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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
INTERCARE.COM, INC.
(Name of small business issuer in its charter)
California 7374 95-4304537
(State Or Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation Classification Code Number) Identification No.)
or Organization)
900 Wilshire Blvd., Suite 500
Los Angeles, CA 90017
(213) 627-8878
(Address and Telephone Number of Principal Executive Offices
and Principal Place of Business)
---------------------------
Anthony C. Dike, Chairman/CEO
900 Wilshire Blvd, Suite 500
Los Angeles, California 90017
(213) 627-8878
(Name, Address and Telephone Number of Agent For Service)
---------------------------
Copy To:
Scott Wellman, Esq
Wellman & Warren, LLP
4 Venture, Suite 325
Irvine, California 92618-3325
(949)450-0662
---------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement as determined by
market conditions and other factors.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Each Class Amount to be Price Per Offering Registration
of Securities Registered Share Price Fee
<S> <C> <C> <C> <C>
Common Stock, (1) 1,000,000 $5.00(2) $5,000,000 $1320
No par value
<FN>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(g) under the Securities Act of 1933.
(2) Our estimated price per share is between $5 and $25.
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PART I - INFORMATION REQUIRED IN PROSPECTUS
INTERCARE.COM, INC.
Cross-Reference Sheet
Showing Location in the Prospectus of
Information Required by Items of Form SB-2
Form SB-2 Item Number and Caption Location In Prospectus
1. Front of Registration Statement and
Outside Front Cover of Prospectus Outside Front Cover
2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front Cover Page
3. Summary Information and Risk Factors Summary; Risk Factors
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Determination of Offering
Price
6. Dilution Dilution
7. Selling Security Holders
8. Plan of Distribution Plan of Distribution
9. Legal Proceedings Business - Legal
Proceedings
10. Directors, Executive Officers,
Promoters and Control Persons Management
11. Security Ownership of Certain
Beneficial Owners and Management Principal Security Holders
12. Description of Securities Description of Securities
13. Interest of Named Experts and Counsel Legal Matters, Experts
14. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities Management -
Indemnification
15. Organization Within Last Five Years Certain Transactions
16. Description of Business Business
17. Management's Discussion and Analysis
or Plan of Operation Management's Discussion
and an Analysis of
Financial Condition and
Results of Operations.
18. Description of Property Business - Facilities
19. Certain Relationships and Related
Transactions Certain Transactions
20. Market for Common Equity and Related
Stockholder Matters Description of Securities
21. Executive Compensation Management - Executive
Compensation
22. Financial Statements Financial Statements
23. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure*_________
(*) None or Not Applicable
The information in this Prospectus is not complete and may be changed. The
Selling Security Holders may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER ___, 1999
PROSPECTUS
INTERCARE.COM, INC.
Minimum 100,000 shares/Maximum 1,000,000 Shares
Of Common Stock
Offering Price between $5.00 and $25 Per Share
We are organized in the State of California to pursue bio-medical software
development, healthcare transactions and tele-medicine contents and programs
development utilizing the Internet Technology.
We are offering these shares through our directors and officers without the
use of a professional underwriter. We will not pay commissions on stock sales
unless we retain a professional underwriter to assist us with this offering.
This is our initial public offering, and no public market currently exists for
our shares. The offering price may not reflect the market price of our shares
after the offering.
It is currently estimated that the initial public offering price will be
between $5 and $25 per share. Application has been made for quotation of our
common stock on the Nasdaq SmallCap Market under the symbol "ICCO".
Investing in our common stock involves risks. You should not purchase our
common stock unless you can afford to lose your entire investment. See "RISK
FACTORS" beginning on page XX of this prospectus.
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These securities have not been approved by the Securities and Exchange
Commission or any state securities commission, nor have those organizations
determined that this prospectus is accurate or complete. Any representation
otherwise is a criminal offense.
Offering
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<CAPTION>
Price to Public (1) Discount (2) Proceeds to Company (3)
Per Share
<S> <C> <C> <C>
$5.00 $0 $5.00
Maximum Shares
1,000,000 $5,000,000 $0 $5,000,000
Minimum Shares
100,000 $500,000 $0 $500,000
<FN>
(Notes on following page.)
</TABLE>
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The date of this prospectus is ______, 1999
INTERCARE.COM, INC.
900 Wilshire Blvd, Suite 500
Los Angeles, CA 90017
(213) 627-8878
You should rely only on the information contained in this document or to which
we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities. The information in this document may only be accurate
on the date of this document.
Dealer Prospectus Delivery Obligation
Until , 2000 (90 days after the commencement of this offering), all dealers
effecting transactions in the these securities, whether or not participating in
this offering, may be required to deliver a prospectus. This is in addition to
the obligation of dealers to deliver a prospectus when acting as underwriters to
their unsold allotments or subscriptions.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Page
Summary
Risk Factors
Use of Proceeds
Determination of Offering Price
Dilution
Plan of Operation
Business
Management
Certain Transactions
Principal Security Holders
Description of Securities
Selling Stockholders
Plan of Distribution
Legal Matters
Experts
Where You Can Find Additional Information
Index to Financial Statements. for period ended December 31, 1999F-1
</TABLE>
<PAGE>
SUMMARY
This summary highlights information we present more fully elsewhere in this
prospectus. You should read this entire prospectus carefully.
About Us
InterCare.com formerly known as Inter-Care Diagnostics, Inc., is a
leading developer of bio-medical healthcare multi-media content and software
technologies. Since February 1991, we have taken steps to become a leading
provider of software technologies for neuromuscular re-education, stress
management and biofeedback.
The company was originally incorporated in 1991 for the purpose of operating a
medical diagnostics laboratory and engaging in various medical services to
clients. On January 17, 1994, a 6.8 magnitude earthquake centered in Northridge,
California caused wide spread damage to commercial and residential structures,
and to major freeways, causing business interruptions and disrupting the normal
flow of traffic. The Company experienced irreversible damage to all its
high-tech computers and diagnostic equipment.
Since that time, the Company has been devoting substantially all its efforts to
establishing a new business entity that develops software for the healthcare
industry and other related activities over the Internet.
We have created, published and marketed multimedia software products, content
and Internet-ready applications that provide biofeedback, healthcare
transactions, medical and health-related information for the education, consumer
and professional markets.
The company developed the Mirage Systems Multimedia Biofeedback software program
( a cross-platform program : Windows 3.X including windows 95;98 and Apple
Macintosh platforms) in 1994, and this software became the first FDA approved
software program for neuromuscular re-education and biofeedback training. The
company also has four other software products in the market including the "Body
Pain Trigger Points Program", one of our best selling software products, with
over 20,000 copies sold. The company intends to convert all its software
programs to run in all the popular operating systems available, including but
not limited to Microsoft Windows, Macintosh and Linus or Unix operating
systems.
During the fiscal year ended December 31, 1994 ("fiscal 1994"),
InterCare.com made the strategic decision to focus the majority of its efforts
on the online dissemination of consumer health information, resulting in the May
1994 launch of WWW.CAPNET.COM, our consumer health destination, the later which
was acquired by Meridian Holdings, Inc., a NASDAQ OTC BB (MEHO) technology
oriented company. In connection with this redirected strategy, we also started
focusing our efforts on Telemedicine product research and development, as well
as conversion of our existing healthcare transaction software program into a
web-enabled healthcare transaction management program.
In the changing world of healthcare, one trend serves the common interests of
doctors, patients, and medical administrators: to maintain and increase the
quality of care through new and more cost-effective technologies, hence the
Company's interest in the emerging healthcare Transactions and telemedicine
services and software applications development.
There are several different reports and articles discussing the telemedicine
market. Each of them looks at telemedicine in a slightly different way and
provides different estimates, as follows:
- - Business Communications Company (BCC): BCC is a large consulting firm
producing industry reports on many industry sectors. In February 1998 the firm
produced a report titled: Telemedicine Opportunities for Medical and Electronic
Providers (240 pages, cost: $1,350). Ben Grimley, an industry analyst who
specializes in health and information technology issues, prepared the report.
BCC estimates that the current U.S. market for telemedicine is $65 million and
will reach $3 billion by the year 20 02 based on the high growth rates of
leading market segments and an assumption that full reimbursement for
telemedicine services will continue to become more common. They predict the
overall growth rate for telemedicine to be 35 percent per year over the next
five years with a 42 percent increase in public sector investments and an 89
percent growth in sites over the same period. The report cites provider plans
for predicting a 280 percent growth in prison telemedicine sites over five years
and a doubling of military investment over seven years. The predicted rates of
growth for telemedicine is particularly important given the firm's prediction
that the market for overall health-care related information is expected to grow
only three percent per year.
- - Feedback Research Services (FRS): FRS is a market research firm
specializing in high-tech health care delivery systems. Overall, FRS states that
the current annual U.S. market for telepathology, teleradiology, and
videoconferencing telemedicine systems is under $100 million. According to FRS,
telemedicine-related videoconferencing equipment sales in Europe, North America,
and the Pacific Rim accounted for $250 million in revenues in 1996. They
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estimate that worldwide sales of products and services during the 1990s reached
an estimated $520 million, cumulative, through the year-end of 1996. They
project the annual worldwide growth rate to be 15 percent. They project that
Europe and the Pacific Rim combined may represent cumulative telemedicine
expenditures of $1.4 billion by 2001.
- - Frost and Sullivan (F&S): F&S is an international marketing, consulting
and training firm covering many different markets. A representative from F&S
wrote an article in the April 1998 issue of ADVANCE for Administrators in
Radiology & Radiation Oncology that provided market forecasts for PACS and
Teleradiology. According to the article, the current total PACS and
teleradiology systems market revenue for the U.S. and Europe is estimated for
1998 at $368.8 million with the United States generating 81 percent of this
market. They project a growth rate of about 28 percent over the next six years
yielding a total annual market of $1.6 billion by 2004. In a separate report on
U.S. hospital communications equipment markets, including telemedicine
videoconferencing as well as other segments, F&S forecasts a 30 percent growth
in this market.
- - Waterford Advisors: Waterford Advisors is an investment firm specializing
in healthcare and information systems. The firm has developed the Waterford
Telemedicine Index (WTI), an index of stock prices from various
telemedicine-related companies. WTI was debuted in the April 1998 issue of
Telemedicine and Telehealth Networks and will be a regular feature of the
magazine. The index does not attempt to predict market size. Rather, the index
is designed to be a monitor of the overall performance of the industry and a way
to estimate the economic value of telemedicine companies. Since the index is
new, there is little information about the recent performance of telemedicine
companies in the market. The index currently includes 38 companies.
- - HIMSS annual leadership survey: The Healthcare Information and Systems
Society (HIMSS) recently conducted their ninth annual survey of senior
healthcare executives. Of the 1,754 respondents, 34 percent reported that their
organizations currently use telemedicine, ten-percent plan on using telemedicine
within the next 21 months and 28 percent are investigating its use in the
future.
- - Telemedicine and Telehealth Networks Survey: The Telemedicine and
Telehealth Networks magazine recently completed a survey of selected
telemedicine program managers. Ninety-three percent reported that they expect to
expand their operations in the next five years.
Corporate Information
We are incorporated under the laws of the State of California in January 1991,
and changed our name from Monet Medical Testing, Inc., to Inter-Care
Diagnostics, Inc., in April 25th, 1991. On December 18, 1999, in keeping with
our new strategy to become an Internet-based company, the Company changed its
name to InterCare.com Inc. Our principal executive offices are located at 900
Wilshire Blvd, Suite 500 Los Angeles, California. Our telephone number at that
address is (213) 627-8878.
This Offering
Securities offered Common Stock, No par value,
100,000 share Minimum
1,000,000 share Maximum
Price per Share $5.00 (minimum)
Common stock outstanding 10,000,000 shares
prior to the offering
Common stock to be 11,000,000 shares
outstanding after
the maximum offering
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Summary Financial And Operating Information
This summary financial information below is from and should be read with the
financial statements, and the notes to the financial statements, elsewhere in
this Prospectus. All numbers are in thousands, except for share and per share
amounts.
Statement of Operations Data:
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<CAPTION>
Year Ended December 31
1999 1998
<S> <C> <C>
Revenues 6,629 13,795
Gross Profit 6,377 13,506
Loss before income taxes (114,423) (62,827)
Net Loss (114,423) (62,827)
Basic and diluted
loss per share: (1) (0.010) (0.010)
Basic and Diluted
Weighted average (1) (0.010) (0.010)
Number of shares
outstanding: 10,000,000 10,000,000
Balance Sheet Data:
Working capital (deficiency) 22,503 76,677
Total assets 22,756 98,652
Total liabilities - 513,700
Stockholders equity (deficit) 22,756 (415,048)
<FN>
(1) Net Loss per Common Share: Stock options and warrants outstanding are
not considered common stock equivalents, as the affect on net loss per share
would be anti-dilutive.
</TABLE>
Risk Factors
Investments in our securities are highly speculative, involve a high degree of
risk, and should be purchased only by you if you can afford to lose your entire
investment. See "Risk Factors" for special risks concerning us and "Dilution"
for information concerning dilution of the book value of your shares from the
public offering.
Use of Proceeds
All proceeds from this offering whether minimum or maximum offering were sold
will be used for working capital and general corporate purposes. No escrow
account will be set-up for this offering. (See "USE OF PROCEEDS").
RISK FACTORS
An investment in our Common Stock involves a high degree of risk and should
only be made by investors who can afford to lose their entire investment.
You should carefully consider the risks and uncertainties described below and
other information in this Prospectus before deciding to invest in our Common
Stock. The risks described herein are intended to highlight risks that are
specific to us and are not the only ones we face. Additional risks and
uncertainties, such as those that apply to the business we acquire may also
impair our business operations. Risks and uncertainties, in addition to those we
describe below, that are presently not known to us or that we currently believe
are not material, may subsequently become material and may also impair our
financial condition.
If any of the following risks actually occur, our business, results of
operations and financial condition could be materially, adversely affected. This
could cause the trading price of our Common Stock to decline and a loss of part
or all of any investment in our Common Stock.
GOING CONCERN CONTINGENCY.
The Company has minimal capital resources presently available to meet
obligations that normally can be expected to be incurred by similar companies,
and with which to carry out its planned activities. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
CAPITAL CONSTRAINTS MAY AFFECT OUR RESOURCES.
Since inception we have funded operations with debt and equity capital. Our
ability to operate profitably under our current business plan is largely
contingent upon success in obtaining additional sources of capital. Assuming the
sale of all the shares in this offering, we will receive net proceeds of
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approximately $5,000,000. Such an amount will be sufficient as a working capital
and general corporate expenses. There can be no assurance that sources of
capital will be available on satisfactory terms or at all. Without sufficient
capital we may not be able to fully implement our business, operating and
development plans. There can be no assurance that any such financing, if
obtained, will be adequate to meet our ultimate capital needs. If adequate
capital can not be obtained or obtained on satisfactory terms, our operations
could be negatively impacted.
WE ARE A YOUNG COMPANY THAT HAS INCURRED LOSSES.
We have experienced substantial losses since our inception. We cannot be certain
that we can obtain profitability in any future period. We operate in a new and
rapidly evolving market and must, among other things:
- - respond to competitive developments;
- - continue to upgrade and expand our content and healthcare information
services offerings; and
- - continue to attract, retain and motivate our employees.
- - demand for our products;
- - size and timing of sales and installations of our products;
- - product and price competition;
- - our unpredictable sales cycle;
- - our ability to successfully expand our direct sales force;
- - our ability to develop and market new and enhanced products on a timely
basis;
- - deferral of customer orders in anticipation of product enhancements or new
products;
- - continued purchases by our existing customers, including additional
licenses and maintenance contracts;
- - delays in our customers' orders due to their year 2000 priorities; .
variability in the mix of our license and professional service revenues;
- - our ability to accurately price fixed-priced professional services
projects;
- - variability in the mix of professional services that we perform versus
those performed for our customers by others;
- - software defects;
- - technological changes in our market;
- - our ability to establish and maintain relationships with our third-party
implementation partners;
- - changes in our sales force incentives;
- - expansion of our international sales organization and increase in
international sales;
- - the loss of any key employees and timing of our new hires; and general
economic factors.
We cannot be certain that we will be successful.
RISK FACTORS RELATED TO OUR OPERATIONS
We are still in the early stages of our development, so evaluating our business
operations and our prospects is difficult. The revenues and income potential of
our Tele-medicine and Healthcare Transaction management business and market are
unproven. We will encounter risks and difficulties frequently encountered by
early-stage companies in new and rapidly evolving markets. These risks include
our:
- - need to sell additional licenses and software products to our existing
customers;
- - need to expand our sales and marketing, customer support and professional
services organizations;
- - need to expand our customer base outside of the electronics and medical
device industries;
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- - need to build strategic partnerships and relationships;
- - need to effectively manage growth;
- - need to expand our international operations and customer base; and
- - need to attract and retain key personnel.
We may not be able to successfully address these risks, and the failure to do so
could seriously harm our business and operating results. In addition, because of
our limited operating history, we have limited insight into trends that may
emerge and affect our business.
NO UNDERWRITER
We are selling the shares through our directors and officers without the use of
a professional securities underwriting firm. Consequently, there may be less due
diligence performed in conjunction with this offering than would be performed in
an underwritten offering. In the event a broker who may be deemed an underwriter
is retained by us, an amendment to our registration statement will be filed.
SUBSTANTIAL SALES OF OUR COMMON STOCK COULD ADVERSELY AFFECT OUR STOCK PRICE
Sales of a substantial number of shares of our common stock after this offering
could cause the market price of our common stock to decline by potentially
introducing a large number of sellers of our common stock into a market in which
our common stock price is already volatile. In addition, the sale of these
shares could impair our ability to raise capital through the sale of additional
equity securities.
RISK RELATED TO THIS OFFERING
Our Executive Officers, Directors and Major Stockholders Will Retain Significant
Control Over Us After This Offering, Which May Lead to Conflicts With Other
Stockholders Over Corporate Governance Matters.
After this offering, executive officers, directors and holders of 5% or more of
our outstanding common stock will, in the aggregate, own approximately % of our
outstanding common stock. These stockholders would be able to significantly
influence all matters requiring approval by our stockholders, including the
election of directors and the approval of significant corporate transactions.
This concentration of ownership may also delay, deter or prevent a change in our
control and may make some transactions more difficult or impossible to complete
without the support of these stockholders.
VOLATILE STOCK PRICE WHICH MAY LEAD TO LOSSES BY INVESTORS AND TO SECURITIES
LITIGATION
Prior to this offering, you could not buy or sell our common stock publicly. An
active public market for our common stock may not develop or be sustained after
the offering. We will negotiate and determine the initial public offering price
with the representatives of the Market Makers based on several factors. This
price may vary from the market price of the common stock after the offering.
The stock market has experienced significant price and volume fluctuations
and the market prices of securities of technology companies, particularly
Internet-related companies, have been highly volatile. Investors may not be able
to resell their shares at or above the initial public offering price. See "Plan
of Distribution."
In the past, securities class action litigation has often been instituted
against a company following periods of volatility in the company's stock price.
This type of litigation could result in substantial costs and could divert our
management's attention and resources.
WE FACE RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY.
Rapid changes in technology pose significant risks to us. To remain
successful, we must continue to change, adapt and improve our content and
delivery mediums in response to changes in technology. Our future success hinges
on our ability to both continue to enhance our current content and to
successfully market this content. We cannot be sure that we will successfully
develop and market new content. Any failure by us to timely develop and
disseminate new or to update and enhance our current content could adversely
affect our business, operating results and financial condition.
WE FACE RISKS REGARDING OUR POTENTIAL FUTURE ACQUISITIONS OR INVESTMENTS.
As part of our growth strategy, we may acquire or make investments in,
companies with products, technologies or professional services capabilities
complementary to ours. In acquiring companies in the future, we could encounter
difficulties in assimilating their personnel and operations into our company.
These difficulties could disrupt our ongoing business, distract our management
and employees, increase our expenses and adversely affect our results of
operations. These difficulties could also include accounting requirements, such
as amortization of goodwill or in-process research and development expense. We
cannot be certain that we will successfully overcome these risks with respect to
<PAGE>
any future acquisitions or that we will not encounter other problems in
connection with our prior or any future acquisitions. In addition, any future
acquisitions may require us to incur debt or issue equity securities. The
issuance of equity securities could dilute the investment of our existing
shareholders.
RISK RELATED TO INTERNET BUSINESS AND PROSPECTS
If Use of the Internet Does Not Grow, Our Business Would Be Harmed. Our success
depends upon continued growth in the use of the Internet as a medium of
commerce. Although the Internet is experiencing rapid growth in the number of
users, this growth is a recent phenomenon and may not continue. Furthermore,
despite this growth in usage, the use of the Internet for commerce is relatively
new. As a result, a sufficiently broad base of enterprises and their supply
chain partners may not adopt or continue to use the Internet as a medium of
commerce. Our business would be seriously harmed if:
- - use of the Internet does not continue to increase or increases more slowly
than expected;
- - the infrastructure for the Internet does not effectively support
enterprises and their supply chain partners;
- - the Internet does not create a viable commercial marketplace, inhibiting
the development of electronic commerce and reducing the demand for our products;
or
- - concerns over the secure transmission of confidential information over
public networks inhibit the growth of the Internet as a means of conducting
commercial transactions.
- - Capacity Restraints May Restrict the Use of the Internet as a Commercial
Marketplace. The Internet infrastructure may not be able to support the demands
placed on it by increased usage and bandwidth requirements.
Other risks associated with commercial use of the Internet could slow its
growth, including:
- - inadequate reliability of the network infrastructure;
- - slow development of enabling technologies and complementary products; and
- - limited availability of cost-effective, high-speed access.
- - Delays in the development or adoption of new equipment standards or
protocols required to handle increased levels of Internet activity, or increased
governmental regulation, could cause the Internet to lose its viability as a
means of communication between enterprises and their supply claim partners.
If these or any other factors cause use of the Internet for commerce to
slow or decline, our business could be harmed.
RISK FACTORS ASSOCIATED WITH INTERNATIONAL EXPANSION
We believe that expansion of our international operations will be necessary for
our future success. Therefore, we believe that we will need to commit
significant resources to expand our international operations. A key aspect to
our strategy is to expand our sales and support organizations internationally.
We employ sales professionals in Europe and are in the early stages of expanding
into the Asia Pacific market. If we are unable to successfully enter into and
expand these international markets on a timely basis, our business and operating
results could be harmed. This expansion may be more difficult or take longer
than we anticipate, and we may not be able to successfully market, sell, deliver
and support our products internationally.
If successful in our international expansion, we will be subject to a number of
risks associated with international business activities. These risks include:
- - difficulty in providing customer support in multiple time zones;
- - need to develop software in multiple foreign languages;
- - laws and business practices favoring local competition;
- - currency fluctuations;
- - longer sales cycles;
- - greater difficulty in collecting accounts receivable;
- - political and economic instability, particularly in Asia;
- - difficulties in enforcing agreements through foreign legal systems;
- - unexpected changes in regulatory requirements;
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- - import or export licensing requirements;
- - reduced protection of our intellectual property rights in some countries;
and
- - multiple conflicting tax laws and regulations.
To date, most of our revenues have been denominated in United States dollars. If
we experience an increase in the portion of our revenues denominated in foreign
currencies, we may incur greater risks in currency fluctuations, particularly
since we translate our foreign currency revenues once at the end of each
quarter. In the future, our international revenues could be denominated in the
Euro, the currency of the European Union. The Euro is an untested currency and
may be subject to economic risks that are not currently contemplated. We
currently do not engage in foreign exchange hedging activities, and therefore
our international revenues and expenses are currently subject to the risks of
foreign currency fluctuations.
LIMITED PROTECTION OF OUR INTERLECTUAL PROPERTY
Our success and ability to compete depend upon our proprietary technology.
Despite our efforts to protect our intellectual property, a third party could
copy or otherwise obtain our software or other proprietary information without
authorization, or could develop software competitive to ours. Our means of
protecting our proprietary rights may not be adequate and our competitors may
independently develop similar technology, duplicate our products or design
around patents that may be issued to us or our other intellectual property. In
addition, the laws of some foreign countries do not protect our proprietary
rights to as great an extent as do the laws of the United States, and we expect
that it will become more difficult to monitor the use of our products if we
increase our international presence.
We may have to resort to litigation to enforce our intellectual property rights,
to protect our trade secrets or know-how or to determine their scope, validity
or enforceability. Enforcing or defending our proprietary technology is
expensive, could cause the diversion of our resources, and may not prove
successful. Our protective measures may prove inadequate to protect our
proprietary rights, and any failure to enforce or protect our rights could cause
us to lose a valuable asset. Our competitors may independently develop similar
technology, duplicate our products or design around any patents that may be
issued to us or our other intellectual property.
SUBJECT TO INTERLECTUAL PROPERTY INFRINGEMENT CLAIMS
There has been a substantial amount of litigation in the software and Internet
industries regarding intellectual property rights. It is possible that, in the
future, third parties may claim that we or our current or potential future
products infringe their intellectual property. We expect that software product
developers and providers of electronic commerce solutions will increasingly be
subject to infringement claims as the number of products and competitors in our
industry segment grows and the functionality of products in industry segments
overlaps. Any claims, with or without merit, could be time-consuming, result in
costly litigation, cause product shipment delays or require us to enter into
royalty or licensing agreements. If our products were found to infringe a third
party's proprietary rights, we could be required to enter into royalty or
licensing agreements in order to continue to be able to sell our products.
Royalty or licensing agreements, if required, may not be available on terms
acceptable to us or at all, which could seriously harm our business.
We integrate third-party software into our products. This third-party software
may not continue to be available on commercially reasonable terms. We depend on
third party licenses, including licenses for our servers, encryption and
security software. If we cannot maintain licenses to this third-party software
at an acceptable cost, shipments of our products could be delayed until
equivalent software could be developed or licensed and integrated into our
products, which could substantially harm our business, operating results and
financial condition.
SEASONALITY OF REVENUE
We have experienced, and expect to continue to experience, seasonality in our
license revenues and results of operations, with a disproportionately greater
amount of our license revenues for any fiscal year being recognized in our
fourth fiscal quarter. As a result, our first quarter revenues can be less than
those of the preceding quarter.
If we introduce products that are sold in a manner different from how we
currently market our products, we could recognize revenue differently than under
our current accounting policies. Depending on the manner in which we sell future
products, this could have the effect of extending the length of time over which
we recognize revenues.
Furthermore, our quarterly revenues could be significantly affected based on how
applicable accounting standards are amended or interpreted over time. Due to
these and other factors, we believe that period-to-period comparisons of our
<PAGE>
results of operations are not meaningful and should not be relied upon as
indicators of our future performance. It is possible that in some future periods
our results of operations may be below the expectations of public market
analysts and investors. If this occurs, the price of our common stock may
decline. We Will Depend on the Commercial Success of Our Product Suite, Which
Has Not Yet Been Shipped We have generated substantially all of our revenues
from licenses and services related to current and prior versions of our product
suite.
Our Quarterly Operating Results Fluctuate and Are Difficult to Predict, and if
Our Future Results are Below the Expectations of Public Market Analysts or
Investors, the Price of Our Common Stock May Decline
Our quarterly operating results have varied significantly in the past and are
likely to vary significantly in the future, which makes it difficult for us to
predict our future operating results. This quarter-to-quarter fluctuation is due
to a number of factors, any of which could harm our business and operating
results, including the following:
- - demand for our products;
- - size and timing of sales and installations of our products;
- - product and price competition;
- - our unpredictable sales cycle;
- - our ability to successfully expand our direct sales force;
- - our ability to develop and market new and enhanced products on a timely
basis;
- - deferral of customer orders in anticipation of product enhancements or new
products;
- - continued purchases by our existing customers, including additional
licenses and maintenance contracts;
- - delays in our customers' orders due to their year 2000 priorities;
- - variability in the mix of our license and professional service revenues;
- - our ability to accurately price fixed-priced professional services
projects;
- - variability in the mix of professional services that we perform versus
those performed for our customers by others; . software defects;
- - technological changes in our market;
- - our ability to establish and maintain relationships with our third-party
implementation partners;
- - changes in our sales force incentives;
- - expansion of our international sales organization and increase in
international sales;
- - the loss of any key employees and timing of our new hires; and
- - general economic factors.
License revenues in any quarter can be difficult to forecast because they depend
on orders shipped or installed in that quarter. Moreover, we typically recognize
a substantial percentage of revenues in the last month of each quarter. A high
percentage of our operating expenses are essentially fixed in the short term. As
a result, if we experience delays in recognizing revenue, we could experience
significant variations in operating results from quarter to quarter. In
addition, we expect our operating expenses to increase as we expand our
engineering and sales and marketing operations, broaden our customer support
capabilities, develop new distribution channels and strategic alliances, fund
increased levels of research and development and build our operational
infrastructure. If our revenues do not grow faster than the increase in these
expenses, our business and operating results could be harmed.
DEPENDENT ON LICENSED TECHNOLOGY FROM A THIRD PARTY
We license technology on a non-exclusive basis from several businesses for use
with our products, including licenses from Microsoft Corporation for our servers
and Macromedia Corporation for our multimedia development tools, from RSA Data
Security, Inc. for security and encryption technology software, and from Adobe
Systems Inc. for our graphic software tools. We anticipate that we will continue
to license technology from third parties in the future. Some of the software we
license from third parties would be difficult to replace. This software may not
continue to be available on commercially reasonable terms, if at all. The loss
or inability to maintain any of these technology licenses could result in delays
in the licensing of our products until equivalent technology, if available, is
identified, licensed and integrated. In addition, the effective implementation
of our products depends upon the successful operation of third-party licensed
<PAGE>
products in conjunction with our products, and therefore any undetected errors
in these licensed products may prevent the implementation or impair the
functionality of products, delay new product introductions and/or injure our
reputation. The increased use of third-party software could require us to enter
into license agreements with third parties, which could result in higher royalty
payments and a loss of product differentiation.
WE FACE INTENSE COMPETITION WITH OTHER ONLINE PROVIDERS OF HEALTHCARE
TECHNOLOGY.
The market for providing healthcare information online is intensely competitive,
and we expect competition to increase in the future. Our business has low
barriers to entry, and we cannot guarantee that we will compete successfully
against our current or potential competitors, especially those with
significantly greater financial resources or brand name recognition. Our current
competitors include, E-Medsoft.com, Medscape.com, Dr. Koop.com and
Healtheon/WebMD. We have yet to derive significant revenues as an online
provider of healthcare information and Tele-medicine company.
Mergers or consolidations among our competitors, or acquisitions of small
competitors by larger companies, would make such combined entities more
formidable competitors to us. Large companies may have advantages over us
because of their longer operating histories, greater name recognition, or
greater financial, technical and marketing resources. As a result, they may be
able to adapt more quickly to new or emerging technologies and changes in
customer requirements. They can also devote greater resources to the promotion
and sale of their products or services than we can.
For the above reasons, we may not be able to compete successfully against our
current and future competitors. Increased competition may result in reduced
gross margins and loss of market share.
WE FACE RAPID TECHNOLOGICAL CHANGE IN OUR INDUSTRY.
Rapid changes in technology pose significant risks to us. To remain successful,
we must continue to change, adapt and improve our content and delivery mediums
in response to changes in technology. Our future success hinges on our ability
to both continue to enhance our current content and to successfully market this
content. We cannot be sure that we will successfully develop and market new
content. Any failure by us to timely develop and disseminate new or to update
and enhance our current content could adversely affect our business, operating
results and financial condition.
CONFLICT OF INTEREST - MANAGEMENT'S FIDUCIARY DUTIES.
Our director and Officer are or may become, in their individual capacities, an
officer, director, controlling shareholder and/or partner of other entities
engaged in a variety of businesses. Anthony C. Dike, our founder, chairman and
CEO is engaged in business activities outside of us, and the amount of time he
will devote to our business will only be about five (5) to twenty (20) hours
per week. There exist potential conflicts of interest including allocation of
time between us and such other business entities.
CONTROL BY PRESENT MANAGEMENT AND SHAREHOLDERS.
Assuming the sale of all the shares offered to persons other than existing
shareholders, the shares of common stock purchased by the public will represent
9% of our outstanding common stock after the completion of this offering.
Therefore, our present stockholders will own 91% of us and will continue to be
able to elect our director, appoint our officer, and control our affairs and
operations. Our articles of incorporation do not provide for cumulative voting.
SHARES ELIGIBLE FOR FUTURE SALE.
Of the common shares outstanding after the offering, up to 3,000,000 shares
including those sold in this offering will be registered with the SEC and can
be freely resold, unless they are acquired by our directors, executive officers
or other persons or entities that they control or who control them. Our
directors, executive officers, and persons or entities that they control or who
control them will be able to sell shares of stock so long as they do so without
violating SEC Rule 144. The remaining 8,000,000 outstanding shares may only be
sold under the Rule 144 until such time as they are registered. We have made no
guarantees to any of our existing shareholders that this registration statement
will be approved by SEC.
Rule 144 provides that director, executive officer, and persons or entities
that they control or who control them may sell shares of common stock in any
three-month period in an amount limited to the greater of:
-1% of our outstanding shares of common stock or
The average weekly trading volume in our common stock during the four
calendar weeks preceding a sale.
Sales under the rule also must be made without violating:
<PAGE>
- Manner-of-sale provisions in the market through a broker at current
market prices
- Notice requirements forms must be filed with the SEC
- Requirement of availability of public information about us current in
filing required SEC reports.
We cannot predict the effect that sales of shares or the availability of shares
for sale will have on the any market price that may exist for our common stock
after completion of the offering. It is likely that sales of substantial
amounts of our common stock in the public market could drive our stock price
down.
INCREASE IN GOVERNMENTAL REGULATIONS OF MARKETING OF SOFTWARE PRODUCTS
As Internet commerce continues to evolve, we expect that federal, state and
foreign governments will adopt laws and regulations covering issues such as user
privacy, taxation of goods and services provided over the Internet, pricing,
content and quality of products and services. It is possible that legislation
could expose companies involved in electronic commerce to liability, taxation or
other increased costs, any of which could limit the growth of electronic
commerce generally. Legislation could dampen the growth in Internet usage and
decrease its acceptance as a communications and commercial medium. If enacted,
these laws and regulations could limit the market for our products.
WE DEPEND ON OUR KEY PERSONNEL.
Our future success also depends on our continuing ability to attract and retain
highly qualified personnel. The competition for employees at all levels of our
industry is increasingly intense. Furthermore, in order to promote the
development of our Web Site, we will need to identify, attract and retain
software engineers, web designers and content editors. If we do not succeed in
attracting such new employees and retaining and motivating our current
employees, our business could suffer significantly.
WE ARE SUBJECT TO RISKS RELATING TO THE YEAR 2000.
Many currently installed computer systems and software products accept only
two-digit entries in the date code field. These date code fields will need to
accept four digit entries to distinguish 21st century dates from 20th century
dates. As a result, computer systems and software used by many companies and
governmental agencies may need to be upgraded to comply with such "Year 2000"
requirements. Non-compliant computer systems or software may cause system
failure or result in miscalculations that will cause disruptions of normal
business activities. Although we have designed all of the products that we
currently offer to be Year 2000 compliant, we cannot assure you that our
products contain all necessary date code changes, or that, in the year 2000, our
products will be compatible with third-party software that may be integrated or
used in conjunction with our products. There can be no assurances that we have
identified all Year 2000 issues with respect to our products and products
supplied to us by third parties and the failure to do so could have a material
adverse effect on our business.
Furthermore, there can be no assurance that our estimates related to the Year
2000 issue will prove to be accurate and actual results could differ materially
from those currently anticipated. Specific factors that could cause such
material differences include, but are not limited to, the ability to identify,
assess, and remediate and test all relevant computer codes and embedded
technology, and similar uncertainties. In addition, variability of definitions
of "compliance with Year 2000" and the myriad of different products and
services, and combinations thereof, sold by adam.com may lead to claims whose
impact on adam.com is not currently estimable. No assurance can be given that
the aggregate cost of defending and resolving such claims, if any, will not
materially adversely affect our results of operation. Although some of the our
agreements and contracts with third parties contain provisions requiring such
parties to indemnify us under some circumstances, there can be no assurance that
such indemnification arrangements will cover all of our liabilities and costs
related to claims by third parties related to the Year 2000 issue.
FUTURE SALES OF OUR COMMON STOCK COULD CAUSE OUR STOCK TO DECLINE IN PRICE.
All shares registered in this offering will be freely tradable upon
effectiveness of this registration statement. The sale of a significant amount
of shares registered in this offering at any given time could cause the trading
price of our common stock to decline and to be highly volatile.
WE HAVE ADOPTED CERTAIN ANTI-TAKEOVER PROVISIONS THAT MAY DETER A TAKEOVER.
Our articles of incorporation and bylaws contain the following provisions that
may deter a takeover, including a takeover on terms that many of our
shareholders might consider favorable, such as:
- - the authority of our board of directors to issue common stock and
preferred stock and to determine the price, rights (including voting rights),
<PAGE>
preferences, privileges and restrictions of each series of preferred stock,
without any vote or action by our shareholders;
- - the existence of large amounts of authorized but un-issued common
stock and preferred stock;
- - staggered, three-year terms for our board of directors; and
- - advance notice requirements for board of directors nominations and for
shareholder proposals.
The rights and preferences of any series of preferred stock could include a
preference over the common stock on the distribution of our assets upon a
liquidation or sale of our company, preferential dividends, redemption rights,
the right to elect one or more directors and other voting rights. The rights of
the holders of any series of preferred stock that may be issued in the future
may adversely affect the rights of the holders of the common stock. We have no
current plans to issue preferred stock. In addition, certain provisions of
California law and our stock option plan may also discourage, delay or prevent a
change in control of our company or unsolicited acquisition proposals.
DILUTION
The difference between the public offering price per share and the pro forma
net tangible book value per share of our Common Stock after this offering
constitutes the dilution to investors in this offering. Net tangible book
value per share is determined by dividing our net tangible book value (total
tangible assets less total liabilities) by the number of our outstanding common
shares.
The following table illustrates, as of December 31, 1999, the dilution to
investors in this offering:
<TABLE>
<CAPTION>
Maximum Minimum
<S> <C> <C>
Public offering price per Share $5.00 $5.00
Net tangible book value per
Share, before this offering $.002 $.002
Increase per Share attributable
to Payment by new investors $0.476 $0.05
Net tangible book value per Share,
after this offering $0.478 $0.07
Dilution to new investors per Share $4.522 $4.93
</TABLE>
As of the date hereof there are currently no plans, proposals, arrangements or
understandings with respect to the sale of additional securities to any persons
for the period commencing with the closing of this offering.
For the maximum offering following table compares between existing shareholders
and investors:
the number of shares of our Common Stock held,
their percentage ownership of such shares,
the total consideration paid,
the percentage of total consideration paid, and
the average price per share:
<TABLE>
<CAPTION>
Shares Purchased Total Consideration Price Per
Amount Percentage Paid Percentage Share
<S> <C> <C> <C> <C> <C>
Existing
Shareholders 10,000,000 91% $577,228 10% $ 0.06
New Investors 1,000,000 9% $5,000,000 90% $ 5.00
Total 11,000,000 100% $5,577,228 100%
</TABLE>
<PAGE>
USE OF PROCEEDS
The Company will use the proceed from the 1,000,000 share sold during this
offering for working capital and general corporate purposes. We are also
registering the shares for sale to provide the holders of the company's shares
thereof with freely tradable securities, but the registration of such shares
does not necessarily mean that any of such shares will be offered or sold by the
holder thereof.
THE MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock has never been traded in any market. We have applied
for listing of our common stock on Nasdaq's SmallCap Market upon effectiveness
of this registration Statement. In order to qualify for listing on Nasdaq's
SmallCap Market:
- our common stock must continue to be registered under Section
12 (g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")
- we must initially EITHER have (i) at least $4,000,000 of net
tangible assets, (ii) net income in two of the last three years
of at least $750,000 OR (iii) a market capitalization of
$50,000,000; and
- we must initially have a minimum bid price of $4.00 per share,
at least 300 round lot shareholders, a public float of at least
1,000,000 shares and at least three active market makers for our
common stock.
If we fail to meet Nasdaq's initial listing requirements, trading in our
Shares would thereafter be conducted in the over-the-counter market on the OTC
Bulletin Board established for securities that do not meet Nasdaq's listing
Requirements. This may result in a lower market price for our common stock
HOLDERS
As of December 31, 1999, the end of the physical year, there were 300 registered
share-holders of record.
DIVIDEND
On December 10, 1999, as provided in Article IV of this Corporation's Article of
Incorporation, as amended, this corporation has one hundred million
(100,000,000) shares of Common Stock authorized and as of December 7, 1999, an
aggregate of one hundred thousand (100,000) shares of Common Stock were issued
and outstanding. The board of directors by way of a written consent declared a
stock dividend of one hundred (100) shares of Common Stock for every one (1)
share of common stock currently issued and outstanding, to be payable to
shareholders of record as of December 30th, 1999. Meridian Holdings, Inc., the
51% owners of the outstanding shares of the Company's Common Stock declared a
dividend simultaneously to all its shareholders of record who owns a share in
Meridian Holdings, Inc., to receive five (5) shares of common stock of
InterCare.com
SELLING SHAREHOLDERS
The following table sets forth the number of shares owned by each of the selling
shareholders. None of the selling shareholders has had a material relationship
with InterCare.com within the past three years other than as a result of the
ownership of the shares or other securities of InterCare.com. The shares offered
by this prospectus may be offered from time to time by the selling shareholders
listed in the Form 8-A
DETERMINATION OF OFFERING PRICE
We set the minimum offering price of $5.00 and maximum of $25 per share
arbitrarily. This price bears no relation to our assets, book value, or
any other customary investment criteria, including our prior operating history
or lack thereof. Among factors considered by us in determining the
offering price were:
Estimates of our business potential
Our limited financial resources
The amount of equity desired to be retained by present shareholders
The amount of dilution to the public
The general condition of the securities markets
BUSINESS
Overview
InterCare.com formerly known as Inter-Care Diagnostics, Inc., is a
leading developer of bio-medical healthcare multi-media content and software
technologies. Since February 1991, we have taken steps to become a leading
provider of software technologies for neuromuscular re-education, stress
management and biofeedback.
The company was originally incorporated in 1991 for the purpose of operating a
<PAGE>
medical diagnostics laboratory and engaging in various medical services to
clients. On January 17, 1994, a 6.8 magnitude earthquake centered in Northridge,
California caused wide spread damage to commercial and residential structures,
and to major freeways, causing business interruptions and disrupting the normal
flow of traffic. The Company experienced irreversible damage to all its
high-tech computers and diagnostic equipment.
Since that time, the Company has been devoting substantially all its efforts to
establishing a new business entity that develops software for the healthcare
industry and other related activities over the Internet.
We have created, published and marketed multimedia software products, content
and Internet-ready applications that provide biofeedback, healthcare
transactions, medical and health-related information for the education, consumer
and professional markets.
The company developed the Mirage Systems Multimedia Biofeedback software program
( a cross-platform program : Windows 3.X including windows 95;98 and Apple
Macintosh platforms) in 1994, and this software became the first United States
FDA approved software program for neuromuscular re-education and biofeedback
training. The company also has four other software products in the market
including the "Body Pain Trigger Points Program", one of our best selling
software products, with over 20,000 copies sold. The company intends to convert
all its software programs to run in all the popular operating systems available,
including but not limited to Microsoft Windows, Macintosh and Linus or Unix
operating systems.
During the fiscal year ended December 31, 1994 ("fiscal 1994"),
InterCare.com made the strategic decision to focus the majority of its efforts
on the online dissemination of consumer health information, resulting in the May
1999 launch of WWW.CAPNET.COM, our consumer health destination, the later which
was acquired by Meridian Holdings, Inc., a NASDAQ OTC BB (MEHO) technology
oriented company. In connection with this redirected strategy, we also started
focusing our efforts on Telemedicine product research and development, as well
as conversion of our existing healthcare transaction software program into a
web-enabled healthcare transaction management program.
The Internet has created new and evolving ways for conducting commerce.
According to Forrester Research, business-to-business electronic commerce is
expected to grow to $1.3 trillion in 2003, accounting for more than 90% of the
dollar value of electronic commerce in the United States. The market for
applications that enable business-to-business electronic commerce is expected to
reach $1.5 billion by 2002, according to Dataquest. Enterprises that have
successfully implemented web-enabled customer interfaces now face the challenge
of utilizing the Internet and intranets to gain the same level of increased
efficiencies in their supply chain. In the changing world of healthcare, one
trend serves the common interests of doctors, patients, and medical
administrators: to maintain and increase the quality of care through new and
more cost-effective technologies, hence the Company's interest in the emerging
healthcare Transactions and tele-medicine services and software applications
development.
There are several different reports and articles discussing the telemedicine
market. Each of them looks at telemedicine in a slightly different way and
provides different estimates, as follows:
- - Business Communications Company (BCC): BCC is a large consulting firm
producing industry reports on many industry sectors. In February 1998 the firm
produced a report titled: Telemedicine Opportunities for Medical and Electronic
Providers (240 pages, cost: $1,350). Ben Grimley, an industry analyst who
specializes in health and information technology issues, prepared the report.
BCC estimates that the current U.S. market for telemedicine is $65 million and
will reach $3 billion by the year 20 02 based on the high growth rates of
leading market segments and an assumption that full reimbursement for
telemedicine services will continue to become more common. They predict the
overall growth rate for telemedicine to be 35 percent per year over the next
five years with a 42 percent increase in public sector investments and an 89
percent growth in sites over the same period. The report cites provider plans
for predicting a 280 percent growth in prison telemedicine sites over five years
and a doubling of military investment over seven years. The predicted rates of
growth for telemedicine is particularly important given the firm's prediction
that the market for overall health-care related information is expected to grow
only three percent per year.
- - Feedback Research Services (FRS): FRS is a market research firm
specializing in high-tech health care delivery systems. Overall, FRS states that
the current annual U.S. market for telepathology, teleradiology, and
videoconferencing telemedicine systems is under $100 million. According to FRS,
telemedicine-related videoconferencing equipment sales in Europe, North America,
and the Pacific Rim accounted for $250 million in revenues in 1996. They
estimate that worldwide sales of products and services during the 1990s reached
an estimated $520 million, cumulative, through the year-end of 1996. They
project the annual worldwide growth rate to be 15 percent. They project that
Europe and the Pacific Rim combined may represent cumulative telemedicine
expenditures of $1.4 billion by 2001.
<PAGE>
- - Frost and Sullivan (F&S): F&S is an international marketing, consulting
and training firm covering many different markets. A representative from F&S
wrote an article in the April 1998 issue of ADVANCE for Administrators in
Radiology & Radiation Oncology that provided market forecasts for PACS and
Teleradiology. According to the article, the current total PACS and
teleradiology systems market revenue for the U.S. and Europe is estimated for
1998 at $368.8 million with the United States generating 81 percent of this
market. They project a growth rate of about 28 percent over the next six years
yielding a total annual market of $1.6 billion by 2004. In a separate report on
U.S. hospital communications equipment markets, including telemedicine
videoconferencing as well as other segments, F&S forecasts a 30 percent growth
in this market.
- - Waterford Advisors: Waterford Advisors is an investment firm specializing
in healthcare and information systems. The firm has developed the Waterford
Telemedicine Index (WTI), an index of stock prices from various
telemedicine-related companies. WTI was debuted in the April 1998 issue of
Telemedicine and Telehealth Networks and will be a regular feature of the
magazine. The index does not attempt to predict market size. Rather, the index
is designed to be a monitor of the overall performance of the industry and a way
to estimate the economic value of telemedicine companies. Since the index is
new, there is little information about the recent performance of telemedicine
companies in the market. The index currently includes 38 companies.
- - HIMSS annual leadership survey: The Healthcare Information and Systems
Society (HIMSS) recently conducted their ninth annual survey of senior
healthcare executives. Of the 1,754 respondents, 34 percent reported that their
organizations currently use telemedicine, ten-percent plan on using telemedicine
within the next 21 months and 28 percent are investigating its use in the
future.
- - Telemedicine and Telehealth Networks Survey: The Telemedicine and
Telehealth Networks magazine recently completed a survey of selected
telemedicine program managers. Ninety-three percent reported that they expect to
expand their operations in the next five years.
OUR PROPRIETARY PRODUCTS
- - The Mirage Systems Body Pain Trigger Points Software programs
(Both Macintosh and Windows versions)
- - The Mirage Systems Multimedia Biofeedback Software Programs
(Both Macintosh and Windows versions)
- - The Mirage Systems Internet-based Healthcare Transaction
Management Software Program
- - The Mirage Systems Stress Profiling Software Programs (Both
Macintosh and Windows versions)
- - The Mirage Systems Electro-Diagnostics Scan Site Program
(Both Macintosh and Windows versions)
Our Business Strategy
We intend to capitalize on the enormous public attention focused on the
Internet and healthcare transactions by increasing our telemarketing sales and
technical support staff, targeting our advertising to our core audience, and by
providing the most efficient, lowest-cost healthcare transactions management and
Tele-Medicine service to our prospective clients.
Our Competitive Advantages
OUR KNOWLEDGEABLE AND GROWING SALES FORCE AND TECHNICAL STAFF. We will be
making sure that the sales force is trained on the "high-end" networking
elements in which we deal so they will be able to service the needs of their
customers.
OUR BUSINESS MODEL COST, EFFICIENCY AND FLEXIBILITY. We have addressed the
largest cost factor in the methodology for deploying our services through an
outsourcing strategy rather than a building the human resources from the scratch
strategy. This keeps start-up costs as low as possible.
OUR STRATEGIC PARTNER STRENGTH. Partnerships with CGI Communications Services,
Inc., Capnet Gateway Online Services, Meridian Holdings, Inc., Netsales, Inc.,
Ingram-Micro Inc., DigitalRiver Corporation, and others, will give us the
ability to deliver our products and solutions faster and at a lower cost than
the competition.
INTEGRATION. We can seamlessly integrate all of the different technological
solutions and custom applications development. We use different strategic
partners to tailor the optimum solution for our customer.
AUTOMATION AND ADVANCED TELECOMMUNICATIONS TECHNOLOGY. Our Network Management
tools are automated which leads to less downtime, and lower labor costs. We use
the latest equipment, work closely with strategic partners that are forerunners
in their fields, and are not hampered by existing legacy infrastructures.
<PAGE>
OUR CUSTOMIZED CUSTOMER APPROACH. We emphasize direct relationships with our
customers. These relationships enable us to learn information from our
customers about their needs and preferences and help us expand our service
offerings to include additional value-added services based on customer demand.
We believe that these customer relationships increase customer loyalty and
reduce turnover. In addition, our existing customers have provided customer
referrals and we believe strong relationships will result in customer referrals
in the future.
Our success depends upon careful planning and the selection of partners. We can
meet the customer's needs more efficiently with entrenched procedures. This
enables us to excel at customer service.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with our financial
statements and notes thereto, as well as the other information included
elsewhere in this prospectus. Our discussion contains forward-looking statements
that involve risks and uncertainties, including those referring to the period of
time the Company's existing capital resources will meet the Company's future
capital needs, the Company's future operating results, the market acceptance of
the services of the Company, the Company's efforts to establish and the
development of new services, and the Company's planned investment in the
marketing of its current services and research and development with regard to
future endeavors. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including: domestic and global economic patterns and trends.
Results of Operations
We have experienced, and expect to continue to experience, seasonality in our
license revenues and results of operations, with a disproportionately greater
amount of our license revenues for any fiscal year being recognized in our
fourth fiscal quarter. As a result, our first quarter revenues can be less than
those of the preceding quarter.
If we introduce products that are sold in a manner different from how we
currently market our products, we could recognize revenue differently than under
our current accounting policies. Depending on the manner in which we sell future
products, this could have the effect of extending the length of time over which
we recognize revenues.
Furthermore, our quarterly revenues could be significantly affected based on how
applicable accounting standards are amended or interpreted over time. Due to
these and other factors, we believe that period-to-period comparisons of our
results of operations are not meaningful and should not be relied upon as
indicators of our future performance. It is possible that in some future periods
our results of operations may be below the expectations of public market
analysts and investors. If this occurs, the price of our common stock may
decline. We Will Depend on the Commercial Success of Our Product Suite, Which
Has Not Yet Been Shipped We have generated substantially all of our revenues
from licenses and services related to current and prior versions of our product
suite.
REVENUES. Total revenues decreased 52% to $6,629 in the year ending December
31, 1999 compared to $13,795 for December 31, 1998. The revenue was generated
from collections from previous years account receivables and consulting
services. No revenue has been generated from activities related to providing
health related content over the Internet, including page view-based and Internet
Healthcare Transaction software licensing. The Company projects a revenue of
$1,000,000 on a proforma basis for the year 2000, assuming adequate capital is
raised from this offering to help finance a comprehensive marketing and
advertisement campaign.
COST OF REVENUES. Cost of revenues decreased 13% to $252 for the year ending
December 31, 1999 compared to $289 in the comparable period in 1998. This
decrease in the cost of revenue is due to our transition from hard-copy software
sale to electronic download over the Internet, with resultant decrease in
software product shipment. Amortization of capitalized software development
costs will continue in the future to bring levels closer to expected future
revenues to be generated, or net realizable value. Any future reduction in net
realizable value during the next coming year will be as a result of our
decision not to support certain products moving forward and instead to focus on
development and execution of our Internet strategies.
SALES AND MARKETING. Only minimal sales and marketing has been done by the
company, since focusing most of its resources at the moment in our Internet
strategies, and software enhancement, testing and debugging. The company is
budgeting over $250,000 for its initial roll-out of new products sales and
marketing campaign during the first quarter of the year 2,000, assuming more
capital is raised from this offering to pay for such an expense.
PRODUCT AND CONTENT DEVELOPMENT. Product and content development expenses
is anticipated to increase significantly during the next coming year, due to
website redesign and other Internet initiative launch costs, consisting
<PAGE>
primarily of personnel and consulting cost. The company projects to spend over
$250,000 during the next 12 months to fund project and content development. As a
result of the Company's decision in fiscal 1999 to no longer develop traditional
products, capitalized software development costs was $0.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 41%
for the year ending December 31, 1999 to $107,295 compared to $62,829 in
comparable period in 1998 primarily due to the additional operating costs of
increased personnel requirement. The company anticipates future increase in
General and administrative expense as it embarks on aggressive product
development, sales and marketing with its' associated increase in personnel
cost, legal and accounting expenses.
OPERATING LOSS. As a result of the factors described above, the operating
expenses increased from $76,333 for the year ending December 31, 1998 to
$120,800 for year ending December 31, 1999. The company expects further increase
in operating expense on a proforma basis up to $752,342 for the year 2000,
assuming additional funding is raised from this offering to be used in financing
future operating costs. There is no guarantee that the company will be able to
raise additional funds to finance all the anticipated operating cost. In absence
of such funds being available, the company may not be able to operate, and this
could have a material impact in the overall execution of the companies business
plan.
NET LOSS. The Company had a net loss of $114,423 or $.011 per share for
the year ended December 31, 1999, compared with net loss of $62,827 or $.006
per share for the year ended December 31, 1998. The proforma projected revenue
for the year 2000 is $122,658 assuming the company is able to raise the
appropriate funds to finance its business plan.
LIQUIDITY AND CAPITAL RESOURCES
The Company has experienced a substantial increase in expenditures since the
launch of our Internet strategy through the growth in those operations and
related staffing. Management anticipates that these increased expenditure levels
will continue for the foreseeable future. Management anticipates incurring
additional expenses to increase our marketing and sales efforts, for content
development and for technology and infrastructure development. Additionally, we
will continue to evaluate possible investments in businesses, products and
technologies and the expansion of our marketing and sales programs.
The Company uses working capital to finance ongoing operations, fund the
development and introduction of our new business strategy and acquire capital
equipment. All the operating cost of the company is being borne by Meridian
Holdings, Inc., the parent company. After this offering, the company will become
an independent entity, and will have to seek for further funding to cover its
operating cost. There is no guarantee that the company will be able to raise
additional funds, and if such funds becomes available, the cost incurred for
securing such funds may not be on favorable terms to the company, and this could
have an adverse impact on the entire operation.
Plan of Operations
Management believes the Company has adequate capital resources to meet
anticipated needs for working capital and capital expenditures through the end
of December 1999, but the Company needs to enhance its capital resources in
order to provide it with sufficient cash to meet its current operating needs and
to address such needs through the end of March 2000. If the Company is unable to
enhance its capital resources, the Company will be forced to reduce its spending
on capital expenditures and product development until such financing is
obtained.
The Company currently is exploring a number of alternatives, including
borrowings, the issuance of debt and/or equity securities, and other strategic
transactions to enhance its cash position. Management is optimistic that the
Company will be able to meet its liquidity needs through one or more of such
alternatives under consideration; however, there can be no assurance that any
particular alternative will be available on terms favorable to the Company, or
at all. Further, any financing or capital transaction would be subject to
customary closing conditions. If additional funds are raised by the issuance of
equity securities, our shareholders may experience dilution of their ownership
interest and these securities may have rights senior to those of the holders of
the common stock. If additional funds are raised by the issuance of debt
securities, we may be subject to certain limitations on our operations,
including limitations on the payment of dividends. The Company may also issue
equity securities for acquisitions of businesses or health information content
to use in the Company's website or other internet based product offerings. If
adequate funds are not available or not available on acceptable terms, we may be
unable to fund our expansion, successfully promote our brandname, take advantage
of acquisition opportunities, develop or enhance services or respond to
competitive pressures, any of which could have a material adverse effect on our
business, financial condition and results of operations.
The company has entered into joint marketing agreement with NetSales, Inc., and
Digital River Corporation, to market the Company's software product through
various retail channels, as well as over the Internet as a downloadable product.
<PAGE>
As of this writing, only a minimal amount of sales has occurred.
The company is also embarking on an advertisement campaign over the next several
months in major Newspapers and consumer and healthcare journals of all its
products and services. There is no assurance that such advertisement campaign
will yield any dividend.
Employees
We presently have three full time employees and four independent contractors.
Some of our officers and directors are engaged in business activities outside
of us, and the amount of time they will devote to our business will only be
approximately 50% of their work week. Upon completion of the public offering,
it is anticipated that management will devote the time necessary each month to
our affairs. We also intend to out-source some of the personnel requirements to
Meridian Holdings, Inc.
Facilities
We are presently using the office of Meridian Holdings, Inc., our parent
company, at no cost, as our office. Such arrangement is expected to continue
after completion of this offering. There is currently no written rental
agreement.
Legal Proceedings
We are not currently a party to any material legal proceedings.
MANAGEMENT
Executive Officers, Directors and Other Significant Employees
<TABLE>
<CAPTION>
Name Age Title
<S> <C> <C>
Anthony C. Dike, MD 45 Chairman, Director
Chief Executive Officer, Secretary
Treasurer
Russell Lyon, MA 47 President, Director
Chief Technology Officer,
Philip Falase, MBA, LLM 43 Chief Financial officer, Director
Edward Williams, MD 64 Director
Daniel Thornton, 39 Director
</TABLE>
Anthony C. Dike, MD, our Chairman, Chief Executive Officer, Secretary and a
Director, will devote approximately 50% of his time to our affairs. Dr. Dike has
been the Chairman of the Board, Chief Executive Officer and President of the
Company since January, 1991 . Anthony C. Dike, a physician by training and
an entrepreneur that has funded and developed various start-up high technology
businesses from inception to fruition through his private Investment Firm, MMG
Investments Inc. a California Corporation. He is the founder of CGI
Communications Services, Inc., Bolingo.com-the world's largest High Technology
Online Store on the Internet, Capnet.com, Bidfair.com, and Capnet.net, all
Internet domain registered businesses. He also is the founder of Intercare
Diagnostics, Inc., a United States Food and Drug Administration (USFDA)
registered Bio-Medical Software Manufacturing Company, with over 5 Multimedia
healthcare related software programs in the market. He also pioneered the design
and development of the Mirage Systems Biofeedback Software Program, the first
United States Food and Drug Administration approved software only for
Biofeedback and Relaxation Training. He is also the founder of Capnet IPA,
Capnet Gateway On-line Services, Meridian Medical Enterprises Corporation and
Meridian Health Systems, Inc. Anthony C. Dike, MD, is also a member of the
peer-review standing panel for United States Department of Education National
Institute for Disability and Rehabilitation Research. He has served as a
consultant to United Nations Development Project (UNDP) Sustainable Human
Development Program ( "TOKTEN" ). He has given several presentations to various
fortune 500 companies including Pacific Bell, AT&T Easylink Services, Apple
Computer, Smithkline Laboratories Clinical Trial Division, UHP Health Plan,
Mullikin IPA, and Wellpoint Healthcare Network Pharmacy department, about the
use of the Internet as a facilitator of global communications, record sharing
and electronic-commerce transaction in the healthcare industry using the
"Computer Aided Provider Network" (CAPNET) module. He most recently pioneered
-----------------------------
the design and development of "The Mirage Systems Internet Based Healthcare
Transaction Module."
Russell A. Lyon, MA, our President and , Chief Technology Officer, and a
Director, will devote approximately 100% of his time to our affairs. Russell
Lyon has been a designer and developer of computer-based educational and
<PAGE>
training programs for nearly two decades. He has served as both designer and
developer on major training projects for a variety of corporate entities,
including TRW, Unocal, Union Bank and Southern California Edison. As the founder
and principal of Kinetic Media, he was a Level II Authorized Developer for
Macromedia Director and has been a featured speaker at the Macromedia
International User Conference on innovative uses of Director. He has developed
or produced over a dozen separate commercial software titles, including The
Mirage Systems Interactive Multimedia Biofeedback Interface for Intercare
Diagnostics. He holds a BA degree in Psychology from Cornell University and an
MA degree in both Educational Psychology and Instructional Technology form
California State University, Long Beach. He is the President and Chief
Technology Officer of Intercare Diagnostics, Inc.
Philip Falese, MBA, JD, LLM, our Chief Financial Officer , and a Director
Mr. Philip Falese had his MBA from University of Alabama, JD from Northrop
University School of Law, Los Angeles, and LLM (Tax) from Golden Gate University
,San Francisco. Mr. Falese has been working as a consultant to various
<PAGE>
clients in the area of strategic business development, tax consultation, asset
valuations, and financial planning. He also has worked as a staff accountant
for Carter, Turner and Company (CPA firm) based in Los Angeles, California.
Edward Williams, MD, a Director, has over 30 years of experience within the
medical profession. Dr. Williams, is currently in private medical practice
specializing in Family Medicine, received his Bachelor of Arts from Allegheny
College, Meadville, PA, and his Doctor of Medicine from Temple University School
of Medicine, Philadelphia, PA. Dr. Williams has also received a Masters Degree
in Health Care Administration from the University of La Verne; La Verne, CA.
Additionally, he is currently undergoing course work in a Certificate Program in
Administrative Medicine from Tulane University.
Dr. Williams has served in the United States Air Force, Flight Surgeon, Captain
Strategic Air Command and has received numerous honors and awards for his
outstanding service in the military. Dr. Williams has served as Chief of Staff
for Hawthorne Memorial Hospital, Hawthorne CA, and Robert F. Kennedy Medical
Center, Hawthorne CA. Additionaly, Dr. Williams has served on numerous civic
boards such as the Chairman of the Torrance Building and Recreation Department,
Torrance, CA, Lawndale Chamber of Commerce, Lawndale CA, a Medical Consultant
and Scholarship Sponsor for the Miss California Pageant a division of the Miss
America Scholarship Pageant, to name a few. Dr. Williams is a Founding Member of
the El Camino Community College Foundation Torrance, CA. He has served the
Lawndale, Torrance, and Hawthorne, California Communities for over 25 years.
Daniel Thornton, a Director, Mr. Thornton began his business career in
the foods industry. He was corporate liaison and District Manager for Dairy
Queen of Denver, responsible for the operations and management of 25 stores in
the Denver metro area. Under his guidance, the stores achieved an overall
increase in sales of 20% and an increase in operational efficiency of over 5%.
Mr. Thornton is also an international lecturer on medical practice management in
addition to having extensive knowledge and experience in the manufacturing and
marketing of homeopathic drugs, medical devices and nutriceuticals.
As CEO of Eclosion Corporation, Mr. Thornton helped to operationalize all
aspects of medical device manufacturing, as well as being instrumental in
establishing Ireland's first fully registered homeopathic drug manufacturing
plant. He has managed projects that encompass the development of numerous drug
products, in addition to having established international markets for those
products. Mr. Thornton has also consulted to Nevada Homeopathic medical board,
primarily on regulatory issues regarding medical technology. His experience in
all facets of nutriceutical operations and marketing makes him well qualified
for his current position as the CEO of BioSynergy Nutriceuticals.
Board of Directors
Our board of directors consists of six (6) authorized members, five of the
positions have been filled, and one vacancy still remains unfilled. The terms of
the Board of Directors is staggered over a three year period.
Apart from Mr. Russell A. Lyons, none of the other directors have been
compensated for their activities as directors or officers of the company. In
the future, our non-employee directors may be reimbursed for expenses incurred
in connection with attending board and committee meetings and compensated for
their services as board or committee members.
Executive Officers
Our officers are elected by the Board of Directors and hold office at the
will of the Board.
Indemnification
Our articles of incorporation provide that we shall indemnify, to the full
extent permitted by California law, any of our directors, officers, employees or
agents who are made, or threatened to be made, a party to a proceeding by
reason of the fact that he or she is or was one of our directors, officers,
employees or agents against judgments, penalties, fines, settlements and
<PAGE>
reasonable expenses incurred by the person in connection with the proceeding if
specified standards are met. Although indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to our directors, officers
and controlling persons under these provisions, we have been advised that, in
the opinion of the SEC, indemnification for liabilities arising under the
Securities Act of 1933 is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
Employment Agreements
Mr. Russell A. Lyons, the president and Chief Technology Officer has entered
into an employment agreement with the Parent Company, Meridian Holdings, Inc.
None of the other executive officers are subject to an employment agreement at
this time. We intend to enter into employment contracts with some of our
executive officers in the near future.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table provides information concerning the compensation of the
named executive officers for each of our last nine completed fiscal year.
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Awards Securities
Name Other Restricted Underlying
And Annual Stock Options/
Principal Compen- Award (s) SARs (#)
Position Year Salary ($) Bonus ($) sation($)
(a) (b) (c) (d) (e) (f) (g)
<S> <C> <C> <C> <C> <C> <C>
Anthony C Dike 1999 $0 10,000
Chairman, 1998 $0 5,000 5,000
Chief 1997 $0 5,000 5,000
Executive 1996 $0 5,000 5,000
Officer(1)(2) 1995 $0 5,000 5,000
1994 $0 5,000 5,000
1993 $0 5,000 5,000
1992 $0 5,000 5,000
1991 $0 5,000 5,000
Russell A. Lyon 1999 $16,666.66
President
Chief
Technology
Officer (3)
Philip Falese 1999 $0
Chief
Financial
Officer (4)
<FN>
Footnotes
(1) Total awards granted from 12-31-91 to 12-31-99 is 4,000,000 at $0.002
per share on a 1 for 100 post split basis.
(2) Total options granted from 1991 to 12-31-99 is 5,000,000 at $0.002
per share on a 1 for 100 post split basis.
(3) Mr. Russell Lyon started working for the company in November 1999. His
original options and bonus awards were granted by Meridian Holdings, Inc., the
parent company.
(4) Mr. Philip Falese will commence working for the company effective
early part of the year 2000.
</TABLE>
Options/SAR Grants in Last Fiscal year
The following table shows information regarding grants of stock options in this
last completed fiscal year to executive officers named in the summary
Compensation Table above.
<TABLE>
<CAPTION>
Individual Grants
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/SARs Employees or Base Expiration
Name Granted (#) in Fiscal Year Price ($/sh) Date
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Anthony C. Dike (1) 5,000,000 100% 0.0 12-31-2008
<FN>
Footnotes
(1) Options granted in December 1999 is 1,000,000 shares, at $0.002 per share
. No stock was issued during this period.
</TABLE>
<PAGE>
CERTAIN TRANSACTIONS
In December 1991, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1991,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2001.
In December 1992, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1992,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2002.
In December 1993, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1993,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2003.
In December 1994, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1994,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2004.
In December 1995, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1995,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2005.
In December 1996, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1996,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2006.
In December 1997, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1997,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2007.
In December 1998, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered. Also in December 1998,
the Chairman was granted option to purchase additional 5,000 shares of our
common stock, exercisable until December 2007.
In December 1999, the board of Directors the Chairman was granted option to
purchase 1,000,000 shares of our common stock, exercisable until December 2008.
The total number of options available to be exercised by our chairman is
5,000,000 on a post-dividend distribution basis.
Also, in February 1991, the board of Directors authorized the issuance of 9,000
shares of Common Stock to MMG Investments, Inc., in consideration for an
aggregate of $75,000 equity investment in the company.
In September 1999, the board directors authorized the issuance of 51,000 shares
of Common Stock to Meridian Holdings, Inc., in exchange for assumption of
$538,000 debt owed by the company to MMG Investments, Inc.($500,000) and United
States Small Business administration ($38,000) and payment of $250,000 to Mr.
Russell Lyons, in the form of cash and common stock as part of his employment
agreement as the president and Chief technology Officer of the Company.
Additional $232,000 for InterCare.com's product customer support, marketing and
banner advertisements on Meridian Holdings, Inc., popular Websites. Total
investments by Meridian Holdings, Inc. is $1,020,000.
Total shares issued and outstanding was 100,000 as of December 7, 1999. On
December 10, 1999, pursuant to stock dividend distribution authorized by the
board of Directors, after the amendment of Article IV of the articles of
Incorporation of the Company, whereby the company's common stock was increased
from 100,000 to 100,000,000, a 1 for 100 forward stock split was approved. All
the current share holders of InterCare.com, Inc., received their dividends
accordingly.
PRINCIPAL SECURITY HOLDERS
The following tables set forth information regarding the beneficial owners of
our Common Stock, as of December 31, 1999, by the following individuals or
groups:
Each of our executive officers;
Each of our directors;
Each person, or group of affiliated persons, whom we know beneficially
owns more than 5% of our outstanding stock; and
All of our directors and executive officers as a group.
Except as otherwise noted, and, to the best of our knowledge, the persons named
in this table have sole voting and investing power with respect to all of the
<PAGE>
shares of common stock held by them.
As of the table date we had 10,000,000 common shares outstanding.
<TABLE>
<CAPTION>
Name and Amount and Percent of Class
Address of Nature of Before After After
Beneficial Beneficial the Maximum Minimum
Owner Ownership Offering Offering Offering
<S> <C> <C> <C> <C>
Anthony C. Dike (1)(2) 4,000,000 40% 36% 39.6%
4127 West 62nd Street
Los Angeles, CA 90043
Meridian Holdings, Inc.(2)(3) 5,100,000 51% 46% 50.5%
900 Wilshire Blvd, #500
Los Angeles, CA 90017
MMG Investments, Inc.(2) 900,000 9% 8% 8.9%
4127 West 62nd Street
Los Angeles, CA 90043
Named Officers and 4,000,000 40% 38% 39.6%
Directors As a Group
<FN>
(1) Officer or Director.
(2) Anthony C. Dike, is a majority shareholder.
(3) INCLUDING THEIR SHAREHOLDERS; EXCLUDING THEIR DIRECTORS, OFFICERS, AND
AFFILIATES.
</TABLE>
DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue up to 100,000,000 shares of Common Stock, No par
value, of which 10,000,000 shares were issued and outstanding as of December 31,
1999. All outstanding shares of our common stock are fully paid and
nonassessable and the shares of our common stock offered by this prospectus
will be, upon issuance, fully paid and nonassessable. The following is a
summary of the material rights and privileges of our common stock.
Preferred Stock
We authorized 20,000,000 shares of preferred stock, with No par var. No
preferred stock have been issued.
VOTING. Holders of our common stock are entitled to cast one vote for each
share held at all shareholder meetings for all purposes, including the election
of directors. The holders of more than 50% of the voting power of our common
stock issued and outstanding and entitled to vote and present in person or by
proxy, together with any preferred stock issued and outstanding and entitled to
vote and present in person or by proxy, constitute a quorum at all meetings of
our shareholders. The vote of the holders of a majority of our common stock
present and entitled to vote at a meeting, together with any preferred stock
present and entitled to vote at a meeting, will decide any
question brought before the meeting, except when California law, our articles
of incorporation, or our bylaws require a greater vote and except when
California law requires a vote of any preferred stock issued and outstanding,
voting as a separate class, to approve a matter brought before the meeting.
Holders of our common stock do not have cumulative voting for the election of
directors.
DIVIDENDS. Holders of our common stock are entitled to dividends when, as and
if declared by the board of directors out of funds available for distribution.
The payment of any dividends may be limited or prohibited by loan agreement
provisions or priority dividends for preferred stock that may be outstanding.
On December 10, 1999, as provided in Article IV of this Corporation's Article of
Incorporation, as amended, this corporation has one hundred million
(100,000,000) shares of Common Stock authorized and as of December 7, 1999, an
aggregate of one hundred thousand (100,000) shares of Common Stock were issued
and outstanding. The board of directors by way of a written consent declared a
stock dividend of one hundred (100) shares of Common Stock for every one (1)
share of common stock currently issued and outstanding, to be payable to
shareholders of record as of December 30th, 1999. Meridian Holdings, Inc., the
51% owners of the outstanding shares of the Company's declared a dividend
simultaneously to all its shareholders of record who owns a share in Meridian
Holdings, Inc., to receive five (5) shares of common stock of InterCare.com.
PREEMPTIVE RIGHTS. The holders of our common stock have no preemptive rights to
subscribe for any additional shares of any class of our capital stock or for
any issue of bonds, notes or other securities convertible into any class of our
capital stock.
<PAGE>
LIQUIDATION. If we liquidate or dissolve, the holders of each outstanding share
of our common stock will be entitled to share equally in our assets legally
available for distribution to our shareholders after payment of all liabilities
and after distributions to holders of preferred stock legally entitled to be
paid distributions prior to the payment of distributions to holders of our
common stock.
TRANSFER AGENT. Corporate Stock Transfer of Denver, Colorado will serve as our
transfer agent. Telephone number 303-282-4800.
PLAN OF DISTRIBUTION
We offer the right to subscribe for up to 1,000,000 shares at the offering
price of between $5.00 (minimum) and $25 (maximum) per share. We are offering
the shares directly on a best efforts, 100,000 share minimum basis. No
compensation is to be paid to any person for the offer and sale of the shares
unless we retain a broker who is also a professional underwriter.
Our directors and officers plan to distribute prospectuses related to this
offering. We estimate up to 500 prospectuses will be distributed in such a
manner to acquaintances, friends and business associates.
Up to 80% of the shares may be purchased by our officers, directors, current
shareholders and any of their affiliates or associates.
Although our directors and officers are associated persons of us as that term
is defined in Rule 3a4-1 under the Exchange Act, they are deemed not to be a
broker for the following reasons:
They are not subject to a statutory disqualification as that term is defined in
Section 3(a)(39) of the Exchange Act at the time of their participation in the
sale of our securities. They will not be compensated for their participation
in the sale of our securities by the payment of commission or other remuneration
based either directly or indirectly on transactions in securities.
They are not an associated person of a broker or dealers at the time of
their participation in the sale of our securities.
- They will restrict their participation to the following activities:
Preparing any written communication or delivering such communication
through the mails or other means that does not involve oral solicitation by
them of a potential purchaser;
Responding to inquiries of a potential purchasers in a communication
initiated by the potential purchasers, provided however, that the content of
such responses are limited to information contained in a registration statement
filed under the Securities Act or other offering document;
Performing ministerial and clerical work involved in effecting any
transaction.
As of the date of this Prospectus, no broker has been retained by us for the
sale of securities being offered. In the event a broker who may be deemed an
underwriter is retained by us, an amendment to our registration statement
will be filed.
Investors in this offering must make their own decisions regarding whether to
hold or sell their shares. We will not exercise any influence over your
decisions.
The common stock offered by this prospectus is being offered by the Company and
the selling shareholders. Such common stock may be sold or distributed from
time to time by Company and the selling shareholders, or by donees or
transferees of, or other successors in interests to, the selling shareholders,
directly to one or more purchasers or through brokers, dealers or underwriters
who may act solely as agents or may acquire such common stock as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices, or at fixed prices, which may be
changed. The sale of the common stock offered hereby may be effected in one or
more of the following methods:
- ordinary brokers' transactions;
- transactions involving cross or block trades or otherwise on the NASDAQ
National Market;
- purchases by brokers, dealers or underwriters as principal and resale by
such purchasers for their own accounts pursuant to this prospectus;
- "at the market" to or through market makers or into an existing market for
the common stock;
- in other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
<PAGE>
- in privately negotiated transactions; or
- any combination of the foregoing.
In order to comply with the securities laws of certain states, if applicable,
the shares may be sold only through registered or licensed brokers or dealers.
In addition, in certain states, the shares may not be sold unless they have been
registered or qualified for sale in such state or an exemption from such
registration or qualification requirement is available and complied with.
Brokers, dealers, underwriters or agents participating in the distribution of
the shares as agents may receive compensation in the form of commissions,
discounts or concessions from the selling shareholders and/or purchasers of the
common stock for whom such broker-dealers may act as agent, or to whom they may
sell as principal, or both (which compensation as to a particular broker-dealer
may be less than or in excess of customary commissions).
THE SELLING SHAREHOLDERS AND ANY BROKER-DEALERS WHO ACT IN CONNECTION WITH THE
SALE OF THE SHARES HEREUNDER MAY BE DEEMED TO BE "UNDERWRITERS" WITHIN THE
MEANING OF THE SECURITIES ACT, AND ANY COMMISSIONS THEY RECEIVE AND PROCEEDS OF
ANY SALE OF THE SHARES MAY BE DEEMED TO BE UNDERWRITING DISCOUNTS AND
COMMISSIONS UNDER THE SECURITIES ACT.
Neither InterCare.com nor the selling shareholders can presently estimate the
amount of such compensation. InterCare.com knows of no existing arrangements
between any selling shareholders, any other shareholder, broker, dealer,
underwriter or agent relating to the sale or distribution of the shares. At a
time particular offer of shares is made, a prospectus supplement, if required,
will be distributed that will set forth the names of any agents, underwriters or
dealers and any compensation from the selling shareholders and any other
required information.
InterCare.com will pay all of the expenses incident to the registration,
offering and sale of the shares to the public other than commissions or
discounts of underwriters, broker-dealers or agents. InterCare.com has also
agreed to indemnify the selling shareholders and certain related persons against
certain liabilities, including liabilities under the Securities Act.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of InterCare.com,
InterCare.com has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and
is therefore, unenforceable.
InterCare.com has advised the selling shareholders that during such time as they
may be engaged in a distribution of the shares included in this prospectus they
are required to comply with Regulation M promulgated under the Securities
Exchange Act of 1934, as amended. With certain exceptions, Regulation M
precludes the selling shareholders, any affiliated purchasers, and any
broker-dealer or other person who participates in such distribution from bidding
for or purchasing, or attempting to induce any person to bid for or purchase any
security which is the subject of the distribution until the entire distribution
is complete. Regulation M also prohibits any bids or purchases made in order to
stabilize the price of a security in connection with the distribution of that
security. All of the foregoing may affect the marketability of the shares
offered hereby.
Method of Subscribing
Persons may subscribe by filling in and signing the subscription agreement and
delivering it, prior to the expiration date, to us. The subscription price of
$5.00 per share must be paid in cash or by check, consideration for services
rendered to the company, bank draft or postal express money order payable in
United States dollars to our order. You may not pay in cash.
Expiration Date
This offering will expire 180 days from the date of this prospectus.
VALIDITY OF COMMON STOCK
The validity of the common stock offered hereby will be passed upon for
us by Wellman and Warren, LLP, Irvine, California.
EXPERTS
The financial statements incorporated in this Prospectus represents the two
consecutive year audited annual financial statements of InterCare.com, Inc.
(formerly, Inter-Care Diagnostics, Inc.)for the year ended December 31, 1998 and
1999 respectively, and have been so incorporated in reliance on the report of
Andrew M. Smith, independent accountant, given on the authority of Mr. Smith,
CPA, as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
This prospectus is a part of a registration statement on Form SB-2 filed by us
<PAGE>
with the SEC under the Securities Act. This Prospectus omits certain
information contained in the registration statement, and we refer you to the
registration statement and to the exhibits to the registration statement for
additional information about the common stock and us.
We upon registration, will file annual, quarterly and special reports, and
other information with the SEC. You may read and copy any document we file with
the SEC at the SEC's public reference room located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's public reference rooms located at it's
regional offices in New York, New York and Chicago, Illinois. Please call the
SEC at 1-800-SEC-0300 for further information on the operation of public
reference rooms. You can also obtain copies of this material from the SEC's
Internet web site (http://www.sec.gov) that contains reports, proxy statements
and other information regarding registrants that file electronically with the
SEC.
<PAGE>
InterCare.com, Inc.
Financial Statements
And Independent Auditor's Report
December 31, 1999
<PAGE>
INTERCARE.COM, INC.
<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Page
Independent Auditor's Report F-1
Audited Financial Statements:
Balance Sheet F-2
Statements of Operations F-3
Statements of Changes in Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6
</TABLE>
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
InterCare.com, Inc.
We have audited the accompanying balance sheet of InterCare.com, Inc. at
December 31, 1999 and the related statements of changes in stockholders'
equity, operations, and cash flows for the period from January 1, 1998 to
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of InterCare.com, Inc. at
December 31, 1999, and the results of its operations and its cash flows for the
period then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, the Company has minimal
capital resources presently available to meet obligations which normally can be
expected to be incurred by similar companies, and with which to carry out its
planned activities. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Management's plans in regard to this
matter are discussed in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Andrew M Smith, CPA
Long Beach, California, 90807
January 17, 2000
<PAGE>
INTERCARE.COM, INC.
Balance Sheet
<TABLE>
<CAPTION>
31-Dec-98 31-Dec-99 Proforma
========= ========= ========
<S> <C> <C> <C>
ASSETS
Current assets
cash . . . . . . . . . . . . . . . . . . . . . . . . 36,785 864 4,584,440
Accounts Receivable. . . . . . . . . . . . . . . . . 47,672 470,081
Inventory. . . . . . . . . . . . . . . . . . . . . . 988 21,639 30,639
Total Current Assets . . . . . . . . . . . . . . . . . . 85,445 22,503 5,085,161
Fixed assets (Net) . . . . . . . . . . . . . . . . . . . 13,206 253 160,253
Deferred Public Offering Costs 9,461
-------- --------- ---------
Total Assets . . . . . . . . . . . . . . . . . . . . . . 98,651 22,756 5,254,875
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accrued liabilities (3,1) . . . . . . . . . . . . . 8,768 9,461
Total Current Liabilities. . . . . . . . . . . . . . . . 8,768 9,461
Long term liabilities (3). . . . . . . . . . . . . . . . 504,932 - -
--------- --------- --------
Total Liabilities. . . . . . . . . . . . . . . . . . . . 513,700 - 9,461
========== ======== =========
Stockholders' equity
Common stock, no par value per share;
100,000,000 shares authorized; 10,000,000 shares
issued and outstanding . . . . . . . . . . . . . . 25,000 577,228 5,577,228
Additional paid-in capital
Deficit accumulated during the development stage . . . . (440,049) (554,472) (331,814)
--------- --------- ----------
Total Liabilities & Equity . . . . . . . . . . . . . . . 98,651 22,756 5,254,875
========== ========= =========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
INTERCARE.COM, INC.
Statement of Operations
Year ending on as of December 31,
<TABLE>
<CAPTION>
1998 1999 Proforma
======= ======= =========
<S> <C> <C> <C>
Revenue 13,795 6,629 1,000,000
-------- ------- ----------
Cost of Goods Sold 289 252 200,000
--------- ------- ----------
Gross Profit 13,506 6,377 800,000
========= ======= ==========
Amortization & Depreciation Expense 13,504 13,505 40,000
General, Sell & Administrative 62,829 107,295 462,342
Stock issued for services - - 250,000
----------- ---------- --------
Total Operating Expenses 76,333 120,800 752,342
----------- ---------- --------
(Loss) Income Before Interest and
Income taxes . . . . . . . . . . . . . (62,827) (114,423) 47,658
Interest Income - - 175,000
Interest Expense - - -
(Loss) Income Before Income taxes (62,827) (114,423) 222,658
----------- ---------- ---------
Net (Loss) Profit (62,827) (114,423) 222,658
----------- ---------- ---------
Weighted average number of shares 10,000,000 10,000,000 11,000,000
Net loss per common share (0.006) (0.011) 0.020
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
INTERCARE.COM, INC.
Statement of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock Additional Accumulated Total
Transaction and Date Shares Amount Paid in Capital Deficit Equity
============ ======= ========== ========= =========
Inception Through December 1997 100,000 $25,000 - $(377,222) (352,222)
<S> <C> <C> <C> <C> <C>
Loss during fiscal year 1998 (4,232) (356,454)
September 18, 1999 sold 51% to Meridian 552,228
holdings
December 10, 1999 completed forward split
of 1 to 100 . . . . . . . . . . . . . . . 9,900,000 (173,018) 22,756
------------ -------- -------- -------- --------
Balance December 31, 1999 . . . . . . . . 10,000,000 25,000 552,228 (554,472) 22,756
========== ======= ======== ========= ========
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
INTERCARE.COM, INC.
Statement of Cashflows
For the Year Ended December 31
<TABLE>
<CAPTION>
1998 1999
====== ======
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (62,826.76) $(114,423.47)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation 13,504 13,505
Loss on sale of equipment (551)
Changes in assets and liabilities:
Decrease in accounts receivable - 47,672
increase in inventory (988) (20,651)
Decrease in accounts payable - (6,357)
Decrease in SBA note payable (1,515) (36,526)
Increase in note payable - MMG investment 50,190 (462,358)
Increase in loan from MMG investment 2,316 (8,460)
------- -------
NET CASH USED IN OPERATING ACTIVITIES 680 (588,149)
======= ========
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of equipment (759) -
------ -------
NET CASH USED IN INVESTING ACTIVITIES (759) -
====== =======
CASH FLOWS FROM FINANCING ACTIVITIES
Sold 51% interest to Meridian Holdings, Inc. - 552,228
NET CASH PROVEDED BY FINANCING ACTIVITIES - 552,228
------ -------
NET DECREASE IN CASH (79) (35,921)
======= =======
CASH AT BEGINNING OF PERIOD 36,864 36,785
CASH AT END OF PERIOD $ 36,785.30 $ 863.85
</TABLE>
The accompanying notes are an integral part of this statement.
<PAGE>
INTERCARE.COM, INC.
Notes to the Financial Statements
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization. InterCare.com formerly known as Inter-Care Diagnostics, Inc., (the
"Company") was Incorporated under the laws of the State of California in
February 1991. The is a leading developer of healthcare multi-media content and
software technologies, and since February 1991, the company have taken steps to
become a leading provider of software technologies for neuromuscular
re-education, stress management and biofeedback.
The company was originally incorporated in 1991 for the purpose of operating a
medical diagnostics laboratory and engaging in various medical services to
clients. On January 17, 1994, a 6.8 magnitude earthquake centered in Northridge,
California caused wide spread damage to commercial and residential structures,
and to major freeways, causing business interruptions and disrupting the normal
flow of traffic. The Company experienced irreversible damage to all its
high-tech computers and diagnostic equipment.
Since that time, the Company has been devoting substantially all its efforts to
establishing a new business entity that develops software for the healthcare
industry and other related activities over the Internet.
The company have created, published and marketed multimedia software products,
content and Internet-ready applications that provide biofeedback, healthcare
transactions, medical and health-related information for the education, consumer
and professional markets.
The company developed the Mirage Systems Multimedia Biofeedback software program
( a cross-platform program : Windows 3.X including windows 95;98 and Apple
Macintosh platforms) in 1994, and this software became the first FDA approved
software program for neuromuscular re-education and biofeedback training. The
company also has four other software products in the market including the "Body
Pain Trigger Points Program", one of our best selling software products, with
over 20,000 copies sold. The company intends to convert all its software
programs to run in all the popular operating systems available, including but
not limited to Microsoft Windows, Macintosh and Linus or Unix operating
systems.
On September 27, 1999, the Company, announced that it has executed an
Electronic Commerce Agreement with Netsales, Inc., in which Netsales will
distribute Intercare's softwareprograms through more than 140,000 loyal
reseller customers in 130 countries of Ingram Micro, the largest provider of
computer technology products and servicesin the world.
The company had entered into similar agreement earlier, with DigitalRiver,
Inc.,in which DigitalRiver will market the company's software program through
major retailers such as CompUSA, Wal-Mart, and other Internet software
resellers.
Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Deferred Costs Related To Proposed Public Offering. Costs incurred in
connection with the proposed public offering of common stock have been deferred
and will be charged against capital if the offering is successful or against
operations if it is unsuccessful.
The estimated expenses of this offering in connection with the issuance and
distribution of the securities being registered, all of which are to be paid
by the Registrant, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Registration Fee $ 1,320.00
Legal Fees and Expenses 5,000.00
Accounting Fees and Expenses 2,000.00
Printing 240.00
Miscellaneous Expenses 820.80
Total $ 9460.80
==========
</TABLE>
Shares Issued In Exchange For Services. The fair value of shares issued in
exchange for services rendered to the Company was determined by the Company's
officers and directors.
<PAGE>
Income Taxes. The Company has made no provision for income taxes because of
accumulated business and tax losses since its inception.
Net Loss Per Common Share. The net loss per common share is computed by
dividing the net loss for the period by the weighted average number of shares
outstanding. For purposes of computing the weighted average number of shares,
all stock issued with regards to the founding of the Company is considered to
be "cheap stock" as defined in SEC Staff Accounting Bulletin 4D and is
therefore counted as outstanding for the entire period.
2. GOING CONCERN CONTINGENCY
The Company has minimal capital resources presently available to meet
obligations which normally can be expected to be incurred by similar companies,
and with which to carry out its planned activities. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
In order to begin any significant operations, the Company will have to pursue
other sources of capital, such as additional equity financing as discussed in
Note 4. There is no assurance that the Company will be able to obtain such
financing. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
3. RELATED PARTY TRANSACTIONS
The company's majority shareholder Anthony C. Dike, is also the principal of MMG
Investments, Inc. MMG Investments Inc., made an equity investment of an
aggregate of $75,000 in exchange for 9,000 shares of common stock of the company
in February 1991.
On September 18th, 1999, pursuant to a Stock Purchase Agreement dated
September 18th, 1999 (the "Stock Purchase Agreement") by and among the
Registrant ("Seller"), and Meridian Holdings, Inc., (a Colorado Corporation)
("Buyer"), the Registrant sold 51,000 shares of Common Stock at 0 par
value, representing 51% of all the issued and outstanding shares to Meridian
Holdings, Inc., in exchange for "Banner" Advertisement and Promotion of
Intercare Products and Services on all high traffic websites of Meridian
Holdings, Inc., as well as assumption of current and future software
development costs and debts of Intercare.com totaling $513,700, hence
this amount was not reflected in the December 31, 1999 balance sheet.
4. CONTINGENT PUBLIC OFFERING OF COMMON STOCK
On December 31, 1999, the board of directors authorized the Company to sell in a
public offering a minimum of 100,000 and a maximum of 1,000,000 shares of common
stock pursuant to an effective registration statement on Form SB-2 filed under
the Securities Act of 1933. Each share shall have a purchase price of $5.00.
Proceeds from the public offering shall be for working capital and General
Corporate purposes.
5. LEGAL FEE
The Company has agreed to pay its corporate attorney, who is also a stockholder
of the Company, $5000 cash for his legal services relative to the public
offering upon the registration statement for the public offering (see Note 4
above) becoming effective. This obligation has been accrued in the
accompanying balance sheet and the costs are included in deferred public
offering costs.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
California Corporate code allow us to indemnify our officers, directors and any
corporate agents in terms sufficiently broad to indemnify such persons under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. Our certificate of incorporation
and our bylaws provide for indemnification of our directors, officers,
employees and other agents to the extent and under the circumstances permitted
by California law. We may enter into agreements with our directors and
executive officers that require us, among other things, to indemnify them
against certain liabilities that may arise by reason of their status or service
as directors and executive officers to the fullest extent permitted by
California law. We have also purchased directors and officers liability
insurance, which provides coverage against certain liabilities including
liabilities under the Securities Act.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of this offering in connection with the issuance and
distribution of the securities being registered, all of which are to be paid
by the Registrant, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Registration Fee $ 1,320.00
Legal Fees and Expenses 5,000.00
Accounting Fees and Expenses 2,000.00
Printing 240.00
Miscellaneous Expenses 820.80
Total $ 9460.80
==========
</TABLE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
(a) The following is a summary of our transactions during the last nine years
preceding the date hereof involving sales of our securities that were not
registered under the Securities Act.
In December 1991, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2001.
In December 1992, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2002.
In December 1993, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2003.
In December 1994, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2004.
In December 1995, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2005.
In December 1996, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2006.
In December 1997, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2007.
In December 1998, the board of Directors authorized the issuance of 5,000 shares
to Anthony C. Dike, our chairman for services rendered, with option to purchase
additional 5,000 shares of our common stock, exercisable until December 2009.
The total number of options available to be exercised by our chairman is
4,000,000 on a post-dividend distribution basis.
Also, in February 1991, the board of Directors authorized the issuance of 9,000
shares of Common Stock to MMG Investments, Inc., in consideration for an
aggregate of $75,000 equity investment in the company.
In September 1999, the board directors authorized the issuance of 51,000 shares
of Common Stock to Meridian Holdings, Inc., in exchange for assumption of
$538,000 debt owed by the company to MMG Investments, Inc.($500,000) and United
<PAGE>
States Small Business administration ($38,000) and payment of $250,000 to Mr.
Russell Lyons, in the form of cash and common stock as part of his employment
agreement as the president and Chief technology Officer of the Company.
Additional $232,000 for InterCare.com's product customer support, marketing and
banner advertisements on Meridian Holdings, Inc., popular Websites. Total
investments by Meridian Holdings, Inc. is $1,020,000.
Total shares issued and outstanding was 100,000 as of December 7, 1999. On
December 10, 1999, pursuant to stock dividend distribution authorized by the
board of Directors, after the amendment of Article IV of the articles of
Incorporation of the Company, whereby the company's common stock was increased
from 100,000 to 100,000,000, a 1 for 100 forward stock split was approved. All
the current share holders of InterCare.com, Inc., received their dividends
accordingly.
The sales and issuances of securities in the transactions described above were
deemed to be exempt from registration under the Securities Act in reliance upon
Section 4(2) of the Securities Act, Regulation D promulgated thereunder or rule
701 promulgated under Section 3(b) of the Securities Act, as transactions by an
issuer not involving any public offering or transactions pursuant to
compensatory benefit plans and contracts relating to compensation as provided
under rule 701. The recipients of securities in each transaction represented
their intentions to acquire the securities for investment only and not with a
view to or for sale in connection with any distribution thereof and appropriate
legends were affixed to the securities issued in such transactions. All
recipients had adequate access, through their relationship with us to
information about us.
(b) There were no underwritten offerings employed in connection with any
of the transactions set forth in Item 26(a).
ITEM 27. EXHIBITS.
The following exhibits are filed with this Registration Statement:
<TABLE>
<CAPTION>
Number Description
<S> <C>
1.0 Form 8-A (*)
3.1 Articles of Incorporation as amended(*)
3.2 By-Laws as amended (*)
4.1 Specimen Common Stock Certificate (*)
5.1 Opinion Regarding Legality(*)
23.2 Consent of Expert (*)
24.1 Power of Attorney (*)
24.2 Form of Electronic Commerce Agreement with NetSales, as amended (*)
24.4 Written Consent of the board of directors of Meridian Holdings, Inc.
approving the dividend stock distribution.
24.5 Written Consent of the board of directors of InterCare.com, Inc.
approving the dividend stock distribution.
27.1 Financial Data Schedule (*)
------------------------------
<FN>
(*) Filed herewith.
</TABLE>
ITEM 28. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(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;
Reflect in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in 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 end 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 a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial bona
fide offering.
<PAGE>
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the small business issuer pursuant to the foregoing
provisions, or otherwise, the small business issuer has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as express in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid by a
director, officer or controlling person of the small business issuer 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 small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication such issue.
(5) For determining any liability under the Securities Act, treat the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the small business issuer under Rule 424(b)(1), or (4) or
497(h) under the Securities Act as part of this registration statement as of
the time the Commission declared it effective.
(6) For determining any liability under the Securities Act, treat each
post-effective amendment that contains a form of prospectus as a new
registration statement for the securities offered in the registration
statement, and that offering of the securities at that time as the initial bona
fide offering of those securities.
POWER OF ATTORNEY
The Registrant and each person whose signature appears below hereby appoints
Anthony C. Dike as their attorney-in-fact, with full power to act alone, to
sign in the name and in behalf of the Registrant and any such person,
individually and in each capacity stated below, any and all amendments,
including post-effective amendments, to this Registration Statement.
SIGNATURES
In accordance with 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 of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Los
Angeles, State of California, on December 31, 1999.
INTERCARE.COM, INC. (Registrant)
By:/s/ Anthony C. Dike
_______________________________
Anthony C. Dike
Chairman, Chief Executive Officer, Secretary
Date: 1/3/2000
By:/s/ Russell Lyons
_______________________________
Russell Lyons
Chief Technology Officer,
Date: 1/3/2000
By:/s/ Philip Falese
______________________________
Philip Falese
Chief Financial Officer,
Date: 1/3/2000
By:/s/ Edward Williams
______________________
Edward Williams, Director
Date: 1/3/2000
By:/s/ Dan Thornton
__________________________
Dan Thornton, Director
1/3/2000
<PAGE>
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated:
Signature Title Date
/s/ Anthony C. Dike
_________________________ 1/3/2000
Anthony C. Dike Chairman, Director,
Chief Executive Officer, Secretary
<PAGE>
Exhibit 1.0:
1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
InterCare.com, Inc.
(Exact name of registrant as specified in its charter)
(State of incorporation) (I.R.S. Employer Identification No.)
CALIFORNIA 95-4304537
(Address of principal executive offices) (Zip Code)
900 Wilshire Boulevard suite 500 90017
Los Angeles, CA
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Not applicable Nasdaq SmallCap Market
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box. [_]
If this Form relates to the registration of a class of debt securities and is
to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [_]
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, No par value
(Title of class)
<PAGE>
Item 1. Description of Registrant's Securities to be Registered.
The information contained in "Description of Capital Stock" in the
Registrant's Registration Statement on Form SB-2 above, is hereby incorporated
by reference. Also the company intends to register additional 1,537,500 shares
issued to all shareholders of Meridian Holdings, Inc., under the dividend stock
distribution with a record date of December 30th, 1999, excluding past and
present directors, officers and affiliates of Meridian Holdings, Inc.
Item 2. Exhibits.
The following exhibits are filed as part of this Registration Statement:
1. Certificate of Incorporation of InterCare.Com, Inc.
a California corporation, as amended to date,
incorporated by reference to Exhibit 3.1 to the
Registrant's Form SB-2 Registration Statement.
2. Bylaws of InterCare.com, a California Corporation
incorporated by reference to Exhibit 3.3 to the
Registrant's Form SB-2 Registration Statement
3. OPINION RE LEGALITY
4. CONSENT OF INDEPENDENT ACCOUNTANT
5. Written Consent of Board of Directors of Meridian Holdings, Inc.,
approving the dividend stock distribution.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
InterCare.com, Inc.
Date: January 1, 2000
By: /s/ Anthony C. Dike
___________________________________
Anthony C. Dike, Secretary
Chairman, Chief Executive Officer
<PAGE>
EX-3.1
ARTICLES OF INCORPORATION
I
The name of this corporation is MONET MEDICAL TESTING, INC.
II
The purpose of the corporation is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporation Code.
III
The name and address in the State of California of this Corporation's initial
agent for service of process is:
NAME: Anthony DIKE
STREET Address: 1601 Centinela Avenue Suite 5
City: Inglewood State: California ZIP 90302
IV
This corporation is authorized to issue only one class of shares of stock; and
the total number of shares of which this corporation is authorized to issue is
100,000 (ONE HUNDRED THOUSAND)
/S/ Anthony C. Dike
__________________________________
Anthony C. Dike, CEO; Secretary
AND
AMENDED ARTICLES OF INCORPORAION
OF
MONET MEDICAL TESTING, INC.
ANTHONY DIKE AND DR. RAWSON certify
1. They constitute a majority of the directors of MONET MEDICAL TESTING,
INC., a California corporation.
2. They hereby adopt the following amendment of the Articles of
Incorporation of this corporation:
Article I is amended to read as follows:
"The name of this corporation is INTER-CARE DIAGNOSTIC, INC.
3. No directors were named in the original articles of incorporation of the
above-named corporation and Two (2) have been elected.
4. The corporation has issued no shares.
Each of the undersigned declares under penalty of perjury under the laws of
the state of California that the matters set forth in this certificate are true
and correct of our own knowledge.
Executed this 19th day of April 1991, at Los Angeles, California.
/s/ Anthony C. Dike
_____________________________________
Anthony C. Dike Chairman/CEO, Director
/s/ DR RAWSON
______________________________________
DR RAWSON Director
<PAGE>
AMENDED ARTICLES OF INCORPORAION
OF
INTER-CARE DIAGNOSTICS, INC.
The undersigned certifies that:
1. He is the president and secretary, respectively, of Inter-Care
Diagnostic, Inc., a California corporation.
2. Article Four of the Articles of Incorporation of this corporation is
amended to read as follows:
The corporation is authorized to issue two classes of shares of stock
designated "Common Stock" and "Preferred Stock," respectively. The total number
of shares of stock which this corporation shall have authority to issue is one
hundred twenty million (120,000,000) shares, consisting of one hundred million
(100,000,000) shares of Common Stock, and twenty million (20,000,000) shares of
Preferred Stock.
The Preferred Stock may be divided into such number of series as the Board
of Directors may determine. The Board of Directors is authorized to fix the
number of shares of any series of Preferred Shares and to determine the
designation of any such series. The Board of Directors is also authorized to
determine or alter the powers, preferences, rights, qualifications, limitations
and restrictions granted to or imposed upon any wholly unissued series of
Preferred Shares and, within the limits and restrictions stated in any
resolution or resolutions of the Board of Directors originally fixing the number
of shares constituting any series, to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of any
such series subsequent to the issue of shares of that series.
3. The foregoing amendments of the Articles of Incorporation have been duly
approved by the board of directors.
4. The foregoing amendments of the Articles of Incorporation have been duly
approved by the required vote of the shareholders in accordance with Section
902, California Corporations Code. The total number of outstanding shares of
the corporation is one hundred thousand (100,000). The number of shares of
voting in favor of the amendment equaled or exceeded the vote required. The
percentage vote required was more than 50 percent.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Date: December __, 1999
/s/ Anthony C. Dike
----------------------
Anthony C. Dike, President and Secretary
AMENDED ARTICLES OF INCORPORATION
OF
Inter-Care Diagnostics, Inc.
The undersigned certifies that:
1. He is the president and secretary, respectively, of Inter-Care
Diagnostics, Inc., a California corporation.
2. Article One of the Articles of Incorporation of this corporation
is amended to read as follows:
"The name of this corporation is " InterCare.com, Inc."
3. The foregoing amendments of the Articles of Incorporation have been
duly approved by the board of directors.
4. The foregoing amendments of the Articles of Incorporation have been duly
approved by the required vote of the shareholders in accordance with section
902, California Corporations Code. The total numbers of outstanding shares of
the corporation is ten million (10,000,000). The numbers of shares of voting in
favor of the amendment equaled or exceeded the vote required. The percentage of
vote required was more than 50 percent.
We further declare under the penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our knowledge.
/s/ Anthony C. Dike
DATE:______________________ __________________________
Anthony C. Dike,
Chairman, Secretary
<PAGE>
EX 3.2
By-Laws
BYLAWS
------
for the regulation, except as otherwise provided
by statute or the Articles of Incorporation,
of
Intercare Diagnostics, Inc.
GENERAL PROVISIONS
Principal Executive Office. The Board of Directors shall designate the location
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of the principal executive office of the corporation at any place within or
without the State of California. The Board of Directors shall have the power to
change the principal executive office to another location and may designate and
locate one or more subsidiary offices within or without the State of California.
Number of Directors. The number of directors of the corporation shall be two
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(2) until changed by a bylaw amending this Section 1.2 duly adopted by the vote
or written consent of a majority of the outstanding shares entitled to vote;
provided, however, that a bylaw reducing the number of directors to a number
less than five (5) cannot be adopted if the votes cast against its adoption at a
meeting or the shares not consenting in the case of action by written consent
are equal to more than 16-2/3 percent of the outstanding shares entitled to
vote.
Name. The name of the corporation shall be "Intercare Diagnostics, Inc." The
corporation shall be authorized to do business under any fictitious business
name, or variation of its legal name, as the Board of Directors may choose from
time to time.
SHARES AND SHAREHOLDERS
Meetings of Shareholders.
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Place of Meetings. Meetings of shareholders shall be held at any place within
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or without the State of California designated by the Board of Directors. In the
absence of any such designation, shareholders' meetings shall be held at the
principal executive office of the corporation.
Annual Meetings. An annual meeting of the shareholders of the corporation shall
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be held on such date and at such time as shall be designated by the Board of
Directors. Should said day fall upon a legal holiday, the annual meeting of
shareholders shall be held at the same time on the next day thereafter ensuing
which is a full business day. At each annual meeting directors shall be
elected, and any other proper business may be transacted.
Special Meetings. Special meetings of the shareholders may be called by the
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Board of Directors, the chairman of the board, the president, or by the holders
of shares entitled to cast not less than 10 percent of the votes at the meeting.
Upon request in writing to the chairman of the board, the president, any vice
president or the secretary by any person (other than the board) entitled to call
a special meeting of shareholders, the officer forthwith shall cause notice to
be given to the shareholders entitled to vote that a meeting will be held at a
time requested by the person or persons calling the meeting, not less than 35
nor more than 60 days after the receipt of the request. If the notice is not
given within 20 days after receipt of the request, the persons entitled to call
the meeting may give the notice.
Notice of Meetings. Notice of any shareholders' meeting shall be given not less
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than 10 nor more than 60 days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting, the general nature of the
business to be transacted, and no other business may be transacted, or (ii) in
the case of the annual meeting, those matters which the Board, at the time of
the giving of the notice, intends to present for action by the shareholders.
The notice of any meeting at which directors are to be elected shall include the
names of nominees intended at the time of the notice to be presented by the
board for election.
If action is proposed to be taken at any meeting, which action is within
Sections 310, 902, 1201, 1900 or 2007 of the General Corporation Law of the
State of California, the notice shall also state the general nature of that
proposal.
Notice of a shareholders' meeting shall be given either personally or by
first-class mail, or other means of written communication, charges prepaid,
addressed to the shareholder at the address of such shareholder appearing on the
books of the corporation or given by the shareholder to the corporation for the
purpose of notice; or if no such address appears or is given, at the place where
the principal executive office of the corporation is located or by publication
at least once in a newspaper of general circulation in the county in which the
principal executive office is located. The notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
other means of written communication. An affidavit of mailing of any notice
executed by the secretary, assistant secretary or any transfer agent, shall be
<PAGE>
prima facie evidence of the giving of the notice.
Adjourned Meeting and Notice Thereof. Any meeting of shareholders may be
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adjourned from time to time by the vote of a majority of the shares represented
either in person or by proxy whether or not a quorum is present. When a
shareholders' meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting the
corporation may transact any business which might have been transacted at the
original meeting. However, if the adjournment is for more than 45 days or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each shareholder of record
entitled to vote at the meeting.
Waiver of Notice. The transactions of any meeting of shareholders, however
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called and noticed, and wherever held, are as valid as though had at a meeting
duly held after regular call and notice, if a quorum is present either in person
or by proxy, and if, either before or after the meeting, each of the persons
entitled to vote, not present in person or by proxy, signs a written waiver of
notice or a consent to the holding of the meeting or an approval of the minutes
thereof. The waiver of notice or consent need not specify either the business
to be transacted or the purpose of any annual or special meeting of
shareholders, except that if action is taken or proposed to be taken for
approval of any of those matters specified in the second paragraph of
subparagraph (d) of Section 2.1 of this Article II, the waiver of notice or
consent shall state the general nature of the proposal. All such waivers,
consents and approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
Quorum. The presence in person or by proxy of the persons entitled to vote a
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majority of the shares entitled to vote at any meeting shall constitute a quorum
for the transaction of business. If a quorum is present, the affirmative vote
of the majority of the shares represented and voting at the meeting (which
shares voting affirmatively also constitute at least a majority of the required
quorum) shall be the act of the shareholders, unless the vote of a greater
number or voting by classes is required by law or the Articles of Incorporation
of the corporation.
The shareholders present at a duly called or held meeting at which a quorum is
present may continue to transact business until adjournment notwithstanding the
withdrawal of enough shareholders to leave less than a quorum, provided that any
action taken (other than adjournment) must be approved by at least a majority of
the shares required to constitute a quorum.
Action Without a Meeting. Any action which may be taken at any annual or
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special meeting of shareholders may be taken without a meeting and without prior
notice, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Notwithstanding the foregoing, directors may not be elected by written consent
except by unanimous written consent of all shares entitled to vote for the
election of directors, except as provided by Section 3.4 hereof.
Where the approval of shareholders is given without a meeting by less than
unanimous written consent, unless the consents of all shareholders entitled to
vote have been solicited in writing, the secretary shall give prompt notice of
the corporate action approved by the shareholders without a meeting. In the
case of approval of transactions pursuant to Section 310, 317, 1201 or 2007 of
the General Corporation Law of the State of California, the notice shall be
given at least 10 days before the consummation of any action authorized by that
approval. Such notice shall be given in the same manner as notice of
shareholders' meeting.
Voting of Shares.
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In General. Except as otherwise provided in the Articles of Incorporation and
subject to subparagraph (b) hereof, each outstanding share, regardless of class,
shall be entitled to one (1) vote on each matter submitted to a vote of
shareholders.
Cumulative Voting. At any election of directors, every shareholder complying
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with this paragraph (b) and entitled to vote may cumulate his or her votes and
give one (1) candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes (i.e., cast for any one (1) or more candidates a number of
votes greater than the number of votes which such shareholder normally is
entitled to cast) unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one (1) shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination. In any
election of directors, the candidates receiving the highest number of
affirmative votes up to the number of directors to be elected by such shares are
elected; votes against a director and votes withheld shall have no legal effect.
Election by Ballot. Elections for directors need not be by ballot unless a
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<PAGE>
shareholder demands election by ballot at the meeting and before the voting
begins.
Proxies. Every person entitled to vote shares may authorize another person or
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persons to act by proxy with respect to such shares. No proxy shall be valid
after the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto, except as
otherwise herein provided. Such revocation may be effected by a writing
delivered to the corporation stating that the proxy is revoked or by a
subsequent proxy executed by the person executing the prior proxy and presented
to the meeting, or as to any meeting by attendance at such meeting and voting in
person by the person executing the proxy. The dates contained on the forms of
proxy presumptively determine the order of execution, regardless of the postmark
dates on the envelopes in which they are mailed. A proxy is not revoked by the
death or incapacity of the maker unless, before the vote is counted, written
notice of such death or incapacity is received by the corporation. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Sections 705(e) and 705(f) of the California
General Corporation Law.
Inspectors of Election.
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Appointment. In advance of any meeting of shareholders the Board may appoint
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inspectors of election to act at the meeting and any adjournment thereof. If
inspectors of election are not so appointed, or if any persons so appointed fail
to appear or refuse to act, the chairman of any meeting of shareholders may, and
on the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election (or persons to replace those who so fail or refuse) at
the meeting. The number of inspectors shall be either one (1) or three (3). If
appointed at a meeting on the request of one (1) or more shareholders or
proxies, the majority of shares represented in person or by proxy shall
determine whether one (1) or three (3) inspectors are to be appointed.
Duties. The inspectors of election shall determine the number of shares
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outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum and the authenticity, validity and effect of proxies,
receive votes, ballots or consents, hear and determine all challenges and
questions in any way arising in connection with the right to vote, count and
tabulate all votes or consents, determine when the polls shall close, determine
the result and do such acts as may be proper to conduct the election or vote
with fairness to all shareholders. The inspectors of election shall perform
their duties impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three inspectors of election, the
decision, act or certificate of a majority is effective in all respects as the
decision, act or certificate of all. Any report or certificate made by the
inspectors of election is prima facie evidence of the facts stated therein.
Record Date. In order that the corporation may determine the shareholders
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entitled to notice of any meeting or to vote or entitled to receive payment of
any dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action, the Board may fix, in
advance, a record date, which shall not be more than 60 nor less than 10 days
prior to the date of such meeting nor more than 60 days prior to any other
action. If no record date is fixed:
The record date for determining shareholders entitled to notice of or to vote at
a meeting of shareholders shall be at the close of business on the business day
next preceding the day on which notice is given or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
The record date for determining shareholders entitled to give consent to
corporate action in writing without a meeting, when no prior action by the Board
has been taken, shall be the day on which the first written consent is given.
The record date for determining shareholders for any other purpose shall be at
the close of business on the day on which the Board adopts the resolution
relating thereto, or the 60th day prior to the date of such other action,
whichever is later.
A determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders shall apply to any adjournment of the meeting unless the
board fixes a new record date for the adjourned meeting, but the board shall fix
a new record date if the meeting is adjourned for more than 45 days from the
date set for the original meeting.
Shareholders at the close of business on the record date are entitled to notice
and to vote or to receive the dividend, distribution or allotment of rights or
to exercise the rights, as the case may be, notwithstanding any transfer of any
shares on the books of the corporation after the record date, except as
otherwise provided in the Articles of Incorporation or by agreement or in the
California General Corporation Law.
Share Certificates.
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In General. The corporation shall issue a certificate or certificates
representing shares of its capital stock. Each certificate so issued shall be
signed in the name of the corporation by the chairman or vice chairman of the
board or the president or a vice president and by the chief financial officer or
an assistant treasurer or the secretary or any assistant secretary, shall state
the name of the record owner thereof and shall certify the number of shares and
<PAGE>
the class or series of shares represented thereby. Any or all of the signatures
on the certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation with the same
effect as if such person were an officer, transfer agent or registrar at the
date of issue.
Two or More Classes or Series. If the shares of the corporation are classified
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or if any class of shares has two or more series, there shall appear on the
certificate one (1) of the following:
A statement of the rights, preferences, privileges, and restrictions granted to
or imposed upon the respective classes or series of shares authorized to be
issued and upon the holders thereof; or
A summary of such rights, preferences, privileges and restrictions with
reference to the provisions of the Articles of Incorporation and any
certificates of determination establishing the same; or
A statement setting forth the office or agency of the corporation from which
shareholders may obtain upon request and without charge, a copy of the statement
referred to in subparagraph (1).
Special Restrictions. There shall also appear on the certificate (unless stated
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or summarized under subparagraph (1) or (2) of subparagraph (b) above) the
statements required by all of the following clauses to the extent applicable:
The fact that the shares are subject to restrictions upon transfer.
If the shares are assessable, a statement that they are assessable.
If the shares are not fully paid, a statement of the total consideration to be
paid therefor and the amount paid thereon.
The fact that the shares are subject to a voting agreement or an irrevocable
proxy or restrictions upon voting rights contractually imposed by the
corporation.
The fact that the shares are redeemable.
The fact that the shares are convertible and the period for conversion.
Transfer of Certificates. Where a certificate for shares is presented to the
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corporation or its transfer clerk or transfer agent with a request to register a
- --
transfer of shares, the corporation shall register the transfer, cancel the
certificate presented, and issue a new certificate if: (a) the security is
endorsed by the appropriate person or persons; (b) reasonable assurance is given
that those endorsements are genuine and effective; (c) the corporation has no
notice of adverse claims or has discharged any duty to inquire into such adverse
claims; (d) any applicable law relating to the collection of taxes has been
complied with; (e) the transfer is not in violation of any federal or state
securities law; and (f) the transfer is in compliance with any applicable
agreement governing the transfer of the shares.
Lost Certificates. Where a certificate has been lost, destroyed or wrongfully
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taken, the corporation shall issue a new certificate in place of the original if
the owner: (a) so requests before the corporation has notice that the
certificate has been acquired by a bona fide purchaser; (b) files with the
corporation a sufficient indemnity bond, if so requested by the Board of
Directors; and (c) satisfies any other reasonable requirements as may be imposed
by the Board. Except as above provided, no new certificate for shares shall be
issued in lieu of an old certificate unless the corporation is ordered to do so
by a court in the judgment in an action brought under Section 419(b) of the
California General Corporation Law.
DIRECTORS
Powers. Subject to the provisions of the California General Corporation Law and
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the Articles of Incorporation, the business and affairs of the corporation shall
be managed and all corporate powers shall be exercised by or under the direction
of the Board of Directors. The Board may delegate the management of the
day-to-day operations of the business of the corporation to a management company
or other person provided that the business and affairs of the corporation shall
be managed and all corporate powers shall be exercised under the ultimate
direction of the Board.
Committees of the Board. The Board may, by resolution adopted by a majority of
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the authorized number of directors, designate one (1) or more committees, each
consisting of two or more directors, to serve at the pleasure of the Board. The
Board may designate one (1) or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the committee.
The appointment of members or alternate members of a committee requires the vote
of a majority of the authorized number of directors. Any such committee, to the
extent provided in the resolution of the Board, shall have all the authority of
the Board, except with respect to:
The approval of any action which also requires, under the California General
Corporation Law, shareholders' approval or approval of the outstanding shares;
The filling of vacancies on the Board or in any committee.
The fixing of compensation of the directors for serving on the Board or on any
committee.
The amendment or repeal of bylaws or the adoption of new bylaws.
The amendment or repeal of any resolution of the Board which by its express
<PAGE>
terms is not so amendable or repealable.
A distribution (within the meaning of the California General Corporation Law) to
the shareholders of the corporation, except at a rate or in a periodic amount or
within a price range determined by the Board.
The appointment of other committees of the Board or the members thereof.
Election and Term of Office. The directors shall be elected at each annual
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meeting of shareholders but, if any such annual meeting is not held or the
directors are not elected thereat, the directors may be elected at any special
meeting of shareholders held for that purpose. Each director, including a
director elected to fill a vacancy, shall hold office until the expiration of
the term for which elected and until a successor has been elected and qualified.
Vacancies. Except for a vacancy created by the removal of a director, vacancies
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on the Board may be filled by approval of the Board or, if the number of
directors then in office is less than a quorum, by (a) the unanimous written
consent of the directors then in office, (b) the affirmative vote of a majority
of the directors then in office at a meeting held pursuant to notice or waivers
of notice under the California General Corporation Law, or (c) a sole remaining
director. The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors, but any such election
by written consent requires the consent of a majority of the outstanding shares
entitled to vote.
The Board of Directors shall have the power to declare vacant the office of a
director who has been declared of unsound mind by an order of court, or
convicted of a felony.
Removal. Any or all of the directors may be removed without cause if such
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removal is approved by the vote of a majority of the outstanding shares entitled
to vote, except that no director may be removed (unless the entire board is
removed) when the votes cast against removal, or not consenting in writing to
such removal, would be sufficient to elect such director if voted cumulatively
at an election at which the same total number of votes were cast (or, if such
action is taken by written consent, all shares entitled to vote were voted) and
the entire number of directors authorized at the time of the director's most
recent election were then being elected.
Resignation. Any director may resign effective upon giving written notice to
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the chairman of the board, the president, the secretary or the Board of
Directors of the corporation, unless the notice specifies a later time for the
effectiveness of such resignation. If the resignation is effective at a future
time, a successor may be elected to take office when the resignation becomes
effective.
Meetings of the Board of Directors and Committees.
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Regular Meetings. Regular meetings of the Board of Directors may be held
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without notice at such time and place within or without the State as may be
designated from time to time by resolution of the Board or by written consent of
all members of the Board or in these bylaws.
Organization Meeting. Immediately following each annual meeting of shareholders
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the Board of Directors shall hold a regular meeting for the purpose of
organization, election of officers, and the transaction of other business.
Notice of such meetings is hereby dispensed with.
Special Meetings. Special meetings of the Board of Directors for any purpose or
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purposes may be called at any time by the chairman of the board or the president
or, by any vice president or the secretary or any two directors.
Notices; Waivers. Special meetings shall be held upon four (4) days' notice by
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mail or forty-eight (48) hours' notice delivered personally or by telephone,
including a voice messaging system or other system or technology designed to
record and communicate messages, telegraph, facsimile, electronic mail, or other
electronic means. Notice of a meeting need not be given to any director who
signs a waiver of notice or a consent to holding the meeting or an approval of
the minutes thereof, whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to such director. All such waivers, consents and approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.
Adjournment. A majority of the directors present, whether or not a quorum is
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present, may adjourn any meeting to another time and place. If the meeting is
adjourned for more than 24 hours, notice of such adjournment to another time and
place shall be given prior to the time of the adjourned meeting to the directors
who were not present at the time of adjournment.
Place of Meeting. Meetings of the Board may be held at any place within or
- ------------------
without the state which has been designated in the notice of the meeting or, if
not stated in the notice or there is no notice, then such meeting shall be held
at the principal executive office of the corporation, or such other place
designated by resolution of the Board.
<PAGE>
Presence by Conference Telephone Call. Members of the Board may participate in
- --------------------------------------
a meeting through use of conference telephone or similar communications
equipment, so long as all members participating in such meeting can hear one
another. Such participation constitutes presence in person at such meeting.
Quorum. A majority of the authorized number of directors constitutes a quorum
- ------
of the Board for the transaction of business. Every act or decision done or
made by a majority of the directors present at a meeting duly held at which a
quorum is present is the act of the Board of Directors, unless a greater number
be required by law or by the Articles of Incorporation. A meeting at which a
quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at least a
majority of the required quorum for such meeting.
Action Without Meeting. Any action required or permitted to be taken by the
- ------------------------
Board of Directors may be taken without a meeting if all members of the Board
shall individually or collectively consent in writing to such action. Such
written consent or consents shall be filed with the minutes of the proceedings
of the Board. Such action by written consent shall have the same force and
effect as a unanimous vote of such directors.
Committee Meetings. The provisions of Sections 3.7 and 3.8 of these bylaws
- -------------------
apply also to committees of the Board and action by such committees, mutatis
mutandis.
OFFICERS
Officers. The officers of the corporation shall consist of a chairman of the
- --------
board or a president, or both, a secretary, a chief financial officer, and such
additional officers as may be elected or appointed in accordance with Section
4.3 of these bylaws and as may be necessary to enable the corporation to sign
instruments and share certificates. Any number of offices may be held by the
same person.
Elections. All officers of the corporation, except such officers as may be
- ---------
otherwise appointed in accordance with Section 4.3, shall be chosen by the Board
of Directors, and shall serve at the pleasure of the Board of Directors, subject
to the rights, if any, of an officer under any contract of employment.
Other Officers. The Board of Directors, the chairman of the board, or the
- ---------------
president at their or his discretion, may appoint one (1) or more vice
presidents, one (1) or more assistant secretaries, a treasurer, one (1) or more
assistant treasurers, or such other officers as the business of the corporation
may require, each of whom shall hold office for such period, have such authority
and perform such duties as the Board of Directors, the chairman of the board, or
the president, as the case may be, may from time to time determine.
Removal. Subject to the rights, if any, of an officer under any contract of
employment, any officer may be removed, either with or without cause, by the
Board of Directors, or, except in case of an officer chosen by the Board of
Directors, by any officer upon whom such power of removal may be conferred by
the Board of Directors, without prejudice to the rights, if any, of the
corporation under any contract to which the officer is a party.
Resignation. Any officer may resign at any time by giving written notice to the
- -----------
Board of Directors or to the president, or to the secretary of the corporation
without prejudice to the rights, if any, of the corporation under any contract
to which the officer is a party. Any such resignation shall take effect at the
date of the receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Vacancies. A vacancy in any office because of death, resignation, removal,
- ---------
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to such office.
Chairman of the Board. The chairman of the board, if there shall be such an
- ------------------------
officer, shall, if present, preside at all meetings of the Board of Directors
and exercise and perform such other powers and duties as may be from time to
time assigned to him by the Board of Directors. If there is no president, the
chairman of the board shall in addition be the chief executive officer of the
corporation and shall have the powers and duties prescribed in Section 4.8
below.
President. Subject to such supervisory powers, if any, as may be given by the
- ---------
Board of Directors to the chairman of the board, if there be such an officer,
the president shall be general manager and chief executive officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and affairs of the
corporation. He shall preside at all meetings of the shareholders and, in the
absence of the chairman of the board, or if there be none, at all meetings of
the Board of Directors. He shall be ex-officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the office of
president of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or these bylaws.
<PAGE>
Vice President. In the absence of the president or in the event of the
- ---------------
president's inability or refusal to act, the vice president, or in the event
there be more than one (1) vice president, the vice president designated by the
Board of Directors, or if no such designation is made, in order of their
election, shall perform the duties of president and when so acting, shall have
all the powers of and be subject to all the restrictions upon the president.
Any vice president shall perform such other duties as from time to time may be
assigned to such vice president by the president or the Board of Directors.
Secretary. The secretary shall keep or cause to be kept the minutes of
- ---------
proceedings and record of shareholders, as provided for and in accordance with
Section 5.1(a) of these bylaws.
The secretary shall give, or cause to be given, notice of all meetings of
the shareholders and of the Board of Directors required by these bylaws or by
law to be given, and shall have such other powers and perform such other duties
as may be prescribed by the Board of Directors.
Chief Financial Officer. The chief financial officer shall have general
- -------------------------
supervision, direction and control of the financial affairs of the corporation
and shall have such other powers and duties as may be prescribed by the Board of
Directors or these bylaws. In the absence of a named treasurer, the chief
financial officer shall also have the powers and duties of the treasurer as
hereinafter set forth and shall be authorized and empowered to sign as treasurer
in any case where such officer's signature is required.
Treasurer. The treasurer shall keep or cause to be kept the books and records
- ---------
of account as provided for and in accordance with Section 5.1(a) of these
bylaws. The books of account shall at all reasonable times be open to
inspection by any director.
The treasurer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the Board of Directors. He shall disburse the funds of the corporation as may
be ordered by the Board of Directors, shall render to the president and
directors, whenever they request it, an account of all of his transactions as
treasurer and of the financial condition of the corporation, and shall have such
other powers and perform such other duties as may be prescribed by the Board of
Directors or these bylaws. In the absence of a named chief financial officer,
the treasurer shall be deemed to be the chief financial officer and shall have
the powers and duties of such office as herein above set forth.
MISCELLANEOUS
Records and Reports.
- ---------------------
Books of Account and Proceedings. The corporation shall keep adequate and
- ------------------------------------
correct books and records of account and shall keep minutes of the proceedings
of its shareholders, Board and committees of the board and shall keep at its
principal executive office, or at the office of its transfer agent or registrar,
a record of its shareholders, giving the names and addresses of all shareholders
and the number and class of shares held by each. Such minutes shall be kept in
written form. Such other books and records shall be kept either in written form
or in any other form capable of being converted into written form.
Annual Report. An annual report to shareholders referred to in Section 1501 of
- --------------
the California General Corporation Law is expressly dispensed with, but nothing
herein shall be interpreted as prohibiting the Board of Directors from issuing
annual or other periodic reports to the shareholders of the corporation as they
consider appropriate.
Shareholders' Requests for Financial Reports. If no annual report for the last
- ---------------------------------------------
fiscal year has been sent to shareholders, the corporation shall, upon the
written request of any shareholder made more than 120 days after the close of
that fiscal year, deliver or mail to the person making the request within 30
days thereafter the financial statements for that year required by Section
1501(a) of the California General Corporation Law. Any shareholder or
shareholders holding at least five (5) percent of the outstanding shares of any
class of the corporation may make a written request to the corporation for an
income statement of the corporation for the three-month, six-month or nine-month
period of the current fiscal year ended more than 30 days prior to the date of
the request and a balance sheet of the corporation as of the end of such period,
and the corporation shall deliver or mail the statements to the person making
the request within 30 days thereafter. A copy of the statements shall be kept
on file in the principal office of the corporation for 12 months and they shall
be exhibited at all reasonable times to any shareholder demanding an examination
of them or a copy shall be mailed to such shareholder upon demand.
Rights of Inspection.
- ----------------------
By Shareholders.
- ----------------
Record of Shareholders. Any shareholder or shareholders holding at least five
- ------------------------
(5) percent in the aggregate of the outstanding voting shares of the corporation
or who hold at least one (1) percent of such voting shares and have filed a
Schedule 14A with the United States Securities and Exchange Commission shall
have an absolute right to do either or both of the following: (i) inspect and
copy the record of shareholders' names and addresses and shareholdings during
<PAGE>
usual business hours upon five (5) business days' prior written demand upon the
corporation, or (ii) obtain from the transfer agent for the corporation, upon
written demand and upon the tender of its usual charges for such a list (the
amount of which charges shall be stated to the shareholder by the transfer agent
upon request), a list of the shareholders' names and addresses, who are entitled
to vote for the election of directors, and their shareholdings, as of the most
recent record date for which it has been compiled or as of a date specified by
the shareholder subsequent to the date of demand. The list shall be made
available on or before the later of five (5) business days after demand is
received or the date specified therein as the date as of which the list is to be
compiled.
The record of shareholders shall also be open to inspection and copying by
any shareholder or holder of a voting trust certificate at any time during usual
business hours upon written demand on the corporation, for a purpose reasonably
related to such holder's interests as a shareholder or holder of a voting trust
certificate.
Corporate Records. The accounting books and records and minutes of proceedings
- ------------------
of the shareholders and the Board and committees of the board shall be open to
inspection upon the written demand on the corporation of any shareholder or
holder of a voting trust certificate at any reasonable time during usual
business hours, for a purpose reasonably related to such holder's interests as a
shareholder or as the holder of such voting trust certificate. This right of
inspection shall also extend to the records of any subsidiary of the
corporation.
Bylaws. The corporation shall keep at its principal executive office in this
- ------
state, the original or a copy of its bylaws as amended to date, which shall be
open to inspection by the shareholders at all reasonable times during office
hours.
By Directors. Every director shall have the absolute right at any reasonable
- -------------
time to inspect and copy all books, records and documents of every kind and to
inspect the physical properties of the corporation of which such person is a
director and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and the
right of inspection includes the right to copy and make extracts.
Checks, Drafts, Etc. All checks, drafts or other orders for payment of money,
- ----------------------
notes or other evidences of indebtedness, issued in the name of or payable to
the corporation, shall be signed or endorsed by such person or persons and in
such manner as, from time to time, shall be determined by resolution of the
Board of Directors.
Representation of Shares of Other Corporations. The chairman of the board, if
- ------------------------------------------------
any, president or any vice president of the corporation, or any other person
authorized to do so by the chairman of the board, president or any vice
president, is authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted to said officers to vote or represent on behalf of the corporation any
and all shares held by the corporation in any other corporation or corporations
may be exercised either by such officers in person or by any other person
authorized so to do by proxy or power of attorney duly executed by said
officers.
Indemnification and Insurance.
- -------------------------------
Right to Indemnification. Each person who was or is made a party to or is
- --------------------------
threatened to be made a party to or is involuntarily involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "Proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the corporation or is or was serving (during such person's tenure as director
or officer) at the request of the corporation, any other corporation,
partnership, joint venture, trust or other enterprise in any capacity, whether
the basis of a Proceeding is an alleged action in an official capacity as a
director or officer or in any other capacity while serving as a director or
officer, shall be indemnified and held harmless by the corporation to the
fullest extent authorized by California General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such amendment), against all expenses, liability and loss (including
attorneys' fees, judgments, fines, or penalties and amounts to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith. The right to indemnification conferred in this Section shall be a
contract right and shall include the right to be paid by the corporation the
expenses incurred in defending a Proceeding in advance of its final disposition;
provided, however, that, if California General Corporation Law requires, the
payment of such expenses in advance of the final disposition of a Proceeding
shall be made only upon receipt by the corporation of an undertaking by or on
behalf of such director or officer to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this Section or otherwise. No amendment to or repeal of this
Section 5.5 shall apply to or have any effect on any right to indemnification
<PAGE>
provided hereunder with respect to any acts or omissions occurring prior to such
amendment or repeal.
Right of Claimant to Bring Suit. If a claim for indemnity under paragraph (a)
- ---------------------------------
of this Section is not paid in full by the corporation within 90 days after a
written claim has been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall also be
entitled to be paid the expense of prosecuting such claim including reasonable
attorneys' fees incurred in connection therewith. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending a Proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the corporation)
that the claimant has not met the standards of conduct which make it permissible
under California General Corporation Law for the corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the corporation. Neither the failure of the corporation (including its Board
of Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in California General Corporation Law,
nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
Non-Exclusivity of Rights. The rights conferred in this Section shall not be
- ---------------------------
exclusive of any other rights which any director, officer, employee or agent may
have or hereafter acquire under any statute, provision of the Articles of
Incorporation, bylaw, agreement, vote of shareholders or disinterested directors
or otherwise, to the extent the additional rights to indemnification are
authorized in the Articles of Incorporation of the corporation.
Insurance. In furtherance and not in limitation of the powers conferred by
- ---------
statute:
the corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the corporation, or is
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify the person against that expense,
liability or loss under the California General Corporation Law.
the corporation may create a trust fund, grant a security interest and/or use
other means (including, without limitation, letters of credit, surety bonds
and/or other similar arrangements), as well as enter into contracts providing
indemnification to the full extent authorized or permitted by law and including
as part thereof provisions with respect to any or all of the foregoing to ensure
the payment of such amounts as may become necessary to effect indemnification as
provided therein, or elsewhere.
Indemnification of Employees and Agents of the Corporation. The corporation
- --------------------------------------------------------------
may, to the extent authorized from time to time by the Board of Directors, grant
rights to indemnification, including the right to be paid by the corporation the
expenses incurred in defending a Proceeding in advance of its final disposition,
to any employee or agent of the corporation to the fullest extent of the
provisions of this Section or otherwise with respect to the indemnification and
advancement of expenses of directors and officers of the corporation.
Employee Stock Purchase Plans. The corporation may adopt and carry out a stock
- ------------------------------
purchase plan or agreement or stock option plan or agreement providing for the
issue and sale for such consideration as may be fixed of its unissued shares, or
of issued shares Acquired or to be acquired, to one (1) or more of the employees
or directors of the corporation or of a subsidiary or to a trustee on their
behalf and for the payment for such shares in installments or at one (1) time,
and may provide for aiding any such persons in paying for such shares by
compensation for services rendered, promissory notes or otherwise.
A stock purchase plan or agreement or stock option plan or agreement may
include, among other features, the fixing of eligibility for participation
therein, the class and price of shares to be issued or sold under the plan or
agreement, the number of shares which may be subscribed for, the method of
payment therefor, the reservation of title until full payment therefor, the
effect of the termination of employment, an option or obligation on the part of
the corporation to repurchase the shares upon termination of employment, subject
to the provisions of the California General Corporation Law, restrictions upon
transfer of the shares and the time limits of and termination of the plan.
Time Notice Given or Sent. Any reference in these Bylaws to the time a notice
- ---------------------------
is given or sent means, unless otherwise expressly provided herein or by law,
(a) the time a written notice by mail is deposited in the United States mails,
postage prepaid; or (b) the time any other written notice, including facsimile,
telegram, or electronic mail message, is personally delivered to the recipient
or is delivered to a common carrier for transmission, or actually transmitted by
the person giving the notice by electronic means, to the recipient; or (c) the
time any oral notice is communicated, in person or by telephone, including a
voice messaging system or other system or technology designed to record and
<PAGE>
communicate messages, or wireless, to the recipient, including the recipient's
designated voice mailbox or address on such system, or to a person at the office
of the recipient who the person giving the notice has reason to believe will
promptly communicate it to the recipient.
Construction and Definitions. Unless the context otherwise requires, the
- ------------------------------
general provisions, rules of construction and definitions contained in the
California General Corporation Law shall govern the construction of these
bylaws. Without limiting the generality of the foregoing, the masculine gender
includes the feminine and neuter, the singular number includes the plural and
the plural number includes the singular, and the term "person" includes a
corporation as well as a natural person.
AMENDMENTS
Power of Shareholders. New bylaws may be adopted or these bylaws may be amended
- ---------------------
or repealed by the vote of shareholders entitled to exercise a majority of the
voting power of the corporation or by the written assent of such shareholders,
except as otherwise provided by law or by the Articles of Incorporation.
Power of Directors. Subject to the right of shareholders as provided in Section
- ------------------
6.01 to adopt, amend or repeal bylaws, any bylaw may be adopted, amended or
repealed by the Board of Directors other than a bylaw or amendment thereof
changing the authorized number of directors, if such number is fixed, or the
maximum-minimum limits thereof, if an indefinite number.
The undersigned, as the Incorporator of _______________________, hereby adopts
the foregoing bylaws as the bylaws of said corporation.
Dated as of April 19 1991.
______________________________
, Incorporator
The undersigned, constituting the Board of Directors of __________________,
hereby adopt the foregoing bylaws as the bylaws of said corporation.
Dated as of April 19, 1991.
______________________________
,Director
______________________________
,Director
,
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of INTER-CARE
DIAGNOSTICS, INC., and that the foregoing bylaws were adopted as the bylaws of
said corporation as of the day of April 19th, 1991, by the Board of Directors
of said corporation.
Dated as of April 19th, 1991
/s/ Anthony C. Dike
----------------------
Anthony C. Dike,
Chairman/CEO and Secretary
<PAGE>
- ------
BYLAWS
------
for the regulation, except as
otherwise provided by statute or
the Articles of Incorporation, of
INTER-CARE DIAGNOSTICS, INC.
-------------------------------
a California corporation
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
PAGE
----
ARTICLE I. GENERAL PROVISIONS 63
Section 1.1 Principal Executive Office 63
Section 1.2 Number of Directors 63
ARTICLE II. SHARES AND SHAREHOLDERS 63
Section 2.1 Meetings of Shareholders. 63
(a) Place of Meetings. 63
(b) Annual Meetings 63
(c) Special Meetings 63
(d) Notice of Meetings. 63
(e) Adjourned Meeting and Notice Thereof 64
(f) Waiver of Notice 64
(g) Quorum 64
Section 2.2 Action Without a Meeting 64
Section 2.3 Voting of Shares. 64
(a) In General 64
(b) Cumulative Voting 64
(c) Election by Ballot 65
Section 2.4 Proxies 65
Section 2.5 Inspectors of Election. 65
(a) Appointment 65
(b) Duties 65
Section 2.6 Record Date 65
Section 2.7 Share Certificates. 66
(a) In General 66
(b) Two or More Classes or Series 66
(c) Special Restrictions 66
Section 2.8 Transfer of Certificates 66
Section 2.9 Lost Certificates 66
ARTICLE III. DIRECTORS 66
Section 3.1 Powers 66
Section 3.2 Committees of the Board 67
Section 3.3 Election and Term of Office 67
Section 3.4 Vacancies 67
Section 3.5 Removal 67
Section 3.6 Resignation 67
Section 3.7 Meetings of the Board of Directors and Committees. 67
(a) Regular Meetings 67
(b) Organization Meeting 67
(c) Special Meetings 67
(d) Notices; Waivers 67
(e) Adjournment 68
(f) Place of Meeting 68
(g) Presence by Conference Telephone Call 68
(h) Quorum 68
Section 3.8 Action Without Meeting 68
Section 3.9 Committee Meetings 68
ARTICLE IV. OFFICERS 68
Section 4.1 Officers 68
Section 4.2 Elections 68
Section 4.3 Other Officers 68
Section 4.4 Removal 68
Section 4.5 Resignation 68
Section 4.6 Vacancies 68
Section 4.7 Chairman of the Board 69
Section 4.8 President 69
Section 4.9 Vice President 69
Section 4.10 Secretary 69
Section 4.11 Chief Financial Officer 69
Section 4.12 Treasurer 69
ARTICLE V. MISCELLANEOUS 69
Section 5.1 Records and Reports. 69
(a) Books of Account and Proceedings 69
(b) Annual Report 69
(c) Shareholders' Requests for Financial Reports 70
Section 5.2 Rights of Inspection. 70
(a) By Shareholders. 70
<PAGE>
(b) By Directors 70
Section 5.3 Checks, Drafts, Etc. 70
Section 5.4 Representation of Shares of Other Corporations 70
Section 5.5 Indemnification and Insurance. 71
(a) Right to Indemnification 71
(b) Right of Claimant to Bring Suit 71
(c) Non-Exclusivity of Rights 71
(d) Insurance 71
(e) Indemnification of Employees and Agents of the Corporation 72
Section 5.6 Employee Stock Purchase Plans. 72
Section 5.7 Time Notice Given or Sent 72
Section 5.8 Construction and Definitions 72
ARTICLE VI. AMENDMENTS 72
Section 6.1 Power of Shareholders 72
Section 6.2 Power of Directors 72
</TABLE>
<PAGE>
AMENDED BYLAWS
--------------
for the regulation, except as otherwise provided
by statute or the Articles of Incorporation,
of
InterCare.com, Inc.
PRINCIPAL EXECUTIVE OFFICE. THE BOARD OF DIRECTORS SHALL DESIGNATE THE LOCATION
- --------------------------
OF THE principal executive office of the corporation at any place within or
without the State of California. The Board of Directors shall have the power to
change the principal executive office to another location and may designate and
locate one or more subsidiary offices within or without the State of California.
Number of Directors. The number of directors of the corporation shall be two
- ---------------------
(2) until changed by a bylaw amending this Section 1.2 duly adopted by the vote
or written consent of a majority of the outstanding shares entitled to vote;
provided, however, that a bylaw reducing the number of directors to a number
less than five (5) cannot be adopted if the votes cast against its adoption at a
meeting or the shares not consenting in the case of action by written consent
are equal to more than 16-2/3 percent of the outstanding shares entitled to
vote.
Name. The name of the corporation shall be "InterCare.Com, Inc." The
- ----
corporation shall be authorized to do business under any fictitious business
name, or variation of its legal name, as the Board of Directors may choose from
time to time.
SHARES AND SHAREHOLDERS
Meetings of Shareholders.
- --------------------------
Place of Meetings. Meetings of shareholders shall be held at any place within
- -------------------
or without the State of California designated by the Board of Directors. In the
absence of any such designation, shareholders' meetings shall be held at the
principal executive office of the corporation.
Annual Meetings. An annual meeting of the shareholders of the corporation shall
- ----------------
be held on such date and at such time as shall be designated by the Board of
Directors. Should said day fall upon a legal holiday, the annual meeting of
shareholders shall be held at the same time on the next day thereafter ensuing
which is a full business day. At each annual meeting directors shall be
elected, and any other proper business may be transacted.
Special Meetings. Special meetings of the shareholders may be called by the
- -----------------
Board of Directors, the chairman of the board, the president, or by the holders
of shares entitled to cast not less than 10 percent of the votes at the meeting.
Upon request in writing to the chairman of the board, the president, any vice
president or the secretary by any person (other than the board) entitled to call
a special meeting of shareholders, the officer forthwith shall cause notice to
be given to the shareholders entitled to vote that a meeting will be held at a
time requested by the person or persons calling the meeting, not less than 35
nor more than 60 days after the receipt of the request. If the notice is not
given within 20 days after receipt of the request, the persons entitled to call
the meeting may give the notice.
Notice of Meetings. Notice of any shareholders' meeting shall be given not less
- ------------------
than 10 nor more than 60 days before the date of the meeting to each shareholder
entitled to vote thereat. Such notice shall state the place, date and hour of
the meeting and (i) in the case of a special meeting, the general nature of the
business to be transacted, and no other business may be transacted, or (ii) in
the case of the annual meeting, those matters which the Board, at the time of
the giving of the notice, intends to present for action by the shareholders.
The notice of any meeting at which directors are to be elected shall include the
names of nominees intended at the time of the notice to be presented by the
board for election.
If action is proposed to be taken at any meeting, which action is within
Sections 310, 902, 1201, 1900 or 2007 of the General Corporation Law of the
State of California, the notice shall also state the general nature of that
proposal.
Notice of a shareholders' meeting shall be given either personally or by
first-class mail, or other means of written communication, charges prepaid,
addressed to the shareholder at the address of such shareholder appearing on the
books of the corporation or given by the shareholder to the corporation for the
purpose of notice; or if no such address appears or is given, at the place where
the principal executive office of the corporation is located or by publication
at least once in a newspaper of general circulation in the county in which the
principal executive office is located. The notice shall be deemed to have been
given at the time when delivered personally or deposited in the mail or sent by
other means of written communication. An affidavit of mailing of any notice
executed by the secretary, assistant secretary or any transfer agent, shall be
prima facie evidence of the giving of the notice.
Adjourned Meeting and Notice Thereof. Any meeting of shareholders may be
- ----------------------------------------
adjourned from time to time by the vote of a majority of the shares represented
either in person or by proxy whether or not a quorum is present. When a
<PAGE>
shareholders' meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place thereof are announced at
the meeting at which the adjournment is taken. At the adjourned meeting the
corporation may transact any business which might have been transacted at the
original meeting. However, if the adjournment is for more than 45 days or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each shareholder of record
entitled to vote at the meeting.
Waiver of Notice. The transactions of any meeting of shareholders, however
- ------------------
called and noticed, and wherever held, are as valid as though had at a meeting
duly held after regular call and notice, if a quorum is present either in person
or by proxy, and if, either before or after the meeting, each of the persons
entitled to vote, not present in person or by proxy, signs a written waiver of
notice or a consent to the holding of the meeting or an approval of the minutes
thereof. The waiver of notice or consent need not specify either the business
to be transacted or the purpose of any annual or special meeting of
shareholders, except that if action is taken or proposed to be taken for
approval of any of those matters specified in the second paragraph of
subparagraph (d) of Section 2.1 of this Article II, the waiver of notice or
consent shall state the general nature of the proposal. All such waivers,
consents and approvals shall be filed with the corporate records or made a part
of the minutes of the meeting.
Quorum. The presence in person or by proxy of the persons entitled to vote a
- ------
majority of the shares entitled to vote at any meeting shall constitute a quorum
for the transaction of business. If a quorum is present, the affirmative vote
of the majority of the shares represented and voting at the meeting (which
shares voting affirmatively also constitute at least a majority of the required
quorum) shall be the act of the shareholders, unless the vote of a greater
number or voting by classes is required by law or the Articles of Incorporation
of the corporation.
The shareholders present at a duly called or held meeting at which a quorum
is present may continue to transact business until adjournment notwithstanding
the withdrawal of enough shareholders to leave less than a quorum, provided that
any action taken (other than adjournment) must be approved by at least a
majority of the shares required to constitute a quorum.
Action Without a Meeting. Any action which may be taken at any annual or
- ---------------------------
special meeting of shareholders may be taken without a meeting and without prior
notice, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Notwithstanding the foregoing, directors may not be elected by written consent
except by unanimous written consent of all shares entitled to vote for the
election of directors, except as provided by Section 3.4 hereof.
Where the approval of shareholders is given without a meeting by less than
unanimous written consent, unless the consents of all shareholders entitled to
vote have been solicited in writing, the secretary shall give prompt notice of
the corporate action approved by the shareholders without a meeting. In the
case of approval of transactions pursuant to Section 310, 317, 1201 or 2007 of
the General Corporation Law of the State of California, the notice shall be
given at least 10 days before the consummation of any action authorized by that
approval. Such notice shall be given in the same manner as notice of
shareholders' meeting.
Voting of Shares.
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In General. Except as otherwise provided in the Articles of Incorporation and
subject to subparagraph (b) hereof, each outstanding share, regardless of class,
shall be entitled to one (1) vote on each matter submitted to a vote of
shareholders.
Cumulative Voting. At any election of directors, every shareholder complying
- ------------------
with this paragraph (b) and entitled to vote may cumulate his or her votes and
give one (1) candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle among as
many candidates as the shareholder thinks fit. No shareholder shall be entitled
to cumulate votes (i.e., cast for any one (1) or more candidates a number of
votes greater than the number of votes which such shareholder normally is
entitled to cast) unless such candidate or candidates' names have been placed in
nomination prior to the voting and the shareholder has given notice at the
meeting prior to the voting of the shareholder's intention to cumulate the
shareholder's votes. If any one (1) shareholder has given such notice, all
shareholders may cumulate their votes for candidates in nomination. In any
election of directors, the candidates receiving the highest number of
affirmative votes up to the number of directors to be elected by such shares are
elected; votes against a director and votes withheld shall have no legal effect.
Election by Ballot. Elections for directors need not be by ballot unless a
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shareholder demands election by ballot at the meeting and before the voting
begins.
<PAGE>
Proxies. Every person entitled to vote shares may authorize another person or
- -------
persons to act by proxy with respect to such shares. No proxy shall be valid
after the expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy continues in full force and effect until
revoked by the person executing it prior to the vote pursuant thereto, except as
otherwise herein provided. Such revocation may be effected by a writing
delivered to the corporation stating that the proxy is revoked or by a
subsequent proxy executed by the person executing the prior proxy and presented
to the meeting, or as to any meeting by attendance at such meeting and voting in
person by the person executing the proxy. The dates contained on the forms of
proxy presumptively determine the order of execution, regardless of the postmark
dates on the envelopes in which they are mailed. A proxy is not revoked by the
death or incapacity of the maker unless, before the vote is counted, written
notice of such death or incapacity is received by the corporation. The
revocability of a proxy that states on its face that it is irrevocable shall be
governed by the provisions of Sections 705(e) and 705(f) of the California
General Corporation Law.
Inspectors of Election.
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Appointment. In advance of any meeting of shareholders the Board may appoint
- -----------
inspectors of election to act at the meeting and any adjournment thereof. If
inspectors of election are not so appointed, or if any persons so appointed fail
to appear or refuse to act, the chairman of any meeting of shareholders may, and
on the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election (or persons to replace those who so fail or refuse) at
the meeting. The number of inspectors shall be either one (1) or three (3). If
appointed at a meeting on the request of one (1) or more shareholders or
proxies, the majority of shares represented in person or by proxy shall
determine whether one (1) or three (3) inspectors are to be appointed.
Duties. The inspectors of election shall determine the number of shares
- ------
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum and the authenticity, validity and effect of proxies,
receive votes, ballots or consents, hear and determine all challenges and
questions in any way arising in connection with the right to vote, count and
tabulate all votes or consents, determine when the polls shall close, determine
the result and do such acts as may be proper to conduct the election or vote
with fairness to all shareholders. The inspectors of election shall perform
their duties impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three inspectors of election, the
decision, act or certificate of a majority is effective in all respects as the
decision, act or certificate of all. Any report or certificate made by the
inspectors of election is prima facie evidence of the facts stated therein.
Record Date. In order that the corporation may determine the shareholders
- ------------
entitled to notice of any meeting or to vote or entitled to receive payment of
any dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action, the Board may fix, in
advance, a record date, which shall not be more than 60 nor less than 10 days
prior to the date of such meeting nor more than 60 days prior to any other
action. If no record date is fixed:
The record date for determining shareholders entitled to notice of or to vote at
a meeting of shareholders shall be at the close of business on the business day
next preceding the day on which notice is given or, if notice is waived, at the
close of business on the business day next preceding the day on which the
meeting is held.
The record date for determining shareholders entitled to give consent to
corporate action in writing without a meeting, when no prior action by the Board
has been taken, shall be the day on which the first written consent is given.
The record date for determining shareholders for any other purpose shall be at
the close of business on the day on which the Board adopts the resolution
relating thereto, or the 60th day prior to the date of such other action,
whichever is later.
A determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders shall apply to any adjournment of the meeting unless the
board fixes a new record date for the adjourned meeting, but the board shall fix
a new record date if the meeting is adjourned for more than 45 days from the
date set for the original meeting.
Shareholders at the close of business on the record date are entitled to
notice and to vote or to receive the dividend, distribution or allotment of
rights or to exercise the rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after the record date,
except as otherwise provided in the Articles of Incorporation or by agreement or
in the California General Corporation Law.
SHARE CERTIFICATES.
- -------------------
In General. The corporation shall issue a certificate or certificates
- -----------
representing shares of its capital stock. Each certificate so issued shall be
signed in the name of the corporation by the chairman or vice chairman of the
board or the president or a vice president and by the chief financial officer or
an assistant treasurer or the secretary or any assistant secretary, shall state
the name of the record owner thereof and shall certify the number of shares and
the class or series of shares represented thereby. Any or all of the signatures
<PAGE>
on the certificate may be facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the corporation with the same
effect as if such person were an officer, transfer agent or registrar at the
date of issue.
Two or More Classes or Series. If the shares of the corporation are classified
- ------------------------------
or if any class of shares has two or more series, there shall appear on the
certificate one (1) of the following:
A statement of the rights, preferences, privileges, and restrictions granted to
or imposed upon the respective classes or series of shares authorized to be
issued and upon the holders thereof; or
A summary of such rights, preferences, privileges and restrictions with
reference to the provisions of the Articles of Incorporation and any
certificates of determination establishing the same; or
A statement setting forth the office or agency of the corporation from which
shareholders may obtain upon request and without charge, a copy of the statement
referred to in subparagraph (1).
Special Restrictions. There shall also appear on the certificate (unless stated
- --------------------
or summarized under subparagraph (1) or (2) of subparagraph (b) above) the
statements required by all of the following clauses to the extent applicable:
The fact that the shares are subject to restrictions upon transfer.
If the shares are assessable, a statement that they are assessable.
If the shares are not fully paid, a statement of the total consideration to be
paid therefor and the amount paid thereon.
The fact that the shares are subject to a voting agreement or an irrevocable
proxy or restrictions upon voting rights contractually imposed by the
corporation.
The fact that the shares are redeemable.
The fact that the shares are convertible and the period for conversion.
Transfer of Certificates. Where a certificate for shares is presented to the
- --------------------------
corporation or its transfer clerk or transfer agent with a request to register a
- --
transfer of shares, the corporation shall register the transfer, cancel the
certificate presented, and issue a new certificate if: (a) the security is
endorsed by the appropriate person or persons; (b) reasonable assurance is given
that those endorsements are genuine and effective; (c) the corporation has no
notice of adverse claims or has discharged any duty to inquire into such adverse
claims; (d) any applicable law relating to the collection of taxes has been
complied with; (e) the transfer is not in violation of any federal or state
securities law; and (f) the transfer is in compliance with any applicable
agreement governing the transfer of the shares.
Lost Certificates. Where a certificate has been lost, destroyed or wrongfully
- ------------------
taken, the corporation shall issue a new certificate in place of the original if
the owner: (a) so requests before the corporation has notice that the
certificate has been acquired by a bona fide purchaser; (b) files with the
corporation a sufficient indemnity bond, if so requested by the Board of
Directors; and (c) satisfies any other reasonable requirements as may be imposed
by the Board. Except as above provided, no new certificate for shares shall be
issued in lieu of an old certificate unless the corporation is ordered to do so
by a court in the judgment in an action brought under Section 419(b) of the
California General Corporation Law.
DIRECTORS
Powers. Subject to the provisions of the California General Corporation Law and
- ------
the Articles of Incorporation, the business and affairs of the corporation shall
be managed and all corporate powers shall be exercised by or under the direction
of the Board of Directors. The Board may delegate the management of the
day-to-day operations of the business of the corporation to a management company
or other person provided that the business and affairs of the corporation shall
be managed and all corporate powers shall be exercised under the ultimate
direction of the Board.
Committees of the Board. The Board may, by resolution adopted by a majority of
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the authorized number of directors, designate one (1) or more committees, each
consisting of two or more directors, to serve at the pleasure of the Board. The
Board may designate one (1) or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the committee.
The appointment of members or alternate members of a committee requires the vote
of a majority of the authorized number of directors. Any such committee, to the
extent provided in the resolution of the Board, shall have all the authority of
the Board, except with respect to:
The approval of any action which also requires, under the California General
Corporation Law, shareholders' approval or approval of the outstanding shares;
The filling of vacancies on the Board or in any committee.
The fixing of compensation of the directors for serving on the Board or on any
committee.
The amendment or repeal of bylaws or the adoption of new bylaws.
The amendment or repeal of any resolution of the Board which by its express
terms is not so amendable or repealable.
A distribution (within the meaning of the California General Corporation Law) to
the shareholders of the corporation, except at a rate or in a periodic amount or
<PAGE>
within a price range determined by the Board.
The appointment of other committees of the Board or the members thereof.
Election and Term of Office. The directors shall be elected at each annual
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meeting of shareholders but, if any such annual meeting is not held or the
directors are not elected thereat, the directors may be elected at any special
meeting of shareholders held for that purpose. Each director, including a
director elected to fill a vacancy, shall hold office until the expiration of
the term for which elected and until a successor has been elected and qualified.
Vacancies. Except for a vacancy created by the removal of a director, vacancies
- ---------
on the Board may be filled by approval of the Board or, if the number of
directors then in office is less than a quorum, by (a) the unanimous written
consent of the directors then in office, (b) the affirmative vote of a majority
of the directors then in office at a meeting held pursuant to notice or waivers
of notice under the California General Corporation Law, or (c) a sole remaining
director. The shareholders may elect a director or directors at any time to
fill any vacancy or vacancies not filled by the directors, but any such election
by written consent requires the consent of a majority of the outstanding shares
entitled to vote.
The Board of Directors shall have the power to declare vacant the office of
a director who has been declared of unsound mind by an order of court, or
convicted of a felony.
Removal. Any or all of the directors may be removed without cause if such
- -------
removal is approved by the vote of a majority of the outstanding shares entitled
to vote, except that no director may be removed (unless the entire board is
removed) when the votes cast against removal, or not consenting in writing to
such removal, would be sufficient to elect such director if voted cumulatively
at an election at which the same total number of votes were cast (or, if such
action is taken by written consent, all shares entitled to vote were voted) and
the entire number of directors authorized at the time of the director's most
recent election were then being elected.
Resignation. Any director may resign effective upon giving written notice to
- -----------
the chairman of the board, the president, the secretary or the Board of
Directors of the corporation, unless the notice specifies a later time for the
effectiveness of such resignation. If the resignation is effective at a future
time, a successor may be elected to take office when the resignation becomes
effective.
Meetings of the Board of Directors and Committees.
- --------------------------------------------------------
Regular Meetings. Regular meetings of the Board of Directors may be held
- -----------------
without notice at such time and place within or without the State as may be
designated from time to time by resolution of the Board or by written consent of
all members of the Board or in these bylaws.
Organization Meeting. Immediately following each annual meeting of shareholders
- --------------------
the Board of Directors shall hold a regular meeting for the purpose of
organization, election of officers, and the transaction of other business.
Notice of such meetings is hereby dispensed with.
Special Meetings. Special meetings of the Board of Directors for any purpose or
- ----------------
purposes may be called at any time by the chairman of the board or the president
or, by any vice president or the secretary or any two directors.
Notices; Waivers. Special meetings shall be held upon four (4) days' notice by
- -----------------
mail or forty-eight (48) hours' notice delivered personally or by telephone,
including a voice messaging system or other system or technology designed to
record and communicate messages, telegraph, facsimile, electronic mail, or other
electronic means. Notice of a meeting need not be given to any director who
signs a waiver of notice or a consent to holding the meeting or an approval of
the minutes thereof, whether before or after the meeting, or who attends the
meeting without protesting, prior thereto or at its commencement, the lack of
notice to such director. All such waivers, consents and approvals shall be
filed with the corporate records or made a part of the minutes of the meeting.
Adjournment. A majority of the directors present, whether or not a quorum is
- -----------
present, may adjourn any meeting to another time and place. If the meeting is
adjourned for more than 24 hours, notice of such adjournment to another time and
place shall be given prior to the time of the adjourned meeting to the directors
who were not present at the time of adjournment.
Place of Meeting. Meetings of the Board may be held at any place within or
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without the state which has been designated in the notice of the meeting or, if
not stated in the notice or there is no notice, then such meeting shall be held
at the principal executive office of the corporation, or such other place
designated by resolution of the Board.
Presence by Conference Telephone Call. Members of the Board may participate in
- --------------------------------------
a meeting through use of conference telephone or similar communications
equipment, so long as all members participating in such meeting can hear one
another. Such participation constitutes presence in person at such meeting.
Quorum. A majority of the authorized number of directors constitutes a quorum
- ------
<PAGE>
of the Board for the transaction of business. Every act or decision done or
made by a majority of the directors present at a meeting duly held at which a
quorum is present is the act of the Board of Directors, unless a greater number
be required by law or by the Articles of Incorporation. A meeting at which a
quorum is initially present may continue to transact business notwithstanding
the withdrawal of directors, if any action taken is approved by at least a
majority of the required quorum for such meeting.
Action Without Meeting. Any action required or permitted to be taken by the
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Board of Directors may be taken without a meeting if all members of the Board
shall individually or collectively consent in writing to such action. Such
written consent or consents shall be filed with the minutes of the proceedings
of the Board. Such action by written consent shall have the same force and
effect as a unanimous vote of such directors.
Committee Meetings. The provisions of Sections 3.7 and 3.8 of these bylaws
- -------------------
apply also to committees of the Board and action by such committees, mutatis
mutandis.
OFFICERS
Officers. The officers of the corporation shall consist of a chairman of the
- --------
board or a president, or both, a secretary, a chief financial officer, and such
additional officers as may be elected or appointed in accordance with Section
4.3 of these bylaws and as may be necessary to enable the corporation to sign
instruments and share certificates. Any number of offices may be held by the
same person.
Elections. All officers of the corporation, except such officers as may be
- ---------
otherwise appointed in accordance with Section 4.3, shall be chosen by the Board
of Directors, and shall serve at the pleasure of the Board of Directors, subject
to the rights, if any, of an officer under any contract of employment.
Other Officers. The Board of Directors, the chairman of the board, or the
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president at their or his discretion, may appoint one (1) or more vice
presidents, one (1) or more assistant secretaries, a treasurer, one (1) or more
assistant treasurers, or such other officers as the business of the corporation
may require, each of whom shall hold office for such period, have such authority
and perform such duties as the Board of Directors, the chairman of the board, or
the president, as the case may be, may from time to time determine.
Removal. Subject to the rights, if any, of an officer under any contract of
- -------
employment, any officer may be removed, either with or without cause, by the
Board of Directors, or, except in case of an officer chosen by the Board of
Directors, by any officer upon whom such power of removal may be conferred by
the Board of Directors, without prejudice to the rights, if any, of the
corporation under any contract to which the officer is a party.
Resignation. Any officer may resign at any time by giving written notice to the
- -----------
Board of Directors or to the president, or to the secretary of the corporation
without prejudice to the rights, if any, of the corporation under any contract
to which the officer is a party. Any such resignation shall take effect at the
date of the receipt of such notice or at any later time specified therein; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
Vacancies. A vacancy in any office because of death, resignation, removal,
- ---------
disqualification or any other cause shall be filled in the manner prescribed in
these bylaws for regular appointments to such office.
Chairman of the Board. The chairman of the board, if there shall be such an
- ------------------------
officer, shall, if present, preside at all meetings of the Board of Directors
and exercise and perform such other powers and duties as may be from time to
time assigned to him by the Board of Directors. If there is no president, the
chairman of the board shall in addition be the chief executive officer of the
corporation and shall have the powers and duties prescribed in Section 4.8
below.
President. Subject to such supervisory powers, if any, as may be given by the
- ---------
Board of Directors to the chairman of the board, if there be such an officer,
the president shall be general manager and chief executive officer of the
corporation and shall, subject to the control of the Board of Directors, have
general supervision, direction and control of the business and affairs of the
corporation. He shall preside at all meetings of the shareholders and, in the
absence of the chairman of the board, or if there be none, at all meetings of
the Board of Directors. He shall be ex-officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the office of
president of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or these bylaws.
Vice President. In the absence of the president or in the event of the
- ---------------
president's inability or refusal to act, the vice president, or in the event
there be more than one (1) vice president, the vice president designated by the
Board of Directors, or if no such designation is made, in order of their
election, shall perform the duties of president and when so acting, shall have
<PAGE>
all the powers of and be subject to all the restrictions upon the president.
Any vice president shall perform such other duties as from time to time may be
assigned to such vice president by the president or the Board of Directors.
Secretary. The secretary shall keep or cause to be kept the minutes of
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proceedings and record of shareholders, as provided for and in accordance with
Section 5.1(a) of these bylaws.
The secretary shall give, or cause to be given, notice of all meetings of
the shareholders and of the Board of Directors required by these bylaws or by
law to be given, and shall have such other powers and perform such other duties
as may be prescribed by the Board of Directors.
Chief Financial Officer. The chief financial officer shall have general
- -------------------------
supervision, direction and control of the financial affairs of the corporation
and shall have such other powers and duties as may be prescribed by the Board of
Directors or these bylaws. In the absence of a named treasurer, the chief
financial officer shall also have the powers and duties of the treasurer as
hereinafter set forth and shall be authorized and empowered to sign as treasurer
in any case where such officer's signature is required.
Treasurer. The treasurer shall keep or cause to be kept the books and records
- ---------
of account as provided for and in accordance with Section 5.1(a) of these
bylaws. The books of account shall at all reasonable times be open to
inspection by any director.
The treasurer shall deposit all moneys and other valuables in the name and
to the credit of the corporation with such depositaries as may be designated by
the Board of Directors. He shall disburse the funds of the corporation as may
be ordered by the Board of Directors, shall render to the president and
directors, whenever they request it, an account of all of his transactions as
treasurer and of the financial condition of the corporation, and shall have such
other powers and perform such other duties as may be prescribed by the Board of
Directors or these bylaws. In the absence of a named chief financial officer,
the treasurer shall be deemed to be the chief financial officer and shall have
the powers and duties of such office as herein above set forth.
MISCELLANEOUS
Records and Reports.
- ---------------------
Books of Account and Proceedings. The corporation shall keep adequate and
- ------------------------------------
correct books and records of account and shall keep minutes of the proceedings
of its shareholders, Board and committees of the board and shall keep at its
principal executive office, or at the office of its transfer agent or registrar,
a record of its shareholders, giving the names and addresses of all shareholders
and the number and class of shares held by each. Such minutes shall be kept in
written form. Such other books and records shall be kept either in written form
or in any other form capable of being converted into written form.
Annual Report. An annual report to shareholders referred to in Section 1501 of
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the California General Corporation Law is expressly dispensed with, but nothing
herein shall be interpreted as prohibiting the Board of Directors from issuing
annual or other periodic reports to the shareholders of the corporation as they
consider appropriate.
Shareholders' Requests for Financial Reports. If no annual report for the last
- ---------------------------------------------
fiscal year has been sent to shareholders, the corporation shall, upon the
written request of any shareholder made more than 120 days after the close of
that fiscal year, deliver or mail to the person making the request within 30
days thereafter the financial statements for that year required by Section
1501(a) of the California General Corporation Law. Any shareholder or
shareholders holding at least five (5) percent of the outstanding shares of any
class of the corporation may make a written request to the corporation for an
income statement of the corporation for the three-month, six-month or nine-month
period of the current fiscal year ended more than 30 days prior to the date of
the request and a balance sheet of the corporation as of the end of such period,
and the corporation shall deliver or mail the statements to the person making
the request within 30 days thereafter. A copy of the statements shall be kept
on file in the principal office of the corporation for 12 months and they shall
be exhibited at all reasonable times to any shareholder demanding an examination
of them or a copy shall be mailed to such shareholder upon demand.
Rights of Inspection.
- ----------------------
By Shareholders.
- ----------------
Record of Shareholders. Any shareholder or shareholders holding at least five
- ------------------------
(5) percent in the aggregate of the outstanding voting shares of the corporation
or who hold at least one (1) percent of such voting shares and have filed a
Schedule 14A with the United States Securities and Exchange Commission shall
have an absolute right to do either or both of the following: (i) inspect and
copy the record of shareholders' names and addresses and shareholdings during
usual business hours upon five (5) business days' prior written demand upon the
corporation, or (ii) obtain from the transfer agent for the corporation, upon
written demand and upon the tender of its usual charges for such a list (the
amount of which charges shall be stated to the shareholder by the transfer agent
upon request), a list of the shareholders' names and addresses, who are entitled
to vote for the election of directors, and their shareholdings, as of the most
<PAGE>
recent record date for which it has been compiled or as of a date specified by
the shareholder subsequent to the date of demand. The list shall be made
available on or before the later of five (5) business days after demand is
received or the date specified therein as the date as of which the list is to be
compiled. The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interests as a shareholder or holder
of a voting trust certificate.
Corporate Records. The accounting books and records and minutes of proceedings
- ------------------
of the shareholders and the Board and committees of the board shall be open to
inspection upon the written demand on the corporation of any shareholder or
holder of a voting trust certificate at any reasonable time during usual
business hours, for a purpose reasonably related to such holder's interests as a
shareholder or as the holder of such voting trust certificate. This right of
inspection shall also extend to the records of any subsidiary of the
corporation.
Bylaws. The corporation shall keep at its principal executive office in this
- ------
state, the original or a copy of its bylaws as amended to date, which shall be
open to inspection by the shareholders at all reasonable times during office
hours.
By Directors. Every director shall have the absolute right at any reasonable
- -------------
time to inspect and copy all books, records and documents of every kind and to
inspect the physical properties of the corporation of which such person is a
director and also of its subsidiary corporations, domestic or foreign. Such
inspection by a director may be made in person or by agent or attorney and the
right of inspection includes the right to copy and make extracts.
Checks, Drafts, Etc. All checks, drafts or other orders for payment of money,
- ----------------------
notes or other evidences of indebtedness, issued in the name of or payable to
the corporation, shall be signed or endorsed by such person or persons and in
such manner as, from time to time, shall be determined by resolution of the
Board of Directors.
Representation of Shares of Other Corporations. The chairman of the board, if
- ------------------------------------------------
any, president or any vice president of the corporation, or any other person
authorized to do so by the chairman of the board, president or any vice
president, is authorized to vote, represent and exercise on behalf of the
corporation all rights incident to any and all shares of any other corporation
or corporations standing in the name of the corporation. The authority herein
granted to said officers to vote or represent on behalf of the corporation any
and all shares held by the corporation in any other corporation or corporations
may be exercised either by such officers in person or by any other person
authorized so to do by proxy or power of attorney duly executed by said
officers.
Indemnification and Insurance.
- -------------------------------
Right to Indemnification. Each person who was or is made a party to or is
- --------------------------
threatened to be made a party to or is involuntarily involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "Proceeding"), by reason of the fact that he or she, or a person
of whom he or she is the legal representative, is or was a director or officer
of the corporation or is or was serving (during such person's tenure as director
or officer) at the request of the corporation, any other corporation,
partnership, joint venture, trust or other enterprise in any capacity, whether
the basis of a Proceeding is an alleged action in an official capacity as a
director or officer or in any other capacity while serving as a director or
officer, shall be indemnified and held harmless by the corporation to the
fullest extent authorized by California General Corporation Law, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the corporation to provide broader
indemnification rights than said law permitted the corporation to provide prior
to such amendment), against all expenses, liability and loss (including
attorneys' fees, judgments, fines, or penalties and amounts to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith. The right to indemnification conferred in this Section shall be a
contract right and shall include the right to be paid by the corporation the
expenses incurred in defending a Proceeding in advance of its final disposition;
provided, however, that, if California General Corporation Law requires, the
payment of such expenses in advance of the final disposition of a Proceeding
shall be made only upon receipt by the corporation of an undertaking by or on
behalf of such director or officer to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this Section or otherwise. No amendment to or repeal of this
Section 5.5 shall apply to or have any effect on any right to indemnification
provided hereunder with respect to any acts or omissions occurring prior to such
<PAGE>
amendment or repeal.
Right of Claimant to Bring Suit. If a claim for indemnity under paragraph (a)
- ---------------------------------
of this Section is not paid in full by the corporation within 90 days after a
written claim has been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall also be
entitled to be paid the expense of prosecuting such claim including reasonable
attorneys' fees incurred in connection therewith. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending a Proceeding in advance of its final disposition where the
required undertaking, if any is required, has been tendered to the corporation)
that the claimant has not met the standards of conduct which make it permissible
under California General Corporation Law for the corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall be
on the corporation. Neither the failure of the corporation (including its Board
of Directors, independent legal counsel, or its shareholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in California General Corporation Law,
nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
Non-Exclusivity of Rights. The rights conferred in this Section shall not be
- ---------------------------
exclusive of any other rights which any director, officer, employee or agent may
have or hereafter acquire under any statute, provision of the Articles of
Incorporation, bylaw, agreement, vote of shareholders or disinterested directors
or otherwise, to the extent the additional rights to indemnification are
authorized in the Articles of Incorporation of the corporation.
Insurance. In furtherance and not in limitation of the powers conferred by
- ---------
statute:
the corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the corporation, or is
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify the person against that expense,
liability or loss under the California General Corporation Law.
the corporation may create a trust fund, grant a security interest and/or use
other means (including, without limitation, letters of credit, surety bonds
and/or other similar arrangements), as well as enter into contracts providing
indemnification to the full extent authorized or permitted by law and including
as part thereof provisions with respect to any or all of the foregoing to ensure
the payment of such amounts as may become necessary to effect indemnification as
provided therein, or elsewhere.
Indemnification of Employees and Agents of the Corporation. The corporation
- --------------------------------------------------------------
may, to the extent authorized from time to time by the Board of Directors, grant
rights to indemnification, including the right to be paid by the corporation the
expenses incurred in defending a Proceeding in advance of its final disposition,
to any employee or agent of the corporation to the fullest extent of the
provisions of this Section or otherwise with respect to the indemnification and
advancement of expenses of directors and officers of the corporation.
Employee Stock Purchase Plans. The corporation may adopt and carry out a stock
- ------------------------------
purchase plan or agreement or stock option plan or agreement providing for the
issue and sale for such consideration as may be fixed of its unissued shares, or
of issued shares Acquired or to be acquired, to one (1) or more of the employees
or directors of the corporation or of a subsidiary or to a trustee on their
behalf and for the payment for such shares in installments or at one (1) time,
and may provide for aiding any such persons in paying for such shares by
compensation for services rendered, promissory notes or otherwise.
A stock purchase plan or agreement or stock option plan or agreement may
include, among other features, the fixing of eligibility for participation
therein, the class and price of shares to be issued or sold under the plan or
agreement, the number of shares which may be subscribed for, the method of
payment therefor, the reservation of title until full payment therefor, the
effect of the termination of employment, an option or obligation on the part of
the corporation to repurchase the shares upon termination of employment, subject
to the provisions of the California General Corporation Law, restrictions upon
transfer of the shares and the time limits of and termination of the plan.
Time Notice Given or Sent. Any reference in these Bylaws to the time a notice
- ---------------------------
is given or sent means, unless otherwise expressly provided herein or by law,
(a) the time a written notice by mail is deposited in the United States mails,
postage prepaid; or (b) the time any other written notice, including facsimile,
telegram, or electronic mail message, is personally delivered to the recipient
or is delivered to a common carrier for transmission, or actually transmitted by
the person giving the notice by electronic means, to the recipient; or (c) the
time any oral notice is communicated, in person or by telephone, including a
<PAGE>
voice messaging system or other system or technology designed to record and
communicate messages, or wireless, to the recipient, including the recipient's
designated voice mailbox or address on such system, or to a person at the office
of the recipient who the person giving the notice has reason to believe will
promptly communicate it to the recipient.
Construction and Definitions. Unless the context otherwise requires, the
- ------------------------------
general provisions, rules of construction and definitions contained in the
California General Corporation Law shall govern the construction of these
bylaws. Without limiting the generality of the foregoing, the masculine gender
includes the feminine and neuter, the singular number includes the plural and
the plural number includes the singular, and the term "person" includes a
corporation as well as a natural person.
AMENDMENTS
Power of Shareholders. New bylaws may be adopted or these bylaws may be amended
- ---------------------
or repealed by the vote of shareholders entitled to exercise a majority of the
voting power of the corporation or by the written assent of such shareholders,
except as otherwise provided by law or by the Articles of Incorporation.
Power of Directors. Subject to the right of shareholders as provided in Section
- ------------------
6.01 to adopt, amend or repeal bylaws, any bylaw may be adopted, amended or
repealed by the Board of Directors other than a bylaw or amendment thereof
changing the authorized number of directors, if such number is fixed, or the
maximum-minimum limits thereof, if an indefinite number.
The undersigned, as the Incorporator of _______________________, hereby adopts
the foregoing bylaws as the bylaws of said corporation.
Dated as of December ___, 1999. ______________________________
, Incorporator
The undersigned, constituting the Board of Directors of __________________,
hereby adopt the foregoing bylaws as the bylaws of said corporation.
Dated as of December ___, 1999.. ______________________________
, Director
______________________________
, Director
THIS IS TO CERTIFY:
That I am the duly elected, qualified and acting Secretary of INTERCARE.COM,
INC., and that the foregoing bylaws were adopted as the bylaws of said
corporation as of the day of December 31st, 1999, by the Board of Directors of
said corporation.
Dated as of December 31st, 1999.
/s/ Anthony C. Dike
----------------------
Anthony C. Dike,
Chairman/CEO and Secretary
<PAGE>
AMENDED BYLAWS
--------------
for the regulation, except as
otherwise provided by statute or
the Articles of Incorporation, of
INTERCARE.COM, INC.
-------------------------------
a California corporation
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C>
PAGE
----
ARTICLE I. GENERAL PROVISIONS 63
Section 1.1 Principal Executive Office 63
Section 1.2 Number of Directors 63
ARTICLE II. SHARES AND SHAREHOLDERS 63
Section 2.1 Meetings of Shareholders. 63
(a) Place of Meetings. 63
(b) Annual Meetings 63
(c) Special Meetings 63
(d) Notice of Meetings. 63
(e) Adjourned Meeting and Notice Thereof 64
(f) Waiver of Notice 64
(g) Quorum 64
Section 2.2 Action Without a Meeting 64
Section 2.3 Voting of Shares. 64
(a) In General 64
(b) Cumulative Voting 64
(c) Election by Ballot 65
Section 2.4 Proxies 65
Section 2.5 Inspectors of Election. 65
(a) Appointment 65
(b) Duties 65
Section 2.6 Record Date 65
Section 2.7 Share Certificates. 66
(a) In General 66
(b) Two or More Classes or Series 66
(c) Special Restrictions 66
Section 2.8 Transfer of Certificates 66
Section 2.9 Lost Certificates 66
ARTICLE III. DIRECTORS 66
Section 3.1 Powers 66
Section 3.2 Committees of the Board 67
Section 3.3 Election and Term of Office 67
Section 3.4 Vacancies 67
Section 3.5 Removal 67
Section 3.6 Resignation 67
Section 3.7 Meetings of the Board of Directors and Committees. 67
(a) Regular Meetings 67
(b) Organization Meeting 67
(c) Special Meetings 67
(d) Notices; Waivers 67
(e) Adjournment 68
(f) Place of Meeting 68
(g) Presence by Conference Telephone Call 68
(h) Quorum 68
Section 3.8 Action Without Meeting 68
Section 3.9 Committee Meetings 68
ARTICLE IV. OFFICERS 68
Section 4.1 Officers 68
Section 4.2 Elections 68
Section 4.3 Other Officers 68
Section 4.4 Removal 68
Section 4.5 Resignation 68
Section 4.6 Vacancies 68
Section 4.7 Chairman of the Board 69
Section 4.8 President 69
Section 4.9 Vice President 69
Section 4.10 Secretary 69
Section 4.11 Chief Financial Officer 69
Section 4.12 Treasurer 69
ARTICLE V. MISCELLANEOUS 69
Section 5.1 Records and Reports. 69
(a) Books of Account and Proceedings 69
(b) Annual Report 69
(c) Shareholders' Requests for Financial Reports 70
<PAGE>
Section 5.2 Rights of Inspection. 70
(a) By Shareholders. 70
(b) By Directors 70
Section 5.3 Checks, Drafts, Etc. 70
Section 5.4 Representation of Shares of Other Corporations 70
Section 5.5 Indemnification and Insurance. 71
(a) Right to Indemnification 71
(b) Right of Claimant to Bring Suit 71
(c) Non-Exclusivity of Rights 71
(d) Insurance 71
(e) Indemnification of Employees and Agents of the Corporation 72
Section 5.6 Employee Stock Purchase Plans. 72
Section 5.7 Time Notice Given or Sent 72
Section 5.8 Construction and Definitions 72
ARTICLE VI. AMENDMENTS 72
Section 6.1 Power of Shareholders 72
Section 6.2 Power of Directors 72
</TABLE>
<PAGE>
EX 4.1 Specimen Certificate
(front)
NUMBER INTERCARE.COM, INC. SHARES
INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA
Authorized Common Stock 100,000,000 No Par Value
This certifies that______________________________________________
Is the owner of ____________________________Shares of the Common Stock of
InterCare.com, Inc.
full paid and non-assessable, transferable only on the books of
the Corporation in person or by Attorney, upon surrender of this Certificate
properly endorsed.
In Witness Whereof, the said Corporation
has caused this Certificate to be signed its duly authorized officers, and its
Corporate Seal to be hereunto affixed
this______________________ day of______________________A.D. 19_
_____________________ _________________________
Secretary President
(back)
For Value Received,_________________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFICATION NUMBER OF ASSIGNEE__________________________________
________________________________________________________________________
Shares represented by the within Certificate, and do hereby irrevocably
Constitute and appoint____________________________________ Attorney to
Transfer the said Shares on the book of the named Corporation with full power of
substitution in the premises
Dated________19______
_______________________________ ___________________________
IN PRESENCE SIGNED
NOTICE: THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
<PAGE>
Ex-5.1
OPINION RE LEGALITY
[LETTERHEAD OF WELLMAN & WARREN, LLP]
4 Venture, Suite 325, Irvine, CA 92618-3325
Phone: (949) 450-0662 Fax: (949) 450-0750
January 9, 2000
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
As legal counsel for InterCare.com Inc., a California corporation (the
"Company"), we are rendering this opinion in connection with the registration
under the Securities Act of 1933, as amended, of up to 2,000,000 shares of the
Common Stock, No par value, of the Company which may be issued pursuant to the
dividend stock distribution to all existing share holders of Meridian Holdings,
Inc., a publicly traded OTC Bulletin Board Company with the symbol: "MEHO"
We have examined all instruments, documents and records which we deemed relevant
and necessary for the basis of our opinion hereinafter expressed. In such
examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies. We are admitted to
practice in the State of California , we express no opinion concerning any law
other than the law of the State of California and the federal law of the United
States.
We have not obtained opinions of counsel licensed to practice in jurisdictions
other than the State of California.
Based on such examination, we are of the opinion that the 2,000,000 shares of
Common Stock which may be issued under the Assumed Stock Dividend Are duly
authorized shares of the Company's Common Stock, and, when issued against
receipt of the consideration therefor in accordance with the provisions of the
Stock Dividend Distribution respectively, will be validly issued, fully paid and
nonassessable. We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement referred to above and the use of our name wherever it
appears in said Registration Statement.
Respectfully submitted,
/s/ Scott W. Wellman
SCOTT W. WELLMAN, ESQ
<PAGE>
EX-23.2
CONSENT OF EXPERT
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We consent to the inclusion in this Prospectus on Form SB-2 and Form-8A of our
report dated January 17, 2000 relative to our audit of the financial statements
of InterCare.com, Inc. at December 31, 1999, and for the period from January
1st 1998 to December 31st, 1999, and to the reference to our firm under the
heading "Experts" therein.
Andrew M. Smith, CPA
Long Beach, California
January 17, 2000
<PAGE>
Exhibit 24.1 Power of Attorney
POWER OF ATTORNEY
The Registrant and each person whose signature appears below hereby appoints
Anthony C. Dike as their attorney-in-fact, with full power to act alone, to
sign in the name and in behalf of the Registrant and any such person,
individually and in each capacity stated below, any and all amendments,
including post-effective amendments, to this Registration Statement.
SIGNATURES
In accordance with 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 of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the City of Los
Angeles, State of California, on December 31, 1999.
INTERCARE.COM, INC. (Registrant)
By:/s/ Anthony C. Dike
_______________________________
Anthony C. Dike
Chairman, Chief Executive Officer, Secretary
Date: 1/3/2000
By:/s/ Russell Lyons
_______________________________
Russell Lyons
Chief Technology Officer,
Date: 1/3/2000
By:/s/ Philip Falese
______________________________
Philip Falese
Chief Financial Officer,
Date: 1/3/2000
By:/s/ Edward Williams
______________________
Edward Williams, Director
Date: 1/3/2000
By:/s/ Dan Thornton
__________________________
Dan Thornton, Director
1/3/2000
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
and on the dates stated:
Signature Title Date
/s/ Anthony C. Dike
_________________________ 1/3/2000
Anthony C. Dike Chairman, Director,
Chief Executive Officer, Secretary
<PAGE>
Exhibit 24.2 Form of Electronic Commerce Agreement with NetSales, (as amended)
ELECTRONIC COMMERCE AGREEMENT THIS ELECTRONIC COMMERCE AGREEMENT (this
"Agreement") is made and entered into on September 23, 1999 (the "Effective
Date") by and between NETSALES, INC., a Delaware Corporation ("NetSales"),
located at 8500 West 110th Street, Overland Park, KS 66210, and INTERCARE
---------
DIAGNOSTICS, INC./WWW.INTERCARE.COM ("Vendor"), located at, 1601 Centinela
------------------------------ ---------------
Avenue Suite #5, Inglewood, CA 90302. NetSales and Vendor shall be referred to
---------------------------------
herein individually as a "Party" or collectively as the "Parties." Other
defined terms are set forth on Schedule A attached hereto.
AGREEMENT
For good and valuable consideration, the receipt and sufficiency of which the
Parties acknowledge, the Parties agree as follows:
GRANT OF RIGHTS; PARTIES' OBLIGATIONS
GRANT OF RIGHTS. Vendor grants to NetSales the right to market and distribute
Products to resellers or directly to customers as reseller's agent, at NetSales'
sole expense, subject to the terms of this Agreement and as they might apply,
additional ESD provisions set forth in Schedule D and physical fulfillment
provisions set forth in Schedule E.
EXCLUSIVITY. Vendor grants to NetSales the right to serve as the exclusive
provider of services related to all online Direct Sales of Vendor's products.
This does not prevent Vendor from establishing relationships with other
distributors or resellers.
NEW AND DISCONTINUED PRODUCTS. Vendor agrees to notify NetSales of new Products
thirty (30) days prior to release of updated and/or new Products. Vendor also
agrees to notify NetSales thirty (30) days prior to the discontinuation of any
Product.
ON-LINE ORDER AND COLLECTION. NetSales shall make reasonable efforts to maintain
the availability of on-line ordering and payment. However, Vendor acknowledges
that periodic computer server and network failures are unavoidable and thus will
not hold NetSales liable for damages or losses incurred as a result of such
failures.
LINKS. Vendor agrees to maintain a Hyper-link from the sales page to the
NetSales' Web page. NetSales agrees to maintain a Hyper-link to Vendor's Web
page.
CUSTOMER LISTS. NetSales agrees to provide to Vendor a copy of the Customer list
from Product Sales. Vendor agrees to comply with all Customer-imposed
restrictions on the use of such Customer list.
EXPORT RESTRICTIONS. NetSales will use its best efforts to screen customers to
deny shipments to any countries to which exports of the Products are prohibited
by United States law and to deny shipments to parties to which sales are
prohibited by United States law, provided however, NetSales shall have no
liability to Vendor for any inadvertent violation of these prohibitions.
TERM & TERMINATION
TERM. This Agreement will continue in effect for one (1) year from the Effective
Date (the "Initial Term"). Upon expiration of the Initial Term, this Agreement
will be automatically renewed for additional one (1) year periods (each a
"Renewal Term") without action by either Party (the Initial Term and any Renewal
Term will be referred to herein collectively as the "Term").
TERMINATION FOR CAUSE OR CONVENIENCE. Either Party may terminate this Agreement
at any time for any reason upon ninety (90) days prior written notice before the
end of a Renewal Term.
EFFECT OF TERMINATION. Upon termination, NetSales will remove Products from
resale. NetSales shall have the right to hold a reserve balance (the "Reserve")
against Product Returns (as defined below) for six (6) months from the
termination date. In the event that NetSales takes returns after termination for
which there is no account balance, Vendor agrees to reimburse NetSales the total
amount of Returns within thirty (30) days after receiving written demand for
payment.
PAYMENTS & RECORDS
SETUP FEES. Vendor agrees to pay to NetSales a one-time, non-refundable payment
for setup fees as set forth on Schedule C attached hereto, to be paid upon the
execution of this Agreement.
PAYMENTS AND REPORTS. NetSales shall pay Vendor (according to Schedule C) any
amounts owed hereunder on the 30th day of each month, or the last day of
February, for sales of the prior month. NetSales shall provide Vendor a monthly
report detailing the Products sold and amounts collected. NetSales shall
provide to Vendor a real-time online electronic sales summary and customer data
gathering report.
RETURNS. If under any circumstance a payment transaction for a Product is
reversed (each a "Return"), the net amount of the reversal will be deducted from
the amount of the payment due to Vendor. If Returns exceed sales in any given
month, Vendor agrees to make payment sufficient to cover the Returns. A
defective Product may be exchanged for the same title only and, in this case,
the entire package (box, contents, and product-registration card) must be
included. NetSales can refuse payment for and distribution of Products to any
Customer that is processing a large percentage of Returns.
RESERVE. NetSales carries significant risk of excessive returns and/or
chargebacks in the event Product Vendor cancels service with NetSales, ships
defective products, discontinues products, or terminates business activity.
Accordingly, Product Vendor agrees to allow NetSales to hold in reserve an
amount equal to 10% of the previous six (6) month's gross Product sales to
<PAGE>
reduce such risk. NetSales shall remit to Product Vendor any Reserve Escrow
Amount that has been held for more than six (6) months and shall be included
with monthly sales statement.
TAXES. NetSales shall pay any applicable taxes required in connection with the
actions contemplated under Schedule C of this Agreement
RECORDS AND AUDITS. NetSales shall keep records and accounts in accordance with
generally accepted accounting principles to show the amount of proceeds payable
to Vendor. NetSales shall keep these records at NetSales' principal place of
business. Vendor shall have the right to conduct at its sole expense an audit of
such records by an independent auditor during regular business hours upon five
(5) days prior written notice once per calendar year to determine NetSales'
compliance with this Agreement.
CONFIDENTIALITY
CONFIDENTIALITY. Each Party will treat all information received or gained from
the other Party in confidence. Only by written agreement between the Parties can
information about any aspect of the agreements, relationships, products, plans
or details of the other Party's business be divulged to a third party.
Information shall not be deemed confidential for the purposes of this Agreement
that (i) is already known to the non-disclosing Party at the time of disclosure;
(ii) is or becomes publicly known through no wrongful act of the non-disclosing
Party, including by public announcement by the disclosing Party; (iii) is
received from a third Party without similar restrictions and without breach of
this Agreement; or (iv) is lawfully required to be disclosed by any governmental
agency or otherwise required to be disclosed by law.
WARRANTIES; LIABILITLES; INDEMNIFICATION
VENDOR'S REPRESENTATIONS AND WARRANTIES. Vendor represents and warrants that
(i) it owns, or has valid and current distribution licenses, to the Products and
all sub-components thereof, and that no provision of this Agreement violates any
prior agreements between Vendor and any third parties (ii) it has the power and
authority to enter into this Agreement and to perform its obligations hereunder;
(iii) this Agreement has been duly authorized, executed and delivered by Vendor
and constitutes a legal, valid and binding obligation of Vendor enforceable
against Vendor according with its terms, (iv) Vendor owns the entire right,
title and interest in and to the trademarks and intellectual property to be
provided to NetSales and included in the Products and the packaging of the
Products, (v) Vendor has obtained any applicable export licenses for the
Products which are required under United States or any other applicable law,
(vi) and Vendor hereby certifies that the Products are Y2K Compliant. For
purposes of this Agreement, "Y2K Compliant" means, the Product is designed to be
used prior to, during, and after calendar year 2000 A.D., and during each such
time period will accurately receive, provide and process data/time data
(including, but not limited to, calculating, comparing and sequencing,) from,
into and between the twentieth and twenty-first centuries, including the years
1999 and 2000, and leap year calculations and will not malfunction, cease to
function, or provide invalid or incorrect results as a result of data/time data,
to the extent that other information technology used in combination with the
Products properly exchanges data/time data with it.
NETSALES' REPRESENTATIONS AND WARRANTIES. NetSales represents and warrants that
it has the right and authority to enter into this Agreement and to perform its
obligations hereunder.
MUTUAL INDEMNIFICATION. NetSales and Vendor agree to defend, indemnify and hold
harmless each other and their affiliates, their officers, directors, employees,
representatives, agents, successors and assigns against and in respect of any
and all loss, damage, liability and expense (including attorneys' fees)
resulting from; (i) any misrepresentations or breaches of any representation,
warranty or non-fulfillment of any obligation under this Agreement; (ii) any
defects in the Products, whether such Products are sold by Vendor or NetSales
and; (iii) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses incident to any of the foregoing.
VENDOR further indemnifies; (iv) the failure of the Products to satisfy the
terms and conditions of any warranty set forth therein and; (v) the Product (in
the form supplied hereunder by Vendor and unadapted by NetSales or any third
party) infringing a U.S. patent or U.S. copyright.
DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE
PARTIES HEREBY SPECIFICALLY DISCLAIM ANY REPRESENTATIONS OR WARRANTIES, EXPRESS
OR IMPLIED, REGARDING THE SERVICES AND PRODUCTS, INCLUDING ANY IMPLIED WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR IMPLIED WARRANTIES
ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.
LIMITATION OF LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO
THE OTHER PARTY OR ANY THIRD PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL,
SPECIAL OR EXEMPLARY DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES), ARISING FROM ANY PROVISION OF THIS AGREEMENT SUCH
AS, BUT NOT LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFIT OR LOST BUSINESS,
COSTS OF DELAY OR FAILURE OF DELIVERY, OR LIABILITIES TO THIRD PARTIES ARISING
FROM ANY SOURCE.
MISCELLANEOUS PROVISIONS
ASSIGNMENT. This Agreement may not be assigned by either Party without the
express written approval of the non-assigning Party; however, NetSales may
assign this Agreement without the approval of Vendor to any affiliate of
NetSales or to any entity that purchases all the stock or all or substantially
all of NetSales' assets.
NOTICES. All notices and demands hereunder shall be in writing and shall be
served by on the receiving Party via certified or registered mail, return
receipt requested or by nationally-recognized private express courier, and shall
be deemed complete upon receipt.
GOVERNING LAW. This Agreement shall be governed by and construed according to
<PAGE>
the substantive laws of the State of Kansas.
RELATIONSHIP OF THE PARTIES. Each Party is acting as an independent contractor
and not as an agent, partner, or joint venture with the other Party for any
purpose.
SURVIVAL OF CERTAIN PROVISIONS. The indemnification, confidentiality, and
payment obligations set forth in the Agreement shall survive the termination of
the Agreement by either Party for any reason.
ALL AMENDMENTS IN WRITING. All modifications or amendments of this Agreement
shall be effective only if they are in writing by a duly authorized
representative of each Party to this Agreement.
ENTIRE AGREEMENT. This Agreement constitutes the complete and entire agreement
of the Parties and supersedes all previous communications, oral or written, and
all other communications between them relating to the subject hereof.
SEVERABILITY. If a court of law or court of competent jurisdiction finds any
provision of this Agreement invalid, illegal or unenforceable, the remaining
portions of this Agreement shall remain in full force and effect and construed
so as to best effectuate the original intent and purpose of this Agreement.
ARBITRATION. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and the judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. Any arbitration proceeding shall be held
within 30 miles of NetSales' headquarters.
ATTORNEYS FEES. In any legal action between the Parties hereto concerning this
Agreement, the prevailing Party shall be entitled to recover reasonable
attorneys fees and costs.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set
forth above. It is assumed that the signer for both companies has company
authorization.
THIS AGREEMENT CONTAINS AN ARBITRATION PROVISION WHICH IS BINDING ON THE
PARTIES.
NETSALES, INC. Vendor
By:__________ By: ___________
Name:_________ Name:___________
Tile:_________ Title:__________
Date: Date: _________
SCHEDULE A - DEFINITIONS
"Customer" shall mean an individual, or single user, at a home or business, who
pays for Products through NetSales.
"Direct Sale" refers to any sale that is from a Direct URL.
"Direct URL" is a URL in NetSales' web site for Product purchases, supplied to
Product Vendor by NetSales, hyper-linked to web site, and are controlled by
Product Vendor or Product Vendor's affiliates.
"Channel Sale" shall mean any sale which occurs within NetSales' channel of
online stores or any other Product sales that do not occur from a Direct URL.
"Processing Fees" shall mean the fees payable to NetSales by Vendor for Direct
Sales. Processing Fees are incurred for each Product sold in a Direct Sale.
"Products" shall mean the products identified by title and reference number in
Schedule B hereto. Any Products not listed on Schedule B, which are sent by
Vendor to NetSales, and which are accepted by NetSales, shall be deemed added to
Schedule B.
"Payment Fees" shall mean the total costs of a customer purchase transaction
charged by a bank or other financial institution. This includes but is not
limited to credit card transaction fees.
"Return" shall be payment for a Product which is initially collected by
NetSales, which is subsequently reversed for any reason.
"Reserve" shall refer to proceeds held from a sales transaction as security
against the significant risk of excessive returns and/or chargebacks.
"Piracy" shall mean the attempted use or distribution of a Product without
payment.
"Hyper-link" shall mean a direct means of accessing one World Wide Web page from
another.
"Territory" shall mean a world-wide territory.
SCHEDULE B - PRODUCT
REF # TITLE STREET PRICE_
- ------ ----- --------------
<PAGE>
SCHEDULE C- FEES - ECOMMERCE
I. PRODUCT ENROLLMENT (SETUP) FEES
Company Setup Fee shall be WAIVED which shall cover up to fifteen (15) Products
including any additional SKU's. This fee shall cover only those Products which
are submitted at the time of initial enrollment.
Setup fees shall be $25 per Product title (additional SKU's included) that
exceeds fifteen (15) at the time of initial enrollment, or for additional
Products that are added after the Agreement is executed.
DIRECT SALES FEES. For Direct Sales, NetSales shall pay Vendor proceeds from
sales, calculated as follows:
Total gross sales from Products, less the following amounts:
Distribution fees equaling fifteen percent (15%) of the gross sale price of the
Product, not to be less than $3.50 per Product;
Returns (as defined in Section III, C.), if any; and
The Reserve.
III. CHANNEL SALES FEES. For Channel Sales, NetSales shall pay Vendor proceeds
from sales, calculated as follows:
Total gross sales from Products, less the following amounts:
Distribution discount percentage equaling fifty percent (50%) of the gross sale
price of the Product;
Returns (as defined in Section III, C.) if any; and
The Reserve
V. OTHER FEES (IF APPLICABLE)
Product/SKU update $25
Page design change $50
VI. Customization Fees. Any non-standard customization beyond basic catalog
creation, pricing, and graphic treatments will be billed to Vendor at a rate of
$100 per hour and subject to change. NetSales will obtain approvals from Vendor
for such customizations prior to performing such work.
SCHEDULE D - ESD
GRANT OF RIGHTS; PARTIES' OBLIGATIONS
SOFTWARE PRODUCT DELIVERABLES. Vendor agrees to supply to NetSales master
distributable images of Products upon execution of this Agreement for any
Products that are electronic in nature (e.g. software). Vendor further agrees to
send new master distributable images of software Products within fourteen (14)
days of release of revised versions of software Products.
PROHIBITED ACTS. NetSales is prohibited from the disassembly or decompilation of
the object code or the disclosure of any other aspect of the workings of the
Products without the prior written consent of Vendor.
II. Ownership
INTELLECTUAL PROPERTY RIGHTS. NetSales agrees that the Products provided
hereunder, and any copies thereof, in whole or in part, and all intellectual
property rights, including without limitation, patent, copyright, trademark,
trade secret, and any other intellectual or industrial property rights, are and
shall remain the sole property of Vendor, and that all rights thereto are
reserved by Vendor. NetSales agrees that it will not create derivatives of any
Product, nor use, copy, disclose, sell, assign, sublicense, or otherwise
transfer any Product except as expressly authorized in the end-user license
agreement for such Product. Vendor acknowledges that NetSales owns the content
of any information developed by NetSales in exploiting the rights granted
herein.
PIRACY. Each Party agrees to take strict measures to secure the Products from
piracy, and in the event that any piracy is discovered, to notify the other
Party, and to take measures to deter further piracy. NetSales' total liability
will be limited to damages arising from negligent acts of NetSales which occur
after discovery of any piracy is made by NetSales or Vendor notifies NetSales in
writing of any piracy.
III. Returns
NetSales will request a signed letter from the customer stating that
all copies made from Product have been permanently destroyed. Vendor will accept
the Return or exchange of any normally stocked product purchased from Vendor
which is unopened for up to 30 days after the date of purchase.
<PAGE>
IV. DEFINITIONS
A. ESD initials standing for Electronic Software Distribution and refers to
the delivery of a digital product electronically.
SCHEDULE F- PRODUCT VENDOR CHECKLIST*
______ Remit Executed Agreement. Two hard copies required.
______ Complete online enrollment form at
http://www.netsales.net/client.wcgi. You will always be required to provide your
User Name (UN) and Password (PW) to gain access to any privileged online client
area. If UN and PW are still needed please contact [email protected] for
-----------------------
assistance.
______ Complete all applicable field entries. For sales description you may
use HTML.
______ Forward graphics to [email protected]. This includes box shot
product images, Logos, and available screen shots.
______ Include any special instructions and/or additional requirements.
______ ESD Product Delivery - If Product will be delivered electronically,
please forward to NetSales any and all product files in an auto-installing
format. If applicable, these files should contain any online documentation and
help files.
______ Physical Product Delivery - If NetSales is to perform physical
product fulfillment on your behalf, please contact [email protected] who
-----------------------
will provide simple instructions and assistance.
______ After you receive notification that products have been enrolled from
a NetSales engineer, thoroughly check that products have been enrolled properly.
______ Check pricing of all products.
______ Check product descriptions for accuracy.
______ Check graphics and License agreement.
______ Perform an actual order process (for ESD, download to insure that
product installs and runs properly).
______ When process is complete reply to "Delivery Verification" email to
activate products online.
______ If you have executed a direct sale agreement (NetSales performs
order process for your direct sales) then prominently display your branded buy
page link on your web home page. A NetSales engineer shall provide you with a
final order page for you to connect to after your "Delivery Verification" is
complete as outlined in step 5 above.
*This checklist is designed to help expedite your enrollment process. If more
than 24 hours passes between any of the above steps please contact your account
coordinator.
ADDENDUM TO DISTRIBUTION AGREEMENT
This Addendum is made and entered into on September 21, 1999, 1999 by and
between NetSales Inc., Located at 8500 West 110th Street, Suite 600 Overland
Park, Kansas 66210 ("Electronic Distributor"), and Intercare Diagnostics, Inc.
located at 1601 Centinela Avenue Suite #5 , Inglewood ,CA. 90302 ("Product
Vendor").
This Addendum shall be deemed added to the original signed Agreement executed on
July 16,1999. Section A shall replace any equivalent Direct Sales terms in
original agreement if it exists. This addendum supplements and is governed by
the terms of the original agreement and in all other respects the original
agreement continues on. To the extent this Addendum conflicts with the
Distribution Agreement,
the terms of this Addendum shall govern.
A. AMOUNT FOR DIRECT SALES. For Direct Sales, Electronic Distributor shall
pay Product Vendor proceeds from sales, calculated as follows: total gross sales
from Products, less the following amounts:
1. Transaction fees equaling fifteen percent (15%) of the gross sale price
of the product, not to be less than $3.00 per Product;
2. Returns, if any;
B. Y2K COMPLIANCE.
Vendor hereby certifies that the Products are Y2K Compliant. For purposes of
this Agreement, "Y2K Compliant" means, the Product is designed to be used prior
to, during, and after calendar year 2000 A.D., and during each such time period
<PAGE>
will accurately receive, provide and process data/time data (including, but not
limited to, calculating, comparing and sequencing,) from, into and between the
twentieth and twenty-first centuries, including the years 1999 and 2000, and
leap year calculations and will not malfunction, cease to function, or provide
invalid or incorrect results as a result of data/time data, to the extent that
other information technology used in combination with the Products properly
exchanges data/time data with it.
SOFTWARE REVIEW, L.C. PRODUCT VENDOR
By: By: __________________________
Name: JEFFERY REENE Name: __________________________
Title: PRESIDENT Title:_________________________
Date: Date: ________________________
<PAGE>
Exhibit 24.4
WRITTEN CONSENT
OF THE SOLE DIRECTOR OF
MERIDIAN HOLDINGS, INC.
----------------------
a Colorado corporation
Pursuant to the authority of Section 7-108 of the Colorado Business
Corporation Act, the undersigned, being the Sole Director of Meridian Holdings,
Inc., a Colorado corporation, does hereby adopt and consent to the following
recitals and resolution:
Approval of Dividend Distribution
WHEREAS, this corporation has purchased fifty one percent (51%) interest in
Inter-Care Diagnostic, Inc., a California corporation ("Inter-Care") and holds
five million one hundred thousand (5,100,000) shares of the outstanding Common
stock of Inter-care (the "Stock");
WHEREAS, it is proposed that this corporation declare a dividend of the Stock
to each of its shareholders with the exception of all current and past officers,
directors and affiliates, by transferring or causing to be issued five (5)
shares of the Stock for each share of this corporation's Common Stock held by
each such shareholder ("Dividends"); and
WHEREAS, it is deemed advisable and in the best interest of this corporation and
its shareholders that the Dividends be approved;
NOW THEREFORE BE IT RESOLVED, that the Dividends be, and hereby are, approved
and authorized;
RESOLVED FURTHER, that this corporation hereby declares the Dividends be payable
to the shareholders of record as of December 30, 1999; and
RESOLVED FURTHER, that the officers of this corporation, and any of them,
be, and they hereby are, authorized, empowered and directed for and on behalf of
this corporation and in its name to execute, deliver and cause the performance
of all such further documents and to take such further actions as such officer,
or any of them, may in their discretion deem necessary, appropriate or advisable
in order to carry out and perform the intent of the foregoing resolution.
This Written Consent shall be filed in the minute book of this corporation
and shall become part of the records of this corporation.
Dated as of December __, 1999.
/s/ Anthony C. Dike
______________________________________
Anthony C. Dike, M.D., Sole Director
<PAGE>
Exhibit 24.5
MINUTES OF MEETING OF DIRECTORS
OF
INTERCARE.COM
A Meeting of the Board of Directors of INTERCARE.COM was held on the 3rd
day of JANUARY 2000. A quorum constituting a majority of the Directors of the
Corporation were present and signed the Waiver of Notice which is on file
herewith:
On motion duly made and seconded it was voted:
RESOLVED, that the Company hereby authorizes the issuance of the following
stock dividend:
EACH SHAREHOLDER OF MERIDIAN HOLDINGS, INC. SHALL RECEIVE 5 SHARES OF
INTERCARE.COM., WHICH DISTRIBUTION SHALL BE REGISTERED.
ONLY THOSE SHAREHOLDERS OF MERIDAIN HOLDINGS, INC. WITH FREE TRADING SHARES
ON THE RECORD DATE SHALL BE ELIGIBLE FOR THE STOCK DIVIDEND.
THE RECORD DATE FOR THE DIVIDEND IS DECEMBER 30, 1999
THE DISTRIBUTION DATE FOR THE DIVIDEND IS JANUARY 15, 2000.
There being no further business to come before the Meeting at this time, it
was voted to adjourn.
/s/ Anthony C. Dike
_____________________
Chairman of the Board
/s/ Anthony C. Dike
________________________
Secretary
<PAGE>
EX-27.1
FINANCIAL DATA SCHEDULE
[ARTICLE] 5
[RESTATED]
[MULTIPLIER] 1
<TABLE>
<CAPTION>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JAN-01-1999
[PERIOD-END] DEC-31-1999
[CASH] 864
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 47672
[INVENTORY] 21639
[CURRENT-ASSETS] 22503
[PP&E] 253
[DEPRECIATION] 13505
[TOTAL-ASSETS] 22756
[CURRENT-LIABILITIES] 0
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 577228
[OTHER-SE] (554472)
[TOTAL-LIABILITY-AND-EQUITY] 22756
[SALES] 6629
[TOTAL-REVENUES] 6629
[CGS] 252
[TOTAL-COSTS] 120800
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] (114423)
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (114423)
[EPS-BASIC] 0
[EPS-DILUTED] 0
</TABLE>
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