<PAGE>
As filed with the Securities and Exchange Commission on January 8, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
----------------------------
USA TALKS.COM, INC.
--------------------
(Exact Name of Registrant as Specified in Charter)
NEVADA 93-0915593
(Jurisdiction of Incorporation (I.R.S. Employer Identification Number)
or Organization)
4350 EXECUTIVE DRIVE SUITE 220
SAN DIEGO, CALIFORNIA 92121
(Address of Principal Executive Offices)
LETTER AGREEMENT FOR CONSULTING SERVICES AND AGREEMENT ADDENDUM
(Full title of the Plan)
ALLEN J. PORTNOY
4350 EXECUTIVE DRIVE SUITE 220
SAN DIEGO, CALIFORNIA 92121
619-546-0550
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
Copies of communications to:
Alan L. Pepper, Esq.
Mitchell, Silberberg & Knupp LLP
11377 West Olympic Boulevard
Los Angeles, California 90064-1683
(310) 312-3155
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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- --------------------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
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<S> <C> <C> <C> <C>
Common Stock, 941,000 $0.06(1) $56,460(1) $15.70(1)
par value $.001
per share
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- --------------------------------------------------------------------------------
</TABLE>
(1) This registration statement is being filed to register 941,000 shares of
Common Stock issuable by the Registrant upon the exercise of a warrant
issued to a consultant at an exercise price of $0.06 per share. The
registration fee is computed pursuant to Rule 457(h)(1) based on the
warrant exercise price. Pursuant to Rule 416, this registration
statement also registers such number of additional shares of Common Stock
that may be offered or issued pursuant to the warrant to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
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<PAGE>
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Registration Statement on Form S-8 is filed pursuant to General
Instruction E for the purpose of registering shares of Common Stock of USA
Talks.com, Inc. (the "Registrant") issuable under an agreement for consulting
services. The information set forth below is incorporated by reference in this
Registration Statement as provided by General Instruction E and as otherwise
provided by the General Instructions to Form S-8. The Registrant hereby
incorporates by reference in this Registration Statement the following documents
filed with the Commission by the Registrant pursuant to the Exchange Act of
1934, as amended:
1. The Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1997;
2. The Registrant's Quarterly Reports on Form 10-QSB for the
quarters ended March 31, 1998, June 30, 1998 and September 30,
1998;
3. The Registrant's Current Reports on Form 8-K filed on August 3,
1998 and November 23, 1998;
3. All other reports filed by the Registrant or the Plan pursuant to
Sections 13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the annual report referred to in paragraph 1,
above.
All documents and other reports subsequently filed by the Registrant
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference in this Registration Statement
and to be part hereof from the date of filing of such documents or reports. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any other subsequently filed document which also is, or is deemed to be,
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Registrant's authorized capital stock consists of (i) 50,000,000 shares
of Common Stock, par value $.001 per share, of which 13,118,420 shares were
outstanding as of the date of this Registration Statement, (ii) 1,000 shares of
Class A Preferred Stock, par value $.001 per share, with other terms or
preferences to be set by the Registrant's board of directors, none of which are
outstanding as of the date of this Registration Statement, (iii) 1,000 shares of
Class B Preferred Stock, par value $.001 per share, with other terms or
preferences to be set by the Registrant's board of directors, none of which are
outstanding as of the date of this Registration Statement and (iv) 1,000 shares
of Class C Preferred Stock, par value $.001 per share, with other terms or
preferences to be set by the Registrant's board of directors, none of which are
outstanding as of the date of this Registration Statement. Each share of Common
Stock has equal rights as to voting and in the event of dissolution and
liquidation. There is no cumulative voting by shareholders. Shareholders have
no preemptive rights to acquire any shares of Registrant.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection 1 of Section 78.7502 of Chapter 78 of the Nevada General
Corporation Law ("NGCL") empowers a corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (except in an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses, including attorneys' fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and that, with respect to any criminal action or proceeding, he had
reasonable cause to believe his action was unlawful.
Subsection 2 of Section 78.7502 of the NGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he
acted in any of the capacities set forth above, against expenses, including
amounts paid in settlement and attorneys' fees, actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if he
acted in accordance with the standard set forth above, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged by a court of competent jurisdiction after
exhaustion of all appeals therefrom to be liable to the corporation or for
amounts paid in settlement to the corporation unless and only to the extent that
the court in which such action or suit was brought or other court of competent
jurisdiction determines that, in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.
Section 78.751 of the NGCL provides that unless indemnification is
ordered by a court, the determination to provide indemnification must be made by
the stockholders, by a majority vote of a quorum of the board of directors who
were not parties to the action, suit or proceeding, or in certain circumstances
by independent legal counsel in a written opinion. In addition, the articles of
incorporation, bylaws or an agreement made by the corporation may provide for
the payment of the expenses of a director or officer of the expenses of
defending an action as incurred upon receipt of an undertaking to repay the
amount if it is ultimately determined by a court of competent jurisdiction that
the person is not entitled to indemnification Section 78.751 of the NGCL further
provides that, to the extent a director or officer of a corporation has been
successful on the merits or otherwise in the defense of any action, suit or
proceeding referred to in subsection (1) and (2), or in the defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith; that indemnification provided for by Section 78.751 of the
NGCL shall not be deemed exclusive of any other rights to which the indemnified
party may be entitled and that the scope of indemnification shall continue as to
directors, officers, employees or agents who have ceased to hold such positions,
and to their heirs, executors and administrators.
Finally, Section 78.752 of the NGCL empowers the corporation to
purchase and maintain insurance on behalf of a director, officer, employee or
agent of the corporation against any liability asserted against him or incurred
by him in any such capacity or arising out of his status as such whether or not
the corporation would have the authority to indemnify him against such
liabilities and expenses.
The Registrant's articles of incorporation provide that, as the board
of directors of the Registrant may provide from time to time in the bylaws or by
resolution, the Registrant may indemnify its officers, directors, agents and
other persons to the full extent permitted by the laws of the State of Nevada.
The Registrant's bylaws provide for indemnification of officer, directors and
others and purchase of insurance pursuant to provisions based on the foregoing
provisions of the NGCL.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
<PAGE>
Not applicable.
ITEM 8. EXHIBITS
The Exhibit Index immediately preceding the exhibits is incorporated herein
by reference.
ITEM 9. UNDERTAKINGS
The Registrant hereby undertakes:
(a)(1) To file, during any period in which it offers or sells
securities, a post-effective amendment to this registration statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in the volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the
low or high and of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) Include any additional or changed material information on the
plan of distribution;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8, and the information
required to be included in a post-effective amendment is incorporated by
reference from periodic reports filed by the registrant under the Securities
Exchange Act of 1934.
(2) To, for the purpose of determining liability under the Securities
Act of 1933, treat each such post-effective amendment as a new registration
statement relating to the securities offered, and the offering of such
securities at that time shall be deemed to be the initial BONA FIDE offering.
(3) To file a post-effective amendment to remove from registration
any of the securities being registered which remain unsold at the end of the
offering.
(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of
<PAGE>
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in San Diego, California, on January 7, 1999.
USA TALKS.COM, INC.
By: /s/ Allen J. Portnoy
---------------------------
Allen J. Portnoy
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, Registration
Statement on Form S-8 has been signed by the following persons in the capacities
and on the date indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Allen J. Portnoy Chief Executive Officer, Secretary and Director January 7, 1999
-------------------------- ----------
Allen J. Portnoy
/s/ William H. Ervine, Jr. President and Director January 7, 1999
-------------------------- ----------
William H. Ervine, Jr.
/s/ Jack C. Alexander Chief Financial Officer January 7, 1999
-------------------------- ----------
Jack C. Alexander
/s/ Stephen A. Storey Director January 7, 1999
-------------------------- ----------
Stephen A. Storey
/s/ Max S. Kissell Director January 7, 1999
-------------------------- ----------
Max S. Kissell
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Exhibit
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<C> <S>
4.1 Letter Agreement for Consulting Services dated May 21, 1998
4.2 Addendum Agreement dated November 11, 1998
4.3 Form of Warrant
4.4 Articles of Incorporation, as amended*
4.5 Bylaws**
5 Opinion of Mitchell, Silberberg & Knupp LLP re: legality
23.1 Consent of Mitchell, Silberberg & Knupp LLP
(included in its opinion contained in Exhibit 5)
23.2 Consent of Crouch Bierwolf & Company, CPA
</TABLE>
* Incorporated by reference from Exhibit 4.2 to Registration Statement on
Form S-8 filed on August 3, 1998 (Registration Number 333-60453)
** Incorporated by reference from Exhibit 4.3 to Registration Statement on
Form S-8 filed on August 3, 1998 (Registration Number 333-60453)
<PAGE>
Exhibit 4.1
ALLEN GELBARD
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May 21, 1998
VIA FACSIMILE NUMBER: (619) 552-8904
Mr. Allen J. Portnoy, Chairman and CEO
ALFINE Corporation
4350 Executive Drive. #220
San Diego, California 92121
Re: CONFIDENTIAL LETTER AGREEMENT FOR CONSULTING SERVICES
Dear Al,
Pursuant to our meeting with you and your associate, Barry, this Letter
Agreement describes my understanding of our professional relationship. If the
following meets with your approval, and is accurate in all respects, please
execute where indicated, fax an executed copy to (310) 446-0685, mail an
executed original to the address shown below and remit funds immediately.
You have informed me that your company wishes to retain my business consulting
services in order to assist in strategizing and planning the acquisition of a
public company. It is fully understood that I make no guarantees or assurances
that the aforementioned merger acquisition will be successful or timelv. I
endeavor to be effective in these situations but, cannot represent that success
is certain. It will be necessary for me to have your organization's full
cooperation and assistance if we are to be productive. In addition, it should
be clearly understood that my services are not exclusive. and that I have other
clients and responsibilities; and that I alone prioritize my work schedule. It
should also be understood that I am neither an attorney nor an accountant and
strongly recommend that you seek assistance and advice from capable parties in
both areas.
The following describes my compensation for services:
1. An initial retainer in the amount of $35,000 (U. S.) in good funds
concurrent with the execution of this Letter Agreement. This retainer is
termed a "time fee" and cover the initial 60 days of our relationship.
2. On Julv 21, 1998, should you wish to continue our relationship, an
additional $15,000 will be due in good funds and on the 4th day of every
additional month thereafter until either of us elect to terminate our
relationship. Termination will be given in writing, with 15 days prior
notice.
<PAGE>
3. In addition to the time fee, a "success fee" equal to 10% of all gross
proceeds will be payable in a timely manner, at closing, in good funds
should the public company contain capital or we assist in the architecture
of a private placement.
4. In addition to the time fee and the success fee, there will be an
equity participation equal to 6% of the equity exchanged. For example, if
100,000 shares are acquired by your firm or you then 6,000 additional
shares shall be made available to me and or my assigns in the form of
warrants exerciseable at 110% of the price paid by you or your firm. Said
warrant shall remain in effect for a period of 5 years from the date of
issuance and the underlying stock fully registered if the company is
publicly traded. In the case of a fully reporting company, then an S-8
registration of the aforementioned stock shall be utilized.
5. In the event that I provide the introduction to the shell "vehicle",
upon execution of a letter of intent, memorandum of understandmg or any
other document which contemplates the merger or acquisition of your company
with that entity, then a "progress fee" of $35,000 (U. S.) in good funds
shall be paid concurrent with your execution of that document. At closing,
an additional progress fee of $35,000 (U.S.) in good funds shall be paid at
closing along with the "success fee" and "equity participation" described
in paragraph 3 and paragraph 4 above.
6. Incidental expenses such as telephone calls, facsimile transmissions,
Federal Express etc. shall be borne by me. However, all travel expenses
shall be first class and be PRE-APPROVED and borne by you. If possible,
airline tickets will be paid in advance and all expenses shall be promptly
refunded within 7 days from submission.
7. In the event of a dispute arising out of this Agreement, we mutually
consent to submit the matter to the American Arbitration Association in Los
Angeles, California for resolution. The prevailing parry shall be entitled
to reasonable legal fees and expenses.
8. We mutually affirm that this document constitutes the totality of our
agreement and that it may only be amended by mutual written consent.
As you know, life is full of surprises and there may be situations that may
arise that are not contemplated by this Letter Agreement. It is expected that
we will work harmoniously and will work together and negotiate in good faith. I
am anticipating a long and lucrative relationship and look forward to working
with you and wish to thank you for giving me this opportunity to be of
assistance.
Agreed to and accepted this 21st day of May, 1998.
/s/ Allen Portnoy /s/ Allen Gelbard
- -------------------------------------- --------------------------------------
Allen J. Portnoy, Chairman and CEO Allen Gelbard
ALFINE Corporation
AG/nl
<PAGE>
Exhibit 4.2
ADDENDUM AGREEMENT
THIS ADDENDUM AGREEMENT is made and entered into, effective as of the
22nd day of October, 1998, by and between Allen Gelbard, whose address is 9903
Santa Monica Blvd., Suite 325, Beverly Hills, CA 9021 hereinafter "Gelbard" and
USA Talks.com, Inc., a Nevada Corporation, successor in interest to ALFINE
Corporation, whose address is 4350 Executive Drive, San Diego, CA 92121,
hereinafter referred to as "USAT".
RECITALS
USAT, through its predecessor, ALFINE corporation and Gelbard entered
into an Agreement effective May 21, 1998 whereby Gelbard was to provide certain
consulting services to USAT relative to USAT acquiring control of a public
vehicle via a reverse merger.
Having completed the reverse merger with SBB, Inc. with Gelbard's
direct consultation and assitance, USAT wishes to expand the scope of Gelbard's
consulting services.
Gelbard has reviewed this agreement and discussed the services to be
performed hereunder and has represented to USAT that GELBARD is qualified and
willing to assist USAT in accordance with the provisions of the May 21, 1998
Agreement, as amended.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1.--
Gelbard will provide all services, on a non-exclusive basis, required to
assist the Company in the furtherance of USAT's business plan.
2.--
USAT reports or graphic information prepared by Gelbard under this
Agreement shall be the sole property of USAT, except to the extent that such
items consist of information available to the general public. All information
that is the sole property of USAT hereunder shall be returned to USAT at their
request and shall not be printed, distributed, published or disclosed to third
parties by GELBARD without prior written consent of USAT.
3.--
In the course of performing under this Agreement, GELBARD will introduce
USAT to various individuals, potential joint venture partners, customers and
potential financing sources, etc. In recognition of said disclosures, USAT
agrees that neither they nor any corporation and or its subdivisions,
subsidiaries, employees or agents with whom they may be associated, will make
any contact with, deal or otherwise become involved in any transaction,
contract, roll-over, or extension with any contact revealed to them by GELBARD
during the term of this agreement and for a period of two (2) years following
its termination without notifying GELBARD and paying fees as prescribed in
<PAGE>
this agreement. GELBARD agrees to treat as confidential all information so
designated when provided by USAT, during the term of this agreement.
4.--
GELBARD is an independent contractor. GELBARD shall not constitute, hold
himself or be deemed to be an employee, servant, agent or representative of USAT
unless so designated by USAT in writing. All employees, agents and permitted
subcontractors of GELBARD shall be under the direct charge of GELBARD and shall
also be independent contractors as regards their relationship with USAT.
5.--
In recognition of GELBARD's assistance, USAT agrees to compensate GELBARD
by increasing the number of warrants to be conveyed per Paragraph 4 of the May
21st Agreement by 200,000. All terms and conditions contained in Paragraph 4
shall apply to this additional 200,000 warrant grant.
6.--
USAT also agrees to pay reasonable legal fees and court costs that GELBARD
incurs in collecting any moneys or shares due them under this agreement that are
not paid as agreed herein.
7.--
This agreement contains and sets forth the entire Addendum to the May 21st,
1998 Agreement between USAT and GELBARD with respect to the subject matter
hereof. No modification, alteration or extension of this Addendum shall be
effective unless in writing and executed by the Parties subsequent to the
effective date of this agreement.
8.--
To facilitate the execution of this agreement, any number of counterparts
hereof may be executed, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
instrument. Copies delivered by fax shall have the same force and effect as
original signed documents.
9.--
This agreement shall be governed by and interpreted in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, the Parties have set their signatures below.
USA Talks.com, Inc. Allen Gelbard
/s/ William H. Ervine /s/ Allen Gelbard
---------------------- ------------------
President
Date: 11/11/98 Date: 11/11/98
<PAGE>
Exhibit 4.3
COMMON STOCK WARRANT
USA TALKS.COM, INC.
COMMON STOCK WARRANT
The Transferability of This Warrant is
Restricted as Provided in Section 1.
Void after 5:00 p.m., Pacific Standard time, Right to Purchase 940,000
___________________, 2003 shares of Common Stock
(subject to adjustment)
No. W-_____
PREAMBLE
USA TALKS.COM, INC. (the "Company"), a Nevada corporation, hereby certifies
that, for value received, ALLEN GELBARD (the "Holder"), is entitled, subject to
the terms set forth below, to purchase from the Company at any time or from time
to time, before 5:00 P.M. California time, on ______________, 2003 (the
"Termination Date"), 940,000 fully paid and nonassessable shares of Common
Stock, $0.001 par value, of the Company ("Common Stock"), at the purchase price
per share (the "Purchase Price") set forth in Section 3.2 (the "Purchase
Price"). The number and character of such shares of Common Stock and the
Purchase Price are subject to adjustment as provided herein.
This Warrant is the Common Stock Purchase Warrant (the "Warrant"),
evidencing the right to purchase an aggregate of 940,000 shares of Common Stock
of the Company (the "Warrant Shares"), issued pursuant to a certain Letter
Agreement for Consulting Services, dated as of May 21, 1998 and an Addendum
Agreement, dated November 11, 1998 between the Company and the Holder
(collectively, the "Agreements").
As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:
(a) The term "Company" includes any corporation which shall succeed
to or assume the obligations of the Company hereunder.
(b) The term "Common Stock" includes all stock of any class or
classes (however designated) of the Company, authorized on or after the
date hereof, the holders of which shall have the right, without limitation
as to amount, either to all or to a share of the balance of current
dividends and liquidating dividends after the payment of dividends and
distributions on any shares entitled to preference, and the holders of
which shall ordinarily, in the absence of contingencies, be entitled to
vote for the election of a majority of directors of the Company (even
though the right so to vote has been suspended by the happening of such a
contingency).
(c) The term "Other Securities" refers to any stock (other than
Common Stock) and
<PAGE>
other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled
to receive, or shall have received, on the exercise of the Warrant, in
lieu of or in addition to Common Stock, or which at any time shall be
issuable or shall have been issued in exchange for or in replacement of
Common Stock or Other Securities.
(d) The term "Warrant Shares" means the Common Stock issued or
issuable upon exercise of the Warrant.
(e) The term "Securities Act" means the Securities Act of 1933, or
any successor federal statute, and the rules and regulations of the
Securities and Exchange Commission thereunder, all as the same shall be in
effect at the time.
1. Restricted Securities. This Warrant has not been registered under the
Securities Act, nor pursuant to the provisions of the securities or other laws
of any other applicable jurisdictions, in reliance upon certain exemptions under
applicable state and federal laws. This Warrant is issued to the Holder in
reliance upon such fact based on the Holder's representations, warranties and
agreements. If, at the time of any transfer or exchange (other than a transfer
or exchange not involving a change in the beneficial ownership of such Warrant
or Warrant Shares) of a Warrant or Warrant Shares, such Warrant or Warrant
Shares shall not be registered under the Securities Act, the Company may
require, as a condition of allowing such transfer or exchange, that the Holder
or transferee of such Warrant or Warrant Shares, as the case may be, furnish to
the Company an opinion of counsel reasonably acceptable to the Company to the
effect that such transfer or exchange may be made without registration under the
Securities Act. In the case of such transfer or exchange and in the case of an
exercise of a Warrant if the Warrant Shares to be issued thereupon are not
registered pursuant to the Securities Act, the Company may require a written
statement that such Warrant or Warrant Shares, as the case may be, are being
acquired for investment and not with a view to the distribution thereof. The
certificates evidencing the Warrant Shares issued on the exercise of the Warrant
shall, if such Warrant Shares are being sold or transferred without registration
under the Securities Act, bear a legend to the effect that the Warrant Shares
evidenced by such certificates have not been so registered. The Company shall
expend its best efforts to register the Warrant Shares under the Securities Act
pursuant to a Registration Statement on Form S-8.
2. Transfer of Warrant. This Warrant and all rights hereunder shall not
be transferred to any entity without the prior written consent of the Company,
which consent may be withheld at its sole discretion.
3. Exercise of Warrant and Warrant Price.
3.1 Exercise of Warrant
This Warrant may only be exercised in full. The holder of this
Warrant may exercise it by surrendering this Warrant, with the exercise notice
at the end hereof duly executed by such holder, to the Company at its principal
office. The surrendered Warrant shall be accompanied by payment, in cash or by
certified or official bank check payable to the order of the Company, in the
amount obtained by multiplying the number of shares of Common Stock called for
on the face of this Warrant (giving effect to any adjustment therein) by the
Purchase Price.
3.2 Purchase Price. The Purchase Price shall be $0.06 per share of
Common Stock,
<PAGE>
subject to adjustment as provided in Section 5.
4. Delivery of Stock Certificates, Etc., on Exercise. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within 10 days thereafter, the Company at its expense (including the
payment by it of any applicable issue taxes) will cause to be issued in the name
of and delivered to the holder hereof, or as such holder (upon payment by such
holder of any applicable transfer taxes) may direct, a certificate or
certificates for the number of fully paid and nonassessable Warrant Shares to
which such holder shall be entitled on such exercise, plus, in lieu of any
fractional Share to which such holder would otherwise be entitled, cash equal to
such fraction multiplied by the then current Fair Market Value of one full
Share. "Fair Market Value" shall mean (i) the closing price per share of the
Common Stock on the date of exercise of this Warrant (the "Exercise Date"), but
if no shares were traded on such date, then on the last previous date on which a
share was so traded if such date is no more than 30 days prior to the Exercise
Date, or, if shares are not traded, (ii) the average of the bid and asked
closing prices for one share of Common Stock on the over-the-counter market if
such prices are available as of a date that is no more than 30 days prior to the
Exercise Date, or, if such information is not available, (iii) the price per
share of Common Stock at which shares of Common Stock were sold by the Company
in private transactions as of a date that is no more than 30 days prior to the
Exercise Date, or, if none of the above is applicable, (iv) the fair market
value of a share of Common Stock as established by the Board of Directors of the
Company as of the Exercise Date using any reasonable method of valuation.
5. Adjustment of Purchase Price and Number of Warrant Shares.
5.1 The Purchase Price hereof shall be subject to adjustment from
time to time as follows:
(a) In case the Company shall, prior to the Termination Date, (i) pay
a dividend on its Common Stock in Common Stock, (ii) subdivide its outstanding
shares of Common Stock, or (iii) combine its outstanding shares of Common Stock
into a small number of shares, then, in such an event, the Purchase Price in
effect immediately prior thereto shall be adjusted proportionately so that the
adjusted Purchase Price will bear the same relation to the Purchase Price in
effect immediately prior to any such event as the total number of shares of
Common Stock outstanding immediately prior to any such event shall bear to the
total number of shares of Common Stock outstanding immediately after such event.
An adjustment made pursuant to this subdivision (a), (i) shall become effective
retroactively immediately after the record date in the case of a dividend and
(ii) shall become effective immediately after the effective date in the case of
a subdivision or combination. The Purchase Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein.
(b) Upon each adjustment of the Purchase Price pursuant to
subdivision (a) of Subsection 5.1, the number of shares of Common Stock
purchasable upon exercise of this Warrant Certificate shall be adjusted to the
number of shares of Common Stock, calculated to the nearest one hundredth of a
share, obtained by multiplying the number of shares of Common Stock purchasable
immediately prior to such adjustment upon the exercise of this Warrant
Certificate by the Purchase Price in effect prior to such adjustment and
dividing the product so obtained by the new Purchase Price.
5.2 In case of any capital reorganization of the Company, or of any
reclassification of the Common Stock, this Warrant Certificate shall be
exercisable after such capital reorganization or reclassification upon the terms
and conditions specified in this Warrant Certificate, for the number of
<PAGE>
shares of stock or other securities which the Common Stock issuable at the
time of such capital reorganization or reclassification upon exercise of this
Warrant Certificate would have been entitled to receive upon such capital
reorganization or reclassification if such exercise had taken place
immediately prior to such action. The subdivision or combination of shares
of Common Stock at any time outstanding into a greater or lesser number of
shares of Common Stock shall not be deemed to be a reclassification of the
Common Stock of the Company for the purposes of this Subsection 5.2.
5.3 In case at any time or from time to time, the Company shall (a)
effect a reorganization, (b) consolidate with or merge into any other person or
(c) transfer all or substantially all of its properties or assets to any other
person under any plan or arrangement contemplating the dissolution of the
Company within 24 months from the date of such transfer (any such transaction
being hereinafter sometimes referred to as a "Reorganization") then, in each
such case, the holder of this Warrant, on the exercise hereof as provided in
Section 3 at any time after the consummation or effective date of such
Reorganization (the "Effective Date"), shall receive, in lieu of the Warrant
Shares issuable on such exercise prior to such consummation or such effective
date, the stock and other securities and property (including cash) to which such
holder would have been entitled upon such consummation, if such holder had so
exercised this Warrant, immediately prior thereto (all subject to further
adjustment thereafter as provided in Section 5).
5.4 Continuation of Terms. Except as otherwise expressly provided in
Subsection 5.3, upon any reorganization, consolidation, merger or transfer (and
any dissolution following any transfer) referred to in this Section 5, this
Warrant shall continue in full force and effect and the terms hereof shall be
applicable to the shares of stock and other securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company.
6. Exchange of Warrants. On surrender for exchange of any Warrant,
properly endorsed, to the Company, the Company at its expense will issue and
deliver to or (subject to Section 2) on the order of the holder thereof a new
Warrant or Warrants of like tenor, in the name of such holder or as such holder
(on payment by such holder or any applicable transfer taxes) may direct, calling
in the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face of the Warrant or Warrants so surrendered.
7. Replacement of Warrants. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor.
8. Negotiability, Etc. This Warrant is issued upon the following terms,
to all of which each holder or owner hereof by the taking hereof consents and
agrees:
(a) This Warrant is not negotiable and may not be transferred by
the holder hereof; and
(b) This Warrant issued pursuant to the terms of the Agreements
and is subject
<PAGE>
to the terms thereof.
9. THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE'S SECURITIES ACTS, AND
MAY NOT BE TRANSFERRED OR HYPOTHECATED WITHOUT PRIOR REGISTRATION OR
QUALIFICATION UNDER SAID ACTS OR AN EXEMPTION THEREFROM ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
10. Notice, Etc. All notices and other communications from the Company to
the holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such holder or, until any such holder furnishes to the
Company an address, then to, and at the address of, the last holder of this
Warrant who has so furnished an address to the Company.
11. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant is being delivered in the State of California and shall
be construed and enforced in accordance with and governed by its laws. The
headings in this Warrant are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. All nouns and pronouns used
herein shall be deemed to refer to the masculine, feminine or neuter, as the
identity of the person or persons to whom reference is made herein may require.
12. Expiration. The right to exercise this Warrant shall expire at 5:00
P.M., Pacific Standard time, on ________________, 2003.
Dated: USA TALKS.COM, INC.
By:
------------------------
Its: President
Attest:
- ------------------------
Secretary
<PAGE>
NOTICE OF EXERCISE
The undersigned registered holder of the within Warrant irrevocably
exercises the within Warrant for and purchases _________________ shares of
Common Stock of USA Talks.com, Inc., a Nevada corporation, the amount of
$_____________, all at the price and on the terms and conditions specified in
the within Warrant and requests that a certificate for the shares of Common
Stock hereby purchased be issued in the name of and delivered to the
undersigned, whose address is ____________________________________________.
Dated: _______________, ______
---------------------------
Allen Gelbard
<PAGE>
Exhibit 5
[MITCHELL SILBERBERG & KNUPP LLP LETTERHEAD]
CLIENT NO: 31413-0
DOC. NO. : 0074164
January 7, 1999
USA Talks.com, Inc.
4505 South Wasatch Blvd., #330
Salt Lake City, Utah 84124
Re: REGISTRATION STATEMENT ON FORM S-8
Dear Sirs:
You have requested the opinion of this firm with respect to certain
matters in connection with the Registration Statement on Form S-8 proposed to be
filed by you under the Securities Act of 1993, as amended (the "Securities
Act"), for the purpose of registering the offer and sale of 940,000 authorized
but unissued shares (the "Shares") of Common Stock, $0.001 par value (the
"Common Stock"), of USA Talks.com, Inc. (the "Company") issuable pursuant to
that certain Agreement for Consulting Services, dated May 21, 1998, and that
certain Addendum Agreement, dated November 11, 1998, between the Company and
Allen Gelbard (collectively, the "Agreements") and a form of warrant to be
issued by the Company to Allen Gelbard (the "Warrant").
For the purpose of rendering the opinions contained in this opinion
letter, we have examined copies of:
(a) The Agreements;
(b) The form of the Warrant;
(c) Resolutions of the Board of Directors of the
Company authorizing INTER ALIA, the issuance of the
Warrant and the Shares;
(d) Such other corporate records and other instruments
as we have deemed necessary or appropriate.
<PAGE>
In the course of our examinations and investigations, we have assumed the
genuineness of all signatures on the original documents, and the due execution
and delivery of all documents requiring due execution and delivery for the
effectiveness thereof.
Based upon and subject to the foregoing, and in reliance thereon, and
subject to the assumptions set forth herein, it is our opinion that the issuance
of the Shares has been duly authorized and, when issued and delivered in
accordance with the terms of the Agreements and the Warrant, the Shares will be
legally issued, fully paid and nonassessable.
We consent to the filing of this opinion with the Registration
Statement. In giving our consent, we do not hereby admit that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules or regulations thereunder. This opinion letter is
given as of the date hereof and we assume no obligation to advise you of any
change that may hereafter be brought to our attention.
Very truly yours,
MITCHELL, SILBERBERG & KNUPP LLP
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
pertaining to the Consulting Services & Fee Agreement, of our report dated
March 10, 1998 with respect to the consolidated financial statements of USAT
Talks.com, Inc., formerly known as SBB, Inc. included in the Annual Report on
Form 10-KSB for the year ended December 31, 1997.
Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
December 30, 1998
