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MEDICAL DEVICE TECHNOLOGIES, INC.
9171 TOWNE CENTRE DRIVE
SUITE 355
SAN DIEGO, CA 92122
July 8, 1997
Via EDGAR Transmission
Attn: Filer Support
U.S. Securities and Exchange Commission
Mail Stop 0-12, Room 1414
6432 General Green Way
Alexandria, VA 22312
Re: Medical Device Technologies, Inc.
(the "Company") Form 8-K dated June 23, 1997
Ladies and Gentlemen:
On behalf of the Company, electronically transmitted herewith please find
Form 8-K dated June 23, 1997.
Very truly yours,
By:/s/ M. Lee Hulsebus
----------------------
M. Lee Hulsebus
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 23, 1997
MEDICAL DEVICE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Utah 0-12365 58-1475517
- --------------------------------------------------------------------------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
formation)
9171 Towne Centre Drive, Suite 355, San Diego, California 92122
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 455-7127
-----------------------------
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
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Item 2. Acquisition and Disposition of Assets.
--------------------------------------
On June 23, 1997 (the "Closing Date"), the Registrant entered into a
definitive agreement to purchase certain of the assets of Boehringer Mannheim
Corporation ("Boehringer), an Indiana corporation, pursuant to that certain
Asset Purchase Agreement (the "Asset Purchase Agreement") by and between the
Registrant and Boehringer, and an exclusive five (5) year distribution agreement
by and between Boehringer Mannheim Gmbh, ("Boehringer Gmbh") a German affiliate
of Boehringer (the "Distribution Agreement") and Registrant.
Pursuant to the Asset Purchase Agreement, attached hereto as Exhibit A,
Boehringer has agreed to sell to the Registrant certain of its assets (the
"Assets") with respect to its product line known as the "Biotrack 516," a system
used in doctors' offices and labs to measure drug levels in the blood for
commonly prescribed asthma and epilepsy medication. The Assets that are being
acquired include, but are not limited to, certain patents, customer lists,
inventory, equipment and trademarks, although Boehringer shall have the right to
continue to use the "Biotrack" name solely with respect to one of its blood
coagulation product lines. The Registrant also agreed to assume certain
liabilities in connection with the Asset Purchase Agreement, specifically,
warranty obligations and certain purchase commitments relating to the Assets.
The aggregate purchase price for the Assets (the "Purchase Price") is
$1,350,000, payable as follows: (i) $100,000 upon execution of the Asset
Purchase Agreement; (ii) $400,000 as soon as practicable but no later than July
15, 1997, at which time Boehringer will deliver to the Registrant a portion of
the manufacturing line with respect to the Biotrack 516; (iii) $500,000 as soon
as practicable but no later than October 1, 1997, at which time Boehringer shall
deliver to the Registrant the remaining portion of the manufacturing line with
respect to the Biotrack 516; (iv) $175,000 no later than November 30, 1997; and
(v) $175,000 no later than December 30, 1997. In the event that the value of
certain of the Assets is ultimately determined to be less than $1,150,000 based
on Boehringer's direct standard costs, the purchase price shall be decreased by
the amount which the value of the Assets is less than $1,150,000. The
Registrant's ability to complete the purchase of the Assets is subject to the
Registrant obtaining the necessary financing, which the Registrant is presently
attempting to secure. Boehringer will retain a purchase money security interest
in the Assets pending payment of the Purchase Price.
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Under the Asset Purchase Agreement, the Registrant has agreed to grant to
Boehringer a non-exclusive, world-wide royalty free license to use the
technology underlying the patents that it will acquire from Boehringer pursuant
to the Asset Purchase Agreement; provided, however, that Boehringer will not be
entitled to manufacture, use or sell any product that uses technology which is
substantially similar to that used in connection with the Biotrack 516.
Pursuant to the Distribution Agreement, a copy of which is attached as
Exhibit B, Boehringer Gmbh will be the exclusive distributor of the Biotrack 516
product line in Germany. Under the Distribution Agreement, Boehringer Gmbh will
be obligated to make minimum purchases of $1,200,000 per year, resulting in an
aggregate minimum purchase obligation of $6,000,000 over the term of the
Distribution Agreement. The minimum purchase amount is subject to adjustment in
the event that the public health insurance reimbursement in Germany with respect
to the Biotrack 516 is significantly reduced or withdrawn.
In addition, the Registrant and Boehringer also entered into a Transition
Plan (the "Transition Plan") to facilitate the transfer of the Assets to the
Registrant, a copy of which is attached hereto as Exhibit C.
The disclosure contained herein is qualified in its entirety by reference
to each of the Asset Purchase Agreement, the Distribution Agreement and the
Transition Plan.
Item 7. Financial Statements and Exhibits.
----------------------------------
(a) Financial Statements.
As of the date of filing of this Current Report on Form 8-K, it is
impracticable for the Registrant to provide the financial statements required by
this Item 7(a). In accordance with Item 7(a)(4) of Form 8-K, such financial
statements will be filed by amendment to this Form 8-K no later than 60 days
after the date hereof.
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(b) Pro Forma Financial Information.
As of the date of this Current Report on Form 8-K, it is impracticable for
the Registrant to provide the pro forma financial information required by this
Item 7(b). In accordance with Item 7(b) of Form 8-K, such financial information
will be filed by amendment to this Form 8-K no later than 60 days after the date
hereof.
<TABLE>
<CAPTION>
(c) Exhibits Exhibit
-------
<S> <C>
Asset Purchase Agreement Exhibit A
Distribution Agreement Exhibit B
Transition Plan Exhibit C
Press Release dated June 24, 1997 Exhibit D
</TABLE>
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SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly authorized and caused the undersigned to sign this Report on
the Registrant's behalf.
MEDICAL DEVICE TECHNOLOGIES, INC.
By: /s/ M. Lee Hulsebus
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M. Lee Hulsebus, Chief Executive Officer
Dated: July 8, 1997
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EXHIBIT A
---------
ASSETS PURCHASE AGREEMENT
ASSETS PURCHASE AGREEMENT, dated as of June 2, 1997, by and among
BOEHRINGER MANNHEIM CORPORATION, an Indiana corporation ("Seller"), and
Medical Device Technologies, INC., a Utah corporation ("Purchaser"), with
reference to the following RECITALS:
A. Seller is engaged, in part, in the business of designing and manufacturing
the product line known as the "516".
B. Purchaser is engaged in, manufacturing and marketing medical devices and
related products, and desires to purchase certain assets of Seller. All of
such business assets of Seller desired to be purchased by Purchaser
thereunder are referred to herein as the "Assets."
C. Subject only to the limitations and exclusions contained in this Agreement
and on the terms and conditions hereinafter set forth, Seller desires to
sell and Purchaser desires to purchase from Seller those Assets designated
herein.
D. Seller and Purchaser incorporate by reference the so called Transition Plan
for Biotrack 516 dated June 2, 1997.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations and agreement herein contained, and intending to
be legally bound hereby, the parties agree as follows:
ARTICLE I - PURCHASE AND SALE
- -----------------------------
1.1 Agreement to Sell. At the Closing hereunder (as defined in Section 2.1
hereof) Seller shall grant, sell, convey, assign, transfer and provide
access to Purchaser, upon and subject to the terms and conditions of
this Agreement, all right, title and interest of Seller in and to all
of the assets, properties and rights of Seller set forth hereto
(collectively referred to herein as the "Assets" attached as Exhibit
A), free and clear of all mortgages, liens, pledges, security
interests, charges, claims, restrictions and encumbrances of any
nature whatsoever. However, Purchaser grants Seller a non-exclusive,
paid up, worldwide, royalty free, non-transferable, except for
affiliates, and any successor, license to the patents listed on
Exhibit A. Seller shall have the right to use any and all technology
in any way that would, absent this license, infringe any of such
patents; provided, however, that this license does not entitle Seller
to make, have made, use, sell or have sold any product that uses
technology which is substantially similar to that used in connection
with Biotrack 516. Purchaser grants Seller worldwide, royalty free,
non transferable license to use the trademark "Biotrack" as it relates
solely to the Biotrack 512 coagulation productline.
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1.2 Agreement to Purchase. At the Closing hereunder, Purchaser shall
purchase the Assets from Seller, upon and subject to the terms and
conditions of this agreement in exchange for the Purchase Price
(hereinafter defined in Section 1.3 hereof).
1.3 The Purchase Price.
1.3.1Purchase Price. The Purchase Price shall consist of the following
consideration:
(a) $1,350,000 in cash.
1.3.2 Payment of Purchase Price.
Purchaser shall deliver the total sum of $1,350,000 which is to be
transferred to Seller, prior to the move of the assets, via wire
transfer, as follows:
Upon execution of the contract $100,000 non-refundable deposit
As soon as is practicable but no $400,000 to BMC and delivery of
later than July 15, 1997 monitor manufacturing line to MDT
As soon as is practicable $500,000 to BMC and delivery of
following safety stock build cartridge manufacturing line
but no later than October 1, 1997 to MDT
No later than November 30, 1997 $175,000 payment
No later than December 30, 1997 $175,000 payment
1.3.3. In order to secure the Purchaser's payment of all amounts due
hereunder, Purchaser hereby grants to Seller a purchase money
security interest in all the Assets. Purchaser agrees to promptly
execute any financing statements required by Seller in order for
Seller to perfect its security interest hereunder. Upon payment
in full of all amounts hereunder, Seller will release its
security interest. The Agreement shall constitute a security
agreement under the laws of any state where the Assets are
located.
1.4 Assumption of Liabilities. Upon the Closing, the Purchaser will
assume all debt, liabilities or other obligations of Seller
relating to the Assets and identified on Exhibit B hereto ( the
"Assumed Liabilities").
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ARTICLE II - CLOSING, ITEMS TO BE DELIVERED
- -------------------------------------------
2.1 Closing. The closing (the "Closing"), of the sale and purchase of
the Assets shall take place on or before:
No later than July 15, 1997 for the monitor manufacturing line,
monitor raw material inventory, and monitor WIP
No later than October 1, 1997 for the cartridge manufacturing
line, cartridge raw material inventory, and cartridge WIP
Value of Assets to be delivered to Purchaser in the form of raw
materials and WIP shall be at least $1,150,000 based on Seller's
direct standard costs. In the case of any shortfall, BM reserves
the right to provide MDT with a credit towards financial
obligations.
2.2 Items to be Delivered at Closing. At the Closing and subject to
the terms and conditions herein contained;
(a) Seller shall provide to Purchaser the following as specified
in 1.3.2
(1) Raw material inventory and WIP
(2) Equipment associated with production as specified on
list provided to Purchaser in March, 1997
and simultaneously with such access, all such steps will be taken
as may be required to put Purchaser in actual possession and
operating control of the Assets.
(b) Purchaser shall deliver to Seller the following:
(i) the Purchase Price in accordance with Section 1.3.2
hereof.
2.3 Third Party Consents. To the extent that Seller's rights under
any agreement, contract, commitment, lease, Authorization or
other Assets to be assigned to Purchaser hereunder may not be
assigned without the consent of another person which has not been
obtained, this Agreement shall not constitute an agreement to
assign the same if an attempted assignment would constitute a
breach thereof or be unlawful, and Seller, at its expense, shall
use its best efforts to obtain any such required consent(s) as
promptly as possible. If any such consent shall not be obtained
or if any attempted assignment would be ineffective or would
impair Purchaser's rights under the Assets in question so that
Purchaser would not in affect acquire the benefit of all such
rights, Seller, to the maximum extent permitted by law and the
Assets, shall act after the Closing as Purchaser's agent in order
to obtain for it the benefits thereunder and shall cooperate, to
the maximum extent permitted by law and the Assets, with
Purchaser in any other reasonable arrangement designed to provide
such benefits to Purchaser.
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ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Seller. The Seller hereby
represents and warrants to Purchaser that:
3.1.1Corporate Existence. Seller is a corporation duly organized
and validly existing under the laws of the jurisdiction of
its incorporation. Seller is duly qualified to do business
and is in good standing as a foreign corporation in each
jurisdiction where the conduct of its business requires it
to be so qualified.
3.1.2Corporate Power; Authorization; Enforceable Obligations.
Seller has the corporate power, authority and legal right to
execute, deliver and perform this Agreement. The execution,
delivery and performance of this Agreement by Seller has
been duly authorized by all necessary corporate and
shareholder action. This Agreement has been, and the other
agreements, documents and instruments required to be
delivered by Seller in accordance with the provisions hereof
(the "Seller's Documents) will be, duly executed and
delivered on behalf of Seller by its duly authorized
officers, and this Agreement constitutes, and the Seller's
Documents when executed and delivered will constitute, the
legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms.
3.1.3No Interest in Other Entities. No shares of any corporation
or any ownership or other investment interest, either of
record, beneficially or equitably, in any association,
partnership, joint venture or other legal entity are
included in the Assets.
3.1.4Validity of Contemplated Transactions, etc.. The execution,
delivery and performance of this Agreement by Seller does
not and will not violate, conflict with or result in the
breach of any term, condition or provision of, or require
the consent of any other person under, (a) any existing law,
ordinance, or governmental rule or regulation to which
Seller is subject, (b) any judgment, order, writ,
injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which
is applicable to Seller, (c) the charter documents of Seller
or any securities issued by Seller, or (d) any mortgage,
indenture, agreement, contract, commitment, lease, plan,
Authorization or other instrument, document or
understanding, oral or written, to which Seller is a party,
by which Seller may have rights or by which any of the
Assets may be bound or have rights or by which any of the
Assets may be bound or affected, or give any party with
rights thereunder the right to terminate, modify, accelerate
or otherwise change the existing rights or obligations of
Seller thereunder.
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3.1.5No Third Party Options. There are no existing agreements,
options, commitments or rights with, of or to any person to
acquire any of Seller's assets, properties or rights
included in the Assets or any interest therein.
3.1.6Absence of Undisclosed Liabilities. To Seller's knowledge,
Seller has no material, defined as amounts individually or
in aggregate in excess of $5,000, undisclosed liabilities or
obligations with respect to the Assets, either direct or
indirect, matured or unmatured or absolute, contingent or
otherwise, except as otherwise disclosed to Purchaser in
writing. For purposes of this Agreement, the term
"liabilities" shall include, without limitation, any direct
or indirect indebtedness, guaranty, endorsement, claim,
loss, damage, deficiency, cost, expense, obligation or
responsibility, fixed or unfixed, known or unknown, asserted
or unasserted, choate or inchoate, liquidated or
unliquidated, secured or unsecured.
3.1.7Tax and Other Returns and Reports. There are no tax liens
on any of the Assets.
3.1.8Books of Account. To the best of Seller's knowledge, the
books, records and accounts of Seller maintained with
respect to the Assets accurately and fairly reflect, in
reasonable detail, the transactions and the assets and
liabilities of Seller with respect to the Assets.
3.1.9Title to Properties. Seller has good, valid and marketable
title to all of the Assets to be transferred and sold to
Purchaser hereunder, free and clear of all mortgages, liens,
pledges, security interests, charges, claims, restrictions
and other encumbrances and defects of title of any nature
whatsoever.
3.2 Representations and Warranties of Purchaser. Purchaser represents
and warrants to Seller as follows:
3.2.1Corporate Existence. Purchaser is a corporation duly
organized, validly existing and in good standing under the
laws of the State of Utah.
3.2.2Corporate Power and Authorization. Purchaser has the
corporate power, authority and legal right to execute,
deliver and perform this Agreement. The execution, delivery
and performance of this Agreement by Purchaser have been
duly authorized by all necessary corporate action. This
Agreement has been duly executed and delivered by Purchaser
and constitutes the legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with
its terms.
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3.2.3Governmental Consents. No consent, approval, qualification,
order or authorization of, or filing with, any local, state
or federal governmental authority is required on the part of
the Purchaser in connection with the Purchaser's valid
execution, delivery, or performance of this Agreement.
Medical Device Technologies, Inc. will obtain all necessary
permits, etc required to manufacture product that meet
local, state, and federal requirements.
ARTICLE IV - AGREEMENTS PENDING CLOSING
- ---------------------------------------
4.1 Agreements of Seller Pending the Closing. Seller covenants and
agrees that, pending the Closing and except as otherwise agreed
to in writing by Purchaser:
4.1.1Business in the Ordinary Course. Seller's business related
to the Assets shall be conducted solely in the ordinary
course consistent with past practice.
4.1.2Maintenance of Physical Assets. Seller shall continue to
maintain and service the Assets in the same manner as has
been its consistent past practice.
4.1.3Compliance with Laws, etc.. Seller shall comply with all
laws, ordinances, rules, regulations and orders applicable
to its business, or Seller's operations, assets or
properties in respect thereof, the noncompliance with which
might materially affect the Assets.
4.1.4Conduct of Business. Seller shall use its best efforts to
conduct its business in such a manner that on the Closing
Date the representations and warranties of Seller contained
in this Agreement shall be true, to the best of Seller's
knowledge, except as specifically contemplated by this
Article IV, as though such representations and warranties
were made on and as of such date. Furthermore, Seller shall
cooperate with Purchaser and use its best efforts to cause
all of the conditions to the obligations of Purchaser and
Seller under this Agreement to be satisfied on or prior to
the Closing Date.
4.1.5Disclosure of Transactions: Seller shall disclose any
transactions leading to liabilities which are to be assumed
by Purchaser or capital equipment acquisition or disposition
prior to closing.
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ARTICLE V - INDEMNIFICATION
5.1 General Indemnification Obligation of Seller. From and after the
Closing, Seller will reimburse, indemnify and hold harmless
Purchaser and its successors and assigns (an "Indemnified
Purchaser Party") against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by any Indemnified
Purchaser Party that result from, relate to or arise out of:
(i) the use of the Assets or conduct of the business
related to the Assets prior to the Closing including
any product liability claim based on a product
manufactured prior to the Closing; or cartridges
manufactured by Seller after the Close to be used as
safety stock during the transition of the business.
(ii) any and all actions, suits, claims, legal,
administrative, arbitration, governmental or other
proceedings or investigations against any Indemnified
Purchaser Party that relate to Seller or its business
in which the principal event giving rise thereto
occurred prior to the Closing Date or which result from
or arise out of any action or inaction prior to the
Closing Date of Seller or any director, officer,
employee, agent, representative or subcontractor of
Seller; or
(iii)any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part
of Seller under this Agreement, or from any
misrepresentation in or omission from any certificate,
schedule, statement, document or instrument furnished
to Purchaser pursuant hereto or in connection with the
negotiation, execution or performance of this
Agreement; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines,
judgments, costs and other expenses (including, without
limitation, reasonable legal fees and expenses) incident to
any of the foregoing or to the enforcement of this Section
5.1.
5.2 General Indemnification Obligation of Purchaser. From and after
the Closing, Purchaser will reimburse, indemnify and hold
harmless Seller and its successors or assigns (an "Indemnified
Seller Party") against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by any Indemnified
Seller Party that result from, relate to or arise out of:
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(i) the use of the Assets or conduct of the business
related to the Assets from and after the Closing
including any product liability claim based on a
product manufactured after the closing, including
claims based on design defects;
(ii) the Assumed Liabilities (Exhibit B)
(iii)any and all actions, suits, claims, legal,
administrative, arbitration, governmental or other
proceedings or investigations against any Indemnified
Seller Party that relate to Purchaser or its business
in which the principal event giving rise thereto
occurred after the Closing Date or which result from or
arise out of any action or inaction from and after the
Closing Date of Purchaser or any director, officer,
employer, agent, representative or subcontractor of
Purchaser,
(iv) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part
of Purchaser under this Agreement, or from any
misrepresentation in or omission from any certificate,
schedule, statement, document or instrument furnished
to Seller pursuant hereto or in connection with the
negotiation, execution or performance of this
Agreement; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines,
judgments, costs and other expenses (including, without
limitation, reasonable legal fees and expenses) incident to
any of the foregoing or to the enforcement of this Section
5.2.
5.3 Method of Asserting Claims, etc.. In the event that any claim or
demand for which Seller would be liable to an Indemnified
Purchaser Party hereunder is asserted against or sought to be
collected from an Indemnified Purchaser Party by a third party,
the Indemnified Purchaser Party shall promptly notify Seller of
such claim or demand, specifying the nature of such claim or
demand and the amount or the estimated amount thereof to the
extent then feasible (which estimate shall not be conclusive of
the final amount of such claim and demand) (the "Claim Notice").
Seller shall have ten (10) days from the personal delivery or
mailing of the Claim Notice (the "Notice Period") to notify the
Indemnified Purchaser Party, (A) whether or not it disputes its
liability to the Indemnified Purchaser Party hereunder with
respect to such claim or demand and (B) notwithstanding any such
dispute, whether or not it desires, at its sole cost and expense,
to defend the Indemnified Purchaser Party against any claim or
demand.
(a) If Seller disputes its liability with respect to such claim
or demand or the amount thereof (whether or not Seller
desires to defend the Indemnified Purchaser Party against
any such claim or demand as provided in paragraphs (b) and
(c) below), the parties may take such reasonable actions to
preserve their rights as are necessary. Pending the
resolutions of any dispute by Seller of its liability with
respect to any claim or demand, such claim or demand shall
not be settled without the prior written consent of the
Indemnified Purchaser Party.
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(b) In the event that Seller notifies the Indemnified Purchaser
Parties within the Notice Period that they desire to defend
the Indemnified Purchaser Party against such claim or demand
then, except as hereinafter provided, Seller shall have the
right to defend the Indemnified Purchaser Party by
appropriate proceedings, which proceedings shall be promptly
settled or prosecuted by them to a final conclusion in such
a manner as to avoid any risk of Indemnified Purchaser Party
becoming subject to liability for any other matter;
provided, however, Seller shall not, without the prior
written consent of the Indemnified Purchaser Party, consent
to the entry of any judgment against the Indemnified
Purchaser Party or enter into any settlement or compromise
which does not include, as an unconditional term thereof,
the giving by the claimant or plaintiff to the Indemnified
Purchaser Party of a release, in form and substance
satisfactory to the Indemnified Purchaser Party, as the case
may be, from all liability in respect of such claim of
litigation. If any Indemnified Purchaser Party desires to
participate in, but not control, any such defense or
settlement, it may do so at its sole cost and expense.
(c) All claims for indemnification by an Indemnified Seller
Party under this Agreement shall be asserted and resolved
under the procedures set forth above substituting in the
appropriate place "Indemnified Seller Party" for
"Indemnified Purchaser Party" and variations thereof and
"Purchaser" for "Seller."
5.4 Other Rights and Remedies Not Affected. The indemnification
rights of the parties under this Article V are independent of and
in addition to such rights and remedies as the parties may have
at law or in equity or otherwise for any misrepresentation,
breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including
without limitation the right to seek specific performance,
rescission or restitution, none of which rights or remedies shall
be affected or diminished hereby.
ARTICLE VI - MISCELLANEOUS
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6.1 Sales, Transfer and Documentary Taxes, etc.. Purchaser shall pay
all Indiana State and local sales, documentary and other transfer
taxes, if any, due as a result of the sale or transfer of the
Assets in accordance herewith.
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6.2 Expenses. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the
preparation of this Agreement, the carrying out of the provisions
of this Agreement and the consummation of the transactions
contemplated hereby.
6.3 Contents of Agreement; Parties in Interest; etc.. This Agreement
sets forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby. It shall not be
amended or modified except by written instrument duly executed by
each of the parties hereto. Any and all previous agreements and
understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this
Agreement.
6.4 Assignment and Binding Effect. This Agreement may not be assigned
prior to the Closing by any party hereto without the prior
written consent of the other parties. Subject to the foregoing,
all of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by
the successors and assigns of Seller and Purchaser.
6.5 Waiver. Any term or provision of this Agreement or any breach of
this Agreement may be waived at any time by the Party entitled to
the benefit thereof by a written instrument duly executed by such
Party. Such waiver shall not constitute a continuing waiver of
that term, provision or breach or of any other term, provision or
breach of the Agreement.
6.6 Notices. Any notice, request, demand, waiver, consent, approval,
or other communication which is required or permitted hereunder
shall be in writing and shall be deemed given only if delivered
personally or sent by telegram or by registered or certified
mail, postage prepaid, as follows:
If to Purchaser, to:
MEDICAL DEVICE TECHNOLOGIES, INC.
9171 Towne Center Drive, Suite 355
San Diego, CA 92122
Attention: M. Lee Hulsebus
Chief Executive Officer and Chairman
If to Seller, to:
BOEHRINGER MANNHEIM CORPORATION
9115 Hague Road
Indianapolis, Indiana 46250
Attention: Robert Bachkosky
Regional Business Director
Latin America, Canada
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with an additional copy sent to:
BOEHRINGER MANNHEIM CORPORATION
Law Department
9115 Hague Road
P. O. Box 50100
Indianapolis, Indiana 46250
or to such other address as the addressee may have specified in a
notice duly given to the sender as provided herein. Such notice,
request, demand, waiver, consent, approval or other communication
will be deemed to have been given as of the date so delivered,
telegraphed or mailed.
6.7 Indiana Law to Govern. This Agreement shall be governed by and
interpreted and enforced in accordance with the internal laws of
the State of Indiana, without regard to conflicts of laws
principles. Venue for any dispute arising out of this Agreement
shall be Marion County, Indiana, and both parties consent to such
venue.
6.8 No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole
benefit of the parties hereto and, in the case of Article VI
hereof, the other Indemnified Parties, and their heirs,
executors, administrators, legal representatives, successors and
assigns, and they shall not be construed as conferring any rights
on any other persons.
6.9 Schedules and Exhibits. All Exhibits and Schedules referred to
herein are intended to be and hereby are specifically made a part
of this Agreement.
6.10 Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the
extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining provisions
hereof, and any such invalidity or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
6.11 Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such
counterpart, each of which when executed and delivered shall be
deemed to be an original and all of which counterparts taken
together shall constitute but one and the same instrument. This
Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered by the
parties. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any
of the other counterparts.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first written.
PURCHASER
By: /s/M. Lee Hulsebus Date: 6/19/97
Name: M. Lee Hulsebus
Title: CEO/Chairman
SELLER
BOEHRINGER MANNHEIM CORPORATION
By: /s/Dennert O. Ware Date: 6/20/97
Name: Dennert O. Ware
Title:President & CEO
12
<PAGE>
Exhibit A - Assets
1. Patents Number
A. 4946795
B. 4868129
C. 5077017
D. 5104813
E. 5028142
F. 5230866
G. Des.347067
Foreign Counterparts
System for mixing solids into small volumes of liq. - has mixing cartridge with
chamber contg. a reciprocating magnetic mixing element
Patent Assignee: (BIOT-) BIOTRACK INC
Author (Inventor): COBB M; GIBBONS I; HILLMAN R; OSTOICH V
Patent Family: CC Number Kind Date Week
US 5028142 A 910702 9304 (Basic)
Priority Data (CC No Date): US 334304 (890406)
- --------------------------------------------------------------------------------
Easily automated capillary stop flow junction - between a capillary passage and
a chamber and providing a more stable stop flow state for e.g. small blood
samples
Patent Assignee: (BIOT-) BIOTRACK INC
Author (Inventor): BESEMER D; GORIN M; SHARTLE R
Patent Family: CC Number Kind Date Week
EP 501796 A2 920902 9236 (Basic)
CA 2061984 A 920902 9247
AU 9211323 A 930128 9311
US 5230866 A 930727 9331
EP 501796 A3 931006 9510
Priority Data (CC No Date): US 663217 (910301)
Applications (CC,No,Date): EP 92301650 (920227); EP 92301650 (920227); CA
2061984 (920227); AU 9211323 (920228)
13
<PAGE>
Dilution and mixing cartridge esp. for small liq. vol. - allows single or
multiple dilutions of sample with diluent in disposable cartridge e.g. to
measure optical density
Patent Assignee: (BIOT-) BIOTRACK INC; (BOEF ) BOEHRINGER MANNHEIM CORP
Author (Inventor): BESEMER D; GORIN M; GIBBONS I
Patent Family: CC Number Kind Date Week
EP 392851 A 901017 9042 (Basic)
AU 9048723 A 901018 9049
JP 2293640 A 901204 9103
US 5104813 A 920414 9218
CA 1323999 C 931109 9351
EP 392851 B1 941102 9442
DE 69013741 E 941208 9503
ES 2069683 T3 950516 9526
Priority Data (CC No Date): US 337286 (890413)
Applications (CC,No,Date): EP 90303985 (900412); EP 90303985 (900412); JP
9095238 (900412); CA 613158 (890926); EP 90303985 (900412); DE 613741 (900412);
EP 90303985 (900412)
- --------------------------------------------------------------------------------
Dilation and mixing of liq. samples - using a fixed volume measuring chamber
filled from a sample application site and emptied by flow of diluent
Patent Assignee: (BIOT-) BIOTRACK INC
Author (Inventor): GIBBONS I; HILLMAN R S; ROBERTSON C R; GORIN M M; COBB M E
Patent Family: CC Number Kind Date Week
EP 305210 A 890301 8909 (Basic)
AU 8821639 A 890302 8918
JP 1257268 A 891013 8947
US 4868129 A 890919 8947
US 4946795 A 900807 9034
US 5077017 A 911231 9204
EP 305210 B1 931208 9349
DE 3886140 G 940120 9404
ES 2049254 T3 940416 9419
CA 1333850 C 950110 9511
JP 95056492 B2 950614 9528
Priority Data (CC No Date): US 117791 (871105); US 90026 (870827); US 395808
(890818)
Applications (CC,No,Date): JP 88213515 (880827); EP 88307946 (880826); JP
88213515 (880827); EP 88307946 (880826); DE 3886140 (880826); EP 88307946
(880826); EP 88307946 (880826); CA 575875 (880826)
14
<PAGE>
Design Patent:
ANALYTICAL CARTRIDGE FOR TESTING BIOLOGICAL FLUIDS
PATENT NO.: D347 ,067
ISSUED: May 17, 1994 (19940517)
INVENTOR(s): Shartle, Robert, Livermore, CA (California), US (United States of
America) Aldrich, William, Redwood City, CA (California),
US (United States of America)
ASSIGNEE(s): Biotrack, Inc
[Assignee Code(s): 17922]
EXTRA INFO: Assignment transaction [Reassigned], recorded September 29, 1994
(19940929) Assignment transaction [Reassigned], recorded
October 13, 1994 (19941013)
APPL. NO.: 7-670,151
FILED: March 15, 1991 (19910315)
FULL TEXT: 14 lines
2. The trademark "Biotrack" - registration #1638268, March 19, 1991
3. 516 Customer List - as provided to MDT, March 1997
4. Inventory - as noted in section 2.1
5. Equipment - list of equipment provided to MDT, March 1997
15
<PAGE>
Exhibit B - Assumed Liabilities
1. All Warranty obligations.
2. Long lead purchase commitments to the extent there have been no receipts of
the committed matter prior to closing.
a. A list of known long lead purchase commitments will be provided to the
Purchaser prior to the Closing.
16
<PAGE>
EXHIBIT B
---------
BIOTRACK 516
EXCLUSIVE DISTRIBUTION AGREEMENT
This agreement is made this 2nd day of June 1997, by and between Medical Device
Technologies (hereinafter referred to as MDT), Inc., a Utah Corporation having
its principal place of business at 9171 Towne Centre Drive, #355, San Diego,
California 92122 and Boehringer Mannheim GmbH, a German corporation (hereinafter
referred to as BMG).
PREAMBLE
WHEREAS, MDT, is engaged in the manufacture and sale of diagnostic instruments,
and related products and
WHEREAS, BMG is experienced with promotion, distribution and sale of diagnostic
instruments and related products, and
WHEREAS, MDT has acquired from Boehringer Mannheim Corporation, Indianapolis,
certain assets related to a Therapeutic Drug Monitoring Productline under the
Designation Biotrack 516; and
WHEREAS BMG is interested to serve as an Exclusive Distributor to promote and
distribute such Productline in the territory described below.
NOW THEREFORE, in consideration of the mutual covenants contained herein the
parties agree hereto as follows:
1. Definitions:
1.1 Contract Products: All products associated with the existing Biotrack
516 product line including: the 516 meter, theophylline cartridge,
phenytoin cartridge, carbamezapine cartridges, electronic control
cartridges, and wet controls. A detailed list of Contract Products is
attached hereto as a detailed Exhibit A.
1
<PAGE>
1.2. Territory: The Territory will be Germany.
2. Appointment
MDT hereby appoints BMG and BMG hereby accepts this appointment to act as
exclusive distributor for the Contract Products in the Territory.
3. Distributor Obligations
3.1 During the term of this Agreement, BMG will promote the sale and use
of the Contract Products in the Territory, devoting BMG's knowledge to
such promotion. More particularly, without limitation of the
generality of the undertaking to promote the sale and use of the
Contract Products, BMG will at its own expense maintain and employ a
knowledgeable sales force which is in the reasonable opinion of BMG
adequate for the promotion of the Contract Products in the Territory.
3.2 Minimum Purchase Order
3.2.1During the term of the agreement, BMG is committed to make
minimum purchase of Contract Products from MDT in accordance with
the following schedule:
Year following signature Minimum Purchase in amount of
------------------------ -----------------------------
Year 1 US $1,200,000
Year 2 US $1,200,000
Year 3 US $1,200,000
Year 4 US $1,200,000
Year 5 US $1,200,000
Total US $6,000,000
2
<PAGE>
3.2.2No sooner than October 1, 1999, BMG may require MDT to enter
into re-negotiations of the minimum purchase requirements and or
purchase prices, section 3.2.1 herein if there is a significant
change in market conditions due to a reduction in, or withdrawal
of reimbursement by the Public Health Insurance in Germany. In
this case, both parties agree to meet to determine new prices
and, or minimum purchase requirements. A significant reduction is
defined as }15% (greater than fifteen percent) compared to the
status of reimbursement in October, 1997 for the parameters
theophylline, carbamazepine, or phenytoin.
3.2.3Compensation for Non-Fulfillment of Minimum Purchase: At the end
of each contract year, the parties will review the purchase made
by BMG. If the total purchases of Contract Products are less than
the purchase commitment defined in para 3.2.1. BMG will pay MDT
an amount equal to the difference of total Contract Products
purchased and the aforesaid purchase commitment. This payment
will be due to MDT within 30 days of completion of the contract
year and is considered as full and final payment and remedy for
non-fulfillment of BMG's minimum purchase obligation for that
contract year.
4 Contract Price:
4.1 The Contract Prices from MDT to BMG will be in effect and are valid
through December 31, 1997.
4.2 Changes in Contract Price: MDT will provide BMG with a minimum of 90
days notice regarding an intended change of the contract prices of any
Contract Product: BMG will accept any such price change in case MDT
can demonstrate to the reasonable satisfaction of BMG the
justification of such price increase provided that such price increase
shall not exceed the increase in the Consumer Price Index for the
corresponding time period. The term "Consumer Price Index" shall mean
the all items index published in the Consumer Price Index - U.S. City
Averages for Urban Wage Earners and Clerical Workers, All Items, of
the United States Department of Labor. In case of an increase in raw
materials or component parts above the CPI, both parties agree to
discuss a price modification increase reflecting the demonstrated
manufacturing cost increases.
3
<PAGE>
In any case a change of Contract Price is only possible once within a
12 month period.
5. Price to German Customers: BMG will have the right to set German end user
prices through the term of the agreement.
6. Purchase Orders: BMG will place orders for Contract Products directly to
MDT.
7. Purchase Forecast In order to facilitate MDT's production planning BMG will
provide MDT each calendar quarter with a rolling purchase forecast for the
following 12 months.
8. Purchase Lead Times and Minimum Order Sizes: BMG will place purchase orders
considering the following order lead times. The minimum order sizes for a
particular product will be as indicated.
Product Order Delivery within Minimum Order Size
516 meters 3 Months 25 each
Electronic QC 3 Months 5 each
Theophylline 3 Months 200 Boxes
Phenytoin 3 Months 50 Boxes
Carbamezapine 3 Months 50 Boxes
Minimum order size for Phenytoin and Carbamezapine is to increase to 100
when MDT is able to demonstrate an expiry date following delivery of 1 year
or more.
4
<PAGE>
9. Customer Services: BMG will provide customer service for the Territory.
Such services shall include technical services, instrument traceability and
quality related user complaints. MDT will provide technical service
assistance at a per diem rate to be negotiated.
10. Invoice Payment: BMG will pay the purchase price net within 30 = days
following receipt of invoices.
11. Obligations of MDT
11.1 MDT will not sell, distribute or license another party to sell or
distribute the Contract Products in the Territory during the term of
this agreement.
11.2 MDT will promptly execute purchase orders received from BMG within the
agreed lead times. MDT will keep BMG informed of the expected shipping
date for Contract Products. Failure for MDT to supply product within
the specified lead times will, besides other rights or remedies BMG
may have in this case, lead to a corresponding reduction of the
minimum purchase volume as in para 3.2.1 above.
11.3 As some raw material components of the Biotrack 516 monitors and
cartridges have long lead time from suppliers, in excess of 90 days,
in the event BMG issues a purchase order in excess of 20% of what has
been provided by BMG forecast, MDT may ship a partial order within the
required lead time but experience delay in completing the order,
pending receipt of components. In this instance, paragraph 11.2 does
not apply.
11.4 Compliance with Standards: MDT will manufacture all Contract Products
in compliance with all applicable United States GMP practices, German
regulations, and European ISO requirements.
5
<PAGE>
11.5 Warranty: MDT will provide BMG with a warranty for the Contract
Products for a period of 18 months from the date of delivery with the
proviso that this warranty is limited to MDT's obligation to replace
any defective Contract Products free of charge.
12. Right of First Refusal As the exclusive distribution partner for Germany,
BMG has first right of refusal for any additional products added to the
Product Line of Contract Products.
13. MDT will provide and update, as needed, the name, phone, and fax number of
appropriate contact individuals at MDT.
14. Term and Termination
14.1 This Agreement is effective as of the date set forth above and is
effective for 5 years ending October 1, 2002..
It may be terminated by either party giving 6 month prior notice to
this date or the end of any year thereafter.
14.2 Either party may terminate this Agreement forthwith by written notice,
if the other party
a. files a declaration of bankruptcy, enters into any arrangement or
composition with their creditors, goes into liquidation whether
voluntarily or compulsory, or has their business closed down;
b. fails or becomes unable to substantially perform any of its
obligations or undertakings to be performed and such default or
inability does not have a mutually accepted resolution for cure
within 30 days after notice from the non-defaulting party.
6
<PAGE>
15. Indemnification
MDT agrees to defend and hold harmless BMG and its officers, directors,
agents, employees, shareholders, legal representatives, successors and
assigns, from and against any and all claims, actions, suits, damages,
costs, liabilities, judgments, losses, charges, costs and expenses,
including attorneys' fees (whether incurred in any action between MDT and
BMG or between BMG and any third party) (any such claims, actions, suits,
damages, costs, liabilities, judgments, losses, charges, costs and expenses
being hereinafter referred to as "Losses") arising from (i) any breach by
MDT of the terms of this Agreement, (ii) any defects in the Contract
Products or (iii) any negligence or willful misconduct of MDT, of any of
its employees, agents, or subcontractors, including, without limitation,
any claims based on product liability, strict liability or express or
implied warranty, provided, that MDT shall not be required to indemnify BMG
with respect to any matter which is the result of BMG'S own gross
negligence or willful misconduct. It is hereby expressly agreed that the
foregoing undertakings are given for the benefit of BMG only and may not be
passed on, and that they are exclusive and are in lieu of any warrant of
merchantability, fitness for particular purpose or warranties of any other
kind express or implied. This provision of this Article shall apply mutatis
mutandis to BMG with respect to MDT and its officers, directors, agents,
employees, shareholders, legal representatives, successors and assigns;
provided, however, that BMG shall not be liable for any indemnification
hereunder with respect to any Losses arising from any defects in the
Contract Products.
16. Miscellaneous
16.1 Notices All notices, requests or other communications hereunder shall
be given or made in writing and shall be (i) delivered personally
(including commercial courier), (ii) sent by registered or certified
airmail, postage prepaid, or (iii) sent by telecopier, addresses to
the party to whom they are directed at the following addresses, or at
such other address as may be designated by notice from such party.
7
<PAGE>
Boehringer Mannheim GmbH
Sandhofer Strasse 116
D- 68298 Mannheim
Federal Republic of Germany
Telefax No.: ++ 49 621 759 4461 (Legal Department)
Medical Device Technologies, Inc.
9171 Towne Center Drive, # 355
San Diego, California 92122
Telefax No.: ++ 001 619 455 7295
16.2 Amendments
This Agreement may not be amended, modified or supplemented at any time
except by a written agreement signed by the parties hereto.
16.3 Severability
In the event any of the provisions of this Agreement are held to be
unenforceable or invalid by any court of competent jurisdiction, unless the
unenforceability or invalidity thereof causes a substantial departure from
the underlying intent and sense of the remainder of this Agreement, the
validity and enforceability of the remaining provisions shall not be
affected thereby, except those remaining provisions of which the
unenforceable or invalidated provisions comprise an integral part or from
which they are otherwise clearly inseparable. In the event any provision is
held unenforceable or invalid, the parties shall use their best efforts to
agree upon an enforceable and valid provision which shall be a reasonable
substitute for such unenforceable or invalid provision in light of the
purpose of this Agreement and, upon so agreeing, shall incorporate such
substitute provision in this Agreement.
8
<PAGE>
16.4 Force Majeure
Neither party shall incur liability under the terms of this Agreement from
actions caused by circumstances beyond the reasonable control of the party
concerned. Such circumstances shall include, but not be limited to, Acts of
God or the public enemy, fire, flood, earthquake, windstorm, war,
government regulations, restrictions, directions or requests; accidents,
labor disputes, shortage of or inability to obtain material, equipment,
transportation, license, or permissions.
16.5 Assignment
Neither party to this Agreement may assign its rights and/or duties in
whole or part without the express written consent of the other; any
purported assignment without such consent shall be void.
16.6 Applicable Law
This Agreement shall be governed by and construed in accordance with the
internal laws of California, without regard to conflicts of laws.
16.7 Entire Agreement
This Agreement is the entire agreement for this subject matter between the
parties and supersedes all prior discussions, agreements or understandings
between the parties, whether written or oral.
MDT will deliver product to BMG FOB San Diego. This includes freight,
insurance, and customs fees to be paid by BMG.
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the date first written above.
BOEHRINGER MANNHEIM GMBH
Its: S.V.P. Sales Thrapeutics Its: SVP Legal
Date: 6/23/97 Date: June 23, 1997
Sandhoferstrabe 116
D-68298 Mannheim
MEDICAL DEVICE TECHNOLOGIES, INC:
By: /s/M. Lee Hulsebus
Its: CEO/Chairman
Date: 6/19/97
10
<PAGE>
EXHIBIT C
---------
TRANSITION PLAN for Biotrack 516 from Boehringer Mannheim Corporation
Seller, Fremont, California to Medical Device Technologies Purchaser, Inc., San
Diego, California
June 2 , 1997
Close Date (s) - as specified in Asset Purchase Agreement, section 2.1
1. Monitor Line:
1.1 As soon as is practicable following the closing date specified in the
Asset Purchase Agreement, Paragraph 2.1, Seller shall deliver to
Medical Device Technologies, Inc. (Purchaser), at such location as
Purchaser shall specify in writing, monitor manufacturing assets,
(equipment list provided to Purchaser in March, 1997), monitor raw
materials, and monitor WIP. Such deliveries shall be F.O.B. Seller's
locations.
1.2 Any open orders for Biotrack 516 monitors existing on or immediately
after the closing dates specified in Assets Purchase Agreement,
section 2.1, will be transferred to Purchaser.
1.3 Seller will continue to receive and repair Biotrack 516 monitors
during the month of June. All open "monitor repair work orders"
received by Seller will be completed and returned to customers prior
to the relocation of the monitor line. Effective July 15, 1997,
Purchaser will receive and repair monitors.
1.4 Monitor DHR (device history record) to be shipped in hard copy with
the monitor line.
1.5 Standard Stock solutions of each drug (or raw material to prepare
them) used in the calibration of monitors will be transferred to
Purchaser with the monitor line.
2. Cartridge Line:
2.1 As soon as is practicable following the closing date specified in the
Asset Purchase Agreement, section 2.1, Seller shall deliver to
Purchaser, at such location as Purchaser shall specify in writing,
cartridge manufacturing assets (equipment list provided to Purchaser
in March, 1997), cartridge raw materials, and cartridge WIP. Such
deliveries shall be F.O.B. Seller's locations.
2.2 Any open orders for Biotrack 516 cartridges existing on or immediately
after the closing dates specified in Assets Purchase Agreement,
section 2.1, will be transferred to Purchaser.
<PAGE>
2.3 Based on a Purchase Order from Purchaser, on or before the closing
dates specified in the Asset Purchase Agreement, section 2.1, Seller
will manufacture safety stock of cartridges. The quantity produced
will be agreed upon by Seller and Purchaser but will not exceed the
forecasted quantity needed for 3 months. Terms for the safety stock
order will be 5% discount for cash on receipt, net 30 days.
2.4 During the period of time that the cartridge safety stock is being
built, Seller will continue to receive, process, and ship orders for
Biotrack 516 cartridges, collect the receivables, and owns the
revenue.
2.5 Seller will provide Purchaser with the name of the contract
manufacturer for the whole blood controls. Purchaser should place
orders directly with the contract manufacturer to ensure product is
available no later than September 1, 1997.
2.6 The contract manufacturing rate for the safety stock build from Seller
is:
(Sep/Oct/Nov)
Fcst Qty, 5/5/97
Theo cartridges (15/pkg) 1,755 pkgs
Theo for Japan bulk packaged 23,400
Carbamazepine 512 pkgs
Phenytoin 516 pkgs
Whole Blood liquid controls - order from contract manufacturer
2.7 During the safety stock build, Purchaser personnel may be present at
the BM Fremont facility to observe normal manufacturing activities
associated with building the cartridge safety stock. All costs and
expenses incurred shall be paid by the party incurring such costs or
expenses
2.8 Seller will provide a certificate stating that raw materials used in
the manufacture of cartridges passed Seller release criteria.
<PAGE>
3. Technical Service:
3.1 Purchaser personnel may visit Seller's facility in Indianapolis for
the purpose of 2 days of Technical Service Training and observe Seller
Technical Service receiving customer inquiries. The date of the
training to be determined by Purchaser and Seller. All costs and
expenses incurred shall be paid by the party incurring such costs or
expenses.
3.2 Seller will continue to receive and respond to customer inquiries at
the Seller Technical Service Center during the safety stock build. As
soon as is practicable but no later than September 15, 1997 Seller
shall refer customer inquiries to Purchaser.
4. Communication:
4.1 Immediately following the monitor close as specified in the Asset
Purchase Agreement , section 1.3.2, a joint communication from Seller
and Purchaser will be sent to the existing Biotrack 516 (U.S.)
customer base, foreign distributors, and suppliers, indicating the
transfer of the business to Purchaser, the effective dates of the
transfer, and instructions for placing orders, customer, and technical
service. Both Seller and Purchaser will work to make the transition
"seamless" in the eyes of the customer and prevent any interruption of
service.
4.2 As soon as is practicable but no later than July 15, 1997, BMG and
BMKK will be notified to send instruments in need of repair to
Purchaser. Purchaser will provide shipping address to Seller in order
for Seller to notify BMG and BMKK
5. Customer Service:
5.1 As soon as is practicable, and no later than July 15, 1997, Purchaser
shall receive, process, ship, and invoice customer orders, collect
receivables, and perform all functions necessary to run and maintain
the monitor business.
5.2 As soon as is practicable, and no later than October 15, 1997,
Purchaser shall receive, process, ship, and invoice customer orders,
collect receivables, and perform all functions necessary to run and
maintain the cartridge business.
6. Consultation:
6.1 To promote successful relocation and recommission of the line(s),
Seller will provide (up to) a total of ten (10) days of on-site
manufacturing consultation. The schedule for the consultation will be
mutually agreed upon by Purchaser and Seller. Purchaser will pay for
travel and accommodations for Seller employees.
6.2 Following the on-site consultation commitment described in section
6.1, BM Fremont employees will be available for consultation at a
mutually agreeable schedule at a rate of $100.00/hr plus expenses. The
area of consultation is: manufacturing processes, recommissioning of
the manufacturing line, facilities, design issues, or any other issues
which arise.
<PAGE>
6.2 Following the transition of the business to Purchaser, Seller
Technical Service Specialist will be available for a time period not
to exceed 90 days for telephone consultation at a fee of $75.00/hour
7. Miscellaneous:
7.1 Following the cartridge closing date, specified in the Asset Purchase
Agreement , section 2.1, Purchaser shall have no right to use the name
"Boehringer Mannheim Corporation" or any version or derivative
thereof, for any purpose, whether in business or otherwise, except
that (a ) finished goods inventories, Packaging boxes, labels,
manuals, etc. for such finished goods inventories that are in
existence as of the closing date and included in the assets may be
used and sold by Purchaser for a period of 1 year following the
closing date. Purchaser may, at its own expense choose to over-label
existing material.
7.2 Both parties agree that it is mutually beneficial to maintain customer
satisfaction and service during the transition of ownership of the
"Biotrack 516" productline. The building of safety stock is necessary
to facilitate the orderly transition of the business from Seller to
Purchaser. The safety stock manufactured for the purpose of transition
of the business from Seller to Purchaser is not included in the base
price of the business.
7.3 All raw material costs associated with the safety stock build are the
responsibility of Seller. The cartridge safety stock build will be
limited to a three (3) month supply, based on existing product
forecasts for 1997.
7.4 Purchaser will be responsible for any open purchase orders placed on
behalf of Purchaser for long lead time raw materials and pay the
Payables when due. Based on mutual agreement of items required,
pricing, and lead times, Seller shall place orders for Purchaser with
delivery and invoicing to Purchaser.
7.5 To comply with Boehringer Mannheim GMP guidelines, Purchaser shall
inform Seller Fremont of any and all complaints that are associated
with product manufactured by Seller.
7.6 Purchaser to be notified 1 week in advance so they may be present
during the tear down of the monitor and cartridge lines.
7.7 Seller to provide "ASK MAN MAN (MRP) files to Purchaser in a mutually
workable format and provide 1 day of on-site consultation, if needed.
<PAGE>
7.8 Reagent manufacture to transfer at the same time as cartridge
manufacturing or sooner. If Purchaser wants a safety stock of reagents
prior to transfer of the reagent and cartridge lines, Purchaser's
personnel may manufacture reagent(s) at Seller's Fremont, CA facility
according to a mutually agreeable schedule. Raw materials consumed or
purchased for such manufacture shall be the responsibility of
Purchaser, and the resulting reagents shall be the property of
Purchaser. For purposes of the indemnification provisions of Section
5.2 of the Assets Purchase Agreement, such reagents shall be deemed to
have been manufactured after the Closing, and Purchaser shall be
solely responsible for their manufacture and use.
BM Fremont, California personnel will assist as needed in both the
reagent build at the Fremont, California facility and the on-site
calibration at the Medical Device Technologies Westlake California
facility.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
date first written.
PURCHASER
By: /s/M. Lee Hulsebus Date: 6/19/97
Name: M. Lee Hulsebus
Title: CEO/Chairman
SELLER
BOEHRINGER MANNHEIM CORPORATION
By: /s/Dennert O. Ware Date: 6/20/97
Name: Dennert O. Ware
Title:President & CEO
<PAGE>
EXHIBIT D
---------
MEDICAL DEVICE TECHNOLOGIES, INC. ACQUIRING PRODUCT LINE FROM BOEHRINGER
MANNHEIM, INC. AND SECURING FIVE YEAR $6.0 MILLION SALES COMMITMENT
Worldwide Sales of Biotrack (TM) Analyzer and Cartridges in 1996 Were $3.0
Million, Up 25% From 1995
Contact: Virginia S. Rybski, 619-455-7127 extension 3012
SAN DIEGO, June 24, 1997 -- Medical Device Technologies, Inc. (NASDAQ
Symbols: MEDD, MEDDP and MEDDW) announced today that it has acquired the
Biotrack product line, including worldwide distribution rights, from Boehringer
Mannheim, Inc. for $1.35 million. In connection with the acquisition, the
Company will acquire $1.15 million of readily useable inventory, an estimated
$0.7 million in manufacturing equipment, the worldwide rights to the seven
associated patents and trademarks, and manufacturing know-how. In addition,
Boehringer Mannheim Gmbh has contractually guaranteed to a minimum product
purchase of $1.2 million per year for the next five years, for a total of $6.0
million, for Germany alone. The Company will pursue additional distribution
contracts with Boehringer affiliates in other countries, as well as expanding
the existing Japan and U.S. markets. The Company intends to secure additional
financing which will be necessary to complete this transaction.
"The acquisition of the Biotrack product line from Boehringer Mannheim will
bring immediate benefits to Medical Device Technologies," stated M. Lee
Hulsebus, Chairman and CEO of MEDD. "First, it gives us an immediate and ongoing
profitable revenue stream; second, it establishes our access to large,
international distribution channels for these and our other products; and third,
it will create an opportunity for additional revenue growth as more distributors
sign-up and new Biotrack disposable drug-testing cartridges enter the market."
The Biotrack product line presently consists of a small instrument analyzer
and three types of disposable cartridges. The system is used in doctors' offices
and central labs to measure patient blood drug levels for the most commonly
prescribed therapeutic drugs to control asthma (Theophylline) and epilepsy
(Carbamazepine, and Phenytoin). Two additional cartridges for epilepsy drugs are
being developed to monitor Valproic Acid and Phenobarbital. Asthma and epilepsy
are prevalent medical conditions throughout the world. The Global Initiative for
Asthma, in cooperation with the National Heart, Lung and Blood Institute and the
World Health Organization, estimates that 100 million people worldwide have
asthma. The World Health Organization estimates that 41 million people in the
world have epilepsy. Doctors monitor their patients' drug levels on an ongoing
basis to adequately control these diseases with drugs. - more - ADD 1 -- MEDICAL
DEVICE TECHNOLOGIES, INC. ACQUIRES PRODUCT LINE FROM BOEHRINGER MANNHEIM, INC.
AND SECURES FIVE YEAR $6.0 MILLION SALES COMMITMENT
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Medical Device Technologies, Inc. is an incubator company that acquires or
licenses technologies or products, then develops, manufactures, gains regulatory
approval and distributes the resulting specialty medical devices. The Company
currently has three products. The Fluid Alarm System(TM) (FAS) (TM) glove
monitor is being marketed as a device which detects when the infection control
barrier created by surgical latex gloves has been compromised. The Cell Recovery
System(TM) (CRS) (TM) is a brush-biopsy device that is entering clinical trials
to compare its results to excision-type biopsies of the bladder in cancer
detection. The Intracranial Pressure Monitoring System(TM) (ICP) (TM) is being
developed to non-invasively monitor the pressure within the skull of trauma or
surgical patients.
This news release contains forward-looking statements regarding the Company
and its systems. These forward-looking statements are based largely on the
Company's expectations and are subject to a number of risks and uncertainties,
certain of which are beyond the Company's control. Actual results could vary
materially from those expected due to a variety of factors, including the
uncertainties of the anticipated market for and sales of the Company's products,
securing necessary additional financing and anticipated receipt of FDA marketing
clearance and timing of such receipt for certain of the Company's systems. The
Company undertakes no obligation to publicly release the result of any revision
to these forward-looking statements which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
A current listing of all the Company's information and press releases may
be found at www.businesswire.com/cnn/medd.htm
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