<PAGE>
Registration No. 333-_________
As filed with the Securities and Exchange Commission on March 5, 1999
- --------------------------------------------------------------------------------
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) 280-2758
(Address, including zip code, and telephone number,
including area code, or registrant's principal executive offices)
-----------------------------------------------------------------
1998 STOCK OPTION PLAN
AND STOCK OPTION AGREEMENTS
(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) 280-2758
(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)
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
================================== =================== ============================ =============== ================
Title of Each Class of Amount to be Proposed Maximum Proposed Amount of
Securities to be Registered Registered(1) Offering Price per Share(1) Maximum Registration
Aggregate Fee(2)
Offering
Price(1)
- ---------------------------------- ------------------- ---------------------------- --------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share(3) 1,000,000 $0.18 $180,000 $50.04
- ---------------------------------- ------------------- ---------------------------- --------------- ----------------
Common Stock, par value
$0.01 per share(3) 42,000 $0.28 $ 11,760 $ 3.27
- ---------------------------------- ------------------- ---------------------------- --------------- ----------------
TOTAL 1,042,000 $191,760 $53.31
================================== =================== ============================ =============== ================
</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: (a) the market price of the Company's
Common Stock, on March 2, 1999, with respect to the 1,000,000 shares to
be registered in connection with the Company's 1998 Stock Option Plan
(the "1998 Plan"), and (b) the maximum aggregate price at which shares
of Common Stock underlying certain stock options unrelated to the 1998
Plan and covered by this Registration Statement are proposed to be
offered.
(3) The shares registered pursuant to this Registration Statement are
available for grant as of the date of this Registration Statement and
available for issuance pursuant to the 1998 Plan and certain stock
option agreements which are attached as exhibits to this Registration
Statement.
<PAGE>
REOFFER PROSPECTUS
------------------
NATIONAL QUALITY CARE, INC.
1,042,000 SHARES
COMMON STOCK
OFFERED BY SELLING STOCKHOLDERS
This Reoffer Prospectus (the "Prospectus") relates to the reoffer and
resale of up to 1,042,000 shares (the "Shares") of common stock, par value $0.01
(the "Common Stock") of National Quality Care, Inc., a Delaware corporation (the
"Company"), to be offered from time to time for the account of certain
directors, officers, employees and consultants of the Company (the "Selling
Stockholders") pursuant to the Company's 1998 Stock Option Plan (the "1998
Plan"), and certain stock option agreements unrelated to the 1998 Plan, some of
whom may be deemed to be "affiliates" of the Company, as such term is defined in
Rule 405 of the Securities Act of 1933, as amended (the "Securities Act"). See
"Selling Stockholders" and "Plan of Distribution."
The Selling Stockholders directly, through agents designated from time
to time, or through brokers, dealers, or through underwriters to be designated,
may sell the shares of Common Stock offered hereby from time to time on terms to
be determined at the time of sale. To the extent required by applicable law, the
specific shares to be sold, the terms of the offering, including price, the
names of any agent, dealer or underwriter, and any applicable commission,
discount or other compensation with respect to a particular sale will be set
forth in an accompanying Prospectus Supplement. See "Selling Stockholders" and
"Plan of Distribution."
The Company will receive none of the proceeds from the sale of these
Shares. The Selling Stockholders and any broker-dealer, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Common
Stock may be deemed to be underwriters within the meaning of the Securities Act
and any commission received by them and any profit on the resale of the Common
Stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. The Company has paid all of the costs of the
Offering with respect to the Shares to be offered by the Selling Stockholders.
See "Selling Stockholders" and "Plan of Distribution."
The Company's Common Stock is currently listed for trading in the
over-the-counter market and is quoted on the National Association of Securities
Dealers, Inc. Bulletin Board or in the "pink sheets" maintained by the National
Quotation Bureau, Inc. under the symbol "NQCI." On March 2, 1999, the closing
market price for the Common Stock as traded in the over-counter-market was
approximately $0.18 per share.
THESE SECURITIES ARE SPECULATIVE
AND INVOLVE A HIGH DEGREE OF RISK.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is March 5, 1999
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission, a Registration Statement on
Form S-8 under the Securities Act of 1933, as amended (the "Securities Act")
with respect to the securities offered hereby. This Prospectus does not contain
all the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Shares, reference is made to the Registration Statement and the exhibits and
schedules filed as a part thereof. Statements made in this Prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference to such exhibits.
The Registration Statement, including exhibits and schedules thereto, may be
inspected without charge at the public reference facilities maintained by the
Securities and Exchange Commission (the "Commission") at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the regional
offices of the Commission at 7 World Trade Center, 13th Floor, New York, New
York 10048 and at 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2411. Copies of the Registration Statement and the exhibits and schedules
thereto may be obtained from the Commission at such offices upon payment of
prescribed rates. In addition, such materials may be accessed electronically at
the Commission's site on the World Wide Web, located at http://www.sec.gov.
The Company is currently subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549; at its New York Regional Office, Room
1400, 7 World Trade Center, New York, New York 10048; and at its Chicago
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2411, and copies of such materials can be obtained from the Public
Reference Section at prescribed rates. In addition, such materials may be
accessed electronically at the Commission's site on the World Wide Web, located
at http://www.sec.gov. The Company intends to furnish its stockholders with
annual reports containing audited financial statements and such other periodic
reports as the Company may determine to be appropriate or as may be required by
law.
The following documents, including the exhibits thereto, 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, 1997.
(b) Quarterly Reports on Form 10-QSB for the quarterly periods ended March
31, 1998, June 30, 1998 and September 30, 1998.
(c) The description of the Common Stock which is contained in the
registration statements filed under the Exchange, 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.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon the written or oral request of such
person, a copy of any or all of the documents which have been or may be
incorporated by reference in this Prospectus (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
such documents). Requests should be directed to: National Quality Care, Inc.,
1835 South La Cienega Boulevard, Suite 235, Los Angeles, California 90035,
Attention: Ron Berkowitz, Chief Operator Officer. Telephone requests may be
directed to the Company at (310) 280-2758.
2
<PAGE>
Any statements contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated herein by reference modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. All information
appearing in this Prospectus is qualified in its entirety by the information and
financial statements (including notes thereto) appearing in the documents
incorporated herein by reference, except to the extent set forth in the
immediately preceding statement.
THE COMPANY
The Company is a provider of integrated dialysis services for patients
suffering from chronic kidney failure, also known as end stage renal disease.
The Company has been in business since 1985 and currently offers dialysis
services through two (2) dialysis centers in Los Angeles, California and
provides home dialysis services.
Further, the Company provides in-patient dialysis services by contract to
five (5) Los Angeles County hospitals. Payment for services is primarily
provided by third party payors, including Medicare, Medi-Cal (a California state
health agency) and commercial insurance companies.
The Company's current business plan includes a strategy to expand as a
provider of dialysis services through the development of new dialysis facilities
and the acquisition of additional dialysis facilities and other strategically
related health care services in selected markets. The Company's acquisition
strategy relates to the Company's intention to purchase existing dialysis
facilities and other related health care services which will create synergies
with the Company's dialysis services business. The Company also intends to
develop and construct additional dialysis facilities.
The market for such acquisition prospects is highly competitive and
management expects that certain potential acquirors will have significantly
greater capital than the Company. In addition, financing for such acquisitions
or development may not be available to the Company on commercially reasonable
terms. In the event the Company cannot obtain the additional financing needed to
fulfill its acquisition and development strategy, the Company may be unable to
achieve its proposed expansion strategy.
The Company's principal executive offices are located at 1835 South La
Cienega Boulevard, Suite 235, Los Angeles, California 90035, tel. no. (310)
280-2758.
3
<PAGE>
USE OF PROCEEDS
The Company will not receive any of the net proceeds from the shares of
Common Stock to be offered by the Selling Stockholders, all of which net
proceeds will be received by the Selling Stockholders. See "Selling
Stockholders" and "Plan of Distribution."
PLAN OF DISTRIBUTION
The shares of the Company's Common Stock offered hereby by the Selling
Stockholders may be sold from time to time to purchasers directly by the Selling
Stockholders. Alternatively, the Selling Stockholders may from time to time
offer the shares of Common Stock through underwriters, dealers or agents, who
may receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the shares
for whom they may act as agent. The Selling Stockholders and any underwriters,
dealers or agents that participate in the distribution of the shares of Common
Stock may be deemed to be underwriters and any profit on the sale of shares by
them and any discounts, commissions or concessions received by any such
underwriters, dealers or agents may be deemed to be underwriting discounts and
commissions under the Securities Act. At the time a particular offer of shares
is made, to the extent required by applicable law, a Prospectus Supplement will
be distributed which will set forth the specific shares to be sold and the terms
of the offering, including the name or names of any underwriters, dealer-agents,
any discounts, commissions or concessions allowed or reallowed or paid to
dealers.
The shares of Common Stock may be sold from time to time in one or more
transactions at a fixed offering price which may be changed or at varying prices
determined at the time of sale or negotiated prices.
The Company has paid all of the expenses incident to the offering of the
shares of the Common Stock offered by the Selling Stockholders, other than
commissions and discounts of underwriters, dealers or agents.
4
<PAGE>
SELLING STOCKHOLDERS
This Prospectus relates to up to 1,042,000 shares of Common Stock which
have been or may be acquired by the Selling Stockholders from time to time
through the issuance of shares of Common Stock to certain officers, directors,
employees and consultants of the Company as compensation for employment or
consulting services pursuant to the 1998 Plan and certain stock option
agreements unrelated to the 1998 Plan. The following table sets forth certain
information with respect to Selling Stockholders, some of whom may be deemed to
be "affiliates" of the Company, as such term is defined in Rule 405 of the
Securities Act, as of the date of this Prospectus, as follows: (i) the name and
position with the Company within the past three (3) years of each Selling
Stockholder; (ii) the number of shares of Common Stock beneficially owned by
each Selling Stockholder (including shares obtainable under options exercisable
within sixty (60) days of such date); (iii) the number of shares of Common Stock
being offered hereby, and (iv) the number and percentage of the Company's
outstanding shares of Common Stock to be beneficially owned by each Selling
Stockholder before and after completion of the sale of Common Stock being
offered hereby. There can be no assurance that any of the Selling Stockholders
will sell any or all of the shares of Common Stock offered hereby.
<TABLE>
<CAPTION>
NO. OF SHARES NO. OF SHARES
BENEFICIALLY NO. OF SHARES BENEFICIALLY
NAME AND ADDRESS OWNED BEFORE TO BE OFFERED OWNED AFTER PERCENT #
OF BENEFICIAL OWNER OFFERING# FOR RESALE OFFERING* BEFORE OFFERING AFTER OFFERING*
- ------------------- -------------- ------------- -------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Victor Gura, M.D.(1) 2,198,611 192,000 2,006,611 21.97% 20.44%
Ron Berkowitz (2) 172,000 120,000 52,000 1.75% **
Ronald Lang, M.D. (3) 1,437,154 52,500 1,317,154 14.56% 13.42%
</TABLE>
Information with respect to Selling Stockholders from time to time will be
updated in supplements to this Prospectus, which will be filed with the
Commission in accordance with Rule 424(b) under the Securities Act.
As of March 5, 1999, there were issued and outstanding 9,814,878 shares of
Common Stock.
(FOOTNOTES ON FOLLOWING PAGE)
- -----------------------------
5
<PAGE>
(FOOTNOTES FROM PRIOR PAGE)
- ---------------------------
# Pursuant to the rules of the Commission, shares of Common Stock which an
individual or group has a right to acquire within 60 days pursuant to the
exercise of options or warrants are deemed to be outstanding for the
purpose of computing the percentage ownership of such individual or group,
but are not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person shown in the table. Certain of
the Selling Stockholders, as indicated below, are currently not deemed to
be the beneficial owners of a certain number of shares of Common Stock
which are being registered for their benefit in connection with the
Registration Statement. Therefore, the number of shares of Common Stock
indicated in the chart as beneficially owned by such Selling Stockholders
may exceed the number of shares which are currently deemed to be
beneficially owned by certain Selling Stockholders pursuant to the rules
of the Commission.
* Assumes the exercise in full and sale of all the Shares registered for
reoffer and resale pursuant to this Registration Statement.
** Less than 1%
1. The address for Dr. Gura is 5901 West Olympic Boulevard, Suite 300, Los
Angeles, California 90036. Dr. Gura has been granted options under the
1998 Plan to purchase up to 150,000 shares of Common Stock and options
unrelated to the 1998 Plan to purchase up 42,000 shares of Common Stock,
which are the subject of this Registration Statement. The exercise price
for each of the 192,000 options is $0.28 per share. The options have
vested with respect to the 192,000 shares, which expire on September 8,
2003. Dr. Gura is the beneficial owner of shares of an additional
2,006,611 shares of Common Stock (which includes 800,000 shares of Common
Stock owned by an affiliate of Dr. Gura). Further, the Company may issue
an additional 2,842,185 shares of Common Stock and warrants to purchase up
to an additional 337,500 shares of Common Stock, subject to certain future
events.
2. The address for Mr. Berkowitz is 1835 South La Cienega Boulevard, Suite
235, Los Angeles, California 90035. Mr. Berkowitz has been granted options
under the 1998 Plan to purchase up to 120,000 shares of Common Stock, at
an exercise price of $0.28 per share, which are the subject of this
Registration Statement. The options have vested with respect to the
120,000 shares, which expire on September 8, 2003. Mr. Berkowitz is the
registered owner of an additional 52,000 shares of Common Stock.
3. The address for Dr. Lang is 5901 West Olympic Boulevard, Suite 300, Los
Angeles, California 90036. Dr. Gura has been granted options under the
1998 Plan to purchase up to 52,500 shares of Common Stock, which are the
subject of this Registration Statement. The exercise price for each of the
52,500 options is $0.28 per share. The options have vested with respect to
the 52,500 shares, which expire on September 8, 2003. Dr. Lang is the
beneficial owner of an additional 1,317,154 shares of Common Stock (which
include 800,000 shares of Common Stock owned by an affiliate of Dr. Lang).
Further, the Company may issue an additional 947,395 shares of Common
Stock and warrants to purchase up to an additional 112,500 shares of
Common Stock, subject to certain future events.
6
<PAGE>
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The Commission has expressed its opinion that indemnification of
directors, officers and controlling persons of the Company against liabilities
arising under the Securities Act, 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 Company
of expenses incurred or paid by an Indemnitee of the Company in the successful
defense of any such act or proceeding) is asserted by such Indemnitee in
connection with securities which have been registered by the Company, the
Company 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.
LEGAL MATTERS
Certain matters with respect to the validity of the Shares offered hereby will
be passed upon for the Company by Matthias & Berg LLP, 1990 South Bundy Drive,
Suite 790, Los Angeles, California 90035. Matthias & Berg LLP currently owns
options to purchase up to 128,422 shares of Common Stock, exercisable at $1.00
per share, which are not the subject of this Registration Statement.
7
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE
ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN OFFER TO, OR
A SOLICITATION OF ANY PERSON IN ANY JURISDICTION WHERE SUCH AN OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY
SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE HEREOF.
NATIONAL QUALITY CARE, INC.
1,042,000 SHARES
OF COMMON STOCK
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION.......................... 2
THE COMPANY.................................... 3
USE OF PROCEEDS................................ 4
PLAN OF DISTRIBUTION........................... 4
SELLING STOCKHOLDERS........................... 5
DISCLOSURE OF COMMISSION POSITION
OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES............................... 7
LEGAL MATTERS.................................. 7
____________
PROSPECTUS
____________
MARCH 5, 1999
<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 Operating Officer, 1835 South La Cienega Boulevard, Suite 235,
Los Angeles, California 90035, tel no. (310) 280-2758.
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, 1997.
(b) Quarterly Reports on Form 10-QSB for the quarterly periods ended March
31, 1998, June 30, 1998 and September 30, 1998.
(c) 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.
---------------------------------------
Matthias & Berg LLP, counsel to the Registrant, has issued the opinion
filed herewith as Exhibit 5.1 to this Registration Statement. Matthias & Berg
LLP currently owns options to purchase up to 128,422 shares of Common Stock,
exercisable at $1.00 per share, 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.
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.
II-2
<PAGE>
ITEM 8: Exhibits
--------
4.1 1998 Stock Option Plan
4.2 Form of Non-Qualified Stock Option Agreement for 1998 Stock Option
Plan.
4.3 Stock Option Agreement between the Registrant and Victor Gura, M.D.,
dated September 9, 1998
5.1 Opinion of Matthias & Berg LLP
23.1 Consent of Matthias & Berg LLP (included in Exhibit 5.1)
23.2 Consent of KPMG LLP
23.3 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 5th day of March,
1999.
NATIONAL QUALITY CARE, INC.
By: /s/Victor Gura, M.D.
------------------------------------
Victor Gura, M.D.
Chief Executive Officer
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.
<TABLE>
<CAPTION>
Signature Capacity in Which Signed Date
--------- ------------------------ ----
<S> <C> <C>
/s/ Victor Gura, M.D. Chief Executive Officer and Director
- ---------------------------- (Principal Executive Officer) March 5, 1999
Victor Gura, M.D.
/s/ Ron Berkowitz Chief Operating Officer and Chief Financial
- ---------------------------- Officer (Principal Financial
Ron Berkowitz Officer and Principal Accounting Officer) March 5, 1999
/s/ Ronald Lang, M.D. Director March 5, 1999
- ----------------------------
Ronald Lang, M.D.
/s/ Melinda McIntyre-Kolpin Director March 5, 1999
- ----------------------------
Melinda McIntyre-Kolpin
/s/ Jose Spiwak, M.D. Director March 5, 1999
- ----------------------------
Jose Spiwak, M.D.
</TABLE>
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.
<TABLE>
<CAPTION>
Signature Capacity in Which Signed Date
--------- ------------------------ ----
<S> <C> <C>
/s/ Victor Gura, M.D. Chief Executive Officer and Director
- ---------------------------- (Principal Executive Officer) March 5, 1999
Victor Gura, M.D.
/s/ Ron Berkowitz Chief Operating Officer and Chief Financial
- ---------------------------- Officer (Principal Financial Officer
Ron Berkowitz and Principal Accounting Officer) March 5, 1999
/s/ Ronald Lang, M.D. Director March 5, 1999
- ----------------------------
Ronald Lang, M.D.
/s/ Melinda McIntyre-Kolpin Director March 5, 1999
- ----------------------------
Melinda McIntyre-Kolpin
/s/ Jose Spiwak, M.D. Director March 5, 1999
- ----------------------------
Jose Spiwak, M.D.
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
-------------
Document Description of Document
- -------- -----------------------
4.1 1998 Stock Option Plan
4.2 Form of Non-Qualified Stock Option Agreement for 1998 Stock
Option Plan
4.3 Stock Option Agreement between the Registrant and Victor Gura,
M.D., dated September 9, 1998
5.1 Opinion of Matthias & Berg LLP
23.1 Consent of Matthias & Berg LLP (included in Exhibit 5.1)
23.2 Consent of KPMG LLP
23.3 Consent of Singer Lewak Greenbaum & Goldstein LLP
- -------------------
<PAGE>
Exhibit 4.1
NATIONAL QUALITY CARE, INC.
1998 STOCK OPTION PLAN
1. PURPOSE. The purpose of the National Quality Care, Inc. 1998 Stock
Option Plan (the "Plan"), is to provide an incentive to officers, directors,
employees, independent contractors, and consultants of National Quality Care,
Inc., a Delaware corporation (sometimes referred to herein as the "Company"),
and any parent companies and subsidiaries (together with the Company herein
collectively referred to as "NQCI") to remain in the employ of NQCI or provide
services to NQCI and contribute to its success.
As used in the Plan, the term "Code" shall mean the Internal Revenue
Code of 1986, as amended, and any successor statute, and the terms "Parent" and
"Subsidiary" shall have the meanings set forth in Sections 424(e) and (f) of the
Code.
This Plan was adopted by the Board of Directors as of April 9, 1998,
and the stockholders of the Company as of July 7, 1998.
2. ADMINISTRATION. The Plan shall be administered by a Plan Committee
which shall be established by the Board of Directors of the Company (the
"Board"). The Plan Committee shall be comprised of at least two members who
shall be outside directors of the Company, as defined in Section 162(m) of the
Code or any successor provision. Members of the Plan Committee shall be
appointed, both initially and as vacancies occur, by the Board. The Board may
serve as the Plan Committee if by the terms of the Plan all members of the Board
are otherwise eligible to serve on the Plan Committee. The Board, at any time it
so desires, may increase or decrease, but not below two, the number of members
of the Plan Committee, may remove from membership on the Plan Committee all or
any portion of its members, and may appoint such person or persons as it desires
to fill any vacancy existing on the Plan Committee, whether by removal,
resignation or otherwise. The provisions of the Plan and all option and stock
appreciation right (SAR) agreements executed pursuant thereto, and its decisions
shall be conclusive and binding upon all interested persons. Subject to the
provisions of the Plan, the Plan Committee shall have the sole authority to
determine:
(a) The persons (hereinafter, "optionees") to whom options to
purchase shares of Common Stock of the Company ("Stock") and SARs shall be
granted;
(b) The number of options and SARs to be granted to each optionee;
1
<PAGE>
(c) The price to be paid for each share of Stock upon the exercise
of each option;
(d) The period within which each option and SAR shall be exercised
and, with the consent of the optionee, any extensions of such period (provided,
however, that the original period and all extensions shall not exceed the
maximum period permissible under the Plan); and
(e) The terms and conditions of each stock option and/or SAR
agreement entered into between the Company and persons to whom the Company has
granted an option or SAR and of any amendments thereto (provided that the
optionee consents to each such amendment).
The Plan Committee shall meet at such times and places as it
determines, including by means of a telephone conference call. A majority of the
members shall constitute a quorum, and a decision of a majority of those present
at any meeting at which a quorum is present shall constitute the decision of the
Plan Committee. A memorandum signed by all of the members of the Plan Committee
shall constitute the decision of the Plan Committee without the necessity, in
such event, for holding an actual meeting.
3. ELIGIBILITY. Officers, directors and employees of NQCI independent
contractors, consultants and other persons providing significant services to
NQCI shall be eligible to receive grants of options under the Plan.
4. STOCK SUBJECT TO PLAN. There shall be reserved for issue, upon the
exercise of options granted under the Plan, 1,000,000 shares of Stock or the
number of shares of Stock, which, in accordance with the provisions of Section 9
hereof, shall be substituted therefor. Such shares may be treasury shares. If an
option granted under the Plan shall expire or terminate for any reason without
having been exercised in full, unpurchased shares subject thereto shall again be
available for the purposes of the Plan. The maximum number of shares with
respect to which options which may be granted to an optionee who is an employee
of NQCI shall not exceed 150,000 shares in any fiscal year during the term of
the Plan.
5. TERMS OF OPTIONS AND SARS.
(a) INCENTIVE STOCK OPTIONS. It is intended that options granted
pursuant to this Section 5(a) qualify as incentive stock options as defined in
Section 422 of the Code. Incentive stock options shall be granted only to
employees of NQCI. Each stock option agreement evidencing an incentive stock
option shall provide that the option is subject to the following terms and
conditions and to such other terms and conditions not inconsistent therewith as
the Plan Committee may deem appropriate in each case:
2
<PAGE>
(1) OPTION PRICE. The price to be paid for each share
of Stock upon the exercise of each incentive stock option shall be determined by
the Plan Committee at the time the option is granted, but shall in no event be
less than 100% of the Fair Market Value (as defined below) of the shares on the
date the option is granted, or not less than 110% of the Fair Market Value of
such shares on the date such option is granted in the case of an individual then
owning (within the meaning of Section 424(d) of the Code) 10% or more of the
total combined voting power of all classes of stock of the Company or of its
Parent or Subsidiaries. As used in this Plan, the term "date the option is
granted" means the date on which the Plan Committee authorizes the grant of an
option hereunder or any later date specified by the Plan Committee. For the
purposes of the Plan, Fair Market Value of the shares shall be (i) the closing
sales price of shares of Stock sold on the New York Stock Exchange, American
Stock Exchange or the NASDAQ National Market System on the date the option is
granted (or if there was no sale on such date, the highest asked price for the
Stock on such date), (ii) if the Stock is not listed on either of those
exchanges or traded on the NASDAQ National Market System on the date the option
is granted, the mean between the "bid" and "asked" price of the Stock in the
National Over-The-Counter Market (or other similar market quotation system) on
the date the option is granted, or (iii) if the Stock is not traded in any
market, the price determined by the Plan Committee to be the fair market value,
based upon such evidence as it may deem necessary or desirable.
(2) PERIOD OF OPTION AND EXERCISE. The period or
periods within which an option may be exercised shall be determined by the Plan
Committee at the time the option is granted, but in no event shall any option
granted hereunder be exercised more than ten years from the date the option was
granted nor more than five years from the date the option was granted in the
case of an individual then owning (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or of its Parent or Subsidiaries.
(3) PAYMENT FOR STOCK. The option exercise price for
each share of Stock purchased under an option shall be paid in full at the time
of purchase. The Plan Committee may provide that the option price be payable, at
the election of the holder of the option and with the consent of the Plan
Committee, in whole or in part either in cash or by delivery of Stock in
transferable form, such Stock to be valued for such purpose at its Fair Market
Value on the date on which the option is exercised. No share of Stock shall be
issued upon exercise until full payment therefor has been made, and no optionee
shall have any rights as an owner of Stock until the date of issuance to him of
the stock certificate evidencing such Stock.
3
<PAGE>
(4) LIMITATION ON AMOUNT BECOMING EXERCISABLE IN ANY
ONE CALENDAR YEAR. Subject to the overall limitations of Section 4 hereof
(relating to the aggregate shares subject to the Plan), the aggregate Fair
Market Value (determined as of the time the option is granted) of Stock with
respect to which incentive stock options are exercisable for the first time by
the optionee during any calendar year (under the Plan and all other incentive
stock option plans of the Company, the Parent, and Subsidiaries) shall not
exceed $100,000.
(b) NONQUALIFIED STOCK OPTIONS. Nonqualified stock options may be
granted not only to employees but also to directors who are not employees of
NQCI and to consultants, independent contractors and other persons who provide
substantial services to NQCI. Each nonqualified stock option granted under the
Plan shall be evidenced by a stock option agreement between the person to whom
such option is granted and the Company. Such stock option agreement shall
provide that the option is subject to the following terms and conditions and to
such other terms and conditions not inconsistent therewith as the Plan Committee
may deem appropriate in each case:
(1) OPTION PRICE. The price to be paid for each share
of Stock upon the exercise of an option shall be determined by the Plan
Committee at the time the option is granted, but in no event shall be less than
85% of the Fair Market Value of the shares on the date the option is granted. As
used in this Plan, the term "date the option is granted" means the date on which
the Plan Committee authorized the grant of an option hereunder or any later date
specified by the Plan Committee. To the extent that the fair market value of
Stock is relevant to the pricing of the option by the Plan Committee, fair
market value of the Stock shall be determined as set forth in Section 5(a)(1)
hereof.
(2) PERIOD OF OPTION AND EXERCISE. The periods,
installments or intervals during which an option may be exercised shall be
determined by the Plan Committee at the time the option is granted, but in no
event shall such period exceed 10 years from the date the option is granted.
(3) PAYMENT FOR STOCK. The option exercise price for
each share of Stock purchased under an option shall be paid in full at the time
of purchase. The Plan Committee may provide that the option exercise price be
payable at the election of the holder of the option, with the consent of the
Plan Committee, in whole or in part either in cash or by delivery of Stock in
transferable form, such Stock to be valued for such purpose at its Fair Market
Value on the date on which the option is exercised. No share of Stock shall be
issued until full payment therefor has been made, and no optionee shall have any
rights as an owner of shares of Stock until the date of issuance to him of the
stock certificate evidencing such Stock.
4
<PAGE>
(c) STOCK APPRECIATION RIGHTS. SARs may be granted in writing
under the Plan by the Plan Committee subject to the following terms and
conditions and such other terms and conditions as the Plan Committee may
prescribe.
(1) RIGHT OF OPTIONEE. Each SAR shall entitle the
holder thereof, upon the exercise of the SAR, to receive from the Company in
exchange therefor an amount equal in value to the excess of the Fair Market
Value on the date of exercise of one share of Stock over its Fair Market Value
on the date of grant (or, in the case of an SAR granted in connection with an
option, the excess of the Fair Market Value of one share of Stock at the time of
exercise over the option exercise price per share under the option to which the
SAR relates), multiplied by the number of shares covered by the SAR or the
option, or portion thereof, that is surrendered. No SAR shall be exercisable at
a time that the amount determined under this subparagraph is negative. Payment
by the Company upon exercise of an SAR shall be made in Stock valued at the Fair
Market Value of the Stock on the date of exercise.
(2) EXERCISE. An SAR shall be exercisable only at the
time or times established by the Plan Committee. If an SAR is granted in
connection with an option, the following rules shall apply: (i) the SAR shall be
exercisable only to the extent and on the same conditions that the related
option could be exercised; (ii) upon exercise of the SAR, the option or portion
thereof to which the SAR relates terminates; and (iii) upon exercise of the
option, the related SAR or portion thereof terminates.
(3) RULES. The Plan Committee may withdraw any SAR
granted under the Plan at any time and may impose any conditions upon the
exercise of an SAR or adopt rules and regulations from time to time affecting
the rights of holders of SARs granted prior to adoption or amendment of such
rules and regulations as well as SARs granted thereafter.
(4) FRACTIONAL SHARES. No fractional shares shall be
issued upon exercise of an SAR. In lieu thereof, cash may be paid in an amount
equal to the value of the fraction or, if the Plan Committee shall determine,
the number of shares may be rounded downward to the next whole share.
(5) SHARES SUBJECT TO PLAN. Upon the exercise of an
SAR for shares, the number of shares of Stock reserved for issuance under the
Plan shall be reduced by the number of shares issued.
5
<PAGE>
6. NONTRANSFERABILITY. The options and SARs granted pursuant to the
Plan shall be nontransferable except by will or the laws of descent and
distribution of the state or country of the optionee's domicile at the time of
death or for options other than incentive stock options, pursuant to a qualified
domestic relations order as defined in the Code or Title I of the Employee
Retirement Income Security Act and shall be exercisable during the optionee's
lifetime only by him (or, in the case of a transfer pursuant to a qualified
domestic relations order, by the transferee under such qualified domestic
relations order) and after his death, by his personal representative or by the
person entitled thereto under his will or the laws of intestate succession.
7. TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP. Unless otherwise
specified in the applicable option and/or SAR agreement or SAR, upon termination
of the optionee's employment or other relationship with NQCI, his rights to
exercise options and SARs then held by him shall be only as follows (in no case
do the time periods referred to below extend the term specified in any option):
(a) DEATH OR DISABILITY. Upon the death or disability (within the
meaning of Section 22(e)(3) of the Code) of an optionee, any option or SAR which
he holds may be exercised (to the extent exercisable at his death or
disability), unless it otherwise expires, within such period after the date of
his death (not less than six months nor more than twelve months) as the Plan
Committee shall prescribe in his option agreement or SAR, by the optionee or, in
the event of death, by the optionee's representative or by the person entitled
thereto under his will or the laws of intestate succession.
(b) RETIREMENT. Upon the retirement (either pursuant to an NQCI
retirement plan, if any, or pursuant to the approval of the Board) of an
officer, director or employee, an outstanding option or SAR may be exercised (to
the extent exercisable at the date of such retirement) by him within such period
after the date of his retirement (provided that such period is no less than 30
days and no more than three months) as the Plan Committee shall prescribe in his
option agreement or SAR.
6
<PAGE>
(c) OTHER TERMINATION. In the event an officer, director or
employee ceases to serve as an officer or director or leaves the employ of NQCI
for any reasons other than as set forth in (a) and (b), above, or a nonemployee
ceases to provide services to NQCI, any option or SAR which he holds shall
remain exercisable (to the extent exercisable as of the date of such
termination) until 30 days after the date of such termination.
(d) PLAN COMMITTEE DISCRETION. The Plan Committee may in its sole
discretion accelerate the exercisability of any or all options or SARs.
8. TRANSFER TO RELATED CORPORATION. In the event an employee leaves the
employ of the Company to become an employee of a Parent or a Subsidiary or any
employee leaves the employ of a Parent or a Subsidiary to become an employee of
the Company or another Parent or Subsidiary, such employee shall be deemed to
continue as an employee for purposes of this Plan.
9. ADJUSTMENT OF SHARES; TERMINATION OF OPTIONS AND SARS.
(a) ADJUSTMENT OF SHARES. In the event of changes in the
outstanding Stock by reason of stock dividends, split-ups, consolidations,
recapitalizations, reorganizations or like events (as determined by the Plan
Committee), an appropriate adjustment shall be made by the Plan Committee in the
number of shares reserved under the Plan, in the number of shares set forth in
Section 4 hereof, in the number of shares and the option price per share
specified in any stock option agreement, and in the number of SARs with respect
to any unexercised shares. The determination of the Plan Committee as to what
adjustments shall be made shall be conclusive. Adjustments for any options to
purchase fractional shares shall also be determined by the Plan Committee. The
Plan Committee shall give prompt notice to all optionees of any adjustment
pursuant to this Section.
7
<PAGE>
(b) TERMINATION OF OPTIONS AND SARS ON MERGER, REORGANIZATION OR
LIQUIDATION OF THE COMPANY. Notwithstanding anything to the contrary in this
Plan, in the event of any merger, consolidation or other reorganization of the
Company in which the Company is not the surviving or continuing corporation (as
determined by the Plan Committee) or in the event of the liquidation or
dissolution of the Company, all options and SARs granted hereunder shall
terminate on the effective date of the merger, consolidation, reorganization,
liquidation or dissolution unless there is an agreement with respect thereto
which expressly provides for the assumption of such options and SARs by the
continuing or surviving corporation.
10. SECURITIES LAW REQUIREMENTS. The Company's obligation to issue
shares of its Stock upon exercise of an option or SAR is expressly conditioned
upon the completion by the Company of any registration or other qualification of
such shares under any state and/or federal law or rulings and regulations of any
government regulatory body or the making of such investment representations or
other representations and undertakings by the optionee (or his legal
representative, heir or legatee, as the case may be) in order to comply with the
requirements of any exemption from any such registration or other qualification
of such shares which the Company in its sole discretion shall deem necessary or
advisable. The Company may refuse to permit the sale or other disposition of any
shares acquired pursuant to any such representation until it is satisfied that
such sale or other disposition would not be in contravention of applicable state
or federal securities law.
8
<PAGE>
11. TAX WITHHOLDING. As a condition to the exercise of an option or SAR
or otherwise, the Company may require an 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 an option or SAR granted hereunder. At
the discretion of the Plan Committee and upon the request of an optionee, the
minimum statutory withholding tax requirements may be satisfied by the
withholding of shares of Stock otherwise issuable to the optionee upon the
exercise of an option or SAR.
12. AMENDMENT. The Board may amend the Plan at any time, except that
without shareholder approval:
(a) The number of shares of Stock which may be reserved for
issuance under the Plan shall not be increased except as provided in Section
9(a) hereof;
(b) The option price per share of Stock subject to incentive stock
options may not be fixed at less than 100% of the Fair Market Value of a share
of Stock on the date the option is granted;
(c) The maximum period of ten (10) years during which the options
or SARs may be exercised may not be extended;
(d) The class of persons eligible to receive options or SARs under
the Plan as set forth in Section 3 shall not be changed; and
(e) This Section 12 may not be amended in a manner that limits or
reduces the amendments which require shareholder approval.
9
<PAGE>
13. EFFECTIVE DATE. The Plan shall be effective upon the date of its
adoption by both the Board, and subject to the approval of the stockholders of
the Company within the 12 month period following such adoption date.
14. TERMINATION. The Plan shall terminate automatically as of the close
of business on the day preceding the 10th anniversary date of its effectiveness
or earlier by resolution of the Board, or upon consummation of any merger,
consolidation or other reorganization in which the options granted hereunder
terminate, all as described in Section 9(b) hereof. Unless otherwise provided
herein, the termination of the Plan shall not affect the validity of any option
agreement outstanding at the date of such termination.
15. STOCK OPTION AND SAR AGREEMENT. Each option and SAR granted under
the Plan shall be evidenced by a written agreement executed by the Company and
accepted by the optionee, which (i) shall contain each of the provisions and
agreements herein specifically required to be contained therein, (ii) shall
indicate whether an option is to be an incentive stock option or a nonqualified
stock option, and if it is to be an incentive stock option, the stock option
agreement shall contain terms and conditions permitting such option to qualify
for treatment as an incentive stock option under Section 422 of the Code, (iii)
may contain the agreement of the optionee to remain in the employ of, and/or to
render services to, the Company or any Parent or Subsidiary for a period of time
to be determined by the Plan Committee, and (iv) may contain such other terms
and conditions as the Plan Committee deems desirable and which are not
inconsistent with the Plan.
16. NO RIGHT TO EMPLOYMENT. Nothing in this Plan or in any option or
SAR granted hereunder shall confer upon any optionee any right to continue in
the employ of NQCI or to continue to perform services for NQCI, or shall
interfere with or restrict in any way the rights of NQCI to discharge or
terminate any officer, director, employee, independent contractor or consultant
at any time for any reason whatsoever, with or without good cause.
10
<PAGE>
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
Executed and dated as of the date first written above at Los Angeles,
California.
NATIONAL QUALITY CARE, INC.
By: /s/ Victor Gura
----------------------------
Victor Gura, M.D.
Chief Executive Officer
<PAGE>
Exhibit 4.2
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of ________________, 199__, by and between
National Quality Care, Inc., a Delaware corporation (the "Company"), and
_______________ ("Optionee").
R E C I T A L
Pursuant to the Company's 1998 Stock Option Plan (the "Plan"), 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 or 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, subject to the terms and
conditions of the Plan, in consideration of employment or consulting services
performed for the benefit of the Company, the option ("Option") to purchase up
to __________ shares ("Shares") of Common Stock of the Company, at the exercise
price of $______ per share.
2. TERM. This Option shall expire ________ (__) years from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. All of the Options granted hereunder shall
vest and be exercisable immediately, 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 time unless the number purchased is
the total number purchasable under such Option at the time. Only whole shares
may be purchased.
<PAGE>
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. Notwithstanding anything to the
contrary in the Plan, this Option shall not terminate as a result of the
termination of Optionee's services as an employee or 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 EMPLOYMENT OR TO PERFORM SERVICES. Nothing in this Option
shall confer upon the Optionee any right to employment or 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. MODIFICATION AND TERMINATION. The rights of Optionee are subject to
modification and termination in certain events as provided in Sections 7,9 and
10 of the Plan.
11. PLAN GOVERNS. This Agreement and the Option evidenced hereby are made
and granted pursuant to the Plan and are in all respects limited by and subject
to the express terms and provisions of the Plan, as it may be construed by the
Board of Directors. Optionee hereby acknowledges receipt of a copy of the Plan.
2
<PAGE>
12. 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, as amended, 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
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.
13. 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 90035, 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).
14. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange or other form of transfer) of any
Shares acquired by exercise of this Option, he or she will first notify the
Company in writing of such proposed disposition and cooperate with the Company
in complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.
15. 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>
16. 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.
17. 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.
18. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
19. 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:_________________________________
_________________________________
_________________________________
Social Security Number
or Employer Identification
Number: ("Optionee")
___________________________ By:________________________________
Address:
_________________________________
_________________________________
_________________________________
_________________________________
Telecopier No. (____) ___-____
<PAGE>
Exhibit 4.3
NATIONAL QUALITY CARE, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made as of September 9, 1998, by and between National
Quality Care, Inc., a Delaware corporation (the "Company"), and Victor Gura,
M.D. ("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 or 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 employment
or consulting services performed for the benefit of the Company, the option
("Option") to purchase up to 42,000 shares ("Shares") of Common Stock of the
Company, at the exercise price of $0.28 per share.
2. TERM. This Option shall expire five (5) years from the date first
written above.
3. SHARES SUBJECT TO EXERCISE. All of the Options granted hereunder shall
vest and be exercisable immediately, in the event that the Company's financial
statements, as filed in the Company's Form 10-QSB for the quarter ending
September 30, 1998, shall reflect positive income from operations during the
quarterly period ending September 30, 1998, 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 time unless the number purchased is
the total number purchasable under such Option at the time. Only whole shares
may be purchased.
<PAGE>
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 or 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 EMPLOYMENT OR TO PERFORM SERVICES. Nothing in this Option
shall confer upon the Optionee any right to employment or 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, as amended, 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
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.
2
<PAGE>
11. 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 90035, 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).
12. SALE OR OTHER DISPOSITION. If Optionee at any time contemplates the
disposition (whether by sale, gift, exchange or other form of transfer) of any
Shares acquired by exercise of this Option, he or she will first notify the
Company in writing of such proposed disposition and cooperate with the Company
in complying with all applicable requirements of law, which, in the judgment of
the Company, must be satisfied prior to such disposition.
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:_________________________________
Ron Berkowitz
Chief Operating Officer
Social Security Number
or Employer Identification
Number: ("Optionee")
_______________________________ By:________________________________
Victor Gura, M.D.
Address:
________________________________
________________________________
________________________________
________________________________
Telecopier No. (____) ___-____
<PAGE>
Exhibit 5.1
March 5, 1999
National Quality Care, Inc.
1835 South La Cienega Boulevard
Suite 235
Los Angeles, California 90035
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 1,000,000 shares (the "Shares") of the Company's common stock, par value
$0.01 per share (the "Common Stock) reserved for issuance pursuant to the
Company's 1998 Stock Option Plan (the "Plan") and with respect to any options
("Options") to purchase shares of Common Stock which may be granted in
connection with the Plan. 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.
March 5, 1999
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 Options duly granted pursuant to the Plan, when issued, paid
for and delivered upon the exercise of such Options, in accordance with the
terms of the Plan, 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. Counsel currently owns options to purchase up to
128,422 shares of Common Stock which are not the subject of the Registration
Statement.
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,
/s/ Matthias & Berg LLP
MATTHIAS & BERG LLP
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
National Quality Care, Inc.
We consent to the use of our report dated March 3, 1998, incorporated herein by
reference in the Registration Statement on Form S-8 of National Quality Care,
Inc., relating to the consolidated balance sheets of National Quality Care, Inc.
and subsidiary as of December 31, 1997, and the related consolidated statements
of operations, stockholders' equity and cash flows for the year ended December
31, 1997, and the related schedule, which report appears in the December 31,
1997 annual report on Form 10-KSB of National Quality Care, Inc.
/s/ KPMG LLP
KPMG LLP
Los Angeles, California
March 5, 1999
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated April 8, 1997, accompanying the consolidated
financial statements of National Quality Care, Inc. appearing in the 1996 Annual
Report of the Company to its shareholders on Form 10-KSB for the year ended
December 31, 1996 which are incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of aforementioned report.
/s/ Singer Lewak Greenbaum & Goldstein LLP
SINGER LEWAK GREENBAUM & GOLDSTEIN LLP
Los Angeles, California
March 5, 1999
