<PAGE>
Registration No. 333-_________
As filed with the Securities and Exchange Commission on April 28, 1997
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
NATIONAL QUALITY CARE, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1215959
- ------------ ------------------------
(State or other (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
5901 West Olympic Boulevard
Suite 109
Los Angeles, California 90036
(213) 692-0948
(Address, including zip code, and telephone number,
-----------------------------------------------------------------
including area code, or registrant's principal executive offices)
STOCK OPTIONS ISSUED TO CONSULTANTS
-----------------------------------
(Full title of plan)
Victor Gura, M.D.
President
National Quality Care, Inc.
5901 West Olympic Boulevard
Suite 109
Los Angeles, California 90036
(213) 692-0948
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
---------------------------------------------------
Copies to:
Matthias & Berg LLP
515 South Flower Street
Seventh Floor
Los Angeles, California 90071
Attn: Jeffrey P. Berg, Esq.
Phone (213) 895-4200
Fax (213) 895-4058
<PAGE>
(REGISTRATION STATEMENT COVER PAGE CONTINUED)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Title of Each Class of Amount to be Proposed Maximum Proposed Amount of
Securities to be Registered Registered(1) Offering Price per Maximum Registration
Share(1) Aggregate Fee(2)
Offering
Price(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share(3) 204,922 $1.00 $204,922
- --------------------------------------------------------------------------------------------------------------------
Common Stock, par value
$0.01 per share(3) 590,000 $0.25 $147,500
- --------------------------------------------------------------------------------------------------------------------
Common Stock, par value
0.01 per share(3) 50,000 $1.75 $87,500
- --------------------------------------------------------------------------------------------------------------------
TOTAL 844,922 $439,422 $133.31
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
- ----------------------------------
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to General Instruction E, the registration fee paid in connection
herewith is based on the maximum aggregate per share exercise price of the
shares of Common Stock covered by this registration statement.
(3) The shares registered pursuant to this Registration Statement are available
for issuance pursuant to certain stock option agreements which are attached
as exhibits to this Registration Statement.
<PAGE>
PART I. INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1: PLAN INFORMATION.
The information required by Part I is included in documents to be sent or
given to the participants.
ITEM 2: REGISTRATION INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Upon written or oral request, National Quality Care, Inc., a Delaware
corporation, f/k/a Sargent, Inc. (the "Registrant") will provide, without
charge, a copy of all documents incorporated by reference in Item 3 of Part II
of this Registration Statement, which are incorporated by reference in the
Section 10(a) Prospectus, and all other documents required to be delivered to
employees pursuant to Rule 428(b) promulgated under the Securities Act of 1933,
as amended (the "Securities Act"). All requests should be made to National
Quality Care, Inc., Ron Berkowitz, Chief Financial Officer, 5901 West Olympic
Boulevard, Suite 109, Los Angeles, California 90036, tel no. (213) 692-0948.
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3: INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which are on file with the Securities and Exchange
Commission (the "Commission"), are incorporated in this Registration Statement
by reference:
(a) Annual Report on Form 10-KSB for the year ended December 31, 1996.
(b) The description of the Common Stock which is contained in the
registration statements filed under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), including any amendment or
report filed for the purpose of updating such description.
All documents filed by the Registrant pursuant to Section 13(a), 14 and
15(d) of the Exchange Act prior to the filing of a post-effective amendment
which indicates that all shares offered hereby have been sold or which
deregisters all shares then remaining unsold, shall be deemed to be incorporated
in this Registration Statement by reference and to be a part hereof from the
date of filing of such documents.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Of the 844,922 shares of Common Stock being registered in connection with
the Registration Statement, 204,922 shares are being registered on behalf of
Matthias & Berg LLP, counsel to the Registrant, which has issued the opinion
filed herewith as Exhibit 5.1 to this Registration Statement. In addition,
Matthias & Berg LLP own additional options to purchase up to an additional
174,739 shares of Common Stock, which are not the subject of this Registration
Statement.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation generally provide for the
maximum indemnification of a corporation's officers and directors as permitted
by law in the State of Delaware. Delaware law empowers a corporation to
indemnify any person who was or is a party or who is threatened to be made a
party to any threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, except in the case of
an action by or in the right of the corporation, by reason of the fact that he
or she is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or other enterprise. Depending on the
character of the proceeding, a corporation may indemnify against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with such action, suit or
proceeding if the person indemnified acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceedings, had no
reasonable cause to believe his or her conduct was unlawful.
A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or other
enterprise, against expenses, including amounts paid in settlement and
attorney's fees actually and reasonably incurred by him or her in connection
with the defense or settlement of the action or suit if he or she acted in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation. Indemnification may not be
made for any claim, issue or matter as to which such a person has been adjudged
by a court of competent jurisdiction, after exhaustion of all appeals therefrom,
to be liable to the corporation or for amounts paid in settlement to the
corporation unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to above, or in defense of any claim, issue or matter
therein, he or she must be indemnified by the corporation against expenses,
including attorney's fees, actually and reasonably incurred by him in connection
with the defense. Any indemnification under this section, unless ordered by a
court or advanced pursuant to this section, must be made by the corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances. The
determination must be made: (a) by the stockholders; (b) by the board of
directors by majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding; (c) if a majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding
so orders, by independent legal counsel in a written opinion; or (d) if a quorum
consisting of directors who were not parties to the action, suit or proceeding
cannot be obtained, by independent legal counsel in a written opinion.
The certificate of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he or she is not entitled to be indemnified
by the corporation. The provisions of this section do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
II-2
<PAGE>
The indemnification and advancement of expenses authorized in or ordered by
a court pursuant to this section: (a) does not exclude any other rights to which
a person seeking indemnification or advancement of expenses may be entitled
under the articles of incorporation or any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, for either an action in
his or her official capacity or an action in another capacity while holding his
or her office, except that indemnification, unless ordered by a court pursuant
to this section or for the advancement of any director or officer if a final
adjudication establishes that his or her acts or omissions involved intentional
misconduct, fraud or a knowing violation of the law and was material to the
cause of action; and (b) continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
ITEM 8: EXHIBITS
4.1 Stock Option Agreement between the Registrant and Michael Markow dated
December 10, 1996
4.2 Stock Option Agreement between the Registrant and Matthias & Berg LLP
dated April 3, 1997
4.3 Stock Option Agreement between the Registrant and A. Vern Tharp dated
May 12, 1996
5.1 Opinion of Matthias & Berg LLP
24.1 Consent of Matthias & Berg LLP (included in Exhibit 5.1)
24.2 Consent of Singer, Lewak, Greenbaum & Goldstein LLP
ITEM 9: UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
PROVIDED, HOWEVER, that paragraphs (1)(i) and (1)(ii) above do not
apply if the Registration Statement is on From S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is incorporated by reference from periodic reports filed by the
Registrant under the Exchange Act.
(2) That, for determining liability under the Securities Act, to treat
each such post-effective amendment as a new registration statement of the
securities offered, and the offering of such securities at that time to be the
initial BONA FIDE offering.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the end of the
offering.
II-3
<PAGE>
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, the Registrant has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officers or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of 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 of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Los Angeles, California, on this 28th day of April,
1997.
NATIONAL QUALITY CARE, INC.
By: /s/Victor Gura, M.D.
--------------------------------
Victor Gura, M.D., President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
--------- ------------------------ ----
/s/Victor Gura, M.D. President and Director April 28, 1997
- ----------------------- (Principal Executive Officer)
Victor Gura, M.D.
/s/Ron Berkowitz Chief Financial Officer April 28, 1997
- ----------------------- (Principal Financial Officer
Ron Berkowitz and Principal Accounting
Officer)
/s/Ronald Lang, M.D. Director April 28, 1997
- -----------------------
Ronald Lang, M.D.
/s/ Judith Gordon Director April 28, 1997
- -----------------------
Judith Gordon
II-5
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Victor Gura, M.D. and Ron Berkowitz, or
either of them, as his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) and supplements to this Registration Statement, and
to file the same with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each end every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
--------- ------------------------ ----
/s/Victor Gura, M.D. President and Director
- ----------------------- (Principal Executive Officer) April 28, 1997
Victor Gura, M.D.
/s/Ron Berkowitz Chief Financial Officer April 28, 1997
- ----------------------- (Principal Financial Officer
Ron Berkowitz and Principal Accounting
Officer)
/s/Ronald Lang, M.D. Director April 28, 1997
- -----------------------
Ronald Lang, M.D.
/s/ Judith Gordon Director April 28, 1997
- -----------------------
Judith Gordon
II-6
<PAGE>
EXHIBIT INDEX
-------------
DOCUMENT DESCRIPTION OF DOCUMENT
- -------- -----------------------
4.1 Stock Option Agreement between the Registrant
and Michael Markow dated December 10, 1996
4.2 Stock Option Agreement between the Registrant
and Matthias & Berg LLP dated April 3, 1997
4.3 Stock Option Agreement between the Registrant and
A. Vern Tharp dated May 12, 1996
5.1 Opinion of Matthias & Berg LLP
24.1 Consent of Matthias & Berg LLP (included in Exhibit 5.1)
24.2 Consent of Singer, Lewak, Greenbaum & Goldstein LLP
<PAGE>
EXHIBIT 4.1
<PAGE>
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of December 10, 1996 by and between National
Quality Care, Inc., a Delaware corporation (the "Company"), and Michael Markow
("Optionee").
R E C I T A L
The Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Optionee, for services previously rendered by
Optionee as a consultant to the Company, of a non-qualified stock option to
purchase the number of shares of Common Stock of the Company specified in
Paragraph 1 hereof, at the price specified therein, such option to be for the
term and upon the terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the Board
of Directors, the Company hereby grants to Optionee, in consideration of
consulting services performed for the benefit of the Company, during the period
from July 1, 1996 to December 31, 1996, related to the location of strategic
business partners for the Company and the expansion of the dialysis facilities
for the Company's business operations, the option ("Option") to purchase up to
590,000 shares ("Option Shares") of Common Stock of the Company, at the exercise
price of $0.25 per share.
2. TERM. This Option shall expire two (2) years from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The 590,000 Options shall vest and be
exercisable on the following dates: (a) 190,000 Options on April 18, 1997, (b)
200,000 Options on June 18, 1997, and (c) 200,000 Options on August 18, 1997,
and shall thereafter remain subject to exercise for the term specified in
Paragraph 2 hereof.
<PAGE>
4. METHOD AND TIME OF EXERCISE. The Option may be exercised by written
notice delivered to the Company stating the number of shares with respect to
which the Option is being exercised, together with a check made payable to the
Company in the amount of the purchase price of such shares plus the amount of
applicable federal, state and local withholding taxes, and the written statement
provided for in Paragraph 10 hereof, if required by such Paragraph 10; PROVIDED,
HOWEVER, with respect to the 590,000 Options set forth in paragraph 1 hereof,
Optionee shall be entitled to pay the exercise price against cancellation in
full of certain indebtedness in the amount of $147,000 owing by the Company to
Optionee for services previously rendered by Optionee as a consultant to the
Company during the period from July 1, 1996 to December 31, 1996, which amount
shall only be payable to Optionee by the exercise of such Options. Not less
than 100 shares may be purchased at any one time unless the number purchased is
the total number purchasable under such Option at the time. Only whole shares
may be purchased.
5. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Company and
upon the request of the Optionee, the minimum statutory withholding tax
requirements may be satisfied by the withholding of shares of Common Stock
otherwise issuable to the Optionee upon the exercise of this Option.
6. EXERCISE ON TERMINATION OF EMPLOYMENT. This Option shall not
terminate as a result of the termination of Optionee's services as a consultant
to the Company.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except, if applicable, by will or by the laws of descent and distribution, and
may be exercised only by Optionee during Optionee's lifetime and after
Optionee's death, by Optionee's representative or by the person entitled thereto
under Optionee's will or the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by the
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued.
2
<PAGE>
9. NO RIGHT TO PERFORM SERVICES. Nothing in this Option shall confer
upon the Optionee any right to perform services for the Company, or shall
interfere with or restrict in any way the rights of the Company to discharge or
terminate Optionee as an independent contractor or consultant at any time for
any reason whatsoever, with or without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that,
upon Optionee's exercise of the Option in whole or part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to him, he will acquire the shares issuable upon
exercise of this Option for the purpose of investment and not with a view to
their resale or further distribution, and that upon each exercise thereof
Optionee will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. Optionee agrees that any
certificates issued upon exercise of this Option may bear a legend indicating
that their transferability is restricted in accordance with applicable state or
federal securities law. Any person or persons entitled to exercise this Option
under the provisions of Paragraphs 5 and 6 hereof shall, upon each exercise of
the Option under circumstances in which Optionee would be required to furnish
such a written statement, also furnish to the Company a written statement to the
same effect, satisfactory to the Company in form and substance.
11. REGISTRATION. On or before thirty days after the date of this
Agreement, the Company shall, at the Company's expense, use its best efforts to
file with the Securities and Exchange Commission ("SEC"), a registration
statement ("Registration Statement") on Form S-8 or other comparable form, in
such form as to comply with applicable federal and state laws for the purpose
of registering or qualifying the Option Shares for resale by Optionee, and
prepare and file with the appropriate state securities regulatory authorities
the documents reasonably necessary to register or qualify such securities,
subject to the ability of the Company to register or qualify such securities
under applicable state laws.
12. NOTICES. All notices to the Company shall be addressed to the Company
at the principal office of the Company at 5901 West Olympic Boulevard, Suite
109, Los Angeles, California 90036, Telecopier No. (213) 933-8836, and all
notices to Optionee shall be addressed to Optionee at the address and telecopier
number of Optionee on file with the Company, or to such other address and
telecopier number as either may designate to the other in writing. A notice
shall be deemed to be duly given if and when enclosed in a properly addressed
sealed envelope deposited, postage prepaid, with the United States Postal
Service and followed by telecopier to the addressee. In lieu of giving notice
by mail as aforesaid,
3
<PAGE>
written notices under this Agreement may be given by personal delivery to
Optionee or to the Company (as the case may be).
13. [RESERVED]
14. ADJUSTMENTS. If there is any change in the capitalization of the
Company affecting in any manner the number or kind of outstanding shares of
Common Stock of the Company, whether by stock dividend, stock split,
reclassification or recapitalization of such stock, or because the Company has
merged or consolidated with one or more other corporations (and provided the
Option does not thereby terminate pursuant to Section 2 hereof), then the number
and kind of shares then subject to the Option and the price to be paid therefor
shall be appropriately adjusted by the Board of Directors; PROVIDED, HOWEVER,
that in no event shall any such adjustment result in the Company's being
required to sell or issue any fractional shares. Any such adjustment shall be
made without change in the aggregate purchase price applicable to the
unexercised portion of the Option, but with an appropriate adjustment to the
price of each Share or other unit of security covered by this Option.
15. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other provision
of this Option, upon the dissolution or liquidation of the Company, the
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or the sale of substantially all the assets of the Company or of more than 50%
of the then outstanding stock of the Company to another corporation or other
entity, the Option granted hereunder shall terminate; provided, however, that:
(i) each Option for which no option has been tendered by the surviving
corporation in accordance with all of the terms of provision (ii) immediately
below shall, within five days before the effective date of such dissolution or
liquidation, merger or consolidation or sale of assets in which the Company is
not the surviving corporation or sale of stock, become fully exercisable; or
(ii) in its sole and absolute discretion, the surviving corporation may, but
shall not be so obligated to, tender to any Optionee, an option to purchase
shares of the surviving corporation, and such new option or options shall
contain such terms and provisions as shall be required substantially to preserve
the rights and benefits of this Option.
16. INVALID PROVISIONS. In the event that any provision of this Agreement
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
4
<PAGE>
17. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. COUNTERPARTS. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties hereto and
delivered to the other.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
NATIONAL QUALITY CARE, INC.
("Company")
By: /s/ Victor Gura, M.D.
--------------------------------
Victor Gura, M.D.,
Chief Executive Officer
Social Security Number
or Employer Identification
Number: ("Optionee")
###-##-#### By: /s/ Michael Markow
- ------------------------------- --------------------------------
Michael Markow
Address:
Michael Markow
c/o Worldwide Corporate Finance
15760 Ventura Boulevard
Suite 1020
Encino, California 91436
Telecopier No. (818) 783-1120
5
<PAGE>
EXHIBIT 4.2
<PAGE>
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of April 3, 1997 by and between National Quality
Care, Inc., a Delaware corporation (the "Company"), and Matthias & Berg LLP
("Optionee").
R E C I T A L
The Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Optionee, for services previously rendered by
Optionee as a consultant to the Company, of a non-qualified stock option to
purchase the number of shares of Common Stock of the Company specified in
Paragraph 1 hereof, at the price specified therein, such option to be for the
term and upon the terms and conditions hereinafter stated.
A G R E E M E N T
NOW, THEREFORE, in consideration of the premises and of the undertakings of
the parties hereto contained herein, it is hereby agreed:
1. NUMBER OF SHARES; OPTION PRICE. Pursuant to said action of the Board
of Directors, the Company hereby grants to Optionee, in consideration of legal
consulting services performed for the benefit of the Company, the option
("Option") to purchase up to 204,922 shares ("Option Shares") of Common Stock of
the Company, at the exercise price of $1.00 per share.
2. TERM. This Option shall expire four (4) years from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The 204,922 Options shall vest and be
immediately exercisable, and shall thereafter remain subject to exercise for the
term specified in Paragraph 2 hereof.
4. METHOD AND TIME OF EXERCISE. The Option may be exercised by written
notice delivered to the Company stating the number of shares with respect to
which the Option is being exercised, together with a check made payable to the
Company in the amount of the purchase price of such shares plus the amount of
applicable federal, state and local withholding taxes, and the written statement
provided for in Paragraph 10 hereof, if required by such Paragraph 10; PROVIDED,
HOWEVER, with respect to the 590,000 Options set forth in paragraph 1 hereof,
Optionee shall be entitled to pay the exercise price against cancellation in
full of certain indebtedness in the amount of $204,922 owing by the Company to
<PAGE>
Optionee for services previously rendered by Optionee as a consultant to the
Company. Not less than 100 shares may be purchased at any one time unless the
number purchased is the total number purchasable under such Option at the time.
Only whole shares may be purchased.
5. TAX WITHHOLDING. As a condition to exercise of this Option, the
Company may require the Optionee to pay over to the Company all applicable
federal, state and local taxes which the Company is required to withhold with
respect to the exercise of this Option. At the discretion of the Company and
upon the request of the Optionee, the minimum statutory withholding tax
requirements may be satisfied by the withholding of shares of Common Stock
otherwise issuable to the Optionee upon the exercise of this Option.
6. EXERCISE ON TERMINATION OF EMPLOYMENT. This Option shall not
terminate as a result of the termination of Optionee's services as a consultant
to the Company.
7. NONTRANSFERABILITY. This Option may not be assigned or transferred
except, if applicable, by will or by the laws of descent and distribution, and
may be exercised only by Optionee during Optionee's lifetime and after
Optionee's death, by Optionee's representative or by the person entitled thereto
under Optionee's will or the laws of intestate succession.
8. OPTIONEE NOT A SHAREHOLDER. Optionee shall have no rights as a
shareholder with respect to the Common Stock of the Company covered by the
Option until the date of issuance of a stock certificate or stock certificates
to him upon exercise of the Option. No adjustment will be made for dividends or
other rights for which the record date is prior to the date such stock
certificate or certificates are issued.
9. NO RIGHT TO PERFORM SERVICES. Nothing in this Option shall confer
upon the Optionee any right to perform services for the Company, or shall
interfere with or restrict in any way the rights of the Company to discharge or
terminate Optionee as an independent contractor or consultant at any time for
any reason whatsoever, with or without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Optionee represents and agrees that,
upon Optionee's exercise of the Option in whole or part, unless there is in
effect at that time under the Securities Act of 1933 a registration statement
relating to the shares issued to him, he will acquire the shares issuable upon
exercise of this Option for the purpose of investment and not with a view to
their resale or further distribution, and that upon each exercise thereof
Optionee will furnish to the Company a written statement to such effect,
satisfactory to the Company in form and substance. Optionee agrees that any
certificates issued upon exercise of this
2
<PAGE>
Option may bear a legend indicating that their transferability is restricted in
accordance with applicable state or federal securities law. Any person or
persons entitled to exercise this Option under the provisions of Paragraphs 5
and 6 hereof shall, upon each exercise of the Option under circumstances in
which Optionee would be required to furnish such a written statement, also
furnish to the Company a written statement to the same effect, satisfactory to
the Company in form and substance.
11. REGISTRATION. On or before thirty days after the date of this
Agreement, the Company shall, at the Company's expense, use its best efforts to
file with the Securities and Exchange Commission ("SEC"), a registration
statement ("Registration Statement") on Form S-8 or other comparable form, in
such form as to comply with applicable federal and state laws for the purpose
of registering or qualifying the Option Shares for resale by Optionee, and
prepare and file with the appropriate state securities regulatory authorities
the documents reasonably necessary to register or qualify such securities,
subject to the ability of the Company to register or qualify such securities
under applicable state laws.
12. NOTICES. All notices to the Company shall be addressed to the Company
at the principal office of the Company at 5901 West Olympic Boulevard, Suite
109, Los Angeles, California 90036, Telecopier No. (213) 933-8836, and all
notices to Optionee shall be addressed to Optionee at the address and telecopier
number of Optionee on file with the Company, or to such other address and
telecopier number as either may designate to the other in writing. A notice
shall be deemed to be duly given if and when enclosed in a properly addressed
sealed envelope deposited, postage prepaid, with the United States Postal
Service and followed by telecopier to the addressee. In lieu of giving notice
by mail as aforesaid, written notices under this Agreement may be given by
personal delivery to Optionee or to the Company (as the case may be).
13. [RESERVED]
14. ADJUSTMENTS. If there is any change in the capitalization of the
Company affecting in any manner the number or kind of outstanding shares of
Common Stock of the Company, whether by stock dividend, stock split,
reclassification or recapitalization of such stock, or because the Company has
merged or consolidated with one or more other corporations (and provided the
Option does not thereby terminate pursuant to Section 2 hereof), then the number
and kind of shares then subject to the Option and the price to be paid therefor
shall be appropriately adjusted by the Board of Directors; PROVIDED, HOWEVER,
that in no event shall any such adjustment result in the Company's being
required to sell or issue any fractional shares. Any such adjustment shall be
made without change in the aggregate purchase price applicable to the
unexercised portion of the Option, but with
3
<PAGE>
an appropriate adjustment to the price of each Share or other unit of security
covered by this Option.
15. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other provision
of this Option, upon the dissolution or liquidation of the Company, the
reorganization, merger or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or the sale of substantially all the assets of the Company or of more than 50%
of the then outstanding stock of the Company to another corporation or other
entity, the Option granted hereunder shall terminate; provided, however, that:
(i) each Option for which no option has been tendered by the surviving
corporation in accordance with all of the terms of provision (ii) immediately
below shall, within five days before the effective date of such dissolution or
liquidation, merger or consolidation or sale of assets in which the Company is
not the surviving corporation or sale of stock, become fully exercisable; or
(ii) in its sole and absolute discretion, the surviving corporation may, but
shall not be so obligated to, tender to any Optionee, an option to purchase
shares of the surviving corporation, and such new option or options shall
contain such terms and provisions as shall be required substantially to preserve
the rights and benefits of this Option.
16. INVALID PROVISIONS. In the event that any provision of this Agreement
is found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
17. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
18. COUNTERPARTS. This Agreement may be executed in counterparts, all of
which shall be considered one and the same agreement, and shall become effective
when one or more counterparts have been signed by each of the parties hereto and
delivered to the other.
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
NATIONAL QUALITY CARE, INC.
("Company")
By: /s/ Victor Gura, M.D.
-------------------------------------
Victor Gura, M.D.,
Chief Executive Officer
Social Security Number
or Employer Identification
Number: ("Optionee")
95-4176116 By: /s/ Michael R. Matthias
- ------------------------------ -------------------------------------
Michael R. Matthias
Partner
Address:
Michael R. Matthias
c/o Matthias & Berg LLP
515 South Flower Street
Seventh Floor
Los Angeles, California 90071
Telecopier No. (213) 895-4058
5
<PAGE>
EXHIBIT 4.3
<PAGE>
STOCK OPTION AGREEMENT
This Stock Option Agreement (the "Agreement") is made and entered into as
of May 12, 1996, by and between A. Vern Tharp ("Optionee"), and Sargent, Inc., a
Delaware corporation ("Optionor") (Optionor and Optionee are sometimes
collectively referred to as the "Parties"),
1. GRANT AND EXERCISE OF OPTION. (a) Subject to the terms and conditions
of this Agreement, Optionor hereby grants Optionee the option to purchase up to
50,000 shares of Common Stock which may be acquired upon the exercise of the
Options (the "Option Stock"), at an exercise price, subject to adjustment
hereunder (the "Exercise Price"), of $1.75 per share (the "Option").
(b) Upon receipt by Optionor of a notice of exercise of the Option by
Optionee, together with certified funds in the amount of the Exercise Price,
Optionor shall cause certificates representing the Shares of Option Stock to be
delivered to Optionee. The Option may be exercised in accordance with this
Section 1 as to all or any portion of the shares of Option Stock subject to the
Option from time to time during the term of the Option, subject, however, to the
provisions of Section 9 hereof.
(c) This Option shall terminate on the second anniversary date of
this Agreement.
2. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee hereby represents
and warrants to Optionor as follows, each of which representation and warranty
is material and is being relied upon by Optionor and each of which is true at
and as of the date hereof:
(a) Optionee understands that the Option and the shares of Option
Stock have not been registered under the Securities Act of 1933, as amended (the
"Act"), or under applicable state securities laws.
(b) Optionee is acquiring the Option solely for its own account, for
investment purposes only and not with the intention of, or a view toward, the
resale, transfer or further distribution thereof in whole or in part.
3. RIGHTS OF OPTION HOLDER. Optionee shall not, by virtue hereof, be
entitled to any of the rights of a stockholder in Optionor, either at law or in
equity; PROVIDED, HOWEVER, that in the event any certificate or certificates
representing shares of Option Stock are acquired by Optionee upon exercise of
the Option, then Optionee shall, for all purposes, be deemed to have become the
holder of record of such shares of Option Stock on the date on
1
<PAGE>
which this Option was exercised and payment of the Exercise Price was made,
irrespective of the date of delivery of such share certificate or certificates.
The rights of Optionee under this option are limited to those expressed herein,
and Optionee, by its acceptance hereof, consents to and agrees to be bound by
and comply with all of the provisions of this Option, including, without
limitation, all of the obligations imposed upon optionee by Section 6 hereof.
4. REPRESENTATIONS AND WARRANTIES OF OPTIONOR. Optionor hereby
represents and warrants to Optionee as follows, each of which representation
and warranty is material and is being relied upon by Optionee and each of which
is true at and as of the date hereof:
(a) All shares of Option Stock to be delivered to Optionee duly and
validly issued, fully paid and non-assessable and free from all stamp taxes,
liens and charges with respect to the purchase thereof.
(b) Optionee is the equitable and legal owner of, and has good title
to, the Options, free and clear of all claims, security interests, mortgages,
pledges, liens and other encumbrances of every nature whatsoever, except as to
Optionor, and Optionee has the right to transfer the Options as provided
herein.
5. TAXES, FEES AND EXPENSES. Optionee shall pay all transfer taxes (but
not income taxes, if any) with respect to the grant of the Option and/or the
issue and transfer of shares of Option Stock pursuant to the exercise of the
Option, and all other fees and expenses necessarily incurred by Optionors in
connection therewith, and will from time to time use its best efforts to comply
with all laws and regulations which, in the opinion of counsel for Optionors,
shall be applicable thereto.
6. TRANSFER OF OPTION OR OPTION STOCK. (a) Optionee and any transferee
of the Option Stock agree that if any distribution of the option or any of the
Option Stock is proposed to be made by them otherwise than by delivery of a
prospectus meeting the requirements of Section 10 of the Act, such action shall
be taken only after submission to Optionor of an opinion of counsel, reasonably
satisfactory in form and substance to the Optionor's counsel, to the effect that
the proposed distribution will not be in violation of the Act or applicable
state law.
(b) It shall be a condition to the transfer of the Option or any part
thereof or Option Stock that any transferee deliver to Optionors his or its
written agreement to accept and be bound by all of the terms and conditions of
this Agreement.
2
<PAGE>
7. ADJUSTMENTS. (a) If there is any change in the capitalization of
Optionor affecting in any manner the number of kind of outstanding shares of
Common Stock of Optionor, whether by stock dividend, stock split,
reclassification or recapitalization of such stock, or because Optionor has
merged or consolidated with one or more other corporations, then the number and
kind of shares then subject to the Option and the price to be paid therefor
shall be appropriately adjusted; PROVIDED, HOWEVER, that in no event shall any
such adjustment result in Optionor's being required to sell or issue any
fractional shares. Any such adjustment shall be made without change in the
aggregate purchase price applicable to the unexercised portion of the Option,
but with an appropriate adjustment to the price of each of share of Option Stock
or other unit of security covered by this Option.
(b) NOTICE OF ADJUSTMENT. Whenever the number of shares of Option
Stock purchasable upon the exercise of the Option or the Exercise Price of such
shares of Option Stock is adjusted, as herein provided, Optionor shall promptly
mail by first class mail, postage prepaid, to the Optionee notice of such
adjustment or adjustments setting forth: (i) the number of shares of Option
Stock purchasable upon the exercise of the option and the Exercise Price of such
shares of Option Stock after such adjustment, (ii) a brief statement of the
facts requiring such adjustment and (iii) the computation by which such
adjustment was made. Such notice shall be conclusive evidence of the
correctness of such adjustment.
(c) NO ADJUSTMENT FOR DIVIDENDS. Except as provided in Section 7(a)
hereof, no adjustment in respect of any dividends shall be made during the term
of an Option or upon the exercise of the Option.
8. LEGENDS ON STOCK CERTIFICATES. Until Optionor files an appropriate
registration statement pursuant to the Act with respect to the shares of Option
Stock, each certificate representing such shares of Option Stock shall be
endorsed on its face with the following legends or their equivalent:
Neither the option pursuant to which the shares represented by
this Certificate are issued nor said shares have been registered under
the Securities Act of 1933, as amended (the "Act"). The shares may not
be transferred or sold unless there is a current registration
statement in effect covering the shares or the Company is furnished
with an opinion of counsel to the holder of the shares that an
exemption from registration under said Act is available.
3
<PAGE>
A copy of this Agreement shall be delivered to the Secretary of Optionor,
to be kept at Optionor's principal office and shown by the Secretary to any
person inquiring about in connection with the proposed transfer of the shares
covered by the Option.
9. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other provision
of this Option, upon the dissolution or liquidation of Optionor, the
reorganization, merger or consolidation of Optionor with one or more
corporations as a result of which Optionor is not the surviving corporation, or
the sale of substantially all the assets of Optionor or of more than 50% of the
then outstanding stock of Optionor to another corporation or entity, the Option
granted hereunder shall become an option or options to purchase shares of the
surviving corporation, and such new option or options shall contain such terms
and provisions as shall be required substantially to preserve the rights and
benefits of this Option.
10. REGISTRATION RIGHTS. The Option Stock shall have the registration
rights set forth in Exhibit "A" hereto.
11. ATTORNEYS' FEES. In any action at law or in equity to enforce or
interpret any provision or right under this Agreement, the prevailing party or
parties to such litigation, as determined by the courts, whether as a result of
a final adjudication or not, shall be entitled to recover all costs, expenses
and attorneys' fees incurred in connection with such claim (including without
limitation, such costs, expenses and fees on any appeal), and if such successful
party shall receive a judgment in any such action or proceeding, such costs,
expenses and attorney's fees shall be included as part of such judgment.
12. NOTICES. All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing, and shall be addressed
to the Parties, their successors in interests or their assignees at the
following addresses and telecopier numbers or such other addresses and
telecopier numbers as the Parties may designate:
If to Optionor: Sargent, Inc.
Attn: Victor Gura, M.D., President
Suite 300
Los Angeles, California 90036
Telecopier No.: (213) 933-8836
If to Optionee: A. Vern Tharp
2854 Vrain Street
Denver, Colorado 80212
Telecopier No.: (303) 477-3217
4
<PAGE>
Any notice, demand or other communication which any party hereto may be
required or may elect to give anyone interested hereunder shall be sufficiently
given if: (a) by telecopier and deposited, postage prepaid, in a United States
or any other country of the sender's residence mail box, stamped registered or
certified mail, return receipt requested; (b) by overnight courier; or (c)
delivered personally, as set forth above.
13. INVALID PROVISIONS. In the event that any provisions of this
Agreement is found to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed as rendering any
other provisions contained herein invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though the
invalid or unenforceable provision were not contained herein.
14. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
supersedes all prior agreements and understandings, oral and written, between
the Parties with respect to the subject matter hereof.
16. HEADINGS. The section and other headings contained in this Agreement
are for reference purposes only and shall not be deemed to be part of this
Agreement or to affect the meaning or interpretation of this Agreement.
17. AMENDMENTS. This Agreement may not be modified or changed except by an
instrument or instruments in writing signed by the Party or Parties against whom
enforcement of any such modification or amendment is sought.
18. SUCCESSORS AND ASSIGNS. This Agreement and the rights, powers and
duties set forth herein shall, except as otherwise set forth herein, bind and
inure to the benefit of the heirs, executors, administrators, legal
representatives, successors and assigns of the Parties.
19. FURTHER ASSURANCES. Each party agrees to perform any further acts and
execute and deliver any documents which may be reasonably necessary to carry out
the provisions and effectuate the purpose of this Agreement.
5
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as
of the date first written above at Los Angeles, California.
"Optionor"
/s/ A. Vern Tharp
----------------------------------------
A. Vern Tharp
"Optionee"
SARGENT, INC.
By: /s/ Victor Gura, M.D.
-------------------------------------
Victor Gura, M.D., President
6
<PAGE>
EXHIBIT 5.1
<PAGE>
April 28, 1997
National Quality Care, Inc.
5901 West Olympic Boulevard
Suite 109
Los Angeles, California 90036
RE: REGISTRATION STATEMENT ON FORM S-8
NATIONAL QUALITY CARE, INC.
----------------------------------
Gentlemen:
We are acting as counsel for National Quality Care, Inc., a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), of the offering and sale of up
to 200,000 shares (the "Shares") of the Company's common stock, par value $0.01
per share (the "Common Stock) which may be issued by the Company upon the
exercise of certain stock options granted to a consultant of the Company as
compensation for consulting services previously rendered to the Company pursuant
to: (i) a Stock Option Agreement between the Company and Michael Markow, dated
December 10, 1996, (ii) a Stock Option Agreement between the Company and
Matthias & Berg LLP, dated April 3, 1997, and (iii) a Stock Option Agreement
between the Company and A. Vern Tharp, dated May 12, 1996 (collectively, the
"Contracts"). A Registration Statement on Form S-8 covering the Shares (the
"Registration Statement") is being filed under the Act with the Securities and
Exchange Commission.
In rendering the opinions expressed herein, we have reviewed such
matters of law as we have deemed necessary and have examined copies of such
agreements, instruments, documents and records as we have deemed relevant.
In rendering the opinions expressed herein, we have assumed the
genuineness and authenticity of all documents examined by us and of all
signatures thereon, the legal capacity of all natural persons executing such
documents, the conformity to original documents of all documents submitted to us
as certified or conformed copies or photocopies and the completeness and
accuracy of the certificates of public officials examined by us. We have made
no independent factual investigation with regard to any such matters.
<PAGE>
National Quality Care, Inc.
April 28, 1997
Page 2
Based upon the foregoing and subject to the qualifications stated
herein, it is our opinion that the Shares, issued or to be issued upon the
exercise of any stock options duly granted pursuant to the Contracts, when
issued, paid for and delivered upon the exercise of such stock options, in
accordance with the terms of the Contracts, will be validly issued, fully paid
and non-assessable.
The opinions expressed herein are limited to matters involving the
federal laws of the United States and to the corporate laws of the State of
Delaware, and we express no opinion as to the effect on the matters covered by
this opinion of the laws of any other jurisdiction.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement and the reference to our firm therein under the caption
"Interests of Named Experts and Counsel."
The opinions expressed herein are rendered solely for your benefit in
connection with the transaction described herein. Except as otherwise provided
herein, this opinion may not be used or relied upon by any person, nor may this
letter or any copies thereof be furnished to a third party, filed with a
governmental agency, quoted, cited or otherwise referred to without our prior
written consent.
Respectfully submitted,
MATTHIAS & BERG LLP
<PAGE>
EXHIBIT 24.2
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 8, 1997, accompanying the financial
statements included in the Annual Report of National Quality Care, Inc. on Form
10-KSB for the year ended December 31, 1996. We hereby consent to the
incorporation by reference of said report in the Registration Statement of
National Quality Care, Inc. on Form S-8.
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
April 28, 1997
