SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of earliest event reported: July 28, 1998
USA TALKS.COM, INC.
(f/k/a SBB, Inc.)
(Exact name of registrant as specified in charter)
NEVADA 33-2474-LA 93-0915593
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
4350 Executive Drive, Suite 220
San Diego, California 92121
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (619) 546-0550
Item 1. Change in Control of Registrant
Effective July 28, 1998, pursuant to the terms of an Agreement and
Plan of Reorganization dated July 17, 1998 (the "Plan"), Alfine Corporation
("Alfine") acquired 12,350,000 shares (the "Shares") of common stock, par
value $0.001 per share (the "Common Stock") of SBB, Inc., now named USA
Talks.com, Inc. ("Registrant"). The Shares constitute 95% of the issued and
outstanding shares of Common Stock. The Shares constitute an original
issuance of shares by the Registrant to Alfine. The consideration for the
Shares consisted of all of the tangible and intangible assets of Alfine. In
addition, the Registrant assumed all of the liabilities of Alfine.
As part of the reorganization, the officers and directors of Alfine
became the officers and directors of the Registrant. As a result, the
following persons became officers and directors of the Registrant:
Allen J. Portnoy Chief Executive Officer,
Secretary and Director
William H. Ervine, Jr. President and Director
Jack C. Alexander Chief Financial Officer
Stephen A. Storey Director
Max S. Kissell Director
Allen J. Portnoy and his affiliates beneficially own 2,642,400
shares, and options to acquire 1,000,000 shares, or 21.9% of the total
outstanding stock of Alfine on a fully diluted basis. William H. Ervine, Jr.
and his affiliates beneficially own 666,200 shares, and options to acquire
950,000 shares, or 10.2% of total outstanding stock on a fully diluted
basis. Jack C. Alexander and his affiliates beneficially own 103,000 shares,
and options and warrants to acquire 488,000 shares, or 3.7% of the total
stock on a fully diluted basis. Stephen A. Storey and his affiliates
beneficially own 27,644 shares, and options to acquire 369,428 shares, or
2.5% of total outstanding stock on a fully diluted basis. Max Kissell and his
affiliates beneficially own 1,400 shares, and options to acquire 250,000
shares, or 1.6% of total outstanding stock on a fully diluted basis. By
virtue of their ownership of shares of Alfine, such persons may be considered
to be indirect beneficial owners of stock of the Registrant and "control
persons" or members of a "control group" of the Registrant.
Alfine intends to liquidate and to distribute the Shares to its
stockholders after the Shares become registered under the Securities Act of
1933, as amended. Such a liquidation and distribution may cause a change in
control of the Registrant. As of the date of this report, no date has been
set for registration of the Shares.
Item 2. Acquisition or Disposition of Assets.
As described above, effective July 28, 1998, pursuant to the Plan,
the Registrant acquired all of the tangible and intangible assets of Alfine
and assumed all of the liabilities of Alfine, in consideration for the
Shares. The primary asset acquired was a license for the use of certain
proprietary technology for audio compression, phonetic speech and voice
verification/identification. Alfine's known liabilities consisted primarily of
a short-term real estate lease for office space.
The above descriptions of the Plan do not purport to be complete and
are qualified in their entirety by the full text of the Plan which is attached
as Exhibit 2 hereto. A press release describing the Plan and the reorganization
is attached as Exhibit 99 hereto.
Item 5. Other Events
Effective August 3, 1998, the Registrant changed its name from SBB,
Inc. to USA Talks.com, Inc.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The required financial statements will be filed by amendment not
later than 60 days after the date that this report must be filed.
The Exhibit Index immediately preceding the exhibits is incorporated
herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
USA TALKS.COM, INC.
Date: August 3, 1998 By /s/ William H. Ervine, Jr.
William H. Ervine, Jr.
President
INDEX TO EXHIBITS
Exhibit
No. Exhibit
2 Agreement and Plan of Reorganization dated July 17, 1998 between
Alfine Corporation and SBB, Inc.
99 Press Release dated July 29, 1998
Exhibit 2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
ALFINE CORPORATION
AND
SBB, INC.
DATED: JULY 13, 1998
TABLE OF CONTENTS
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - DEFINITIONS/ACQUISITION/CLOSING. . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Transfer of Alfine Assets. . . . . . . . . . . . . . . . 4
1.3 Acquisition of the Alfine Assets and Assumption of Alfine
Liabilities.............................................. 4
1.4 The Closing. . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF ALFINE. . 5
2.1 Organization and Related Matters.. . . . . . . . . . . . 5
2.2 Alfine Assets. . . . . . . . . . . . . . . . . . . . . . 5
2.3 Alfine's Organization. . . . . . . . . . . . . . . . . . 5
2.4 No Material Liabilities or Contingencies.. . . . . . . . 5
2.5 Tax and Other Returns and Reports. . . . . . . . . . . . 5
2.6 Material Contracts.. . . . . . . . . . . . . . . . . . . 5
2.7 Tangible Property. . . . . . . . . . . . . . . . . . . . 6
2.8 Intangible Property. . . . . . . . . . . . . . . . . . . 6
2.9 Authorization; No Conflicts. . . . . . . . . . . . . . . 6
2.10 Legal Proceedings. . . . . . . . . . . . . . . . . . . . 6
2.11 Minute Books.. . . . . . . . . . . . . . . . . . . . . . 6
2.12 Compliance With Law. . . . . . . . . . . . . . . . . . . 7
2.13 Employee Benefits. . . . . . . . . . . . . . . . . . . . 7
2.14 No Brokers, Finders or Financial Advisors. . . . . . . . 7
2.15 Environmental Compliance.. . . . . . . . . . . . . . . . 7
2.16 Accuracy of Information. . . . . . . . . . . . . . . . . 7
2.17 Investment Representation. . . . . . . . . . . . . . . . 7
2.18 Delay in Distribution of Stock.. . . . . . . . . . . . . 8
ARTICLE 3 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF SBB . . . 8
3.1 Organization and Related Matters.. . . . . . . . . . . . 8
3.2 Authorization. . . . . . . . . . . . . . . . . . . . . . 8
3.3 No Conflicts.. . . . . . . . . . . . . . . . . . . . . . 8
3.4 No Brokers, Finders or Financial Advisors. . . . . . . . 9
3.5 Financial Statements; Changes; Contingencies.. . . . . . 9
(a) Audited Financial Statements. . . . . . . . . . . . 9
(b) No Material Adverse Changes.. . . . . . . . . . . . 9
(c) No Other Liabilities or Contingencies.. . . . . . . 9
3.6 Tax and Other Returns and Reports. . . . . . . . . . . . 10
3.7 Material Contracts.. . . . . . . . . . . . . . . . . . . 10
3.8 Legal Proceedings. . . . . . . . . . . . . . . . . . . . 10
3.9 Minute Books.. . . . . . . . . . . . . . . . . . . . . . 10
3.10 Accounting Records; Internal Controls. . . . . . . . . . 10
(a) Accounting Records. . . . . . . . . . . . . . . . . 10
(b) Data Processing; Access.. . . . . . . . . . . . . . 10
3.11 Employee Benefits. . . . . . . . . . . . . . . . . . . . 11
3.12 Environmental Compliance.. . . . . . . . . . . . . . . . 11
3.13 SBB's Organization and Business. . . . . . . . . . . . . 11
3.14 Registration of Common Stock.. . . . . . . . . . . . . . 12
3.15 Information Statement. . . . . . . . . . . . . . . . . . 12
3.16 Accuracy of Information. . . . . . . . . . . . . . . . . 12
ARTICLE 4 - COVENANTS WITH RESPECT TO CONDUCT OF ALFINE PRIOR TO CLOSING 12
4.1 Access.. . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2 Material Adverse Changes; Reports; Financial Statements. 13
4.3 Conduct of the Alfine Business.. . . . . . . . . . . . . 13
4.4 Notification of Certain Matters. . . . . . . . . . . . . 13
4.5 Permits and Approvals. . . . . . . . . . . . . . . . . . 13
ARTICLE 5 - COVENANTS WITH RESPECT TO CONDUCT OF THE SBB PRIOR TO CLOSING 13
5.1 Access.. . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Material Adverse Changes; Reports; Financial Statements. 13
5.3 Issuances of Securities. . . . . . . . . . . . . . . . . 14
5.4 Material Contracts.. . . . . . . . . . . . . . . . . . . 14
5.5 Conduct of Business. . . . . . . . . . . . . . . . . . . 14
ARTICLE 6 - CONDITIONS OF PURCHASE . . . . . . . . . . . . . . . . 14
6.1 General Conditions.. . . . . . . . . . . . . . . . . . . 14
(a) No Orders; Legal Proceedings. . . . . . . . . . . . 14
(b) Approvals.. . . . . . . . . . . . . . . . . . . . . 14
6.2 Conditions to Obligations of SBB.. . . . . . . . . . . . 14
6.3 Conditions to Obligations of Alfine. . . . . . . . . . . 15
(a) Representations, Warranties and Covenants of SBB. . 15
(b) No Material Adverse Effect. . . . . . . . . . . . . 15
(c) Consents. . . . . . . . . . . . . . . . . . . . . . 15
(d) Due Diligence.. . . . . . . . . . . . . . . . . . . 15
ARTICLE 7 - TERMINATION OF OBLIGATIONS; SURVIVAL . . . . . . . . . 15
7.1 Termination of Agreement.. . . . . . . . . . . . . . . . 15
(a) Mutual Consent. . . . . . . . . . . . . . . . . . . 15
(b) Conditions of SBB's Performance Not Met.. . . . . . 15
(c) Conditions of Alfine's Performance Not Met. . . . . 15
(d) Material Breach.. . . . . . . . . . . . . . . . . . 16
7.2 Effect of Termination. . . . . . . . . . . . . . . . . . 16
7.3 Survival of Representations and Warranties.. . . . . . . 16
7.4 Effect of Closing Over Known Unsatisfied Conditions. . . 16
ARTICLE 8 - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . 16
8.1 Obligations of SBB.. . . . . . . . . . . . . . . . . . . 16
8.2 Obligations of Alfine. . . . . . . . . . . . . . . . . . 17
8.3 Procedure. . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Notice. . . . . . . . . . . . . . . . . . . . . . . 17
(b) Defense.. . . . . . . . . . . . . . . . . . . . . . 17
8.4 Limitations on Indemnification.. . . . . . . . . . . . . 17
ARTICLE 9 - GENERAL. . . . . . . . . . . . . . . . . . . . . . . . 17
9.1 Amendments; Waivers. . . . . . . . . . . . . . . . . . . 17
9.2 Schedules; Exhibits; Integration.. . . . . . . . . . . . 18
9.3 Best Efforts; Further Assurances.. . . . . . . . . . . . 18
9.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . 18
9.5 No Assignment. . . . . . . . . . . . . . . . . . . . . . 18
9.6 Headings.. . . . . . . . . . . . . . . . . . . . . . . . 18
9.7 Counterparts.. . . . . . . . . . . . . . . . . . . . . . 18
9.8 Publicity and Reports. . . . . . . . . . . . . . . . . . 18
9.9 Confidentiality. . . . . . . . . . . . . . . . . . . . . 18
9.10 Parties in Interest. . . . . . . . . . . . . . . . . . . 19
9.11 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 19
9.12 Expenses.. . . . . . . . . . . . . . . . . . . . . . . . 19
9.13 Remedies; Waiver.. . . . . . . . . . . . . . . . . . . . 19
9.14 Attorney Fees. . . . . . . . . . . . . . . . . . . . . . 19
9.15 Knowledge Convention.. . . . . . . . . . . . . . . . . . 19
9.16 Interpretation.. . . . . . . . . . . . . . . . . . . . . 20
9.17 Severability.. . . . . . . . . . . . . . . . . . . . . . 20
9.18 Arbitration; Waiver of Jury Trial. . . . . . . . . . . . 20
SCHEDULE A - Disclosure Schedule of Alfine
SCHEDULE B - Disclosure Schedule of SBB
SCHEDULE C - Compensation Agreement for Allen Gelbard
AGREEMENT AND PLAN OF REORGANIZATION
ALFINE CORPORATION
AND
SBB, INC.
This Agreement and Plan of Reorganization ("Agreement"), dated as of
July __, 1998, is entered into by and between SBB, INC., a Nevada corporation
("SBB") with its principal office at 4505 Wasatch Boulevard, Suite 300, Salt
Lake City, Utah 84124, and ALFINE CORPORATION, a Delaware corporation
("Alfine") with its principal office at 4350 Executive Drive, Suite 220, San
Diego, California 92121, with respect to the following facts:
RECITALS
a. Organization. Alfine and SBB are corporations duly organized
under the Laws of the states of Delaware and Nevada respectively.
b. Plan of Reorganization. It is the intention of the parties
hereto that all of the assets and liabilities of Alfine shall be acquired and
assumed by SBB in exchange solely for SBB's voting stock, and that immediately
following the consummation ofthe exchange, Alfine will own 95% of the issued
and outstanding capital stock of SBB. For federal income tax purposes, it is
intended that this exchange shall qualify as a tax-free reorganization within
the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended.
c. The parties hereto wish to enter into this Agreement, pursuant
to the provisions of the Nevada Statutes.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE 1 - DEFINITIONS/ACQUISITION/CLOSING
1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided unless the context otherwise requires,
(a) The terms defined in this Article 1 have the meaning assigned
to them in this Article 1 and include the plural as well as the singular;
(b) All accounting terms not otherwise defined herein have the
meanings assigned under GAAP;
(c) All references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of the body of this Agreement;
(d) pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms; and
(e) The words, "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
As used in this Agreement and the Exhibits and Schedules delivered
pursuant to this Agreement, the following definitions shall apply.
"Act" means the Securities Act of 1933, as amended.
"Action" means any action, compliant, petition, investigation, suit
or other proceeding, whether civil or criminal, in law or in equity, or before
any arbitrator or Governmental Entity.
"Agreement" means this Agreement by and among SBB and Alfine as
amended or supplemented together with all Exhibits and Schedules attached or
incorporated by reference.
"Alfine Assets" means all of the tangible and intangible assets of
Alfine of every kind and description existing as of the Closing.
"Alfine Liabilities" means all of the liabilities of Alfine, known
or unknown, contingent or otherwise, of every kind and description existing as
of the Closing.
"Approval" means any approval, authorization, consent, qualification
or registration, or any waiver of any of the foregoing, required to be obtained
from, or any notice, statement or other communication required to be filed
with or delivered to, any Governmental Entity or any other Person.
"Associate" of a Person means
(a) a corporation or organization of which such Person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10%
of more of any class of equity securities;
(b) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee
or in a similar capacity; and
(c) any relative or spouse of such Person or any relative of such
spouse.
"Auditors" means Gordon, Hughes & Banks, LLP, independent public
accountants to SBB.
"Alfine Business" means the business of Alfine as currently
conducted, and shall be deemed to include, but not be limited to, any of the
following incidents of such business: income, cash flow, operations,
condition (financial or other), assets, properties, anticipated revenues,
prospects, liabilities and personnel.
"Closing" means the consummation of the plan of reorganization
contemplated by this Agreement.
"Closing Date" means the date of the Closing.
"Commission" or "SEC" means the Securities and Exchange Commission
"Common Stock" means the common stock of SBB, $.001 par value.
"Contract" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"Disclosure Schedule" means each of the Disclosure Schedules dated
the date hereof and delivered by Alfine and SBB. The Disclosure Schedule of
Alfine is Schedule A hereto, and the Disclosure Schedule of SBB is Schedule
B hereto.
"Employee Plan" means any employee benefit plan, collective
bargaining, employment or severance agreement or other similar arrangement
to which either Alfine or SBB is a party or by which it is bound, legally or
otherwise.
"Encumbrance" means any claim, charge, easement, encumbrance, lease,
covenant, security interest, lien, option, pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise, except
for any restrictions on transfer generally arising under any applicable
federal or state securities law.
"Exchange Act" means the Securities Exchange Act of 1934.
"GAAP" means generally accepted accounting principles in the United
States, as in effect from time to time.
"Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state or local,
domestic or foreign.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the related regulations and published
interpretations.
"Hazardous Substance" means (but shall not be limited to) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Laws as "hazardous substances," "hazardous materials,"
"hazardous wastes" or "toxic substances," or any other formulation intended
to define, list or classify substances by reason of deleterious properties
such as ignitibility, corrosivity, reactivity, radioactivity,
carcinogenicity, reproduction toxicity or "EP toxicity," and petroleum and
drilling fluids, produced waters and other wastes associated with the
exploration, development, or production of crude oil, natural gas or geothermal
energy.
"Indemnifiable Claim" means any Loss for or against which any party
is entitled to indemnification under this Agreement; "Indemnified Party" means
the party entitled to indemnity hereunder; and "Indemnifying Party" means
the party obligated to provide indemnification hereunder.
"Law" means any constitutional provision, statute or other law,
rule, regulation, or interpretation of any Governmental Entity and any Order.
"Loss" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including, but not limited to, interest or other carrying costs, penalties,
legal, accounting and other professional fees and expenses incurred in the
investigation, collection, prosecution and defense of claims and amounts
paid in settlement, that may be imposed on or otherwise incurred or suffered
by the specified person.
"Material Adverse Effect" means any change in or effect on Alfine or
SBB that is materially adverse to their respective businesses.
"Material Contract" means those Contracts listed on the Disclosure
Schedule as Material Contracts.
"Order" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"Permit" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued
by any Governmental Entity.
"Person" means an association, a corporation, a limited liability
company, an individual, a partnership, a trust or other firm, entity or
organization,including a Governmental Entity.
"Subsidiary" means any Person in which Alfine has a direct or
indirect equity or ownership interest in excess of 5%.
"Tax" means any foreign, federal, state, county or local income,
sales and use, excise, franchise, real and personal property, transfer, gross
receipt, capital stock, production, business and occupation, disability,
employment, payroll, severance or withholding tax or charge imposed by any
Governmental Entity, any interest and penalties (civil or criminal) related
thereto or to the nonpayment thereof, any Loss in connection with the
determination, settlement or litigation of any Tax liability.
"Tax Return" means a report, return or other information required to
be supplied to a Governmental Entity with respect to Taxes.
1.2 Transfer of Alfine Assets. Subject to the terms and conditions of
this Agreement, Alfine agrees to transfer and convey the Alfine Assets to SBB
at the Closing together with such transfer documents as may be reasonably
required to vest title to the Alfine Assets in SBB.
1.3 Acquisition of the Alfine Assets and Assumption of Alfine
Liabilities. Subject to the terms and conditions of this Agreement, SBB agrees
to acquire the Alfine Assets from Alfine and assume the Alfine Liabilities,
and to issue, convey, transfer and deliver in exchange therefor 12,350,000
shares of the Common Stock to Alfine; fully paid and nonassessable. Upon
Closing the Common Stock issued to Alfine shall constitute not less than 95% of
the capital stock of SBB and not less than 95% of the voting power of SBB.
1.4 The Closing. The Closing will take place at the offices of Alfine's
counsel, Mitchell, Silberberg & Knupp, LLP, at 10:00 a.m. on the fifth business
day following execution of this Agreement or on such other date, not later
than July 31, 1998, which SBB and Alfine may mutually choose.
ARTICLE 2 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF ALFINE
Except as otherwise indicated on Alfine's Disclosure Schedule,
Alfine represents warrants and agrees as follows:
2.1 Organization and Related Matters. Alfine, Inc. is a corporation
duly organized, validly existing and in good standing under the laws of
Delaware. Alfine has no Subsidiaries other than PhonClub, Inc., a New Mexico
corporation, which is a wholly owned Subsidiary of Alfine. Alfine has all
necessary corporate power and authority to own its properties and assets and
to carry on the Alfine Business as now conducted. There are no jurisdictions
outside of California where the character or the location of the Alfine
Assets or the nature of the Alfine Business requires licensing or
qualification. True, correct and complete copies of the charter documents
of Alfine as in effect on the date hereof have been delivered to SBB.
2.2 Alfine Assets. Alfine has good and marketable title to the Alfine
Assets free and clear of all Encumbrances. There exist no facts or set of
circumstances which, to the best of Alfine's knowledge, would prevent Alfine
from performing under this Agreement, or which would prevent or render
Alfine unable to deliver good and marketable title to the Alfine Assets.
2.3 Alfine's Organization. The authorized capital of Alfine consists
of 1,000,000 shares of preferred stock $.0001 par value, of which none are
issued, and 30,000,000 shares of common stock, $.0001 par value, of which
9,063,804 shares were issued and outstanding as of June 30, 1998. Other than
as set forth in Alfine's Disclosure Schedule there are no (i) outstanding
contracts or other rights to subscribe for or purchase, or Contracts or other
obligations to issue or grant any rights to acquire, any equity securities of
Alfine, or to restructure or recapitalize Alfine; (ii) outstanding Contracts
of Alfine to repurchase, redeem or otherwise acquire any equity securities of
Alfine. All shares of capital stock of Alfine are duly authorized, validly
issued and outstanding and are fully paid and non-assessable and were issued
in conformity with applicable Laws.
2.4 No Material Liabilities or Contingencies. Alfine is a Delaware
corporation formed on or about August 26, 1991 and, to its knowledge, Alfine
does not have any liabilities of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, probable of
assertion or not, that, in accordance with GAAP applied on a consistent basis,
exceed $25,000.00, except as disclosed on its financial statements and Alfine's
Disclosure Schedule, and except for liabilities and expenses incurred in the
ordinary course of operations, and liabilities not required to be included in
its financial statements in accordance with GAAP.
2.5 Tax and Other Returns and Reports. Alfine has filed, or will, on or
before the Closing Date, file all Tax Returns required to be filed by it on or
before the Closing Date. All required Tax Returns including amendments to
date, have been prepared in good faith without negligence or willful
misrepresentation and are complete in all material respects. No Governmental
Entity has, during the past three years, examined or is in the process of
examining any Tax Returns of Alfine. No Governmental Entity has proposed,
asserted or assessed or, to the best knowledge of Alfine, threatened to
propose or assert, any deficiency, assessment or claim for Taxes and there
would be no basis for any such delinquency, assessment or claim.
2.6 Material Contracts. Alfine has duly performed all its obligations
under each Material Contract to the extent that such obligations to perform
have accrued; and no material breach or default, alleged material breach or
default, or event which would constitute a material breach or default
thereunder by Alfine or, to the best knowledge of Alfine, by any other party
or obligor with respect thereto, has occurred or as a result of this Agreement
or performance will occur. Consummation of the transactions contemplated by
this Agreement will not terminate or modify any rights of, or accelerate or
augment any obligation of, Alfine under any Material Contract.
2.7 Tangible Property.
(a) Alfine owns no real property. There is no pending or
threatened action that would materially interfere with the quiet enjoyment of
any leasehold by Alfine.
(b) Alfine owns or leases all tangible personal property that is
material to the Alfine Business free of Encumbrances except for Encumbrances
consisting of liens for Taxes not yet due.
(c) All material leasehold properties held by Alfine, as lessee,
are held under valid, binding and enforceable leases, subject only to such
exceptions which would not individually or in the aggregate, have a Material
Adverse Effect on the Alfine Business. All material tangible properties
of Alfine are in a good state of maintenance and repair (except for ordinary
wear and tear) and are reasonably adequate for the Alfine Business.
2.8 Intangible Property. Alfine owns no Patents. Included among the
Alfine Assets are certain speech recognition, compression and speaker
identification software programs.
2.9 Authorization; No Conflicts. The execution, delivery and
performance of this Agreement by Alfine and the execution, delivery and
performance of any related agreements and contemplated transactions by Alfine
will not violate in any material way, or constitute a material breach or
material default (whether upon lapse of time and/or the occurrence of any act
or event or otherwise) under, the charter documents or bylaws of Alfine or any
Material Contract of Alfine, result in the imposition of any Encumbrance
against any asset or properties of Alfine, or violate any material Law.
The "ultimate parent entity" of Alfine and all entities which such entity
controls directly or indirectly did not have annual net sales (as stated on the
last regularly prepared balance sheet or sheets) of $100,000,000.00 or more,
and, to the best knowledge of Alfine, the consummation of the transactions
contemplated by this Agreement would not require filings under the Hart-Scott
- -Rodino Act.
2.10 Legal Proceedings. There is no order or Action pending, or, to the
best knowledge of Alfine, threatened, against or affecting Alfine or any of its
properties or assets that individually or when aggregated with one or more
other Orders or Actions adversely affect the ability of Alfine to perform
this Agreement or any aspect of the transactions contemplated by this
Agreement. There is no matter as to which Alfine has received any notice,
claim or assertion, or, to the best knowledge of Alfine, which otherwise has
been threatened against or affecting any director, officer, employee, agent
or representative of Alfine or any other Person, in connection with which
any such Person has or may reasonable be expected to have any right to be
indemnified by Alfine.
2.11 Minute Books. The minute books of Alfine accurately reflect, in all
material respects, all actions and proceedings taken to date by its
stockholders, board of directors and committees, and such minute books
contain true and complete copies of the charter documents of Alfine and all
related amendments. The stock record books of Alfine reflect accurately all
transactions in its capital stock of all classes.
2.12 Compliance With Law.
(a) Alfine is organized and has conducted its businesses in
accordance with applicable Laws in all material respects, and the forms,
procedures and practices of Alfine are in compliance with all such Laws, to
the extent applicable, in all material respects.
(b) The use and operations of the Alfine Assets are in compliance
in all material respects with all applicable Laws and there is no material
violation of any of such Laws.
2.13 Employee Benefits. Except as set forth on Alfine's Disclosure
Schedule, there are no Employee Benefit Plans or other material employee
benefits accruing for the benefit of any employee of Alfine.
2.14 No Brokers, Finders or Financial Advisors. Except for Allen
Gelbard, no agent, broker, finder or investment or commercial banker, or other
Person engaged by or acting on behalf of Alfine or any of its respective
Affiliates in connection with the negotiation, execution or performance of
this Agreement or the transactions contemplated by this Agreement, is or will
be entitled to any brokerage or finder's or similar fee or other commission as
a result of this Agreement or such transactions. Allen Gelbard will receive
options to purchase shares of Common Stock of SBB as set forth on "Schedule C"
attached hereto. Allen Gelbard has advised Alfine and SBB that he will
distribute a portion of these options to two other individuals who have
assisted him in connection with this transaction.
2.15 Environmental Compliance. Alfine has not generated, used,
transported, treated, stored, released or disposed of, or has suffered or
permitted anyone else to generate, use, transport, treat, store, release or
dispose of any Hazardous Substance in material violation of any laws. There
has not been any generation, use transportation, treatment, storage, release
or disposal of any Hazardous Substance in connection with the conduct of the
Alfine Business or the use of any property or facility of Alfine or to the
knowledge of Alfine any nearby or adjacent properties or facilities, which has
created or might reasonably be expected to create any liability under any Laws
or which would require reporting to or notification of any Governmental Entity
so as to have a Material Adverse Effect on Alfine's Business.
2.16 Accuracy of Information. The statements, representations and
warranties contained in Alfine's Disclosure Schedule are true in all material
respects. None of the information expressly required by this Agreement to be
supplied by or on behalf of Alfine to SBB, or contained in this Agreement,
Alfine's Disclosure Schedule or the documents listed in Alfine's Disclosure
schedule, did contain or will contain, at the respective times such information
is or was delivered and as of the Closing Date, any untrue statement of a
material fact or will omit to state any 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. If any of such
information at any time subsequent to which they was made, not misleading.
If any of such information at any time subsequent to delivery and prior to
Closing become untrue or misleading, in any material respect, Alfine will
promptly notify SBB in writing of such fact and the reason for such change.
2.17 Investment Representation. The Common Stock to be issued pursuant
to this Agreement will be, upon their issuance, "restricted securities" within
the meaning of the Act. The certificate or certificates evidencing such
restricted Common Stock shall bear a legend substantially as follows:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE OR SECURITIES LAWS AND NEITHER
THESE SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD,TRANSFERRED, PLEDGED, HYPOTHECATED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR SUCH LAWS OR
AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND
SUCH LAWS WHICH, IN THE OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER, IS AVAILABLE."
2.18 Delay in Distribution of Stock. The Common Stock to be issued to
Alfine pursuant to this Agreement shall not be distributed by Alfine to its
stockholders until such time as such Common Stock has been registered under the
Act by SBB and has ben registered or qualified under applicable state securities
laws in accordance with the obligations of SBB set forth in Section 3.14 of
this Agreement. Alfine covenants and agrees that it will not cause a reverse
split of the Common Stock pursuant to such registration so as to reduce the
number of shares held by the current stockholders of SBB.
ARTICLE 3 - REPRESENTATIONS, WARRANTIES AND COVENANTS OF SBB
SBB represents, warrants and agrees as follows:
3.1 Organization and Related Matters. SBB is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. SBB has all necessary corporate power and authority to carry on its
business as now being conducted. SBB has the necessary corporate power and
authority to execute, deliver and perform this Agreement and any related
agreements to which it is a party.
3.2 Authorization. The execution, delivery and performance of this
Agreement and any related agreements, by SBB has been duly and validly
authorized necessary corporate action on the part of SBB. This Agreement
constitutes the legal, valid and binding obligation of SBB, enforceable
against SBB in accordance with its respective terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally.
3.3 No Conflicts. The execution, delivery and performance of this
Agreement and any related agreements by SBB will not violate the provisions
of, or constitute a breach or default whether upon lapse of time and/or the
occurrence of any act or event or otherwise under (a) the charter documents
of SBB, (b) any Law to which SBB is subject or (c) any Contract to which SBB
is a party that is material to the financial condition, results of operations
or conduct of the business of SBB. The execution and delivery of this Agreement
by SBB and the performance of this Agreement and any related to contemplated
transaction by SBB will not require filing or registration with, or the
issuance of any Permit by, any other Person. SBB is not required to seek
the approval of its stockholders to issue the Common Stock to be issued to
Alfine pursuant to this Agreement, or otherwise to enter into, and perform any
related transaction under, this Agreement. The "ultimate parent" of SBB and
all entities which such controls directly or indirectly did not have annual
net sales (as stated on the last regularly prepared annual income statement or
statements) or total assets (as stated on the last regularly prepared balance
sheet or sheets) of $100,000,000.00 or more, and, to the best knowledge of
SBB, the consummation of the transactions contemplated by this Agreement
would not require any filings under the Hart-Scott-Rodino-Act.
3.4 No Brokers, Finders or Financial Advisors. Except for Allen
Gelbard, whose compensation is set forth on Schedule C, attached hereto, no
agent, broker, finder or investment or commercial banker, or other Person
engaged by or acting on behalf of SBB in connection with the negotiation,
execution, or performance of this Agreement or the transactions contemplated
by this Agreement, is or will be entitled to any broker's or finder's or similar
fees or other commissions as a result to this Agreement or such transactions.
3.5 Financial Statements; Changes; Contingencies.
(a) Audited Financial Statements. SBB has delivered to Alfine
balance sheets for SBB at December 31, 1997, and the related statements of loss
and deficit for the periods then ended. All such financial statements have
been examined by the Auditors whose reports thereon are included with such
financial statements. All such financial statements have been prepared in
conformity with GAAP applied on a consistent basis (except for changes, if any,
disclosed therein). Such statements of loss and deficit present fairly the
results of operations and cash flows of SBB for the respective periods covered,
and the balance sheets present fairly the financial condition of SBB as of
their respective dates. SBB has made available to representatives of Alfine
copies of each management letter or other letter delivered to SBB, by the
Auditors in connection with such financial statements or relating to any review
by the Auditors of the internal controls of SBB, and has made available for
inspection all reports and working papers produced or developed by the Auditors
or management in connection with their examination of such financial statements,
as well as all such reports and working papers for prior periods for which any
tax liability of SBB has not been finally determined or barred by applicable
statues of limitation. Since December 1997, there has been no change in any
of the significant accounting policies, practices or procedures of SBB.
(b) No Material Adverse Changes. There has not been, occurred or
arisen, whether or not in the ordinary course of business:
(i) any change in or event affecting SBB or SBB's business
that has had or may reasonably be expected to have a
Material Adverse Effect;
(ii) any agreement (other than a Material Contract listed on
the Disclosure Schedule), condition, action or omission
which would be proscribed by (or require consent under)
Section 5.5 had it existed, occurred or arisen after
the date of this Agreement;
(iii) any strike or other labor dispute; or
(iv) any casualty, loss, damage or destruction whether or not
covered by insurance) or any material property of SBB.
(c) No Other Liabilities or Contingencies. To the best of SBB's
knowledge, SBB does not have any liabilities of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, probable
of assertion or not, that, in accordance with GAAP applied on a consistent
basis, should have been but were not reflected or disclosed in the financial
statements (including the notes thereto) referred to in subsections (a) and
(b) above.
3.6 Tax and Other Returns and Reports. SBB has timely filed or will
file, on or before the Closing Date, all Tax Returns required to be filed by it
on or before the Closing Date and has paid all Taxes due for all periods
since its formation, which Taxes are required to be paid by it on or before
the Closing Date. Adequate provision has been made in the books and records
of SBB and in the financial statements. No liability for Taxes has arisen
since such date other than in the ordinary course of SBB's business. All
required Tax Returns including amendments to date, have been prepared in good
faith without negligence or willful misrepresentation and are complete and
accurate in all material respects. No Governmental Entity has, during the past
three years, examined or is in the process of examining any Tax Returns, of
SBB. No Governmental Entity has proposed (tentatively or definitively),
asserted or assessed or, to the best knowledge of SBB, threatened to propose
or assert, any deficiency, assessment of claim for Taxes and there would be
no basis or any such delinquency, assessment or claim.
3.7 Material Contracts. Each Material Contract of SBB is, to the
knowledge of SBB, valid and subsisting; SBB has duly performed all its
obligations thereunder to the extent that such obligations to perform have
accrued and no material breach or default, alleged material breach or
default, or event which would (with the passage of time, notice or both)
constitute a material breach or default thereunder by SBB or, to the best
knowledge of SBB, by any other party or obligor with respect thereto, has
occurred or as a result of this Agreement, or performance will occur.
Consummation of the transactions contemplated by this Agreement will not (and
will not give any Person a right to) terminate or modify any rights of, or
accelerate or augment any obligation of SBB under any Material Contract.
3.8 Legal Proceedings. There is no Order or Action pending, or, to the
best knowledge of SBB, threatened, against or affecting SBB or any of its
properties or assets. There is no matter as to which SBB has received any
notice, claim or assertion, or, to the best knowledge of SBB, which
otherwise has been threatened against or affecting any director, officer,
employee, agent or representative of SBB or any other Person, in connection
with which any such Person has or may reasonably be expected to have any right
to be indemnified by SBB.
3.9 Minute Books. The minute books of SBB accurately reflect all
actions and proceedings taken to date by its stockholders, board of directors
and committees, and such minute books contain true and complete copies, of the
charter documents of SBB and all related amendments. The stock record books of
SBB reflect accurately all transactions in its capital stock of all classes.
3.10 Accounting Records; Internal Controls.
(a) Accounting Records. SBB has records that accurately and validly
reflect its transactions and accounting controls sufficient to insure that
such,transactions are (i) executed in accordance with management's general or
specific authorization and (ii) recorded in conformity with GAAP so as to
maintain accountability for assets.
(b) Data Processing; Access. Such records, to the extent they
contain important information that is not easily and readily available
elsewhere, have been duplicated and such duplicates are stored safely and
securely pursuant to procedures and techniques utilized by companies of
comparable size in similar lines of business.
3.11 Employee Benefits. Except as set forth on SBB's Disclosure
Schedule, there are no Employee Benefit Plans or other material employee
benefits accruing for the benefit of any employee of SBB.
3.12 Environmental Compliance. SBB has not generated, used, transported,
treated, stored, released or disposed of, or has suffered or permitted anyone
else to generate, use, transport, treat, store, release or dispose of any
Hazardous Substance in material violation of any laws. There has not been
any generation, use transportation, treatment, storage, release or disposal
of any Hazardous Substance in connection with the conduct of the SBB Business
or the use of any property or facility of SBB or to the knowledge of SBB any
nearby or adjacent properties or facilities, which has created or might
reasonably be expected to create any liability under any Laws or which would
require reporting to or notification of any Governmental Entity so as to have
a Material Adverse Effect on SBB's business.
3.13 SBB's Organization and Business.
(a) The authorized capital of SBB consists of three classes of
preferred stock, each class consisting of 50,000 shares of $0.001 par, of which
none are issued, and 50,000,000 shares of $0.001 par common stock, of which a
total of 650,000 shares will have been validly issued and will be outstanding
as fully paid and non-assessable, immediately prior to Closing. No Person
has any right, agreement or option, present or future, contingent or
absolute, or any right capable of becoming a right, agreement or option,
other than as provided for herein:
(b) to require SBB to issue any share in its capital or to convert
any securities of SBB or of any other company into shares in its capital;
(c) for the issue or allotment of any of SBB's authorized but
unissued shares; or
(d) to require SBB to purchase, redeem or otherwise acquire any of
its issued and outstanding SBB shares.
(e) SBB does not beneficially own, directly or indirectly, shares
of any other corporation or any interest in a partnership, joint venture or
other business.
(f) SBB has not declared or paid any dividends of any kind nor
declared or made any other distributions of any kind whatsoever, including,
without limitation, by way of redemption or repurchase or reduction of
authorized capital.
(g) SBB has not waived or surrendered any right of substantial
value and has not made any gift of money or of any of its property or assets.
(h) There are no management contracts or consulting contracts to
which SBB is a party or by which it is bound, other than as set forth in the
schedules hereto; no amount is payable or has been agreed to be paid by SBB
to any Person as remuneration, pension, bonus, share of profits other similar
benefit, and no director, officer or member, or former director, officer or
member of SBB, nor any Associate or affiliate of any such person, has any
claims of any nature against, or is indebted to, SBB.
(i) No change will occur in the Articles of Incorporation, Bylaws
or other charter documents of SBB from the date hereof to the Closing Date.
(j) At the Closing, SBB will not have any material liabilities,
direct or indirect, present or future, existing or contingent.
(k) At the Closing, SBB will have no more than 650,000 shares of
Common Stock and no shares of preferred stock issued and outstanding (the
"Outstanding Shares"). As of the Closing, the restricted Common Stock issued
to Alfine shall constitute not less than (i) 95% of the Outstanding Shares of
SBB and (ii) 95% of the voting power of the Outstanding Shares.
3.14 Registration of Common Stock. As promptly as is reasonably
practicable following the Closing, SBB shall prepare and file with the
Commission a Registration Statement, on the appropriate form, for the purpose
of registering the shares of Common Stock to be issued to Alfine pursuant to
this Agreement, and shall cause such shares to be registered or qualified
under applicable state securities laws, so that (i) Alfine may distribute such
shares to its stockholders in connection with the liquidation and dissolution
of Alfine, and (ii) the stockholders of Alfine, as recipients of such Common
Stock shall be free to sell such shares publicly in compliance with the
requirements of the Act, subject to any limitations on such sales by an
stockholder who is an "affiliate" of Alfine or becomes an affiliate of SBB as
such term is defined under the Act.
3.15 Information Statement. In order to comply with the requirements of
the Exchange Act, SBB shall prepare, file with the Commission, and distribute
to its stockholders an Information Statement with respect to the subject
transaction as shall comply with the requirements of Regulation 14C under
the Exchange Act.
3.16 Accuracy of Information. The statements, representations and
warranties contained in SBB's Disclosure Schedule are true in all material
respects. None of the information expressly required by this Agreement to be
supplied by or on behalf of SBB to Alfine, or contained in this Agreement,
SBB's Disclosure Schedule or the documents listed in SBB's Disclosure
schedule, did contain or will contain, at the respective times such information
is or was delivered and as of the Closing Date, any untrue statement of a
material fact or will omit to state any 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. If any of such
information at any time subsequent to which they was made, not misleading.
If any of such information at any time subsequent to delivery and prior to
Closing become untrue or misleading, in any material respect, SBB
will promptly notify Alfine in writing of such fact and the reason for such
change.
ARTICLE 4 - COVENANTS WITH RESPECT TO CONDUCT OF ALFINE PRIOR TO CLOSING
4.1 Access. Alfine has authorized and permitted SBB and its
representatives which term shall be deemed to include its independent
accountants and counsel and representatives of prospective financing
institutions of SBB) to have reasonable access during normal business hours,
upon reasonable notice and in such manner as will not unreasonably interfere
with the conduct of its business, to all of its properties, books, records,
operating instructions and procedures, Tax Returns and all other information
with respect to the Alfine Business as SBB may from time to time request,
and to make copies of such books, records and other documents and to discuss
its business with such counsel and its suppliers, customers and creditors, as
SBB considers necessary or appropriate for the purposes of familiarizing itself
with the Alfine Business, obtaining any necessary Approvals of or Permits for
the transactions contemplated by this Agreement and conducting, an
evaluation of the organization and Alfine Business.
4.2 Material Adverse Changes; Reports; Financial Statements. Alfine
will promptly notify SBB of any event of which Alfine obtains knowledge which
has had or might reasonably be expected to have a Material Adverse Effect on
the Alfine Business, or which if known as of the date hereof would have been
required to be disclosed to SBB.
4.3 Conduct of the Alfine Business. Alfine shall not, without the prior
consent in writing of SBB which may not be unreasonably withheld, conduct the
Alfine Business in any manner except in the ordinary course consistent with
past practices or consistent with the transactions contemplated by this
Agreement.
4.4 Notification of Certain Matters. Alfine shall give prompt notice to
SBB, and SBB shall give prompt notice to Alfine, of (i) the occurrence, or
failure to occur of any event that would be likely to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate in any
material respect at any time from the date of this Agreement to the Closing
Date and (ii) any failure of SBB or Alfine, as the case may be, to comply with
or satisfy, in any material respect at any time from the date of this Agreement
to the Closing Date and (ii) any failure of SBB or Alfine, as the case may be,
to comply with or satisfy, in any material respect, any covenant, condition
or agreement to be complied with or satisfied by it under this Agreement.
Except as provided in Section 7.4, no such notification shall affect the
representations or warranties of the parties or the conditions to their
respective obligations hereunder.
4.5 Permits and Approvals. Alfine and SBB each agree to cooperate and
use commercially reasonable efforts to obtain (and will immediately prepare
all registrations, filings and applications, requests and notices preliminary
to) all Approvals and Permits that may be necessary or which may be reasonably
requested by Alfine and SBB to consummate the transactions contemplated by
this Agreement. To the extent that an Approval with respect to any Contract
is required in connection with the transactions contemplated by this
Agreement, Alfine and SBB shall each use commercially reasonable efforts to
obtain such Approval prior to the Closing Date.
ARTICLE 5 - COVENANTS WITH RESPECT TO CONDUCT OF THE SBB PRIOR TO CLOSING
5.1 Access. SBB has authorized and permitted Alfine and its
representatives which term shall be deemed to include its independent
accountants and counsel and representatives of prospective financing
institutions of Alfine) to have reasonable access during normal business
hours, upon reasonable notice and in such manner as will not unreasonably
interfere with the conduct of its business, to all of its properties, books,
records, operating instructions and procedures, Tax Returns and all other
information with respect to SBB's business as Alfine may from time to time
request, and to make copies of such books, records and other documents and to
discuss its business with such counsel and its suppliers, customers and
creditors, as Alfine considers necessary or appropriate for the purposes of
familiarizing itself with SBB's business, obtaining any necessary Approvals of
or Permits for the transactions contemplated by this Agreement and conducting,
an evaluation of SBB's organization and its business.
5.2 Material Adverse Changes; Reports; Financial Statements. SBB will
promptly notify Alfine of any event of which SBB obtains knowledge which has
had or might reasonably be expected to have a Material Adverse Effect on the
Common Stock or SBB's Business, or which if known as of the date hereof would
have been required to be disclosed to Alfine.
5.3 Issuances of Securities. Until the Closing, SBB will not, without
the prior written consent of Alfine, issue any shares in its capital stock or
any other securities, rights, options or warrants to purchase shares in its
capital stock, or issue or sell securities convertible into or exchangeable
for shares of its capital stock or any commitments for the issue of any
shares its capital stock or any securities which provide a right to purchase,
acquire, exchange or convert into shares of its capital stock.
5.4 Material Contracts. Until the Closing, SBB will not, without the
prior written consent of Alfine, enter into any material contract or make
any material contract or make any material acquisition or commitment.
5.5 Conduct of Business. SBB shall not, without the prior consent in
writing of SBB which may not be unreasonably withheld, conduct its Business in
any manner except in the ordinary course consistent with past practices or
consistent with the transactions contemplated by this Agreement. SBB will
promptly disclose to Alfine any change in or effect on SBB occurring after
the date hereof which is materially adverse to its business or financial
position prior to the Closing.
ARTICLE 6 - CONDITIONS OF PURCHASE
6.1 General Conditions. The obligations of the parties to effectuate
the Closing shall be subject to the following conditions unless waived in
writing by both parties hereto:
(a) No Orders; Legal Proceedings. No Law or Order shall have been
enacted, entered, issued, promulgated or enforced by an Governmental Entity,
nor shall any Action have been instituted and remain pending at what would
otherwise be the Closing Date, which prohibits or restricts or would (if
successful) prohibit or restrict the transactions contemplated by this
Agreement or (with respect to obligations of SBB only) which would not
permit the Alfine Business as presently conducted to continue unimpaired
following the Closing Date. No Governmental Entity shall have notified any
party to this Agreement that consummation of the transactions contemplated by
this Agreement would constitute a violation of any Laws of any jurisdiction
and that it intends to commence proceedings to restrain or prohibit such
transactions or force divestiture rescission, unless such Governmental
Entity shall have withdrawn such notice and abandoned any such proceedings
prior to the time which otherwise would have been the Closing Date.
(b) Approvals. To the extent required by applicable Law, all
permits and Approvals required to be obtained from and Governmental Entity or
from the stockholders of SBB shall have been received or obtained on or prior
to the Closing Date.
6.2 Conditions to Obligations of SBB. The obligations of SBB to
effectuate the Closing shall be subject to the following conditions except to
the extent waived in writing by SBB:
(a) Representations, Warranties and Covenants of Alfine. The
representations and warranties of Alfine herein contained shall be true, in all
material respects, at the Closing Date with the same effect as though made at
such time; Alfine shall have performed all obligations and complied with all
covenants and conditions required by this Agreement to be performed or
complied with by it at or prior to the Closing Date. Alfine shall have
delivered to SBB a certificate of Alfine in form and substance satisfactory to
SBB and dated the Closing Date, to such effect.
(b) No Material Adverse Effect. There shall not have been any
Material Averse Effect relating to Alfine subsequent to June 1, 1998.
(c) Consents. Alfine have obtained and provided to SBB any
required Approvals and Permits, each in form and substance reasonably
satisfactory to SBB.
6.3 Conditions to Obligations of Alfine. The obligations of Alfine to
the effectuate the Closing shall be subject to the following conditions, except
to the extent waived in writing by Alfine:
(a) Representations, Warranties and Covenants of SBB. The
representations and warranties of SBB herein contained shall be true at the
Closing Date with same effect as though made at such time; SBB shall have
performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by it at or prior
to the Closing Date. SBB shall have delivered to Alfine a certificate of SBB,
respectively, in form and substance satisfactory to Alfine and dated the
Closing Date, to such effect.
(b) No Material Adverse Effect. There shall not have been any
Material Adverse Effect relating to SBB subsequent to June 1, 1998.
(c) Consents. SBB shall have obtained and provided to Alfine any
required Approvals and Permits, each in form and substance reasonably
satisfactory to Alfine.
(d) Due Diligence. Alfine shall not, in the course of its ongoing
business investigation, have discovered information not previously disclosed by
SBB which Alfine reasonably believes has or is likely to have a Material
Adverse Effect or is materially inconsistent with information disclosed to
Alfine prior to the Date hereof.
ARTICLE 7 - TERMINATION OF OBLIGATIONS; SURVIVAL
7.1 Termination of Agreement. Anything herein to the contrary
notwithstanding, this Agreement and the transactions contemplated by this
Agreement shall terminate if the Closing does not occur on or before the close
of business on July 31, 1988, unless extended by mutual consent in writing of
SBB and Alfine, and otherwise may be terminated at any time before the Closing
as follows and in no other manner:
(a) Mutual Consent. By mutual consent in writing of SBB and Alfine.
(b) Conditions of SBB's Performance Not Met. By SBB's written
notice to Alfine if any event occurs or conditions exist which would render
impossible the satisfaction of one or more conditions to the obligations of SBB
to consummate the transactions contemplated by this Agreement as set forth in
Section 6.1 or Section 6.2.
(c) Conditions of Alfine's Performance Not Met. By Alfine's
written notice to SBB if any event occurs or conditions exist which would
render impossible the satisfaction of one or more conditions to the obligations
of SBB to consummate the transactions contemplated by this Agreement as set
forth in Section 6.1 or Section 6.3.
(d) Material Breach. By SBB or Alfine if there has been a material
misrepresentation or other material breach by the other party in its
representations, warranties and covenants set forth herein; provided, however,
that if such breach is susceptible to cure, the breaching party shall have five
business days after receipt of notice from the other party of its intention to
terminate this Agreement if such breach continues in which to cure such breach.
7.2 Effect of Termination. In the event that this Agreement shall be
terminated pursuant to Section 7.1, all further obligations of the parties
under this Agreement shall terminate without further liability of any party to
the other, provided that the obligations of the parties contained in Article
8, Section 9.9 and Section 9.12 shall survive any such termination. A
termination under Section 7.1 shall not relieve any party of any liability for
a breach of, or for any misrepresentation under, this Agreement, or be deemed
to constitute a waiver of any available remedy (including specific
performance if available) for any such breach or misrepresentation.
7.3 Survival of Representations and Warranties. The representations and
warranties contained in or made pursuant to this Agreement shall survive the
Closing and expire at the end of twelve (12) full calendar months after the
Closing except that (i) the representations and warranties contained in
Sections 2.1, 2.9, 3.1 and 3.3 shall survive this Closing and shall remain
in full force and effect indefinitely, (ii) the representations and warranties
contained in Sections 2.5 and 3.6 shall continue through the expiration of the
applicable statute of limitations as the same may be extended (or, if a
claim has been asserted prior to such expiration, until 90 days after the
date of its final resolution), and (iii) if a claim or notice is given under
Article 8 with respect to any representation or warranty prior to the
applicable expiration date, such representation or warranty shall continue,
with respect to the facts or circumstances giving rise to such claim,
indefinitely until such claim is finally resolved.
7.4 Effect of Closing Over Known Unsatisfied Conditions. If, with
actual knowledge of the failure of any condition or breach of any
representation and warranty,either SBB or Alfine elects to proceed with the
Closing, the condition that is unsatisfied at the Closing Date shall be
deemed to be waived and the electing party shall so acknowledge by a writing
delivered at the Closing; provided, however, that the foregoing provision shall
not limit any party's right not to waive and condition or right to condition
any waiver hereunder upon mutually acceptable conditions. Such decision and
writing shall constitute a waiver of any liability for breach of or
misrepresentation under this Agreement, but only with respect to, and such
waiver shall be limited to the extent of, the facts or circumstances, actually
known by the electing party, giving rise to or in respect to such waived
condition.
ARTICLE 8 - INDEMNIFICATION
8.1 Obligations of SBB. SBB shall indemnify and hold harmless Alfine
and its directors, officers, employees, affiliates, agents and assigns from and
against any and all Losses of Alfine directly or indirectly, as a result of, or
based upon or arising from:
(a) any inaccuracy in or breach or nonperformance of any of the
representations, warranties, covenants or agreements made by SBB in or pursuant
to this Agreement; or
(b) any other matter as to which SBB in other provisions of this
Agreement has agreed to indemnify Alfine.
8.2 Obligations of Alfine. Alfine agrees to indemnify and hold harmless
SBB and its directors, officers, employees, affiliates, agents and assigns from
and against any and all Losses of SBB directly or indirectly, as a result of,
or based upon or arising from:
(a) any inaccuracy in or breach or nonperformance of any of the
representations, warranties, covenants or agreements made by Alfine in or
pursuant to this Agreement; or
(b) any other matter as to which Alfine in other provisions of this
Agreement has agreed to indemnify SBB.
8.3 Procedure.
(a) Notice. Any party seeking indemnification with respect to any
Loss shall give notice to the Indemnifying Party.
(b) Defense. If any claim, demand or liability is asserted by any
third party against the Indemnified Party, the Indemnifying Party shall, upon
written request of the Indemnified Party, shall defend any actions or
proceedings brought against the Indemnified Party in respect to matters
embraced by the indemnity, but the Indemnified Party shall have the right
to conduct and control the defense, compromise or settlement of an
Indemnifiable Claim if the Indemnified Party chooses to do so, on behalf of and
for the account and risk of the Indemnifying Party who shall be bound by the
result so obtained to the extent provided herein: provided, however, that the
Indemnified Party, shall not settle or compromise any Indemnifiable Claim
without written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld. If, after a request to defend any action or
proceeding, the Indemnifying Party neglects to defend the Indemnified Party, a
recovery against the latter suffered by it in good faith, is conclusive in its
favor against the Indemnifying Party; provided, however, that, if the
Indemnifying Party has not received reasonable notice of the action or
proceeding against the Indemnified Party, or is not allowed to control its
defense, judgement against the Indemnified Party, or is not allowed to control
its defense, judgement against the Indemnified Party is only presumptive
evidence against the Indemnifying Party. The Parties shall cooperate in the
defense of all third party claims, which may give rise to Indemnifiable
Claims hereunder. In connection with the defense of any claim, each party
shall make available to the party controlling such defense, any books, records
or other documents within its control that are reasonably requested in the
course of such defense.
8.4 Limitations on Indemnification. No party shall be required to
indemnify any other Person under this Article 8 unless the Loss for which
indemnity would otherwise be payable by such party exceeds $10,000.00
individually or $30,000.00 in the aggregate, and in such event the
Indemnifying Party shall be responsible for a maximum of $50,000.00.
ARTICLE 9 - GENERAL
9.1 Amendments; Waivers. This Agreement and any schedule or exhibit
attached hereto may be amended only by agreement in writing of all parties. No
waiver or any provision nor consent to any exception to the terms of this
Agreement shall be effective unless in writing and signed by the party to be
bound and then only to the specific purpose, extent and instance so provided.
9.2 Schedules; Exhibits; Integration. Each schedule and exhibit
delivered pursuant to the terms of this Agreement shall be in writing and shall
constitute a part of this Agreement, although schedules need not be attached
to each copy of this Agreement. This Agreement, together with such schedules
and exhibits, constitutes the entire agreement among the parties pertaining to
the subject matter hereof and supersedes all prior agreements and understandings
of the parties in connection therewith.
9.3 Best Efforts; Further Assurances. Except as otherwise expressly
provided herein, each party will use its best efforts to cause all conditions
to its obligations hereunder to be timely satisfied and to perform and
fulfill all obligations on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement
shall be effected substantially in accordance with its terms as soon as
reasonably practicable. The parties shall cooperate with each other in such
actions and in securing requisite Approvals. Each party shall execute and
deliver both before and after the Closing such further certificates,
agreements and other documents and take such other actions as the other party
may reasonably request to consummate or implement the transactions
contemplated hereby or to evidence such events or matters.
9.4 Governing Law. This Agreement and the legal relations between the
parties shall be governed by and construed in accordance with the laws of the
State of Nevada applicable to contracts made and performed in such State
without regard to conflicts of law doctrines, except to the extent that
certain matters are preempted by federal law or governed by the law of
the jurisdiction of organization of the respective parties.
9.5 No Assignment. Neither this Agreement nor any rights or obligations
under it are assignable.
9.6 Headings. The descriptive headings of the Articles, Sections and
Subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
9.7 Counterparts. This Agreement, any amendment hereto or any other
agreement (or document) delivered pursuant hereto may be executed in one or
more counterparts and by different parties in separate counterparts. All of
such counterparts shall constitute one and the same agreement (or other
document) and shall become effective (unless otherwise provided therein) when
one or more counterparts have been signed by each party and delivered to the
other party.
9.8 Publicity and Reports. Alfine and SBB shall coordinate all
publicity relating to the transactions contemplated by this Agreement and no
party shall issue any press release, publicity statement or other public notice
relating to this Agreement, or the transactions contemplated by this
Agreement, without consulting the other party except to the extent that a
particular action is required by applicable Law or stock exchange or regulatory
policy.
9.9 Confidentiality. All information disclosed in writing by any party
(or its representatives) in connection with the transactions contemplated by
this Agreement to any other party (or its representatives) shall be kept
confidential by such other party and its representatives and shall not be
used by any such, Persons other than as contemplated by this Agreement,
except to the extent that such information or disclosure (i) was known by the
recipient when received, (ii) is or hereafter becomes lawfully obtainable from
other sources, (iii) is necessary or appropriate to disclose to a
Governmental Entity or stock exchange having jurisdiction over the parties,
or (iv) may otherwise be required by law. If this Agreement is terminated in
accordance with its terms) each party shall use all reasonable efforts to
return upon written request from the other party all documents (and
reproductions thereof) received by it or its representatives from such other
party (and, in the case of reproductions, all such reproductions made by the
receiving party) that include information not within the exceptions contained
in the first sentence of this Section 9.9, unless the recipients provide
assurances reasonable satisfactory to the requesting party that such
documents have been destroyed.
9.10 Parties in Interest. This Agreement shall be binding upon and inure
to the benefit of each party, and nothing in this Agreement, express or implied,
is intended to confer upon any other Party and rights or remedies of any nature
whatsoever under or by reason of the Agreement. Nothing in this Agreement is
intended to relieve or discharge the obligation of any third party to any party
to this Agreement.
9.11 Notices. Any notice or other communication hereunder must be given
in writing and (a) delivered in person, (b) transmitted by telex, telefax or
other telecommunications mechanism or (c) mailed by certified or registered
mail, postage prepaid, receipt requested. Notice shall be delivered to the
address set forth in the preamble of this Agreement or to such address or
addresses and to such person or persons as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 9.11 and an appropriate answer-back is received; (ii) if given by mail,
three days after such Communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid; or (iii) if given by any other
means, when actually received as such address.
9.12 Expenses. Each party hereto shall pay its expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including, but not limited to, the fees, expenses and
disbursements of their respective advisors, accountants and counsel.
9.13 Remedies; Waiver. All rights and remedies existing under this
Agreement and any related agreements or documents are cumulative to and not
exclusive of, any rights or remedies otherwise available. No failure on the
part of any party to exercise or delay in exercising any right hereunder shall
be deemed a waiver thereof, nor shall any single or partial exercise preclude
any further or other exercise of such or any other right.
9.14 Attorney Fees. In the event of any action for the breach of the
Agreement or misrepresentation by any party, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and expenses, including the costs
of arbitration, incurred in connection with such action.
9.15 Knowledge Convention. Whenever any statement herein or in any
schedule, exhibit, certificate or other documents delivered to any party
pursuant to this Agreement is made "to its knowledge" or "to its best
knowledge" or words of similar intent of effect or any party or its
representative, such party shall make such statements only after making due
inquiry in a commercially reasonably manner of the subject matter thereof, and
each statement shall be deemed to include a representation that such due
inquiry has been conducted.
9.16 Interpretation. Any rule of law or statute in Nevada or other
jurisdiction, or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement has no application and is expressly
waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intent of SBB and Alfine.
9.17 Severability. If any provision of this Agreement is determined to
be invalid, illegal or unenforceable by any Governmental Entity, the remaining
provisions of this Agreement to the extent permitted by Law shall remain in
full force and effect provided that the economic and legal substance of the
transactions contemplated is not affected in any manner materially adverse to
any party hereto.
9.18 Arbitration; Waiver of Jury Trial. Any controversy, dispute or
claim under, arising out of, in connection with or in relation to this
Agreement shall be settled, at the request of either party, by arbitration
conducted in accordance with the Center for Public Resources Rules for Non-
Administered Arbitration of Business Disputes, by three arbitrators of whom
SBB and Alfine shall each appoint one and the third shall be selected by the
other two. The arbitration shall be governed by the United States Arbitration
Act (9 U.S.C. 1-16). The Arbitration of such issues, including the
determination of any amount of damages suffered by any party hereto by reason
of the acts or omissions of any other party, shall be final and binding upon
the parties to the maximum extent permitted by law, except that the arbitrators
Shall not be authorized to award punitive damages with respect to any such
claim, dispute or controversy. No party shall seek (and no arbitrators
shall be authorized to award) any punitive damages relating to any matters
under, arising out of, in connection with or relating to this Agreement in the
proceedings hereunder or in any other forum. The parties intend that this
Section shall be valid, binding, enforceable, irrevocable and shall survive
the termination of this Agreement. The Arbitrators shall select the place of
arbitration. Any court having jurisdiction thereof may enter judgement upon
the award rendered by the arbitrators. BY EXECUTING THIS AGREEMENT, THE
PARTIES HERETO HEREBY WAIVE ANY RIGHTS THEY MAY POSSESS TO HAVE ANY
CONTROVERSY, DISPUTE OR CLAIM UNDER, ARISING OUT OF, OR IN CONNECTION WITH OR
IN RELATION TO THIS AGREEMENT LITIGATED IN A COURT OR JURY TRIAL.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed by its duly authorized officers as of the day and year first above
written.
SBB: SBB, INC.
By: /s/ Robert B. Wallace
Robert B. Wallace
President
By: /s/ Robert B. Wallace
Secretary
ALFINE: ALFINE CORPORATION
By: /s/ William H. Ervine, Jr.
William H. Ervine, Jr.
President
By: /s/ Allen J. Portnoy
Allen J. Portnoy
Secretary
Exhibit 99
USA TALKS.COM, INC.
4350 EXECUTIVE DRIVE, SUITE 220, SAN DIEGO, CA 92121BULLETVOICE 619.546.0550
BULLET FAX 619.552.8904
For more information contact:
Lesley R. Wilber, Investor Relations
USA Talks. com, Inc., 619-546-0550
FOR IMMEDIATE RELEASE
USA TALKS.COM, INC. FORMED
San Diego, CA (July 29, 1998)--- Alfine Corporation today announced that it
has been reorganized with SBB, Inc. (OTC, BB: SBBI). The combined Company will
be renamed USA TALKS.COM, INC. The Company will become a service provider for
Internet Phone long-distance telephone calling, and will offer new flat-rate-
per-month plans for unlimited use, in both the U.S. and international markets.
Combining its proprietary technologies in Advanced Audio Compression, Phonetic
Speech Recognition and Voice Verification/Identification, USA TALKS.COM, INC.
will be the only Internet Phone long-distance service provider offering:
- unlimited use for flat-rate-per-month
- telephone-to-telephone calling with no computer needed
- "toll-quality" voice clarity
- long-distance calls accessed by speech recognition
- unauthorized use verified electronically by speaker
identification
The Company expects to make service available from most large United States
cities in late October, 1998, contingent upon the consummation of financing
necessary to acquire transmission equipment and related facilities.
This press release contains forward looking statements relating to future
revenues and operating information and their impact on future results. Actual
results could differ materially from those projected in the forward looking
statements as a result of risk factors such as market conditions, product life
cycles, customer delays in purchasing products, technology shifts, potential
difficulties in introducing new products, competition, price sensitivity and the
uncertainty of continuing market acceptance of the Company's products by
distributors, retailers and customers.
