Document:

Unassociated Document

    THIS
      WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ANY EXERCISE HEREOF HAVE
      NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”),
      OR
      ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR OTHERWISE
      TRANSFERRED TO ANY PERSON, INCLUDING A PLEDGEE, UNLESS (i) EITHER (A) A
      REGISTRATION STATEMENT WITH RESPECT THERETO SHALL BE EFFECTIVE UNDER THE
      SECURITIES ACT, OR (B) THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL
      SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER THE
      SECURITIES ACT IS AVAILABLE, AND (ii) THERE SHALL HAVE BEEN COMPLIANCE WITH
      ALL
      APPLICABLE STATE SECURITIES OR “BLUE-SKY” LAWS.

    

      
        	No.
                ______________	 	
                For
                  the Purchase

              
	 	 	
                of
                  up to _______ shares

              
	 	 	
                of
                  Common
                  Stock

              

      

    

     

    WARRANT
      TO PURCHASE 

     

    COMMON
      STOCK

     

    OF

     

    U.S.
      WIRELESS DATA, INC.

    

    (A
      DELAWARE CORPORATION)

     

    U.S.
      Wireless Data, Inc., a Delaware corporation (the “Company”),
      for
      value received, the sufficiency of which is hereby acknowledged, certifies
      that
      _________, or his, her or its permitted assigns (the “Holder”),
      is
      entitled, subject to the terms set forth below, to purchase from the Company,
      at
      any time or from time to time at or before the earlier of 5:00 p.m. New York
      City local time on January 18, 2008 (the “Expiration
      Date”)
      and
      the termination of this Warrant as provided in Section 7 hereof, up to
      _________shares of common stock, par value $0.01 per share, of the Company
      (“Common
      Stock”),
      at a
      purchase price per share equal to $1.00 per share (the “Base
      Price”),
      as
      adjusted upon the occurrence of certain events as set forth in Section 2 of
      this
      Warrant. The shares of Common Stock issuable upon exercise of this Warrant,
      and
      the purchase price per share, are hereinafter referred to as “Warrant
      Stock”
and
      the
“Purchase
      Price,”
      respectively. 

     

    1. Exercise.

     

    1.1 Manner
      of Exercise; Payment in Cash.
      This
      Warrant may be exercised by the Holder, in whole or in part, by surrendering
      this Warrant, with the purchase form appended hereto as Exhibit
      A
      duly
      executed by the Holder, at the principal office of the Company, or at such
      other
      place as the Company may designate, accompanied by payment in full of the
      Purchase Price payable in respect of the number of shares of Warrant Stock
      purchased upon such exercise. Payment of the Purchase Price shall be in cash
      or
      by certified or official bank check payable to the order of the
      Company.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.2 Effectiveness.
      Each
      exercise of this Warrant shall be deemed to have been effected immediately
      prior
      to the close of business on the day on which this Warrant shall have been
      surrendered to the Company as provided in Section 1.1 above. At such time,
      the
      person or persons in whose name or names any certificates for Warrant Stock
      shall be issuable upon such exercise as provided in Section 1.3 below shall
      be
      deemed to have become the holder or holders of record of the Warrant Stock
      represented by such certificates.

     

    1.3. Delivery
      of Certificate(s).
      As soon
      as practicable after the exercise of this Warrant in full or in part, and in
      any
      event within three (3) business days thereafter, the Company, at its sole
      expense, will cause to be issued in the name of, and delivered to, the Holder,
      or, subject to the terms and conditions hereof, as such Holder (upon payment
      by
      such Holder of any applicable transfer taxes) may direct:

     

    (a) A
      certificate or certificates for the number of full shares of Warrant Stock
      to
      which such Holder shall be entitled upon such exercise, plus, in lieu of any
      fractional share to which such Holder would otherwise be entitled, cash in
      an
      amount determined pursuant to Section 1.4 hereof, and

     

    (b) In
      case
      such exercise is in part only, a new warrant or warrants (dated the date hereof)
      of like tenor, calling in the aggregate on the face or faces thereof for the
      number of shares of Warrant Stock (without giving effect to any adjustment
      therein) equal to the number of such shares called for on the face of this
      Warrant minus the number of such shares purchased by the Holder upon such
      exercise as provided in Section 1.1 above.

     

    1.4. Fractional
      Shares.
      The
      Company shall not be required upon the exercise of this Warrant to issue any
      fractional shares, but shall make an adjustment therefor in cash on the basis
      of
      the fair market value of the Warrant Stock reasonably determined by the Board
      of
      Directors of the Company (and, in the case of a conversion of this Warrant,
      in
      accordance with Section 1.5(c)).

     

    1.5 Right
      to Convert Warrant into Stock; Net Issuance.

    

    (a) Right
      to Convert.
      Subject
      to Section 7, in addition to and without limiting the rights of the Holder
      under
      the terms of this Warrant, the Holder shall have the right to convert this
      Warrant or any portion thereof (the “Conversion
      Right”)
      into
      shares of Warrant Stock as provided in this Section 1.5 at any time or from
      time
      to time during the term of this Warrant. Upon exercise of the Conversion Right
      with respect to a particular number of shares subject to this Warrant (the
      “Converted
      Warrant Shares”),
      the
      Company shall deliver to the Holder (without payment by the Holder of any
      Purchase Price or any cash or other consideration) that number of shares of
      fully paid and nonassessable Warrant Stock equal to the quotient obtained by
      dividing (X) the value of this Warrant (or the specified portion hereof) on
      the
      Conversion Date (as defined in subsection (b) hereof), which value shall be
      determined by subtracting (A) the aggregate Purchase Price of the Converted
      Warrant Shares immediately prior to the exercise of the Conversion Right from
      (B) the aggregate fair market value of the Converted Warrant Shares issuable
      upon exercise of this Warrant (or the specified portion hereof) on the
      Conversion Date (as herein defined) by (Y) the fair market value of one share
      of
      Warrant Stock on the Conversion Date (as herein defined).

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Expressed
      as a formula, such conversion shall be computed as follows:

    

    N 
=         
      B-A

                                  
       Y

     

    
      
        	               where:
                	N =  	the number of shares of Warrant Stock
                that may
                be issued to Holder

      

      
        	 	 	 

      

      
        	 	
                Y
                  =
                  

              	
                the
                  fair market value (FMV) of one share of Warrant
                  Stock

              

      

    

    

    
      
        	 	
                A
                  =
                  

              	
                the
                  aggregate Warrant Price (Converted Warrant Shares x Purchase
                  Price)

              

      

      
        	 	 	 

      

      
        	 	B =  	the aggregate FMV (i.e., FMV x Converted Warrant
                Shares)

      

    

    

     

    No
      fractional shares shall be issuable upon exercise of the Conversion Right,
      and,
      if the number of shares to be issued determined in accordance with the foregoing
      formula is other than a whole number, the Company shall pay to the Holder an
      amount in cash equal to the fair market value of the resulting fractional share
      of the Conversation Date (as herein defined).

    

    (b) Method
      of Exercise.
      The
      Conversion Right may be exercised by the Holder by the surrender of this Warrant
      at the principal office of the Company together with the Subscription Form
      in
      the form attached hereto, duly completed and executed and indicating the number
      of shares subject to this Warrant which are being surrendered (referred to
      in
      Section 1.5(a) hereof as the Converted Warrant Shares) in exercise of the
      Conversion Right. Such conversion shall be effective upon receipt by the Company
      of this Warrant, together with the aforesaid written statement, or on such
      later
      date as is specified therein (the “Conversion
      Date”),
      and,
      at the election of the Holder hereof, may be made contingent upon the occurrence
      of any of the events specified in Section 7. Certificates for the shares
      issuable upon exercise of the Conversion Right and, if applicable, a new warrant
      (date the date hereof) evidencing the balance of the shares remaining subject
      to
      this Warrant, shall be issued as of the Conversion Date and shall be delivered
      to the Holder within thirty (30) days following the Conversion
      Date.

    

    (c) Determination
      of Fair Market Value.
      For
      purposes of this Section 1.5, “fair
      market value”
of
      a
      share of Warrant Stock as of a particular date (the “Determination
      Date”)
      shall
      mean: 

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (1) If
      the
      Company’s Common Stock is traded on an exchange or is quoted on the Nasdaq
      National or Small Cap Market, then the closing price on the day before the
      Determination Date;

    

    (2) If
      the
      Company’s Common Stock is not traded on an exchange or on the Nasdaq National or
      Small Cap Market but is traded in the over-the-counter market, then the closing
      price on the day before the Determination Date;

    

    (3) In
      the
      event that the Determination Date is the date of a liquidation, dissolution
      or
      winding up, or any event deemed to be a liquidation, dissolution or winding
      up
      with respect to the Warrant Stock under the Company’s Certificate of
      Incorporation, then the fair market value per share of the Warrant Stock shall
      be determined by aggregating all amounts to be payable per share to holders
      of
      the Warrant Stock in the event of such liquidation, dissolution or winding
      up;
      or

    

    (4) In
      all
      other cases, the fair market value per share of the Warrant Stock shall be
      determined in good faith by the Company’s Board of Directors upon review of
      relevant factors.

    

    2. Certain
      Adjustments.
      The
      Purchase Price and the number of shares of Warrant Stock
      deliverable upon exercise of the Warrant shall be subject to adjustment from
      time to time as follows:

    

    2.1 Subdivision,
      Reclassification or Change in Common Stock.
      In the
      event of any subdivision, reclassification or change of the Common Stock into
      a
      greater number or different class or classes of stock, the number of shares
      of
      Warrant Stock deliverable upon exercise of this Warrant shall be determined
      in
      accordance with the terms of the Certificate of Incorporation, and the Purchase
      Price for such Warrant Stock shall be proportionately reduced. 

     

    2.2 Consolidation,
      Reclassification or Change in Common Stock.
      In the
      event of any consolidation, reclassification or change of the Common Stock
      into
      a lesser number or different class or classes of stock, the number of shares
      of
      Warrant Stock deliverable upon exercise of this Warrant shall be determined
      in
      accordance with the terms of the Certificate of Incorporation, and the Purchase
      Price for such Warrant Stock shall be proportionately increased.

     

    2.3 Reorganizations.
      If
      there shall occur any capital reorganization of the Common Stock (other than
      a
      subdivision, combination, reclassification or change in par value), then, as
      part of any such reorganization, lawful provision shall be made so that the
      Holder shall have the right thereafter to receive upon the exercise of this
      Warrant the kind and amount of shares of stock or other securities or property
      which such Holder would have been entitled to receive if, immediately prior
      to
      any such reorganization, such Holder had held the number of shares of Common
      Stock which were then purchasable upon the exercise of this Warrant. In any
      such
      case, appropriate adjustment (as reasonably determined by the Board of Directors
      of the Company) shall be made in the application of the provisions set forth
      herein with respect to the rights and interests thereafter of the Holder such
      that the provisions set forth in this Section 2 (including provisions with
      respect to adjustment of the Purchase Price) shall thereafter be applicable,
      as
      nearly as is reasonably practicable, in relation to any shares of stock or
      other
      securities or property thereafter deliverable upon the exercise of this
      Warrant.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    2.4 Merger,
      Consolidation or Sale of Assets.
      Subject
      to the provisions of Section 7, if there shall be a merger or consolidation
      of
      the Company with or into another corporation (other than a merger or
      reorganization involving only a change in the state of incorporation of the
      Company or the acquisition by the Company of other businesses where the Company
      survives as a going concern), or the sale of all or substantially all of the
      Company’s capital stock or assets to any other person, then as a part of such
      transaction, provision shall be made so that the Holder shall thereafter be
      entitled to receive the number of shares of stock or other securities or
      property of the Company, or of the successor corporation resulting from the
      merger, consolidation or sale, to which the Holder would have been entitled
      if
      the Holder had exercised its rights pursuant to this Warrant immediately prior
      thereto. In any such case, appropriate adjustment shall be made in the
      application of the provisions of this Section 2 to the end that the provisions
      of this Section 2 shall be applicable after that event in as nearly equivalent
      a
      manner as may be practicable.

     

    2.5 Certificate
      of Adjustment.
      When
      any adjustment is required to be made in the Purchase Price, the Company shall
      promptly mail to the Holder a certificate setting forth the Purchase Price
      after
      such adjustment and setting forth a brief statement of the facts requiring
      such
      adjustment. Delivery of such certificate shall be deemed to be a final and
      binding determination with respect to such adjustment unless challenged by
      the
      Holder within ten (10) days of receipt thereof. Such certificate shall also
      set
      forth the kind and amount of stock or other securities or property into which
      this Warrant shall be exercisable following the occurrence of any of the events
      specified in this Section 2.

     

    3. Compliance
      with Securities Act.

     

    3.1 Unregistered
      Securities.
      The
      Holder acknowledges that this Warrant and the Warrant Stock have not been
      registered under the Securities Act, and agrees not to sell, pledge, distribute,
      offer for sale, transfer or otherwise dispose of this Warrant or any Warrant
      Stock in the absence of (i) an effective registration statement under the
      Securities Act covering this Warrant or such Warrant Stock and registration
      or
      qualification of this Warrant or such Warrant Stock under any applicable
“blue-sky” or state securities law then in effect, or (ii) an opinion of
      counsel, satisfactory to the Company, that such registration and qualification
      are not required. The Company may delay issuance of the Warrant Stock until
      completion of any action or obtaining of any consent, which the Company deems
      necessary under any applicable law (including without limitation state
      securities or “blue-sky”
      laws).

     

    3.2 Legend.
      Certificates delivered to the Holder pursuant to Section 1.3 shall bear the
      following legend or a legend in substantially similar form:

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
      THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
      (B)
      AN OPINION OF COUNSEL, IN A REASONABLY ACCEPTABLE FORM, THAT REGISTRATION IS
      NOT
      REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS, OR (II) UNLESS
      SOLD
      PURSUANT TO RULE 144 UNDER SAID ACT.”

     

    4. Reservation
      of Stock.
      The
      Company agrees that, prior to the expiration of this Warrant, the Company will
      at all times have authorized and in reserve, and will keep available, solely
      for
      issuance or delivery upon the exercise of this Warrant, the shares of Common
      Stock and other securities and properties as from time to time shall be
      receivable upon the exercise of this Warrant, free and clear of all restrictions
      on sale or transfer and free and clear of all preemptive rights and rights
      of
      first refusal.

     

    5. Replacement
      of Warrants.
      Upon
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and (in the case of loss, theft or
      destruction) upon delivery of an indemnity agreement (with surety if reasonably
      required) in an amount reasonably satisfactory to the Company, or (in the case
      of mutilation) upon surrender and cancellation of this Warrant, the Company
      will
      issue, in lieu thereof, a new Warrant of like tenor.

     

    6. Registration
      Rights.

    

    6.1.
      “Piggy
      Back” Registration.
      If at
      any time the Company shall determine to register under the Securities Act,
      any
      of its Common Stock, other than on Form S-8 or its then equivalent, it shall
      send to the Holder written notice of such determination and, if within thirty
      (30) days after receipt of such notice, the Holder shall so request in writing,
      the Company shall use its best efforts to include in such registration statement
      all or any part of the Warrant Stock except that if, in connection with any
      offering involving an underwriting of Common Stock to be issued by the Company,
      the managing underwriter shall impose a limitation on the number of shares
      of
      such Common Stock which may be included in any such registration statement
      because, in its judgment, such limitation is necessary to effect an orderly
      public distribution, and such limitation is imposed pro rata
      among
      the holders of such Common Stock having an incidental (“piggy
      back”)
      right
      to include such Common Stock in the registration statement according to the
      amount of such Common Stock which each holder had requested to be included
      pursuant to such right, then the Company shall be obligated to include in such
      registration statement only such limited portion of the Warrant Stock with
      respect to which the Holder has requested inclusion hereunder.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    6.2.
      Effectiveness.
      The
      Company will use its best efforts to maintain the effectiveness for up
      to twelve (12) months of any registration statement pursuant to which
      any of the Warrant Stock is being offered, and from time to time will amend
      or
      supplement such registration statement and the prospectus contained therein
      as
      and to the extent necessary to comply with the Securities Act and any applicable
      state securities statute or regulation. The Company will also provide the Holder
      with as many copies of the prospectus contained in any such registration
      statement as it may reasonably request.

    

    6.3.
      Indemnification
      of Holder.
      In the
      event that the Company registers any of the Warrant Stock under the Securities
      Act, the Company will indemnify and hold harmless the Holder from and against
      any and all losses, claims, damages, expenses or liabilities, to which it
      becomes subject under the Securities Act or under any other statute or at common
      law or otherwise, and, except as hereinafter provided, will reimburse the Holder
      for any legal or other expenses reasonably incurred by it in connection with
      investigating or defending any actions whether or not resulting in any
      liability, insofar as such losses, claims, damages, expenses, liabilities or
      actions arise out of or are based upon any untrue statement or alleged untrue
      statement of a material fact contained in the registration statement, in any
      preliminary or amended preliminary prospectus or in the prospectus (or the
      registration statement or prospectus as from time to time amended or
      supplemented by the Company) 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 in order to make the statements therein not misleading or any
      violation by the Company of any rule or regulation promulgated under the
      Securities Act applicable to the Company and relating to action or inaction
      required of the Company in connection with such registration, unless such untrue
      statement or omission was made in such registration statement, preliminary
      or
      amended, preliminary prospectus or prospectus in reliance upon and in conformity
      with information furnished in writing to the Company in connection therewith
      by
      the Holder expressly for use therein. Promptly after receipt by the Holder
      of
      notice of the commencement of any action in respect of which indemnity may
      be
      sought against the Company, the Holder will notify the Company in writing of
      the
      commencement thereof, and, subject to the provisions hereinafter stated, the
      Company shall assume the defense of such action (including the employment of
      counsel, who shall be counsel reasonably satisfactory to the Holder), and the
      payment of expenses insofar as such action shall relate to any alleged liability
      in respect of which indemnity may be sought against the Company. The Holder
      shall have the right to employ separate counsel in any such action and to
      participate in the defense thereof but the fees and expenses of such counsel
      shall not be at the expense of the Company unless the employment of such counsel
      has been specifically authorized by the Company. The Company shall not be liable
      to indemnify any person for any settlement of any such action effected without
      the Company’s consent.

    

    6.4.
      Indemnification
      of Company.
      In the
      event that the Company registers any of the Warrant Stock under the Securities
      Act, the Holder will indemnify and hold harmless the Company, each of its
      directors, each of its officers who have signed the registration statement,
      each
      underwriter of the shares so registered (including any broker or dealer through
      whom such of the shares may be sold) and each person, if any, who controls
      the
      Company within the meaning of Section 15 of the Securities Act from and against
      any and all losses, claims, damages, expenses or liabilities, joint or several,
      to which they or any of them may become subject under the Securities Act or
      under any other statute or at common law or otherwise, and, except as
      hereinafter provided, will reimburse the Company and each such director,
      officer, underwriter or controlling person for any legal or other expenses
      reasonably incurred by them or any of them in connection with investigating
      or
      defending any actions whether or not resulting in any liability, insofar as
      such
      losses, claims, damages, expenses, liabilities or actions arise out of or are
      based upon any untrue statement or alleged untrue statement of a material fact
      contained in the registration statement, in any preliminary or amended
      preliminary prospectus or in the prospectus (or in the registration statement
      or
      prospectus as from time to time amended or supplemented) 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 in order to make the statements
      therein not misleading, but only insofar as any such statement or omission
      was
      made in reliance upon and in conformity with information furnished in writing
      to
      the Company in connection therewith by the Holder expressly for use therein.
      Promptly after receipt of notice of the commencement of any action in respect
      of
      which indemnity may be sought against the Holder, the Company will notify the
      Holder in writing of the commencement thereof, and the Holder shall, subject
      to
      the provisions hereinafter stated, assume the defense of such action (including
      the employment of counsel, who shall be counsel reasonably satisfactory to
      the
      Company) and the payment of expenses insofar as such action shall relate to
      the
      alleged liability in respect of which indemnity may be sought against the
      Holder. The Company and each such director, officer, underwriter or controlling
      person shall have the right to employ separate counsel in any such action and
      to
      participate in the defense thereof but the fees and expenses of such counsel
      shall not be at the expense of the Holder unless employment of such counsel
      has
      been specifically authorized by the Holder. The Holder shall not be liable
      to
      indemnify any person for any settlement of any such action effected without
      the
      Holder’s consent.

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    7. Termination
      Upon Certain Events.
       If
      there
      shall be a merger or consolidation of the Company with or into another
      corporation (other than a merger or reorganization involving only a change
      in
      the state of incorporation of the Company or the acquisition by the Company
      of
      other businesses where the Company survives as a going concern), or the sale
      of
      all or substantially all of the Company’s capital stock or assets to any other
      person, or the liquidation or dissolution of the Company, then as a part of
      such
      transaction, at the Company’s option, either:

     

    (a) provision
      shall be made so that the Holder shall thereafter be entitled to receive the
      number of shares of stock or other securities or property of the Company, or
      of
      the successor corporation resulting from the merger, consolidation or sale,
      to
      which the Holder would have been entitled if the Holder had exercised its rights
      pursuant to this Warrant immediately prior thereto (and, in such case,
      appropriate adjustment shall be made in the application of the provisions of
      this Section 7(a) to the end that the provisions of Section 2 shall be
      applicable after that event in as nearly equivalent a manner as may be
      practicable); or

     

    (b) this
      Warrant shall terminate on the effective date of such merger, consolidation
      or
      sale (the “Termination
      Date”)
      and
      become null and void, provided that if this Warrant shall not have otherwise
      terminated or expired, (i) the Company shall have given the Holder written
      notice of such Termination Date at least twenty (20) business days prior to
      the
      occurrence thereof and (ii) the Holder shall have the right until 5:00 p.m.,
      New
      York City local time, on the day immediately prior to the Termination Date
      to
      exercise its rights hereunder to the extent not previously
      exercised.

     

    8. Transferability.
      Without
      the prior written consent of the Company, this Warrant shall not be assigned,
      pledged or hypothecated in any way (whether by operation of law or otherwise)
      and shall not be subject to execution, attachment or similar process. Any
      attempted transfer, assignment, pledge, hypothecation or other disposition
      of
      this Warrant or of any rights granted hereunder contrary to the provisions
      of
      this Section 8, or the levy of any attachment or similar process upon this
      Warrant or such rights, shall be null and void.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    9. No
      Rights as Stockholder.
      Until
      the exercise of this Warrant, the Holder shall not have or exercise any rights
      by virtue hereof as a stockholder of the Company.

     

    10. Notices.
      All
      notices, requests and other communications hereunder shall be in writing, shall
      be either (i) delivered by hand, (ii) made by telex, telecopy or facsimile
      transmission, (iii) sent by overnight courier, or (iv) sent by registered mail,
      postage prepaid, return receipt requested. In the case of notices from the
      Company to the Holder, they shall be sent to the address furnished to the
      Company in writing by the last Holder who shall have furnished an address to
      the
      Company in writing. All notices from the Holder to the Company shall be
      delivered to the Company at its offices at 2121 Avenue of the Stars, Suite
      1650,
      Los Angeles, California 90067, Attention: Chief Executive Officer, or such
      other
      address as the Company shall so notify the Holder. All notices, requests and
      other communications hereunder shall be deemed to have been given (i) by hand,
      at the time of the delivery thereof to the receiving party at the address of
      such party described above, (ii) if made by telex, telecopy or facsimile
      transmission, at the time that receipt thereof has been acknowledged by
      electronic confirmation or otherwise, (iii) if sent by overnight courier, on
      the
      next business day following the day such notices is delivered to the courier
      service, or (iv) if sent by registered mail, on the fifth business day following
      the day such mailing is made.

    

    11. Waivers
      and Modifications.
      Any
      term or provision of this Warrant may be waived only by written document
      executed by the party entitled to the benefits of such terms or
      provisions.

    The
      terms
      and provisions of this Warrant may be modified or amended only by written
      agreement executed by the parties hereto.

     

    12. Headings.
      The
      headings in this Warrant are for convenience of reference only and shall in
      no
      way modify or affect the meaning or construction of any of the terms or
      provisions of this Warrant.

     

    13. Governing
      Law.
      This
      Warrant will be governed by and construed in accordance with and governed by
      the
      laws of New York without giving effect to the conflict of law principles
      thereof.

     

    [Signature
      Page Follows]

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, by
      one
      of its officers thereunto duly authorized.

     

    
      
        	 	 	 
	 	U.S.
                WIRELESS
                DATA, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
                

                Name:

              
	 	Title:

      

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

    

    PURCHASE
      FORM

    

    To: U.S.
      WIRELESS DATA, INC.

    

    The
      undersigned pursuant to the provisions set forth in the attached Warrant hereby
      irrevocably elects to (check one):

    

    _____  (A) purchase
      ___________________ shares of Common Stock, par value $0.01 per share, of U.S.
      Wireless Data, Inc. (the “Common
      Stock”),
      covered by such Warrant and herewith makes payment of $_____________,
      representing the full purchase price for such shares at the price per share
      provided for in such Warrant; or

    

    _____  (B) convert
      ______________________ Warrant Shares into that number of shares of fully paid
      and nonassessable shares of Common Stock, determined pursuant to the provisions
      of Section 1.5 of the Warrant.

    

    Common
      Stock for which the Warrant may be exercised or converted shall be known herein
      as “Warrant
      Stock.”

    

    The
      undersigned is aware that Warrant Stock has not been and will not be registered
      under the Securities Act of 1933, as amended (the “Securities
      Act”),
      or
      any state securities laws. The undersigned understands that reliance by the
      Company on exemptions under the Securities Act is predicated in part upon the
      truth and accuracy of the statements of the undersigned in this Purchase
      Form.

    

    The
      undersigned represents and warrants that (i) he has been furnished with all
      information which he deems necessary to evaluate the merits and risks of the
      purchase of Warrant Stock, (ii) he has had the opportunity to ask questions
      concerning Warrant Stock and the Company and all questions posed have been
      answered to his satisfaction, (iii) he has been given the opportunity to obtain
      any additional information he deems necessary to verify the accuracy of any
      information obtained concerning Warrant Stock and the Company and (iv) he has
      such knowledge and experience in financial and business matters that he is
      able
      to evaluate the merits and risks of purchasing Warrant Stock and to make an
      informed investment decision relating thereto.

    

    The
      undersigned hereby represents and warrant that he is purchasing Warrant Stock
      for his own account for investment and not with a view to the sale or
      distribution of all or any part of Warrant Stock.

    

    
      The
        undersigned understands that because Warrant Stock has not been registered
        under
        the Securities Act, he must continue to bear the economic risk of the investment
        for an indefinite period of time and Warrant Stock cannot be sold unless
        it is
        subsequently registered under applicable federal and state securities laws
        or an
        exemption from such registration is available.

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      undersigned agrees that he will in no event sell or distribute or otherwise
      dispose of all or any part of Warrant Stock unless (i) there is an effective
      registration statement under the Securities Act and applicable state securities
      laws covering any such transaction involving Warrant Stock, or (ii) the Company
      receives an opinion legal counsel acceptable to the Company stating that such
      transaction is exempt from registration. The undersigned consents to the placing
      of a legend on his certificate for Warrant Stock stating: (i) that the resale
      or
      transfer of the Warrant Stock has not been registered and setting forth the
      restriction on transfer contemplated hereby; and (ii) to the placing of a
      stop-transfer order on the books of the Company and with any transfer agents
      against Warrant Stock until Warrant Stock may be legally resold or distributed
      without restriction.

    

    The
      undersigned has considered the federal and state income tax implications of
      the
      exercise of the Warrant and the purchase and subsequent sale of the Warrant
      Stock.

    

      
        	 	 	 
	 	 	Signature
	 	 	 
	 	 	Print Name
	 	 	 
	 	 	or
	 	 	 
	 	 	Entity
                Name:____________________________________
	 	 	 
	 	 	By:___________________________________________
	 	 	Signature
	 	 	 
	 	 	 
	 	 	Print Name
	 	 	 
	 	 	Title

      

    

    
      
        
        

      

      
        -2-Unassociated Document

    U.S.
      WIRELESS DATA, INC.

    

    

    January
      18, 2006

     

    

     

    David
      Chazen

    317
      Park
      Avenue

    Aspen,
      CO
      81611

    

    Dear
      David:

    

    It
      is our
      pleasure to extend to you an offer to become a member of the Board of Directors
      and the President of U.S. Wireless Data, Inc. (the “Company”). If you accept,
      this letter shall serve as our agreement (this “Agreement”) as to the terms and
      conditions of your employment, which would begin on the date
      hereof.

    

    1.  Title.
      You
      will serve on the Board of Directors of the Company. You will also be employed
      by the Company as President of the Company.

    

    2.  Employment
      At Will.
      Your
      employment hereunder will be on an “at-will” basis and may be terminated by the
      Company or by you for any reason or for no reason.

    

    3.  Compensation.
      During
      your employment by the Company, commencing on February 1, 2006, you shall
      receive a base salary at the rate of $10,000 per month. 

    

    4.  Withholding.
      The
      Company shall deduct from amounts to which you are entitled pursuant to this
      Agreement all applicable federal, state and local taxes and other charges which
      it may now or hereafter be required to deduct.

     

    5.  Entire
      Agreement; Modification.
      This
      Agreement sets forth the entire understanding of the parties with respect to
      the
      subject matter hereof, supercedes all existing agreements between them
      concerning such subject matter, and may be modified only by a written instrument
      duly executed by each party.

    

    6.  Severability.
      If any
      provision of this Agreement shall be held or deemed to be invalid, inoperative
      or unenforceable as written, it shall be construed to the greatest extent
      possible, in a manner which shall render it valid, operative and enforceable,
      and any limitation on the scope or duration of any such provision necessary
      to
      make it valid, operative and enforceable shall be deemed to be a part
      thereof.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    7.  Assignment;
      Binding Effect.
      Your
      rights and obligations under this Agreement shall not be transferable by
      assignment or otherwise, such rights shall not be subject to commutation,
      encumbrance or the claims of your creditors, and any attempt to do any of the
      foregoing shall be void. The provisions of this Agreement shall be binding
      upon
      and inure to your benefit and the benefit of your heirs and personal
      representatives, and shall be binding upon and inure to the benefit of the
      Company and its successors and assigns.

    

    8.  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, without giving effect to conflicts of law. 

    

    

    [Remainder
      of the page intentionally left blank.]

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    If
      the
      foregoing accurately reflects our agreement, please sign two copies of this
      letter in the space provided below and return it to the
      undersigned.

     

    
      	 	 	 
	 	Very
              truly
              yours,
	 	 
	 	U.S. WIRELESS DATA, INC.
	 
 	 
 	 
 
	 	By:  	 /s/
              Robert Ellin
	 	
              
Robert
              Ellin, Chief Executive Officer 
	 	 

    

     

    
      
        	
                ACCEPTED
                  AND AGREED TO:

              	 	 
	
                 /s/
                  David Chazen

              	 	 
	
                David
                  Chazen

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