As an inducement to the undersigned to enter into this Subscription
Agreement and to purchase the Shares, the Company hereby covenants and agrees as
follows:
Required Registration.
(A) Within 90 days following the special meeting of the stockholders of the
Company to approve the issuance of 23,000 shares of Series B Preferred Stock
(the "Special Meeting"), the Company will file a registration statement on Form
S-3, or such other form as is available, if Form S-3 is unavailable, with the
SEC to register for resale under the Act all of the shares of Common Stock
underlying the Series B Preferred Stock being subscribed for by the undersigned
(the "Registration Statement").
(B) In the event the Company fails to file the Registration Statement
within the ninety (90) day period set forth in Subsection (A) above, then the
Company shall pay the undersigned an amount equal to 1% of the stated value of
$100 per share for each share of Series B Preferred Stock held by the
undersigned per month computed on a pro rata basis for the period beginning on
the date 90 days after the Special Meeting and ending on such date as the
Company files the Registration Statement. The payment required under this
Subsection (B) may at the election of the Company be paid to the undersigned in
the form of cash, Common Stock or Series B Preferred Stock, such shares of
Common Stock or Series B Preferred Stock being valued as follows: (i) in the
case of Common Stock, such shares shall be valued at the average closing price
for such shares as reported on NASDAQ during the period for which such amount is
computed, and (ii) in the case of Series B Preferred Stock, such shares shall be
valued at their stated value of $100 per share. No payment shall be required
under this Subsection (B) if the sole cause of the
19
<PAGE>
delay in filing the Registration Statement is the undersigned's failure to
comply with its obligations under Subsection (C) (ii).
(C) Registration Procedures.
(i) All expenses incurred by the Company in connection with the
registration under subsection (A) above, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
the Company's counsel and independent public accountants for the Company,
fees and expenses (including counsel fees) incurred in connection with
complying with state securities or "blue sky" laws, fees of the National
Association of Securities Dealers, Inc. and fees of transfer agents and
registrars, shall be borne by the Company. In connection with the
registration under Subarticle (A) above, the Company shall (1) use all
reasonable efforts to cause the Registration Statement to promptly become
effective and remain effective for a period of at least two years; (2) use
all reasonable efforts to register and qualify the shares covered by the
Registration Statement under such applicable state securities laws as the
undersigned shall request to enable the public sale or other disposition in
such jurisdictions of such shares; and (3) take such other actions as are
reasonable to comply with the requirements of the Act and the 34 Act, and
the regulations thereunder.
(ii) In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information
with respect to themselves and the proposed distribution by them and
execute such documents regarding the sale of the Restricted Stock as
reasonably shall be necessary in order to assure compliance with federal
and applicable state securities laws.
(D) Holdback. The undersigned agrees that it will not sell, transfer or
otherwise dispose of any Shares during the 90 day period following the closing
of the initial sale and purchase of shares of Series B Preferred Stock. Upon the
expiration of such 90 day period and the effectiveness of the Registration
Statement, the undersigned may sell, transfer or otherwise dispose under the
Registration Statement of up to 16.7% of the shares of Common Stock which may be
acquired upon conversion of the Series B Preferred Stock being purchased by the
undersigned (the "Unrestricted Registered Shares"). The undersigned may assign
its right to another subscriber in the Offering. Any sales, transfers or other
dispositions under the Registration Statement of Common Stock acquired upon
conversion of the Series B Preferred Stock in excess of the Unrestricted
Registered Shares shall be subject to the volume limitations set forth in Rule
144(e) under the Act until such shares may be sold free of such volume
limitations under Rule 144(k) under the Act.
(E) Availability of Rule 144. The Company covenants that it will use all
reasonable efforts to file the reports required to be filed by the Company under
the Act and the 34 Act, so as to enable the undersigned to sell the Shares
pursuant to Rule 144 under the Act. In connection with any sale by any holder of
any Shares pursuant to Rule 144 under the Act, the Company shall cooperate with
the undersigned to facilitate the timely preparation and delivery after such
sale of Shares certificates not bearing any restrictive legend required by the
Act.
20
<PAGE>
This Subscription Agreement may be executed through the use of separate
signature pages or in any number of counterparts, and each of such counterparts
shall, for all purposes, constitute one agreement binding on all parties,
notwithstanding that all parties are not signatories to the same counterpart.
This Subscription Agreement contains the entire agreement of the parties with
respect to the subject matter hereof and there are no representations, covenants
or other agreements except as stated or referred to herein. Each provision of
this Subscription Agreement is intended to be severable from every other
provision, and the invalidity or illegality of any portion hereof shall not
affect the validity or legality of the remainder hereof.
This Subscription Agreement is not transferable or assignable by the
undersigned except as may be provided herein. This Subscription Agreement shall
be governed by and construed in accordance with the laws of the State of
California as applied to residents of that state executing contracts wholly to
be performed in that state.
21
<PAGE>
Please sign and return two copies of this Subscription Agreement. A
countersigned copy of this Subscription Agreement will be returned to you,
together with your Securities. For the purpose of having the Securities
prepared, please indicate the exact manner in which the Certificate representing
the Securities is to be made out in the space provided for below.
Date Executed: March 3, 1999.
Number of shares of Series B Preferred Stock subscribed for: 16,200
Number of shares of Common Stock subscribed for: 0
Cost of shares of Series B Preferred Stock: $100.00 per share
Cost of shares of Common Stock: $1.00 per share
Amount of check or wire to be delivered to the Company upon
execution and delivery of this Subscription Agreement: $1,620,000
Amount of check or wire to be delivered to the Escrow Agent
upon execution and delivery of this Subscription Agreement: $0
Agreed to and Accepted by:
(Individual) (Corp., Partnership or Trust)
/s/ Irwin Gross Interactive Flight Technologies, Inc.
- ------------------------------ -------------------------------------
Signature of Subscriber Name of Corp., Partnership or Trust
By: /s/ Irwin Gross
---------------------------------
Name: Irwin Gross
Title: Chairman
22
<PAGE>
Certificate for Securities issued to the following:
Interactive Flight Technologies, Inc.
- --------------------------------------
Name
4041 N. Central Ave., #B200
Phoenix, Arizona 85012
- --------------------------------------
Address
11-3197148
- --------------------------------------
SS # or Fed. Tax Id. #
Arizona
- --------------------------------------
State of Residency (principal offices)
Delaware
- -------------------------------
State of Incorporation
The foregoing subscription is accepted by the Company to the extent of
16,200 shares of Series B Preferred Stock/____ shares of Common Stock this 5th
day of March, 1999.
Very truly yours,
U.S. WIRELESS CORPORATION
By: /s/ Oliver Hilsenrath
--------------------------------
Dr. Oliver Hilsenrath, President
23
<PAGE>
APPENDICES
Appendix A - Accredited Investor Criteria
Appendix B - Restated Certificate of Incorporation
Appendix C - Risk Factors
Appendix D - Escrow Agreement
<PAGE>
Please sign and return two copies of this Subscription Agreement. A
countersigned copy of this Subscription Agreement will be returned to you,
together with your Securities. For the purpose of having the Securities
prepared, please indicate the exact manner in which the Certificate representing
the Securities is to be made out in the space provided for below.
Date Executed: March 3, 1999.
Number of shares of Series B Preferred Stock subscribed for: 13,800
Number of shares of Common Stock subscribed for: 0
Cost of shares of Series B Preferred Stock: $100.00 per share
Cost of shares of Common Stock: $1.00 per share
Amount of check or wire to be delivered to the Company upon
execution and delivery of this Subscription Agreement: $0
Amount of check or wire to be delivered to the Escrow Agent
upon execution and delivery of this Subscription Agreement: $1,380,000
Agreed to and Accepted by:
(Individual) (Corp., Partnership or Trust)
Interactive Flight Technologies, Inc.
-------------------------------------
Name of Corp., Partnership or Trust
By: Irwin Gross
----------------------------------
Name: Irwin Guss
Title: Chairman
<PAGE>
Certificate for Securities issued to the following:
Interactive Flight Technologies, Inc.
- ------------------------------------------
Name
4041 N. Central Ave., #B200
Phoenix, Arizona 85012
- ------------------------------------------
Address
11-3197148
- ------------------------------------------
SS# or Fed. Tax Id. #
Arizona
- ------------------------------------------
State of Residency (principal offices)
Delaware
- ------------------------------------------
State of Incorporation
The foregoing subscription is accepted by the Company to the extent of
13,800 shares of Series B Preferred Stock/____ shares of Common Stock this 5th
day of April, 1999.
Very truly yours,
U.S. WIRELESS CORPORATION
By: /s/ Oliver Hilsenrath
----------------------------------
Dr. Oliver Hilsenrath, President
<PAGE>
Please sign and return two copies of this Subscription Agreement. A
countersigned copy of this Subscription Agreement will be returned to you,
together with your Securities. For the purpose of having the Securities
prepared, please indicate the exact manner in which the Certificate representing
the Securities is to be made out in the space provided for below.
Date Executed: March 4, 1999.
Number of shares of Series B Preferred Stock subscribed for: 5,400
Number of shares of Common Stock subscribed for: 0
Cost of shares of Series B Preferred Stock: $100.00 per share
Cost of shares of Common Stock: $1.00 per share
Amount of check or wire to be delivered to the Company upon
execution and delivery of this Subscription Agreement: $540,000
Amount of check or wire to be delivered to the Escrow Agent
upon execution and delivery of this Subscription Agreement: $0
Agreed to and Accepted by:
(Individual) (Corp., Partnership or Trust)
Liberty Ventures I, L.P.
-------------------------------------
Name of Corp., Partnership or Trust
By: XXXXXXXXX
----------------------------------
Name:
Title:
<PAGE>
Certificate for Securities issued to the following:
Liberty Ventures I, L.P.
- ------------------------------------------
Name
200 S. Broad Street, 8th Floor
c/o Liberty Ventures, Inc.
Philadelphia, PA 19103
- ------------------------------------------
Address
232791398
- ------------------------------------------
SS# or Fed. Tax Id. #
Pennsylvania
- ------------------------------------------
State of Residency (principal offices)
Delaware
- ------------------------------------------
State of Organization
The foregoing subscription is accepted by the Company to the extent of
5,400 shares of Series B Preferred Stock/____ shares of Common Stock this 15th
day of March, 1999.
Very truly yours,
U.S. WIRELESS CORPORATION
By: /s/ Oliver Hilsenrath
----------------------------------
Dr. Oliver Hilsenrath, President
<PAGE>
Please sign and return two copies of this Subscription Agreement. A
countersigned copy of this Subscription Agreement will be returned to you,
together with your Securities. For the purpose of having the Securities
prepared, please indicate the exact manner in which the Certificate representing
the Securities is to be made out in the space provided for below.
Date Executed: March 4, 1999.
Number of shares of Series B Preferred Stock subscribed for: 4,600
Number of shares of Common Stock subscribed for: 0
Cost of shares of Series B Preferred Stock: $100.00 per share
Cost of shares of Common Stock: $1.00 per share
Amount of check or wire to be delivered to the Company upon
execution and delivery of this Subscription Agreement: $0
Amount of check or wire to be delivered to the Escrow Agent
upon execution and delivery of this Subscription Agreement: $460,000
Agreed to and Accepted by:
(Individual) (Corp., Partnership or Trust)
Liberty Ventures I, L.P.
-------------------------------------
Name of Corp., Partnership or Trust
By: XXXXXXXXX
----------------------------------
Name:
Title:
<PAGE>
Certificate for Securities issued to the following:
Liberty Ventures I, L.P.
- ------------------------------------------
Name
200 S. Broad Street, 8th Floor
c/o Liberty Ventures, Inc.
Philadelphia, PA 19103
- ------------------------------------------
Address
232791398
- ------------------------------------------
SS# or Fed. Tax Id. #
Pennsylvania
- ------------------------------------------
State of Residency (principal offices)
Delaware
- ------------------------------------------
State of Organization
The foregoing subscription is accepted by the Company to the extent of
4,600 shares of Series B Preferred Stock/____ shares of Common Stock this 5th
day of April, 1999.
Very truly yours,
U.S. WIRELESS CORPORATION
By: /s/ Oliver Hilsenrath
----------------------------------
Dr. Oliver Hilsenrath, President
<PAGE>
Please sign and return two copies of this Subscription Agreement. A
countersigned copy of this Subscription Agreement will be returned to you,
together with your Securities. For the purpose of having the Securities
prepared, please indicate the exact manner in which the Certificate representing
the Securities is to be made out in the space provided for below.
Date Executed: March 9, 1999.
Number of shares of Series B Preferred Stock subscribed for: 5,400
Number of shares of Common Stock subscribed for: 0
Cost of shares of Series B Preferred Stock: $100.00 per share
Cost of shares of Common Stock: $1.00 per share
Amount of check or wire to be delivered to the Company upon
execution and delivery of this Subscription Agreement: $540,000
Amount of check or wire to be delivered to the Escrow Agent
upon execution and delivery of this Subscription Agreement: $0
Agreed to and Accepted by:
(Individual) (Corp., Partnership or Trust)
WT Holding, Inc.
-------------------------------------
Name of Corp., Partnership or Trust
By: /s/ Edward J. Rosner
----------------------------------
Name: Edward J. Rosner
Title: President
<PAGE>
Certificate for Securities issued to the following:
WT Holding, Inc.
- ------------------------------------------
Name
225 S. 4th Street
Philadelphia, PA 19106
- ------------------------------------------
Address
Applied for
- ------------------------------------------
SS# or Fed. Tax Id. #
Virginia
- ------------------------------------------
State of Residency (principal offices)
Delaware
- ------------------------------------------
State of Incorporation
The foregoing subscription is accepted by the Company to the extent of
5,400 shares of Series B Preferred Stock/____ shares of Common Stock this 25th
day of March, 1999.
Very truly yours,
U.S. WIRELESS CORPORATION
By: /s/ Oliver Hilsenrath
----------------------------------
Dr. Oliver Hilsenrath, President
<PAGE>
Please sign and return two copies of this Subscription Agreement. A
countersigned copy of this Subscription Agreement will be returned to you,
together with your Securities. For the purpose of having the Securities
prepared, please indicate the exact manner in which the Certificate representing
the Securities is to be made out in the space provided for below.
Date Executed: March 9, 1999.
Number of shares of Series B Preferred Stock subscribed for: 4,600
Number of shares of Common Stock subscribed for: 0
Cost of shares of Series B Preferred Stock: $100.00 per share
Cost of shares of Common Stock: $1.00 per share
Amount of check or wire to be delivered to the Company upon
execution and delivery of this Subscription Agreement: $0
Amount of check or wire to be delivered to the Escrow Agent
upon execution and delivery of this Subscription Agreement: $460,000
Agreed to and Accepted by:
(Individual) (Corp., Partnership or Trust)
WT Holding, Inc.
-------------------------------------
Name of Corp., Partnership or Trust
By: Edward J. Rosner
---------------------------------
Name: Edward J. Rosner
Title: President
<PAGE>
Certificate for Securities issued to the following:
WT Holding, Inc.
- ------------------------------------------
Name
225 S. 4th Street, #104
Philadelphia, PA 19106
- ------------------------------------------
Address
Applied for
- ------------------------------------------
SS# or Fed. Tax Id. #
Virginia
- ------------------------------------------
State of Residency (principal offices)
Delaware
- ------------------------------------------
State of Organization
The foregoing subscription is accepted by the Company to the extent of
4,600 shares of Series B Preferred Stock/____ shares of Common Stock this 5th
day of April, 1999.
Very truly yours,
U.S. WIRELESS CORPORATION
By: /s/ Oliver Hilsenrath
----------------------------------
Dr. Oliver Hilsenrath, President
<PAGE>
U.S. WIRELESS CORPORATION PRIVATE
Amendment No. 1 dated March 23, 1999
to the
Subscription Agreement dated March 1999
The subscription agreement (inclusive of appendicies and exhibits thereto,
collectively referred to as (the "Subscription Agreement") by and between U.S.
Wireless Corporation (the "Company") and the undersigned dated as of the date of
execution, is hereby supplemented as follows:
The defined terms in the Subscription Agreement are deemed to be applicable
herein, except as otherwise amended herein. All references herein to page
numbers, appendices and/or exhibits, refer to page numbers, appendicies and/or
exhibits of and to the Subscription Agreement.
Amendment to the terms of the Series B Preferred Stock
References in the Subscription Agreement to the designated rights and
preferences of the shares of the Series B Preferred Stock shall be amended to
reflect a change in the conversion feature to provide that each share of Series
B Preferred Stock converted into shares of Common Stock within 12 months of the
date such Series B Preferred Stock was issued to the undersigned shall be
convertible at a conversion rate equal to $1.50 per share of Common Stock. In
addition, the mandatory conversion provision shall commence 12 months from
issuance.
Subarticles (D)(vi)(a) and (e) of Article Fourth of the Amended and
Restated Certificate of Incorporation of the Company dated as filed on March 5,
1999, annexed to the Subscription Agreement as Appendix B, shall be amended, and
a certificate of amendment filed in the state of Delaware, to read as follows:
"(a) Subject to, and upon compliance with, the provisions of this Subarticle
(vi) (including, without limitation, the mandatory conversion provision of
Subarticle (e) of this Subarticle (vi), the holder of a share of Series B
Preferred Stock designated shall have the right, at such holder's option, at any
time commencing ninety (90) days from issuance, to convert each share of Series
B Preferred Stock into one hundred (100) validly issued, fully paid and
non-assessable shares of Common Stock of the Corporation which is based on a
stated value of $100 per share of Series B Preferred Stock divided by a
conversion rate equal to $100 per share of Common Stock. Notwithstanding the
provisions of this subarticle, each share of Series B Preferred Stock
voluntarily converted within 12 months of issuance shall be converted into
sixty-seven (67) validly issued fully paid and non-assessable shares of Common
Stock of the Corporation, which is based on a stated value of $1.00 per share of
Series B Preferred Stock divided by a conversion rate equal to $1.50 per share
of Common Stock. The stated value of the shares of Series B Preferred Stock
divided by the conversion rate, as applicable, shall be referred herein as the
"Series B Conversion Price"."
<PAGE>
"(e) Mandatory Conversion. Commencing 12 months from issuance, upon the
occurrence of an Event of Conversion (as defined below), each share of Series B
Preferred Stock then outstanding shall, by virtue of, and simultaneously with,
the occurrence of the Event of Conversion and without any action an the part of
the holder thereof, be automatically converted into one hundred (100) validly
issued, fully paid and non-assessable Common Shares (subject to any prior
adjustments, as provided in Subarticle (vi)(d) above) for the shares of Series B
Preferred Stock being converted. The term "Event of Conversion" shall mean the
occurrence of the closing price per share for the Corporation's common stock
having been at least $5.00 for a consecutive 30 trading day period."
3. Except at, provided herein all other terms and conditions to the
Subscription Agreement shall remain in full force and effect as of the dates of
execution.
Please read carefully and review this Amendment No. 1 and please execute
the Agreement and Acknowledgment below. By your execution of this Amendment No.
1, you hereby reconfirm your subscription for the shares previously subscribed.
AGREED TO AND ACCEPTED:
(INDIVIUAL) If a CORP., PARTNERSHIP OR TRUST:
- ------------------------------------ -----------------------------------
Name of Subscriber Name of Corp., Partnership or Trust
_____________________________________ By: _______________________________
Signature of Subscriber Name:
Title:
Date Executed: March ___, 1999
2
<PAGE>
U.S. WIRELESS CORPORATION
Amendment No. 3 dated July 20, 1999
to the
Subscription Agreement dated March 1999,
Amendment No. 2 dated April 6, 1999 and
Amendment No. 1 dated March 23, 1999
The subscription agreement (inclusive of amendments, appendices and
exhibits thereto, collectively referred to as the "Subscription Agreement") by
and between U.S. Wireless Corporation (the "Company") and the undersigned dated
as of the date of execution, is hereby supplemented as follows:
The defined terms in the Subscription Agreement are deemed to be applicable
herein, except as otherwise amended herein. All references herein to page
numbers, appendices and/or exhibits refer to page numbers, appendices and/or
exhibits of and to the Subscription Agreement.
Amendment to Registration Rights Provisions
1. The registration rights provisions in the Subscription Agreement are
hereby amended to terminate the requirement that the Company file a registration
statement within 90 days of the Company's April 5, 1999 shareholders meeting,
thereby requesting the termination of the Form S-3 registration statement which
is currently filed and pending with the Securities and Exchange Commission.
2. In consideration for the holders of the Series B Preferred Stock
consenting to the provisions of Paragraph 1 above, the Company grants to the
holders of the Series B Preferred Stock the following demand registration right:
a. If the holders of more than 50% of the shares of the Company's Common
Stock (the "Shares") underlying the shares of Series B Preferred
Stock, (all of such holders collectively called "Holders") shall at
any time on one occasion, give notice to the Company to the effect
that the Holders contemplate the transfer of all or any part of the
Shares in a manner which may constitute a public offering thereof in
the United States, then the Company shall as soon as practicable, but
in any event within 30 days, file a registration statement pursuant to
the 1933 Act, in order that the Shares may be sold under the Act as
promptly and practicable thereafter, and the Company will use its best
efforts to cause such registration to become effective; provided that
the Holders shall furnish the Company with appropriate information
(relating to the intentions of the Holders), in connection therewith
as the Company shall reasonably request in writing.
<PAGE>
b. When the Company proposes to file a Registration Statement for a
public offering, it will, prior to such filing, give 20 days written
notice to all Holders of its intention to do so.
c. In the event the Company is in the middle of a year end audit during
the time that the request is made pursuant to subparagraph 2(a), then
the Company shall have the right to extend its time to file from 30
days from the date of notice to 10 days after the filing of its
audited statements with the Securities and Exchange Commission. In
addition, if at the time of the request, or during the registration
process the Company has fixed plans to engage in a registered public
offering or another activity which in the good faith opinion of the
Board of Directors would be adversely affected by the requested
registration, then the Company may direct that the request be delayed
for a period not to exceed 90 days from the effective date of such
registration or material activity.
d. In the event the Company fails to file the Registration Statement
within the period set forth herein, then the Company shall pay the
undersigned an amount equal to 1% of the stated value of $100 per
share for each share of Series B Preferred Stock held by the
undersigned per month computed on a pro rata basis. The payment
required under this subparagraph may at the election of the Company be
paid to the undersigned in the form of cash, Common Stock or Series B
Preferred Stock, such shares of Common Stock or Series B Preferred
Stock being valued as follows: (i) in the case of Common Stock, such
shares shall be valued at the average closing price for such shares as
reported an NASDAQ during the period for which such amount is
computed, and (ii) in the case of Series B Preferred Stock, such
shares shall be valued at their stated value of $100 per share. No
payment shall be required under this subparagraph if the sole cause of
the delay in filing the Registration Statement is the undersigned's
failure to comply with its obligations to provide information to the
Company as provided for in subparagraph 2(a).
3. Except a provided herein all other terms and conditions to the
Subscription Agreement shall remain in full force and effect as of the dates of
execution.
2
<PAGE>
Please read carefully and review this Amendment No. 3 and please execute
the Agreement and Acknowledgment below. By your execution of this Amendment
No. 3, you hereby reconfirm your subscription for the shares previously
subscribed.
Dated as of July 20,1999
AGREED TO AND ACCEPTED:
By
------------------------------------ -------------------------------
Name: Name of Company
Title:
