HEALTHSTAR CORP /UT/, S-8, 1999-02-12

HEALTHSTAR CORP /UT/
S-8, 1999-02-12
PERIODICALS: PUBLISHING OR PUBLISHING & PRINTING

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<PAGE> 1
As filed on February 12, 1999 Registration No. ________

- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------

FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

HEALTHSTAR CORP.
- --------------------------------------------------------------------------------

(Exact Name of Registrant as Specified in Its Charter)

Delaware 91-1934592
- -------------------------------- ----------------------------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)

9495 E. San Salvador Drive, Scottsdale, Arizona 85258
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

HEALTHSTAR CORP. 1998 STOCK OPTION PLAN
---------------------------------------
HEALTHSTAR CORP. EMPLOYEE STOCK PURCHASE PLAN
---------------------------------------------
(Full Title of the Plans)

DENISE E. NEDZA
Vice President and Chief Financial Officer
HealthStar Corp.
8745 West Higgins, Suite 300
Chicago, Illinois 60631
(773) 693-7827
---------------------------------------------------------------
(Name, Address and Telephone Number of Agent for Service)

CALCULATION OF REGISTRATION FEE

===================================================================================================================
Title of Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered(1) Registered(2) Offering Price per Aggregate Offering Registration Fee
Share(3) Price(3)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par 1,000,000 shares $3.09375 $3,093,750 $912.66
value
===================================================================================================================
</TABLE>

(1)In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plans described
herein.

(2)Of this number, 500,000 shares are being registered for issuance
under the 1998 Stock Option Plan and 500,000 shares are being registered for
issuance under the Employee Stock Purchase Plan.

(3)Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h) under the Securities Act of 1933, as amended,
based upon the average of the bid and asked price reported on the OTB Bulletin
Board as of February 9, 1999.

<PAGE> 2

PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3. Incorporation of Documents By Reference.

All documents filed by the Registrant with the Commission after the
date of this Registration Statement under Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act, and before the filing of a post-effective amendment which
indicates that all securities offered hereunder pursuant to the Plans have been
sold or which deregisters all securities then remaining unsold, will be deemed
to be incorporated by reference into this Registration Statement and to be a
part hereof from the date of filing of such documents.

The Registrant is the successor corporation to Champion Financial
Corporation, a Utah corporation. The reincorporation was undertaken to effect a
change in domicile to Delaware. As of the date of this filing, the Registrant
has not filed any reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act"), or any registration statement under
the Exchange Act that contains a description of the securities being registered
hereunder.

Item 4. Description of Securities.

(a) General.

The Registrant is authorized by its Certificate of Incorporation to
issue 16,000,000 shares of capital stock, of which 15,000,000 are Common Stock,
$.001 par value per share (the "Common Stock"), and 1,000,000 are Preferred
Stock, $.001 par value per share (the "Preferred Stock").

(b) Common Stock.

The issued and outstanding shares of Common Stock are fully paid and
nonassessable. Holders of Common Stock are entitled to one vote per share in the
election of directors and all matters submitted to a vote of the stockholders.
There is no cumulative voting in the election of directors, which means that the
holders of a majority of the outstanding Common Stock can elect all of the
directors then standing for election. The holders of Common Stock are entitled
to receive dividends ratably when, as and if declared by the Board of Directors
out of funds legally available. In the event of liquidation, dissolution or
winding up of the Registrant, the holders of Common Stock are entitled to share
ratably in all assets of the Registrant remaining after payments of liabilities
and liquidation preferences to the holders of any Preferred Stock then
outstanding. The holders of Common Stock, as such, have no preemptive,
conversion or other subscription rights and are not subject to further calls or
assessments by the Registrant. There are no redemption or sinking funds
provisions applicable to the Common Stock. The rights of the holders of Common
Stock are subject to the rights of the holders of any Preferred Stock that may
be outstanding at any time.

As of the date of this registration statement, no shares of Preferred
Stock are issued or outstanding. Preferred Stock may, without action by the
stockholders of the Registrant, be issued by the

2
<PAGE> 3

Board of Directors of the Registrant from time to time in one or more series for
such consideration and with such relative rights, privileges and preferences as
the Board of Directors may determine. Accordingly, the Board has the power,
without stockholder approval, to fix the dividend rate and to establish the
provisions, if any, relating to voting rights, redemption rate, sinking fund,
liquidation preferences and conversion rights for any series of Preferred Stock
issued in the future.

(d) Classified Board of Directors; Restriction On Removal of
Directors.

The Registrant's Certificate of Incorporation divides the Board of
Directors into three classes of directors, each serving staggered three-year
terms. As a result, one-third of the Board of Directors will be elected at each
annual meeting of stockholders. Furthermore, at least two annual meetings of
stockholders may be required for the stockholders to change a majority of the
directors, regardless of whether a change in the Board of Directors may be
beneficial to the Registrant and its stockholders or a majority of the
Registrant's stockholders believes that such a change would be desirable.

The Certificate of Incorporation also provides that any director or the
entire Board of Directors may be removed at any time, but only for cause and
only by the affirmative vote of the holders of 75% or more of the outstanding
shares of the capital stock of the Registrant entitled to vote generally in the
election of directors (voting as a single class for this purpose) cast at a
meeting of stockholders called for that purpose. If the holders of any series of
Preferred Stock shall have the right, voting separately as a class, to elect one
or more directors of the Registrant, this provision of the Certificate of
Incorporation shall not apply to the director or directors elected by such
holders of Preferred Stock.

Item 5. Interests of Named Experts and Counsel.

Item 6. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law ("GCL") provides
for indemnification of directors and officers against any legal liability (other
than liability arising from derivative suits) if the officer or director acted
in good faith and in a manner that he reasonably believed to be in or not
opposed to the best interests of the corporation. In criminal actions, the
officer or director must also have had no reasonable cause to believe that his
conduct was unlawful. A corporation may indemnify an officer or director in a
derivative suit if the officer or director acted in good faith and in a manner
that he reasonably believed to be in or not opposed to the best interest of the
corporation unless the officer or director is found liable to the corporation.
However, if the Court of Chancery or the court in which such action or suit was
brought determines that the officer or director is fairly and reasonably
entitled to indemnity, then the Court of Chancery or such other court may permit
indemnity for such officer or director to the extent it deems proper.

The By-laws of the Registrant provide that the Registrant shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, including, without limitation,
an action by or in the right of the Registrant by reason of the fact that such
person is or was a director or officer of the Registrant or is or was serving at
the request of the Registrant as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding to the fullest extent

3
<PAGE> 4

and in the manner set forth and permitted by the GCL or any other applicable
law, as from time to time in effect, provided that such person acted in good
faith and in a manner he or she reasonably believed to be in the best interests
of the Registrant and, with respect to any criminal action or proceedings, had
no reasonable cause to believe his or her conduct was unlawful.

Under its Certificate of Incorporation and By-laws, the Registrant is
authorized to purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Registrant, or is or was
serving at the request of the Registrant as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against such person and incurred by
such person in any such capacity, or arising out of such person's status as
such, whether or not the Registrant would have the power to indemnify such
person against liability under the provisions of the Certificate of
Incorporation, the By-Laws or any provision of law.

Item 7. Exemption from Registration Claimed.

Not Applicable.

Item 8. Exhibits.

See Exhibit Index on page 8.

Item 9. Undertakings.

(a) Rule 415 Offering.

The 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 of 1933 (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 (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.

4
<PAGE> 5

(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment 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.

(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.

(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report under Section 13(a) or 15(d) of the Exchange Act
(and, where applicable, each filing of an employee benefit plan's annual report
under 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.

(h) Filing of Registration Statement on Form S-8.

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, or otherwise, 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 of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of 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.

5
<PAGE> 6

SIGNATURES

The Registrant

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 Scottsdale, State of Arizona on February 11, 1999.

HEALTHSTAR CORP.
(The Registrant)

By /s/ Denise E. Nedza
------------------------------------------
Denise E. Nedza,
Vice President and Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on February 11, 1999.

Signature Title
- --------- -----

*
- -----------------------------
Stephen J. Carder President, Chief Executive Officer and
Director (Principal Executive and
Financial Officer)

* Chairman of the Board of Directors
- -----------------------------
Gerald E. Finnell

/s/ Denise E. Nedza Vice President and Chief Financial Officer
- -----------------------------
Denise E. Nedza

* Director
- -----------------------------
Gary L. Nielson

* Director
- -----------------------------
Jon M. Donnell

*
- ----------------------------- Director
Thomas S. O'Brien

6
<PAGE> 7

The Plan

Pursuant to the requirements of the Securities Act of 1933, the administrator of
the HealthStar Corp. Employee Stock Purchase Plan has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Scottsdale, State of Arizona, on February 11,
1999.

HEALTHSTAR CORP.
EMPLOYEE STOCK PURCHASE PLAN

By: *
------------------------------------
Gary L. Nielson
Chairperson of the
Employee Stock Purchase Plan Committee

*Denise E. Nedza, by signing her name hereto, signs this document on
behalf of the persons indicated above pursuant to powers of attorney duly
executed by such persons.

By /s/ Denise E. Nedza
------------------------
Denise E. Nedza,
Attorney-in-Fact
<PAGE> 8

EXHIBIT INDEX

The following exhibits are filed as part of this Registration
Statement:

Exhibit

4.1 Certificate of Incorporation of the Registrant.

4.2 Bylaws of the Registrant.

5.1 Legal opinion of Bryan Cave LLP.

23.2 Consent of Bryan Cave LLP (included in the opinion filed as Exhibit 5.1).

24.1 Power of Attorney.

<PAGE> 1
EXHIBIT 4.1

CERTIFICATE OF INCORPORATION
OF
HEALTHSTAR CORP.

For purposes of incorporating and organizing a corporation under the
General Corporation Law of the State of Delaware, the undersigned, whose mailing
address is 8745 West Higgins, Suite 300, Chicago, Illinois 60631, and whose
powers as incorporator shall terminate immediately upon the filing of this
Certificate, does execute this Certificate and does hereby certify as follows:

ARTICLE I

The name of the Corporation is HealthStar Corp.

ARTICLE II

The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle, 19801.
The name of its registered agent at such address is The Corporation Trust
Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.

ARTICLE IV

A. Classes of Stock. The Corporation is authorized to issue two
classes of stock to be designated, respectively, as "Common Stock" and
"Preferred Stock." The total number of shares which the Corporation is
authorized to issue is sixteen million (16,000,000) shares. Fifteen million
(15,000,000) shares shall be Common Stock, $.001 par value per share, and one
million (1,000,000) shares shall be Preferred Stock, $.001 par value per share.

B. Issuance of Preferred Stock. The Preferred Stock may be issued
from time to time in one or more series. The Board of Directors is hereby
authorized, by filing one or more certificates pursuant to the Delaware General
Corporation Law (each, a "Preferred Stock Designation"), to fix or alter from
time to time the designations, powers, preferences and rights of each such
series of Preferred Stock and the qualifications, limitations or restriction
thereof, including without limitation the dividend rights, dividend rate,
conversion rights, voting rights, uprights and terms of redemption (including
sinking fund provisions), redemption price or prices, and the liquidation
preferences of any wholly-unissued series of Preferred Stock, and to establish
from time to time the number of shares constituting any such series and the
designation thereof,

<PAGE> 2

or any-of them; and to increase or decrease the number of shares of any series
subsequent to the issuance of shares of that series, but not below the number
"of shares of such series then outstanding. In case the number of shares of any
series shall be decreased in accordance with the foregoing sentence, the shares
constituting such decrease shall resume the status that they had prior to the
adoption of the resolution originally fixing the number of shares of such
series.

C. Common Stock.

1. Dividend Rights. Subject to the prior rights of holders of
all classes of stock at the time outstanding having prior rights as to
dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of the Corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.

2. Redemption. The Common Stock is not redeemable upon demand
of any holder thereof or upon demand of this Corporation.

3. Voting Rights. The holder of each share of Common Stock
shall have the right to one vote, and shall be entitled to notice of any
stockholders' meeting in accordance with the Bylaws of this Corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.

ARTICLE V

A. Exculpation. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law; (iii) under Section 174 of the
Delaware General Corporation Law; or (iv) for any transaction from which the
director derived any improper personal benefit. If the Delaware General
Corporation Law is hereafter amended to further reduce or to authorize, with the
approval of the Corporation's stockholders, further reductions in the liability
of the Corporation's directors for breach of fiduciary duty, then a director of
the Corporation shall not be liable for any such breach to the fullest extent
permitted by the Delaware General Corporation Law as so amended.

B. Indemnification. To the extent permitted by applicable law,
this Corporation is also authorized to provide indemnification of (and
advancement of expenses to) such agents (and any other persons to which Delaware
law permits this Corporation to provide indemnification) through bylaw
provisions, agreements with such agents or other persons, vote of stockholders
or disinterested directors or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware General
Corporation Law, subject only to limits created by applicable Delaware law
(statutory or non-statutory), with respect to actions for breach of duty to the
Corporation, its stockholders, and others.

<PAGE> 3

C. Effect of Repeal or Modification. Any, repeal or modification
of any of the foregoing provisions of this Article V shall be prospective and
"shall not adversely affect any right or protection of a director, officer,
agent or other person existing at the time of, or increase the liability of any
director of the Corporation with respect to any acts or omissions of such
director occurring prior to, such repeal or modification.

ARTICLE VI

A. The number of directors constituting the entire Board shall be
determined by the Board from time to time by vote of a majority of the entire
Board, provided, however, that the number of directors shall not be reduced so
as to shorten the term of any director at the time in office, and provided
further, that the number of directors constituting the entire Board shall be
seven (7) until otherwise fixed by a majority of the entire Board.

B. The Board of Directors shall be divided into three classes, as
nearly equal in numbers as the then total number of directors constituting the
entire Board permits, with the term of office of one class expiring each year.
At the first annual meeting of stockholders in 1999, directors of the first
class shall be elected to hold office for a term expiring at the next succeeding
annual meeting, directors of the second class shall be elected to hold office
for a term expiring at the second succeeding annual meeting and directors of the
third class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. Any vacancies in the Board of Directors for any
reason, and any directorships resulting from any increase in the number of
directors, may be filled by the Board of Directors, acting by a majority of the
directors then in office, although less than a quorum, and any directors so
chosen shall hold office until the next election of the class for which such
directors shall have been chosen and until their successors shall be elected and
qualified. Notwithstanding the foregoing, and except as otherwise required by
law, whenever the holders of any one or more series of Preferred Stock shall
have the right, voting separately as a class, to elect one or more directors of
the Corporation, the terms of the director or directors elected by such holders
shall expire at the next succeeding annual meeting of stockholders. Subject to
the foregoing, at each annual meeting of stockholders the successors to the
class of directors whose term shall then expire shall be elected to hold office
for a term expiring at the third succeeding annual meeting.

C. Notwithstanding any other provisions of this Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, this Certificate of
Incorporation or the By-Laws of the Corporation), any director or the entire
Board of Directors of the Corporation may be removed at any time, but only for
cause and only by the affirmative vote of the holders of 75% or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose.
Notwithstanding the foregoing, and except as otherwise required by law, whenever
the holders of any one or more series of Preferred Stock shall have the right,
voting separately as a class, to elect one or more directors of the Corporation,
the provisions of section (c) of this

<PAGE> 4

Article shall not apply with respect to the director or directors elected by
such holders of Preferred Stock.

ARTICLE VII

Elections of directors need not be by written ballot except and to the
extent provided in the Bylaws of the Corporation.

ARTICLE VIII

The Corporation is to have a perpetual existence.

ARTICLE IX

The Corporation reserves the right to repeal, alter, amend or rescind
any provision contained in this Certificate of Incorporation and/or any
provision contained in any amendment to or restatement of this Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred on stockholders herein are granted subject to this reservation.

ARTICLE X

The Board of Directors may from time to time make, amend, supplement or
repeal the Bylaws by the requisite affirmative vote of Directors as set forth in
the Bylaws.

ARTICLE XI

The Corporation shall not be subject to the provisions of Section 203
of the Delaware General Corporation Law.

ARTICLE XII

No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the corporation may be taken without a
meeting and the power of stockholders to consent in writing, without a meeting,
to the taking of any action is specifically denied.

ARTICLE XIII

The initial director of the Corporation shall be Steven Carder, whose
mailing address is 8745 West Higgins, Suite 300, Chicago, Illinois 60631, and
who shall serve until the first annual meeting of stockholders of the
Corporation or, if sooner, until his successor is duly elected and qualified.
Upon the election and qualification of the successor to the initial director,
the Corporation shall have the number of directors set forth in the bylaws of
the Corporation, as amended from time to time.

<PAGE> 5

IN WITNESS WHEREOF, the undersigned incorporator hereby acknowledges
that the foregoing Certificate of Incorporation is his act and deed on this 28th
day of August, 1998.

/s/ Kevin Ryan
---------------------------
Incorporator

<PAGE> 1
EXHIBIT 4.2

- --------------------------------------------------------------------------------

BYLAWS

HEALTHSTAR CORP.
(a Delaware corporation)

(Effective ___, 1998)

- --------------------------------------------------------------------------------

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE

ARTICLE I - STOCKHOLDERS........................................................................1

<S> <C> <C>
1. Annual Meeting................................................................1
2. Special Meeting...............................................................1
3. Place of Meeting..............................................................1
4. Notice of Meeting.............................................................1
5. Fixing Date for Determination of Stockholders of Record.......................1
6. Voting Record.................................................................2
7. Quorum and Manner of Acting...................................................2
8. Voting of Shares of Stock.....................................................2
9. Organization..................................................................3
10. Order of Business.............................................................3
11. Nomination of Directors.......................................................3
12. Business at Annual Meetings...................................................4

ARTICLE II - BOARD OF DIRECTORS.................................................................6

1. General Powers................................................................6
2. Number and Term of Office.....................................................6
3. Place of Meeting..............................................................6
4. Annual Meeting................................................................6
5. Regular Meetings..............................................................6
6. Special Meetings; Notice......................................................6
7. Quorum and Manner of Acting...................................................7
8. Organization..................................................................7
9. Action by Directors Without a Meeting.........................................7
10. Committees....................................................................7
11. Resignations..................................................................8
12. Removal of Directors..........................................................8
13. Vacancies.....................................................................8
14. Compensation..................................................................8

ARTICLE III - OFFICERS..........................................................................8

1. Number........................................................................8
2. Election and Term of Office...................................................9
3. Agents........................................................................9
4. Removal.......................................................................9
5. Resignations..................................................................9
6. Vacancies.....................................................................9
7. President.....................................................................9
8. Vice President................................................................9

</TABLE>

<PAGE> 3

<TABLE>

<S> <C> <C>
9. Secretary....................................................................10
10. Treasurer....................................................................10
11. Assistant Officers...........................................................11
12. Chairman of the Board........................................................11

ARTICLE IV - CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS,
SECURITIES OF OTHER CORPORATIONS..................................................11

1. Execution of Contracts.......................................................11
2. Attestation..................................................................11
3. Loans........................................................................11
4. Checks, Drafts...............................................................11
5. Deposits.....................................................................12
6. Proxies in Respect of Stock or Other Securities of Other Corporations........12

ARTICLE V - STOCK..............................................................................12

1. Certificates and Uncertificated Shares.......................................12
2. Transfers of Stock...........................................................13
3. Regulations..................................................................13

ARTICLE VI - DIVIDENDS.........................................................................13

ARTICLE VII - INDEMNIFICATION OF OFFICERS AND DIRECTORS........................................13

ARTICLE VIII - SEAL............................................................................15

ARTICLE IX - AMENDMENTS........................................................................15

</TABLE>

<PAGE> 4

BYLAWS

HEALTHSTAR CORP.
(a Delaware corporation)
(Effective ___, 1998)

ARTICLE I

STOCKHOLDERS

1. Annual Meeting. The annual meeting of the stockholders shall be held
on such date and at such time as shall be designated from time to time by the
Board and stated in the notice of the meeting. At the annual meeting,
stockholders shall elect directors and transact such other business as may
properly come before the meeting.

2. Special Meeting. Special meetings of the stockholders may be called
for any purpose or purposes at any time by the President, Chairman of the Board,
or the Board, or otherwise as provided by the Delaware General Corporation Law.
In the event that the Corporation shall have no directors in office, any officer
or any stockholder may call a special meeting of stockholders for the purpose of
electing at least one director.

3. Place of Meeting. Annual and special meetings of the stockholders
shall be held at the principal place of business of the Corporation, unless a
different place, either within or without the State of Delaware, is specified in
the notice of such meeting, or in the event of a waiver of notice of such
meeting, in such waiver of notice.

4. Notice of Meeting. Written notice stating the place, date and hour
of the meeting and, in the case of a special meeting, the purpose or purposes
for which the meeting is called, shall be delivered to each stockholder of
record entitled to vote at such meeting not less than ten (10) nor more than
sixty (60) days before the date of the meeting, either personally or by mail, by
an officer of the Corporation at the direction of the person or persons calling
the meeting. If mailed, notice shall be deemed to be delivered when mailed to
the stockholder at his or her address as it appears on the stock transfer books
of the Corporation. A written waiver of notice, whether given before or after
the meeting to which it relates, shall be equivalent to the giving of notice of
such meeting to the stockholder or stockholders signing such waiver. Attendance
of a stockholder at a meeting shall constitute a waiver of notice of such
meeting, except when the stockholder attends for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened.

5. Fixing Date for Determination of Stockholders of Record. In order
that the Corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or to express a
consent to corporate action in writing without a meeting, or to receive payment
of any dividend or other distribution or allotment of any rights, or to exercise
any rights in respect of any other change, conversion or exchange of

<PAGE> 5

stock or for the purpose of any other lawful action, the Board may fix in
advance a record date, which shall not be more than sixty (60) nor less than ten
(10) days prior to the date of such meeting or such action, as the case may be.
If the Board has not fixed a record date for determining the stockholders
entitled to notice of or to vote at a meeting of stockholders, the record date
shall be at the close of business on the day before the day on which notice is
given, or if notice is waived, at the commencement of the meeting. If the Board
has not fixed a record date for determining the stockholders entitled to express
consent to corporate action in writing without a meeting, the record date shall
be the time of the day on which the first written consent is served on the
Corporation in the manner provided by the Delaware General Corporation Law. If
the Board has not fixed a record date for determining stockholders for any other
purpose, the record date shall be at the close of business on the day before the
Board adopts the resolution relating thereto. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting if such adjournment or adjournments does not
exceed one hundred twenty (120) days in the aggregate; provided, however, that
the Board may fix a new record date for the adjourned meeting.

6. Voting Record. The Secretary or other officer having charge of the
stock transfer books of the Corporation shall make, or cause to be made, a
complete record of the stockholders entitled to vote at a meeting of
stockholders or any adjournment thereof, arranged in alphabetical order, with
the address of and the number of shares held by each stockholder. Such record
shall be produced and kept open at the time and place of the meeting and shall
be subject to inspection by the stockholders during the entire time of the
meeting for the purposes thereof. Failure to comply with the requirements of
this Section 6, however, shall not affect the validity of any action taken at
any such meeting.

7. Quorum and Manner of Acting. At any meeting of the stockholders, the
presence, in person or by proxy, of the holders of a majority of the outstanding
shares entitled to vote shall constitute a quorum. All shares represented and
entitled to vote on any single subject matter which may be brought before the
meeting shall be counted for quorum purposes. Only those shares entitled to vote
on a particular subject matter shall be counted for the purpose of voting on
that subject matter. Business may be conducted once a quorum is present and may
continue to be conducted until adjournment sine die, notwithstanding the
withdrawal or temporary absence of stockholders leaving less than a quorum.
Except as otherwise provided in the Delaware General Corporation Law, the
affirmative vote of the holders of a majority of the shares of stock then
represented at the meeting and entitled to vote on the subject matter under
consideration shall be the act of the stockholders; provided, however, that if
the shares of stock then represented are less than the number required to
constitute a quorum, the affirmative vote must be such as would constitute a
majority if a quorum were present, except that the affirmative vote of the
holders of a majority of the shares of stock then present is sufficient in all
cases to adjourn a meeting.

8. Voting of Shares of Stock. Each stockholder shall be entitled to one
vote or corresponding fraction thereof for each share of stock or fraction
thereof standing in his or her name on the books of the Corporation on the
record date. A stockholder may vote either in

<PAGE> 6

person or by proxy executed in writing by the stockholder or by his or her duly
authorized attorney-in-fact, but no such proxy shall be voted or acted upon
after eleven (11) months from the date of its execution unless the proxy
provides for a longer period. Shares of its own stock belonging to the
Corporation or to another corporation, if a majority of the shares of stock
entitled to vote in the election of directors of such other corporation is held
directly or indirectly by the Corporation, shall neither be entitled to vote nor
counted for quorum purposes; provided, however, that the foregoing shall not be
construed as limiting the right of the Corporation to vote its own stock when
held by it in a fiduciary capacity. The Board, in its discretion, or the officer
of the Corporation presiding at the meeting, in such officer's discretion, may
require that any votes cast at such meeting shall be cast by written ballot.

9. Organization. At each meeting of the stockholders, the Chairman of
the Board, or, if the Chairman of the Board is absent, the President or another
officer of the Corporation chosen as chairman of such meeting by the Board,
shall act as chairman of the meeting and preside thereat. The Secretary, or, if
the Secretary is absent from the meeting or is required pursuant to the
provisions of this Section 9 to act as chairman of such meeting, the person (who
shall be an Assistant Secretary, if any and if present) whom the chairman of the
meeting shall appoint shall act as secretary of the meeting and keep the minutes
thereof.

10. Order of Business. The order of business at each meeting of the
stockholders shall be determined by the chairman of such meeting.

11. Nomination of Directors. Only persons who are nominated in
accordance with the following procedures shall be eligible for election as
directors of the Corporation. Nominations of persons for election to the Board
may be made at any annual meeting of Stockholders (a) by or at the direction of
the Board (or any duly authorized committee thereof), or (b) by any stockholder
of the Corporation (i) who is a stockholder of record on the date of the giving
of the notice provided for in this Section 11 and on the record date for the
determination of stockholders entitled to vote at such annual meeting, and (ii)
who complies with the notice procedures set forth in this Section 11.

In addition to any other applicable requirements, for a nomination to
be made by a stockholder, such stockholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the Corporation
(a) in the case of an annual meeting, not less than sixty days nor more than
ninety days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; provided, however, that in the event that the annual
meeting is called for a date that is not within thirty days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth day following the day
on which such notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first occurs;
and (b) in the case of a special meeting of stockholders called for

<PAGE> 7

the purpose of electing directors, not later than the close of business on the
tenth day following the day on which notice of the date of the special meeting
was mailed or public disclosure of the date of the special meeting was made,
whichever first occurs.

To be in proper written form, a stockholder's notice to the Secretary
must set forth (a) as to each person whom the stockholder proposes to nominate
for election as a director (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person, and (iv)
any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons (including
their names) pursuant to which the nomination(s), are to be made by such
stockholder, (iv) a representation that such stockholder intends to appear in
person or by proxy at the meeting to nominate the persons named in its notice,
and (v) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.

Notwithstanding compliance with the foregoing provisions, the Board
shall not be obligated to include information as to any stockholder nominee for
director in any proxy statement or other communication sent to stockholders.

No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in this
Section 11. If the chairman of the meeting determines that a nomination was not
made in accordance with the foregoing procedures, the chairman shall declare to
the meeting that the nomination was defective and such defective nomination
shall be disregarded.

12. Business at Annual Meetings. No business may be transacted at an
annual meeting of stockholders, other than business that is either (a) specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board (or any duly authorized committee thereof), (b) otherwise
properly brought before the annual meeting by or at the direction of the Board
(or any duly authorized committee thereof), or (c) otherwise properly brought
before the annual meeting by any stockholder of the Corporation (i) who is a
stockholder of record on the dates of the giving of the notice provided for in
this Section 12 and

<PAGE> 8

on the record date for the determination of stockholders entitled to vote at
such annual meeting and (ii) who complies with the notice procedures set forth
in this Section 12.

In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary of
the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the Company not
less than sixty days nor more than ninety days prior to the anniversary date of
the mediately preceding annual meeting of Stockholders; provided, however, that
in the event that the annual meeting is called for a date that is not within
thirty days before or after such anniversary date, notice by the stockholder in
order to be timely must be so received not later than the close of business on
the tenth day following the day on which such notice of the date of the annual
meeting was mailed or such public disclosure of the date of the annual meeting
was made, whichever first occurs.

To be in proper written form, a stockholder's notice to the Secretary
must set forth as to each matter such stockholder proposes to bring before the
annual meeting (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such stockholder, (iii) the
class or series and number of shares of capital stock of the Corporation that
are owned beneficially or of record by such stockholder, (iv) a description of
all arrangements or understandings between such stockholder with the proposal of
such business by such stockholder and any material interest of such stockholder
in such business and, (v) a representation that such stockholder intends to
appear in person or by proxy at the annual meeting to bring such business before
the meeting.

No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 12, provided, however, that, once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing on this Section 12 shall be deemed to preclude discussion by
any stockholder of any such business. If the chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.

13. Election of Directors. At each election of directors, each
stockholder entitled to vote thereat shall have the right to vote, in person or
by proxy, the number of shares of stock owned by such stockholder for as many
persons as there are directors to be elected and for whose election he or she
has a right to vote. The candidates receiving the greatest number of votes, up
to the number of directors to be elected, shall be the directors.

14. Action By Stockholders Without a Meeting. Except as expressly
required by Delaware law or as permitted by the Board, stockholders may not act
by written consent.

<PAGE> 9

15. Irregularities. All informalities and irregularities at any meeting
of the stockholders with respect to calls, notices of meeting, the manner .of
voting, the form of proxies and credentials, and the method of ascertaining
those present shall be deemed waived if no objection is made at the meeting.

ARTICLE II

BOARD OF DIRECTORS

1. General Powers. The business and affairs of the Corporation shall
be managedby the Board of Directors.

2. Number and Term of Office. Subject to the requirements of the
Delaware General Corporation Law, the Board may from time to time determine the
number of directors. Until the Board shall otherwise determine, the number of
directors shall be seven (7). Each director shall hold office for a term of
three (3) years, or until his or her successor is elected, or until his or her
death, or until his or her earlier resignation or removal in the manner
hereinafter provided.

3. Place of Meeting. The Board may hold its meetings at such place or
places, within or without the State of Delaware, as the Board may from time to
time determine or as shall be designated in any notices or waivers of notice
thereof. Any such meeting, whether regular or special, may be held by conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
in such manner shall constitute presence in person at such meeting.

4. Annual Meeting. As soon as practicable after each annual election of
directors and on the same day, the Board may meet for the purpose of
organization and the transaction of other business at the place where regular
meetings of the Board are held, and no notice of such meeting shall be necessary
in order to legally hold the meeting, provided that a quorum is present. If such
meeting is not held as provided above, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for a
special meeting of the Board, or in the event of waiver of notice as specified
in the written waiver of notice.

5. Regular Meetings. Regular meetings of the Board may be held without
notice at such times as the Board shall from time to time determine. If any day
fixed for a regular meeting shall be a legal holiday in Delaware, the meeting
that would otherwise be held on that day shall be held at the same hour on the
next succeeding business day.

6. Special Meetings; Notice. Special meetings of the Board shall be
held whenever called by the President, the Chairman of the Board or a majority
of the directors at the time in office. Notice shall be given, in the manner
hereinafter provided, of each such special meeting, which notice shall state the
time and place of such meeting, but need not state the purposes thereof. Except
as otherwise provided in Section 7 of this Article II, notice of each such
meeting shall be mailed to each director, addressed to him or her at his or her
residence or usual place

<PAGE> 10

of business, at least two (2) days before the day on which such meeting is to be
held, or shall be sent addressed to him or her at such place by telefacsimile,
wireless or other form of recorded communication or deliveries personally or by
telephone not later than the day before the day on which such meeting is to be
held. A written waiver of notice, whether given before or after the meeting to
which it relates, shall be equivalent to the giving of notice of such meeting to
the director or directors signing such waiver. Attendance of a director at a
special meeting of the Board shall constitute a waiver of notice of such
meeting, except when he or she attends the meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened.

7. Quorum and Manner of Acting. A majority of the whole Board shall be
present in person at any meeting of the Board in order to constitute a quorum
for the transaction of business at such meeting, and except as otherwise
specified in these Bylaws, and except also as otherwise expressly provided by
the Delaware General Corporation Law, the vote of a majority of the directors
present at any such meeting at which a quorum is present shall be the act of the
Board. In the absence of a quorum from any such meeting, a majority of the
directors present thereat may adjourn such meeting from time to time to another
time or place, without notice other than announcement at the meeting, until a
quorum shall be present thereat. The directors shall act only as a Board and the
individual directors shall have no power as such.

8. Organization. At each meeting of the Board, the President, or if he
or she is absent, a director chosen by a majority of the directors present,
shall act as chairman of such meeting and preside thereat. The Secretary, or if
he or she is absent, the person (who shall be an Assistant Secretary, if any and
if present) whom the chairman of such meeting shall appoint, shall act as
secretary of such meeting and keep the minutes thereof.

9. Action by Directors Without a Meeting. Any action required or
permitted to be taken at a meeting of the Board may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, is signed by all directors entitled to vote with respect to
the subject matter thereof.

10. Committees. The Board may, by resolution passed by a majority of
the entire Board, designate one or more committees, each committee to consist of
one or more of the directors of the Corporation. The Board may designate one or
more directors as alternate members of any committee, who may replace any absent
or disqualified member at any meeting of any such committee. In the absence or
disqualification of a member of a committee, and in the absence of a designation
by the Board of an alternate member to replace the absent or disqualified
member, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or she or they constitute a quorum,
may unanimously appoint another member of the Board to act at the meeting in the
place of any absent or disqualified member. A majority of the members of a
committee, including any alternate members, shall constitute a quorum of such
committee. Any committee, to the extent allowed by law and provided in the
resolution establishing such committee, shall have and may exercise all the

<PAGE> 11

powers and authority of the Board in the management of the business and affairs
of the Corporation. Each committee shall keep regular minutes and report to the
Board when required.

11. Resignations. Any director may resign at any time by giving written
notice of his or her resignation to the Corporation. Any such resignation shall
take effect at the time specified therein, or, if the time when it shall become
effective is not specified therein, it shall take effect immediately upon its
receipt by the President or the Secretary; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.

12. Removal of Directors. Directors may be removed, with or without
cause, as provided from time to time by the Delaware General Corporation Law as
then in effect.

13. Vacancies. Any vacancy occurring in the Board, and any newly
created directorship, may be filled by a majority of the directors then in
office, including any director whose resignation from the Board becomes
effective at a future time, even if the number of directors then in office is
less than a quorum of the whole Board, or by a sole remaining director.
Notwithstanding the foregoing, if the holders of any class or classes of stock
or series thereof are entitled to elect one or more directors by the provisions
of the Certificate of Incorporation, vacancies and newly created directorships
of such class or classes or series may be filled by a majority of the directors
elected by such class or classes or series thereof then in office, or by a sole
remaining director so elected. If at any time the Corporation has no directors
in office, any officer or any stockholder or any fiduciary entrusted with
responsibility for the person or estate of a stockholder may call a special
meeting of the stockholders for the purpose of filling vacancies in the Board.

14. Compensation. The Board may at any time and from time to time
provide that directors shall be paid a fixed sum for attendance at each meeting
of the Board or a stated salary as director. In addition, the Board may at any
time and from time to time provide that directors shall be paid their actual
expenses, if any, of attendance at each meeting of the Board. Members of special
or standing committees may be allowed like compensation for attending committee
meetings. Nothing in this section shall be construed as precluding any director
from serving the Corporation in any other capacity and receiving compensation
therefor. In addition, the Board may adopt one or more director compensation
plans using securities of the Corporation.

ARTICLE III

OFFICERS

1. Number. The Corporation shall have the following officers: a
President, a Vice President, a Secretary and a Treasurer. At the discretion of
the Board, the Corporation may also have a Chairman of the Board (who shall be
an officer only if so designated by the Board), additional Vice Presidents
(however designated, including the designations Executive Vice President and
Senior Vice President), one or more Assistant Vice Presidents, one or more

<PAGE> 12

Assistant Secretaries and one or more Assistant Treasurers. Any two or more
offices may be held by the same person.

2. Election and Term of Office. The officers of the Corporation shall
be elected annually by the Board. Each such officer shall hold office until his
or her successor is duly elected or until his or her earlier death or
resignation or removal in the manner hereinafter provided.

3. Agents. In addition to the officers mentioned in Section 1 of this
Article, III, the Board may appoint such agents as the Board may deem necessary
or advisable, each of which agents shall have such authority and perform such
duties as are provided in these Bylaws or as the Board may from tome to time
determine. The Board may delegate to any office or to any committee the power to
appoint or remove any such agents.

4. Removal. Any officer may be removed, with or without cause, at any
time by resolution adopted by a majority of the whole Board.

5. Resignations. Any officer may resign at any time by giving written
notice of his or her resignation to the Board, the President or the Secretary.
Any such resignation shall take effect at the time specified therein, or, if the
time when it shall become effective is not specified therein, it shall take
effect immediately upon its receipt by the Board, the President or the
Secretary; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.

6. Vacancies. A vacancy in any office due to death, resignation
removal, disqualification or any other cause may be filled for the unexpired
portion of the term thereof by the Board.

7. President. The President shall be the Chief Executive Officer of the
Corporation and shall have, subject to the control of the Board, general and
active supervision and direction over the business and affairs of the
Corporation and over its several officers. He or she may sign, with the
Secretary, or an Assistant Secretary, certificates for stock of the Corporation.
He or she may sign, execute and deliver in the name of the Corporation all
deeds, mortgages, bonds, contracts or other instruments authorized by the Board,
except in cases where the signing, execution or delivery thereof is expressly
delegated by the Board or by these Bylaws to some other officer or agent of the
Corporation or where any of them are required by law otherwise to be signed,
executed or delivered, and he or she may cause the corporate seal, if any, to be
affixed to any instrument which requires it. In general, the President shall
perform all duties incident to the office of the President and such other duties
as from time to time may be assigned to him or her by the Board.

8. Vice President. The Vice President and any additional Vice
Presidents shall have such powers and perform such duties as the President or
the Board may from time to time prescribe and shall perform such other duties as
may be prescribed by these Bylaws. At the

<PAGE> 13

request of the President, or in case of his or her absence or inability to act,
the Vice President shall perform the duties of the President and, when so
acting, shall have all the powers of, and be subject to all the restrictions
upon, the President. In the event that there is more than one Vice President,
the Board shall designate which Vice President is to act for the President.

9. Secretary. The Secretary shall: (a) record all the proceedings of
the meetings of the stockholders, the Board and any committee established by the
Board, if any, in one or more books kept for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these Bylaws or as
required by law; (c) be the custodian of all contracts, deeds, documents, all
other indicia of title to properties owned by the Corporation and of its other
corporate records (except accounting records) and of the corporate seal, if any,
and affix such seal to all documents the (execution of which on behalf of the
Corporation under its seal is duly authorized; (d) sign, with the President or a
Vice President, certificates for stock of the Corporation; (e) have charge,
directly or through the transfer clerk or transfer clerks, transfer agent or
transfer agents and registrar or registrars appointed as provided in Section 3
of Article V of these Bylaws, of the issue, transfer and registration of
certificates for stock of the Corporation and of the records thereof, such
records to be kept in such manner as to show at any time the amount of the stock
of the Corporation issued and outstanding, the manner in which and the time when
such stock was paid for, the names, alphabetically arranged, and the addresses
of the holders of record thereof, the number of shares held by each, and the
time when each became a holder of record; (f) upon request, exhibit or cause to
be exhibited at all reasonable times to any Director such records of the issue,
transfer and registration of the certificates for stock of the Corporation; (g)
see that the books, reports, statements, certificates and all other documents
and records required by law are properly kept and filed; and (h) see that the
duties prescribed by Section 6 of Article I of these Bylaws are performed. In
general, the Secretary shall perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him or
her by the President or the Board.

10. Treasurer. If required by the Board, the Treasurer shall give a
bond for the faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board shall determine The Treasurer shall: (a) have
charge and custody of, and be responsible for, all funds, securities, notes and
valuable effects of the Corporation; (b) receive and give receipt for moneys due
and payable to the Corporation from any sources whatsoever; (c) deposit all such
moneys to the credit of the Corporation or otherwise as the Board or the
President shall direct in such banks, trust companies or other depositories as
shall be selected in accordance with the provisions of Article IV of these
Bylaws; (d) cause such funds to be disbursed by checks or drafts on the
authorized depositories of the Corporation signed as provided in Article IV of
these Bylaws; (e) be responsible for the accuracy of the amounts of, and cause
to be preserved proper vouchers for, all moneys so disbursed; (f) have the right
to require from time to time reports or statements giving such information as he
or she may desire with respect to any and all financial transactions of the
Corporation from the officers or agents transacting the same; (g) render to the
President or the Board, whenever they, respectively, shall request him or her so
to do, an account of the financial condition of the Corporation and of all his
or her transactions as Treasurer; and (h) upon request, exhibit or cause to be
exhibited at all reasonable times the

<PAGE> 14

cash books and other records to the President or any of the directors of the
Corporation. In general, the Treasurer shall perform all duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him or her by the President or the Board.

11. Assistant Officers. Any persons elected as assistant officers shall
assist in the performance of the duties of the designated office and such other
duties as shall be assigned to them by the Vice President, Secretary or
Treasurer, as the case may be, or by the Board or the President.

12. Chairman of the Board. The Chairman of the Board, if one shall have
been appointed and be serving, shall preside at all meetings of the Board of
Directors and meetings of stockholders and shall perform such other duties as
may be assigned by the board. Except and unless otherwise provided by the Board,
the Chairman of the Board shall not be an officer of the Corporation.

ARTICLE IV

CONTRACTS, CHECKS, DRAFTS, BANK
ACCOUNTS, SECURITIES OF OTHER CORPORATIONS

1. Execution of Contracts. Except as otherwise required by law or by
these Bylaws, any contract or other instrument may be executed and delivered in
the name of the Corporation and on its behalf by the President or a Vice
President. In addition, the Board may authorize any other officer or officers or
agent or agents to execute and deliver any contract or other instrument in the
name of the Corporation and on its behalf, and such authority may be general or
confined to specific instances as the Board may by resolution determine.

2. Attestation. Any Vice President, the Secretary, or any Assistant
Secretary may attest the execution of any instrument or document by the
President or any other duly authorized officer or agent of the Corporation and
may affix the corporate seal, if any, in witness thereof, but neither such
attestation nor the affixing of a corporate seal shall be requisite to the
validity of any such document or instrument.

3. Loans. Unless the Board shall otherwise determine, the President,
acting together with any one of the following officers, to-wit: the Vice
President, the Treasurer or the Secretary, may effect loans and advances at any
time for the Corporation from any bank, trust company or other institution or
from any firm or individual and, for such loans and advances, may make, execute
and deliver promissory notes or other evidences of indebtedness of the
Corporation, and may mortgage, pledge, hypothecate or otherwise transfer for
security any property owned or held by the Corporation.

4. Checks, Drafts. All checks, drafts, orders for the payment of money,
bills of lading, warehouse receipts, obligations, bills of exchange and
insurance certificates shall be signed or endorsed (except endorsements for
collection for the account of the Corporation or for deposit to its credit,
which shall be governed by the provisions of Section 5 of this Article IV)

<PAGE> 15

by such officer or officers or agent or agents of the Corporation and in such
manner as shall from time to time be determined by resolution of the Board.

5. Deposits. All funds of the Corporation not otherwise employed shall
be deposited from time to time to the credit of the Corporation or otherwise as
the Board or the President shall direct in general or special accounts at such
banks, trust companies, savings and loan associations, or other depositories as
the Board may select or as may be selected by any officer or officers or agent
or agents of the Corporation to whom power in that respect has been delegated by
the Board. For the purpose of deposit and for the purpose of collection for the
account of the Corporation, checks, drafts and other orders for the payment of
money which are payable to the order of the Corporation may be endorsed,
assigned and delivered by any officer or agent of the Corporation. The Board may
make such special rules and regulations with respect to such accounts, not
inconsistent with the provisions of these Bylaws, as it may deem expedient.

6. Proxies in Respect of Stock or Other Securities of Other
Corporations. Unless otherwise provided by resolution adopted by the Board, the
President or any Vice President may exercise in the name and on behalf of the
Corporation the powers and rights which the Corporation may have as the holder
of stock or other securities in any other corporation, including without
limitation the right to vote or consent with respect to such stock or other
securities.

ARTICLE V

STOCK

1. Certificates and Uncertificated Shares. Shares of the Corporation's
capital stock may but need not be represented by certificates. The Board may
authorize the issuance of some or all of the shares of any or all classes or
series without certificates. Notwithstanding such authorization, every holder of
uncertificated shares shall be entitled to receive a certificate representing
such shares, which certificate shall be delivered or otherwise made available to
a stockholder making a request therefor. Each share certificate shall be signed
by one or more officers designated by the Board or, in the absence of such
designation, the President or a Vice President and by the Secretary or an
Assistant Secretary. The signatures of such officers upon such certificate may
be facsimiles. If any officer who has signed or whose facsimile signature has
been placed upon a certificate has ceased for any reason to be such officer
prior to issuance of the certificate, the certificate may be issued with the
same effect as if that person were such officer at the date of issue. All
certificates for stock of the Corporation shall be consecutively numbered, shall
state the number of shares represented thereby and shall otherwise be in such
form as shall be determined by the Board, subject to such requirements as are
imposed by the Delaware General Corporation Law. The names and addresses of the
persons to whom the shares represented by certificates are issued shall be
entered on the stock transfer books of the Corporation, together with the number
of shares and the date of issue, and in the case of cancellation, the date of
cancellation. Certificates surrendered to the Corporation for transfer shall

<PAGE> 16

be canceled, and no new certificate shall be issued in exchange for such shares
until the original certificate has been canceled; except that in the case of a
lost, destroyed or mutilated certificate, a new certificate may be issued
therefor upon such terms and indemnity to the Corporation as the Board may
prescribe.

2. Transfers of Stock. Transfers of shares of stock of the Corporation
shall be made on the stock transfer books of the Corporation only by the holder
of record thereof or by his or her legal representative or attorney-in-fact, who
shall furnish proper evidence of authority to transfer to the Secretary, or a
transfer clerk or a transfer agent, and upon surrender of the certificate or
certificates for such shares properly endorsed and payment of all taxes thereon.
The person in whose name shares of stock stand on the books of the Corporation
shall be deemed the owner thereof for all purposes as regards the Corporation.

3. Regulations. The Board may make such rules and regulations as it may
deem expedient, not inconsistent with these Bylaws, concerning the issue,
transfer and registration of certificates for stock of the Corporation. The
Board may appoint, or authorize any officer or officers or any committee to
appoint, one or more transfer clerks or one or more transfer agents and one or
mere registrars, and may require all certificates for restock to bear the
signature or signatures of any of them.

ARTICLE VI

DIVIDENDS

The Board may from time to time declare, and the Corporation may pay,
dividends on its outstanding shares of stock in the manner and upon the terms
and conditions provided in the Delaware General Corporation Law.

ARTICLE VII

INDEMNIFICATION OF OFFICERS AND DIRECTORS

The Board of Directors of the Corporation shall have the power to:

(a) Indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than 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, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in 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. The termination of
any action, suit or proceeding

<PAGE> 17

by judgment, order, settlement or conviction or upon a plea of nolo contendere
or its equivalent shall not of itself create a presumption that the person did
not act in good faith and in a manner which he or she reasonably believed to be
in the best interest of the Corporation and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his or her conduct was
unlawful.

(b) 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 the Corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection with the defense or
settlement of such action or suit if he or she acted in good faith and in a
manner he reasonably believed to be in the best interests of the Corporation;
but no indemnification shall be made in respect of any claim, issue or matter as
to which such person has been adjudged to be liable for negligence or misconduct
in the performance of his or her duty to the Corporation unless and only to the
extent that the court in which such action or suit was brought determines upon
application that, despite the adjudication of liability, but in view of all
circumstances of the case such person is fairly and reasonably entitled to
indemnification for such expenses which such court deems proper.

(c) Indemnify a director, officer, employee or agent of the Corporation
to the extent that such person has been successful on the merits in defense of
any action, suit or proceeding referred to in Subparagraph (a) or (b) of this
Article VIII, or in defense of any claim, issue or matter therein, against
expenses (including attorneys' fees) actually and reasonably incurred in
connection therewith.

(d) Authorize indemnification under Subparagraph (a) or (b) of this
Article VII (unless ordered by a court) in the specific case upon a
determination that indemnification of the director, of finer, employee or agent
is proper in the circumstances because he or she has met the applicable standard
of conduct set forth in said Subparagraph (a) or (b). Such determination shall
be made by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or, if such a
quorum is not obtainable or even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or by
the stockholders.

(e) Authorize payment of expenses (including attorneys' fees) incurred
in defending a civil or criminal action, suit or proceeding in advance of the
final disposition of such action, suit or proceeding as authorized in
Subparagraph (d) of this Article VII upon receipt of an undertaking by or on
behalf of the director, officer, employee or agent to repay such amount unless
it is ultimately determined that he is entitled to be indemnified by the
Corporation as authorized in this Article VII.

<PAGE> 18

(f) Purchase and maintain insurance on behalf of any person who is or
was a director, officer, employee or agent of the Corporation or who is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and incurred by
such person in any such capacity or arising out of his status as such, whether
or not the Corporation would have the power to indemnify such person against
such liability under the provisions of this Article VII.

ARTICLE VIII

SEAL

A corporate seal shall not be requisite to the validity of any
instrument executed by or on behalf of the Corporation. Nevertheless, if in any
instance a corporate seal is used, the same shall bear the name of the
Corporation.

ARTICLE IX

AMENDMENTS

These Bylaws may be repealed, altered or amended, and new Bylaws may be
adopted, at any time only by the Board.

ADOPTED by the Board of Directors of the Corporation at_______________,
this day of___________________, 1998.

------------------------------
Secretary
---------------------

<PAGE> 1

[BRYAN CAVE LLP LETTERHEAD]

February 11, 1999

HealthStar Corp.
9495 East San Salvador Drive
Scottsdale, Arizona 85258

Dear Sirs:

We are acting as counsel to HealthStar Corp., a Delaware corporation (the
"Company") in connection with the Registration Statement on Form S-8 (the
"Registration Statement"), under the Securities Act of 1933, as amended (the
"Act"), covering 1,000,000 shares of the Company's common stock, par value $.001
per share (the "Common Stock"), issuable upon exercise of options granted or to
be granted pursuant to the HealthStar Corp. 1998 Stock Option Plan (the "Stock
Option Plan") or issuable pursuant to the HealthStar Corp. Employee Stock
Purchase Plan (the "Stock Purchase Plan").

We have reviewed copies of the Stock Option Plan and the Stock Purchase
Plan (collectively, the "Plans"), and have examined the originals, or certified,
conformed or reproduction copies, of all such records, agreements, instruments
and documents as we have deemed relevant or necessary as the basis for the
opinion hereinafter expressed. In all such examinations, we have assumed the
genuineness of all signatures on original or certified copies and the conformity
to original or certified copies of all copies submitted to us as conformed or
reproduction copies. As to various questions of fact relevant to such opinion,
we have relied upon, and assumed the accuracy of, certificates and oral or
written statements and other information of or from public officials, officers
or representatives of the Company, and others.

Based upon the foregoing, we are of the opinion that the shares of Common
Stock reserved for issuance (i) upon exercise of option granted pursuant to the
Stock Option Plan and (ii) pursuant to the Stock Option Plan, when so issued in
accordance with the terms and provisions of the relevant Plan, will be validly
issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act.

Very truly yours,

/s/ Bryan Cave LLP
--------------------------------
BRYAN CAVE LLP

<PAGE> 1
EXHIBIT 24.1

POWER OF ATTORNEY FOR
OFFICERS AND DIRECTORS OF
HEALTHSTAR CORP.

Pursuant to the requirements of the Securities Act of 1933, the
undersigned officers and/or directors of HealthStar Corp., a Delaware
corporation (the "Company"), hereby appoint Denise E. Nedza as attorney-in-fact
with full power of substitution and resubstitution to sign for the undersigned
and in the name of the undersigned in any and all capacities with respect to the
registration on Form S-8 of 1,000,000 shares of the Company's Common Stock under
the HealthStar Corp. 1998 Stock Option Plan and the HealthStar Corp. Employee
Stock Purchase Plan (the "Registration Statement") with the Securities and
Exchange Commission ("SEC"), and to sign any and all amendments (including
post-effective amendments) thereto and any and all applications or other
documents to be filed with the SEC pertaining to the Registration Statement, and
to grant unto the attorney-in-fact and agent the full power and authority to do
and perform each and every act and thing required to be done, as fully to all
intents and purposes as the undersigned could do if personally present. The
undersigned hereby ratifies and confirms all that the attorney-in-fact and agent
or his substitutes may lawfully do or cause to be done by virtue hereof.

Signatures Title Date
- ---------- ----- ----

<S> <C> <C>
/s/ Stephen J. Carder President, Chief Executive Officer February 11, 1999
- --------------------------------- and Director (Principal Executive
Steven J. Carder Officer)

/s/ Gerald E. Finnell Chairman of the Board February 11, 1999
- --------------------------------- of Directors
Gerald E. Finnell

/s/ Gary L. Nielson Director February 11, 1999
- ---------------------------------
Gary L. Nielson

/s/ Jon M. Donnell Director February 11, 1999
- ---------------------------------
Jon M. Donnell

/s/ Thomas S. O'Brien Director February 11, 1999
- ---------------------------------
Thomas S. O'Brien
</TABLE>