Agreement For Purchase and Sale of Assets - Innovative Physician Services Inc. d/b/a Diagnostic Monitoring and Biosensor Corp.
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
BETWEEN
INNOVATIVE PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING),
AND
BIOSENSOR CORPORATION
DATED DECEMBER 31, 1998
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Schedule 1.1.6 Records Transferred
Schedule 2.1 Assumed Liabilities
Schedule 4.3(i) Real Property
Schedule 4.3(ii) Executory Contracts
Schedule 4.3(iii) Intangible Property Rights
Schedule 4.3(iv) Permits
Schedule 4.3(v) Contracts, Agreements, Leases Requiring Consent
Schedule 4.3(vi) Personal Property
Schedule 4.3(vii) Inventory
Schedule 4.3(viii) Accounts Receivable
Schedule 4.3(ix) Accounts Payable and Accrued Expenses
Schedule 4.3(x) Equipment
Schedule 4.13 Environmental Matters
Schedule 5.5 Capitalization
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LIST OF EXHIBITS
Exhibit A Condensed Balance Sheet
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AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
This Agreement for Purchase and Sale of Assets is made December 31, 1998
by and between Innovative Physician Services, Inc. (DBA Diagnostic
Monitoring), a Nevada corporation ("Seller"), and Biosensor Corporation, a
Minnesota corporation ("Purchaser").
RECITALS:
A. Seller desires to sell to Purchaser, and Purchaser desires to purchase
from Seller, on the terms and subject to the conditions set forth in
this Agreement, a product line (collectively, the "Product Line")
consisting of certain assets and operations conducted on the date
hereof by Seller under the name "Diagnostic Monitoring" (including,
without limitation, the distribution of certain medical monitoring
devices).
NOW, THEREFORE, in consideration of the premises, the respective covenants
and commitments of Seller and Purchaser set forth in this Agreement, and
other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1.0. PURCHASE AND SALE OF ASSETS
1.1 ASSETS: In reliance on the representations, warranties and
covenants contained in this Agreement, on the Closing Date, but with effect
as and from 11:59:00 p.m. local time in Columbia, S.C. on December 31,
1998, Seller shall sell, assign, deliver and transfer to Purchaser, and
Purchaser agrees to purchase and acquire from Seller, free and clear of all
Encumbrances and on the terms and subject to the conditions set forth in
this Agreement, those certain assets set forth below in this Section 1.1,
and including those assets identified on Schedules prepared in accordance
with Section 4.3, owned by Seller and used in the manufacture and
distribution of the Product Line distributed by Seller under the name
Diagnostic Monitoring (the "Assets"). The parties acknowledge that the
Assets totaled approximately $251,000 on November 30,1998.
1.1.1. INVENTORIES, PURCHASE CONTRACTS; All inventories of supplies, raw
materials, parts, finished goods, work-in-process, product labels and
packaging materials, all third party manufacturers' warranties applicable
to the inventories, all orders or contracts for the purchase of
inventories, raw materials, parts, or supplies ordered by Seller in the
ordinary course of business under the name Diagnostic Monitoring prior to
the Closing Date;
1.1.2. MACHINERY, TOOLING; All machinery, equipment, fixtures and other
fixed assets used by Seller in manufacturing, procuring, testing or
distributing the Product Line.
1.1.3. ENGINEERING AND PRODUCTION DATA. All blueprints, drawings, forms,
raw material specifications, manufacturing specifications, quality
assurance specifications, engineering data, production data, development
data, design data, formulae, plans, and other data owned by Seller and used
in connection with the Product Line, whether such properties are located on
the site at which business is being conducted or on the business premises
of Seller's suppliers;
1.1.4 EXECUTORY CONTRACTS. To the extent assignable, all executory
licenses, contracts, agreements, sales orders, purchase orders and
commitments relating to the Product Line including, without limitation,
those listed on Schedule 4.3(ii) and (v) to this Agreement, with such
additions
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and deletions as may hereafter arise in the ordinary course of business,
excluding, however, all facility leases;
1.1.5. INTANGIBLE PROPERTY RIGHTS. All intangible property rights used
in connection with the Product Line, including patents, patent
applications, copyrights, copyright applications, trade names (including
the name "Diagnostic Monitoring" and any and all other names similar to the
foregoing), trade dress, goodwill, trademarks or service marks, registered
or unregistered and applications therefor, logos, processes, computer
programs and software, inventions, trade secrets, discoveries,
improvements, drawings, designs, patterns, know-how, manufacturing
standards and procedures, computer software, data bases, product names, Web
page, internet domain names and other intellectual property rights listed
on Schedule 4.3 (iii) to this Agreement, with such additions and deletions
as may hereafter arise in the ordinary course of business (collectively,
the "Intangible Property Rights");
1.1.6. BOOKS AND RECORDS. Originals (or, where appropriate, copies) of
all books, accounting records, records and other documents and information
relating to the Assets and the Product Line as specified on Schedule 1.1.6,
including, without limitation, all customer, prospect, dealer and
distributor lists, sales literature, inventory records, purchase orders and
invoices, sales orders and sales order log books, customer information,
commission records, correspondence, outstanding proposals, product data,
price lists, product demonstrations, quotes and bids, catalogues and
brochures of every kind and nature;
1.1.7. ACCOUNTS RECEIVABLE. All accounts receivable owing to Seller on
the Closing Date, as a result of sales of the Product Line prior to the
Closing Date, listed on Schedule 4.3 (viii) to this Agreement, with such
additions and deletions as may hereafter arise in the ordinary course of
business (collectively, the "Accounts Receivables");
1.1.8. TELEPHONE LISTINGS. Seller's current telephone listings for
Diagnostic Monitoring and the right to use the telephone numbers currently
being used at the principal offices and at any sales, warehouse, or
distribution facilities of the Product Line;
1.1.9. PERMITS. To the extent assignable, all permits, licenses and
other approvals (including Food and Drug Administration approvals) relating
to the Product Line as listed on Schedule 4.3(iv) to this Agreement, with
such additions and deletions as may hereafter arise in the ordinary course
of business;
1.1.10. PREPAID EXPENSES AND DEPOSITS. All prepaid expenses and deposits
required for the operation of the Product Line or relating to the Assets;
1.1.11. GOODWILL. All goodwill associated with or attributable to the
Product Line;
1.1.12. CLAIMS. All of the Seller's right, title and interest to claims
and causes of action relating to the Assets or the Product Line;
1.1.13. RIGHTS. Seller's rights under all supply agreements, customer
agreements, licenses, and other contracts relating to Diagnostic Monitoring
to which it is a party; but not including any facility leases;
1.1.14 OTHER All other assets that are related to or used in connection
with Seller's business and that are owned by Seller, or by any affiliate of
Seller.
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1.2 EXCLUDED ASSETS: Assets do not include any books and records of
account of Seller, cash, and personal property or equipment other than
those identified on Schedules 1.1.6 and 4.3(x).
2.0 ASSUMPTION OF LIABILITIES.
2.1 OBLIGATIONS TO BE ASSUMED BY PURCHASER. Purchaser agrees to assume
and to pay, perform and discharge in accordance with their respective
terms, from and after the Closing Date, each of the following obligations
or commitments of Seller (the "Assumed Liabilities"):(A) trade accounts
payable and accrued expenses incurred in the normal course of business and
directly associated with the Product Line sold under the name Diagnostic
Monitoring (excluding employment and travel expenses incurred by Victor
Bravo through the Closing Date), to be agreed upon by Purchaser and Seller
prior to Closing and a complete schedule of which is attached as Schedule
2.1, and (B) warranty obligations accrued in the ordinary course of
business for Seller, but solely with respect to 1/0 board patient recorders
which have been sold or delivered prior to the Closing Date, but only if
and to the extent the same have not been paid or discharged prior to the
Closing Date. The parties acknowledge that the foregoing liabilities and
obligations, excluding warranty obligations, if any, referred to in (B)
above, totaled approximately $110,000 as of November 30, 1998. Assets
less Assumed Liabilities ("Net Book Value") shall not be less than
$100,000. Any special obligations or liabilities, if any, to employees, or
ex-employees of Seller are not assumed by Purchaser.
The assumption by Purchaser of the Assumed Liabilities shall not enlarge
any rights of any person under contracts or arrangements with Seller.
Nothing contained herein shall prevent Purchaser from contesting in good
faith any of the Assumed Liabilities with any third party obligee.
3.0 PURCHASE PRICE
The purchase price for the Assets shall equal the aggregate of (i) the
Assumed Liabilities, and (ii) 1,440,000 shares of common stock of
Purchaser (this amount represents the "Initial Purchase Price"), subject to
the post closing adjustments provided in Section 3.1. On the Closing Date,
Purchaser shall (I) assume the Assumed Liabilities, and (II) issue to
Seller 1,440,000 shares of its common stock. Seller acknowledges that
Purchaser has proposed a one share for six reverse stock split that is
pending shareholder approval, and upon approval of same the consideration
hereunder shall represent 240,000 shares, all as described in Purchaser's
Preliminary Proxy Statement filed with the Securities and Exchange
Commission on December 4, 1998. Following the reverse stock split (A) there
will be a total of approximately 3,125,000 shares of Purchaser's common
stock outstanding, (B) no preferred stock issued and outstanding, and (C)
options, warrants, convertible securities and other commitments for an
additional ________ shares of its common stock outstanding. Seller
acknowledges that the most recent price paid by new investors of
Purchaser's common stock was in May of 1998, and was the equivalent of
$2.08 per share (on a post-reverse stock split basis).
3.1 POST CLOSING ADJUSTMENT. The Initial Purchase Price is based on the
assumption that the Net Book Value of the Business will be at least
$100,000 as of the Closing Date. Within twenty (20) days after the Closing
Date, Seller shall cause to be prepared and delivered to Purchaser an
unaudited list of Assets and Assumed Liabilities for the Product Line as of
the close of business on the Closing Date (the "Closing Balance Sheet") and
a computation of the Net Book Value of the Product Line as of the Closing
Date. The Closing Balance Sheet shall be prepared in conformity with
generally accepted accounting principles ("GAAP"), applied on a basis
consistent with Seller's Financial Statements and shall present fairly the
Assets and Assumed Liabilities of Seller as of that date; provided that
there shall not be included in the Closing Balance Sheet any asset which is
an Excluded Asset.
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Within ten (10) days after the delivery of the Closing Balance Sheet,
Purchaser may notify Seller in writing of any objections or changes to the
Closing Balance Sheet or computation of Net Book Value, specifying in
reasonable detail any such objections or changes, and the parties shall
attempt in good faith to resolve any such dispute. If the parties cannot
resolve such dispute within a period of twenty (20) days commencing from
Seller's receipt of the Purchaser's notification, the parties shall submit
the matter to McGladrey Pullen, LLP (the "Accountant") whose decision with
respect to the disputed matter shall be binding on the parties. The
prevailing party shall be entitled to receive from the other party its
costs and expenses, including reasonable attorneys fees in connection with
its objection or defense to the calculation of Net Book Value. The fees
and expenses of the Accountant shall be paid by the party against whom a
decision is rendered. The prevailing party shall be the party whose
proposed Net Book Value is closest to the Net Book Value finally determined
by the Accountant.
If the Net Book Value as of the Closing Date, as finally determined as
provided in this Section 3.1, is less than $100,000, the Seller shall pay
to Purchaser the amount of the deficit in cash; and if the Net Book Value
is greater than $100,000, Purchaser shall pay to Seller the amount of the
excess in additional shares of common stock based on a pre-reverse split
value of $0.3472 per share, not to exceed 210,000 additional shares (or
35,000 shares post reverse stock split).
3.2 UNREGISTERED SHARES All shares of common stock of the Purchaser
issued to the Seller will not have been registered under the Securities Act
of 1933, as amended (the "Act"), on the basis that (i) this transaction is
exempt under the Act and such shares shall have the status of securities
acquired under Section 4(2) of the Act, as not involving any public
offering, and (ii) in the view of the Securities and Exchange Commission
(the "SEC"), the statutory basis for the exemption would not be present,
if, notwithstanding the forgoing, the Seller has a present intention to
dispose of such shares or any portion thereof.
3.3 PIGGYBACK REGISTRATION RIGHTS All of the shares of common stock of
the Purchaser issued to the Seller shall have "piggy back" registration
rights to be included in the next registration statement filed by the
Purchaser with the Securities and Exchange Commission. Purchaser has a
current intention to file an S-4 Registration Statement during the first
calendar quarter of 1999, but no assurance can be given that any
Registration Statement will be filed, or if filed, whether it will become
effective. If registered under the Act, Seller's shares of Purchaser's
stock shall also be registered under such state securities laws as Seller
may reasonably request.
3.4 SELLER'S RELIANCE ON PURCHASER'S FINANCIAL AND OTHER INFORMATION
PUBLICLY ON FILE. In determining the value of the securities to be
issued in exchange for the Assets purchased, Seller acknowledges that it is
relying solely on the financial and other information regarding the
Purchaser's financial condition, operating results and business and other
matters that is on file with the Securities and Exchange Commission (Forms
10-KSB, 10-QSB, 8-K and Preliminary Proxy Statements). Such financial
information has been prepared in accordance with GAAP, is audited where
appropriate, and to the best of the Purchaser's belief is current as
regards SEC filing requirements. Seller further acknowledges that
Purchaser has not made and is not making any representations or warranties
with respect to itself other than as expressly set forth in this Agreement
and for the information contained in its materials filed with the
Securities and Exchange Commission.
4.0 REPRESENTATIONS AND WARRANTIES OF SELLER.
As a material inducement to Purchaser to enter into this Agreement and with
the understanding that Purchaser will be relying thereon in consummating
the transactions contemplated by this Agreement, Seller represents and
warrants to Purchaser as follows:
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4.1 CORPORATE AUTHORIZATION. Seller has full corporate power and
authority to enter into this Agreement and to sell the Assets and the
Product Line in accordance with the terms of this Agreement. The
execution, delivery and performance of this Agreement by Seller, and all
other agreements or instruments to be executed by Seller pursuant to this
Agreement, have been duly and effectively authorized by its board of
directors and its sole shareholder, and no other corporate proceedings on
its part are necessary to authorize this Agreement or the transactions
contemplated by this Agreement. This Agreement constitutes, and such other
agreements or instruments will constitute, the legal, valid and binding
obligations of Seller and Cardiac Science, Inc. ("CSI"), enforceable in
accordance with their respective terms, except as enforcement may be
limited by bankruptcy, insolvency, or other similar laws affecting the
enforcement of creditors' rights in general, moratorium laws or by general
principles of equity.
4.2 NO LIENS OR ENCUMBRANCES. Seller has, and on the Closing Date will
transfer and convey to Purchaser, good, marketable and insurable title to
the Assets, and, except as set forth in this Agreement and the Schedules
hereto, the Assets shall be free and clear of all mortgages, liens,
claims, charges, encumbrances, leases, security interests, pledges, and
title retention agreements of any kind or nature (collectively,
"Encumbrances")
4.3 SCHEDULES. Each of the following schedules, which have been
furnished to Purchaser by Seller and which are incorporated into this
Agreement by reference, is complete and the information contained in the
schedules is correct in all material respects as of the date of this
Agreement:
SCHEDULE 4.3(i) This Schedule contains a description of each
lease of real property of Seller with respect to the Product Line.
SCHEDULE 4.3(ii) This Schedule lists the following executory
agreements, whether oral or written, to which Seller is a party,
that relate to the Product Line:
(1) Each contract with any dealer, distributor, broker, agent or
sales representative;
(2) Each contract, agreement, or commitment for delivery by Seller
of its products or services for more than $___________ or over a
period of more than thirty (30) days from the date of this
Agreement.
SCHEDULE 4.3(iii): This Schedule lists all Intangible Property
Rights owned by Seller and used or useful in the manufacture and
distribution of the Product Line.
SCHEDULE 4.3(iv): This Schedule lists all permits, licenses and
other approvals (including Food and Drug Administration approvals)
and authorizations including, without limitation, those required
under the Environmental Laws, issued to the Seller related to the
Product Line, and sets forth the title, issuing agency and expiration
date thereof.
SCHEDULE 4.3(v): This Schedule lists all contracts, agreements,
leases, documents, permits, and licenses relating to the Product Line
required to be listed on any of the Schedules described in this
Section 4.3 (including governmental and regulatory bodies and
agencies) requiring the consent or approval of a third party to
Seller's sale or assignment and Purchaser's assumption of such
contracts, agreements, leases, documents, permits and licenses
on the Closing Date.
SCHEDULE 4.3(vi): This Schedule lists all personal property owned
by any third party (whether a customer, supplier or other person)
relating to the operation of the business of the Product Line for
which the Seller is responsible.
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SCHEDULE 4.3(vii): This Schedule lists all inventory relating to the
Product Line which will include cost, location and item.
SCHEDULE 4.3(viii):This Schedule lists all trade accounts receivable
relating to the Product Line which will include customer name, invoice
number, and amount due.
SCHEDULE 4.3(ix): This Schedule will list all accounts payable and accrued
expenses relating to the Product Line which will include vendor name,
invoice number and amount due.
SCHEDULE 4.3(x): This Schedule will list all equipment relating to the
Product Line which will include a brief description, cost and location.
4.4 SELLER AS AN INVESTOR IN THE PURCHASER'S SECURITIES Seller
acknowledges that in accepting Purchaser's common stock as payment for the
Assets, Seller becomes an investor in the common stock of the Purchaser, and
in that capacity Seller represents and warrants to and with Purchaser as
follows:
4.4.1 HIGH DEGREE OF RISK Seller acknowledges that investment in
Purchaser's stock is speculative and involves a high degree of risk and the
possible loss of its entire investment.
4.4.2 REVIEW OF AVAILABLE FINANCIAL INFORMATION Seller is familiar with
the operations of the Purchaser, has evaluated the merits and risks of this
transaction, has made its independent judgment as to the value of the
securities to be issued in exchange for the Assets purchased by reviewing
the financial and other information regarding the Purchaser that is
publicly available and on file with the Securities and Exchange Commission
(Forms 10-KSB, 10-QSB, 8-K and Preliminary Proxy Statements). Seller has
had the opportunity to request additional information and to ask questions
and receive answers concerning the business operations of Purchaser, and is
satisfied with the results of it investigation of the Purchaser.
4.4.3 ACQUIRED SHARES FOR INVESTMENT Seller is acquiring the
Purchaser's shares in good faith for the purpose of investment in the
Purchaser and not for the purpose of distributing or publicly selling the
shares to others, reselling, assigning, pledging or hypothecating the
shares, or dividing its participation in ownership of the shares with
others, except that Seller may transfer the shares to its parent company,
CSI.
4.4.4. UNREGISTERED SHARES. Seller understands and acknowledges that it
has been advised by the Purchaser that shares of the common stock of
Purchaser will not have been registered under the Act, on the basis that
(i) this transaction is exempt under the Act and the shares shall have the
status of securities acquired under Section 4(2) of the Act, as not
involving any public offering, and (ii) in the view of the Securities and
Exchange Commission (the "SEC"), the statutory basis for the exemption
would not be present, if, notwithstanding the forgoing, the Seller has a
present intention to dispose of such shares or any portion thereof. Seller
acknowledges that the Purchaser is relying on the statutory exemption from
the registration requirements under the Minnesota Securities Act, basing
its reliance in part on the Seller's representations set forth in this
agreement.
4.4.5. [INTENTIONALLY OMITTED]
4.4.6. NO ASSURANCE OF LIQUIDITY Seller recognizes that the Purchaser
may not comply in the future with the requirements which would permit it to
sell the shares of Purchaser pursuant to Rule 144. As such, Seller agrees
that such shares may have to be held for an indeterminate period of time.
Seller understands that the certificates representing the shares shall be
stamped with a legend in substantially the following form:
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"The shares of common stock represented by this certificate
have not been registered under the Securities Act of 1933 or
under applicable state securities laws and may not be sold,
transferred, or pledged in the absence of such registration,
unless pursuant to an exemption from the registration
requirements of the Securities Act of 1933 and applicable state
securities laws. The Company reserves the right to require on
opinion of counsel satisfactory to it before effecting any
transfer of the shares."
Purchaser's shares cannot be expected to be readily liquidated,
if at all. Seller is aware that there is currently a very limited
public market for the shares of Purchaser and that there is no
assurance that a more liquid market will develop.
4.4.7 FORWARD LOOKING STATEMENTS NOT INDICATIVE Seller acknowledges
that the available financial statements and forecasts cannot be
relied upon as an indication of future results. Future operations of
Purchaser will be dependent, in part, on the market acceptance of its
products, "Health Care Reform" legislation, health insurance
reimbursement policies, the status of the economy and its effect on
the market for diagnostic health care products, competition, changes
in demographic characteristics of the market or shifts in emphasis
regarding health care, and on management's ability to control
operating expenses. Many of these factors cannot be controlled by
Purchaser. No representation had been made that actual results of
operations will conform to historical results or forecasted results.
4.5 LAWSUITS; PROCEEDINGS; ETC. Seller is not engaged in any legal
action or other proceedings before any court or administrative agency.
Seller is not a party to any action or proceeding, nor has Seller been
threatened with any such action or proceeding, nor, to the Knowledge of
Seller, does there exist any basis therefor, which will or could have a
material adverse effect on the condition, financial or otherwise, of the
Assets or the Product Line. No order, writ, injunction or decree has been
issued by, or requested of, any court or governmental agency which does or
may result in any material adverse change in the Assets or in the selling
or servicing of the Product Line.
4.6 ASSETS. All of the tangible Assets, whether or not reflected on the
Balance Sheet, are being acquired by Purchaser on an "as-is, where is"
basis. Except as otherwise set forth in this Agreement, SELLER MAKES NO
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY SUCH ASSETS ACQUIRED BY
PURCHASER HEREUNDER, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. The Assets constitute
all of the operating assets and properties that have been used by Seller in
the manufacturing and distribution of the Product Line and comprise all
those properties, assets and rights of Seller necessary to operate the
Product Line under the name Diagnostic Monitoring in the ordinary course of
business.
4.7 INVENTORY: All inventories reflected on Schedule 4.3 (vii) are stated
at the lower of cost or market value determined using the first-in,
first-out ("FIFO") method of accounting. All inventories reflected on such
Schedule shall be stated at the lower of cost or market determined using
the FIFO method of accounting. All inventories reflected on such Schedule
are used in the manufacture and distribution of the Product Line, regularly
offered from current price lists. All inventories are being acquired by
Purchaser on an "as-is, where is" basis. Except as otherwise set forth in
this Agreement, SELLER MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY INVENTORIES, WORK IN PROGRESS OR RAW MATERIALS ACQUIRED BY
PURCHASER HEREUNDER, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
4.8 COMPLIANCE WITH LAWS; PERMITS. Seller has complied in all material
respects with all applicable statutes, regulations, orders, ordinances and
other laws of the United States of America, all state, local
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and foreign governments and other governmental bodies and authorities,
and agencies of any of the foregoing to which they are subject in
connection with the operation of the Product Line under the name
Diagnostic Monitoring. Seller has not received any notice to the effect
that, or otherwise been advised that, Seller is not in compliance with
any of such statutes, regulations and orders, ordinances, other laws or
undertakings as they might relate to any manner whatsoever to the Product
Line.
4.9 INTANGIBLE PROPERTIES. The Intangible Property Rights listed on
Schedule 4.3 (iii) to this Agreement are all those used by or useful to the
Product Line and are valid and in full force and effect. All patents,
copyrights and trademarks have been duly registered or filed in the United
States Patent and Trademark Office, and such registrations have been
properly maintained and renewed in accordance with all applicable laws,
rules and regulations.
Seller has good and marketable title to and owns or exclusively holds all
rights to use, free and clear of all liens, claims, restrictions, and
infringements, the Intangible Property Rights. The Intangible Property
Rights are valid, subsisting, enforceable and in full force and effect.
There is no infringement or other adverse claim pending against any of the
Intangible Property Rights. In connection with the operation of the
Business, Seller is not obligated or under any liability whatsoever to make
any payments by way of royalties, fees or otherwise with respect to
third-party patents, trademarks, copyrights or other intellectual property
in connection with the conduct of the Business.
4.10 CHANGES IN CUSTOMERS OR SUPPLIERS. Seller has not received any
notice that any major customer or supplier of the Product Line intends to
terminate, limit or reduce its business relations with Seller either
currently or following the consummation of the transactions contemplated by
this Agreement. No customer or supplier which was material to the Product
Line in the past twelve month period has terminated, materially reduced or,
to the knowledge of Seller, threatened to terminate or materially reduce
its purchases from or provision of products or services to the Product
Line.
4.11 BROKERS OR FINDERS. No person, firm or corporation has or will
have, as a result of any act or omission of the Seller, any right, interest
or valid claim against Purchaser for any commission, fee or other
compensation as a finder or broker in connection with the transactions
contemplated by this Agreement.
4.12 ACCOUNTS AND NOTES RECEIVABLE. The accounts receivable of Seller
that are part of the Assets being transferred hereby (i) have and shall
have arisen only from bona fide transactions in the ordinary course of
business, and (ii) represent and will represent valid and binding
obligations of the account debtors, not subject to defense or offset to
which such receivables relate.
4.13 ENVIRONMENTAL MATTERS. Schedule 4.13 to this Agreement contains a
complete list of all permits, consents, licenses and authorizations related
to the Product Line obtained by Seller under the Environmental Laws. The
Seller is in compliance with all terms and conditions of the permits,
consents, licenses, approvals, and authorizations listed on Schedule 4.13
to this Agreement.
There is no civil, criminal, or administrative action, suit, demand, claim,
hearing, notice or demand letter, notice of violation, investigation, or
proceeding pending or, to the Knowledge of Seller, threatened against
Seller, the Assets, or the operations and properties currently or
previously owned, leased, or used with respect to the Product Line relating
in any way to the Environmental Laws.
With respect to the Product Line, and any currently or previously owned,
leased, or used properties or operations, there are no past or present
events, conditions, circumstances, activities, practices, incidents,
actions, or plans that interfere with or prevent compliance or continued
compliance with the Environmental Laws or which may give rise to any
liability (whether statutory or common law) or otherwise form the basis of
any claim, action, demand, suit, proceeding, hearing, notice of violation,
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study, or investigation arising under any Environmental Law or otherwise
based on or related to the generation, manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or
the release into the workplace, the community, or the environment of any
contaminant.
No environmental lien has attached to any Asset.
4.14 NO OTHER AGREEMENTS TO SELL THE ASSETS OR THE PRODUCT LINE. Seller
has no legal obligation, absolute or contingent, to any other person or
firm to sell the Assets or the Product Line (other than sales of inventory
in the ordinary course of business).
4.15 DISCLOSURE. Seller has not withheld from Purchaser any material
facts relating to the Assets, or the operations of the Product Line. No
representation or warranty of Seller in this Agreement contains any untrue
statement of material fact required to be stated herein to make the
statement not misleading.
4.16 NO BREACHES; ETC. Neither Seller nor CSI is in violation of, and
the execution, delivery and performance of this Agreement by Seller or the
other agreements contemplated by this Agreement and the consummation of the
transactions contemplated by this Agreement does not and will not result in
any breach or acceleration of, any of the terms or conditions of their
articles of incorporation or by-laws, or of any mortgage, bond, indenture,
contract, agreement, license or other instrument or obligation to which
Seller or CSI is a party or by which the Assets are bound. The execution,
delivery and performance of this Agreement or the other agreements
contemplated by this Agreement will not result in the violation of any
statute, regulation, judgment, writ, injunction or decree of any court, nor
require the consent, approval, permission or other authorization of any
court, arbitrator or governmental, administrative or self-regulatory
authority or any other third party.
4.17 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Seller have been made with the Knowledge and expectation that Purchaser is
relying on them, and such representations and warranties shall survive the
Closing Date in accordance with Section 9.1.
5.0 REPRESENTATIONS AND WARRANTIES OF PURCHASER
As a material inducement to Seller to enter into this Agreement and with
the understanding that Seller will be relying thereon in consummating the
transactions contemplated by this Agreement, Purchaser represents and
warrants to Seller as follows:
5.1 ORGANIZATION AND STANDING. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Minnesota, and has all requisite corporate power and capital assets to
carry on its business as it is now being conducted.
5.2 CORPORATE AUTHORIZATION. Purchaser has the full corporate power and
authority to enter into this Agreement and purchase the Assets and Product
Line in accordance with the terms of this Agreement. The execution,
delivery and performance of this Agreement by Purchaser pursuant to this
Agreement have been duly and effectively authorized by the board of
directors of Purchaser and no other corporate proceedings on the part of
Purchaser are necessary to authorize this Agreement or the transactions
contemplated by this Agreement. This Agreement constitutes, and such other
agreements and instruments will constitute, the legal, valid and binding
obligations of Purchaser which are, or will be, enforceable against
Purchaser in accordance with their respective terms, except as enforcement
may be limited by bankruptcy, insolvency, or other similar laws affecting
the enforcement of creditors rights in general, moratorium laws or by
general principles of equity.
<PAGE>
5.3 FULLY PAID AND VALIDLY ISSUED SHARES. Purchaser's shares, when
issued and delivered to Seller, shall be deemed to be, and shall be, fully
paid and validly issued shares of stock of Purchaser and Seller shall not
be liable to any further call or assessment thereon, and any holder of said
shares of stock shall not be liable for any further payment in respect
thereto.
5.4 RELIABLE FINANCIAL INFORMATION. The audited fiscal year financial
statements and the unaudited quarterly and pro forma combined financial
statements filed by the Purchaser with the SEC in Forms 8-K, 10-KSB, 10-QSB
and the Preliminary Proxy Statement, were prepared in accordance with GAAP
and fairly present Purchaser's financial position and results of operations
for the covered periods.
5.5 CAPITALIZATION. The current capitalization of Purchaser, and the pro
forma capitalization of Purchaser giving effect to the contemplated reverse
stock-split, is set forth in Schedule 5.5 hereto. Such capitalization
shall include the authorized and issued and outstanding shares of common
and preferred stock of Purchaser, the terms of the preferred stock and the
options, warrants, and convertible securities (and the like) of Purchaser,
including the terms thereof.
5.6 NO BREACHES; ETC. Purchaser is not in violation of, and the
execution, delivery, and performance of this Agreement or the other
agreements contemplated by this Agreement and the consummation of the
transactions contemplated by this Agreement do not and will not result in
any breach or acceleration of, any of the terms or conditions of its
articles of incorporation or by-laws, or of any mortgage, bond, indenture,
contract, agreement, license or other instrument or obligation to which
Purchaser is a party. The execution, delivery and performance of this
Agreement or the other agreements contemplated by this Agreement will not
result in the material violation of any statute, regulation, judgment,
writ, injunction or decree of any court, threatened or entered in a
proceeding or action in which Purchaser is, was or may be bound.
5.7 NO BROKERS OR FINDERS. No person, firm or corporation has or will
have, as a result of any act or omission of Purchaser, any right, interest
or valid claim against Seller for any commission, fee or other compensation
as a finder or broker in connection with the transactions contemplated by
this Agreement.
5.8 DISCLOSURE. No representation or warranty of Purchaser in this
Agreement contains any untrue statement of material fact required to be
stated herein to make the statement not misleading. The Forms 10-KSB,
10-QSB and 8-K, and the Preliminary Proxy Statement of Purchaser do not
contain any untrue statement of material fact, or omit to state any
material fact required to be stated therein.
5.9 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Purchaser have been made with the Knowledge and expectation that Seller is
relying on them, and such representations and warranties shall survive the
Closing Date in accordance with Section 9.1.
6.0 POST-CLOSING AGREEMENT. Seller hereby covenants and agrees with
Purchaser as follows:
6.1 NON-COMPETITION. In consideration of the benefits to Seller
hereunder and in order to induce Purchaser to enter into this Agreement,
Seller hereby covenants and agrees that for a period of two (2) years after
the Closing Date, Seller shall not, and Seller shall cause each corporation
or other entity, controlling, controlled by or under common control with,
Seller to not, directly or indirectly, anywhere in the world where the
Product Line is currently produced, marketed, sold or used, as a
proprietor, partner, stockholder, director, officer, employee, joint
venturer, investor, lender, guarantor or in any other capacity own, engage
in, conduct, manage, operate or control, or participate in, be associated
with or be connected in any manner whatsoever in the ownership,
management, operation or control
<PAGE>
of, any business which, directly or indirectly, is competitive with the
Product Line, except that this non-competition obligation shall not apply
as follows:
(i) Ownership by Seller or any of its affiliates, in the aggregate,
of less than five (5%) percent of the outstanding shares of
capital stock of any corporation with one (1) or more classes
of its capital stock listed on a national securities exchange
or publicly traded in the over-the-counter market shall not
constitute a violation of this Section 6.1; and
(ii) The provisions of this Section 6.1 shall not preclude Seller or
any of its affiliates from acquiring control of an entity which
has a portion of its business which competes with the Business
(the "Competing Business"), provided the Competing Business
does not represent more than five (5%) percent of the total
business conducted by such entity.
(a) Seller hereby covenants and agrees that for a period of two (2) years
after the Closing Date, Seller shall not, and Seller shall cause each
person, corporation or other entity related to, controlling or
controlled by, directly or indirectly, Seller to not, without the
prior written consent of Purchaser, (A) solicit or employ any employee
of Purchaser (i.e.: Victor Bravo) at any time on or after the date
hereof to become an officer, director, employee, agent, consultant or
otherwise affiliated with Seller, or any entity in which Seller owns
an equity or debt interest or has the power to direct management or
(B) solicit at any time on or after the date hereof any employee of
Purchaser (i.e.: Victor Bravo) to terminate his or her relationship
with the Purchaser.
(b) Seller will not at any time from and after the Closing Date divulge,
furnish to or make accessible to anyone any knowledge or information
with respect to confidential or secret processes, inventions,
discoveries, improvements, formulae, plans, material, devices or ideas
or know-how, whether patentable or not, with respect to any
confidential or secret aspects of the Product Line (including, without
limitation, customer lists, supplier lists and pricing arrangements
with customers or suppliers) (collectively, "Confidential
Information"). Any portion of such information and only such portion,
which (i) at or prior to the time of disclosure was generally
available to the public through no breach of this covenant, (ii) was
available to the public on a non-confidential basis prior to its
disclosure, or (iii) is required to be disclosed by law or by order of
a court of competent jurisdiction, shall not be deemed Confidential
Information for purposes of this Agreement, and the undertakings in
this covenant with respect to Confidential Information shall not apply
thereto.
(c) Seller hereby covenants and agrees that, for a period of two (2) years
after the Closing Date, Seller shall not, and Seller shall cause each
person, corporation or other entity related to, controlling or
controlled by, directly or indirectly, Seller to not solicit or
attempt to solicit any of the current customers, clients or accounts
with respect to the Product Line and such other customers, clients or
accounts to whom Seller, directly or indirectly, sold goods or
services in the Product Line during the 24 month period immediately
preceding the Closing Date, with the intent or purpose to perform for
such customer, client or account the same or similar services sold by
Seller or to sell to such customer, client or account the same or
similar goods or services which was performed by Seller for or sold to
such customer, client or account.
(d) In the event a court of competent jurisdiction deems any provision in
this Section 6.1 to be unreasonable, unenforceable or invalid, then
such provision(s) shall be interpreted as broadly as may be
considered reasonable by such court and this Section 6.1 shall be
deemed amended to the maximum scope of business, duration or
geographic scope as such court determines to be reasonable and , as so
amended, shall be enforced.
<PAGE>
The parties acknowledge and agree that the breach of the provisions of this
Section 6.1 could not be adequately compensated with monetary damages and
would irreparably injure Purchaser, and, accordingly, that injunctive
relief and specific performance shall be appropriate remedies to enforce
the provisions of this Section, and the parties waive (a) any claim or
defense that there is an adequate remedy at law for such breach, and (b)
the necessity of posting a bond or similar security; PROVIDED, HOWEVER,
that nothing contained herein shall limit the remedies, legal, or
equitable, otherwise available to Purchaser, and all remedies of the
parties herein are in addition to any remedies available to the parties at
law or otherwise.
6.2 ACCESS TO BOOKS AND RECORDS.
(a) Seller shall afford to Purchaser and Purchaser's auditing staff,
accountants and other authorized representatives, upon reasonable
notice, full access to the books and records of the Product Line not
acquired by Purchaser hereunder pertaining to the Product Line
operations prior to the Closing Date for a period of three (3) years
following the Closing Date in connection with tax and accounting
matters and other reasonable business purposes. Purchaser shall
reimburse Seller for all out-of-pocket costs incurred in complying
with this Section 6.2 other than with respect to the storage of
records.
For a period of three (3) years after the Closing Date, Purchaser shall
allow Seller, its affiliates and their auditing staffs, accountants and
other authorized representatives, at Seller's expense, and during normal
business hours upon reasonable notice to Purchaser, to inspect and copy any
records of the Product Line with respect to periods prior to the Closing
Date for the purposes of (a) preparing and /or defending tax returns for
any period prior to the Closing Date, (b) obtaining information relating to
claims arising from the conduct of the business of the Product Line prior
to the Closing Date, or (c) for such other purposes as Seller may
reasonably request. During such three (3)-year period, Purchaser shall
make the records available to Seller and shall not destroy or discard such
financial records without giving Seller thirty (30) days prior written
notice of its intentions and giving Seller the right, at its expense, to
remove from Purchaser's premises any such financial records. Seller shall
reimburse Purchaser for all out-of-pocket costs incurred in complying with
this Section 6.2, other than with respect to the storage of records.
6.3 COLLECTION OF RECEIVABLES. After the Closing Date, all cash, checks
or other proceeds received by Seller or its banks that relate to the
accounts receivable of Seller purchased by Purchaser shall be paid to
Purchaser within five (5) days after receipt by Seller, which payments
shall be accompanied by a statement identifying the payee, the amount of
the payment and the related invoice number. Seller agrees to endorse and
Purchaser shall have the right to endorse the name of Seller on any such
checks or proceeds (whether received directly by Purchaser or received from
Seller or its banks) and shall deposit such checks and other proceeds in
bank accounts maintained in Purchaser's name. From and after the Closing
Date, Seller shall cooperate with, and provide reasonable assistance to,
Purchaser in collecting such accounts.
7.0 [INTENTIONALLY OMITTED]
7.1 [INTENTIONALLY OMITTED]
8.0 CLOSING
8.1 TIME AND PLACE. The Closing shall take place at 9:00 o'clock a.m. on
December 31, 1998 by facsimile transmission (and overnight mailing) of the
signature pages to this Agreement and all
<PAGE>
ancillary agreements. As soon as practicable following the Closing,
Seller shall cause to be delivered to Purchaser and its counsel an
original set of the closing documents.
8.2 DELIVERIES AT THE CLOSING:
(a) Seller shall execute and deliver to Purchaser such bills of
sale, assignments and other good and sufficient instruments of
conveyance and transfer, in form and substance reasonably
satisfactory to Purchaser, as are effective to transfer the Assets.
(b) Purchaser shall execute and deliver to Seller such documents of
assumption, in form and substance reasonably satisfactory to Seller,
as are effective to assume the Assumed Liabilities.
(c) Purchaser shall issue to Seller, in accordance with Section 3.0
of this Agreement, shares of fully paid, non assessable Common Stock
of Purchaser.
(d) The parties shall each deliver to the other such other
documentation, such as Board of Director and Shareholder
resolutions, as the other party shall reasonably request.
9.0 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; IDENTIFICATION
9.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC. All representations and
warranties of the parties made in this Agreement or as provided in
this Agreement shall survive the Closing Date for a period of two (2)
years thereafter notwithstanding any investigation at any time made by
or on behalf of the other party ("Survival Period"). All
representations and warranties related to any specific claim asserted
in writing prior to the expiration of the Survival Period shall
survive until such claim shall be resolved and payment in respect
thereof, if any is owing, shall be made.
9.2 INDEMNIFICATION.
(a) Seller will fully indemnify and hold harmless Purchaser, its officers,
directors, employees and affiliates against and in respect of any and
all liabilities, losses, damages, deficiencies, costs, or expenses
(including, without limitation, the reasonable fees and expenses of
investigation and counsel) (collectively, "Losses") resulting from:
(i) any misrepresentation or breach of any representation,
warranty, covenant or agreement by Seller made in this
Agreement;
(ii) any claims, proceedings, actions or investigations made or
brought by third parties based on or arising from acts,
omissions or states of fact relating to Seller, the Assets or
the Product Line and occurring or in existence prior to the
Closing Date, except to the extent they constitute an Assumed
Liability;
(iii) the failure of Seller to timely pay any taxes relating to or
resulting from the operation of the Product Line for any and
all periods through and including the Closing Date (except
where an Assumed Liability); or
(iv) the noncompliance with any Bulk Sales Law.
(b) Purchaser will fully indemnify and hold harmless the Seller,
its officers, directors, shareholders, employees and affiliates
against and in respect of any and all Losses resulting from:
<PAGE>
(i) any misrepresentation or breach of any representation,
warranty, covenant or agreement by Purchaser made in this
Agreement (including, without limitation, the certificates
delivered under this Agreement) or as provided in this
Agreement;
(ii) the failure by Purchaser to pay, perform or discharge when due
any Assumed Liability; or
(iii) any claims, proceedings, actions or investigations made or
brought by third parties based on or arising from acts,
omissions or states of fact relating to Purchaser, the Assets
or the Product Line and occurring after the Closing Date.
(c) Any indemnification claim of a party must be asserted prior to
the expiration of the Survival Period. Following the
expiration of the Survival Period, a party may not assert any
claims for indemnification under this Section 9.2.
(d) Each parties' responsibility shall not apply to the first
$1,000 of Losses, and is subject to a maximum responsibility of
$500,000.
9.3 PROCEDURE FOR INDEMNIFICATION. Any person entitled to
indemnification under this Agreement shall (i) give prompt
notice to the indemnifying party of any third party claim with
respect to which it seeks indemnification and (ii) permit such
indemnifying party to assume the defense of such claim with
counsel reasonably satisfactory to the indemnified party;
PROVIDED, that any person entitled to indemnification under
this Agreement shall have the right to employ separate counsel
and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such
person.
10.0 MISCELLANEOUS.
10.1 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of and be enforceable against the parties and
their respective successors and permitted assigns. Nothing in
this Agreement, express or implied, is intended to, or shall
confer on, any person other than any of the parties hereto any
rights, benefits or remedies of any nature whatsoever under or
by reason of this Agreement.
10.2 GOVERNING LAW. This Agreement shall in all respects be
governed by, and enforced and interpreted in accordance with
the laws of the State of Minnesota without giving effect to
choice of law principles.
10.3 NOTICES. All notices, consents, requests, demands,
instructions or other communications provided for in this
Agreement shall be in writing and shall be deemed validly
given, made and served when delivered personally, or sent by
certified or registered mail, postage prepaid, overnight
courier or by telephone facsimile, pending the designation of
another address, addressed as follows:
If to Seller: Cardiac Science Inc.
1176 Main Street Bldg. "C"
Irvine, Ca 92614
Attn: Mr. Raymond Cohen
Fax No. (949) 951-7315
With a copy to: Breslow & Walker
767 Third Avenue
New York, New York 10017
Attn: Mr. Howard Breslow
<PAGE>
Fax No. (212) 888-4955
If to Purchaser: Biosensor Corporation
6 Woodcross Drive
Columbia, SC 29212
Attn: Ronald G. Moyer
Fax No. (803) 407-1967
With a copy to: Blanco, Tackabery, Combs &
Matamoros
P.O. Drawer 25000
Winston-Salem, NC 27114-5000
Attn: Brian L. Herndon
Fax No. (910) 761-1530
10.4 ENTIRE AGREEMENT AND COUNTERPARTS. This Agreement and the
attached Exhibits and Schedules evidence the entire agreement
among the Seller and Purchaser relating to the purchase and
sale of the Assets and the Product Line and supersede in all
respects any and all prior oral or written agreements or
understandings. This Agreement shall be amended or modified
only by written instrument signed by Seller and Purchaser.
This Agreement may be executed in counterparts.
10.5 HEADINGS. Section and article headings used in this Agreement
have no legal significance and are used solely for convenience
of reference.
10.6 EXPENSES. Each party shall pay for its own legal, accounting
and other similar expenses incurred in connection with the
transactions contemplated by this Agreement, whether or not
such transactions are consummated.
10.7 BULK SALES LAWS. Purchaser and Seller waive compliance with
the provisions of any bulk sales laws, including Article 6 of
the Uniform Commercial Code as it may be in effect in any
applicable jurisdiction ("Bulk Sales Laws").
10.8 TAXES. Any sales, use or excise taxes payable in connection
with these transactions shall be shared equally by Seller and
Purchaser. Each party agrees to execute all of the documents
and to take such other action or corporate proceedings as may
be necessary or desirable to structure the transaction which is
the subject of this Agreement as an "exempt occasional sale"
under applicable tax law, to obtain the relevant tax exemption
certificates and to provide copies of such certificates to the
other parties hereto.
10.9 SEVERABILITY. Each and every provision of this Agreement
shall be deemed valid, legal and enforceable in all
jurisdictions to the fullest extent possible. Any provision of
this Agreement that is determined to be invalid, illegal or
enforceable in any jurisdiction shall, as to that jurisdiction,
be adjusted and reformed rather than voided, if possible, in
order to achieve the intent of the parties. Any provision of
this Agreement that is determined to be invalid, illegal or
unenforceable in any jurisdiction which cannot be adjusted and
reformed shall for the purposes of that jurisdiction, be
voided. Any adjustment, reformation or voidance of any
provision of this Agreement shall only be effective in the
jurisdiction requiring such adjustment or voidance, without
affecting in any way the remaining provisions of this Agreement
in such jurisdiction or adjusting, reforming, voiding or
rendering that provision or any other provision of this
Agreement invalid, illegal or unenforceable in any other
jurisdiction.
<PAGE>
10.10 INTERPRETIVE PROVISION. Whenever used in this Agreement "to
the Knowledge of" or similar language shall mean the actual
knowledge, after reasonable inquiry, of any person who, on the
date hereof is an officer of Seller.
IN WITNESS WHEREOF, each of the parties hereto have
executed this Agreement as of the date set forth in the first paragraph.
INNOVATIVE PHYSICIAN SERVICES, INC.
d/b/a Diagnostic Monitoring
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Date:
------------------------------------------
BIOSENSOR CORPORATION
By:
--------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Date:
------------------------------------------
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 1.1.6
Records Transferred:
- Inventory Records: Copies of original invoices and or receiving documents.
- Distributor Agreements - Copies
- Customer list - hard copy and electronic version in Excel format
- Supplier list - hard copy and electronic version in Excel format
- Accounts Payable - hard copy of all outstanding A/P invoices as well as
list in hard copy and electronic version
- Accounts Receivable - hard copy of all outstanding customer invoices as
well as list in hard copy and electronic version
- Historical Invoicing records - 2 sets of hard copies of the last (approx.)
5 years of invoices. One set sorted by invoice date and other set by
customer name
- Dealer/Customer Files - duplication set of certain file records selected by
V Bravo from key dealers files
- Operation Manuals for Products - Win P-V, DM-400, etc will be provided in
both hard copy originals as well as electronic form (Zip disks) - ACTION
ITEM FOR RAUL
- Shipping Logs
- Production Logs, Production Test documents and Test reports
- 510(k)s, FDA Correspondence, SE Letters, etc.
- DM 400 Holter Tape Recorder Technical File
- Service reports, call reports, in-process failure reports, complaint files
- Drawings and Work Instructions
- Standard Operating Procedures (SOP)s
- Revision Change documentation
- ECN/DCNs
- Approved Vendor files
- Calibration and ESD Reports
- International Translation documentation for Labels and Manuals
- OEM Specification file
- Win P-V Holter documentation
- Ambulatory Blood Pressure documentation
- Dealer Database - Database in MS Access format containing 118 records
representing 110 active distributors
- Dealer Propsect database - Database in MS Access format containing 898
records of interested dealers
- End-User Prospect database - Database in MS Access format containing 2167
records of end users who have responded to some type of advertisment
- Brochures - various quantities of literature
- Diagnostic Monitoring Web site - www.diagnosticmonitoring.com will have all
changes made and the revised site will be ready for uploading on 1/4/99.
Certain decisions require input from Biosensor.
- Email addresses - all relevant email addresses to be forward to
vbravo@diagnosticmonitoring.com
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 2.1
Assumed Liabilities - See Schedule 4.3(ix)
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(i)
Leased Real Property - None.
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(ii)
Executory Contracts -
(1) Dealer, distributor, broker, agent or sales representative:
a. Meditech Distributor Agreement dated April 3, 1998.
b. Magna Medical Distributor Agreement dated November 1, 1996
c. Meditronik BRNO Distributor Agreement dated March 1, 1997
d. Medimar Ltd.STI Distribution Agreement dated May 7, 1997
e. Technum S.R.O. Distribution Agreement dated June 9, 1997
f. Hanlim Technology Co., Ltd Distribution Agreement dated
January 3, 1997
g. Oral Agreement with I.M.M. Tunisia to translate the WINPV
software into French for a fee of $2,400.
h. Biomedical Systems Corporation dated June 19, 1997 ( the parties
agree that this agreement is not being assigned to Purchaser nor
is Purchaser bound by the terms of this agreement).
(2) None
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(iii)
Intangible Property Rights -
DIAGNOSTIC MONITORING - REGULATORY PAPERWORK DESCRIPTIVE INFORMATION
510(k) SUBMISSION:
Full title: ORIGINAL PREMARKET 510(K) NOTIFICATION
Device: DM-400 510(k) Holter ECG Cassette Recorder
Date: January 24, 1997
FDA Number - K970298
510(k) APPROVAL:
Full title: FDA SUBSTANTIAL EQUIVALENCE LETTER
Device: DM-400 510(k) Holter ECG Cassette Recorder
Date: August 20, 1997
FDA Number - K970298
CURRENT FDA REGISTRATION INFORMATION:
Document Title: ANNUAL REGISTRATION OF DEVICE ESTABLISHMENT
Registration No.: 2030901
Expiration Date: 2/28/99
Registered Establishment: Diagnostic Monitoring ,1176 Main St.,
Suite C
Irvine, CA 92614
Official Correspondent Listed: Mr. Raymond W. Cohen
Owner / Operator: Diagnostic Monitoring
Establisment Type: Manufacturor,Initial Distributor
TRADEMARK INFORMATION:
Trademark NOT registered for DM 400 Holter ECG Recorder
Trademark symbol used (exclusively): DM 400 -TM-
FDA EXPORT CERTIFICATES:
Application Paperwork Mailed: 2/6/98
Device: DM-400 510(k) Holter ECG Cassette Recorder
Certificate No. 1306-02-1998
Certificate Notary Date: February 25, 1998
Certificate Expires: February 25, 2001
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(iv)
Permits, Licenses and other Approvals - See Schedule 4.3(iii)
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(v)
Contracts, Agreements, Leases Requiring Consent -None
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(vi)
Personal Property owned by a third party -None
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(vii) (PAGE 1)
Inventory
Inventory located at IPS site, Irvine, Calif.
<TABLE>
<CAPTION>
ITEM NUMBER/DESCRIPTION UNIT COST ON HAND UNIT Total Cost
<S> <C> <C> <C> <C>
CASE-CC-BLACK 9.85 95 EA 935.75
CASE-CC-BLANK 9.85 118 EA 1,162.30
CASE-CC-DM 9.85 205 EA 2,019.25
DECK-P4CD350I 674 1 EA 674.00
DECK-P5SYS350E 1,303.00 1 EA 1,303.00
EREC-CARDIOVU 1000 1 EA 1,000.00
EREC-ER310 240 5 EA 1,200.00
EREC-ERJB 169 1 EA 169.00
FC -10MB 99 11 EA 1,089.00
FC -20MB 139 2 EA 278.00
FC -PCMCIAREAD 99 4 EA 396.00
FCPC-MCIA PROTEGE 99 3 EA 297.00
HKIT-350ENCL 73 3 EA 219.00
HKIT-P5SOFT 3.71 44 EA 163.24
HKIT-PLUS KEY 1,696.00 7 EA 11,872.00
HKIT-PREPHOOK 2.79 27 EA 75.33
HKIT-REDKEY 1,272.00 5 EA 6,360.00
HKIT-SMARTKIT 2,375.00 3 EA 7,125.00
HREC-DL250 343 1 EA 343.00
HREC-DL700 525 14 EA 7,350.00
HREC-DM21501 10.85 162 EA 1,757.70
HREC-DM21701 11.5 23 EA 264.50
HREC-DM4005 460 20 EA 9,200.00
HREC-DM4007 460 39 EA 17,940.00
HREC-DP3C 36.75 3 EA 110.25
HREC-RZ21501 10.85 3 EA 32.55
HREC-RZ21701 11.5 1 EA 11.50
SPRO-220FADAPT 35 5 EA 175.00
SPRO-FLOWSENS180 1 1,985 EA 1,985.00
SPRO-FLOWSENSQRS 1.6 58 EA 92.80
SPRO-HOSE-ADPT 15 5 EA 75.00
SPRO-MTHPCS 7.76 1 EA 7.76
SPRO-PAPER-ST2000 4 31 EA 124.00
SPRO-PAPERST95 1.9 84 EA 159.60
SPRO-SA 800 1 EA 800.00
SPRO-ST2000 785 5 EA 3,925.00
SPRO-ST70 830 3 EA 2,490.00
SPRO-ST70PCABLE 40 5 EA 200.00
200-1595-001 Bearing 28 EA 229.60
</TABLE>
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(vii) (PAGE 2)
<TABLE>
<S> <C> <C> <C>
800-0364-00 Clock 2 EA 14.00
200-0450-001 On/Off Switch 10 EA 45.00
800-0393-00 Pressure Roller 2 EA 39.00
800-0352-00 Take-up clutch Assembly 8 EA 128.00
800-0355-00 Motor with Pulley 3 EA 333.00
800-0358-00 Capstan/Flywheel Assembly 8 EA 104.00
100-1470-001 Drive Belt Molded 19 EA 38.00
800-0350-05 Headbar Assembly 1 EA 141.00
Sub-Total 84,453.13
Inventory located at Braemar, Minnesota
Per Schedule 4.3 (vii) page 4 16,227.34
---------
Total Inventory before Reserve 100,680.47
Reserve (5,000.00)
----------
Total Inventory 95,680.47
----------
</TABLE>
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(viii)
ACCOUNTS RECEIVABLE
<TABLE>
<CAPTION>
CUSTOMER NAME \ INV TOTAL BY
INVOICE NUMBER AMOUNT CUSTOMER
------------------------------------------------------------------
<S> <C> <C>
APS Diagnostic
IN 980720 315.00 315.00
Ashland-Bellefonte Cardiology
IN 980759 270.00 270.00
Badin, Tom, M.D.
IN 980766 87.81 87.81
Beijing Hanker Co., LTD.
IN 4009 365.00
IN 980772 50.00 415.00
Biomedical Systems, Inc.
IN 980760 15.00 15.00
Cardiac Medical Services
IN 980773 4,306.78 4,306.78
Cosin, LTDA
IN 3988 85.00 85.00
De La Madriz Medical, Inc.
IN 980642 3,992.00 3,992.00
Diagniscan, S.A.
IN 980727 649.00
IN 980739 945.00 1,594.00
Diamed, Inc.
IN 3602 40.00
IN 980704 259.00 299.00
Diag. Test & Inst. Supply
IN 980716 69.00 69.00
DRG International, Inc.
IN 980735 1,050.00
IN 980743 868.00 1,918.00
Equimed Medical
IN 980709 3,549.00 3,549.00
<PAGE>
Harris Healthcare, Inc.
IN 980754 779.75 779.75
</TABLE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(viii) PAGE 2
<TABLE>
<S> <C> <C>
I.M.M. Company
IN 980719 26,200.00 26,200.00
Kapston, LTD
IN 980736 3,675.00 3,675.00
Lake Erie Med & Surg. Supply
IN 980774 6,515.47 6,515.47
Magna Medical, Inc.
IN 980705 2,500.00 2,500.00
Manta Medical Systems, Pty Ltd
IN 980643 298.00
IN 980671 1,540.00 1,838.00
Martin Gruber Medizintechnik
IN 980644 820.00
IN 980676 3,714.00
IN 980690 3,450.00
IN 980694 200.00
IN 980695 820.00
IN 980721 557.00
IN 980728 2,476.00
IN 980747 3,095.00 15,132.00
Medimar
IN 980529 2,310.00
IN 980556 4,645.00
IN 980589 1,000.00
IN 980723 7,065.00
IN 980733 169.00
IN 980749 4,975.00 20,164.00
MEDINGENIERIA LTDA
IN 980902 2,539.70 2,539.70
Medtechnica Ltd.
IN 980698 245.00
IN 980775 250.00 495.00
Medicotehna, d.o.o.
IN 980558 185.00 185.00
<PAGE>
Meditech
IN 980734 192.00
IN 980768 6,940.00 7,132.00
</TABLE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(viii) PAGE 3
<TABLE>
<S> <C> <C>
Medical Equipment Service
IN 980641 84.50 84.50
Mississippi State University
IN 980745 4,036.00 4,036.00
Omnilabo
IN 980756 2,780.00
IN 980757 3,475.00 6,255.00
Qmed Lab Services, Inc.
IN 980751 652.00 652.00
Sana-Med, Inc.
IN 980722 479.00
IN 980764 46.30 525.30
S.K. Wadhwa, M.D.
Richland Medical Center
IN 980761 270.00 270.00
Soft & Hard - in s.r.l.
IN 980741 5,000.00 5,000.00
The Stevens Co. -Ontario
IN 980715 77.00 77.00
Sylco, s.r.l.
IN 980702 81.00 81.00
Technum, s.r.o.
IN 980701 150.00 150.00
United Airlines
IN 980763 285.00 285.00
Willamette Valley Med. Center
IN 980765 56.00 56.00
Less: Reserve (2,500.00)
--------------------------
Totals 121,543.31 119,043.31
--------------------------
--------------------------
</TABLE>
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(ix)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
<TABLE>
<CAPTION>
Vendor Name/
Doc. Number Amount
--------------------------------------------------
<S> <C>
Arrhythmia Research Technology
IN 13667 3,750.00
3,750.00
AT&T- N79-714 0
IN N79714033-12 27.97
27.97
BRAEMAR,INC.
IN 866 10,500.00
IN 873 8,280.00
IN 865 4,016.58
IN 884 3,680.00
IN 98-0185 674
IN 887 3,680.00
IN 902 8,740.00
IN 905 5,520.00
IN 906 2,475.00
IN 907 301.5
IN 940 564
IN 975 13,800.00
IN 976 9,360.00
IN 985 228.2
IN 1020 1,303.00
73,122.28
Clinical Devices, Inc.
IN 204322 69.75
IN 204324 279
IN 204322-1 279
IN 206178 28.5
IN 206438 139.5
795.75
Copy Center
IN 26463 134.56
IN 27018 436.71
IN 27091 84.75
656.02
DHL Airways, Inc.
IN 944793 106.20
<PAGE>
IN 1022025 284.20
</TABLE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(ix) PAGE 2
<TABLE>
<S> <C>
IN 1224202 158.10
548.50
Direct Access Technology
IN 8549 1,016.49
IN 8641 141.00
IN 8742 20.00
1,177.49
Envoy Data Corp
IN 309914 1,532.75
1,532.75
Forest Medical
IN AA2072 210.00
210.00
Future Solutions, Inc.
IN 14529 180.00
IN 14743 47.50
IN 14744 94.88
IN 14742 110.38
IN 14819 127.25
IN 14820 90.00
650.01
GH Medical, Inc
IN 101312 150.00
IN 101323 2,800.00
IN 101324 1,445.00
IN 101343 45.00
4,440.00
ICC Instruments
IN 86839 45.00
IN 86848 52.50
IN 86853 562.50
660.00
Imex Medical Systems. Inc.
IN 9818454 386.25
386.25
MedMarket, Inc.
IN 1664 150.00
150.00
<PAGE>
Merit Industries
</TABLE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(ix) PAGE 3
<TABLE>
<S> <C>
IN 23276 1,200.87
IN 23286 774.17
IN 23332 231.70
IN 23386 351.49
IN 23450 776.18
IN 23493 1,121.91
IN 23502 1,083.49
IN 23781 537.50
IN 98-1092 1,699.03
7,776.34
Pulse Biomedical Inc.
IN 978469 1,400.00
IN 978470 750.00
IN 978476 1,400.00
IN 120798 178.00
IN Invoice not received
by Dec 31, 1998 2,800.00
6,528.00
Sierra Packaging
IN 980182 85.00
IN 8948 122.40
IN 9049 27.50
234.90
Union Transport Corporation
IN 76073037 191.31
IN 76074531 160.00
IN 76075709 187.25
IN 76075711 444.16
IN 76076738 220.00
IN 76076989 183.63
1,386.35
United Parcel Service
IN 83098W-518 20.00
IN 83098W-528 122.15
142.15
UPS Custom House Brokerage Inc.
IN 97535458 20.00
20.00
Vacumetrics, Inc.
IN 93648 30.82
30.82
<PAGE>
Estimated accrued expenses 5,000.00
Total Accounts Payable and ----------
Accrued Expenses 109,225.58
----------
</TABLE>
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.3(x)
Equipment:
<TABLE>
<CAPTION>
DESCRIPTION LOCATION VALUE
----------- -------- -----
<S> <C> <C>
Compaq Pressario Model 1215 s/n v812bxn21817 DM 1,000
Pentium 166 DM 300
14" video Monitor Tatung model s/n 37468849 DM 50
Pentium 133 Demo PC DM 300
HP 5l Laserjet printer s/n uscboo4732 DM 200
486dx-4 computer and Goldstar 15' monitor DM 200
Fukuda Electrocardiograph s/n 29140380 DM 1,000
DM400 Test fixtures Braemar 1,300
Fukuda Electrocardiograph Braemar 2,200
DM400 Test Fixture DM 1,300
Garner Industries Tape Eraser DM 2,000
------
Total $9,850
------
------
</TABLE>
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 4.13
Environmental Matters -None
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
SCHEDULE 5.5
Capitalization
Biosensor's Articles of Incorporation currently provide that the Company is
authorized to issue up to 5,000,000 shares of capital stock, of which 4,850,000
has been designated Class A common stock and 150,000 of which has been
designated as Series A Preferred Stock. The total number of shares of capital
stock outstanding as of December 31, 1998 consisted of 3,008,055 shares of $.05
par value common stock and 149,025.15 shares of no par value Series A Preferred
Stock. While each share of common stock is entitled to one vote, each share of
Series A Preferred Stock is entitled to 96 votes. Holders of the preferred
shares hold approximately 83% of the voting power of all shares (including both
common and preferred) entitled to vote. There is no cumulative voting. Of the
4,850,000 authorized shares of common stock, 3,008,055 shares are issued and
outstanding, 82,500 are reserved for issuance upon exercise of outstanding
options, and 1,759,445 shares are available for issue. If 1,440,000 shares of
common stock are issued to Innovative Physician Services as contemplated by this
Agreement, 4,448,055 shares of common stock will then be issued and outstanding,
and 319,445 shares of common stock will be available for issue. Holders of the
preferred shares would then hold approximately 76% of the voting power of all
shares entitled to vote.
On July 23, 1998, Biosensor Corporation ('Biosensor" or the "Company")
acquired all of the outstanding shares of Carolina Medical, Inc. pursuant to a
Plan of Reorganization and Agreement which requires the Company to submit to its
shareholders proposals: i) to change the Company's name to BIOTEL Inc., ii) to
effect a one-for-six reverse stock split (the "Reverse Stock Split"), and iii)
to increase the authorized number of shares of common stock to 10,000,000 and
the authorized number of preferred stock shares to 2,000,000. A Preliminary
Proxy Statement filed with the Securities and Exchange Commission on December 4,
1998 includes the above proposals.
If the proposed Reverse Stock Split is approved, there will be 808,333.333
shares of common stock authorized of which 501,342 will be issued and
outstanding. The authorized number of Series A Preferred Stock will be
unaffected by the Reverse Stock Split. The number of shares of common stock
issuable upon conversion of the Series A Preferred Stock will, however, be
reduced from 14,400,000 to 2,400,000. In addition, if the Reverse Stock Split is
approved, the Company will have 306,991 shares of common stock that are
authorized but unissued, of which 13,750 will be reserved for issuance upon
exercise of outstanding options and 293,241 shares will be available to issue.
If 1,440,000 shares of pre-reverse split common stock are issued to Innovative
Physician Services as contemplated by this Agreement, these shares will be
replaced by 240,000 post reverse split shares, bringing the total number of
common shares issued and outstanding to 741,341 and leaving 53,241 shares of
common stock available for issue.
<PAGE>
If the proposal to increase the authorized number of shares of common stock
to 10,000,000 and the authorized number of preferred stock shares to 2,000,000
is approved, the 149,025.15 Series A Preferred Shares will automatically be
converted to 2,384,402 shares of common stock, increasing the total number of
common stock shares issued and outstanding to 2,885,744. The number of
available common stock shares would then be 7,114,256 and the number of
available preferred stock shares would be 2,000,000. If 240,000 post reverse
split shares of common stock are issued to Innovative Physician Services as
contemplated by this Agreement, the total number of common shares issued and
outstanding will be 3,125,744, 13,750 shares will be reserved for options, and
6,860,506 shares of common stock will remain authorized and available for issue.
Principal Shareholders
Of the thirty-two (32) Series A Preferred Stock holders, the following
eight (8) own more than four (4) per cent of the current voting power of the
Company.
<TABLE>
<CAPTION>
NAME OF SHAREHOLDER APPROXIMATE PERCENTAGE OF OWNERSHIP*
<S> <C>
Ronald G. Moyer 27.1%
C. Roger Jones 10.6%
Ronald D. Ordway 10.3%
Nishimoto Sangyo Co., LTD. 8.4%
Bernard B. Klawans 6.8%
Charles A. Barefoot 4.9%
Counterpoint Capital Management, LLC 4.2%
Woodhaven Investors, Inc. 4.2%
TOTAL FOR 8 76.5%
</TABLE>
* calculated as if all issued and outstanding shares of Series A Preferred
Stock were converted into Common Stock at the ratio of 96 shares of Common
Stock for each share of Series A Preferred Stock.
In addition to the above holders of Series A Preferred Stock, Steven
Springrose owns 5.2% of the voting power of the Company as a result of his
beneficial ownership of 896,000 shares of the Company's Common Stock.
Other than in connection with: i) this Agreement, and ii) the possible
merger of Advance Medical Products, Inc. into Advanced Biosensor, Inc., a wholly
owned subsidiary of the Company, the Company has no current plans, agreements or
arrangements for the issuance of additional shares of common stock or Preferred
Stock, other than the issuance of shares pursuant to its stock option and other
employee benefit plans. The Company is at all times investigating additional
sources of financing and future acquisitions which the Board of Directors
believes will be in the best interests of the Company and its shareholders. In
addition, the Company is currently seeking and plans to continue to seek
additional financing, which could involve the issuance of debt or equity of the
Company.
<PAGE>
AGREEMENT FOR PURCHASE AND SALE OF ASSETS BETWEEN INNOVATIVE
PHYSICIAN SERVICES, INC. (DBA DIAGNOSTIC MONITORING) AND
BIOSENSOR CORPORATION
<TABLE>
<CAPTION>
Exhibit A Condensed Balance Sheet
<S> <C>
Accounts Receivable $119,043
Inventory 95,680
Equipment 9,850
Accounts Payable 109,226
Net Book Value 115,347
</TABLE>