As filed with the Securities and Exchange Commission on April 17, 1998
File No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
LIFEPOINT, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 33-0539168
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
10400 Trademark Street, Rancho Cucamonga, California 91730
(Address of Principal Executive Offices) (Zip Code)
Financial Consulting Agreement dated as of January 19, 1998
(Full Title of the Plan)
Ms. Linda H. Masterson
LifePoint, Inc.
10400 Trademark Street
Rancho Cucamonga, CA 91730
(909) 466-8047
(Name, Address and Telephone Number of Agent for Service)
Copy to:
Robert W. Berend, Esq.
Wachtel & Masyr, LLP
110 East 59th Street
New York, NY 10022
CALCULATION OF REGISTRATION FEE
<PAGE ii>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate
to be to be Price Offering Amount of
Registered Registered Per Share(1) Price(1) Registration Fee
- ------------- ---------- ------------ -------- ----------------
Common Stock, 300,000 $0.50(2) $150,000(2) $172.50
$.001 par
value shares
Common Stock 300,000 $2.00(3) $600,000(3) $177.00
$.001 par value
issuable upon the
exercise of
options
Total $349.50
______________________
(1) Estimated solely for the purpose of calculating the registration fee.
(2) The proposed maximum offering price and the registration fee for the
shares are computed on the basis of the price set in the Financial
Consulting Agreement.
(3) The proposed maximum offering price and the registration fee for the
shares to be issued upon the exercise of the options are computed,
pursuant to Rule 457(h), on the basis of the exercise prices of the
options as set forth in the Financial Consulting Agreement.
<PAGE I-1>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
The information required by Item 1 of Part I is being
separately provided by LifePoint, Inc., a Delaware corporation
formerly named U.S. Drug Testing, Inc. (the "Company" or the
Registrant"), to Michael M. Markow (the "Consultant") as
specified by Rule 428(b)(1) promulgated under the Securities Act
of 1933, as amended (the "Securities Act").
Item 2. Registrant Information and Employee Agreement Annual
Information
The Company will provide, without charge, to the
Consultant, upon his written or oral request, a copy of all
documents incorporated by reference in Item 3 of Part II of this
Registration Statement, which are incorporated by reference in
the Section 10(a) Prospectus, and all other documents required
to be delivered to employees pursuant to Rule 428(b) promulgated
under the Securities Act. All requests should be directed to
Linda H. Masterson, President and Chief Executive Officer,
LifePoint, Inc., 10400 Trademark Street, Rancho Cucamonga,
California, 91730, telephone number, (909) 466-8047.
<PAGE II-1>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents, which are on file with the
Securities and Exchange Commission (the "Commission"), are
incorporated in this Registration Statement by reference:
(a) the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1997.
(b) the Company's Quarterly Reports on Form 10-Q for the
quarters ended June 30, 1997, September 30, 1997 and
December 31, 1997.
(c) the description of the Company's Common Stock, $.001
par value (the "Common Stock"), as contained in the
Company's Registration Statement on Form 8-A filed on
February 4, 1998 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
Certain events which are considered to be significant to
the Company occurred subsequent to the filing of the Company's
Annual Report on Form 10-K for the fiscal year ended March 31,
1997 and have been properly disclosed in the Company's Quarterly
Reports on Form 10-Q for the quarters ended June 30, 1997,
September 30, 1997 and December 31, 1997. These documents are
incorporated herein by reference as noted above. The
disclosures regarding these
<PAGE II-2>
subsequent events included in the Company's Quarterly Reports on Form 10-Q
should be read in conjunction with the Company's annual financial statements
included in the Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1997.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all
shares offered hereby have been sold or which deregisters all
shares then remaining unsold shall be deemed to be incorporated
in this Registration Statement by reference and to be a part
hereof from the date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
The financial statements of the Company at March 31, 1997
and 1996 and for the years then ended, appearing in the
Company's Annual Report on Form 10-K and incorporated herein by
reference, have been audited by Ernst & Young LLP, independent
auditors, and for the year ended March 31, 1995, by Wolinetz,
Gottlieb & Lafazan, P.C., independent auditors, as set forth in
their respective reports thereon (the former of which contains
an explanatory paragraph describing conditions that raise
substantial doubt about the Company's ability to continue as a
going concern as described in Note 2 to the financial
statements) which are incorporated herein by reference. Such
financial statements are incorporated herein by reference in
reliance upon such reports given upon the authority of such
firms as experts in accounting and auditing.
The validity of the shares offered hereby will be passed
upon for the Company by Wachtel & Masyr, LLP, 110 East 59th
Street, New York, New York 10022.
Item 6. Indemnification of Directors and Officers
The Company's Certificate of Incorporation provides for the
maximum indemnification of the Company's officers and directors,
employees and agents as permitted by Section 145 of the General
Corporation Law of the State of Delaware (the "GCL"). Section
145(a) empowers a corporation to indemnify any person who was or
is a party or who is threatened to be made a party to any
threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, except
in the case of an action by or in the right of the corporation,
by reason of the fact that he or she is or was director,
officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director,
officer, employee or agent of another corporation or other
enterprise. Depending on the character of the proceeding, a
corporation may indemnify against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred in connection with such action, suit or
proceeding if the person indemnified acted in good faith and in
a manner he or she reasonably believed to be in or not opposed
to the best interests of the corporation and, with respect to
any criminal action or proceedings, had no reasonable cause to
believe his or her conduct was unlawful.
<PAGE II-3>
Pursuant to Section 145(b) of the GCL, a corporation may
indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he or she is or
was a director, officer, employee or agent of the corporation,
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or
other enterprise, against expenses, including amounts paid in
settlement and attorney's fees actually and reasonably incurred
by him or her in connection with the defense or settlement of
the action or suit if he or she acted in good faith and in a
manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter
as to which such a person has been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable to the corporation or for amounts paid
in settlement to the corporation unless and only to the extent
that the court in which the action or suit was brought or other
court of competent jurisdiction determines upon application
that, in view of all the circumstances of the case, the person
is fairly and reasonably entitled to indemnity for such expenses
as the court deems proper.
To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to above,
or in defense of any claim, issue or matter therein, then,
pursuant to Section 145(c) of the GCL, he or she must be
indemnified by the corporation against expenses, including
attorney's fees, actually and reasonably incurred by him in
connection with the defense. Any indemnification under
subsections (a) and (b) of Section 145 of the GCL, unless
ordered by a court or advanced pursuant to this Section, must be
made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances. The
determination must be made pursuant to subsection (d) of Section
145 if the person is a director or officer at the time of the
determination: (a) by the stockholders; (b) by a majority vote
of the directors who were not parties to the action, suit or
proceeding, even if less than a quorum; (c) by a majority vote
of a committee consisting of directors who were not parties to
the action, suit or proceeding, even if less than a quorum; or
(d) if there are no directors who were not parties to the
action, suit or proceeding, or if such directors so order, by
independent legal counsel in a written opinion.
Pursuant to Section 145(e) of the GCL, the corporation may
provide that the expenses of a director or officer incurred in
defending a civil or criminal action, suit or proceeding be paid
by the corporation as they are incurred and in advance of the
final disposition of the action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director or officer to
repay the amount if it is ultimately determined by a court of
competent jurisdiction that he or she is not entitled to be
indemnified by the corporation.
The indemnification and advancement of expenses authorized
pursuant to the subsections of Section 145 of GCL described
above: (a) do not exclude any other rights to which a person
seeking indemnification or advancement of expenses may be
entitled under any bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to an action in
his or her official capacity and as to an action in another
capacity while holding his or her office, and (b) continues for
a person who has ceased to be a director, officer, employee or
agent and inures to the benefit of the heirs, executors and
administrators of such a person.
<PAGE II-4>
Section 145(g) of the GCL permits a corporation to purchase
and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, 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 such person's status as such,
whether or not the corporation would have the power to indemnify
such person against such liability under Section 145. The
Company has in effect a standard directors' and officers'
liability insurance policy.
See the last undertaking in Item 17 to this Registration Statement.
Item 7. Exemption from Registration Claimed
The 300,000 shares of the Common Stock issued pursuant to a
Consulting Agreement, which constitutes the plan for the
purposes of this Registration Statement, to Michael M. Markow
(the "Consultant"), of which 200,000 shares are currently being
held in escrow, were, upon issuance, restricted securities as
such term is defined in Rule 144(a)(3) promulgated under the
Securities Act and were issued to the Consultant pursuant to the
exemption from registration of Section 4(2) of the Securities
Act, in that it was a transaction not involving a public
offering, only one offeree being involved.
Item 8. Exhibits
Number Exhibit
- ------ -------
4(a) Copy of Financial Consulting Agreement dated as of
January 19, 1998 between the Registrant and the
Consultant.
4(b) Form of stock option issued to the Consultant pursuant
to Exhibit 4(b).
5 Opinion of Wachtel & Masyr, LLP.
23(a) Consent of Wachtel & Masyr, LLP (included in Exhibit 5).
23(b) Consent of Ernst & Young LLP.
23(c) Consent of Wolinetz, Gottlieb & Lafazan, P.C.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
<PAGE II-5>
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement; and
(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.
1. 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.
2. 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.
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the Registrant's annual report pursuant to
Section 13(a) 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.
The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the Prospectus, to each person to
whom the Prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the
Prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act;
and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the
Prospectus, to deliver, or cause to be delivered to each person
to whom the Prospectus is sent or given, the latest quarterly
report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
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
<PAGE II-6>
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE II-7>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Rancho Cucamonga, State of California, on April 16,
1998.
LIFEPOINT, INC.
(Registrant)
By: /s/ Linda H. Masterson
--------------------------------------
Linda H. Masterson
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated on April 16, 1998.
Signature Title
/s/ Linda H. Masterson Principal Executive Officer and Director
- ----------------------
Linda H. Masterson
Position Vacant Principal Financial and Accounting Officer
/s/ Peter S. Gold Director
- -----------------
Peter S. Gold
/s/ Jonathan J. Pallin Director
- ----------------------
Jonathan J. Pallin
/s/ Paul Sandler Director
- ----------------
Paul Sandler
<PAGE E-1>
LIFEPOINT, INC.
REGISTRATION STATEMENT ON FORM S-8
E X H I B I T S
<PAGE E-2>
Exhibit Index
Page
Number Exhibit Number
- ------ ------- ------
4(a) Copy of Financial Consulting Agreement dated
as of January 19, 1998 by and between the
Registrant and Michael M. Markow
(the "Consultant") E-3
4(b) Form of Stock Option issued by
the Registrant to the Consultant pursuant
to Exhibit 4(a) E-12
5 Opinion of Wachtel & Masyr, LLP E-22
23(a) Consent of Wachtel & Masyr, LLP is
included in their opinion filed as
Exhibit 5 hereto E-22
23(b) Consent of Ernst & Young LLP E-24
23(c) Consent of Wolinetz, Gottlieb & Lafazan, P.C. E-25
<PAGE E-3>
Exhibit 4(a)
FINANCIAL CONSULTING AGREEMENT
------------------------------
THIS AGREEMENT is made and entered into as of this 19th day
of January, 1998, and is made by and between Michael M. Markow
(hereinafter, "Consultant") and U.S. Drug Testing, Inc., a
Delaware corporation (hereinafter, the "Company").
WITNESSETH:
WHEREAS, the Company is desirous of obtaining financial
advice and business consulting services (hereinafter, the
"Services");
WHEREAS, Consultant is experienced in providing financial
advice and business consulting services such as the Services
desired by the Company;
WHEREAS, the Company desires to retain Consultant and
Consultant desires to be retained to provide the Services to the
Company;
WHEREAS, Consultant will devote substantial time and incur
substantial expense in connection with the provision of the
Services to the Company, under and pursuant to the terms of this
Agreement; and,
WHEREAS, in consideration for Consultant agreeing to devote
the time and incur the expense in performing the Services under
and pursuant to the terms of this Agreement, the Company agrees
to pay Consultant the considerations called for in this
Agreement.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein set forth, the Company and Consultant
hereby agree as follows:
AGREEMENT
Section 1. CONSULTING SERVICES. Consultant shall provide to
the Company, when and as requested by the Company, from time to
time and during normal business hours, financial advice and
business consulting services concerning, but not limited to:
(i) acting as the liaison for the Company with
respect to institutional investors and/or broker-dealers utilized
by the Company.
(ii) introducing market makers for the Company's
traded securities;
<PAGE E-4>
(iii) evaluating financing proposals the Company
may receive;
(iv) assisting the Company in stockholder and
investor relations, including the financial public relations and
participating in the preparation of annual reports and other press
or public releases of information;
(v) providing long-term business, managerial and
financial planning; and,
(vi) investigating and analyzing corporate
reorganization and expansion, and merger/acquisition
opportunities.
In performing the services, Consultant may utilize the services of
Worldwide Corporate Finance, a California corporation
(hereinafter, "WCF"), of which Consultant is the President.
Section 2. OTHER SERVICES. In connection with the
Services to be provided by Consultant, Consultant shall assist
the Company in the accumulation of any due diligence material
and in the preparation of any and all documents on behalf of the
Company as deemed necessary and appropriate by Consultant.
Notwithstanding the foregoing, Consultant shall be under no
obligation to provide Services for any minimum number of hours
per month during the term hereof. Any other services requested
by the Company, such as, for example, obtaining and/or rendering
legal, tax or other opinions on specific transactions, shall be
the subject of separate agreements between the Company and
Consultant if not otherwise covered hereunder.
Section 3. TERM OF AGREEMENT. This Agreement shall
become effective as of the date first written above and shall
continue for a period of Two (2) Years thereafter (hereinafter,
the "Term"), at which time this Agreement shall automatically
expire.
Section 4. SCOPE OF RETENTION. The Company hereby
retains Consultant as its non-exclusive financial advisor and
business consultant during the Term of this Agreement. In the
event that the Company does not call upon Consultant to perform
Services during the Term of this Agreement, the Company shall
nonetheless remain liable to pay the fee and additional
compensation as set forth in Sections 5 and 6 hereof.
Section 5. INITIAL COMPENSATION. As the initial
compensation for the Services, the Company shall pay Consultant
upon execution of this Agreement the sum of One Hundred Fifty
Thousand Dollars ($150,000), which sum shall be treated as a
non-refundable retainer (the "Retainer"). Consultant has elected
to receive payment of the Retainer in a non-cash transaction in
which the fee set forth in this Section 5 shall be considered
paid in full by delivery to Consultant the amount of Three
Hundred Thousand (300,000) shares of the Company's common stock
(hereinafter, the "Shares"), which Shares shall be put in escrow
by the Company within Fifteen (15) Days from the date first
written above and of which the amount of One
<PAGE E-5>
Hundred Thousand (100,000) Shares shall be released to Consultant
immediately thereafter, and the balance of the Shares shall be released to
Consultant in Four (4) equal installments in the amount of Fifty
Thousand (50,000) Shares each which installments shall be
released to Consultant in Ninety (90) Day intervals following
the date of the first release. The Shares shall be included by
the Company in a registration statement on Form S-8 or other
appropriate form which the Company shall file, with counsel
selected and paid for by Consultant, provided that any such
registration statement has been reviewed and approved from a
legal perspective by counsel to the Company, with the Securities
and Exchange Commission (hereinafter, the "SEC") to register
those Shares as soon as the Company may lawfully do so.
Section 6. ADDITIONAL COMPENSATION. In addition to the
Retainer payable pursuant to Section 5 hereof, Consultant shall
be compensated with options (collectively, the "Options") as
follows:
(i) Fifty Thousand (50,000) options
(hereinafter, the "First Options") each of these First Options
entitling Consultant to purchase One (1) Share at the price per
Share equal to One Dollar ($1.00), which First Options shall be
exercisable from the date first written above and for a period of
One Hundred and Fifty (150) Days thereafter;
(ii) Fifty Thousand (50,000) options
(hereinafter, the "Second Options") each of these Second Options
entitling Consultant to purchase One (1) Share at a price per
Share equal to One Dollar Fifty Cents ($1.50), which Second
Options shall be exercisable from the date first written above and
for a period of One Hundred and Eighty (180) Days thereafter;
(iii) Fifty Thousand (50,000) options
(hereinafter, the "Third Options") each of these Third Options
entitling Consultant to purchase One (1) Share at a price per
Share equal to Two Dollars Fifty Cents ($2.50), which Third
Options shall be exercisable from the date first written above and
for a period of One (1) Year thereafter;
(iv) Fifty Thousand (50,000) options
(hereinafter, the "Fourth Options") each of these Fourth Options
entitling Consultant to purchase One (1) Share at a price per
Share equal to Three Dollars ($3.00), which Fourth Options shall
be exercisable from the date first written above and for a period
of Two (2) Years thereafter; and,
(v) One Hundred Thousand (100,000) options
(hereinafter, the "Fifth Options") each of these Fifth Options
entitling Consultant to purchase One (1) Share at a price per
Share equal to Four Dollars ($4.00), which Fifth Options shall
be exercisable from the date first written above and for a period
of Three (3) Years thereafter.
The Company shall undertake to file a registration statement on
Form S-8 or other appropriate form, with counsel selected and paid
for by Consultant, provided that any such registration statement
has been reviewed and approved from a legal perspective by counsel
to the Company to register with the SEC the Shares underlying all
the Options as soon as the Company may lawfully do so.
<PAGE E-6>
Section 7. PAYMENT OF REASONABLE COSTS. Consultant
shall pay for all his or WCF's out-of-pocket expenses, including
his or its travel and entertainment, incurred by Consultant or
WCF in connection with the performance of the Services pursuant
hereunder. All fees and disbursements of counsel and of
auditors for engagements specific to the Services provided, if
any, must be approved in writing by the Company and shall be the
subject of separate agreements if not otherwise covered
thereunder.
Section 8. NON-CIRCUMVENTION. This Agreement requires
the services of third parties such as market makers, broker-
dealers or financial institutions (hereinafter, collectively,
the "Sources") doing business with Consultant pursuant
hereunder. As soon as practicable after the date first written
above the Company shall provide Consultant with a list of
Sources already known to the Company which listed Sources shall
be excluded from the provisions of this Section 8.
Notwithstanding the foregoing, prior to engaging on behalf of
the Company any Source not listed, Consultant will identify such
unlisted Source in writing to the Company, and the Company shall
have Five (5) Business Days to provide proof to the satisfaction
of Consultant that such unlisted Source is, in fact, already
known to the Company.
With respect to any Source introduced by the Consultant, the
Company warrants that it shall not, and shall use reasonable
efforts to cause its partners, officers, employees, affiliates
or associates not to, during the Term and for a period of Two
(2) Years following the termination or expiration of this
Agreement:
(i) disclose to any other party the identity of
any such introduced Source; and,
(ii) make any contact, or otherwise become
involved with any such introduced Source in any transaction for
or, on behalf of, the Company.
The Company agrees that any such unauthorized disclosure and/or
contact will cause irreparable harm and significant financial
injury to Consultant and that, should legal action be required
by Consultant to remedy any harm and/or financial injury, the
financial burden of costs and remedies shall be borne by the
Company.
Section 9. COUNTERPARTS. This Agreement may be
executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall be but a
single instrument.
Section 10. EXPERT TESTIMONY. Should Consultant or any
of WCF's employees, contractors or affiliates be required to
testify in the event of any litigation relating to matters with
respect to which Consultant or WCF has expertise, such as, for
example, matters similar to the Services pursuant hereunder, the
Company agrees to pay Consultant or his designee, the Per Diem
rate customary for experts providing such expert testimony in the
jurisdiction where such testimony is to be provided, plus
reasonable out of pocket expenses, for all the time required for
such testimony.
<PAGE E-7>
Section 11. INDEMNIFICATION. The Company and Consultant
agree to indemnify and hold the other party and all of the other
party's officers, directors, employees, affiliates and agents
harmless from and against any and all manner of actions, causes
of action, claims, demands, costs, damages, liabilities, losses,
obligations and expenses (including actual attorneys' fees)
arising or resulting from or related to Consultant's performance
of the Services pursuant hereunder, unless they are due to
breach of this Agreement or gross negligence or willful
misconduct of the party to be indemnified or of any of its
officers, directors, employees, affiliates and agents.
Section 12. INDEPENDENT CONTRACTOR. Consultant and the
Company hereby acknowledge and agree that Consultant is an
independent contractor and is not a licensed broker-dealer.
Consultant shall not hold himself out as, nor shall he take any
action from which others might infer that he or WCF is a partner
or agent of, or a joint venturer with the Company. In addition,
Consultant shall take no action which binds, or purports to
bind, the Company.
Section 13. LAW; FORUM AND JURISDICTION. This Agreement
shall be construed and interpreted in accordance with the laws
of the State of California. The parties agree that any dispute
arising under or with respect to or in connection with this
Agreement, whether during the Term of this Agreement or at any
subsequent time, shall be resolved fully and exclusively by
binding arbitration in accordance with the commercial rules then
in force of the American Arbitration Association and the
proceedings taking place in Los Angeles, California.
Section 14. NOTICES. Any notices or other communications
required or permitted hereunder shall be sufficiently given if
personally delivered, or sent by express mail or telegram, or
transmitted by fax or e-mail, addressed as set forth herein below.
If to Consultant:
Michael M. Markow, President
Worldwide Corporate Finance
15760 Ventura Boulevard, Suite 1020
Encino, CA 91436
Phone: 1-818-783-0054
Fax: 1-818-783-1120
e-mail: [email protected]
<PAGE E-8>
If to the Company
U.S. Drug Testing, Inc.
10400 Trademark Street
Rancho Cucamonga, CA 91730
Phone: 1-909-466-8047
Fax: 1-909-948-3591
Attn: Linda H. Masterson, President and CEO
The parties may change their address to any other address as shall
be furnished by written notice from any party changing address to
the other party in the manner for giving notices as set forth in
this Section 14. Any notice or communication given pursuant
hereunder shall be deemed to have been given as of the date so
delivered, sent, or transmitted.
Section 15. ATTORNEYS' FEES. In the event that any
party institutes any action to enforce this Agreement or to
secure relief from any default hereunder or breach hereof, the
prevailing party shall be entitled to reimbursement from the
non-prevailing party for all costs, including reasonable
attorneys' fees, incurred in connection therewith and in
enforcing or collecting any judgment rendered therein.
Section 16. CONFIDENTIALITY. Each party hereto agrees
with the other party hereto that, unless and until mutually
agreed upon, they and their representatives will hold in strict
confidence all data and information obtained with respect to the
other party or any subsidiary or affiliate thereof from any
representative, officer, director or employee, or from any books
or records or from personal inspection, of such other party, and
shall not use such data or information or disclose the same to
others, except:
(i) to the extent such data or information are a
matter of public knowledge or are required by law to be
published; and,
(ii) to the extent that such data or information
must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
Section 17. TERMINATION. This Agreement may be
terminated by Consultant during the Term hereof by notice to the
Company in the event that the Company shall have provided
materially inaccurate or misleading information, of any type or
nature, to the Consultant, or failed or been unable to comply in
any material respect with any of the terms, conditions or
provisions of this Agreement on the part of the Company to be
performed, complied with or fulfilled within the respective
times, if any, herein provided for, unless compliance therewith
or the performance or satisfaction thereof shall have been
expressly waived by Consultant in writing.
<PAGE E-9>
Any termination of this Agreement pursuant to the proceeding
paragraph of Section 17 shall be without liability of any
character (including, but not limited to, loss of anticipated
profits or consequential damages) on the part of the Company,
except that the Company shall remain obligated to pay the fees,
other compensation and costs otherwise to be paid, as set forth
in Sections 5, 6 and 7 hereof.
This Agreement may be terminated by the Company for "Cause" by
notice to Consultant in the event of failure by Consultant or
WCF to perform his material duties hereunder which failure
continues for not less than Thirty (30) Days after written
notice from the Company is given to Consultant specifying such
failure. The Company may also terminate for "Cause" if the
Consultant or WCF is under investigation by the Securities and
Exchange Commission, the Justice Department or any state
agencies comparable to the aforementioned federal agencies; the
Consultant or WCF has been convicted of a felony; any action by
the Consultant or WCF involving dishonesty, fraud or gross or
willful misconduct in connection with his or its service on
behalf of the Company; intentional conduct on behalf of the
Consultant or WCF which is knowingly detrimental to the Company
and the Consultant's or WCF's failure to perform in a competent
manner his duties resulting in damage or detriment to the
Company. Upon termination of this Agreement by the Company for
Cause, all Shares not already released to Consultant shall be
canceled and Consultant shall return to the Company all Options
not exercised by Consultant as of the date of termination, which
unexercised Options shall become null and void.
Section 18. THIRD PARTY BENEFICIARIES. This Agreement
is solely among and between Consultant and the Company and,
except as specifically provided herein, no creditor, director,
officer, stockholder, employee, agent, independent contractor or
any other person or entity shall be deemed to be a third party
beneficiary of this Agreement.
Section 19. SURVIVAL; TERMINATION. The representations,
warranties and covenants of the respective parties shall survive
the consummation of the transactions herein contemplated.
Section 20. AMENDMENT OR WAIVER. Every right and remedy
provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and may
be enforced concurrently herewith, and no waiver by any party of
the performance of any obligation by the other party shall be
construed as a waiver of the same or any other obligation or
default then, theretofore, or thereafter occurring or existing.
At any time during the Term this Agreement may be amended by a
written amendment executed by the parties hereto, with respect
to any of the terms contained herein, and any term or condition
of this Agreement may be waived or the time for performance
hereof may be extended by a written notice executed by the
waiving or extending party.
Section 21. INCORPORATION OF RECITALS. All of the
recitals hereof are incorporated by this reference and are made
a part hereof as though set forth at length herein.
<PAGE E-10>
Section 22. HEADINGS; CONTEXT. The headings of the
sections and paragraphs contained in this Agreement are for
convenience of reference only, do not form a part hereof, and in
no way modify, interpret or construe the meaning of this
Agreement.
Section 23. BENEFIT. This Agreement shall be binding
upon and shall inure only to the benefit of the parties hereto,
and their assigns permitted hereunder. This Agreement shall not
be assigned by any party without the prior written consent of
the other party.
Section 24. SEVERABILITY. In the event that any
particular provision or provisions of this Agreement shall for
any reason hereafter be determined to be unenforceable, or in
violation of any law, governmental order or regulation, such
unenforceability or violation shall not affect the remaining
provisions of this Agreement, which shall continue in full force
and effect and be binding upon the respective parties hereto.
Section 25. NO STRICT CONSTRUCTION. The language of
this Agreement shall be construed as a whole, according to its
fair meaning and intent, and not strictly for or against either
party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or the terms or
conditions hereof.
Section 26. EXECUTION KNOWING AND VOLUNTARY. In
executing this Agreement, the parties severally acknowledge and
represent that each:
(i) has fully and carefully read and considered
this Agreement;
(ii) has been or has had the opportunity to be
fully apprised by his or its attorneys of the legal effect and
meaning of this Agreement and all terms and conditions hereof;
(iii) has been afforded the opportunity to
negotiate as to any and all terms hereof; and,
(iv) is executing this Agreement voluntarily,
free from any influence, coercion or duress of any kind.
Section 27. ENTIRE AGREEMENT. This Agreement represents
the entire agreement between the parties hereto relating to the
subject matter hereof. This Agreement alone fully and
completely expresses the agreement of the parties relating to
the subject matter hereof and there are no other courses of
dealing, understandings, agreements, representations or
warranties, written or oral, except as set forth herein. This
Agreement may not be amended or modified, except by a written
agreement signed by all parties hereto.
<PAGE E-11>
IN WITNESS WHEREOF, the parties hereto have executed or caused
this Agreement to be executed as of the date first written
above.
"Consultant":
/s/Michael M. Markow
- --------------------
Michael M. Markow
"Company":
U.S. Drug Testing, Inc.
/s/ Linda H. Masterson
- ----------------------
by: Linda H. Masterson
its: President and CEO
<PAGE E-12>
Exhibit 4(b)
OPTION TO PURCHASE _______ SHARES
OF COMMON STOCK OF
U.S. DRUG TESTING, INC.
ISSUED TO
MICHAEL M. MARKOW
DATED: JANUARY 19, 1998
OPTION granted as of this 19th day of January, 1998 by U.S.
DRUG TESTING, INC., a Delaware corporation (hereinafter called
the "Corporation"), to MICHAEL M. MARKOW (hereinafter called the
"Optionee").
1. Grant of Option. In consideration of the Optionee's
agreement to serve as a consultant pursuant to an agreement
dated as of January 19, 1998 (the "Consulting Agreement") with
the Corporation, the Corporation, subject to the terms of this
Agreement and the Consulting Agreement, hereby irrevocably
grants to Optionee on January 19, 1998 (the "Date of Grant") the
right to purchase (hereinafter called the "Option") an aggregate
of up to ________ shares of the Common Stock, $.001 value (the
"Common Stock), of the Corporation, subject to adjustment as
provided in paragraph 8 hereof.
2. Exercise Price. The exercise price of the shares of
the Common Stock covered by the Option will be $_____ per share,
subject to adjustment as provided in paragraph 8 hereof.
3. Exercise of Option. The Option may be exercised from
time to time, in whole or in part, during the period commencing
__________, 1998 and terminating on _______________ (the
"Expiration Date").
The Option may be exercised as provided in this Section 3
by notice and payment to the Corporation as provided in Sections
6 and 9, respectively, hereof.
<PAGE E-13>
4. Rights as Stockholder. The holder of the Option will
not have any right to dividends or any other rights of a
stockholder with respect to a share of the Common Stock subject
to the Option until such share shall have been issued to him
following exercise of the Option. Such issuance shall be
evidenced by the appropriate entry on the books of the duly
authorized transfer agent of the Corporation, provided that the
date of issue shall not be earlier than the Exercise Date with
respect to such share.
5. Registration.
a) The Optionee understands that the shares of the
Common Stock subject to the Option and issuable upon
the exercise thereof may not, at the time of
exercise, be registered under the Securities Act of
1933, as amended (the "Securities Act"), nor is the
Option or such shares registered under the
Securities Act on the Date of Grant. The Optionee
represents that the Option is being acquired by him,
and, in the event the underlying shares are not
registered at the time of exercise, such shares of
the Common Stock will be acquired by him, for
investment for his own account and not with a view
to, or in connection with, the sale or other
distribution thereof.
b) In the event the shares issuable upon exercise of
the Option are not then registered or, if required
by the Securities Act, there is not in effect a
prospectus complying with Section 10(a) of the
Securities Act, the certificate or certificates for
the shares of the Common Stock issued upon such
exercise shall bear the following legend:
<PAGE E-14>
"The shares evidenced by this Certificate have been
purchased for investment and may not be sold or
transferred unless there is delivered an opinion of
counsel to the Company that either (1) such shares
have been registered under the Securities Act of 1933,
as amended, and, if required, there is in effect a
current prospectus meeting the requirements of
subsection 10(a) of said Act which is being or will be
delivered to the purchaser or transferee at or prior
to the time of delivery of such shares for sale or
transfer, or (2) such shares may sold without
violating Section 5 of said Act."
6. Method of Exercise of Option. Subject to the terms
and conditions of this Agreement, the Option will be exercisable
by notice and payment to the Corporation in accordance with the
procedure prescribed herein. Each such notice, which may be in
the form of Exhibit A hereto, shall:
a) state the election to exercise the Option and the
number of shares of the Common Stock in respect of
which it is being exercised;
b) contain, if requested, a representation and
agreement as to investment intent with respect to
such shares in form satisfactory to the
Corporation's counsel;
c) be signed by the person or persons entitled to
exercise the Option, including the address to which
share certificates are to be delivered, and, if the
Option is being exercised by any person or persons
other than the Optionee, be accompanied by proof,
satisfactory to counsel for the Corporation, of the
right of such person or persons to exercise the
Option; and
d) be accompanied by payment in full of the purchase
price for the shares of the Common Stock covered by
the notice in the form of a check, bank draft or
money order payable to the Corporation.
Upon receipt of such notice (such date and time of receipt
being herein called the "Exercise Date"), the Option will be
deemed to have been exercised with respect to such particular
shares of the Common Stock if, and only if, the preceding
provisions of this Section 6
<PAGE E-15>
and the provisions of Section 9 hereof shall have been complied with.
Notwithstanding anything in this Agreement to the contrary, any notice
of exercise given pursuant to the provisions of this Section 6 will be
void and of no effect if all the preceding provisions of this Section 6 and
the provisions of Section 9 shall not have been complied with.
The certificate or certificates representing the shares of the
Common Stock as to which the Option shall be exercised will be
registered in the name of the person or persons exercising the
Option and will be delivered, as soon as practicable after the
Exercise Date, to the person or persons exercising the Option at
the place specified in the notice of exercise of the Option, but
only upon compliance with all of the provisions of this
Agreement.
7. Stock Dividend and Capital Changes.
a) In the event that the Corporation shall pay a stock
dividend with respect to the Common Stock, the number of
shares of the Common Stock subject to this Option shall
be increased by the number of shares which would have
been issuable to the holder if such holder had exercised
this Option immediately prior to the record date related
to the declaration and payment of such share dividend.
The exercise price of the shares subject to the Option
shall be appropriately adjusted as provided in subsection
(d) of this Section 7.
b) If the Corporation shall at any time subdivide its
outstanding Common Stock by recapitalization,
reclassification or split-up thereof, the number of
shares of the Common Stock subject to this Option
immediately prior to such subdivision shall be
proportionately increased and, if the Corporation shall
at any time combine the outstanding Common Stock by
recapitalization, reclassification of combination
thereof, the number of shares of the Common Stock subject
to this Option
<PAGE E-16>
immediately prior to such combination
shall be proportionately decreased. The adjustment to the
exercise price pursuant to subsection (d) of this Section
7 and the adjustment to the number of shares shall become
effective at the close of business on the record date for
such subdivision or combination.
c) In case of any reclassification or capital reorganization
of the outstanding shares of the Common Stock (other than
a change covered by subsection (b) of this Section 7
which solely affects the par value of such Common Shares)
or in the case of any merger or consolidation of the
Corporation with or into another corporation (other than
a merger or consolidation in which the Corporation is the
continuing corporation) or in the case of any sale or
conveyance to another corporation of the property of the
Corporation as an entirety or substantially as an
entirety in connection with which the Corporation is
dissolved, the holder of this Option shall have the right
thereafter (until the expiration of the right of exercise
of the Option) to receive upon the exercise hereof, for
the same aggregate exercise price payable hereunder
immediately prior to such event, the kind and amount of
shares of stock or other securities or property
receivable upon such reclassification, capital
reorganization, merger or consolidation, or upon the
dissolution following any sale or other transfer, by a
holder of the number of shares of the Common Stock
obtainable upon the exercise of this Option immediately
prior to such event. The provisions of this subsection
(c) of this Section 7 shall similarly apply to successive
reclassifications, capital reorganizations, mergers or
consolidations, sales or other transfers.
d) Whenever the number of shares of the Common Stock
purchasable upon the exercise of this Option is adjusted,
as provided in this Section 7, the exercise price shall
be
<PAGE E-17>
adjusted (to the nearest one tenth of a cent) by
multiplying such exercise price immediately prior to such
adjustment by fraction, the numerator of which shall be
the number of shares of the Common Stock purchasable upon
the exercise of this Option immediately prior to such
adjustment and the denominator of which shall be the
number of shares of the Common Stock so purchasable
immediately thereafter.
e) Upon the occurrences of each event requiring an
adjustment of the exercise price and the number of shares
of the Common Stock obtainable upon exercise of this
Option in accordance with, and as required by, the terms
of this Section 7, the Corporation may employ a firm of
certified public accountants (which may be the regular
accountants for the Corporation) which shall compute the
adjusted exercise price and the adjusted number of shares
of the Common Stock purchasable at such adjusted exercise
price by reason of such event in accordance with the
provisions of this Section 7. The Corporation shall mail
forthwith to the holder of this Option a copy of the
certification containing such computation which shall be
conclusive and shall be binding upon the holder of the
Option and the Company.
8. Notices. Each notice relating to this Agreement will
be in writing and delivered in person or by registered or
certified mail or by express courier service to the proper
address. All notices to the Corporation shall be addressed to
it at its principal office, now at 10400 Trademark Avenue,
Rancho Cucamonga, California 91730, attention of the President.
All notices to the Optionee or other person or persons then
entitled to exercise the Option shall be addressed to the
Optionee or such other person or persons at Worldwide Corporate
Finance, 15760 Ventura Boulevard, Suite 1020, Encino, California
91436. Anyone to whom a notice may
<PAGE E-18>
be given under this Agreement may designate a new address by notice to
that effect given in accordance with this provision.
9. Approval of Counsel. Should the Optionee elect to
exercise all or part of the Option prior to the effectiveness of
a registration statement covering the securities as to which the
Option is being exercised, the exercise of the Option and the
issuance and delivery of shares of the Common Stock pursuant
thereto shall be subject to approval by the Corporation's
counsel of all legal matters in connection therewith, including
compliance with the requirements of the Securities Act, or
corresponding provision of future law, and the Securities
Exchange Act of 1934, as amended, or corresponding provision of
future law, and the rules and regulations thereunder, and the
requirements of any stock exchange upon which the Common Stock
may then be listed or, if applicable, of the National
Association of Securities Dealers, Inc.
10. Reservation of Shares. The Corporation shall at all
times during the term of the Option reserve and keep available
such number of shares of the class of stock then subject to the
Option as will be sufficient to satisfy the requirements of this
Agreement.
11. Disputes. Any dispute or disagreement which arises
under, or as a result of, or in any way relates to, the
interpretation, construction or application of this Agreement,
will be resolved by the Board of Directors of the Corporation.
Any such resolution made hereunder shall be final, binding and
conclusive for all purposes upon all persons.
12. Limitation of Action. The Optionee agrees that every
right of action accruing to him and arising out of , or in
connection with, this Agreement against the Corporation will,
irrespective of the place where an action may be brought, cease
and be barred by the expiration of there (3) years from the date
of the act or omission in respect of which such right of action.
<PAGE E-19>
13. Benefits of Agreement. This Agreement will inure to
the benefit of, and be binding upon, each successor and assign
of the Corporation. All obligations imposed upon the Optionee
and all rights granted to the Corporation under this Agreement
will be binding upon the Optionee's heirs and assigns.
IN WITNESS WHEREOF, the Corporation has caused this Option
to be executed in its name by its President as of the day, month
and year first above written.
U.S. DRUG TESTING, INC.
By:____________________________
President
<PAGE E-20>
EXHIBIT A
ELECTION TO PURCHASE
To U.S. Drug Testing, Inc.
c/o ________________________
________________________
________________________
The undersigned hereby irrevocable elects to exercise the
foregoing Option to purchase shares of the Common
Stock issuable upon the exercise of the Option and requests that
a certificate for such shares shall be issued in the name of
________________________________________________________________
(Name)
________________________________________________________________
(Address)
________________________________________________________________
(Taxpayer number)
and be delivered to_____________________________________________
(Name)
at______________________________________________________________
(Address)
and, if said number of shares of the Common Stock shall not be
all the shares of the Common Stock evidenced by the foregoing
Option, that a new Option for the balance remaining of such said
shares be registered in the name of
________________________________________________________________
(Name)
________________________________________________________________
(Address)
________________________________________________________________
(Taxpayer number)
and delivered to the undersigned at the address below stated.
Dated:___________, _____
<PAGE E-21>
Name of holder of Option:
________________________________________________________________
(please print)
________________________________________________________________
(Address)
________________________________________________________________
(Signature)
Note: The above signature must correspond with the
name as written upon the face of the Option
in every particular, without alteration or
enlargement or any change whatever.
<PAGE E-22>
Exhibit 5
April 16, 1998
LifePoint, Inc.
10400 Trademark Street
Rancho Cucamonga, CA 91730
Dear Sirs:
We refer to the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by LifePoint, Inc. (the
"Company") under the Securities Act of 1933, as amended,
relating to (1) 300,000 shares (the "Shares") of the Common
Stock, $.001 par value per share (the "Common Stock"), of the
Company issued to Michael M. Markow (the "Consultant") and (2)
300,000 shares of the Common Stock issuable upon the exercise of
the following stock options (the "Options"): (a) a stock option
expiring June 17, 1998 to purchase 50,000 shares at $1.00 per
share; (b) a stock option expiring July 20, 1998 to purchase
50,000 shares at $1.50 per share; (c) a stock option expiring
January 18, 1999 to purchase 50,000 shares at $2.50 per share;
(d) a stock option expiring January 18, 2000 to purchase 50,000
shares at $3.00 per share; and (e) a stock option expiring
January 18, 2001 to purchase 100,000 shares at $4.00, the Shares
being issued and the Options being granted pursuant to the terms
of a financial consulting agreement dated as of January 19, 1998
(the "Agreement") by and between the Company and the Consultant.
As counsel to the Company, we have examined the Certificate
of Incorporation of the Company, its By-laws, its minutes, the
Options, the Agreement and other corporate proceedings relating
to the authorization and issuance of the Shares and the
authorization of the Options and have reviewed the Registration
Statement in the form intended to be filed. In our opinion, we
have made such an investigation and examination as we have
deemed necessary for the purposes of expressing an informed
opinion on the matters hereafter discussed.
Based upon such examination, it is our opinion that:
1. The Company is duly organized and validly existing
under the laws of the State of Delaware; and
2. The Shares are, and the 300,000 shares of the Common
Stock to be issued upon exercise of the Options will, upon
issuance pursuant to exercise of the respective Option in
<PAGE E-23>
accordance with the terms of the respective Option and the
Agreement, be, validly issued, fully paid and nonassessable.
In addition, we hereby consent to the filing of this option
as an Exhibit to said Registration Statement and to the
reference to our firm in Item 5 of the Registration Statement
and under the caption "Description of Consulting Agreement-Tax
Effects" in the Section 10(a) Prospectus.
Very truly yours,
/s/ WACHTEL & MASYR, LLP
<PAGE E-24>
Exhibit 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Interests of Named Experts and Counsel" in this Registration
Statement on Form S-8 pertaining to the Financial Consultation
Agreement dated as of January 19, 1998 and to the incorporation
by reference therein of our report dated July 3, 1997, with
respect to the financial statements of LifePoint, Inc., formerly
named U.S. Drug Testing, Inc., included in its Annual Report on
Form 10-K for the year ended March 31, 1997, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Riverside, California
April 10, 1998
<PAGE E-25>
Exhibit 23(c)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption
"Interests of Named Experts and Counsel" in this Registration
Statement on Form S-8 pertaining to the Financial Consultation
Agreement dated as of January 19, 1998 and to the incorporation
by reference therein of our report dated May 26, 1995, with
respect to the statements of operations, stockholders' equity
and cash flows for the fiscal year ended March 31, 1995 of
LifePoint, Inc., formerly named U.S. Drug Testing, Inc.,
included in its Annual Report on Form 10-K for the year ended
March 31, 1997, filed with the Securities and Exchange
Commission.
/s/ Wolinetz, Gottilieb & Lafazan, P.C.
Rockville Center, New York
April 10, 1998
<PAGE P-1>
PROSPECTUS
LIFEPOINT, INC.
300,000 Shares of Common Stock and 300,000 Shares Issuable
Upon the Exercise of Stock Options
______________________________
Financial Consulting Agreement dated as of January 19, 1998 by
and between LifePoint, Inc. and Michael M. Markow
______________________________
This Prospectus relates to an offering by LifePoint, Inc.,
formerly named U.S. Drug, Inc. (the "Company"), of 300,000
shares (the "Shares") of the Company's Common Stock, $.001 par
value (the "Common Stock"), issued to Michael M. Markow (the
"Consultant"), and an aggregate of 300,000 shares of the Common
Stock to be issued upon the exercise of the following stock
options (the "Options"): (1) a stock option expiring June 17,
1998 (the "First Option") to purchase 50,000 shares at $1.00 per
share; (2) a stock option expiring July 20, 1998 (the "Second
Option") to purchase 50,000 shares at $1.50 per share; (3) a
stock option expiring January 18, 1999 (the "Third Option") to
purchase 50,000 shares at $2.50 per share; (4) a stock option
expiring January 18, 2000 (the "Fourth Stock Option") to
purchase 50,000 shares at $3.00 per share; and (5) a stock
option expiring January 18, 2001 (the "Fifth Option") to
purchase 100,000 shares at $4.00 per share granted, pursuant to
a written financial consulting agreement dated as of January 19,
1998 (the "Consulting Agreement") by and among the Company and
the Consultant.
Because the Consultant, as of the date of this Prospectus,
is not an affiliate of the Company as the term "affiliate" is
defined in Rule 405 under the Securities Act of 1935, as amended
(the "Securities Act"), the Consultant may, from time to time,
sell without restrictions, the Shares and, after exercise of an
Option, similarly sell the shares of the Common Stock underlying
the Option (the "Underlying Shares"). In the event that the
Consultant subsequently becomes an affiliate of the Company, he
may not resell under this Prospectus the Shares or the
Underlying Shares.
______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSEPCTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
______________________________
The date of this Prospectus is April 17, 1998
<PAGE P-2>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports, proxy and
information statements and other information with the Securities
and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed with the Commission can
be inspected and copied at the public reference facilities of
the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, as well as at the following regional offices of the
Commission: 7 World Trade Center, Suite 1300, New York, New York
10048 and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of this
material can also be obtained at prescribed rates from the
Public Reference Section of the Commission at its principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding
registrants that file electronically with the Commission at the
following Web site address: http://www.sec.gov.
The Company has filed with the Commission a Registration
Statement on Form S-8 (the "Registration Statement") under the
Securities Act with respect to the Shares and the Underlying
Shares. This Prospectus which is a part of the Registration
Statement, sets forth certain information with respect to the
Agreement and is being distributed to the Consultant pursuant to
the Securities Act. This Prospectus omits certain information
contained in the Registration Statement. For further
information with respect to the Company and the shares of the
Common Stock offered by this Prospectus, reference is made to
the Registration Statement, including the exhibits thereto.
Statements in this Prospectus as to any document are not
necessarily complete and, where such document is an exhibit to
the Registration Statement or is incorporated herein by
reference, each such statement is qualified in all respects by
the provisions of such exhibit or other document, to which
reference is hereby made for a full statement of the provisions
thereof. A copy of the Registration Statement, with exhibits,
may be obtained from the Commission's office in Washington, D.C.
(at the above address) upon payment of the fees prescribed by
the rules and regulations of the Commission, or examined there
without charge.
The Company will provide without charge to each person to
whom a Prospectus has been delivered, upon the written or oral
request of such person, a copy of any and documents required to
be delivered pursuant to Rule 428(b) under the Securities Act
and a copy of any or all of the other documents that have been
incorporated by reference in the Registration Statement.
Requests for such copies should be directed to LifePoint, Inc.,
Attention: Linda H. Masterson, President and Chief Executive
Officer, 10400 Trademark Street, Rancho Cucamonga, CA 91730,
Telephone: (909) 466-8047.
INTRODUCTION
This Prospectus relates to (1) 300,000 shares of the Common
Stock valued at $.50 per share issued by the Company to the
Consultant in lieu of cash consideration of $150,000 for
performance of certain consulting services and (2) 300,000
shares of the Common Stock issuable upon the exercise of the
Options granted as additional compensation for the performance
of such
<PAGE P-3>
consulting services, the consulting services to be
performed pursuant to the Consulting Agreement.
The Company's executive offices are located at 10400
Trademark Street, Rancho Cucamonga, CA 91730, telephone number
(909) 466-8047.
DESCRIPTION OF CONSULTING AGREEMENT
The following description of the Consulting Agreement is
only a summary and does not purport to be complete. It is
qualified in its entirety by reference to the complete text of
the Agreement, a copy of which is filed as Exhibit 4(a) to the
Registration Statement of which this Prospectus is a part and is
incorporated herein by this reference.
General Information
The Consulting Agreement is administered for the Company by
its President and Chief Executive Officer. Officers of the
Company are elected by its Board of Directors and serve at the
discretion of the Board. Such officers have the authority to
construe and interpret any of the provisions of the Consulting
Agreement.
The officers and directors of the Company, except in such
capacity, have no material relationship with the Company, its
employees or its affiliates.
The Consulting Agreement is not subject to the provisions
of the Employee Retirement Income Security Act of 1974 ("ERISA")
and is not qualified under Section 401(a) of the Internal
Revenue Code of 1986, as amended (the "Code").
Description of Services
The services to be performed by the Consultant under the
Consulting Agreement include acting as a liaison for the Company
with respect to any investment bankers, institutional investors,
selling agents and/or broker-dealers utilized by the Company,
engaging market makers for the Company's traded securities, of
which the Common Stock is currently the only traded security,
supervising stockholder and investor relations, evaluating
financing proposals the Company may receive, providing long-term
business, managerial and financial planning and investigating
and analyzing corporate reorganization and expansion and
merger/acquisition opportunities. In performing the services,
the Consultant may use, to assist him, the services of Worldwide
Corporate Finance, a California corporation ("WCF") of which he
is the President.
Term of Consulting Agreement
The Consulting Agreement terminates on January 18, 2000.
The Consulting Agreement may be terminated by the
Consultant during the term by notice to the Company in the event
that the Company shall have provided materially inaccurate
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or misleading information, of any type or nature, to the
Consultant, or failed or been unable to comply in any material
respect with any of the terms, conditions or provisions of the
Consulting Agreement on the part of the Company to be performed,
complied with or fulfilled within the respective times, if any,
therein provided for, unless compliance therewith or the
performance or satisfaction thereof shall have been expressly
waived by the Consultant in writing.
The Consulting Agreement may be terminated by the Company
for "Cause" by notice to Consultant in the event of the failure
by the Consultant to perform its material duties thereunder
which failure continues for not less than thirty days after
written notice from the Company is given to the Consultant
specifying such failure. The Company may also terminate for
"Cause" if the Consultant or WCF is under investigation by the
Commission, the Justice Department or any state agencies
comparable to the aforementioned federal agencies; the
Consultant or WCF has been convicted of a felony; any action by
the Consultant or WCF involving dishonesty, fraud or gross or
willful misconduct in connection with the services on behalf of
the Company; intentional conduct on behalf of the Consultant or
WCF which is knowingly detrimental to the Company and the
Consultant's or WCF's failure to perform in a competent manner
his or its duties resulting in damage or detriment to the
Company. Upon termination of this Agreement by the Company for
Cause, all of the Shares not already released to the Consultant
shall be cancelled and the Consultant shall return to the
Company all Options not exercised by the Consultant as of the
date of termination, which unexercised Options shall become null
and void.
Securities To Be Offered
The Consulting Agreement provides for initial compensation
of $150,000 as a non-refundable retainer for the Consultant's
services. The Consultant has elected to receive, in lieu of a
cash payment, 300,000 shares of the Common Stock (i.e., the
Shares) valued at $.50 per share. 200,000 shares were placed in
escrow and will be released to the Consultant 50,000 shares on
each of May 4, 1998, August 3, 1998, October 31, 1998 and
January 29, 1999 unless the Consulting Agreement is terminated
prior thereto (see the section "Term of Consulting Agreement"
under this caption "Description of Consulting Agreement").
The Consultant also received, as additional compensation,
the Options to purchase an aggregate of 300,000 shares of the
Common Stock (see the section "Purchase of Securities Pursuant
to the Consulting Agreement and Payment for Securities Offered"
under this caption "Description of Consulting Agreement").
Purchase of Securities Pursuant to the Consulting Agreement
and Payment for Securities Offered
The First Option to purchase 50,000 shares of the Common
Stock at $1.00 per share expires June 17, 1998. The Second
Option to purchase 50,000 shares of the Common Stock at $1.50
per share expires July 20, 1998. The Third Option to purchase
50,000 shares of the Common Stock at $2.50 per share expires
January 18, 1999. The Fourth Option to purchase 50,000 shares
of the Common Stock at $3.00 per share expires January 18, 2000.
The Fifth Option to purchase 100,000 shares at $4.00 per share
expires January 18, 2001. If the Company
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terminates for Cause (see the section "Term of the Consulting Agreement"
under this caption "Description of Consulting Agreement"), the unexercised
Options will become null and void.
The Consultant may exercise the Options with respect to all
of the Underlying Shares then available for purchase or with
respect to such lesser number of shares of the Underlying Shares
as he, from time to time, desires prior to the expiration dates
or the earlier termination of the Options.
The Options will be deemed exercised upon receipt by the
Company, at its principal office, during the term of the Options
of (a) a written notice signed by the Consultant advising of the
Consultant's exercise of the Options with respect to the
specified number of shares of the Underlying Shares and (b)
payment in the form of a check, bank draft or money order of the
full purchase price for the number of shares of the Underlying
Shares covered by the notice. A check, bank draft or money
order will be accepted as payment, subject to collection, and
stock certificates registered in the name of the Consultant for
the number of shares of the Underlying Shares covered by such
exercise will be delivered by the Company within five business
days after such collection. The shares of the Common Stock to
be issued upon exercise will be issued from authorized by
unissued shares (or, if available and the Board of Directors of
the Company so directs, from treasury shares) and the Company
will not purchase shares in the open market for such purpose.
The Shares are, and upon issuance the Underlying Shares
will be, deemed fully paid and nonassessable and shall be free
and clear of all liens and encumbrances.
Restrictions on Transfer
200,000 shares of the Shares, until released from escrow,
and the Options may not be assigned or transferred in whole or
in part by the Consultant. The Shares and the Underlying Shares
have been registered under the Securities Act pursuant to the
Registration Statement. Because the Consultant is currently not
an affiliate of the Company (as the term "affiliate" is defined
in Rule 405 under the Securities Act), he may, from time to
time, sell, without restriction, the Shares and, after the
exercise of an Option, similarly sell the Underlying Shares
subject to such Option. In the event that the Consultant
subsequently becomes an affiliate of the Company, he may not
resell under this Prospectus the Shares or the Underlying
Shares.
Tax Effects
The following is a summary of the federal income tax
provisions under the Code currently applicable to the Shares and
the Options, including the consequences of exercise of the
Options, based upon advice to the Company by Wachtel & Masyr,
LLP, its counsel. The Consultant should consult his own tax
advisors concerning legislative or administrative developments,
as well as his individual federal income tax position before
exercising the Options or disposing of the Shares or any shares
of the Underlying Shares. The Company makes no representation
as to the tax status or effect of the Options under the Code or
the tax consequences under the laws of any state or other
jurisdiction of (1) the issuance and subsequent sale of the
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Shares or (2) the granting of the Options, any exercise thereof
or of any sale of any shares of the Underlying Shares acquired
pursuant thereto.
1. The Shares
The issuance to the Consultant of the 100,000 shares of the
Shares not held in escrow will result in taxable income to the
Consultant in an amount equal to the fair market value of such
shares at the time of its receipt.
The release from escrow of any of the 200,000 shares of the
Shares will result in taxable income to the Consultant in an
amount equal to the excess of the fair market value of such
shares at the time they are released to the Consultant over the
amount, if any, paid for the shares, unless the Consultant has
made an election under Section 83(b) of the Code. If such an
election has been made, the Consultant will realize taxable
income at the time such shares are placed in escrow, even though
such shares may be forfeited subsequently and never received by
him, to the extent of the excess of the fair market value of
such shares at the time the shares are placed in escrow over the
amount, if any, paid for the shares and no compensation will be
includable in the gross income of the Consultant when such
shares are released from escrow. If any of the shares are
forfeited at a later time, an ordinary loss will not be allowed
to the Consultant.
The Company is entitled to a deduction equal to the amount
included in the gross income of the Consultant in the tax year
in which the Consultant is required to include such amount.
Upon a subsequent sale of shares of the Shares received by
the Consultant, he will realize gain or loss to the extent that
the proceeds of the sale exceed (in the case of a gain), or are
less than (in the case of a loss), the Consultant's tax basis in
the shares. His tax basis in the Shares will be the amount he
paid for the Shares, if anything, plus the amount included in
his gross income with respect to the receipt of the Shares. His
gain or loss will be short-term or long-term capital gain or
loss depending upon the Consultant's holding period for the
Shares. The holding period for purposes of the capital gain
rules begins when the Shares are received by the Consultant,
except that, if an election under Section 83(b) is made, the
holding period begins when the Shares are transferred into
escrow.
2. The Options
The grant of the Options under the Agreement has no
immediate tax consequences to the Consultant or the Company
under the Code. Upon the exercise of an Option, the Consultant
will recognize ordinary income, and the Company will be entitled
to a deduction, in an amount equal to the excess of the fair
market value of the shares of the Underlying Shares as to which
the Option is exercised over the exercise price on the date of
the exercise of the Option. The Consultant's tax basis in such
shares of the Underlying Shares will be the exercise price plus
the amount of ordinary income recognized by the Consultant and
the Consultant's holding period will commence on the date of
exercise.
Upon a subsequent sale of any shares of the Underlying
Shares, any difference between the tax basis of such shares of
the Underlying Shares and the amount realized on the sale is
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treated under the Code as short-term or long-term capital gain
or loss, depending on the holding period of such shares of the
Underlying Shares.
Annual Report
The Company is delivering to the Consultant with this
Prospectus a copy of its Annual Report on Form 10-K for the
fiscal year ended March 31, 1997. The Company did not have any
Annual Report to Stockholders pursuant to Rule 14a-3(b) under
the Exchange Act other than the foregoing Form 10-K. In
addition, no prospectus was filed pursuant to Rule 424(b) under
the Securities Act or a registration statement on Form 10 under
the Exchange Act that contained audited financial statements for
the Company's latest fiscal year.
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No person has been authorized to give any
information or to make any representations
in connection with this offering other than LIFEPOINT, INC
those contained in this Prospectus and, if given
or made, such information or representations 300,000 Shares of
must not be relied upon as having been autho- Common Stock and
rized by the Company. This Prospectus does 300,000 Shares of
not constitute an offer to sell or a solicitation Common Stock Issuable
of an offer to buy the shares offered hereby to Upon the Exercise of
any person in any state or other jurisdiction in Options
which such offer or solicitation would be un-
lawful. Neither the delivery of this Prospectus
nor any distribution of the Shares or the
Underlying Shares under the terms of the
Consulting Agreement (which constitutes the
plan) shall, under any circumstances, create
any implication that the information con-
tained herein is correct as of any time sub-
sequent to the date hereof.
TABLE OF CONTENTS PROSPECTUS
Page
Introduction 2
Description of Consulting Agreement 3
General Information 3
Description of Services 3
Term of Consulting Agreement 3
Securities To Be Offered 4 April 17, 1998
Services To Be Offered
Purchase of Securities Pursuant
to the Consulting Agreement
and Payment for Securities Offered 4
Restrictions on Transfer 5
Tax Effects 5
Annual Report 7
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Lifepoint/Sec Filing/Form S-8 April 9, 1998
