<PAGE>
Registration No. 333-______
As filed with the Securities and Exchange Commission on April 1, 1998
_______________________________________________________________________________
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)
1835 South La Cienega Boulevard
Suite 235
Los Angeles, California 90035
(310) 280-2750
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
STOCK OPTIONS AND WARRANTS ISSUED TO CONSULTANTS
(Full title of plan)
Victor Gura, M.D.
President
National Quality Care, Inc.
1835 South La Cienega Boulevard
Suite 235
Los Angeles, California 90035
(310) 280-2750
(Name and address, including zip code, and telephone
number, including area code, of agent for service)
Copies to:
Matthias & Berg LLP
1990 South Bundy Drive
Suite 790
Los Angeles, California 90025
Attn: Jeffrey P. Berg, Esq.
Phone (310) 820-0083
Fax (310) 820-8313
<PAGE>
(REGISTRATION STATEMENT COVER PAGE CONTINUED)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Title of Each Class of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered(1) Offering Price per Share(1) Aggregate Registration
Offering Price(1) Fee(2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per 13,855 $1.045 $ 14,478.50
share(3)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per 144,692 $0.93 $134,563.56
share(3)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per 144,691 $1.31 $189,545.21
share(3)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per 144,690 $1.53 $221,375.70
share(3)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value 25,000 $0.81 $ 20,250.00
$0.01 per share(3)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value 7,813 $1.28 $ 10,000.00
$0.01 per share(3)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL 480,741 $590,212.97 $174.12
- ------------------------------------------------------------------------------------------------------------------------------
</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 and warrant
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 (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, 1835 South La Cienega Boulevard, Suite 235,
Los Angeles, California 90035, tel no. (310) 280-2750.
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) Quarterly Reports on Form 10-QSB for the quarterly periods ended March
31, 1997, June 30, 1997 and September 30, 1997.
(c) Report on Form 8-K, dated December 15, 1997.
(d) 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.
The 13,855 shares of Common Stock being registered in connection with the
Registration Statement are being registered on behalf of Singer Lewak Greenbaum
& Goldstein LLP, former independent certified accountants to the Registrant,
which has issued the consent filed herewith as Exhibit 24.2 to 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 Warrant Agreement between the Registrant and Michael Markow dated
December 18, 1997
4.2 Stock Option Agreement between the Registrant and Singer Lewak
Greenbaum & Goldstein LLP, dated March 12, 1998
4.3 Stock Option Agreement between the Registrant and Parks Palmer Turner
& Yemedjian, LLP dated March 27, 1998
4.4 Stock Option Agreement between the Registrant and Marianne Arieli
dated March 16, 1998
4.5 Stock Option Agreement between the Registrant and Judith Gordon dated
March 16, 1998
4.6 Stock Option Agreement between the Registrant and Igal Koiman dated
March 16, 1998
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 Form 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 30th day of March,
1998.
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 March 30, 1998
- ------------------------ (Principal Executive Officer)
Victor Gura, M.D.
/s/ Ron Berkowitz Chief Financial Officer March 30, 1998
- ------------------------ (Principal Financial Officer
Ron Berkowitz and Principal Accounting
Officer)
/s/ Ronald Lang, M.D. Director March 30, 1998
- ------------------------
Ronald Lang, M.D.
/s/ Jose Spiwak, M.D. Director March 30, 1998
- ------------------------
Jose Spiwak, M.D.
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 March 30, 1998
- ------------------------ (Principal Executive Officer)
Victor Gura, M.D.
/s/ Ron Berkowitz Chief Financial Officer March 30, 1998
- ------------------------ (Principal Financial Officer
Ron Berkowitz and Principal Accounting
Officer)
/s/ Ronald Lang, M.D. Director March 30, 1998
- ------------------------
Ronald Lang, M.D.
/s/ Jose Spiwak, M.D. Director March 30, 1998
- ------------------------
Jose Spiwak, M.D.
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Document Description of Document
- -------- -----------------------
<S> <C>
4.1 Warrant Agreement between the Registrant
and Michael Markow dated December 18, 1997
4.2 Stock Option Agreement between the Registrant and Singer
Lewak Greenbaum & Goldstein LLP, dated March 12, 1998
4.3 Stock Option Agreement between the Registrant and Parks
Palmer Turner & Yemedjian, LLP dated March 27, 1998
4.4 Stock Option Agreement between the Registrant and Marianne
Arieli dated March 16, 1998
4.5 Stock Option Agreement between the Registrant and Judith
Gordon dated March 16, 1998
4.6 Stock Option Agreement between the Registrant and Igal
Koiman dated March 16, 1998
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
</TABLE>
<PAGE>
NATIONAL QUALITY CARE, INC.
WARRANT AGREEMENT
THIS AGREEMENT is made as of December 18, 1997 by and between National
Quality Care, Inc., a Delaware corporation (the "Company"), and Michael Markow
("Warrantholder").
R E C I T A L
The Board of Directors of the Company (the "Board of Directors") has
authorized the granting to Warrantholder, for services rendered by Warrantholder
as a consultant to the Company, services, of a warrant to purchase the number of
shares of Common Stock of the Company specified in Paragraph 1 hereof, at the
price specified therein, such warrant 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. Pursuant to said action of the Board of Directors,
the Company hereby grants to Warrantholder, in consideration of consulting
services to be performed for the benefit of the Company, during the period from
January 1, 1998 to December 31, 1998, related to the location of strategic
business partners for the Company and the expansion of the dialysis facilities
for the Company's business operations, a warrant ("Warrant") to purchase up to
434,073 shares ("Warrant Shares") of Common Stock of the Company.
2. TERM. This Warrant shall expire five (5) years from the date first
written above.
3. SHARES SUBJECT TO EXERCISE; EXERCISE PRICE.
a) 97,585 Warrants shall be immediately exercisable at an
exercise price of $0.93 per share, an additional 97,585 Warrants shall be
exercisable on April 18, 1998 at an exercise price of $1.31 per share, and an
additional 97,584 Warrants shall be exercisable on August 18, 1998 at an
exercise price of $1.53 per share, and shall thereafter remain subject to
exercise for the term specified in Paragraph 2 hereof.
<PAGE>
b) Further, an additional 141,319 Warrants shall be immediately
exercisable in the event that the Company shall issue an additional 4,210,644
shares of Common Stock and warrants to purchase up to 500,000 shares of
Common Stock shall vest (collectively, the "Unvested Securities"), or any
portion thereof, in connection with Section 3.7 of that certain Agreement for
Exchange of Stock, dated May 11, 1996, by and among the Company, Victor Gura,
M.D., Avraham H. Uncyk, M.D. and Ronald P. Lang, M.D. (the "Exchange
Agreement"), at the following exercise prices: (i) 47,107 Warrants at an
exercise price of $0.93 per share,(ii) 47,106 Warrants at an exercise price
of $1.31 per share, and (iii) 47,106 Warrants at an exercise price of $1.53
per share; PROVIDED, HOWEVER, in the event that a greater or lesser number of
Unvested Securities shall be issued or vest, as the case may be, in
connection with the Exchange Agreement, other than pursuant to Section 13 or
14 of this Agreement, the number of Warrants which may vest in accordance
with this Section 3(b) shall increase or decrease proportionately, as the
case may be, and shall thereafter remain subject to exercise for the term
specified in Paragraph 2 hereof.
4. METHOD AND TIME OF EXERCISE. The Warrants may be exercised by
written notice delivered to the Company stating the number of shares with
respect to which the Warrant 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. Not less than 100 shares may be purchased at any one
time unless the number purchased is the total number purchasable under such
Warrant at the time. Only whole shares may be purchased.
5. TAX WITHHOLDING. As a condition to exercise of this Warrant, the
Company may require the Warrantholder 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 Warrant. At the discretion of
the Company and upon the request of the Warrantholder, the minimum statutory
withholding tax requirements may be satisfied by the withholding of shares of
Common Stock otherwise issuable to the Warrantholder upon the exercise of
this Warrant.
6. EXERCISE ON TERMINATION OF EMPLOYMENT. This Warrant shall not
terminate as a result of the termination of Warrantholder's services as a
consultant to the Company.
7. NONTRANSFERABILITY. This Warrant 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 Warrantholder during Warrantholder's lifetime and after
Warrantholder's death, by Warrantholder's representative or by the
2
<PAGE>
person entitled thereto under Warrantholder's will or the laws of intestate
succession.
8. WARRANTHOLDER NOT A SHAREHOLDER. Warrantholder shall have no
rights as a shareholder with respect to the Common Stock of the Company
covered by the Warrant until the date of issuance of a stock certificate or
stock certificates to him upon exercise of the Warrant. 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 Warrant shall confer
upon the Warrantholder 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 Warrantholder as an independent contractor or
consultant at any time for any reason whatsoever, with or without good cause.
10. RESTRICTIONS ON SALE OF SHARES. Warrantholder represents and
agrees that, upon Warrantholder's exercise of the Warrant 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 Warrant for the purpose of
investment and not with a view to their resale or further distribution, and
that upon each exercise thereof Warrantholder will furnish to the Company a
written statement to such effect, satisfactory to the Company in form and
substance. Warrantholder agrees that any certificates issued upon exercise
of this Warrant 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 Warrant under the provisions
of Paragraphs 5 and 6 hereof shall, upon each exercise of the Warrant under
circumstances in which Warrantholder 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 Warrant Shares for resale by
Warrantholder, 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.
3
<PAGE>
12. NOTICES. All notices to the Company shall be addressed to the Company
at the principal office of the Company at 1835 South La Cienega Boulevard, Suite
235, Los Angeles, California 90034, Telecopier No. (310) 840-5681, and all
notices to Warrantholder shall be addressed to Warrantholder at the address and
telecopier number of Warrantholder 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 Warrantholder or to the Company (as the case may be).
13. 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
Warrant does not thereby terminate pursuant to Section 2 hereof), then the
number and kind of shares then subject to the Warrant 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 Warrant, but with an appropriate adjustment to the
price of each Share or other unit of security covered by this Warrant.
14. CESSATION OF CORPORATE EXISTENCE. Notwithstanding any other
provision of this Warrant, 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 Warrant granted hereunder shall terminate;
provided, however, that: (i) each Warrant for which no Warrant 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 Warrantholder, a warrant to purchase shares of the surviving corporation,
and such new warrant or warrants shall contain such terms and provisions as
shall be
4
<PAGE>
required substantially to preserve the rights and benefits of this
Warrant.
15. 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.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
17. 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.
5
<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: ("Warrantholder")
###-##-#### 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
6
<PAGE>
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of March 12, 1998 by and between National Quality
Care, Inc., a Delaware corporation (the "Company"), and Singer Lewak Greenbaum &
Goldstein 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
accountants consulting services performed for the benefit of the Company, the
option ("Option") to purchase up to 13,855 shares ("Option Shares") of Common
Stock of the Company, at the exercise price of $1.045 per share.
2. TERM. This Option shall expire one (1) year from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The 13,855 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 13,855 Options set forth in paragraph 1 hereof,
Optionee shall be entitled to pay the exercise price against cancellation in
full of certain
<PAGE>
indebtedness in the amount of $14,478.50 owing by the Company to
Optionee for services previously rendered by Optionee as a consultant to the
Company. Not less than 100 shares may be purchased upon the exercise of the
Options 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 SERVICES. 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.
2
<PAGE>
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 (30) 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") and maintain
effective during the term of this Option, 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 1835 South La Cienega Boulevard,
Suite 235, Los Angeles, California 90034, Telecopier No. (310) 840-5681, 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. 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.
14. 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.
15. 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.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
17. 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/ Ron Berkowitz
--------------------------
Ron Berkowitz
Chief Financial Officer
Social Security Number
or Employer Identification
Number: ("Optionee")
By: /s/ Marc Abrams
- --------------------------- --------------------------
Marc Abrams
Partner
Address:
Marc Abrams
c/o Singer Lewak Greenbaum &
Goldstein LLP
10960 Wilshire Boulevard
Suite 1100
Los Angeles, California 90024
Telecopier No. (310) 477-9684
5
<PAGE>
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of March 27, 1998 by and between National Quality
Care, Inc., a Delaware corporation (the "Company"), and Parks Palmer Turner &
Yemedjian, 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
accountants consulting services performed for the benefit of the Company, the
option ("Option") to purchase up to ______ shares ("Option Shares") of Common
Stock of the Company, at the exercise price of $_______ per share.
2. TERM. This Option shall expire one (1) year from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The ______ 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 ______ 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
$10,000 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 upon the exercise of the
Options 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 SERVICES. 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 (30) 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") and maintain
effective during the term of this Option, 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 1835 South La Cienega
Boulevard, Suite 235, Los Angeles, California 90034, Telecopier No. (310)
840-5681, 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. 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.
14. 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.
15. 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.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
17. 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/ Ron Berkowitz
--------------------------
Ron Berkowitz
Chief Financial Officer
Social Security Number PARKS PALMER TURNER & YEMEDJIAN, LLP
or Employer Identification
Number: ("Optionee")
By: /s/ Michael Palmer
- -------------------------- -----------------------------------
Michael Palmer
Partner
Address:
Michael Palmer
c/o Parks Palmer Turner &
Yemedjian, LLP
1990 South Bundy Drive
Suite 600
Los Angeles, California 90025
Telecopier No. (310) 207-1731
5
<PAGE>
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of March 16, 1998 by and between National
Quality Care, Inc., a Delaware corporation (the "Company"), and Marianne
Arieli ("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 an employee of 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
employment services performed for the benefit of the Company, the option
("Option") to purchase up to 5,000 shares ("Option Shares") of Common Stock
of the Company, at the exercise price of $0.81 per share. This Option shall
constitute all securities to which Optionee shall be entitled to be issued by
the Company as of the date hereof.
2. TERM. This Option shall expire one (1) year from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The 5,000 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. Not less than 100 shares may be purchased at any one
<PAGE>
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 an employee of 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 employee, 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
2
<PAGE>
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 state
11. REGISTRATION. On or before thirty (30) 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") and maintain
effective during the term of this Option, 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 1835 South La Cienega
Boulevard, Suite 235, Los Angeles, California 90034, Telecopier No. (310)
840-5681, 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. 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.
3
<PAGE>
14. 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.
15. 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.
16. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
17. 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")
###-##-#### By: /s/ Marianne Arieli
- --------------------------- ---------------------------
Marianne Arieli
Address:
Marianne Arieli
10770 Lindbrook Drive
Los Angeles, California 90024
Telecopier No. ( ) -
5
<PAGE>
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of March 16, 1998 by and between National Quality
Care, Inc., a Delaware corporation (the "Company"), and Judith Gordon
("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 member of the Board of Directors of 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
services as a member of the Board of Directors performed for the benefit of the
Company, the option ("Option") to purchase up to 5,000 shares ("Option Shares")
of Common Stock of the Company, at the exercise price of $0.81 per share. This
Option shall constitute all securities to which Optionee shall be entitled to be
issued by the Company as of the date hereof.
2. TERM. This Option shall expire one (1) year from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The 5,000 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. Not less
than 100 shares may be purchased at any one
<PAGE>
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 an employee
of 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 employee, 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
<PAGE>
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 (30) 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") and maintain
effective during the term of this Option, 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 1835 South La Cienega Boulevard,
Suite 235, Los Angeles, California 90034, Telecopier No. (310) 840-5681, 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. 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.
<PAGE>
14. 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.
15. 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.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
17. 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.
<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")
###-##-#### By: /s/ Judith Gordon
- --------------------------- -----------------------
Address:
Judith Gordon
6647 Maryland Drive
Los Angeles, California 90048
Telecopier No. (213) 658-7317
<PAGE>
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of March 16, 1998 by and between National
Quality Care, Inc., a Delaware corporation (the "Company"), and Igal Koiman
("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 an employee of 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
employment services performed for the benefit of the Company, the option
("Option") to purchase up to 15,000 shares ("Option Shares") of Common Stock of
the Company, at the exercise price of $0.81 per share. This Option shall
constitute all securities to which Optionee shall be entitled to be issued by
the Company as of the date hereof.
2. TERM. This Option shall expire one (1) year from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. The 15,000 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. Not less
than 100 shares may be purchased at any one
<PAGE>
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 an employee
of 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 employee, 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
2
<PAGE>
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 (30) 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") and maintain
effective during the term of this Option, 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 1835 South La Cienega Boulevard,
Suite 235, Los Angeles, California 90034, Telecopier No. (310) 840-5681, 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. 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.
3
<PAGE>
14. 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.
15. 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.
16. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
17. 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")
By: /s/ Igal Koiman
- --------------------------- ---------------------------
Igal Koiman
Address:
Igal Koiman
_______________________________
_______________________________
_______________________________
_______________________________
Telecopier No. ( ) -
5
<PAGE>
March 30, 1998
National Quality Care, Inc.
1835 South La Cienega Boulevard
Suite 235
Los Angeles, California 90034
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 480,741 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 and warrants granted to certain
consultants of the Company as compensation for consulting services previously
rendered to the Company pursuant to the following agreements: (i) Warrant
Agreement between the Registrant and Michael Markow dated December 18, 1997,
(ii) Stock Option Agreement between the Company and Singer Lewak Greenbaum &
Goldstein LLP, dated March 12, 1998, (iii) Stock Option Agreement between the
Registrant and Parks Palmer Turner & Yemedjian, LLP dated March 27, 1998,
(iv) Stock Option Agreement between the Registrant and Marianne Arieli dated
March 16, 1998, (v) Stock Option Agreement between the Registrant and Judith
Gordon dated March 16, 1998, and (vi) Stock Option Agreement between the
Registrant and Igal Koiman dated March 16, 1998 (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
<PAGE>
National Quality Care, Inc.
March 30, 1998
Page 2
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.
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 or warrants duly granted pursuant to the
Contracts, when issued, paid for and delivered upon the exercise of such
stock options and warrants, 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.
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>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 8, 1997 accompanying the consolidated
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 and the reference to our
firm therein under the caption entitled "Interests of Named Experts and
Counsel."
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
March 30, 1998
