As filed with the Securities and Exchange Commission on January 29, 1999.
Registration No. 333-
- ------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
HEALTHCARE IMAGING SERVICES, INC.
(Exact name of issuer as specified in its charter)
Delaware 22-3119929
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
Tri-Parkway Corporate Park
200 Schulz Drive
Red Bank, New Jersey 07701
(Address of principal executive offices) (Zip Code)
-------------------------
HEALTHCARE IMAGING SERVICES, INC.
1997 OMNIBUS INCENTIVE PLAN
and
1997 EMPLOYEE STOCK PURCHASE PLAN
AND OPTION AGREEMENTS WITH CERTAIN INDIVIDUALS
(Full title of the Plans)
-------------------------
Elliott H. Vernon, Esq. Scott M. Zimmerman, Esq.
Chairman of the Board, Swidler Berlin Shereff Friedman,
President and Chief Executive Officer LLP
HealthCare Imaging Services, Inc. 919 Third Avenue
Tri-Parkway Corporate Park New York, New York 10022
200 Schulz Drive (212) 758-9500
Red Bank, New Jersey 07701
(732) 224-9292
(Name, address and telephone number,
including area code, of agents for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Proposed
Title of Maximum Proposed Maximum
Securities Amount Offering Price Aggregate Amount of
to be Registered to be Registered(1) Per Share(2) Offering Price(2) Registration Fee(3)
Common Stock, par value 28,800 shares $1.0625 30,600 $ 8.51
$0.01 per share 600,000 shares $1.71875 $1,031,250 $ 286.69
200,000 shares $1.3125 $ 262,500 $ 72.98
30,000 shares $0.96875 $ 29,063 $ 8.08
22,500 shares $0.96875 $ 21,797 $ 6.06
15,000 shares $0.96875 $ 14,531 $ 4.04
4,103,700 shares $1.09375 $4,488,422 $ 1,247.78
50,000 shares $ 7.50 $ 375,000 $ 104.25
50,000 shares $10.00 $ 500,000 $ 139.00
50,000 shares $12.50 $ 625,000 $ 173.75
50,000 shares $0.96875 48,438 $13.47
- ---------------------------- ------------------------------------------------- -----------------
Total 5,200,000 shares $7,426,601 $2,064.61
- ---------------------------- ------------------------------------------------- -----------------
</TABLE>
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<PAGE>
(1) Pursuant to Rule 416, this Registration Statement also covers such
additional securities as may become issuable to prevent dilution resulting
from stock splits, stock dividends or similar transactions.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 on the basis of the exercise price if known or the
average of the high and low prices of the Registrant's Common Stock as
quoted on The Nasdaq National Market on January 27,1999.
(3) The Registration Fee has been calculated pursuant to Rule 457(h) as
follows: $30,600 multiplied by .000278, $1,031,250 multiplied by .000278,
$262,500 multiplied by .000278, $29,063 multiplied by .000278, $21,797
multiplied by .000278, $14,531 multiplied by .000278, $7,426,601
multiplied by .000278, $375,000 multiplied by .000278, $500,000 multiplied
by .000278, $625,000 multiplied by .000278 and $48,438 multiplied
by .000278.
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PART II
INFORMATION REQUIRED IN
THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents, which have been filed by HealthCare Imaging
Services, Inc., a Delaware corporation (the "Registrant"), with the Securities
and Exchange Commission (the "Commission"), are incorporated herein by
reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
(b) (i) The Registrant's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1998, (ii) the Registrant's Quarterly Report on Form 10-Q
for the quarterly period ended June 30, 1998, (iii) the Registrant's
Quarterly Report on Form 10-Q for the quarterly period ended September 30,
1998, (iv) the Registrant's Current Report on Form 8- K/A-1, filed with the
Commission on January 16, 1998, (v) the Registrant's Current Report on Form
8-K, filed with the Commission on March 16, 1998, (vi) the Registrant's
Current Report on Form 8-K, filed with the Commission on September 18,
1998, (vii) the Registrant's Current Report on Form 8-K, filed with the
Commission on October 16, 1998, (viii) the Registrant's Current Report on
Form 8-K/A-1 filed with the Commission on November 12, 1998 and (ix) the
Registrant's Current Report on Form 8-K, filed with the Commission on
December 7, 1998.
(c) The Registrant's Report on Form 8-A, filed with the Commission on December
17, 1993, under Section 12 of the Securities Exchange Act of 1934 (the
"Exchange Act"), which contains the description of the Registrant's Common
Stock, par value $0.01 per share.
In addition, all documents subsequently filed by the Registrant pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered under this
Registration Statement have been sold or which deregisters all such securities
then remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the time of filing of such
documents. Any statement contained in the documents incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
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<PAGE>
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Registrant's Certificate of Incorporation (the "Certificate") provides
that each person who was or is made a party or is threatened to be made a party
to or is involved in any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Registrant or is or was
serving at the request of the Registrant as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or alleged action in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified by
the Registrant to the maximum extent authorized by the General Corporation Law
of the State of Delaware ("DGCL") as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Registrant to provide broader indemnification rights then said law
permitted the Registrant to provide prior to such amendment) against all
expense, liability and loss (including attorneys' fees, judgments, fines, excise
taxes or penalties pursuant to the Employee Retirement Income Security Act of
1974 and amounts paid or to be paid in settlement) reasonably incurred by such
person in connection with such proceeding and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators.
The DGCL permits indemnification of a director, officer, employee or agent
in civil, criminal, administrative or investigative actions, suits or
proceedings (other than an action by or in the right of the corporation) to
which such person is a party or is threatened to be made a party by reason of
the fact of such relationship with the corporation or the fact that such person
is or was serving in a similar capacity with another entity at the request of
the corporation against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action if such person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, if he had
no reasonable cause to believe his conduct was unlawful. The DGCL permits
indemnification of a director, officer, employee or agent in actions or suits by
or in the right of the corporation to which such person is a party or is
threatened to be made a party by reason of the fact of such relationship with
the corporation or the fact that such person is or was serving in a similar
capacity with another entity
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<PAGE>
at the request of the corporation against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation except that no indemnification may be made in respect of any such
claim, issue or matter to any person adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which the action was brought determines that, despite the adjudication of
liability, such person is under all circumstances, fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
Under the DGCL, to the extent that a present or former director or officer is
successful, on the merits or otherwise, in the defense of any action, suit or
proceeding or any claim, issue or matter therein (whether or not the suit is
brought by or in the right of the corporation), he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him. In
all cases in which indemnification is permitted (unless ordered by a court), it
may be made by the corporation only as authorized in the specific case upon a
determination that the applicable standard of conduct has been met by the party
to be indemnified. Such determination must be made, with respect to a person who
is a director or officer at the time of such determination, (i) by a majority
vote of the directors who are not parties to such action, suit or proceeding,
even though less than a quorum, or (ii) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum,
or (iii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iv) by the stockholders. The
statute authorizes the corporation to pay expenses incurred by an officer or
director in advance of a final disposition of a proceeding upon receipt of an
undertaking by or on behalf of the person to whom the advance will be made, to
repay the advances if it shall ultimately be determined that he was not entitled
to indemnification. The DGCL provides that indemnification and advancement of
expenses permitted thereunder are not to be exclusive of any rights to which
those seeking indemnification or advancement of expenses may be entitled under
any By-law, agreement, vote of stockholders or disinterested directors, or
otherwise. The DGCL also authorizes the corporation to purchase and maintain
liability insurance on behalf of its directors, officers, employees and agents
regardless of whether the corporation would have the statutory power to
indemnify such persons against the liabilities insured.
The Certificate provides that the right to indemnification contained
therein is a contract right and includes the right to be paid by the Registrant
the expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the DGCL requires, the payment of such
expenses incurred by a director or officer in advance of the final disposition
of a proceeding shall be made only upon delivery to the Registrant of an
undertaking by or on behalf of such person to repay all amounts so advanced if
it shall ultimately be determined that such person is not entitled to be
indemnified by the Registrant as authorized in the Certificate or otherwise.
The Registrant maintains directors' and officers' liability insurance
covering certain liabilities incurred by the directors and officers of the
Registrant in connection with the performance of their duties.
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<PAGE>
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits
The following exhibits are filed as part of this Registration Statement:
4.1 HealthCare Imaging Services, Inc. 1997 Omnibus Incentive Plan (Incorporated
by reference to Exhibit 10.51 to the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1997) (File No. 000-19636)
4.2 HealthCare Imaging Services, Inc. 1997 Employee Stock Purchase Plan
(Incorporated by reference to Exhibit 10.52 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997) (File No.
000-19636)
4.3 Stock Option Agreement, dated as of April 13, 1998, between HealthCare
Imaging Services, Inc. and Robert Baca.
4.4 Form of Stock Option Agreement, dated as of July 30, 1998 between
HealthCare Imaging Services, Inc. and Frank Leo.
5.1 Opinion of Swidler Berlin Shereff Friedman, LLP.
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of David Fischer & Co., P.A.
23.3 Consent of Swidler Berlin Shereff Friedman, LLP (included in Exhibit
5.1).
24 Power of Attorney (included in signature page to this registration
statement).
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<PAGE>
Item 9. Undertakings.
(a) 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 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.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the change in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement;
(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 Registration Statement is on Form S-3 or S-8 and 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 the Registration
Statement.
(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.
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<PAGE>
(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) The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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.
(c) 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 Securities and
Exchange 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 Act and will be governed by the final
adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all 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 County of Monmouth, State of New Jersey, on this 29th day of
January, 1999.
HEALTHCARE IMAGING SERVICES, INC.
By: /s/ Elliott H. Vernon
Elliott H. Vernon
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENT, that each of the undersigned whose
signature appears below constitutes and appoints Elliott H. Vernon and Scott P.
McGrory, and each of them (with full power of each of them to act alone), his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution for him and on his behalf, and in his name, place and stead,
in any and all capacities to execute and sign any and all amendments or
post-effective amendments to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, 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 and
every act and thing requisite or necessary to be done in and about the premises,
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 or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof and the Registrant hereby confers like authority on its
behalf.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
date indicated.
Signature Title Date
/s/ Elliott H. Vernon Chairman of the Board, January 29, 1999
Elliott H. Vernon President and Chief Executive
Officer
/s/ Scott P. McGrory Vice President, Controller January 29, 1999
Scott P. McGrory (Principal Financial and
Accounting Officer)
/s/ Shawn Freidkin
Shawn Freidkin Director January 29, 1999
/s Manmohan A. Patel Director January 29, 1999
Manmohan A. Patel, M.D.
/s/ Joseph J. Raymond Director January 29, 1999
Joseph J. Raymond
/s/ Michael S. Weiss Director January 29, 1999
Michael S. Weiss
<PAGE>
HEALTHCARE IMAGING SERVICES, INC.
FORM S-8
REGISTRATION STATEMENT
EXHIBIT INDEX
Exhibit
4.1 HealthCare Imaging Services, Inc. 1997 Omnibus Incentive Plan (Incorporated
by reference to Exhibit 10.51 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997) (File No. 000-19636)
4.2 HealthCare Imaging Services, Inc. 1997 Employee Stock Purchase Plan
(Incorporated by reference to Exhibit 10.52 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997) (File No.
000-19636)
4.3 Stock Option Agreement, dated as of April 13, 1998, between HealthCare
Imaging Services, Inc. and Robert Baca
4.4 Stock Option Agreement, dated as of July 30, 1998 between HealthCare
Imaging Services, Inc. and Frank Leo.
5.1 Opinion of Swidler Berlin Shereff Friedman, LLP
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of David Fischer & Co., P.A.
23.3 Consent of Swidler Berlin Shereff Friedman, LLP (included in Exhibit 5.1)
24 Power of Attorney (included in signature page to this Registration
Statement).
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<PAGE>
EXHIBIT 4.3
NON-QUALIFIED STOCK OPTION AGREEMENT
FOR KEY EMPLOYEES
HEALTHCARE IMAGING SERVICES, INC.
1997 OMNIBUS INCENTIVE PLAN
Agreement, made as of the 13th day of April, 1998, between Healthcare
Imaging Services, Inc. (the "Company"), a Delaware corporation, and Robert D.
Baca (the "Optionee"), residing at ________________ .
The Company has an omnibus equity incentive plan entitled the "HealthCare
Imaging Services, Inc. 1997 Omnibus Incentive Plan" (the "Plan"). Although this
option is not being granted under the Plan, the Company and the Optionee agree
that this option shall nonetheless be subject to the terms and conditions of the
Plan. In the case of any conflict between the provisions hereof and those of the
Plan, the provisions of the Plan shall be controlling. A copy of the Plan is
available upon request by the Optionee from the Assistant Secretary of the
Company.
A Committee of the Board of Directors of the Company (the "Committee") has
adopted a resolution granting the Optionee a stock option (the "Option") to
purchase shares of the Company's Common Stock, $.01 par value per share
("Shares"), for the price and on the terms and conditions set forth in this
Agreement and in the Plan.
The Company makes no representations or warranties as to the income, estate
or other tax consequences to the Optionee of the grant or exercise of the Option
or the sale or other disposition of the Shares acquired pursuant to the exercise
thereof.
1. (a) The price at which the Optionee shall have the right to purchase
Shares under this Agreement is set forth on Schedule A hereto and is subject to
adjustment as provided in Paragraph 6.
(b) Unless the Option is previously terminated pursuant to the Plan or this
Agreement, the Option shall be exercisable during the period or periods
specified herein, including Schedule A hereto.
In no event shall any Shares be purchasable under this Agreement after the
respective expiration date or dates specified on Schedule A hereto ("Expiration
Date"). Unless otherwise specified on Schedule A hereto, the unexercised portion
of the Option will terminate (i) immediately upon the termination of the
Optionee's employment or other retention (A) for Cause (as defined in Section
7.3 of the Optionee's Employment Agreement with the Company, dated as of the
date hereof (the "Employment Agreement")), (B) pursuant to Section 7.5 of the
Employment Agreement or (C) by the Optionee other than for Good Reason (as
defined in
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Section 7.4 of the Employment Agreement); (ii) 6 months after the date on
which the Optionee's employment or other retention is terminated (A) by the
Company other than for Cause, death Disability (as defined in Section 7.2 of the
Employment Agreement) or (B) by Optionee for Good Reason (other than with
respect to a Change of Control as defined in the Employment Agreement) or (iii)
12 months after the date on which the Optionee's employment or other retention
is terminated by reason of death or Disability.
If, at any time within eighteen (18) months after the termination of the
Optionee's employment or other retention, the Optionee engages in any activity
in competition with any activity of the Company or any of its subsidiaries, or
inimical, contrary or harmful to the interests of the Company or any of its
subsidiaries, including, but not limited to: (1) conduct related to the
Optionee's employment or other retention for which either criminal or civil
penalties against the Optionee may be sought, (2) violation of Company policies,
including, without limitation, the Company's insider trading policy, (3)
employing or recruiting any present, former or future employee of the Company or
any of its subsidiaries, (4) disclosing or misusing any confidential information
or material concerning the Company or any of its subsidiaries, (5) participating
in a hostile takeover attempt of the Company or (6) conduct which violates the
terms of any non-competition and/or confidentiality agreement between the
Optionee and the Company and/or any of its affiliates, then, unless otherwise
determined by the Committee, the Option shall terminate effective the date on
which the Optionee enters into such activity, unless terminated sooner by
operation of another term or condition of the Option or the Plan.
2. Nothing contained herein shall be construed to confer on the Optionee
any right to continue as an employee of (or in any other position with) the
Company or any subsidiary of the Company or to derogate from any right of the
Company or any subsidiary thereof to retire, request the resignation of or
discharge the Optionee, or to lay off or require a leave of absence of the
Optionee, with or without pay, at any time, with or without Cause. No person or
entity shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of any Shares subject to the Option until the Option shall have been
duly exercised to purchase such Shares in accordance with the provisions of this
Agreement.
3. The Option shall not be assignable, alienable, saleable, or transferable
by the Optionee otherwise than (a) by will or by the laws of descent and
distribution, (b) to the spouse or any lineal ancestor or descendant of the
Optionee, (c) to a trust, the sole beneficiaries of which are any or all of the
Optionee or the spouse or any lineal ancestor or descendant of the Optionee, or
(d) with the consent of, or in accordance with rules and procedures established
by, the Committee. The Option may not be pledged, alienated, attached, or
otherwise encumbered, and any purported pledge, alienation, attachment, or
encumbrance thereof shall be void and unenforceable against the Company or any
Affiliate (as defined in the Plan).
4. The Option shall be exercisable during the Optionee's lifetime only by
the Optionee or, if permissible under applicable law, by his or her guardian or
legal representative, or, if the Option has been transferred in accordance with
the provisions of Paragraph 3 hereof, by the permitted transferee of the Option
or such other person as may be entitled to exercise the Option on behalf of such
transferee.
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<PAGE>
The Option may only be exercised by the delivery to the Company of a
written notice of such exercise in the form of Annex I hereto (the "Exercise
Notice"), which notice shall specify the number of Shares to be purchased (the
"Purchased Shares") and the aggregate exercise price for such Shares, together
with payment in full of such aggregate exercise in price in cash or check
payable to the Company; provided, however, that payment of such aggregate
exercise price may instead be made, in whole or in part, with the consent of the
Committee, by one or more of the following means (a) delivering to the Company a
certificate or certificates representing Shares duly endorsed or accompanied by
a duly executed stock power(s), which delivery effectively transfers to the
Company good and valid title to such Shares, free and clear of any pledge,
commitment, lien, claim or other encumbrance (such shares to be valued on the
basis of the aggregate fair market value thereof on the date of such exercise,
which aggregate fair market value shall be applied against and used to pay the
aggregate exercise price for the portion of the Option being exercised); (b)
"pyramiding" of Shares issuable upon exercise of the Option, provided in each
case that the Company is not then prohibited from purchasing or acquiring such
Shares; and/or (c) surrendering options to the Company in lieu of cash as
provided herein. Upon receipt by the Company of a duly executed Exercise Notice
which states that the Optionee is paying the aggregate exercise price as
provided in clause (c) of the immediately preceding sentence, the Company shall
issue to the Optionee a number of Shares equal to (a) the amount by which the
Market Price (as hereafter defined) on the date of the Exercise Notice exceeds
the exercise price per share divided by (b) the Market Price on the date of
exercise, which fraction is then multiplied by (c) the number of Options
surrendered. "Market Price" per Share on any day shall equal Fair Market Value,
as defined in the Plan, of a Share. For example, if the exercise price per Share
is $4.00 and the Market Price per Share is $10.000, the difference is (i) $6.00
divided by (ii) $10.00 which is .60. This amount, .60, is multiplied by (iii)
the number of Options surrendered to determine the actual number of Shares to be
issued upon exercise thereof. Therefore, if 20,000 Options were surrendered,
12,000 Shares would be issued to the Optionee.
5. If the Company shall become obligated to withhold an amount on account
of any tax imposed as a result of the exercise of the Option, including, without
limitation, any federal, state, local or other income tax, or any F.I.C.A.,
state disability insurance tax or other employment tax (the "Withholding
Liability"), then the Optionee shall, on the date of exercise and as a condition
to the issuance of the Shares subject to the Option, pay the Withholding
Liability to the Company. Payment shall be by check payable to the Company;
provided, however, that, with the consent of the Committee, payment may instead
be made by delivery to the Company of a certificate or certificates representing
Shares duly endorsed or accompanied by a duly executed stock power(s), which
delivery effectively transfers to the Company good and valid title to such
Shares, free and clear of any pledge, commitment, lien, claim or other
encumbrance (such Shares to be valued on the basis of the Fair Market Value
thereof on the date of such payment); provided, further, that the Company is not
then prohibited from purchasing or acquiring Shares. The Optionee hereby
consents to the Company withholding the full amount of the Withholding Liability
from any compensation or other amounts otherwise payable to the Optionee if the
Optionee does not pay the Withholding Liability to the Company on the date of
exercise of the Option, and the Optionee agrees that the withholding and payment
of any such
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<PAGE>
amount by the Company to the relevant taxing authority shall constitute
full satisfaction of the Company's obligation to pay such compensation or other
amounts to Optionee.
6. (a) In the event that the Committee shall determine that any (i)
subdivision or consolidation of Shares, (ii) dividend or other distribution (in
the form of Shares), (iii) recapitalization or other capital adjustment of the
Company or (iv) merger, consolidation or other reorganization of the Company or
other rights to purchase Shares or other securities of the Company, or other
similar corporate transaction or event described in Treasury Regulation Section
1.162-27(e)(2)(iii)(C) promulgated under the Internal Revenue Code of 1986, as
amended, affects the Shares such that an adjustment is determined by the
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Option,
then the Committee shall, in such manner as it may deem equitable, adjust any or
all of (1) the number and type of Shares (or other securities or property)
purchasable under the Option and (2) the exercise price of the Shares
purchasable under the Option or, if deemed appropriate, make provision for a
cash payment to the Optionee. Any determination made by the Committee under this
Paragraph shall be final, binding and conclusive. In computing any adjustment
under this Paragraph, any fractional share shall be eliminated. Nothing
contained in this Agreement shall be construed to affect in any way the right of
power of the Company to make any adjustment, reclassification, reorganization or
changes to its capital or business structure or to merge or to consolidate or to
dissolve, liquidate or transfer all or any part of its business assets.
(b) Upon the occurrence of a Change of Control of the Company (as defined
in the Plan), the Optionee shall have the right, exercisable during the 30 day
period preceding the occurrence of such Change of Control, and, in addition,
with respect to a Change of Control described in clauses (i) and (ii) of the
definition thereof, within 30 days after the occurrence of such Change of
Control, to exercise in whole or in part the unexercised portion of the Option
without regard to the vesting provisions thereof. The Company will mail or cause
to be mailed to the Optionee a notice specifying the date that is to be fixed as
of which all holders of record shall be entitled to exchange their Shares for
securities, cash or other property issuable or deliverable pursuant to a Change
of Control described in clauses (iii) or (iv) of the definition thereof. In the
event the Option is not exercised in its entirety on or prior to the date
specified therein, any and all remaining rights under the Option shall terminate
as of said date.
7. Anything in this Agreement to the contrary notwithstanding, in no event
may the Option be exercisable if the Company shall, at any time and in its sole
discretion, determine that (a) the listing, registration or qualification of any
Shares otherwise deliverable upon such exercise, upon any securities exchange or
under any state or federal law, or (b) the consent or approval of any regulatory
body or the satisfaction of withholding tax or other withholding liabilities, is
necessary or desirable in connection with such exercise. In such event, such
exercise shall be held in abeyance and shall not be effective unless and until
such listing, registration, qualification, withholding or approval shall have
been affected or obtained free of any conditions not acceptable to the Company.
4
<PAGE>
8. Unless the issuance of the Shares upon the exercise of the Option has
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), the Committee may require as a condition to the right to exercise the
Option hereunder that the Company receive from the person exercising the Option
representations, warranties and agreements, at the time of any such exercise, to
the effect that the Shares are being purchased for investment only and without
any present intention to sell or otherwise distribute such Shares and that the
Shares will not be disposed of in transactions which, in the opinion of counsel
to the Company, would violate the registration provisions of the Securities Act
and the rules and regulations thereunder. The certificate issued to evidence
such Shares shall bear appropriate legends summarizing such restrictions on the
disposition thereof.
9. This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware, without reference to principles regarding
conflicts of law. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors or assigns, as the case may be.
5
<PAGE>
IN WITNESS WHEREOF, the parties have witnessed this Agreement to be duly
executed and delivered as of the date first above written.
OPTIONEE: HEALTHCARE IMAGING SERVICES, INC.
/s/Robert D. Baca By:/s/Elliott H. Vernon
- ----------------- -------------------------------
Robert D. Baca Name: Elliott H. Vernon
Title:Chairman of the Board,
President and Chief Executive
Officer
6
<PAGE>
SCHEDULE A
Name of Optionee: Robert D. Baca
Date of Grant: April 13, 1998
Option Exercise Price: (subject to Paragraph 6) $7.50 (with respect to
50,000 of the shares subject to the Option), $10.00 (with respect to 50,000 of
the shares subject to the Option) and $12.50 (with respect to 50,000 of the
shares subject to the Option) per share, respectively.
Market Price on Date of Grant: $1.3125
Number of Shares subject to Option: 150,000
Type of Option: Non-Qualified
Dated of Expiration: April 13, 2008, 5:00 p.m., NYC time
Terms of Exercisability:
Subject to the terms and conditions of the Plan and the Agreement to which
this Schedule is annexed, the Option shall vest upon the attainment of any two
of the three following objectives: (1) the Company achieving gross revenues of
$100 million in any fiscal year during the Term (as defined in the Optionee's
employment agreement with the Company), (2) the Company achieving net income of
$12 million in any fiscal year during the Term or (3) the common stock of the
Company attaining, during the Term, an average Fair Market Value (as defined in
the Plan) for a period of twenty (20) consecutive trading days, and a Fair
Market Value on the last day of such twenty (20) day period of $20.00; provided,
however, that in any event the Option shall vest on the third anniversary of the
grant date of the Option, and the Option shall become fully vested immediately
upon a Change in Control (as defined in the Plan). The Option shall be
exercisable, subject to paragraph 1 herein, until April 13, 2008.
Other exercisability features: Not Applicable
Date: April 13, 1998 HEALTHCARE IMAGING SERVICES, INC.
By:/s/ Elliott H. Vernon
------------------------
OPTIONEE:
/s/ Robert D. Baca
------------------
Robert D. Baca
7
<PAGE>
ANNEX I
FORM OF ELECTION TO EXERCISE
(To be executed upon exercise of Option)
The undersigned hereby elects to exercise the right pursuant to that
certain Stock Option Agreement dated as of _________________, 19__ by and
between Healthcare Imaging Services, Inc. (the "Company") and
_______________________ (the "Option Agreement"), to purchase _________________
shares of common stock, $.01 par value per share (the "Shares"), of the Company.
Choose one of the following options:
_____ (i) Payment for the Shares in the amount of $_________ is enclosed.
The undersigned requests that certificates for the Shares be
registered in the name of the undersigned.
_____ (ii) Cashless Exercise/Hold - Payment for the Shares should be made by
the surrender of ______________ shares of the Company's Common
Stock having an aggregate fair market value of $____________.
The undersigned requests that certificates for the Shares be
registered in the name of the undersigned.
_____ (iii) Cashless Exercise/Same Day Sale (Appropriate broker forms must be
completed; forms may be obtained from the Assistant Secretary).
Dated:
_________________________ _________________________________
Optionee
________________________
Social Security Number
Administrator Use Only
- ------------------------------------------------------------------------------
Date of Grant: ___________________________
Market Price on Date of Grant: ___________________________
Market Price on Date of Exercise: ___________________________
Number of shares: ___________________________
Type of Option: ___________________________
Number of Shares Currently
Vested: ___________________________
Expiration Date: ___________________________
Withholding Tax: ___________________________
____________________________________________
Vice President, Controller Date
<PAGE>
EXHIBIT 4.4
OPTION AGREEMENT
AGREEMENT, dated as of July 30, 1998, between HEALTHCARE IMAGING SERVICES,
INC., a Delaware corporation (the "Company"), and FRANK LEO (the "Grantee").
1. Grant of Option. The Company hereby grants the Grantee a non-qualified
stock option to purchase up to 50,000 shares (the "Shares") of the common
stock, par value $0.01 per share (the "Common Stock"), of the Company at an
exercise price of $0.96875 per share (the "Option"). The Option is, in its
entirety, intended to be a non-qualified stock option.
2. Term of the Option. The Option (to the extent not earlier exercised or
forfeited) will expire five (5) years from the date hereof.
3. Commencement of Exercisability. Subject to Section 2, the Option will vest
quarterly, in equal installments, over a one (1) year period commencing
August 15, 1998. The installments provided for in this Section 3 are
cumulative. The installment which becomes exercisable pursuant to this
Section 3 shall remain exercisable until such installment is no longer
exercisable pursuant to Section 2 hereof and the other terms of this
Agreement.
4. Manner of Exercise. The Option may be exercised solely by delivery to the
secretary of the Company, or to his/her office, of all of the following
after the vesting thereof and prior to the expiration thereof:
(a) Notice in writing signed by the Grantee or any other person then
entitled to exercise the Option, stating that the Option, or portion thereof, is
thereby exercised;
(b) Full payment (in cash or by check, or as otherwise permitted under
Section 5 of this Agreement) to the Company for the Shares with respect to which
the Option, or portion thereof, is exercised;
(c) Such representations and documents as the Company, in its sole and
absolute discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended (the "Act"), and
any other federal or state securities laws or regulations. (The Company may, in
its absolute and sole discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on the certificate(s) evidencing the Shares and issuing stop transfer
orders to transfer agents and registrars);
(d) Full payment to the Company of all amounts which, under federal, state
or local law, the Company is required to withhold upon exercise of the Option,
provided, however, that the Grantee may arrange with the Company to satisfy such
federal, state or local law by having the Company withhold a portion of the
Shares; and
(e) In the event the Option shall be exercised by any person or persons other
than
<PAGE>
the Grantee, appropriate proof of the right of such person or persons to
exercise the Option.
The date of exercise of the Option shall be deemed to be the date all
of the foregoing conditions are met.
5. Cashless Exercise Procedures. The Company, in its sole and absolute
discretion, may establish procedures whereby the Grantee, to the extent
permitted by and subject to Regulation T issued by the Board of Governors of the
Federal Reserve System pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), federal income tax laws, and other federal, state
or local tax and securities laws, can exercise the Option, or a portion thereof,
without making a direct payment of the exercise price thereof to the Company. If
the Company so elects to establish a cashless exercise program, the Company
shall determine, in its sole and absolute discretion and from time to time, such
administrative procedures and policies as it deems appropriate. Such procedures
and policies shall be binding on the Grantee should he elect to utilize the
cashless exercise program.
6. Conditions to Issuance of Stock Certificates. The Shares deliverable
upon exercise of the Option, or any portion thereof, may be either previously
authorized but unissued shares of Common Stock or issued shares of Common Stock
which have then been reacquired by the Company. Such Shares shall be fully paid
and nonassessable. The Company shall not be required to issue or deliver any
certificate or certificates evidencing the Shares purchased upon the exercise of
the Option, or portion thereof, prior to fulfillment of all of the following
conditions (in addition to the conditions set forth in Section 4 of this
Agreement):
(a) The completion of any registration or other qualification of such
Shares under any state or federal law or under ruling or regulations of the
Securities and Exchange Commission or of any other governmental regulatory body,
which the Company shall, in its sole and absolute discretion, deem necessary or
advisable;
(b) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Company shall, in its sole and absolute
discretion, determine to be necessary or advisable; or
(c) The lapse of such reasonable period of time following the exercise of
the Option as the Company may from time to time establish for reasons of
administrative convenience.
7. Right of Stockholder. The holder of the Option shall not be, nor have
any of the rights or privileges of, a stockholder of the Company in respect of
any Shares purchasable upon the exercise of any part of the Option unless and
until certificates evidencing such Shares shall have been issued by the Company
to such holder.
<PAGE>
8. Other Conditions and Limitations.
(a) The Option is granted on the condition that the purchase of Shares
hereunder shall be for investment purposes and not with a view to resale or
distribution, except that such condition shall be inoperative if the offering of
Shares subject to the Option is registered under the Act or if in the opinion of
counsel for the Company such Shares may be resold without registration. At the
time of the exercise of the Option or any portion thereof, the Grantee will
execute such further agreements as the Company may require to implement the
foregoing condition and to acknowledge the Grantee's familiarity with
restrictions on the resale of the Shares under applicable securities laws.
(b) The Company will furnish upon request of the Grantee copies of such
publicly available financial and other information concerning the Company and
its business and prospects as may be reasonably requested by the Grantee in
connection with the exercise of the Option, or portion thereof.
9. Adjustments Upon Certain Events.
(a) In the event of any (i) subdivision or consolidation of the Common
Stock, (ii) dividend or other distribution (whether in the form of cash, shares
of Common Stock, other securities, or other property), (iii) recapitalization or
other capital adjustment of the Company or (iv) merger, consolidation or other
reorganization of the Company or other similar corporate transaction or event
that affects the Common Stock, appropriate adjustments shall be made, as
determined by the Board of Directors of the Company in its discretion, to
prevent dilution of the Grantee's interest in the Common Stock and to preserve
the benefits or potential benefits intended to be made available to the Grantee
under this Agreement; provided, however, that the number of shares of Common
Stock subject to the Option shall always be a whole number.
(b) No adjustment in the current exercise price per share (the "Per Share
Option Price") shall be required unless such adjustment would require an
increase or decrease of at least $0.10 in such price, provided, however, that
any adjustments which by reason of this clause (b) are not required to be made
shall be carried forward cumulatively and taken into account in any subsequent
calculation.
(c) In any case in which this Section 9 shall require that an adjustment as
a result of any event become effective from and after a record date, the Company
may elect to defer until the occurrence of such event (i) the issuance to the
Grantee, if the Grantee exercised the option after such record date and before
the occurrence of such events of the additional shares of Common Stock issuable
upon such exercise over and above the shares issuable immediately prior to
adjustment and (ii) the payment to the Grantee of any amount in cash in lieu of
a fractional share of Common Stock; provided, however, that the Company shall
deliver to the Grantee a due bill or other appropriate instrument evidencing the
Grantee's right
<PAGE>
to receive such additional Common Stock or such payment in lieu of such
fractional shares.
(d) Whenever the Per Share Option Price is adjusted as provided in this
Section 9 and upon any modification of the rights of the holder in accordance
with this Section 9, the Company shall promptly prepare a certificate of an
officer of the Company setting forth the Per Share Option Price and the number
of shares of Common Stock issuable upon exercise of the Option after such
adjustment or modification, a brief statement of the facts requiring such
adjustment or modification and the manner of computing the same and cause a copy
of such certificate to be mailed to the Grantee.
(e) If the Board of Directors of the Company shall declare any dividend or
other distribution in cash with respect to the Common Stock, other than out of
earned surplus, the Company shall mail notice thereof to the Grantee not less
than 15 days prior to the record date fixed for determining stockholders
entitled to participate in such dividend or other distribution.
10. Transferability. Neither the Option nor any rights under the Option,
shall be assignable, alienable, saleable, or transferable by the Grantee
otherwise than by will or by the laws of the descent and distribution or
pursuant to a qualified domestic relations order; provided, however, that, if so
determined by the Stock Option Committee of the Board of Directors of the
Company (the "Committee"), the Grantee may, in the manner established by the
Committee, designate a beneficiary or beneficiaries to exercise the rights of
the Grantee, and to receive any property distributable, with respect to the
Option upon the death of the Grantee. The Option, and each right under the
Option, shall be exercisable, during the Grantee's lifetime, only by the Grantee
or, if permissible under applicable law with respect to the Option, by the
Grantee's legal representative. Neither the Option nor any right under the
Option, may be pledged, alienated, attached, or otherwise encumbered, and any
purported pledge, alienation, attachment or encumbrance thereof shall be void
and unenforceable against the Company or any affiliate thereof.
11. Notices. All notices hereunder shall be in writing, and if to the
Company, shall be delivered personally to the Secretary of the Company or mailed
by certified mail to its principal office, addressed to the attention of the
Secretary, and if to the Grantee, shall be delivered personally or mailed by
certified mail to the Grantee at the address set forth below. Such addresses may
be changed at any time by notice from one party to the other. Notices shall be
effective upon the delivery thereof, if personally delivered, or three days
after the certification thereof.
12. Miscellaneous. This Agreement shall bind and inure to the benefit of
the parties hereto, the successors and assigns of the Company, and the heirs and
personal representatives of the Grantee. The validity, interpretation,
construction, performance and enforcement of this Agreement shall be governed by
the internal laws of the State of New Jersey, without regard to its conflicts of
law rules. This Agreement may be executed in one or more counterparts, which
together shall constitute one agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
HEALTHCARE IMAGING SERVICES, INC.
By: /s/ Elliott H. Veron
------------------------
Name: Elliott H. Vernon
Title: Chairman of the Board, President
and Chief Executive Officer
By: /s/ Frank Leo
-----------------
FRANK LEO
Address:
<PAGE>
EXHIBIT 5.1
Opinion of Swidler Berlin Shereff Friedman, LLP
January 29, 1999
HealthCare Imaging Services, Inc.
Tri-Parkway Corporate Park
200 Schulz Drive
Red Bank, New Jersey 07701
Gentlemen and Ladies:
HealthCare Imaging Services, Inc., a Delaware corporation (the "Company"),
intends to file with the Securities and Exchange Commission a registration
statement under the Securities Act of 1933, as amended, on Form S-8 (the
"Registration Statement") which relates to an aggregate of 5,200,000 shares (the
"Shares") of the Company's common stock, par value $.01 per share (the "Common
Stock"), which may be offered from time to time pursuant to the Company's 1997
Omnibus Incentive Plan (the"Omnibus Plan"), the Company's 1997 Employee Stock
Purchase Plan (the "Purchase Plan"), the Stock Option Agreement, dated as of
April 13, 1998, between the Company and Robert Baca (the"Baca Agreement") and
the Stock Option Agreement, dated as of July 30, 1998, between the Company and
Frank Leo (the "Leo Agreement"). The Omnibus Plan, the Purchase Plan, the Baca
Agreement and the Leo Agreement are referred to collectively herein as the
"Plans". This opinion is an exhibit to the Registration Statement.
We have at times acted as counsel to the Company in connection with certain
corporate and securities matters, and in such capacity we are familiar with the
various corporate and other proceedings relating to the proposed offer and sale
of the Shares as contemplated by the Registration Statement. We have examined
copies (in each case signed, certified or otherwise proved to our satisfaction)
of the Company's Certificate of Incorporation as presently in effect, its
By-Laws as presently in effect, minutes and other instruments evidencing actions
taken by its directors and stockholders, the Plans and such other documents and
instruments relating to the Company and the proposed offering as we have deemed
necessary under the circumstances. Insofar as this opinion relates to securities
to be issued in the future, we have assumed that all applicable laws, rules and
regulations in effect at the time of such issuance will be the same as such
laws, rules and regulations in effect as of the date hereof.
We note that we are members of the Bar of the State of New York and that we
are not admitted to the Bar of the State of Delaware. To the extent that the
opinion expressed herein involves the corporate law of the State of Delaware,
our opinion is based solely upon our reading of the Delaware General Corporation
Law as reported by Prentice Hall Legal and Financial Services without any
investigation of the legal decisions or other statutory provisions in effect in
such state that may relate to the opinions expressed herein.
-1-
<PAGE>
Based on the foregoing, and subject to and in reliance on the accuracy and
completeness of the information relevant thereto provided to us, it is our
opinion that the Shares to be issued pursuant to the Plans (including upon the
proper exercise of stock options granted pursuant to the Plans) have been duly
authorized, and (subject to the effectiveness of the Registration Statement and
compliance with applicable state securities laws) when issued in accordance with
the terms of the Plans and any applicable award agreements, will be legally and
validly issued, fully paid and non-assessable.
It should be understood that nothing in this opinion is intended to apply
to any disposition of the Shares which any participant or optionee in the Plans
might propose to make.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and as an exhibit to any filing made by the Company under
the securities or "Blue Sky" laws of any state.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose, except as expressly provided in the
preceding paragraph, without our express written consent, and no party other
than you is entitled to rely on it. This opinion is rendered to you as of the
date hereof, and we undertake no obligation to advise you of any changes in any
matters herein, whether legal or factual, after the date hereof.
Very truly yours,
/s/ SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
SWIDLER BERLIN SHEREFF FRIEDMAN, LLP
<PAGE>
EXHIBIT 23.1
Consent of Deloitte & Touche LLP
To the Board of Directors and Stockholders
of HealthCare Imaging Services, Inc.
Red Bank, New Jersey
We consent to the incorporation by reference in this Registration Statement
of HealthCare Imaging Services, Inc. (the "Company") on Form S-8 of the report
of Deloitte & Touche LLP dated March 24, 1998, appearing in the Annual Report on
Form 10-K of the Company for the year ended December 31, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
New York, New York
January 28, 1999
<PAGE>
EXHIBIT 23.2
Consent of David Fischer & Co., P.A.
To the Board of Directors and Stockholders
of HealthCare Imaging Services, Inc.
Red Bank, New Jersey
We consent to the incorporation by reference in this Registration Statement
of HealthCare Imaging Services, Inc. (the "Company") on Form S-8 of (i) the
report of David Fischer & Co., P.A., dated August 18, 1998, on the Financial
Statements of Irving N. Beran M.D., P.A. and Affiliates for the years ended
December 31, 1997 and 1996 appearing in the Current Report on Form 8-K of the
Company filed with the Securities and Exchange Commission on October 16, 1998
and (ii) the report of David Fischer & Co., P.A., dated January 7, 1998, on the
Financial Statements of M.R. Radiology Imaging of Lower Manhattan, P.C. for the
year ended December 31, 1996 appearing in the Current Report on Form 8-K/A-1 of
the Company filed with the Securities and Exchange Commission on January 16,
1998.
/s/ David Fischer & Co., P.A.
DAVID FISCHER & CO., P.A.
Morristown, New Jersey
January 28, 1999
