BIOSOURCE INTERNATIONAL INC, SB-2/A, 1996-05-14

BIOSOURCE INTERNATIONAL INC
SB-2/A, 1996-05-14
IN VITRO & IN VIVO DIAGNOSTIC SUBSTANCES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 14, 1996

REGISTRATION NO. 333-3336

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1

FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BIOSOURCE INTERNATIONAL, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)

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DELAWARE 2835 77-0340829
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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820 FLYNN ROAD
CAMARILLO, CALIFORNIA 93012
(805) 987-0086
(Address and Telephone Number of Principal Executive Offices)
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820 FLYNN ROAD
CAMARILLO, CALIFORNIA 93012
(805) 987-0086
(Address of Principal Place of Business or Intended Principal Place of Business)
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JAMES H. CHAMBERLAIN
CHIEF EXECUTIVE OFFICER AND PRESIDENT
BIOSOURCE INTERNATIONAL, INC.
820 FLYNN ROAD
CAMARILLO, CALIFORNIA 93012
(805) 987-0086
(Name, Address and Telephone Number of Agent for Service)
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Copies to:

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SCOTT W. ALDERTON, ESQ. MARK A. KLEIN, ESQ.
LINDA M. GIUNTA, ESQ. KATHERINE J. BLAIR, ESQ.
TROOP MEISINGER STEUBER & PASICH, LLP FRESHMAN, MARANTZ, ORLANSKI, COOPER & KLEIN
10940 Wilshire Boulevard Eighth Floor, East Tower
Los Angeles, California 90024 9100 Wilshire Boulevard
(310) 824-7000 Beverly Hills, California 90212
(310) 273-1870
</TABLE>

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APPROXIMATE DATE OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
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If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED MAY 14, 1996

2,150,000 Shares

LOGO

Common Stock
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Of the 2,150,000 shares of Common Stock offered hereby, 2,017,000 shares
are being sold by BioSource International, Inc. ("BioSource" or the "Company")
and 133,000 shares are being sold by certain stockholders of the Company (the
"Selling Stockholders"). See "Principal and Selling Stockholders." The Company
will not receive any proceeds from the sale of shares by the Selling
Stockholders. The Company's Common Stock is quoted on the Nasdaq National Market
under the symbol "BIOI." On May 13, 1996, the last reported sales price of the
Common Stock was $10.13 per share. See "Price Range of Common Stock."

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

PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY THE
DISCUSSION UNDER "RISK FACTORS" BEGINNING ON PAGE 6.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
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Per Share..................... $ $ $ $
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Total(3)...................... $ $ $ $
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(1) Excludes a non-accountable expense allowance payable to the representatives
(the "Representatives") of the several Underwriters and the value of
warrants to be issued to the Representatives to purchase up to 100,000
shares of Common Stock (the "Representatives' Warrants"). The Company and
the Selling Stockholders have agreed to indemnify the Underwriters against
certain liabilities under the Securities Act of 1933, as amended (the
"Act"). See "Underwriting."

(2) Before deducting expenses estimated at $ payable by the Company,
including the Representatives' non-accountable expense allowance. See
"Underwriting."

(3) The Company has granted an option to the Underwriters, exercisable within
forty-five (45) days from the date of this Prospectus, to purchase up to
322,500 additional shares of Common Stock on the same terms and conditions
set forth above, solely to cover over-allotments, if any. If the
Underwriters' over-allotment option is exercised in full, the total Price to
Public, Underwriting Discounts and Commissions and Proceeds to Company will
be $ , $ and $ , respectively. See
"Underwriting."
------------------------

The shares of Common Stock are offered by the Underwriters when, as and if
delivered to and accepted by the Underwriters, subject to the right to reject
any order in whole or in part and certain other conditions. It is expected that
delivery of such shares will be made through the offices of Cruttenden Roth
Incorporated, Irvine, California, or the facilities of The Depository Trust
Company on or about , 1996.

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CRUTTENDEN ROTH COMMONWEALTH ASSOCI ATES
I N C O R P O R A T E D

The date of this Prospectus is , 1996

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[PICTURES]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS MAY ENGAGE IN
PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL
MARKET IN ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934.
SEE "UNDERWRITING."

BioSource, CYTOscreen, PRIMESCREEN and TAGOImmunologicals are trademarks of
BioSource International, Inc. Medgenix and DynaMix are trademarks of Medgenix
Diagnostics, S.A.
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CERTAIN SCIENTIFIC TERMS USED IN THIS PROSPECTUS ARE DEFINED IN THE GLOSSARY
APPEARING AT PAGES 50 AND 51.

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements, including notes thereto, appearing
elsewhere in this Prospectus. Except as otherwise noted, the information
contained in this Prospectus assumes that the Underwriters' over-allotment
option and the Representatives' Warrants are not exercised.

THE COMPANY

BioSource International, Inc. ("BioSource" or the "Company") develops,
manufactures, markets and distributes products which are widely used in
biomedical research and are instrumental in the development of new medical
diagnostic methods and pharmaceutical products. The Company's products enable
scientists to understand better the biochemistry, immunology and cell biology of
the human body, aging and certain diseases such as cancer, arthritis and other
inflammatory diseases, AIDs and certain other sexually transmitted diseases. The
Company's products include immunological reagents, including bioactive proteins
(cytokines, growth factors and adhesion molecules) and monoclonal and polyclonal
antibodies. The Company also develops, manufactures, markets and distributes
oligonucleotides and Enzyme Linked Immunosorbent Assay ("ELISA") test kits, and
uses recombinant DNA technology to produce cytokines and other proteins.

The biomedical research industry is a large and growing segment of the
biotechnology industry. Most industrialized nations, led by the United States,
Japan and the countries of Western Europe, support some level of biomedical
research. BioSource's products are used by thousands of physicians and
scientists who are employed by or affiliated with medical laboratories and
research centers in universities, government institutions and private
pharmaceutical and biotechnology firms around the world. Some of the Company's
customers include Eli Lilly, Hoffman LaRoche, Amgen, Genentech, the National
Institutes of Health, the Centers for Disease Control and the research centers
of many of the major universities in the United States.

The Company's primary business strategy has been to capitalize on the
growth of the biotechnology industry by creating "building block" reagents and
test kits which are sold only for research, and thus are not subject to
regulation by the U.S. Food and Drug Administration ("FDA"). By pursuing this
strategy, the Company does not undertake the risks typically associated with the
research and development of new drugs. BioSource has followed this strategy
through an aggressive program of internal new product development, and through
the selective acquisition of complementary businesses. The Company intends to
focus new research and development efforts towards the development of medical
products which will be used to detect and diagnose disease at a molecular level.
Unlike the Company's current products, which are offered exclusively for
research uses, these new products would be offered for the detection of diseases
in humans and animals. See "Risk Factors -- New Product Development; Government
Regulation."

Since 1993, BioSource has focused on internal new product development, and
currently offers more than 800 products to more than 1,700 medical laboratories
and research centers in universities, government institutions and pharmaceutical
and biotechnology firms. The Company's products are marketed and sold
domestically by its own sales force and throughout the world by international
distributors. The Company's growth has also been stimulated by acquisitions. For
example, the Company recently acquired Keystone Laboratories, Inc. ("Keystone"),
located in Menlo Park, California, which manufactures and sells
oligonucleotides. Oligonucleotides are used in the study and research of
cellular and molecular biology. This acquisition provided a captive source of
supply for needed oligonucleotides, enhanced the Company's ability to clone
specific genes into bacterial cell lines, provided an expanded product line and
customer base and resulted in the contribution of additional revenue from
Keystone's existing product line. The acquisition has also given the Company the
ability to develop and produce internally the oligonucleotides it uses in the
production of cytokines and in turn in its ELISA test kits. Thus, the Company
has become less dependent on certain suppliers and has been able to reduce cost
of goods sold for various products, thereby increasing its gross margins.

The Company has entered into an agreement to acquire certain assets and
selected liabilities of Medgenix Diagnostics, S.A. ("Medgenix") related to its
in vitro diagnostic business (the "Medgenix Business"). BioSource believes that
the acquisition of the Medgenix Business will expand and broaden its product
lines,

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and provide a European manufacturing capability, access to an additional animal
facility and a direct sales force in Europe. The Medgenix acquisition is
expected to significantly increase BioSource's consolidated revenue. During the
years ended October 31, 1994 and 1995, the Medgenix Business reported revenue of
$11.6 million and $11.3 million, respectively, and net losses of $2.7 million
and $2.5 million, respectively. Assuming the Medgenix Business had been acquired
on January 1, 1995, pro forma combined results of the Company and the Medgenix
Business for the year ended December 31, 1995 reflect revenue of $19.9 million
and a net loss of $1.4 million (or a loss of $0.17 per share after giving effect
to this offering) as compared to actual revenue and net income of the Company of
$8.6 million and $1.2 million (or $0.20 per share before giving effect to this
offering), respectively. For the three months ended January 31, 1995 and 1996,
the Medgenix Business reported revenue of $2.7 million and $2.9 million,
respectively, and net losses of $483,000 and $151,000, respectively. Assuming
the Medgenix Acquisition had occurred on January 1, 1996, pro forma combined
results of the Company and the Medgenix Business for the three months ended
March 31, 1996 reflect revenue of $5.4 million and net income of $350,000 (or
$0.04 per share after giving effect to this offering) as compared to actual
revenue and net income of the Company of $2.5 million and $520,000 (or $.09 per
share before giving effect to this offering), respectively.

The Company believes that acquiring the Medgenix Business will provide the
Company with a number of strategic advantages that will enhance its existing
business. BioSource further believes that those synergies, and its ability to
acquire the Medgenix Business without assuming many of the costs associated with
Medgenix' historical operations, will permit the Company to reverse Medgenix'
recent history of unprofitable operations. See "Business -- Acquisition of
Medgenix Business."

The Company maintains laboratory facilities at its executive offices in
Camarillo, California, manufactures oligonucleotides at laboratory facilities
located in Menlo Park, California, and has direct access to animal facilities in
Northern California which are used to produce antibodies. The breadth and name
recognition of the Company's product lines including, CYTOscreen and
TAGOImmunologicals give the Company a strong presence in the academic, hospital
and research communities around the world. Management believes that none of the
Company's competitors offer a more broadly based product line and few can match
the specifications that the Company's products provide. BioSource has an
advanced scientific research staff, a broad product line and an established
trade name, giving it a strong presence in the biomedical research market.

THE OFFERING

Common Stock offered:

By the Company........................ 2,017,000 shares

By the Selling Stockholders........... 133,000 shares

Total....................... 2,150,000 shares

Common Stock to be outstanding after
this offering......................... 7,926,774(1)

Use of Proceeds....................... The net proceeds will be used to
provide funds to acquire the Medgenix
Business, for research and
development, to pay off the balance
due on an installment note and
capital lease obligation and for
working capital. See "Risk
Factors -- Business Acquisition" and
"Use of Proceeds."

Risk Factors.......................... Prospective investors should consider
carefully the factors set forth under
"Risk Factors."

Nasdaq National Market Symbol......... BIOI
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(1) Includes 31,000 shares of Common Stock to be sold by certain Selling
Stockholders that will be issued by the Company upon exercise of outstanding
warrants, and excludes (i) 135,000 shares of Common Stock subject to
outstanding warrants and (ii) 1,174,688 shares of Common Stock subject to
outstanding options as of May 13, 1996.

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SUMMARY FINANCIAL DATA(1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
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PRO FORMA PRO FORMA
AS ADJUSTED AS ADJUSTED
1991 1992 1993 1994(2) 1995 1995(3)(4) 1995 1996 1996(3)(4)
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CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenue.......................... $3,144 $4,317 $6,113 $ 7,367 $8,608 $19,921 $1,925 $2,519 $5,445
Gross profit................... 2,013 2,370 3,555 4,234 5,612 12,520 1,067 1,670 3,436
Operating expenses:
Research and development....... 278 242 609 722 1,074 2,729 288 244 632
Selling, general and
administrative............... 2,155 2,479 2,454 3,070 2,923 10,576 661 697 2,274
Compensation recognized under
performance escrow share
arrangement.................. -- -- -- 577 -- -- -- -- --
Total operating expenses..... 2,433 2,721 3,063 4,369 3,997 13,305 949 941 2,906
Operating income (loss)...... (420) (351) 492 (135) 1,615 (785) 118 729 530
Net income (loss).............. $ (406) $ (390) $ 513 $ (210) $1,160 $(1,389) $ 115 $ 520 $ 350
Net income (loss) per share.... $(0.12) $(0.12) $ 0.11 $ (0.04) $ 0.20 $ (0.17) $ .02 $ .09 $ .04
Weighted average number of common
shares outstanding............. 3,261 3,339 4,880 5,724 5,946 7,994 5,817 5,957 8,005
</TABLE>

<TABLE>
<CAPTION>
AT MARCH 31, 1996
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PRO FORMA
ACTUAL PRO FORMA(3) AS ADJUSTED(3)(4)
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CONSOLIDATED BALANCE SHEET DATA:
Working capital....................................................... $4,493 $ 8,745 $23,376
Total assets.......................................................... 9,223 20,112 34,743
Current maturities of notes payable................................... 665 849 849
Notes payable less current maturities................................. 785 785 785
Net stockholders' equity.............................................. 6,448 6,448 27,644
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(1) The data reflects the acquisitions of TAGO, Inc. ("TAGO"), effected on May
19, 1993, and Keystone, effected on November 21, 1995, each of which was
accounted for as a pooling of interests. See "The Company," and Note 2 of
Notes to Consolidated Financial Statements.

(2) The Company recognized compensation expense of $577,452 in 1994 related to
the release from escrow of 469,180 shares of Common Stock held by directors,
officers and others deemed to be able to affect the financial results of the
Company. No expense was recognized with respect to 635,763 shares of Common
Stock held by other stockholders which were also released from escrow. In
addition, the Company recorded a one-time charge in 1994 of $312,000 in
connection with the closure of its Northern California facility. These
changes affect the comparability of operating results during 1993, 1994 and
1995. See Note 6 to Notes to Consolidated Financial Statements.

(3) The Company has entered into an agreement to acquire certain assets and
selected liabilities of Medgenix which is to occur concurrently with
completion of this offering. The table gives pro forma effect to such
acquisition, to be accounted for as a purchase, as of the beginning of the
period for consolidated statement of operations data and at March 31, 1996
for consolidated balance sheet data. The pro forma results do not
necessarily indicate results which can be expected for future periods. See
"Risk Factors -- Business Acquisition," "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Acquisition of
Medgenix Business," "Business -- Acquisition of Medgenix Business" and the
Unaudited Pro Forma Condensed Consolidated Financial Statements included
elsewhere in this Prospectus.

(4) As adjusted to reflect the sale of 2,048,000 shares of Common Stock in
connection with this offering (including the sale of 31,000 shares of Common
Stock to be issued by the Company upon exercise of warrants by two of the
Selling Stockholders for which the Company will receive net proceeds of
$59,750) and the application of the net proceeds therefrom. See "Use of
Proceeds" and "Principal and Selling Stockholders."

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RISK FACTORS

An investment in the shares offered hereby involves a high degree of risk.
Many of the matters discussed in this Prospectus are forward-looking statements
that inherently involve risks and uncertainties. Factors associated with such
forward looking statements which could cause actual results to differ materially
from those projected in the statements appear below. In addition to the other
information contained in this Prospectus, prospective investors should carefully
consider the following risk factors and cautionary statements before purchasing
any of the shares offered hereby.

GROWTH STRATEGY AND EXPANSION. The Company has and will continue to seek
to increase sales and profitability primarily through the acquisition or
internal development of new product lines, additional customers and new
businesses. The Company's historical revenue growth is primarily attributable to
the Company's acquisitions and new product development and, to a lesser extent,
to increased revenues from the Company's existing products. Concurrently with
the completion of this offering, the Company plans to acquire a new business,
for which a substantial portion of the proceeds of this offering will be
allocated. See "-- Business Acquisition," "Use of Proceeds" and
"Business -- Acquisition of Medgenix Business." The Company expects that in
connection with its acquisition of the Medgenix Business, it will experience
increased working capital requirements which will likely precede by several
months any material contribution by the Medgenix Business to the income of the
Company. It is likely that subsequent acquisitions, if successfully consummated,
will have a similar effect on the Company's short-term financial condition. The
ability of the Company to achieve its expansion objectives and to manage its
growth effectively depends upon a variety of factors, including (i) the ability
to internally develop new products, (ii) the ability to make profitable
acquisitions, (iii) the integration of new facilities into existing operations,
(iv) the hiring, training and retention of qualified personnel, (v) the
establishment of new relationships or expansion of existing relationships with
suppliers, (vi) the identification and lease of suitable premises on competitive
terms and (vii) the availability of capital. In addition, the implementation of
the Company's growth strategy will place significant strain on the Company's
administrative, operational and financial resources and increased demands on its
systems and controls. The Company's ability to manage its growth successfully
will require it to continue to improve and expand such systems and controls. If
the Company's management is unable to manage growth effectively, the Company's
operating results could be adversely affected. In addition, the Company competes
for acquisition and expansion opportunities with companies which have
significantly greater financial and management resources than those of the
Company. There can be no assurance that suitable acquisition or investment
opportunities will be identified, that any such transactions can be consummated,
or that, if acquired, such new businesses can be integrated successfully and
profitably into the Company's operations. Moreover, there can be no assurance
that the Company's historic rate of growth will continue, that the Company will
continue to successfully expand, or that growth or expansion will result in
profitability.

BUSINESS ACQUISITION. On April 30, 1996, the Company entered into an
agreement (the "Acquisition Agreement") to acquire certain assets and assume
selected liabilities of the Medgenix Business (the "Medgenix Acquisition").
Medgenix is located in Fleurus, Belgium. The assets consist of certain product
lines which are similar to those of the Company, customer accounts, laboratory
and animal facilities, real property leasehold interests and an existing
employee base, all of which are used in the Medgenix Business. The purchase
price for the Medgenix Business is $6.6 million, payable in cash, and the
assumption of certain Medgenix liabilities, which liabilities were approximately
$2.0 million at January 31, 1996. The Company plans to fund the cash portion of
the purchase price of the Medgenix Business from a portion of the net proceeds
of this offering and to close the Medgenix Acquisition concurrently with the
closing of this offering. See "Use of Proceeds." During the years ended October
31, 1994 and 1995, the Medgenix Business reported revenue of $11.6 million and
$11.3 million respectively, and net losses of $2.7 million and $2.5 million,
respectively. Assuming the Medgenix Acquisition had occurred on January 1, 1995,
pro forma combined results of the Company and the Medgenix Business for the year
ended December 31, 1995 reflect revenue of $19.9 million and a net loss of $1.4
million (or $0.17 per share after giving effect to this offering) as compared to
actual sales and net income of the Company of $8.6 million and $1.2 million (or
$.20 per share before giving effect to this offering), respectively. For the
three months ended January 31, 1995 and 1996, the Medgenix Business reported
revenue of $2.7 million and $2.9 million, respectively, and net losses of
$483,000

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and $151,000, respectively. Assuming the Medgenix Acquisition had occurred on
January 1, 1996, pro forma combined results of the Company and the Medgenix
Business for the three months ended March 31, 1996 reflect revenue of $5.4
million and net income of $350,000 (or $0.04 per share after giving effect to
this offering) as compared to actual revenue and net income of the Company of
$2.5 million and $520,000 (or $.09 per share before giving effect to this
offering), respectively. See Unaudited Pro Forma Condensed Consolidated
Financial Statements, the Consolidated Financial Statements of the Company and
the Combined Financial Statements of Medgenix, each of which is included
elsewhere herein. The Company's ability to operate the Medgenix Business
profitably will depend upon a variety of factors, including (i) integration of
the management, administration and personnel of the Medgenix Business into the
Company, (ii) the ability of the Company to successfully reduce the cost of
sales, including distribution costs, and operating costs of the Medgenix
Business, (iii) continued market acceptance of the products of the Medgenix
Business following the acquisition, (iv) establishing and maintaining favorable
relations with Medgenix employees and (v) the ability of the Company to both
market its existing products through Medgenix into Europe and Medgenix products
through the Company into the United States. The Company also intends to
manufacture oligonucleotides at Medgenix following the acquisition, a business
in which Medgenix is currently not involved. Profitability will be impacted by
the ability of the Company to implement successfully the manufacturing and sale
of oligonucleotides at and from the Medgenix facilities. In addition, the
profitability of the Medgenix Business may be dependent upon the factors
identified in "-- Growth Strategy and Expansion" and "-- International Sales."

NEW PRODUCT DEVELOPMENT; GOVERNMENT REGULATION. The Company anticipates
that in addition to its currently planned research and development expenses, it
may spend up to $1 million from the net proceeds of this offering over a two to
three year period to fund research and development of certain technologies
related to the area of molecular diagnostics. This effort will be directed
towards the development of medical products which will be used to detect or
diagnose disease at a molecular level. See "Business -- Research and
Development." There can be no assurance that any such diagnostic products will
be successfully developed or that if developed, will be commercially successful.
Unlike the Company's current products, which are offered exclusively for
research uses, the new products would be offered for the detection of diseases
in humans and animals. Prior to any such use, the Company will be required to
have such products approved by the FDA following extensive clinical trials.
Management believes that its $1 million investment in these products will be
sufficient to cover the development of these products and all necessary clinical
trials; however, there can be no assurance that this level of investment will be
sufficient. Furthermore, the Company's investment will be made with no assurance
that development efforts or clinical trials will be successful, or that the FDA
will approve such products. In the event that the Company is unable to develop a
commercialized product from its research and development efforts, or the FDA
does not permit the Company to manufacture and sell such products, or the
Company is unable or unwilling to allocate amounts beyond the $1 million
investment, the Company could lose its entire investment in such products. If
required to increase its investment beyond the $1 million allocated from this
offering, there can be no assurance that financing will be available on
reasonable terms, or at all. See "Business -- Government Regulation."

COMPETITION. The Company is engaged in a segment of the health care
products industry that is highly competitive. Competitors in the United States
and elsewhere are numerous and include major pharmaceutical, chemical and
biotechnology companies, many of which have substantially greater capital
resources, marketing experience, research and development staffs and facilities
than the Company. These companies may succeed in developing products competitive
with those of the Company that are more effective than any that have been or may
be developed by the Company and may also be more successful than the Company in
producing and marketing their products. See "Business -- Competition."

INTERNATIONAL SALES. International sales accounted for approximately 25%
and 27% of the Company's revenues in 1994 and 1995, respectively. The Company
believes that there is large demand for its products internationally and is
aggressively pursuing such sales. While the Company expects that international
sales will increase as a percentage of revenue in future periods, particularly
as a result of the acquisition of the Medgenix Business, the Company may not be
successful in expanding its international sales. The products of the Company or
of the Medgenix Business (including oligonucleotides which the Company intends
to manufac-

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<PAGE> 9

ture at Medgenix for international sale) may not continue to meet with the same
market acceptance as they currently receive, other competitive products may be
more attractive to international customers and the cost of selling the Company's
products overseas may result in a competitive disadvantage. In addition,
international sales are subject to certain inherent risks, including unexpected
changes in regulatory requirements and tariffs, difficulties in staffing and
managing foreign operations, longer payment cycles, problems in collecting
accounts receivable and potentially adverse tax consequences. The Company
currently depends on third party distributors for substantially all of its
international sales, although the Company expects such dependence to decrease if
the acquisition of the Medgenix Business is consummated. Certain of the
Company's third party distributors may also act as resellers for competitors of
the Company and could devote greater effort and resources to marketing
competitive products. The loss of, or other significant reduction in sales to,
certain of these third party distributors could have a material adverse effect
on the Company's business and results of operations.

Giving effect to the Medgenix Acquisition on January 1, 1995, pro forma
combined revenues of the Company and the Medgenix Business made in currencies
other than U.S. dollars amounted to approximately 56.8% of total pro forma
combined revenue during the year ended December 31, 1995 and 53.7% for the three
months ended March 31, 1996. A substantial portion of the Medgenix Business'
sales are invoiced in non-Belgian currencies while the costs associated with
these sales are based primarily on the Belgian franc. The Company's gross
margins from the Medgenix Business may, therefore, be materially adversely
affected by significant exchange rate fluctuations between the Belgian franc and
other currencies. In addition, because Medgenix' sales are not made in U.S.
dollars, currency exchange rate fluctuations could materially impact Medgenix'
results of operations. Although the Company may be able to hedge against all or
a portion of these currency exchange rate exposures, the Company does not
currently have plans to do so and, if the Company chooses to do so, there can be
no assurance that the Company will be able to do so successfully. Currently all
of the Company's sales are made in U.S. dollars, and increases in the exchange
rate of the dollar against specific currencies could cause the Company's
products to become relatively more expensive to customers in an affected
country, leading to a reduction in sales or profitability in that country.

DEPENDENCE ON KEY MANAGEMENT. The Company's success will continue to
depend to a significant extent on the members of its management and scientific
staff, particularly its Chief Executive Officer, James H. Chamberlain. The
Company has an employment contract with Mr. Chamberlain which expires at the end
of 1998. The Company maintains "key man" life insurance on Mr. Chamberlain in
the amount of $1 million, of which the Company is the sole beneficiary but there
can be no assurance that the proceeds will be sufficient to offset the loss to
the Company in the event of his death. The Company does not maintain any
insurance on the lives of its other senior management or scientific staff. As
the Company continues to grow, it will continue to hire, appoint or otherwise
change senior management and members of its scientific staff. There can be no
assurance that the Company will be able to retain its executive officers and key
personnel or attract additional qualified members to management in the future.
The loss of services of Mr. Chamberlain or of any key employee could have a
material adverse effect upon the Company's business. See "Management."

HISTORY OF LOSSES. The Company reported net losses of $406,000, $390,000,
and $210,000 in each of the years ended December 31, 1991, 1992 and 1994,
respectively, although the Company's net loss in 1994 includes substantial
non-cash charges. See "Summary Financial Data" and "Selected Consolidated
Financial Data." At March 31, 1996, the Company had an accumulated deficit of
$2.9 million. While the Company reported net income of $513,000, $1,160,000 and
$520,000 during the years ended December 31, 1993 and 1995 and the three months
ended March 31, 1996, respectively, there can be no assurance that the Company
will report net income in any future year or period.

SIGNIFICANT UNALLOCATED NET PROCEEDS. The principal purposes of this
offering are to acquire the Medgenix Business and to substantially increase the
Company's research and development of new products. The Company also expects to
use the net proceeds from this offering for working capital and general
corporate purposes, including enhancing its ability to make potential future
acquisitions of complementary businesses, products or technologies. The Company
from time to time evaluates potential acquisitions of complementary businesses,
products or technologies and expects that it may likely undertake one or more
such acquisitions during 1996 in addition to the acquisition of the Medgenix
Business. As of the date of this Prospectus, the

8
<PAGE> 10

Company has no negotiations, understandings, commitments or agreements with
respect to any acquisition, other than the acquisition of the Medgenix Business.
Consequently, the Company's management will have discretion over the use of a
significant portion of the proceeds of this offering for the foreseeable future.
See "Use of Proceeds."

VOLATILITY OF STOCK PRICE. Until April 29, 1996, the Company's Common
Stock was quoted on the Nasdaq Small Cap Market, and there was substantial
volatility in the market price of such Common Stock. The trading price of the
Common Stock has been and is likely to continue to be subject to significant
fluctuations in response to variations in quarterly operating results, the gain
or loss of significant contracts, changes in management, announcements of
technological innovations or new products by the Company or its competitors,
legislative or regulatory changes, general trends in the industry,
recommendations by securities industry analysts and other events or factors. In
addition, the stock market has experienced extreme price and volume fluctuations
which have affected the market price of the common stock of many technology
companies in particular and which have at times been unrelated to operating
performance of the specific companies whose stock is affected. In addition, in
the past the Company has not experienced significant trading volume in its
Common Stock, has not been actively followed by stock market analysts and has
had limited market-making support from broker-dealers. If market-making support
does not continue at present or greater levels and/or the Company does not
continue to receive analyst coverage, the average trading volume in the
Company's Common Stock may not increase or even sustain its current levels, in
which case, there can be no assurance that an adequate trading market will exist
to sell large positions in the Company's Common Stock. See "Price Range of
Common Stock."

POTENTIAL ISSUANCE OF PREFERRED STOCK; ANTI-TAKEOVER PROVISIONS. The
Company's Certificate of Incorporation authorizes the issuance of 1,000,000
shares of Preferred Stock with such designations, rights and preferences as may
be determined from time to time by the Board of Directors, without any further
vote or action by the stockholders. The rights of the holders of the Common
Stock will be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. The issuance of
Preferred Stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company, thereby delaying, deferring or
preventing a change in control of the Company. Furthermore, such Preferred Stock
may have other rights, including economic rights senior to the Common Stock, and
as a result, the issuance of such Preferred Stock could have a material adverse
effect on the market value of the Common Stock. Although the Company has no
present intention to issue any shares of its Preferred Stock, there can be no
assurance that the Company will not do so in the future. These provisions, as
well as other provisions contained in the Company's Certificate of
Incorporation, also may have the effect of discouraging, delaying or preventing
a change in control of the Company. See "Description of Capital
Stock -- Anti-Takeover Provisions."

9
<PAGE> 11

THE COMPANY

The Company was originally incorporated as a California corporation in
1989, and was reincorporated as a Delaware corporation on May 19, 1993 through
the consolidation of BioSource Industries, Inc. ("Old BioSource") and TAGO. TAGO
was incorporated in 1973 to succeed to the business of what had then been
operated as a general partnership. TAGO developed and manufactured immunological
reagents derived from antibodies produced in goats and other animals as well as
test kits incorporating such reagents. The TAGO product line consisted mainly of
polyclonal and monoclonal antibodies. Old BioSource was a Canadian holding
company incorporated under the laws of British Columbia, Canada, in 1989, which
had one wholly-owned operating subsidiary, BioSource California, Inc., a
California corporation, incorporated in 1989. Old BioSource packaged and
distributed a variety of high quality reagents and other products, including
bioactive peptides, monoclonal and polyclonal antibodies, enzyme substrates and
various ELISA test kits used in biomedical research. Following the consolidation
of TAGO and Old BioSource, the Company has continued to carry on its
predecessors' historical businesses.

On November 21, 1995, the Company acquired Keystone, located in Menlo Park,
California, by issuing 500,000 shares of its Common Stock in exchange for all of
the issued and outstanding common stock of Keystone. Keystone manufactures and
sells oligonucleotides, which are used in the study and research of cellular and
molecular biology. This acquisition has enhanced the Company's ability to clone
specific genes into bacterial cell lines, provided an expanded product line and
customer base and resulted in the contribution of additional revenue from
Keystone's existing product line. The acquisition has also given the Company the
ability to internally develop and produce the oligonucleotides used in the
production of cytokines which in turn are used in its ELISA test kits.

The Company's executive offices are located at 820 Flynn Road, Camarillo,
California 93012, and its telephone number is (800) 242-0607.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,017,000 shares of
Common Stock being offered by the Company hereby (assuming an initial public
offering price of $10.13 per share), after deducting the estimated underwriting
discounts and offering expenses, are estimated to be approximately $18.2 million
($21.2 million if the over-allotment option is exercised in full). The Company
will not receive any proceeds from the sale of Common Stock by the Selling
Stockholders; however, the Company will receive approximately $59,750 upon the
exercise by two of the Selling Stockholders of warrants to purchase 31,000
shares of Common Stock contemporaneously with the closing of this offering.

The Company's principal purpose for this offering is to acquire the
Medgenix Business and the Company will use approximately $6.6 million of the net
proceeds for that purpose. See "Risk Factors -- Business Acquisition,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Acquisition of Medgenix Business" and "Business -- Acquisition of
Medgenix Business." The Company will also use up to $1.0 million of the net
proceeds for additional research and development (in addition to its current
ongoing research and development activities) related to the commercialization of
new molecular diagnostic products. See "Risk Factors -- New Product Development;
Government Regulation" and "Business -- Research and Development." The Company
also intends to use a portion of the proceeds to pay off the balance on an
installment note issued to the bank providing the Company's credit facility and
a capital lease obligation. At December 31, 1995, the aggregate balance due on
these obligations was $130,000. For information concerning the interest rate and
maturities of these obligations, see Note 5 of Notes to Consolidated Financial
Statements. The balance of the net proceeds will be used for general corporate
purposes, including marketing and related expenditures associated with expansion
of the Company's domestic and international business, expenditures associated
with the Company's ongoing research and development efforts and the introduction
of new products and product enhancements. In addition, the Company may use a
portion of the net proceeds to acquire businesses, products or technologies
complementary to the Company's current business. Except for the acquisition of
the Medgenix Business, the Company has no such commitments and no such
acquisitions are currently being negotiated or planned. Pending these uses, the
net proceeds

10
<PAGE> 12

of this offering will be invested in deposits with banks, investment grade
securities and short-term, income-producing investments, including government
obligations and other money market instruments.

PRICE RANGE OF COMMON STOCK

The Company's Common Stock commenced trading on the Nasdaq National Market
on April 29, 1996 under the symbol "BIOI." Prior to that time, the Company's
Common Stock traded on the Nasdaq Small Cap Market under the same symbol. The
following table sets forth, for the periods indicated, certain high and low bid
information of the Common Stock as reported by IDD/Tradeline until April 29,
1996 and certain high and low sale prices of the Common Stock as reported by the
Nasdaq National Market beginning April 29, 1996. Prices before April 29, 1996
reflect inter-dealer prices, without retail mark-up, mark-down or commissions
and may not necessarily reflect actual transactions.

<TABLE>
<CAPTION>
HIGH LOW
----- ----
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1994
First Quarter.................................................. $ 2 5/16 $1 11/1
Second Quarter................................................. 1 7/8 1 11/3
Third Quarter.................................................. 2 1 1/4
Fourth Quarter................................................. 1 13/16 1 9/3
YEAR ENDED DECEMBER 31, 1995
First Quarter.................................................. $ 1 19/32 $1 9/3
Second Quarter................................................. 2 1/8 1 3/8
Third Quarter.................................................. 4 3/32 1 7/8
Fourth Quarter................................................. 6 1/4 2 3/8
YEAR ENDED DECEMBER 31, 1996
First Quarter.................................................. $ 7 $4 3/4
Second Quarter (through May 13, 1996).......................... 10 3/8 5 7/8
</TABLE>

On May 13, 1996, the last reported sales price of the Common Stock as
reported on the Nasdaq National Market was $10.13 per share. As of May 10, 1996
there were 653 holders of record of the Common Stock.

DIVIDEND POLICY

The Company has never paid cash dividends on its Common Stock and does not
currently anticipate that it will do so in the foreseeable future. The Company
plans to retain earnings to finance the Company's operations. The terms of the
Company's bank line of credit restrict the payment of cash dividends.

11
<PAGE> 13

CAPITALIZATION

The following table sets forth the short term debt and capitalization of
the Company at March 31, 1996, pro forma to reflect the acquisition of the
Medgenix Business, and pro forma as adjusted to reflect the issuance and sale by
the Company of 2,017,000 shares of Common Stock offered hereby at an assumed
initial public offering price of $10.13 per share, the receipt by the Company of
$59,750 from the exercise of warrants by two of the Selling Stockholders, and
the application of the estimated net proceeds therefrom. See "Use of Proceeds."

<TABLE>
<CAPTION>
AT MARCH 31, 1996
-------------------------------------------
PRO FORMA AS
ACTUAL PRO FORMA(1) ADJUSTED(1)(2)
------- ------------ --------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C>
Short term debt....................................... $ 665 $ 849 $ 849
========== ========== ==========
Notes payable, less current maturities................ $ 785 $ 785 $ 785
Stockholders' equity:
Preferred Stock, $0.001 par value;
1,000,000 shares authorized; no shares issued or
outstanding...................................... -- -- --
Common Stock, $0.001 par value;
20,000,000 shares authorized;
5,862,565 shares outstanding;
7,910,565 shares outstanding as adjusted(3)...... 6 6 8
Additional paid-in capital.......................... 9,369 9,369 30,563
Accumulated deficit................................. (2,927) (2,927) (2,927)
--------
--
-------- -- -------- --
Net stockholders' equity............................ 6,448 6,448 27,644
--------
--
-------- -- -------- --
Total capitalization........................ $ 7,233 $ 7,233 $ 28,429
========== ========== ==========
</TABLE>

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

(1) The Company has entered into an agreement to acquire certain assets and
selected liabilities of Medgenix which is to occur concurrently with
completion of this offering. The table gives pro forma effect to such
acquisition, to be accounted for as a purchase as of March 31, 1996. The pro
forma results do not necessarily indicate results which can be expected for
future periods. See "Risk Factors -- Business Acquisition," "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Acquisition of Medgenix Business," "Business -- Acquisition of
Medgenix Business" and the Unaudited Pro Forma Condensed Consolidated
Financial Statements included elsewhere in this Prospectus.

(2) As adjusted to reflect the sale of 2,048,000 shares of Common Stock in
connection with this offering (including the sale of 31,000 shares of Common
Stock to be issued by the Company upon exercise of warrants by two of the
Selling Stockholders for which the Company will receive net proceeds of
$59,750) and the application of the net proceeds therefrom. See "Use of
Proceeds" and "Principal and Selling Stockholders."

(3) Does not include (i) 135,000 shares of Common Stock subject to outstanding
warrants and (ii) 1,752,210 shares of Common Stock reserved for issuance
under the Company's Stock Incentive Plans, under which options to purchase
an aggregate of 1,174,688 shares were outstanding at May 13, 1996 at a
weighted average exercise price of approximately $2.583 per share.

12
<PAGE> 14

SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data presented below have been derived
from the consolidated financial statements of BioSource International, Inc.,
which consolidated financial statements for the years ended December 31, 1994
and 1995 have been audited by KPMG Peat Marwick LLP, independent certified
public accountants. The consolidated financial statements as of December 31,
1995, and for each of the years in the two-year period ended December 31, 1995,
and the report thereon, are included elsewhere in this Prospectus. The selected
consolidated financial data as of December 31, 1991, 1992, 1993 and 1994 and for
each of the years in the three year period ended December 31, 1993 have been
derived from audited consolidated financial statements not included herein. The
selected consolidated financial data as of March 31, 1996 and for the three
months ended March 31, 1995 and 1996 included herein have been derived from the
Company's unaudited financial statements. In the opinion of management, the
unaudited financial statements have been prepared on the same basis as the
audited financial statements and include all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations as of such dates and for such periods. The
results for the three month period ended March 31, 1996 are not necessarily
indicative of the results to be expected for the entire year or the quarters
following in 1996. The selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements and
Unaudited Pro Forma Condensed Consolidated Financial Statements and related
notes and other financial information included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31,(1) MARCH 31,
--------------------------------------------------------- ------------------------------
PRO FORMA PRO FORMA
AS ADJUSTED AS ADUSTED
1991 1992 1993 1994(2) 1995 1995(3)(4) 1995 1996 1996(3)(4)
------ ------ ------ ------ ------ ------------ ------ ------ ------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue............................. $3,144 $4,317 $6,113 $7,367 $8,608 $ 19,921 $1,925 $2,519 $ 5,445
Cost of goods sold.................. 1,131 1,947 2,558 3,133 2,996 7,401 858 849 2,009
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Gross profit...................... 2,013 2,370 3,555 4,234 5,612 12,520 1,067 1,670 3,436
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Operating expenses:
Research and development.......... 278 242 609 722 1,074 2,729 288 244 632
Sales and marketing............... 815 720 897 1,141 1,290 4,822 310 323 1,098
General and administrative........ 1,340 1,759 1,557 1,929 1,633 5,754 351 374 1,176
Compensation recognized under
performance escrow share
arrangement..................... -- -- -- 577 -- -- -- -- --
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Total operating expenses........ 2,433 2,721 3,063 4,369 3,997 13,305 949 941 2,906
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Operating income (loss)......... (420) (351) 492 (135) 1,615 (785) 118 729 530
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Other income (expense), net......... 14 (37) (17) (27) (4) (53) 19 61 97
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Income (loss) before income
taxes and cumulative effect of
change in accounting
principle..................... (406) (388) 475 (162) 1,611 (838) 137 790 627
Provision for income taxes.......... -- 2 65 48 451 551 22 270 277
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Income (loss) before cumulative
effect
of change in accounting
principle....................... (406) (390) 410 (210) 1,160 (1,389) 115 520 350
Cumulative effect of change in
accounting principle.............. -- -- 103 -- -- -- -- -- --
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Net income (loss)................. $ (406) $ (390) $ 513 $ (210) $1,160 $ (1,389) $ 115 $ 520 $ 350
====== ====== ====== ====== ====== =========== ====== ====== ===========
Income (loss) per share:
Income (loss) before cumulative
effect
of change in accounting
principle....................... (0.12) (0.12) 0.08 (0.04) 0.20 (0.17) .02 .09 .04
Cumulative effect of change in
accounting principle............ -- -- 0.03 -- -- -- -- -- --
------ ------ ------ ------ ------ ------------ ------ ------ ------------
Net income (loss) per share....... $(0.12) $(0.12) $ 0.11 $(0.04) $ 0.20 $ (0.17) $ .02 $ .09 $ .04
====== ====== ====== ====== ====== =========== ====== ====== ===========
Weighted average number of common
shares outstanding................ 3,261 3,339 4,880 5,724 5,946 7,994 5,817 5,957 8,005
====== ====== ====== ====== ====== =========== ====== ====== ===========
</TABLE>

<TABLE>
<CAPTION>
AT MARCH 31,
AT DECEMBER 31, ---------------------
------------------------------------------ PRO FORMA
1991 1992 1993 1994 1995 1996 1996(3)
------ ------ ------ ------ ------ --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital................................. $1,141 $1,285 $3,518 $3,485 $4,996 $ 4,493 $ 8,745
Total assets.................................... 2,127 3,255 5,446 5,968 7,388 9,223 20,112
Notes payable less current maturities........... 118 83 72 150 64 785 785
Net stockholders' equity........................ 1,374 1,949 4,252 4,673 5,897 6,448 6,448
</TABLE>

13
<PAGE> 15

- ---------------
(1) The data reflects the acquisitions of TAGO, effected on May 19, 1993, and
Keystone, effected on November 21, 1995, each of which was accounted for as
a pooling of interests. See "The Company," and Note 2 of Notes to
Consolidated Financial Statements.

(2) The Company recognized compensation expense of $577,452 in 1994 related to
the release from escrow of 469,180 shares of Common Stock held by directors,
officers and others deemed to be able to affect the financial results of the
Company. No expense was recognized with respect to 635,763 shares of Common
Stock held by other stockholders which were also released from escrow. In
addition, the Company incurred a one-time charge in 1994 of $312,000 in
connection with the closure of its Northern California facility. These
charges affect the comparability of operating results during 1993, 1994 and
1995. See Note 6 of Notes to Consolidated Financial Statements.

14
<PAGE> 16

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read together with the
financial statements and notes thereto included elsewhere herein.

OVERVIEW

BioSource develops, manufactures, markets and distributes products which
are widely used in biomedical research and are instrumental in the development
of new medical diagnostic methods and pharmaceutical products. The Company's
products enable scientists to understand better the biochemistry, immunology and
cell biology of the human body, aging and certain diseases such as cancer,
arthritis and other inflammatory diseases, AIDs and certain other sexually
transmitted diseases. The Company's products include immunological reagents,
including bioactive proteins (cytokines, growth factors and adhesion molecules)
and monoclonal and polyclonal antibodies. The Company also develops,
manufactures, markets and distributes oligonucleotides and ELISA test kits, and
uses recombinant DNA technology to produce cytokines and other proteins. Because
the Company's products are sold only for research, the Company is not subject to
regulation by the FDA, and therefore undertakes none of the risks associated
with the research and development of new drugs. However, the Company intends to
focus new research and development efforts towards the development of medical
products which will be used to detect and diagnose disease at a molecular level.
Unlike the Company's current products, which are offered exclusively for
research uses, these new products would be offered for the detection of diseases
in humans and animals. See "Risk Factors -- New Product Development; Government
Regulation."

The Company's growth has also been stimulated by acquisitions. On November
21, 1995, the Company acquired Keystone, located in Menlo Park, California,
which manufactures and sells oligonucleotides. Oligonucleotides are used in the
study and research of cellular and molecular biology. This acquisition provided
a captive source of supply for needed oligonucleotides, enhanced the Company's
ability to clone specific genes into bacterial cell lines, provided an expanded
product line and customer base and resulted in the contribution of additional
revenue from Keystone's existing product line. The acquisition has also given
the Company the ability to develop and produce internally the oligonucleotides
it uses in the production of cytokines and in turn in its ELISA test kits. Thus,
the Company has become less dependent on certain suppliers and has been able to
reduce cost of goods sold for various products, thereby increasing its gross
margins.

ACQUISITION OF MEDGENIX BUSINESS

The Company has entered into an agreement to acquire certain assets and
selected liabilities related to the Medgenix Business. See "Risk
Factors -- Business Acquisition" and "Business -- Acquisition of Medgenix
Business." BioSource believes that the acquisition of the Medgenix Business will
allow it to introduce several new products, including several assays and a
number of polyclonal and monoclonal antibodies. During the years ended October
31, 1994 and 1995, the Medgenix Business reported revenue of $11.6 million and
$11.3 million, respectively, and net losses of $2.7 million and $2.5 million,
respectively. Assuming the Medgenix Acquisition had occurred on January 1, 1995,
pro forma combined results of the Company and the Medgenix Business for the year
ended December 31, 1995 reflect revenue of $19.9 million and a net loss of $1.4
million (or a loss of $0.17 per share after giving effect to this offering) as
compared to actual revenue and net income of the Company of $8.6 million and
$1.2 million (or $.20 per share before

15
<PAGE> 17

giving effect to this offering), respectively. For the three months ended
January 31, 1995 and 1996, the Medgenix Business reported revenue of $2.7
million and $2.9 million, respectively, and net losses of $483,000 and $151,000,
respectively. Assuming the Medgenix Acquisition had occurred on January 1, 1996,
pro forma combined results of the Company and the Medgenix Business for the
three months ended March 31, 1996 reflect revenue of $5.4 million and net income
of $350,000 (or $0.04 per share after giving effect to this offering) as
compared to actual revenue and net income of the Company of $2.5 million and
$520,000 (or $.09 per share before giving effect to this offering),
respectively. See Unaudited Pro Forma Condensed Consolidated Financial
Statements, the Consolidated Financial Statements of the Company and the
Combined Financial Statements of Medgenix, each of which is included elsewhere
herein.

The Company believes that the Medgenix Acquisition provides the Company
with a number of strategic advantages which will enhance the Company's existing
business. The Company further believes that those synergies, and its ability to
acquire the Medgenix Business without assuming many of the costs associated with
Medgenix' historical operations, will permit the Company to reverse Medgenix'
recent history of unprofitable operations. Following the Medgenix Acquisition,
the Company intends to conform the operating expenses and overhead of the
Medgenix Business to follow BioSource's standard practices, resulting in
considerable cost savings. In 1995, the Medgenix Business absorbed allocated
overhead of $602,000 from its parent, Nordion International Inc., which expenses
will not be incurred following the Medgenix Acquisition. Additionally, sales and
marketing expenses of the Medgenix Business as a percentage of revenue for the
last fiscal year were 101% higher than that of BioSource, and general and
administrative expenses ran 56% higher than that of BioSource. It is an
objective of Company's management to control operating expenses and overhead to
the greatest degree possible, while utilizing the synergies of the Medgenix
Acquisition to generate profitability in the near term from the Medgenix
Business. BioSource anticipates that the acquisition of the Medgenix Business
will require a significant amount of financial and management resources due to
the travel between California and Europe which will be required of certain
members of the management team. A substantial amount of management time,
including that of James H. Chamberlain, BioSource's Chairman of the Board,
President and Chief Executive Officer, is expected to be required in the early
stages following the Medgenix Acquisition. In addition, the Company expects to
incur significant expense initially in connection with the consolidation of the
research and development activities of the two companies. See
"Business -- Acquisition of Medgenix Business."

The purchase price of $6.6 million to be paid for the Medgenix Business was
determined through an arms-length negotiation between BioSource and the parent
company of Medgenix, Nordion International Inc. ("Nordion"). In arriving at the
amount BioSource was willing to offer for the Medgenix Business, management
considered the book value of the assets of the Medgenix Business, the historical
revenue and losses associated with the operation of the Medgenix Business, and
management's perceived ability to create more profitable operation of the
Medgenix Business as a result of the factors identified above. Management
discounted the book value of the Medgenix Business from that reflected on the
books of Medgenix primarily as a result of its belief that a portion of the
inventory was obsolete and that certain of the accounts receivable were
uncollectible. On the basis of this discount analysis, BioSource offered an
amount it believed approximated the true book value of the Medgenix Business.
Nordion and BioSource then arrived at the actual purchase price through
negotiations. No appraisal or fairness opinion with respect to the Medgenix
Business was obtained.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated, selected
information derived from the Company's Consolidated Statements of Operations
expressed as percentages of revenue. The table also presents

16
<PAGE> 18

information on the Company's consolidated results of operations expressed as a
percentage increase or decrease relative to the results of the previous period.

<TABLE>
<CAPTION>
PERCENTAGE PERCENTAGE
INCREASE INCREASE
(DECREASE) PERCENTAGE OF (DECREASE)
OVER RESULTS FOR REVENUE OVER RESULTS FOR
PERCENTAGE OF REVENUE PRIOR PERIOD --------------- PRIOR PERIOD
------------------------- ------------------ ------------------
THREE MONTHS
YEAR ENDED YEAR ENDED ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31, MARCH 31, MARCH 31,
------------------------- ------------------ --------------- ------------------
1993 1994 1995 1994 1995 1995 1996 1996
----- ----- ----- ------ ------- ----- ----- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue......................... 100.0% 100.0% 100.0% 20.5% 16.8% 100.0% 100.0% 30.9%
Cost of goods sold.............. 41.8 42.5 34.8 22.5 (4.4) 44.6 33.7 (1.0)
----- ----- ----- ----- -----
Gross profit.................. 58.2 57.5 65.2 19.1 32.5 55.4 66.3
Operating expenses:
Research and development...... 10.0 9.8 12.5 18.6 48.7 15.0 9.7 (15.2)
Sales and marketing........... 14.7 15.5 15.0 27.2 13.1 16.1 12.8 4.4
General and administrative.... 25.5 26.2 19.0 23.9 (15.3) 18.2 14.9 6.2
Compensation recognized under
performance escrow share
arrangement................. -- 7.8 -- 100.0 (100.0) -- -- --
----- ----- ----- ----- -----
Income (loss) from operations... 8.0 (1.8) 18.7 (127.4) 1,296.9 6.1 28.9 518.9
Other (income) expense.......... (0.2) (0.4) -- 58.8 (86.3) 1.0 2.4 215.4
----- ----- ----- ----- -----
Income (loss) before provision
for income taxes.............. 7.8 (2.2) 18.7 (134.1) 1,098.1 7.1 31.3 475.9
Provision for income taxes...... 1.1 0.7 5.2 (26.2) 835.8 1.1 10.7 1,129.2
Cumulative effect of change in
accounting principle.......... 1.7 -- -- 100.0 -- --
----- ----- ----- ----- -----
Net income (loss)............... 8.4 (2.9) 13.5 (140.9) 653.5 6.0 20.6 351.2
===== ===== ===== ===== =====
</TABLE>

THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995

Revenue. Revenue for the three months ended March 31, 1996 increased
$594,055, or 31%, to $2,518,557 from $1,924,502 when compared to the three
months ended March 31, 1995. The primary factors contributing to revenue growth
were the continued demand for BioSource products both domestically and
internationally across all product lines, and the introduction of new ELISA test
kits, cytokines, growth factors, antibodies, oligonucleotides and other
biomedical reagents supplied by the Company.

Cost of Goods Sold. Cost of goods sold of $849,031 decreased for the three
months ended March 31, 1996 by $8,674, or 1%, when compared to $857,705 for the
three months ended March 31, 1995. The decrease was due to efficiencies in
production which were created by manufacturing larger volumes of products and
their components, thereby recognizing greater economies of scale.

Research and Development Expenses. Research and development expenses were
$244,019 for the three months ended March 31, 1996 and decreased by $43,745, or
15%, as compared to $287,764 for the three months ended March 31, 1995. The
decrease resulted from the favorable comparison to the comparable period in 1995
when the Company incurred higher research and development expenses in connection
with the expansion of its research and development efforts. The Company has
continued to maintain productive research and development efforts while
implementing expense controls. The Company believes its protein recombinant rat
IL-6, introduced in the first quarter of 1996, was the first to be commercially
available. The research department also produced other biologically active
proteins which are replacements for outsourced raw materials used in ELISA
development. In the same period, the Company introduced five new ELISA test kits
and two replacement kits using internally developed components. The Company
continues its focus on producing new proteins for commercial sale and for use in
new ELISA kits and other products used in biomedical research.

Sales and Marketing Expenses. Sales and marketing expenses for the three
months ended March 31, 1996 were $323,442, an increase of 4%, or $13,686, as
compared to $309,756 for the three months ended March 31, 1995. As a percentage
of revenue, these expenses decreased to 13% in 1996 as compared to 16% in 1995.
The increase in absolute dollars is the net effect of increased salaries for the
new fiscal year and related personnel expenses against decreased expenditures in
catalog printing, direct mail and advertising.

17
<PAGE> 19

General and Administrative Expenses. General and administrative expenses
for the three months ended March 31, 1996 were $373,540, an increase of $21,969,
or 6%, as compared to $351,571 for the three months ended March 31, 1995. As a
percentage of revenue, these expenses decreased to 15% in 1996 as compared to
18% in 1995. The increase in expenditures in absolute dollars was due primarily
to the addition of new personnel, increased salaries for the new fiscal year and
related personnel expenses. Other general and administrative expenses remained
relatively stable.

Provision for Income Taxes. The provision for income taxes for the three
months ended March 31, 1996 of $270,193 increased by $248,211, when compared to
$21,982 for the three months ended March 31, 1995. The increase resulted from
the increase in income before taxes.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Revenue. Revenue increased $1.2 million during 1995 or 17% to $8.6 million
from $7.4 million when compared to the year ended December 31, 1994. The
increase in revenue is attributable to broad sales growth across all product
lines, including existing and newly introduced ELISA test kits, cytokines,
growth factors, antibodies, oligonucleotides and other biochemical reagents
supplied by the Company. The Company has been able to increase its revenue
domestically through increased and more efficient marketing efforts, such as
greater attendance at trade shows, increased sales personnel, greater print
advertising and direct mail programs. The Company has also increased
international sales through increased distributor training and marketing
activities. In November 1995, the Company acquired Keystone. See "The Company."
This acquisition was accounted for as a pooling of interests and, as a result,
the Company's consolidated financial statements were restated for all periods
presented to include the financial statements of Keystone. Keystone's revenue
for 1995 was $976,744, a decrease of $150,366 when compared to Keystone's 1994
revenue of $1.1 million. This decrease was primarily attributable to competitive
pricing and discounting of oligonucleotides by Keystone to meet market demands.
Management believes that the consolidation of many of the Company's operations
with those of Keystone and the utilization of BioSource's sales and marketing
staff will result in greater revenue and more profitability of the Keystone
subsidiary. BioSource is already experiencing an increase in revenue from its
Keystone subsidiary, and expects that subsidiary to contribute revenue in excess
of that earned by Keystone in 1995. Notwithstanding the decrease in revenue for
the Keystone subsidiary, BioSource's revenue (on a combined basis) increased by
17%.

The Company anticipates that revenue will increase for the year ending
December 31, 1996 as a result of the acquisition of the Medgenix Business.
Assuming the acquisition had occurred on January 1, 1995, pro forma combined
revenue of the Company and the Medgenix Business for the year ended December 31,
1995 would have been $19.9 million. See "Risk Factors -- Business Acquisition"
and "Business -- Acquisition of Medgenix Business."

Cost of Goods Sold. Cost of goods sold of $3.0 million decreased during
1995 by $136,888 or 4% when compared to the year ended December 31, 1994. Cost
of goods sold as a percentage of revenue also decreased 8% from 43% in 1994 to
35% in 1995. This decrease was a direct result of the Company recognizing
benefits in the form of decreased manufacturing expenses and economies of scale
as a result of the relocation of its manufacturing operations that had been
conducted in Northern California, to its headquarters in Camarillo, California
in October 1994. During 1995, the Company also concentrated on lowering
manufacturing expenses, including labor, materials and overhead, without
compromising product quality or reducing customer demand.

Research and Development Expenses. The Company's research and development
expenses were $1.1 million for 1995, an increase of $351,831 or 49%, as compared
to $721,902 for the year ended December 31, 1994. As a percentage of revenue,
research and development expenses increased only 2%, from 10% in 1994 to 12% in
1995. This increase contributed to the growth in the Company's product lines as
a result of the Company's directed effort at producing new ELISA test kits. In
1995, the Company produced 14 new ELISA test kits. In addition, the Company
redeveloped three existing ELISA test kits to include its own internally
produced antibodies, thereby reducing the Company's cost of goods sold and
dependence on outside suppliers. Also in 1995, the Company initiated new
projects which resulted in additional monoclonal and polyclonal antibodies. The
Company intends to continue to focus on internally developed products whenever

18
<PAGE> 20

management determines that the cost benefit associated with such production
provides a benefit as compared to sourcing such products from external
suppliers.

Sales and Marketing Expenses. Sales and marketing expenses were $1.3
million for 1995, an increase of $149,277, or 13%, as compared to $1.1 million
for the year ended December 31, 1994, but as a percentage of revenue were
unchanged at 15%. The increase in absolute dollars is primarily attributable to
greater levels of direct marketing, including advertising, distributor training
and other marketing programs, as well as increased expenses for the printing and
mailing of the Company's research product catalog. The Company also expanded its
marketing department in 1995 by adding one additional sales representative, and
three new positions in customer service, technical service and marketing
support.

General and Administrative Expenses. General and administrative expenses
were $1.6 million for 1995, a decrease of $295,538 or 15%, as compared to $1.9
million for the year ended December 31, 1994. The decrease is attributable
primarily to the elimination of duplicate expenditures as a result of the
closure of the Northern California facility in October 1994, and in part to the
in-house management of stockholder services. On March 28, 1996, the Company
purchased its Camarillo headquarters. The Company expects to see a reduction in
general and administrative expenses previously attributable to rent of
approximately $155,892 for the year ending December 31, 1996 which will be
offset in part by interest expense of $137,256 relating to the portion of the
mortgage payments attributable to interest. See "Business -- Properties."

Compensation Expense. During 1994, the Company recognized $577,452 of
non-cash compensation expense related to the release from escrow of certain
performance escrow shares which were earned out of escrow based upon the
Company's operating results as of December 31, 1994. The Company's 1994
quarterly financial statements were restated as of December 31, 1994 to
attribute the compensation expense pro rata over each quarter. For the year
ended December 31, 1995, no compensation expense was recognized and no future
compensation expense with regard to the performance escrow shares will be
recognized.

Provision for Income Taxes. The provision for income taxes for the year
ended December 31, 1995 of $451,000 increased by $402,805, when compared to
$48,195 for the year ended December 31, 1994. The increase resulted from the
increase in income before taxes, as well as an increase in the Company's
effective tax rate for the year.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 1996, the Company's current ratio was 3.33 to 1 compared to
4.8 to 1 at December 31, 1995. The decrease was due to a short-term bridge loan
which partially funded the Company's March 28, 1996 purchase of its Camarillo
headquarters. Cash generated from operating activities increased to $128,211 for
the three months ended March 31, 1996 as compared to $33,584 for the three
months ended March 31, 1995. At March 31, 1996, total cash and cash equivalents
on hand amounted to $1.3 million as compared to $1.4 million at December 31,
1995.

At December 31, 1995 the Company's current ratio was 4.8 to 1 compared to
4.0 to 1 at December 31, 1994. Cash generated from operating activities
increased to $853,200 as compared to $16,536 at December 31, 1994. At December
31, 1995 total cash and cash equivalents on hand amounted to $1.4 million as
compared to $883,760 at December 31, 1994. Inventories at December 31, 1995 of
$3.3 million increased by $592,581 or 22% as compared to $2.7 million at
December 31, 1994. The buildup was due to the increased sales volume, new
products produced in 1995 and increased production of selected products to
reduce the amount of backorders to customers.

Capital expenditures for the year ended December 31, 1995 were $211,809, a
reduction of $480,330 when compared to $692,139 for the year ended December 31,
1994. The majority of the reduction was due to the build-out of the laboratory
facilities and the equipment needed to supply the new production and laboratory
areas in the Southern California location in 1994. Additional equipment was
purchased in 1995 for use at the Company's Camarillo facility and the Keystone
facility in order to maintain and improve research and manufacturing
capabilities.

19
<PAGE> 21

Capital expenditures for the three months ended March 31, 1996 were $1.6
million as compared to $84,325 for the three months ended March 31, 1995. The
majority of the increase was due to the March 28, 1996 purchase of the Company's
Camarillo headquarters. The Company expects to see a reduction in general and
administrative expenses previously attributable to rent of approximately
$155,892 for the year ending December 31, 1996 which will be offset in part by
interest expense of $137,256 relating to the portion of the mortgage payments
attributable to interest. This reduction is expected to improve the Company's
liquidity. See "Business -- Properties."

The Company's revolving line of credit with Silicon Valley Bank, as
extended, provides for borrowings of up to $1.0 million limited to 75% of
eligible accounts receivable. The credit line expires on December 31, 1996.
Interest on the revolving line of credit is payable monthly at prime plus .75%.
The Company also has a $150,000 installment note payable to Silicon Valley Bank
payable in monthly installments of principal and interest of prime plus 1.375%
through June 30, 1998. At March 31, 1996 an aggregate balance of $96,429 was due
on the installment note and a separate capital lease obligation, and no amounts
had been drawn against the line of credit. The Company plans to repay the
installment note with a portion of the net proceeds of this offering.

International sales accounted for approximately 25% and 27% of the
Company's revenues in 1994 and 1995, respectively. Currently all of the
Company's sales are made in U.S. dollars, and increases in the exchange rate of
the dollar against specific currencies could cause the Company's products to
become relatively more expensive to customers in an affected country, leading to
a reduction in sales or profitability in that country.

The Company expects that international sales will increase as a percentage
of revenue in future periods, particularly as a result of the acquisition of the
Medgenix Business. Giving effect to the Medgenix Acquisition as of the beginning
of the respective periods, pro forma combined revenues of the Company and the
Medgenix Business made in currencies other than U.S. dollars amounted to
approximately 56.8% of total pro forma combined revenue during the year ended
December 31, 1995 and 53.7% for the three months ended March 31, 1996. A
substantial portion of the Medgenix Business' sales are invoiced in non-Belgian
currencies while the costs associated with these sales are based primarily on
the Belgian franc. The Company's gross margins from the Medgenix Business may,
therefore, be materially adversely affected by significant exchange rate
fluctuations between the Belgian franc and other currencies. In addition,
because Medgenix' sales are not made in U.S. dollars, currency exchange rate
fluctuations could materially impact Medgenix' results of operations. Although
the Company may be able to hedge against all or a portion of these currency
exchange rate exposures, the Company does not currently have plans to do so and,
if the Company chooses to do so, there can be no assurance that the Company will
be able to do so successfully.

Management believes that the Medgenix Acquisition will result in increased
working capital requirements because senior management will be required to
travel between California and Europe, the consolidation of the business and
elimination of overlap (particularly in research and development) will result in
higher costs, and the entire Medginex sales staff will need to be trained, much
of which will require that they travel to California. Management believes that
notwithstanding the increased working capital requirements created by the
Medgenix Acquisition, its working capital and amounts available under its line
of credit, together with internally generated funds and the proceeds of this
offering which it has allocated to working capital will provide sufficient
liquidity to enable the Company to meet its current operating and capital needs
for at least the next 12 months.

NEWLY ISSUED ACCOUNTING STANDARDS

In March 1995, Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," was issued. This statement provides guidelines for recognition
of impairment losses related to long-term assets. Effective January 1, 1996, the
Company adopted Statement No. 121. The adoption of this new standard did not
have a material effect on the Company's consolidated financial statements.

20
<PAGE> 22

In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("Statement No. 123"), was issued.
This statement encourages, but does not require, a fair value based method of
accounting for employee stock options. The Company has elected to continue to
measure compensation costs under APB Opinion No. 25, "Accounting for Stock
Issued to Employees" and to comply with the pro forma disclosure requirements of
Statement No. 123. The adoption of Statement No. 123 did not have a material
impact on the Company's consolidated financial statements.

21
<PAGE> 23

BUSINESS

CERTAIN SCIENTIFIC TERMS USED IN THIS PROSPECTUS ARE DEFINED IN THE GLOSSARY
APPEARING AT PAGES 50 AND 51.

Medgenix, located in Fleurus, Belgium, manufactures, markets and
distributes a series of assay test kits and a number of monoclonal and
polyclonal antibodies. While there is some overlap between the products of the
Company and those of the Medgenix Business, the Medgenix Acquisition is expected
to (i) provide several new assay products and antibodies to BioSource's existing
product lines, (ii) enable BioSource to market those products in the United
States while simultaneously providing for a direct European sales channel for
BioSource's existing products, (iii) provide economies of scale and cost savings
in the area of research and development, and (iv) allow BioSource to expand its
oligonucleotides business in Europe and into other international markets. See
" -- Acquisition of Medgenix Business."

Since its consolidation with TAGO in 1993, BioSource has concentrated on
internal development of new products, and currently offers over 800 products to
more than 1,700 medical laboratories and research centers in universities,
government institutions and pharmaceutical and biotechnology firms. In 1995,
BioSource further expanded its product lines by acquiring Keystone, enabling it
to manufacture oligonucleotides both as a new product line and for use in the
production of cytokines and its ELISA test kits. The Company believes that the
acquisition of the Medgenix Business will further benefit its business by
providing a European manufacturing capability, access to an additional animal
facility and a direct sales force in Europe. The Medgenix Acquisition is also
expected to expand and broaden BioSource's product lines. BioSource intends to
continue its focus on new product development, and to acquire businesses,
products or technologies complementary to its current business.

BioSource's branded products, including the CYTOscreen line of ELISA test
kits and TAGOImmunologicals, are basic tools used in the daily work of
researchers, including medical doctors and Ph.D.'s. The Company offers its
products to medical laboratories and research centers in universities,
government institutions and private pharmaceutical and biotechnology firms
around the world. The breadth and name recognition of the Company's product
lines, give the Company a strong presence in each of its markets. Some of the
Company's customers include Eli Lilly, Hoffman LaRoche, Amgen, Genentech, the
National Institutes of Health, the Centers for Disease Control and the research
centers of many of the major universities in the United States. Management
believes that none of the Company's competitors offer a more broadly based
product line and few can match the specifications that the Company's products
provide.

BioSource has an advanced scientific research staff, a broad product line
and an established trade name, giving it a strong presence in the biomedical
research market.

INDUSTRY OVERVIEW

The biomedical research industry has recently seen major advances in the
understanding of physiological processes at the cellular and molecular level.
New research technologies require the use of qualitative and quantitative
analysis of the way in which tissues and cells communicate with each other, what
stimulates cellular activity and how cells respond when stimulated. Biomedical
researchers around the world are constantly in search of specialty research
products necessary to conduct basic and clinical research. This research is
conducted in settings that range from university and medical school laboratories
to pharmaceutical and biotechnology research and development groups. The success
of such research in creating new health care

22
<PAGE> 24

products depends upon the availability of biological reagents, including various
biological proteins, antibodies, serums and immunoassay kits, such as those
manufactured and sold by the Company.

The biomedical research industry is a large and growing segment of the
biotechnology industry. Large, highly capitalized biotechnology and
pharmaceutical companies have concentrated their efforts on the development of
human therapeutics and high volume diagnostic tests. BioSource supplies these
larger companies with the tools to assist them in achieving their scientific
goals. Because the Company's products are sold only for research, they do not
require approval from the FDA and thus the Company is not subject to many of the
regulatory risks associated with the development of pharmaceuticals.

Most industrialized nations, led by the United States, Japan and the
countries of Western Europe, support some level of biomedical research.
BioSource's products are used by thousands of physicians and scientists who are
employed by or affiliated with universities, medical schools, research
institutes and private industry. The biomedical research industry is highly
fragmented with no dominant competitors.

STRATEGY

The Company's primary business strategy has been to capitalize on the
growth of the biotechnology industry by creating "building block" reagents and
test kits which are not subject to regulatory overview or the risk and
volatility inherent in developing pharmaceuticals, and to grow through the
selective acquisition of complementary businesses. The Company's strategy
includes the following elements:

Develop Broad Product Lines. The Company offers over 800 products in
four major product lines in an effort to serve effectively a diverse and
fragmented industry. The Company believes that its many and diverse
products more fully address the needs of researchers, thereby offering them
the ability and convenience of obtaining their research products from a
single source, which will cause researchers to look first to the Company to
satisfy their needs.

Focus on Product Research. Over the last two years, the Company has
developed over 40 new products to serve the biomedical research industry.
The Company's sales force, who have education and training in the
biological sciences, continuously evaluates the direction of its customers'
biomedical research, enabling the Company's management to develop more
effectively innovative ELISA test kits, cytokines, antibodies and other
immunological reagents to address those needs. For example, the Company
capitalized on the use of mice and rats as the species of choice of most
researchers as a preclinical model for potential therapeutics by developing
ELISA test kits to measure separate cytokines for both mice and rats.

Commitment to Product Development. Over the last two years, the
Company has invested 10% and 12% of its revenue in research and development
and plans to increase its research and development expenses in the future.
The Company employs nine professionals with Ph.D. degrees in the life
sciences. The Company believes it was the first to introduce certain ELISA
test kits to measure several different human interleukins (a type of
cytokine) that researchers have associated with diseases of the immune
system.

Offer Products of Exacting Capability. The Company constantly strives
to offer products with the greatest sensitivity, precision, accuracy and
reproducibility available on the market. For example, the Company's
products are generally capable of measuring to the picogram (one trillionth
of a gram), and in certain cases to the femtogram (one quadrillionth of a
gram), more quickly than products available from certain of its
competitors.

Create Superior Value. The Company seeks to create superior value for
its customers. For instance, BioSource includes two ELISA test plates in
each package which allows for double the number of tests, at a comparable
price, compared to the test kits of most of its competitors, thereby
offering greater affordability and convenience to customers, and fostering
more economical and prolific research.

Acquire Complementary Businesses, New Products and Technologies. The
Company evaluates potential acquisitions of complementary products and
businesses from time to time and has a proven track record of profiting
from its business acquisitions. In 1993, the Company acquired TAGO, which
added polyclonal and monoclonal antibodies to its product lines and in 1995
the Company acquired

23
<PAGE> 25

Keystone, which added oligonucleotides. The Company will use a portion of
the net proceeds of this offering to acquire the Medgenix Business which
will permit it to further expand its product offerings and geographic
distribution.

Esprit de Corps. The Company seeks to create a team spirit among all
of its employees, foster awareness of the Company's objectives and
strategies at all levels within the Company, and reward meritorious
performance with compensation and other incentives. The Company believes
this creates loyalty to the Company and pride in its products, which
translates into greater product quality and enhanced customer service.

PRODUCTS

BioSource has over 800 different products in its inventory. The Company
groups its products into four principal product lines, oligonucleotides (DNA
segments), bioactive proteins (cytokines, growth factors and adhesion
molecules), monoclonal and polyclonal antibodies and ELISA test kits.

Oligonucleotides (DNA Segments). An oligonucleotide is a synthesized
polymer made up of the same building blocks which form DNA. Synthetic
oligonucleotides have been used in molecular biology for over twenty years,
basically to act as primers and templates for nucleic acid and protein
synthesis, and more recently, as the therapeutic agents for the inhibition of
either DNA transcription or RNA translation or as a diagnostic agent to identify
disease. DNA is used by almost every discipline in biomedical research in both
academic and industry areas, including molecular biology departments and cell
biology departments of major universities, and biomedical companies developing
gene therapy drugs. These researchers use synthetic oligonucleotides, such as
those made by the Company, to determine the exact sequence of a gene, or to
perform experiments leading to the potential development of pharmaceutical
drugs. Oligonucleotides are primarily developed and sold by the Company for
processes called DNA sequencing and Polymerase Chain Reaction (PCR) priming.

In DNA sequencing, oligonucleotides are custom synthesized by the Company
pursuant to customer specifications and are used to initiate a process of
sequencing a growing DNA strand. DNA sequencing is used in a wide range of other
biomedical research applications to identify specific diseases.

In PCR priming, oligonucleotides synthesized by the Company are used in
combination with other reagents to amplify a specific genetic sequence isolated
from a cell sample. After PCR amplification, gel electrophoresis is used to
identify and even to quantitate a specific DNA or RNA sequence from that sample.
PCR is an extremely powerful tool in molecular biology research. It can amplify
genetic information from as few as one copy of DNA or RNA. Using PCR technology,
the presence of the genetic message used to code for the production of protein
can be identified, thereby offering numerous possibilities in the detection of
genetic disorders, monitoring disease progression, and in understanding cellular
functions.

Bioactive Proteins (Cytokines, Growth Factors and Adhesion Molecules). The
development of an effective immune response involves complex cell-to-cell
communications which are mediated by a group of secreted proteins collectively
called cytokines. Cytokines and other similar growth factors and adhesion
molecules are instrumental in the body's defense against cancer, AIDS and other
life-threatening disorders. Cytokines are small, hormone-like, soluble proteins
secreted by activated cells of the immune system. Through their activities,
cytokines coordinate and orchestrate the proper functioning of the immune
system. Growth factors are proteins that stimulate the multiplication and
differentiation of various types of immature precursor cells. Adhesion molecules
enable cells to interact for the purpose of cell communication and are involved
in such processes as wound healing and tumor metastasis.

Cytokines, like growth factors, interact with specialized target receptors
on the surface of the cells and stimulate a chain of secondary messengers
leading to a biological response. These responses result from changes in both
the molecular capabilities and behaviors of cells. For example, cytokines can
activate cells to recognize and eliminate harmful bacteria and viruses. They
carry vital signals to the cell's genetic machinery that can trigger it to grow
or stop growing. Cytokines can also signal a cell to differentiate, that is, to
acquire the features necessary for it to take on more specialized tasks. Certain
cytokines play a key role in stimulating cells surrounding a wound to grow and
divide and also in attracting migratory cells to the site. Some cytokines have a
regulatory function, and other cytokines exert direct effects of their own.

24
<PAGE> 26

Cytokines are the subject of worldwide research efforts. To date, more than
40 molecules have been identified as cytokines. Cytokines are extracted from
natural sources (human and animal platelets, leukocytes and lymphocytes) or are
produced through genetic engineering (recombinant DNA technology). These
recombinant cytokines have the same biological activities as their natural
counterparts and have been used to manipulate the immune system for research
purposes as well as therapeutically to treat various diseases. Recombinant DNA
technology offers several advantages over extraction of these proteins from
natural sources, including lower production cost and potentially unlimited
supplies.

BioSource produces and sells bulk cytokines, and also uses them in the
manufacture of its ELISA test kits. The following table shows examples of
different cytokines produced and used by BioSource:

<TABLE>
<CAPTION>
CYTOKINE CHARACTERISTICS USES
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------
Interleukin 4 Human IL-4 is a protein produced IL-4 also exhibits antitumor activity
primarily by activated T-lymphocytes in a variety of animal models. In
and has many immunoregulatory antitumor experiments, IL-4 has been
properties. observed to have direct
growth-suppressive activity on a
variety of malignancies. Other
potential uses are as an
anti-inflammatory agent and in
management of T-cell mediated
autoimmune diseases such as Type I
diabetes.
- -------------------------------------------------------------------------------------------------------
Interleukin 12 IL-12 is a broad spectrum IL-12 has potential in antitumor
immunomodulatory cytokine. therapy and also plays a major part in
the control of infections and
autoimmune diseases. Its broad array
of activities suggests clinical
utility as an antitumor and antiviral
agent, in restoring immune function in
immune suppressed patients, as a
vaccine adjuvant in promoting cellular
immune response, and in combating
opportunistic infections in immune
suppressed patients.
- -------------------------------------------------------------------------------------------------------
Interleukin 15 IL-15 is a cytokine recently cloned by Researchers believe that IL-15
scientists. It is produced by a wide produced locally has a transient
variety of cells and tissues of initial push start on T-lymphocyte
lymphoid and non-lymphoid origin, and growth. Pre-clinical data also
is most abundant in epithelial and suggests that IL-15 may be an
monocyte cell lines, muscle and effective treatment for a condition
placental tissue. known as mucositis, a mouth and
digestive tract lesion which is a side
effect of cancer chemotherapy.
- -------------------------------------------------------------------------------------------------------
Interferon-Gamma IFN-Gamma is a potent in vivo IFN-Gamma's presence is required for
antiviral activity which has been well the resolution of microbial
documented, and it is also a powerful infections. It is also involved with
immunomodulator, able to induce the inflammatory response and participates
expression of many key molecules. It in the development of autoimmune
has synergistic activity with many diseases.
other cytokines.
- -------------------------------------------------------------------------------------------------------
Tumor Necrosis Factor TNF is an amino acid protein produced TNF plays a vital role in immune
primarily by macrophages in response modulation, viral replication,
to a wide variety of stimuli. inflammation and septic shock, as well
as numerous other functions. Some of
its biological activities include
inhibition of tumor cell growth,
antiviral effects, and induction of
other cytokines. TNF alone and in
combination with other substances has
been used as a potent antitumor agent.
- -------------------------------------------------------------------------------------------------------
</TABLE>

Antibodies. Antibodies are used as detector systems in the research of
normal and abnormal proteins. Antibodies are molecules generated by a particular
group of immune cells in response to foreign antigens. They have a specific
amino acid sequence by virtue of which they interact only with the antigen that
induced their synthesis. They are classified according to their mode of action.
In vivo, secreted antibodies circulate in the blood and serve as the effectors
of humoral immunity by searching out and neutralizing or eliminating foreign
antigens. Antibodies are also used in vitro for neutralization studies in
bioassay systems. Antibodies are

25
<PAGE> 27

generally produced by injecting a particular antigen into animals (usually
goats, chickens, rabbits or mice) which can cause the animal's immune system to
produce an antibody specific to that antigen.

BioSource makes its own antibodies when it is able to do so. Where the
Company perceives a need for a specific antibody that it is unable to produce
internally, it licenses from a third party a cell line specific to that antibody
(hybridoma cells) which permits the Company to obtain and purify the antibody
from the secretions of the hybridoma cell line. In some cases, the Company will
purchase bulk antibodies directly. The Company believes that the acquisition of
the Medgenix Business will enhance its ability to create antibodies because,
among other things, the Medgenix assets include an animal facility and other
laboratory facilities useful in the production of antibodies. See "Risk
Factors -- Business Acquisition" and "-- Acquisition of Medgenix Business."

The following table illustrates some of the uses for antibodies offered by
the Company:

<TABLE>
<CAPTION>
USES DESCRIPTION
<S> <C>
- ---------------------------------------------------------------------------------------------
Cell Identification Antibodies are used to identify specific cell types by the nature
of the antigens expressed on their surface. The binding of
antibodies to cells or tissue sections can be visualized by
labeling the antibody molecules with a fluorescent dye or
"fluorochrome" and examining it either through a microscope or
with other specialized instruments.
- ---------------------------------------------------------------------------------------------
Flow Cytometry Flow cytometry, a specific cell identification technique, is
becoming an increasingly common means, both in research and
diagnosis, for identifying certain cell types in blood samples. A
mixed cell population is "stained" with one or more antibodies,
specific for each of the surface antigens identifying the cell
type under investigation, using different fluorescent "colors".
The cell mixture is loaded into the flow cytometer and passes
through a beam of laser light that excites the fluorochrome. The
intensity of the fluorescence emitted by each antibody on the cell
surface is monitored by a detector and displayed on an
oscilloscope. The percentage of the cells in the mixed population
expressing the antigens for which the antibodies were specific can
then be enumerated.
- ---------------------------------------------------------------------------------------------
ELISA Uses Antibodies are used by the Company in their ELISA test kits to
detect and measure proteins (antigens) in biological fluids. An
antibody coupled with an enzyme reacts with a colorless substrate
in the presence of a sample containing the antigen of interest to
generate a colored reaction product. The color produced is
proportional to, and thereby indicates the amount of, antigen
present in the sample.
- ---------------------------------------------------------------------------------------------
Immunoblotting Immunoblotting uses antibodies to identify a specific protein in a
complex mixture of proteins. Commonly, a protein of interest is
separated by molecular weight using denaturing agarose gel
electrophoresis. This generates a series of bands each
representing a different protein. The bands are then blotted onto
a nitrocellulose support membrane. Hybridization of the
immobilized protein present on the bands with a labeled antibody
allows for the visual detection of any protein band specifically
recognized by the labeled antibody.
- ---------------------------------------------------------------------------------------------
</TABLE>

ELISA Test Kits. ELISA test kits are a combination of certain cytokines
and their antibodies and other chemical reagents, and are used to measure the
presence or quantity of a particular bioactive protein in serum, plasma or other
biological sample. In a typical ELISA test kit, an antibody is immobilized or
"bound" on a microtiter well of the kit's test plate. A sample containing
antigen is added by the researcher and allowed to react with the bound antibody.
After the well is washed, a second antibody with a specific enzymatic tag is
added and allowed to react with the bound antigen. After washing away any
remaining free antibody, the researcher adds a substrate which produces a
colored reaction. The amount of color is proportional, and thereby indicates the
amount of antigen present, and can be measured even in minute concentrations,
off a standard curve using common laboratory instruments.

ELISA technology is a valuable tool both in research and diagnostic
applications as it provides a relatively inexpensive, accurate and rapid method
of protein quantitation. Prior to the development of ELISA

26
<PAGE> 28

technologies, proteins were measured using cell-based bioassays, in which the
cytokine level in a sample was estimated by observing the experimental sample's
effect on cultured live cells, relative to a standard known effect. These tests
are highly variable, extremely tedious and time consuming. The Company's ELISA
tests produce results in a few hours, compared to days or even weeks with
bioassay. ELISA kits for human as well as other species commonly investigated in
the laboratory (mouse, rat and monkey) have been developed by the Company to
detect immune proteins in body fluids, such as serum or plasma, and in vitro
test samples, such as tissue culture fluids. Detection of fluctuations in
cytokine levels by ELISA tests whether in an in vitro cell culture experiment of
a new drug or in a patient's serum, provide researchers and scientists with
valuable information in understanding disease progression, therapy or diagnosis.

The Company gains a competitive advantage by including two ELISA test
plates in each package, which are generally sold at a comparable price to the
competitor's kits containing a single test plate. The Company currently offers
60 different ELISA test kits which are used in a broad range of biomedical
research, including, research on cancer, infectious disease, organ
transplantation, AIDS, and research by pharmaceutical or biotechnology companies
intended to lead to the development of specific therapeutic drugs. A typical use
of an ELISA test kit may be where a hospital laboratory tests a human sample
taken from a patient who recently received a transplanted organ. If that test
detects an elevated level of Human IL-2 Receptor, it is a clear sign that
infection is present which may lead to a rejection of the organ by that person's
body. Thus, the information is useful to the physician in diagnosing and
treating the patient. Some of the more common applications of ELISA test kits
are illustrated by the following table:

<TABLE>
<CAPTION>
TEST KIT CHARACTERISTICS/APPLICATIONS
<S> <C>
- ---------------------------------------------------------------------------------------------
Interleukin-1B IL-1B is a potent activating cytokine which may be identified in
elevated levels in joint fluid of arthritis patients, in
circulation of Crohn's disease, septic shock and graft rejection
patients and in circulation after exercise. Conversely, in vitro
experiments on blood cells from certain cancer patients have shown
decreased levels of this cytokine. Detection of this cytokine in
fluids appears to be important for monitoring numerous immune
disorders.
- ---------------------------------------------------------------------------------------------
Interleukin-6 IL-6 is an important cytokine which regulates the growth and
differentiation of many cells of the immune system. Abnormal
quantities of IL-6 have been associated with several inflammatory
conditions, including septic shock, traumatic tissue injury,
infectious diseases, arthritis and graft rejection. Since
increased levels of IL-6 generally appear before the acute phase
protein response, it has been suggested as an early detection
parameter of inflammatory events.
- ---------------------------------------------------------------------------------------------
Interleukin-12 Recent findings indicate that IL-12 may be suppressed in AIDS
positive patients. It has been suggested that during monitoring
and treatment of this disease, quantitative levels of this
cytokine may provide more information about the onset and
progression of the disease, thereby providing useful information
for therapy strategies.
- ---------------------------------------------------------------------------------------------
</TABLE>

ACQUISITION OF MEDGENIX BUSINESS

The Company has entered into an agreement to acquire certain assets and
assume selected liabilities of the Medgenix Business. Medgenix is located in
Fleurus, Belgium. Fleurus is located in the southern part of Belgium, in the
Walloon region, approximately 60 miles south of Brussels. The Medgenix assets
consist of certain product lines which are similar to those of the Company,
customer accounts, laboratory and animal facilities, real property leasehold
interests and an existing employee base, all of which are used in the Medgenix
Business. The purchase price for the Medgenix Business is $6.6 million, payable
in cash, and the assumption of certain Medgenix liabilities, which liabilities
were approximately $2.0 million at January 31, 1996. The Company plans to fund
the cash portion of the purchase price of the Medgenix Business from a portion
of the net proceeds of this offering and to close the Medgenix Acquisition
concurrently with the closing of this offering. See "Use of Proceeds." In
addition, BioSource has agreed to pay a royalty of three percent (3%) for a
period of five years on the net sales (as defined in the agreement relating to
such royalties) of certain of the products from the Medgenix Business.

27
<PAGE> 29

The Acquisition Agreement provides for a threshold on indemnification such
that no indemnity is payable to BioSource, on the one hand, or to Medgenix and
Nordion, on the other hand, until the aggregate amount due with respect to
losses incurred exceeds $300,000. All amounts in excess of $300,000 are payable
pursuant to the indemnification provisions. Furthermore, the maximum amount
payable by or on behalf of BioSource to either Medgenix or Nordion, or vice
versa, with respect to any claim under the Acquisition Agreement is limited to
$6 million.

Nordion has agreed that for a period of five years from the closing of the
Medgenix Acquisition neither Nordion nor any of its affiliates will engage in an
in vitro diagnostics business which is substantially similar to or in
competition with the products sold by the Medgenix Business. In addition, for a
period of one year from the closing of the Medgenix Acquisition, Nordion has
agreed that neither Nordion nor its affiliates will interfere adversely between
BioSource and its employees, will induce any employee of the Medgenix Business
to work for or supply confidential information to any third person or will
induce any customer, supplier, or other business relation of the Medgenix
Business to cease doing business with BioSource or otherwise interfere with such
relationship.

The purchase price of $6.6 million to be paid for the Medgenix Business was
determined through an arms-length negotiation between BioSource and Nordion. In
arriving at the amount BioSource was willing to offer for the Medgenix Business,
management considered the book value of the assets of the Medgenix Business, the
historical revenue and losses associated with the operation of the Medgenix
Business, and management's perceived ability to create more profitable operation
of the Medgenix Business as a result of the factors identified above. Management
discounted the book value of the Medgenix Business from that reflected on the
books of Medgenix primarily as a result of its belief that a portion of the
inventory was obsolete and that certain of the accounts receivable were
uncollectible. On the basis of this discount analysis, BioSource offered an
amount it believed approximated the true book value of the Medgenix Business.
Nordion and BioSource then arrived at the actual purchase price through
negotiations. No appraisal or fairness opinion with respect to the Medgenix
Business was obtained.

Medgenix currently manufactures, markets and sells a series of assay test
kits, both radioactive assays and ELISA test kits, as well as a series of
monoclonal and polyclonal antibodies. Medgenix was formed in 1987 and was the
first company in the world to produce a commercial radioimmunoassay for the
measurement of Tumor Necrosis Factor-Alpha. Medgenix currently offers six
radioactive assays and 27 ELISA test kits.

In June 1995, Medgenix introduced an original and novel technique which is
incorporated in its DynaMix product line, and allows an individual to measure
the ability of a certain biological cell type to be stimulated in order to
produce a cytokine, and to simultaneously measure and quantify the amount of
cytokine being produced by that cell. Until now, cytokine production by immune
competent cells has been evaluated following a multistep procedure involving
cell isolation, culture of separated cells in the presence of activators,
followed by measurement of the cytokines in the culture fluid by immunoassay.
This multistep procedure for measuring cytokine production is subject to
artifacts created during isolation of immune cells from blood. Furthermore, it
is time consuming and cannot be automated.

The measurement of cytokine production in whole blood using the DynaMix
immunoassay technology eliminates the problems described above. In addition,
this technology for ex vivo measurement of cytokine production allows for
experiments and approaches which are not possible using traditional
immunoassays. For example, it is known that the specific pattern of cytokine
production is an indicator of relapse in multiple sclerosis ("MS") patients. The
DynaMix assays allow for the tailoring of therapy in individual MS patients by
monitoring the cytokines produced by the immune cells of the blood of MS
patients after the addition of a battery of therapeutic agents.

In addition, the DynaMix technology can be a significant aid in the
discovery of new drugs by pharmaceutical and biotechnology companies. Briefly,
the measurement of cytokine production by whole blood in the presence of
candidate drugs to treat AIDS, cancer, arthritis and autoimmune diseases, among
others, is a more accurate indicator of the drug's effect than experiments on
isolated cells in tissue culture or experiments on animals. Upon consummation of
the Medgenix Acquisition, the Company will acquire the European patent on the
DynaMix technology. A patent is pending in the United States.

28
<PAGE> 30

Medgenix currently targets biomedical research laboratories as well as
certain clinical diagnostic laboratories for selected test kits. Their marketing
efforts utilize direct sales representatives, both in Belgium and through a
series of wholly owned subsidiaries in various countries throughout Europe,
while maintaining distribution primarily from their main location in Fleurus,
Belgium. Medgenix has a strong marketing program with trade show attendance,
medical journal advertisement and an extensive customer list.

BioSource believes that the Medgenix Acquisition will provide the Company
with a number of strategic advantages, which will not only enhance the Company's
existing business but will enable the Company to reverse Medgenix' recent
history of unprofitable operations. Among these advantages are the following:

- In addition to converting a European competitor into an ally, the
Medgenix Acquisition will enable BioSource to incorporate several
new products into its product lines for both the U.S. and European
markets. These products include certain assays, ELISA test kits and
a number of monoclonal and polyclonal antibodies that BioSource does
not currently offer. Moreover, the Company immediately will be able
to expand its product lines by adding Medgenix' DynaMix test system.
The Company also intends to explore the expansion of the present use
of the DynaMix patented technology to certain cytokines and ELISA
test kits that BioSource produces.

- BioSource believes that its own sales force can market Medgenix'
products to the same customer base of research laboratories and
specialized clinical laboratories in the United States that purchase
BioSource's products and that a substantial increase in Medgenix'
sales should result. This belief is based on the Company's
assessment that Medgenix' relatively low sales volume in the United
States is a consequence of Medgenix' current distributor targeting
routine diagnostic laboratories, customers who may be appropriate
for the distributor's other products, but whom the Company believes
are inappropriate for Medgenix' ELISA test kits and antibodies that
are used in research.

- The Medgenix Acquisition will not only permit BioSource to use its
direct sales force for Medgenix' products in the United States, but
to use Medgenix' direct sales forces for BioSource's products in
Europe, particularly in Germany, which has historically accounted
for the largest volume of the Company's international sales, and
France, where the Company believes a substantial market opportunity
exists but has had disappointing sales through distributors. The
greater utilization by BioSource and Medgenix of their direct sales
forces and the corresponding reduction by them of sales through
distributors should also increase the gross margins of the
consolidated Company as the Company recognizes greater revenue from
direct sales.

- The Company intends to manufacture its products at the most
efficient site or sites and thereby reduce costs associated with
transporting the products to customers in the United States and
Europe and improve customer service. The Company plans to
manufacture oligonucleotides which it has historically sold to
European customers through Medgenix' operations and from that
expects to enjoy cost savings and improved margins for this product
line.

- BioSource can concentrate the utilization of available resources.
The Company already perceives a major opportunity for furthering its
operating synergies by utilizing Medgenix' research and development
facilities to enhance its product development. Moreover, the Company
believes that Medgenix' facilities may be more effectively used to
produce antibodies, while the Company's facilities could be used to
make cytokines, thus utilizing the most efficient resources for
certain types of production.

- Management believes that the Company's historic sensitivity to
employee morale and its accepted business strategy of seeking to
create a team spirit, fostering communication between management and
employees regarding business goals and rewarding meritorious
performance will generate the same esprit de corps among Medgenix'
employees as now exists at BioSource, and that this will translate
into greater product quality and enhanced customer service at
Medgenix.

Management's assessments of, and beliefs in, the advantages to the Company
of the Medgenix Acquisition and its plans to realize such advantages, are
forward looking. For a discussion of the risks to the Company involved in the
Medgenix Acquisition, risks that could prevent the Company from realizing any

29
<PAGE> 31

advantages from it or cause the Company to suffer as a result of it, see "Risk
Factors -- Business Acquisition."

The Medgenix Business also includes test kits which are radioimmunoassays
("RIAs"). Sales of RIAs comprise approximately 40% of Medgenix' sales in Europe
and the Company plans to continue to sell RIAs in Europe. However, because this
market is a declining one in the United States, BioSource may elect not to
market these particular products in the United States and either discontinue
their use or utilize a distributor on an OEM basis to supply these products in
the United States. The Company believes that the complete loss of this product
line in the United States would not have a material impact on the Medgenix
Business.

BioSource anticipates that the acquisition of the Medgenix Business will
require a significant amount of financial and management resources due to the
travel between California and Europe which will be required of certain members
of the management team. A substantial amount of management time, including that
of James H. Chamberlain, BioSource's Chairman of the Board, President and Chief
Executive Officer, is expected to be required in the early stages following the
Medgenix Acquisition. In addition, the Company expects to incur significant
expense initially as a result of the consolidation of the research and
development activities of the two companies.

RESEARCH AND DEVELOPMENT

General

The Company funds its own research and development costs. BioSource has
historically focused its research and development on the creation of new and
unique ELISA test kits. The Company spent $721,902 and $1.1 million on research
and development during 1994 and 1995, respectively.

Commencing in 1994, BioSource began to dramatically expand its research and
development efforts, and to focus its efforts in the area of molecular biology.
The Company's molecular biology group is now focusing its efforts on cloning and
expressing rat cytokine genes. This effort involves the use of recombinant DNA
technology to produce certain proteins which will be unique internally produced
cytokines. In addition, the Company has begun to develop a group of new products
which will build upon its current antibody product line. This includes, but is
not limited to, labeled anti-cytokine antibodies for intracellular staining
(flow cytometry) and antibody coupled magnetic beads for cell separation.

New Product Development

The Company intends to use up to $1.0 million of the proceeds of this
offering for the research and development of products in the area of molecular
diagnostics. Management believes that the Company is well-positioned to take
advantage of recent advances in genetic sequencing and molecular biology which
are leading to novel methods for rapidly diagnosing infectious and human genetic
diseases.

BioSource plans to target the oncology market by providing tests for cancer
markers using several technologies, including gene amplification, mutation
detection and fluorescent in situ hybridization. This effort will require the
expertise of individuals in the ELISA development and molecular biology
departments, as well as requiring additional staffing and equipment in both
these areas. The Company hopes to create assay kits which will initially be sold
to research laboratories which combine quantitative PCR and ELISA technologies
to detect various targets in immunocompromised patients and specific nucleic
acid targets in cancer patients. If clinical utility is established, BioSource
intends to seek FDA approval to sell these kits as diagnostic products.

Specifically, the Company plans to develop a test that combines two
technologies, quantitative PCR and ELISA technologies, to detect cancer cells in
humans that have spread to the bone marrow. Initial research and development
efforts at BioSource, which should last for approximately six months, will focus
on the optimization of detection of certain markers in samples which will serve
as surrogates of bone marrow aspirates from breast cancer patients. Once an
assay has been fully optimized, the assay will be evaluated by various medical
centers over a period of approximately four months for its efficacy on true bone
marrow aspirates. Once efficacy on these bone marrow samples has been
established, BioSource will seek pre-market approval from the FDA to engage in
clinical studies to validate the use of the assay. The clinical studies will be
conducted in a number of research centers on clinical samples obtained from a
large number of cancer

30
<PAGE> 32

patients. The clinical studies will occur over a period of approximately six
months. The data generated from these clinical studies will then be submitted to
the FDA to determine if the assay can be marketed for in vitro diagnostic use.
Typically, the FDA reviews such applications, and if appropriate, issues
marketing approval for such products in a three to six month period.

SALES AND MARKETING

The Company's sales force hold biological sciences undergraduate degrees
and undergo training in the nature and application of BioSource's products and
proven selling techniques. BioSource believes that by investing in the
scientific training of its sales force, it is able to determine the needs of
researchers and scientists in the biomedical community. Its sales force is used
not only as a traditional marketing branch of the Company, but also to provide
valuable feedback for the Company's product development.

The principal markets for BioSource products are in the United States,
Japan and Western Europe. Domestic sales accounted for approximately 75% and 73%
of total revenue for the years ended December 31, 1994 and 1995, respectively.
International sales accounted for the balance of total revenues during these
periods. Because of Medgenix' stronger position in Europe, the acquisition of
the Medgenix Business is expected to result in an increase in the Company's
consolidated revenue in future periods from international sales. See "Risk
Factors -- Business Acquisition" and "Risk Factors -- International Sales."
Domestic sales are achieved through the use of a direct sales force
strategically located in major metropolitan areas in the United States,
advertising in various scientific trade journals and catalog distribution to all
current and potential customers. The use of a direct sales force also provides
the Company with an opportunity to discuss directly with researchers and
scientists new developments and trends in the industry. The international
markets are serviced through the use of highly respected international
distributors which specifically target the foreign medical market, advertising
and catalog distribution.

Marketing. BioSource has a comprehensive and integrated marketing program
which utilizes advertisements in key journals, direct mail, trade show exhibits,
press releases, and other forms of advertisement to provide exposure to
potential end users of BioSource products. Currently, the Company is advertising
in scientific journals and through direct mail campaigns.

The Company's journal advertisements emphasize BioSource's innovative
products and attempt to depict pictorially its competitive strengths. For
example, the "think twice" advertisements focus on innovative ELISA test kits
and illustrate the fact that each BioSource kit gives double the number of
assays than competitor kits at about the same price, while providing superior
kit specifications. Other BioSource advertisements emphasize new, internally
developed products which would be of interest to a large number of end users.

The Company generally uses direct mail to support a new product launch. The
direct mail campaign is coordinated with advertisement programs in an effort to
achieve maximum product exposure. The Company's direct mail literature is
targeted to specific end user groups believed to have the highest potential for
immediate purchase of the specified product.

In 1996, BioSource expects to appear at several major trade shows and local
institutional shows. The Company selects trade shows in which to appear on the
basis of the scientific discipline sponsoring the show, expected attendance and
historical performance of a show in delivering quality sales leads.

Sales. BioSource effects sales to end users domestically through a direct
sales force and internationally through a network of distributors. Domestic
sales are made through several field territories with a direct sales
representative located in the east, midwest and western parts of the United
States. Each representative is responsible for the maintenance of existing
accounts as well as the generation of new business. Representatives are paid a
base salary and commissions. The commissions are based upon sales growth over
previous years' sales levels.

The Company requires that all field representatives have a degree in a
biological science, and either molecular or immunological laboratory research
experience. This laboratory experience allows them to understand end user
applications and match BioSource product benefits to specific needs. All
representatives

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<PAGE> 33

are required to attend professional selling skills courses and, in most cases,
are given supplemental selling skills training each year at the Company's
expense. The Company monitors sales performance on a weekly basis in an effort
to ensure the quality and quantity of customer contacts.

BioSource's network of international distributors covers 25 countries.
Distributors can be exclusive or non-exclusive, but BioSource generally grants
exclusive distribution rights only where the distributor maintains direct field
representatives proportionate to the potential for BioSource product sales in a
defined geographical area, and is subject to mutually acceptable annual sales
goals. All BioSource distributors are required to limit their primary sales
focus to the biomedical research market. BioSource employs an international
sales manager who is responsible for all aspects of international sales,
including the addition of new distributors, the negotiation of contracts,
establishing sales goals, determining transfer pricing levels, and in-field
visits for new product training and support of marketing programs. The Company
offers all of its distributors annual training to enhance their knowledge of
product applications, solicit requests for new products and ultimately to
increase sales.

MANUFACTURING

The Company's reagent products and ELISA test kits are manufactured by
technicians in laboratories housed in its 27,000 square foot facility located in
Camarillo, California, approximately 50 miles northwest of Los Angeles. The
Company's oligonucleotides are manufactured at its Keystone subsidiary in Menlo
Park, California, approximately 30 miles south of San Francisco. The Company
recently completed an interior renovation to its Camarillo facility in order to
use more efficiently 10,000 square feet of existing space. The facility
currently has three labs, including a molecular biology lab, a protein
purification lab, and an assay development and manufacturing lab, and ELISA
development and manufacturing space and cold storage rooms sufficient to
accommodate the Company's current and projected needs.

Labeling, packaging, and shipping is carried out independently at each
facility. The Company's packaging components are purchased from outside
suppliers, and are custom designed by the Company. The Company believes there
are numerous available suppliers for its packaging components. As part of the
renovation, the Company plans to increase packaging capacity at its Camarillo
facility.

AVAILABILITY OF RAW MATERIALS

The principal raw materials for the oligonucleotides manufactured by the
Company are the nucleotides that comprise DNA which are available from numerous
sources. The Company's oligonucleotides are used to make genes. Genes are then
used to make some cytokines, which are in turn used to make antibodies. The
Company also purchases some cytokines and antibodies. ELISA test kits are
manufactured from antibodies, proteins, enzymes and various buffers, and utilize
plastic test well plates. The Company develops most of its cell lines
internally, and obtains licenses to various cell lines that are necessary to the
manufacture of key components of its product lines, on an as needed basis. The
Company believes that it maintains adequate supplies of materials on hand to
allow it to continue to manufacture products and meet customer demand, and that
those materials that it does not produce internally are readily available from
multiple sources.

COMPETITION

The Company is engaged in a segment of the health care products industry
that is highly competitive. The Company's primary competitors include major
pharmaceutical, chemical and biotechnology companies, such as Endogen, Inc.,
Techne Corporation, Genzyme Corporation, Southern Biotechnology, Jackson Labs,
Dako Corporation and Genosys Biotechnologies. Many of its competitors have been
involved in the health care industry significantly longer than BioSource and
benefit from greater name recognition. In addition, many of these companies have
greater resources to devote to research and development, sales and marketing and
engage in significant price cutting measures to achieve leadership in their
field. BioSource believes that by offering a very broad and complete product
line which enables the end user to obtain many of its product needs from one
source it gains a competitive advantage. In addition, BioSource competes by
producing high quality products with exacting capabilities at reasonable prices,
and by maintaining an aggressive marketing and sales effort. BioSource believes
that the biomedical research market is highly fragmented, and that neither
BioSource nor any of its competitors has a dominant share of any of the market
segments. Upon

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<PAGE> 34

consummation of the Medgenix Acquisition, BioSource anticipates that it will
achieve greater name recognition in Europe, will increase its marketing and
sales efforts and will obtain a larger share of the market in the European
community. See " --Acquisition of Medgenix Business," "Risk Factors -- Business
Acquisition" and "Risk Factors -- Competition."

CUSTOMERS

The Company has over 1,700 customers worldwide exclusive of the customers
of its distributors. No single customer accounted for 10% or more of the
Company's total revenue for the year ended December 31, 1995. The Company's
customers include:

<TABLE>
<CAPTION>
GOVERNMENT
PHARMACEUTICAL BIOTECHNOLOGY UNIVERSITIES INSTITUTIONS
- ---------------------- ---------------- ------------------------- ----------------------
<S> <C> <C> <C>
Bristol Meyers Squibb Amgen Duke University Centers for Disease
Pfizer Inc. Cell Genesys Johns Hopkins University Control
Schering-Plough Chiron University of Alabama FDA
Research Institute Genelabs University of Miami National Cancer
Smith Kline Beecham Technology University of Texas MD Institute
Upjohn Company Neurocrine Anderson National Institutes of
Biosciences Health
VA Medical Centers
</TABLE>

PATENTS AND TRADEMARKS

The Company does not own any patents and does not believe that patent
protection is available for any of its processes. The Company licenses a number
of products from companies that are incorporated into certain BioSource products
resulting in BioSource receiving quasi or derivative patent protection therefor.
Upon consummation of the Medgenix Acquisition, BioSource will acquire certain
United States and European Patents including those on the DynaMix product line.
See "-- Acquisition of Medgenix Business."

The Company claims "TAGOImmunologicals," "CYTOscreen," and "PRIMESCREEN" as
trademarks, although the Company believes such trademarks are of limited
importance to its business. The Company has generally sought to protect its
interests by treating its technologies and know how as trade secrets and by
requiring all employees to execute invention and assignment agreements with the
Company, including confidentiality provisions. The Company believes that its
processes can only be understood from direct observation and are not
ascertainable by examination of the end product. However, there can be no
assurance that others will not independently develop the same or similar
information, obtain unauthorized access to the Company's proprietary information
or misuse information to which the Company has granted access.

GOVERNMENT REGULATION

Approval by the FDA is not required for the sale of any of the Company's
products because the products are marketed and sold for research use only.
Therefore, the Company's research products are not currently required to comply
with the lengthy FDA approval process associated with diagnostics or
therapeutics. The Company is subject to governmental regulations under the
Occupational Safety and Health Act, the Environmental Protection Act, the Toxic
Substances Control Act, and other similar laws of general application, to all of
which the Company believes itself to be in material compliance.

In the event the Company develops products for the diagnostic market, it
may be required to obtain FDA approval prior to selling them. Such approval, if
required, would be time consuming and costly. In such event, the Company would
also be subject to the FDA Good Manufacturing Practices which include testing,
control and documentation requirements enforced by periodic site inspections.
See "Risk Factors -- New Product Development; Government Regulation."

EMPLOYEES

As of April 30, 1996, the Company employed 64 individuals, of which 61 are
full-time employees. Nine of the Company's employees at that date held Ph.Ds. At
April 30, 1996, Medgenix employed 89 individuals in the Medgenix Business.

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<PAGE> 35

DESCRIPTION OF PROPERTIES

The Company's executive offices and manufacturing facilities, consisting of
approximately 27,000 square feet located on 63,162 square feet of land, are
located in Camarillo, California. The Company purchased this property on March
28, 1996 and owns it subject to a first trust deed mortgage (the "First
Mortgage") which was made by the lender pursuant to the Small Business
Administration's Loan Guarantee Program. At the date of purchase, the First
Mortgage had an outstanding balance of $745,000 and is due on April 1, 2006. The
principal amount of the loan is being amortized over twenty years. Pursuant to
the First Mortgage, the Company is obligated to make monthly payments of $6,895,
which includes interest at 9.4% per annum. Yield maintenance charges will be
assessed on any prepayment of the principal amount of the loan which results in
a loss to the lender due to a decrease in the interest rate. The balance due at
maturity, assuming no prepayments by the Company, will be $535,178.

The property is subject to a second trust deed loan (the "Second Mortgage")
with the California Statewide Development Corp. with an outstanding principal
balance of $616,000 as of the date of sale of the debenture which is scheduled
for funding by June 10, 1996. The Second Mortgage is subject to a fixed rate of
approximately 7.75% per annum, payable and amortized over a period of 20 years,
due approximately June 1, 2016, with estimated monthly payments of principal and
interest of $5,057.

As of May 13, 1996 there is a bridge loan in the amount of $596,000 payable
to the holder of the First Mortgage, subject to a fixed rate of 9.75%. The
bridge loan will be funded upon the sale of the debenture underlying the Second
Mortgage by the California Statewide Certified Development Corporation.

Payments by the Company under the First Mortgage and the Second Mortgage
are unconditionally guaranteed by James H. Chamberlain, Chairman of the Board of
the Company.

The Company recently renovated the Camarillo facilities to provide for
additional ELISA development and manufacturing, additional office space and
additional refrigerated storage space for inventory.

The Company also leases facilities in Menlo Park, California which consist
of approximately 1,491 square feet of laboratory space. The lease commenced on
May 1, 1993 and is a 5 year lease which expires on April 30, 1998. The lease
provides for monthly rental payments of approximately $1,148.

The Company believes that its facilities are adequately covered by
insurance and, when renovated, will be adequate for its reasonably foreseeable
needs.

LEGAL PROCEEDINGS

The Company is not involved in any material legal proceedings.

34
<PAGE> 36

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The current directors, executive officers and key employees of the Company
are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------ --- ------------------------------------------
<S> <C> <C>
James H. Chamberlain...................... 48 Chairman of the Board, President and Chief
Executive Officer
Anna M. Anderson.......................... 40 Chief Financial Officer, Executive Vice
President -- Finance
Gus E. Davis.............................. 48 Chief Operating Officer, Executive Vice
President -- Sales and Marketing
Leonard M. Hendrickson*................... 48 Director
David J. Moffa, Ph.D.*.................... 53 Director
John R. Overturf, Jr...................... 35 Director
Robert D. Weist........................... 56 Director
Key Employees
Madelyn Baran, Ph.D. ..................... 45 Vice President -- Business Development
Richard Buford............................ 48 Vice President -- Human Resources
Cirilo D. Cabradilla, Jr., Ph.D. ......... 48 President -- Keystone Subsidiary
</TABLE>

- ---------------
* Member of the Compensation and Audit Committees.

JAMES H. CHAMBERLAIN has served as Director, President and Chief Executive
Officer of the Company and its predecessor, BioSource Industries, Inc., since it
was founded in October 1989, and was elected as its Chairman of the Board in
November 1993. Previously, Mr. Chamberlain was Manager for Business Development
for Amgen, Inc., where he started and managed the Amgen Biologicals Division.
Mr. Chamberlain has held various executive positions with Browning Ferris
Industries and Amersham Corporation, a biomedical company, and was a research
biochemist for Wm. H. Rorer Pharmaceutical, a major pharmaceutical company. He
received his Bachelor of Arts degree from West Virginia University and studied
biochemistry at the University of Pittsburgh.

ANNA M. ANDERSON became Executive Vice President -- Finance and Chief
Financial Officer of the Company in 1994 and has served as corporate controller
and Chief Accounting Officer of the Company and its predecessor, BioSource
Industries, Inc., since June 1991. Prior to that time, since January 1984, Ms.
Anderson was employed in financial and accounting positions with El Camino
Management Company, Mulford and Tignino Accountancy Corporation, Brickman &
Brickman, Certified Public Accountants, and Temkin, Zisken, Kahn and Matzner,
Certified Public Accountants. Ms. Anderson is a Certified Public Accountant and
holds a Bachelor of Science degree in Business Administration from California
State University, Northridge.

GUS E. DAVIS became Executive Vice President -- Sales and Marketing and
Chief Operating Officer of the Company in June 1995. From February 1994 until
June 1995, Mr. Davis served as Vice President of Sales and Marketing of the
Company. Prior to that time, since February 1993, Mr. Davis was employed as Vice
President of Sales and Marketing at Genosis BioTechnology, a company engaged in
the manufacture of oligonucleotides. From January 1983 to January 1993, Mr.
Davis was employed as the Midwestern Area Manager for Pharmacia BioTechnology, a
company involved in the sale of reagents and capital equipment used to purify
samples. Mr. Davis received his Bachelor of Science and Masters degree in
Biology and Chemistry from Sam Houston State University.

LEONARD M. HENDRICKSON has been a Director of the Company since October
1993. Mr. Hendrickson is the President of Isotope Products Laboratories, a
privately held company, a position he has held since February 1992. From
February 1990 to January 1992, Mr. Hendrickson served as the principal
consultant for Microchemics, a marketing and business development consulting
firm which he founded. Prior to that time,

35
<PAGE> 37

Mr. Hendrickson served as the Director of Marketing for Scicor, a diagnostics
laboratory in Indianapolis, Indiana, and held various executive positions with
Amersham Corporation. Mr. Hendrickson has also held positions with Marion
Laboratories, a pharmaceutical company, and Standard Oil Company. Mr.
Hendrickson holds a Bachelor of Science degree from the University of
Pennsylvania and a Masters in Business Administration from American University
in Washington D.C.

DAVID J. MOFFA, PH.D., has been a Director of the Company since April 1995.
Dr. Moffa serves: as the Regional Director and as special projects director for
Lab Corporation of America, Inc. (Fairmont, WV), positions he has held since
1982 and 1984, respectively; as Director of Medical Arts Lab/RBL, a position he
has held since 1985; and as Director of Lab Corporation of America, Inc.
(Altoona, PA), a position he has held since 1990. Dr. Moffa also serves as an
advisor and consultant to various diagnostic, scientific and health care
facilities, and is an owner and developer of GM Realty and Moffa Properties.
Prior to serving in his current positions, Dr. Moffa has served as a Director
and General Manager of BioMedical Reference and Roche BioMedical Labs, as
President, Chief Executive Officer and a Director of BioPreps Laboratories,
Inc., as Assistant Professor of Medical Biochemistry and Director of Dental
Biochemistry Programs at the West Virginia University School of Medicine, as NIH
Post Doctoral Fellow and Instructor in Medical Biochemistry as well as a
Graduate Research Assistant at the West Virginia University School of Medicine.
Dr. Moffa also serves on a number of committees and boards of directors of
various privately held companies and governmental offices. Dr. Moffa has
completed a post doctoral fellowship in Clinical Biochemistry at the West
Virginia University National Institutes of Health, holds a Ph.D. in Medical
Biochemistry from the West Virginia University School of Medicine, a Masters of
Science degree in Biochemistry from West Virginia University and a Bachelor of
Arts degree in Pre-Medicine from West Virginia University.

JOHN R. OVERTURF, JR. has been a Director of the Company since September
1993. Mr. Overturf serves: as the President of R.O.I., Inc., a private
investment company, a position he has held since July 1993; and as Vice
President of The Rockies Fund, Inc., a closed-end stock market fund, a position
he has held since September 1993. From June 1984 until February 1992, Mr.
Overturf served as Vice President of Colorado National Bank. Mr. Overturf holds
a Bachelor of Science degree in Finance from the University of Northern
Colorado.

ROBERT D. WEIST became a Director of the Company, effective April 5, 1996.
Mr. Weist has been President of Weist Associates (a management consulting firm)
since April 1992. From January 1986 through April 1992, Mr. Weist was a
consultant to and Senior Vice President, Administration, General Counsel and
Secretary of Amgen, Inc., having served as Vice President, General Counsel and
Secretary from March 1982 through January 1986. Mr. Weist holds a Juris Doctor
degree from New York University and a Masters in Business Administration from
the University of Chicago.

KEY EMPLOYEES

The Company also considers the following individuals to be key to its
operations.

MADELYN BARAN, PH.D. has been Vice President of Business Development of the
Company since October 1994 and has also served as Vice President of Assay
Development since April 1993. Prior to that time, since January 1992, Dr. Baran
was a consultant to Orion, a European health care concern, where she managed the
research and development and quality control departments of Photest Diagnostics,
Inc., an in vitro diagnostics company, which was acquired by Orion in 1992. From
December 1988 to December 1991, Dr. Baran was employed as Vice President of
Research and Development of Photest Diagnostics, a company involved in the
manufacture of chemistry tests and immunoassays. Dr. Baran has also held various
research and development and technology management positions at BioRad
Laboratories and Becton Dickinson Company. Dr. Baran received a Bachelors of
Arts in Biology from Emmanual College and a Ph.D. in genetics from Cornell
University.

RICHARD BUFORD became Vice President of Human Resources of the Company in
February 1993. From 1989 to December 1992, Mr. Buford served as Vice President
of Operations of Office Mart. Mr. Buford received a Bachelors of Arts and a
Masters degree in English from University of California at Santa Barbara.

36
<PAGE> 38

CIRILO D. CABRADILLA, JR., PH.D. became President of the Keystone
subsidiary in November 1995. From 1992 to 1995, Mr. Cabradilla served as
President of Keystone. Prior to that time, from 1988 to 1992, Mr. Cabradilla was
Vice President, Product Development, of Vasocor, a pharmaceutical company. Mr.
Cabradilla received a Bachelor of Science and a Ph.D. degree in Biochemistry
from the University of California at Davis.

SCIENTIFIC ADVISORY BOARD

The Company has established a group of scientists and other physicians to
provide advice with respect to its research and development programs and new
technological advances. All members of the Scientific Advisory Board are
employed by employers other than the Company and may have commitments to or
consulting or advisory agreements with other entities that may limit their
availability to the Company. The members of the Scientific Advisory Board meet
twice a year. Each member receives $500 per meeting and an option to purchase
10,000 shares of common stock upon appointment to the Scientific Advisory Board.

VINAY KUMAR, M.D. Dr. Kumar is associated with the University of Texas,
Southwestern Medical School, where he is Professor of Pathology.

KENNETH LANDRETH, PH.D. Dr. Landreth is associated with West Virginia
University, where he is Associate Professor of Immunology and Pediatrics.

RICHARD SCHEUERMAN, PH.D. Dr. Scheuerman is associated with the University
of Texas, Southwestern Medical School where he is Associate Professor of
Pathology.

EXECUTIVE COMPENSATION

The following table sets forth both cash and noncash compensation paid or
accrued by the Company during 1993, 1994 and 1995 with respect to James H.
Chamberlain, Chief Executive Officer and President of the Company, the only
executive officer whose salary and bonus exceeded $100,000 during 1995, Gus E.
Davis, Chief Operating Officer and Executive Vice President, and Anna M.
Anderson, Chief Financial Officer (together, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL NUMBER OF
COMPENSATION SECURITIES
YEAR ENDED ------------------ UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION DECEMBER 31, SALARY BONUS OPTIONS(1) COMPENSATION
- --------------------------------------- ------------ -------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
James H. Chamberlain................... 1995 $129,000 $15,000 100,000 $ 720(2)
Chairman of the Board, 1994 110,000 47,518 -- 720(2)
Chief Executive Officer 1993 85,000 -- 100,000 720(2)
and President
Gus E. Davis........................... 1995 $ 81,000 $13,000 55,000 $3,600(3)
Chief Operating Officer 1994 64,000 -- 10,000 3,300(3)
and Executive Vice 1993 -- -- -- --
President
Anna M. Anderson....................... 1995 $ 80,000 $ 9,000 25,000 --
Chief Financial Officer 1994 69,000 -- -- --
1993 55,000 -- 50,000 --
</TABLE>

- ---------------
(1) See "Stock Option Grants," below.

(2) Consists of country club membership dues paid by the Company.

(3) Consists of a car allowance paid by the Company.

37
<PAGE> 39

STOCK OPTION GRANTS

The following table sets forth information regarding stock options granted
in 1995 to the Named Executive Officers.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EXERCISE OR
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED(1) FISCAL YEAR(2) ($/SH.)(3) DATE
- -------------------------------------------- ---------- --------------- ----------- ----------
<S> <C> <C> <C> <C>
James H. Chamberlain,....................... 100,000 18.6% $ 1.50 1/23/05
Chairman of the Board, Chief Executive
Officer and President
Gus E. Davis................................ 30,000 10.2% $ 1.688 5/31/05
Chief Operating Officer and Executive 25,000 1.50 1/23/05
Vice President
Anna M. Anderson............................ 25,000 4.6% $ 1.50 1/23/05
Chief Financial Officer
</TABLE>

- ---------------
(1) Options granted in 1995 are fully vested upon grant, except for the grant of
25,000 incentive stock options to Gus Davis which vest over a four year
period. The options were granted for a term of ten years.

(2) Options covering an aggregate of 539,000 shares were granted to employees of
the Company and its subsidiaries during the year ended December 31, 1995.

(3) The exercise price and the tax withholding obligations related to exercise
may be paid by delivery of already owned shares, subject to certain
conditions.

STOCK OPTIONS

The following table summarizes information with respect to the number of
shares of Common Stock underlying stock options held by the Named Executive
Officers at December 31, 1995 and the value of unexercised options at December
31, 1995 based upon the closing price of the Common Stock on the Nasdaq Small
Cap Market on December 29, 1995 ($5.6875 per share) less the exercise price
thereof. None of the Named Executive Officers exercised any options during 1995.

AGGREGATED YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1995 DECEMBER 31, 1995
----------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
James H. Chamberlain(1).................... 212,500 -- $ 801,468 $ --
Chairman of the Board, Chief Executive
Officer and President
Gus E. Davis............................... 32,708 32,292 $ 131,462 $ 135,566
Chief Operating Officer and Executive
Vice President
Anna M. Anderson........................... 67,708 19,792 $ 284,423 $ 72,983
Chief Financial Officer
</TABLE>

- ---------------
(1) Since December 31, 1995, an option to purchase 137,500 shares of Common
Stock was granted at an exercise price of $5.25 per share to Mr.
Chamberlain.

38
<PAGE> 40

DIRECTOR COMPENSATION

Directors are elected annually to serve until the next annual meeting of
stockholders and until their successors are elected and qualified. Nonemployee
directors of the Company currently are paid $1,000 for each Board meeting
attended. The Company pays all out-of-pocket fees of attendance. In addition,
non-employee directors have received an annual grant of 10,000 non-statutory
stock options under the Company's 1993 Stock Incentive Plan, exercisable at the
fair market value of the Company's Common Stock on the date of grant, and which
fully vest on the date of grant. Pursuant to an amendment to the 1993 Plan
adopted by the Company's Board of Directors on April 5, 1996, after 1996, such
annual grants will be reduced to 4,000 non-statutory options.

STOCK INCENTIVE PLAN

In addition to the 1993 Stock Incentive Plan (the "1993 Plan"), the Company
has in effect the stock option plan of the Company's predecessor, the BioSource
Industries, Inc. 1992 Stock Incentive Plan (the "Predecessor Plan"), and has
granted non-statutory stock options outside of the 1993 Plan and the Predecessor
Plan to purchase an aggregate of 255,000 shares of the Company's Common Stock.
The Predecessor Plan, which was adopted by the Company's predecessor's Board of
Directors and stockholders, provides for the issuance of options to employees,
officers and, under certain circumstances, directors of the Company. The Board
of Directors has suspended all issuances under the Predecessor Plan;
consequently, there are no shares available for issuance pursuant to the
Predecessor Plan.

The 1993 Plan provides for the issuance of options and stock purchase
rights (together, "Rights") to employees, officers and, under certain
circumstances, directors of the Company. Options granted under the 1993 Plan may
be either Incentive Stock Options or Non-Qualified Stock Options. The 1993 Plan
imposes no limit on the number of officers and other key employees to whom
awards may be made. At April 1, 1996, approximately 70 persons were eligible to
receive Rights under the 1993 Plan. An aggregate of 1,500,000 shares of the
Company's Common Stock are reserved for issuance under the 1993 Plan. On April
5, 1996, the Board of Directors of the Company adopted an amendment to the 1993
Plan increasing the number of shares of Common Stock reserved for issuance
thereunder from 750,000 shares to 1,500,000 shares. The amendment requires the
approval of the Company's stockholders which will be sought by the Company at
its 1996 Annual Meeting of Stockholders to be held in July 1996. The
exercisability of all options granted pursuant to the 1993 Plan, as amended, is
conditioned upon the receipt of such stockholder approval. At April 1, 1996,
27,500 options were outstanding under the Predecessor Plan, 10,000 shares had
been issued upon exercise of options granted under the Predecessor Plan, 893,897
options were outstanding under the 1993 Plan, 30,290 shares had been issued upon
exercise of options granted under the 1993 Plan and 255,000 options were
outstanding outside of the 1993 Plan and the Predecessor Plan.

STOCK PURCHASE PLAN

The BioSource Employee Stock Purchase Plan (the "Employee Purchase Plan")
was adopted by the Company's Board of Directors on April 7, 1995. The Employee
Purchase Plan covers an aggregate of 300,000 shares of the Company's Common
Stock, which will be shares purchased in the open market. Such shares may be
acquired by participants through quarterly offerings, as determined by the Board
in its discretion. All full-time employees of the Company or any of its
subsidiaries who are at least of the legal age of majority in their state of
residence, and who are not executive officers of the Company, shall be eligible
to participate in the Employee Purchase Plan for so long as they remain employed
by the Company or any of its subsidiaries.

All contributions by participating employees are by payroll deduction.
Payroll deductions may not be less than twenty dollars ($20.00) per individual
per pay period. There is no maximum limitation on the amount of payroll
deductions for any participating employee. Payroll deductions must be in whole
dollar amounts only and once commenced shall remain in effect for a period of at
least twelve (12) months absent a showing of special circumstances which, in the
opinion of the Company, shall warrant a change in the deduction authorization.
Non-participating employees who are eligible or become eligible may execute
payroll deduction authorizations at any time. Participating employee
contributions shall be remitted quarterly to the Custodian

39
<PAGE> 41

appointed by the Company to act as financial agent (the "Custodian"). A
participating employee may withdraw from participation in the Employee Purchase
Plan at any time by signing a withdrawal notice.

The Company may, at the discretion of the Compensation Committee of the
Board of Directors, contribute to the Employee Purchase Plan and deposit with
the Custodian with respect to each participating employee, immediately prior to
the quarterly purchase of the shares, an amount equal to 50 percent of the
participating employee's quarterly contribution, up to four percent of the
participating employee's Base Compensation. The participating employee's "Base
Compensation" means the participating employee's salary or regular straight time
earnings excluding payments for overtime, bonuses, incentive compensation and
other special payments. Such Company contributions when made shall be applied to
the quarterly purchase of shares of the Company's Common Stock pursuant to the
provisions of the Employee Purchase Plan for allocation to each participating
employee.

Upon remittance of the participating employees' contributions to the
Custodian by the Company, the funds are placed in an interest bearing account
entitled "BioSource International, Inc. Employee Stock Purchase Plan." The
interest earned on funds deposited into this account with the Custodian are used
to pay the charges of the Custodian and all costs of maintaining records and
executing transfers. To the extent that the Custodian's charges and expenses of
administering the Employee Purchase Plan exceed the interest earned on the
participating employee's contributions deposited with the Custodian, the Company
pays the expenses of the Employee Purchase Plan.

Before the close of business on the third business day following the public
announcement of the Company's quarterly earnings, the Company will remit to the
Custodian the total of all unremitted deductions and the Company contributions
to be made under the Employee Purchase Plan with respect to the previous
quarter. On behalf of each participating employee, the Custodian applies the
funds contributed by such employee and the funds contributed by the Company on
behalf of such employee, separately, to purchase that number of full shares of
the Company's Common Stock that may be purchased through open market purchases
on the Nasdaq National Market at prevailing market prices. Any funds remaining
with the Custodian after purchase of the maximum number of full shares which can
be purchased on behalf of such employee out of the remittance, are, to the
extent such funds were contributed by the employee, placed in an interest
bearing account and added to the remittance for the next calendar quarter to be
used to purchase shares on behalf of such employee, and, to the extent such
funds were contributed by the Company, returned to the Company or retained for
future share purchases. Purchases will be made in the name of the Custodian for
the account of the BioSource International, Inc. Employee Stock Purchase Plan.

A participating employee shall have a fully vested interest in the shares
purchased using funds deducted from the employee's salary immediately upon the
purchase thereof. The participating employee has the right to vote his or her
shares through proxy with the Custodian, withdraw the stock from the plan or
direct the Custodian to sell the shares subject to the requirements described
below.

Shares of stock purchased with funds contributed by the Company are
"unvested" for a period of two years from the date of purchase of such shares by
the Custodian. "Unvested" stock means stock which the participating employee has
voting, dividend and distribution rights to, however, the participating employee
may not sell or withdraw the stock from the plan until the stock becomes vested.

EMPLOYMENT AGREEMENT

Effective as of January 2, 1996, James Chamberlain entered into an
employment agreement with the Company which superseded Mr. Chamberlain's
existing Employment Agreement dated January 31, 1995. The term of the Employment
Agreement is three years. Pursuant to the terms of the Employment Agreement, Mr.
Chamberlain is to be paid an annual salary of $144,000, $154,000 and $164,000
for each of 1996, 1997 and 1998, respectively, an annual bonus determined on the
basis of the Company's existing management incentive plan which is limited to
$75,000, $85,000 and $100,000 for each of 1996, 1997 and 1998, respectively, and
is to receive certain additional benefits.

40
<PAGE> 42

In the event there is a "change of control" of the Company, Mr. Chamberlain
may terminate his employment agreement, in which case, the Company is obligated
to continue to pay Mr. Chamberlain his then-current base salary for a period of
12 months following the effective date of such termination. A "change of
control" includes (i) the acquisition by any person or entity of shares of
capital stock of the Company entitled to exercise 35% or more of the total
voting power of the Company, (ii) the execution by the Company of an agreement
to sell or otherwise transfer all or substantially all of its assets or the
execution by the Company of an agreement to merge, consolidate or reorganize
with any other corporation or entity, which results in less than 75% of the
total voting power represented by the capital stock or other equity interests of
the corporation or entity to which the Company's assets are sold or transferred
or surviving such merger, consolidation or reorganization being held by the
persons and entities who were holders of common stock of the Company on January
1, 1996, (iii) the issuance by the Company, otherwise than on a pro rata basis,
of additional shares of capital stock representing (after giving effect to such
issuance) more than 35% of the total voting power of the Company, (iv) or if the
persons who were the directors of the Company as of January 1, 1996 cease to
comprise a majority of the Board of Directors of the Company.

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS

Article Eight of the Company's Certificate of Incorporation and Article
Five of its Bylaws provide for the indemnification by the Company of each
director, officer and employee of the Company to the fullest extent permitted by
the Delaware General Corporation Law, as the same exists or may hereafter be
amended. Section 145 of the Delaware General Corporation Law provides in
relevant part that a corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful.

In addition, Section 145 provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Delaware Court of Chancery or
such other court shall deem proper. Delaware law further provides that nothing
in the above-described provisions shall be deemed exclusive of any other rights
to indemnification or advancement of expenses to which any person may otherwise
be entitled under any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise.

Article Eight of the Company's Certificate of Incorporation provides that a
director of the Company shall not be liable to the Company or its stockholders
for monetary damages for breach of fiduciary duty as a director. Section
102(b)(7) of the Delaware General Corporation Law provides that a provision so
limiting the personal liability of a director shall not eliminate or limit the
liability of a director for, among other things: breach of the duty of loyalty;
acts or omissions not in good faith or which involve intentional misconduct or a

41
<PAGE> 43

knowing violation of the law; unlawful payment of dividends; and transactions
from which the director derived an improper personal benefit.

The Company has entered into separate but identical indemnity agreements
(the "Indemnity Agreements") with each director of the Company and certain of
its officers (the "Indemnitees"). Pursuant to the terms and conditions of the
Indemnity Agreements, the Company will indemnify each Indemnitee against any
amounts which he or she becomes legally obligated to pay in connection with any
claim against him or her based upon any action or inaction which he or she may
commit, omit or suffer while acting in his or her capacity as a director and/or
officer of the Company or its subsidiaries, provided, however, that Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company and, with respect to any
criminal action, had no reasonable cause to believe Indemnitee's conduct was
unlawful.

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<PAGE> 44

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Common Stock as of May 13, 1996 and as adjusted to
reflect the sale of 2,017,000 shares by the Company and the sale of 133,000
shares by the Selling Stockholders. Additionally, the table below sets forth
beneficial ownership regarding (i) each person (including any group) known by
the Company to be the beneficial owner of more than 5% of the Common Stock, (ii)
each director of the Company, and (iii) all directors and executive officers of
the Company as a group. Except as may be indicated in the footnotes to the
table, each of such persons or entities has sole voting and investment power
with respect to all shares owned, subject to applicable community property laws.
The address of each person listed is in care of the Company, 820 Flynn Road,
Camarillo, California 93012, unless otherwise set forth below such person's
name.

<TABLE>
<CAPTION>
COMMON STOCK OWNED COMMON STOCK OWNED
PRIOR TO OFFERING(1) AFTER THE OFFERING
---------------------- SHARES ----------------------
NUMBER OF PERCENT BEING NUMBER OF PERCENT
NAME AND ADDRESS SHARES OF CLASS OFFERED SHARES OF CLASS
- ----------------------------------------------- --------- -------- ------- --------- --------
<S> <C> <C> <C> <C> <C>
James H. Chamberlain(2)........................ 691,356 11.3% -- 691,356 8.5%
Leonard M. Hendrickson(3)...................... 31,000 * -- 31,000 *
John R. Overturf, Jr.(4)....................... 20,000 * -- 20,000 *
David J. Moffa, Ph.D.(5)....................... 11,000 * -- 11,000 *
Robert D. Weist(6)............................. 20,000 * -- 20,000 *
Cirilo D. Cabradilla, Jr. ..................... 80,645 1.4 10,000 70,645 *
961 Hamilton Avenue
Menlo Park, California 94025
Raymond S. Poon................................ 80,645 1.4 20,000 60,645 *
210 Walter Hays Drive
Palo Alto, California 94303
Dragan Spasic.................................. 80,645 1.4 20,000 60,645 *
961 Hamilton Avenue
Menlo Park, California 94025
Francis W. Chen................................ 80,645 1.4 15,000 65,645 *
244 California Street
Suite 310
San Francisco, California 94111
Bradford W. Baer............................... 80,645 1.4 20,000 60,645 *
961 Hamilton Avenue
Menlo Park, California 94025
Alan Smith..................................... 80,645 1.4 10,000 70,645 *
3769 Farm Hill Blvd.
Redwood City, California 94061
Immunoplex, Inc.(7)............................ 60,000 1.0 25,000 35,000 *
412 South Saddle Creek Road,
Omaha, Nebraska 68131
Charles Ditlow................................. 16,129 * 7,000 9,129 *
Northwestern University
Department of Otolaryngology
Searle 12-490, 320 East Superior
Chicago, Illinois 60611
The Equity Group, Inc.(8)...................... 6,000 * 6,000 -- --
919 3rd Avenue, 18th Floor
New York, New York 10022
Directors and executive officers as a group (7
persons)(9).................................. 891,422 14.2% -- 891,422 10.7%
</TABLE>

- ---------------
* Less than one percent.

(1) Beneficial ownership is determined in accordance with rules of the
Securities and Exchange Commission that deem shares to be beneficially owned
by any person who has or shares voting or investment power

43
<PAGE> 45

with respect to such shares. Unless otherwise indicated, the persons named
in this table have sole voting and sole investment power with respect to all
shares shown as beneficially owned, subject to community property laws where
applicable.

(2) Includes (i) 212,500 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable; and (ii) 475,656
shares of Common Stock held in the Chamberlain Family Trust for which Mr.
Chamberlain serves as trustee.

(3) Includes (i) 20,000 shares of Common Stock reserved for issuance upon
exercise of stock options which are currently exercisable; (ii) 4,000 shares
of Common Stock held of record by two of Mr. Hendrickson's minor children;
and (iii) 7,000 shares of Common Stock held in the Microchemics Simplified
Employee Pension Plan.

(4) Represents shares of Common Stock reserved for issuance upon exercise of
stock options which are currently exercisable.

(5) Includes 10,000 shares of Common Stock reserved for issuance upon exercise
of stock options which are currently exercisable.

(6) Represents shares of Common Stock reserved for issuance upon exercise of
stock options which are currently exercisable.

(7) Represents shares of Common Stock to be sold in this offering which are
reserved for issuance upon exercise of a warrant granted to Immunoplex,
Inc., which warrant will be exercised in part by Immunoplex, Inc.
contemporaneously with the closing of this offering.

(8) Represents shares of Common Stock to be sold in this offering which are
reserved for issuance upon exercise of a warrant granted to The Equity
Group, Inc., which warrant will be exercised by The Equity Group, Inc.
contemporaneously with the closing of this offering.

(9) Includes 395,699 shares of Common Stock reserved for issuance upon exercise
of stock options which are currently exercisable.

44
<PAGE> 46

DESCRIPTION OF CAPITAL STOCK

The Company is authorized to issue up to 20,000,000 shares of Common Stock,
par value $0.001 per share (the "Common Stock") and 1,000,000 shares of
Preferred Stock, par value $.001 per share (the "Preferred Stock"). The
following statements are brief summaries of certain provisions relating to the
Company's capital stock.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Subject to any
preferences which may be granted to the holders of Preferred Stock, each holder
of Common Stock is entitled to receive ratably such dividends as may be declared
by the Board of Directors out of funds legally available therefor, as well as
any other distributions to stockholders, and, in the event of the liquidation,
dissolution or winding up of the Company, is entitled to share ratably in all
assets of the Company remaining after payment of liabilities. All of the
Company's outstanding shares of Common Stock are, and the shares to be issued
and sold by the Company in this offering and in connection with this offering,
will be, upon issuance, duly authorized, validly issued, fully paid and non-
assessable.

PREFERRED STOCK

The Board of Directors has the authority to issue the authorized and
unissued Preferred Stock in one or more classes or series with such
designations, rights and preferences as may be determined by the Board of
Directors. Accordingly, the Board of Directors is empowered, without stockholder
approval, to issue Preferred Stock with dividend, conversion, voting,
liquidation or other rights which may adversely affect the voting power or other
rights of the holders of Common Stock. In the event of issuance, the Preferred
Stock could be utilized, under certain circumstances, as a way of discouraging,
delaying or preventing an acquisition or change in control of the Company. At
present, no shares of Preferred Stock are outstanding and the Company has no
plans to issue shares of Preferred Stock.

WARRANTS

On February 1, 1996, the Company granted to Nordion a warrant (the "Nordion
Warrant") to purchase an aggregate of 100,000 shares of Common Stock of the
Company at an exercise price equal to the lesser of (i) $7.50 per share, and
(ii) 115% of the closing sale price of the Common Stock on the Nasdaq National
Market on the date of closing of the Medgenix Acquisition. The Nordion Warrant
fully vested on the date of grant and terminates on February 1, 2001. The
Nordion Warrant does not have any voting rights, dividend rights or preferences
until such time as the Nordion Warrant is exercised and converted to Common
Stock. The Nordion Warrant is not redeemable.

ANTI-TAKEOVER PROVISIONS

The Company's Certificate of Incorporation and Bylaws include some
provisions which may have the effect of discouraging persons from pursuing
non-negotiated takeover attempts. These provisions include the inability of
stockholders to take action by written consent without a meeting, and the
inability of stockholders to remove directors without cause. In its Proxy
Statement for the 1996 Annual Meeting of Stockholders, the Company has included
proposals (i) preclude the ability of the stockholders to call a special meeting
of stockholders and (ii) divide the Board of Directors into three classes
serving staggered three-year terms. Initially, the terms of the Class I, Class
II and Class III directors expire at the 1997, 1998 and 1999 annual meetings,
respectively. Following the initial terms, at each annual meeting, one class of
directors will be elected for a three-year term.

TRANSFER AGENT

The Company's transfer agent and registrar for its Common Stock is U.S.
Stock Transfer Corporation, 1745 Gardena Avenue, Glendale, California
91204-2991.

45
<PAGE> 47

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, the Company will have 7,926,774 shares of
Common Stock outstanding. The 2,150,000 shares sold in this offering (2,472,500
shares if the Underwriters' over-allotment option is exercised in full) and
6,931,051 shares held by current stockholders will be freely tradable without
restriction under the Securities Act, except for any such shares held at any
time by an "affiliate" of the Company, as such term is defined under Rule 144
promulgated under the Securities Act. 500,000 shares were issued and sold by the
Company in private transactions and may be publicly sold only if registered
under the Securities Act or
sold in accordance with an applicable exemption from registration, such as Rule
144. Of those shares, 102,000 are being sold by Selling Stockholders in this
offering. The remaining 397,999 will be registered for resale by such Selling
Stockholders on a Registration Statement to be filed with the Commission
concurrently with the effective date of the Registration Statement containing
this Prospectus. 495,723 shares held by affiliates of the Company will be
eligible for sale subject to the resale limitations of Rule 144. In general,
under Rule 144, as currently in effect, a person who has beneficially owned
shares for at least two years, including an "affiliate," as that term is defined
in Rule 144, is entitled to sell, within any three month period, a number of
"restricted" shares that does not exceed the greater of 1% of the then
outstanding shares of Common Stock (79,268 shares immediately after this
offering) or the average weekly trading volume during the four calendar weeks
preceding such sale. Sales under Rule 144 are subject to certain manner of sale
limitations, notice requirements and the availability of current public
information about the Company. Rule 144(k) provides that a person who is not
deemed an "affiliate" and who has beneficially owned shares for at least three
years is entitled to sell such shares at any time under Rule 144 without regard
to the limitations described above.

The Company and the Company's directors and officers and the Selling
Stockholders have agreed with the Underwriters not to sell or otherwise dispose
of any shares of Common Stock for a period of 180 days from the date of this
Prospectus without the prior written consent of Cruttenden Roth Incorporated.

The Company has outstanding options to purchase an aggregate of 1,770,210
shares of its Common Stock held by employees, directors, advisors and
consultants of the Company. Of this amount options to purchase 588,501 shares
are presently exercisable and options to purchase an additional 111,521 shares
become exercisable within 180 days from the date of this Prospectus. Of these
amounts 454,980 shares as to which the options are presently exercisable and
34,166 shares as to which options become exercisable within said 180 day period
are held by persons who have entered into the agreement referred to above not to
sell their shares within said 180 day period. The options were granted at prices
ranging from $1.281 to $6.440 per share. The Company has registered the shares
issuable upon exercise of the options and option holders who have not agreed to
refrain from selling may exercise their options to the extent they are
exercisable and sell their shares.

The Company has agreed, upon effectiveness of this offering, to file a
Registration Statement with the Securities and Exchange Commission to register
397,999 shares of Common Stock held by certain stockholders of the Company who
acquired their shares in connection with the Company's acquisition of Keystone.
Each of these stockholders has agreed with the Underwriters not to sell or
otherwise dispose of any shares of Common Stock for a period of 180 days from
the date of this Prospectus without the prior written consent of Cruttenden Roth
Incorporated.

The Company is unable to estimate the number of shares that may be sold in
the future by its existing stockholders or the effect, if any, that sales of
shares by such stockholders will have on the market price of the Common Stock
prevailing from time to time. Sales of substantial amounts of Common Stock by
existing stockholders could adversely affect prevailing market prices.

46
<PAGE> 48

UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting
Agreement, the Company and the Selling Stockholders have agreed to sell to the
Underwriters named below, for whom Cruttenden Roth Incorporated and Commonwealth
Associates are acting as representatives (the "Representatives"), and the
Underwriters have severally agreed to purchase, the numbers of shares of Common
Stock set forth opposite their respective names in the table below at the public
offering price less the underwriting discount set forth on the cover page of
this Prospectus. The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions and that the Underwriters are
committed to purchase all of such shares if any are purchased:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
Cruttenden Roth Incorporated..............................................
Commonwealth Associates...................................................

---------
Total........................................................... 2,150,000
=========
</TABLE>

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares to the public at the public offering price set forth
on the cover page of this Prospectus, and to certain securities dealers at such
price less a concession of not more than $ per share, and that the
Underwriters and such dealers may reallow to other dealers, including the
Underwriters, a discount not in excess of $ per share. After the public
offering, the public offering price and concessions and discounts may be changed
by the Representatives.

The Company has granted an option to the Underwriters, exercisable for a
period of 45 days after the date of this Prospectus, to purchase up to an
additional 322,500 shares of Common Stock at the public offering price set forth
on the cover page of this Prospectus less the underwriting discounts and
commissions. The Underwriters may exercise this option only to cover
over-allotments, if any. To the extent such option is exercised, each
Underwriter will become obligated, subject to certain conditions, to purchase a
percentage of such additional shares approximately equal to the percentage of
shares it was obligated to purchase from the Company pursuant to the
Underwriting Agreement.

At the closing of this offering, the Company has agreed to pay the
Representatives a non-accountable expense allowance of 1.5% of the total
offering proceeds, which will include proceeds from sales by the Selling
Stockholders and from the Underwriters' exercise of the over-allotment option to
the extent exercised. The Company has paid $30,000 of the non-accountable
expense allowance to the Representatives. The Representatives' expenses in
excess of the non-accountable expense allowance, including their legal expenses,
will be borne by the Representatives. If the expenses of the Representatives are
less than the non-accountable expense allowance, the excess will be deemed to be
compensation to the Representatives.

The Underwriting Agreement provides that the Company and the Seller
Stockholders will indemnify the Underwriters against certain liabilities under
the Securities Act.

The Company has also agreed to sell to the Representatives for $100
warrants (the "Representatives' Warrants") to purchase up to 100,000 shares of
Common Stock at an exercise price per share equal to 120% of the public offering
price per share. The Representatives' Warrants are exercisable for a period of
four years beginning one year from the date of this Prospectus, and are not
transferable for a period of one year except to officers of the Representatives
or any successors to the Representatives. The Representatives' Warrants

47
<PAGE> 49

include a net exercise provision permitting the holders to pay the exercise
price by cancellation of a number of shares with a fair market value equal to
the exercise price of the Representatives' Warrants. In addition, the Company
has granted certain rights to the holders of the Representatives' Warrants to
register the Representatives' Warrants and the Common Stock underlying the
Representatives' Warrants under the Securities Act.

The rules of the Commission generally prohibit the Underwriters and other
members of the selling group from making a market in the Company's Common Stock
during the "cooling off" period immediately preceding the commencement of sales
in the offering. The Commission has, however, adopted an exemption from these
rules that permits passive market making under certain conditions. These rules
permit an Underwriter or other member of the selling group to continue to make a
market in the Company's Common Stock subject to the conditions, among others,
that its bid not exceed the highest bid by a market maker not connected with the
offering and that its net purchases on any one trading day not exceed prescribed
limits. Pursuant to these exemptions, certain Underwriters and other members of
the selling group intend to engage in passive market making in the Company's
Common Stock during the cooling off period.

LEGAL MATTERS

Counsel for the Company, Troop Meisinger Steuber & Pasich, LLP, Los
Angeles, California, have rendered an opinion to the effect that the Common
Stock offered by the Company will upon sale be duly and validly issued, fully
paid and non-assessable. Freshman, Marantz, Orlanski, Cooper & Klein, a law
corporation, Beverly Hills, California, has acted as counsel to the Underwriters
in connection with certain legal matters relating to this offering.

EXPERTS

The consolidated financial statements of BioSource International, Inc. and
Subsidiary as of December 31, 1995, and for each of the years in the two-year
period ended December 31, 1995, have been included herein and in the
Registration Statement in reliance upon the report of KPMG Peat Marwick LLP,
independent certified public accountants, appearing elsewhere herein, and upon
the authority of said firm as experts in accounting and auditing.

The combined financial statements relating to the in vitro business of
Medgenix Diagnostics, S.A. as of October 31, 1995 and for each of the years in
the two-year period ended October 31, 1995 have been included herein and in the
Registration Statement in reliance upon the report of KPMG
Bedrijfsrevisoren-Reviseurs d' Entreprises, independent statutory auditors,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.

CHANGE IN INDEPENDENT PUBLIC ACCOUNTANT

Effective August 15, 1994, KPMG Peat Marwick LLP was engaged as the
principal independent certified public accountants for the Company. KPMG Peat
Marwick LLP succeeded Coopers & Lybrand, LLP. The decision to change independent
certified public accountants was unanimously approved by the Company's Board of
Directors. There were no disagreements with Coopers & Lybrand, LLP on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedures.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission in
Washington, D.C., a Registration Statement on Form SB-2 under the Securities Act
with respect to the shares offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement and the exhibits
thereto. Statements contained in this Prospectus as to the contents of any
contract or any other document referred to are not necessarily complete, and
with respect to any contract or other document filed as an exhibit to the
Registration Statement, reference is made to the exhibit for a more complete
description of the matter

48
<PAGE> 50

involved, and each such statement is qualified in its entirety by such
reference. For further information with respect to the Company and the shares
offered hereby, reference is hereby made to the Registration Statement and
exhibits thereto. A copy of the Registration Statement, including the exhibits
thereto, may be inspected without charge at the Securities and Exchange
Commission's principal office in Washington, D.C., and copies of all or any part
thereof may be obtained from the Public Reference Section of the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, upon
payment of certain prescribed rates.

49
<PAGE> 51

GLOSSARY OF SCIENTIFIC TERMS

ALPHA INTERFERON: IFN-, one of the large family of proteins (cytokines)
released by leukocytes (white blood cells). Among their multiple regulatory
functions are interference with viral multiplication and with the proliferation
of cancer cells.

AIDS: Acquired immunodeficiency syndrome, the fatal disease caused by HIV
(Human immunodeficiency virus) that breaks down the immune system's defenses
against a variety of microorganisms.

AMINO ACIDS: The building blocks of proteins. Twenty distinctive amino
acids (e.g., serine, tryptophan, glutamic acid), in some particular sequence of
one hundred or more, constitute all cellular proteins.

ANTIBODY: a protein formed by an animal in response to invasion by a
foreign substance (e.g., bacterial, viral, plant) that binds with that substance
and neutralizes its action.

MONOCLONAL: An antibody derived from a single clone of cells. All of
the molecules of such an antibody are therefore chemically and structurally
identical.

POLYCLONAL: A population of antibodies derived from many clones of
cells, each producing antibodies that are directed against different facets
of the foreign antigen. Although similar, polyclonal antibodies are
chemically and structurally different.

ANTIGEN: A substance that can stimulate an animal to produce antibodies
that can then bind the antigen. Generally, an antigen is a foreign substance,
but, when it is produced by the same individual that produced the antibody, it
can be the cause of disease.

B CELLS: Lymphocytes formed in the bone marrow of mammals that function in
the immune system to produce antibodies both in the blood stream and secreted
onto mucous surfaces.

BIOLOGICAL: The noun denotes a product derived from cells or organisms.

CHEMOKINE: One of a family of small proteins (cytokines), functioning as
chemical attractants, that promote cellular interactions.

CYTOKINES: A group of hormone-like proteins released by some cells to
stimulate others. They include interferons, interleukins, colony stimulating
factors, growth factors and tumor necrosis factors. Cytokines produces by
lymphocytes are called lymphokines.

DNA: Deoxyribonucleic acid, the macromolecule of heredity in virtually all
organisms. The particular sequence of the four deoxynucleotide building blocks
of DNA (adenine, thymine, guanine, cytosine) spells the identity of a gene.

ELISA: Enzyme-Linked Immunosorbent Assay.

GENE: A sequence of DNA that encodes a protein or RNA; a unit of heredity
at a specific place on a chromosome.

HYBRIDOMA: A hybrid cell produced by the fusion of two cells that is
useful for the production of monoclonal antibodies.

IL: Interleukins, a family of cytokines designated IL-1 through IL-16,
named in the order of their discovery.

IMMUNE COMPLEX: A complex formed by the binding of an antibody with an
antigen.

IN VITRO: Pertaining to behavior outside a living organism; includes the
use of extracts of cells, subcellular fractions; tissue slices, and perfused
organs.

IN VIVO: Pertaining to behavior within a living organism; includes the use
of a whole plant or animal or an intact microbial cell.

LYMPHOCYTES: The white blood cells (leukocytes) that include the B cells
and T cells, but not the others (such as granulocytes and eosinophils).

50
<PAGE> 52

PCR: The polymerase chain reaction, in which DNA polymerase repeatedly
copies a segment of DNA, resulting in enormous amplification of a tiny sample.
The technique is widely used in research, medical diagnosis, and forensic
medicine.

PROTEINS: Chains of twenty distinctive amino acids in a particular
sequence of one hundred or more that perform virtually all cellular functions,
including those of enzymes, receptors, cytokines, interferons, and antibodies.

REAGENT: A substance that participates in a chemical reaction. Reagents
are commonly used to detect or determine another substance.

RECEPTOR: A molecule on the surface (membrane) of a cell that serves as a
target for the binding of a hormone, drug, virus, or other entity that triggers
a physiological or pharmacological response.

RECOMBINANT DNA: DNA prepared in the laboratory by breaking up and
splicing together DNA from several different species of organisms.

RNA: Ribonucleic acid, the many forms of which include messenger RNA,
transfer RNA and ribosomal RNA (used in the translation of messenger RNA), and
viral RNA, which functions as the genome of certain viruses.

51
<PAGE> 53

INDEX TO FINANCIAL STATEMENTS

BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARY

<TABLE>
<S> <C>
Independent Auditors' Report.......................................................... F-2
Consolidated Balance Sheet at December 31, 1995....................................... F-3
Consolidated Statements of Operations for the years ended December 31, 1994 and
1995................................................................................ F-4
Consolidated Statements of Stockholders' Equity for the years ended December 31, 1994
and 1995............................................................................ F-5
Consolidated Statements of Cash Flows for the years ended December 31, 1994 and
1995................................................................................ F-6
Notes to Consolidated Financial Statements............................................ F-7
Unaudited Consolidated Balance Sheet at March 31, 1996................................ F-15
Unaudited Consolidated Statements of Operations for the quarters ended March 31, 1995
and 1996............................................................................ F-16
Unaudited Consolidated Statements of Cash Flows for the quarters ended March 31, 1995
and 1996............................................................................ F-17
Notes to Consolidated Financial Statements............................................ F-18
ACQUIRED COMPANY:
MEDGENIX DIAGNOSTICS, S.A.
Independent Auditors' Report.......................................................... F-22
Consolidated Balance Sheet at October 31, 1995........................................ F-23
Consolidated Statements of Operations for the years ended October 31, 1994 and 1995... F-24
Consolidated Statements of Changes in Equity for the years ended October 31, 1994 and
1995................................................................................ F-25
Consolidated Statements of Cash Flows for the years ended October 31, 1994 and 1995... F-26
Notes to Consolidated Financial Statements............................................ F-27
Unaudited Consolidated Balance Sheet at January 31, 1996.............................. F-30
Unaudited Consolidated Statements of Operations for the quarters ended January 31,
1995 and 1996....................................................................... F-31
Unaudited Consolidated Statements of Cash Flows for the quarters ended January 31,
1995 and 1996....................................................................... F-32
Notes to Consolidated Financial Statements............................................ F-33
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Introduction to the Unaudited Pro Forma Condensed Consolidated Financial
Information......................................................................... F-36
Unaudited Pro Forma Condensed Consolidated Balance Sheet at March 31, 1996............ F-37
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended
December 31, 1995................................................................... F-38
Unaudited Pro Forma Condensed Consolidated Statement of Operations for the quarter
ended March 31, 1996................................................................ F-39
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.............. F-40
</TABLE>

F-1
<PAGE> 54

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
BioSource International, Inc.:

We have audited the accompanying consolidated balance sheet of BioSource
International, Inc. and subsidiary as of December 31, 1995 and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the years in the two-year period ended December 31, 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of BioSource
International, Inc. and subsidiary as of December 31, 1995 and the results of
their operations and their cash flows for each of the years in the two-year
period ended December 31, 1995 in conformity with generally accepted accounting
principles.

KPMG PEAT MARWICK LLP

Los Angeles, California
February 9, 1996

F-2
<PAGE> 55

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1995

ASSETS

<TABLE>
<S> <C>
Current assets:
Cash and cash equivalents..................................................... $ 1,393,092
Accounts receivable, less allowance for doubtful accounts of $29,000.......... 1,389,859
Inventories (note 3).......................................................... 3,301,208
Prepaid expenses and other current assets (note 11)........................... 142,321
Deferred income taxes (note 9)................................................ 91,000
-----------
Total current assets.................................................. 6,317,480
Property and equipment, net (note 4)............................................ 922,608
Other assets.................................................................... 147,515
-----------
$ 7,387,603
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of notes payable (note 5).................................. $ 65,857
Accounts payable.............................................................. 726,631
Accrued expenses.............................................................. 186,692
Income taxes payable.......................................................... 342,176
-----------
Total current liabilities............................................. 1,321,356
-----------
Notes payable, less current maturities (note 5)................................. 64,286
Deferred income taxes (note 9).................................................. 65,000
Other liabilities............................................................... 39,654
Commitments and contingencies (notes 5 and 13)
Stockholders' equity (notes 6, 7 and 8):
Preferred stock, $.001 par value. Authorized 1,000,000 shares; none issued.... --
Common stock, $.001 par value. Authorized 20,000,000 shares; issued and
outstanding 5,845,306 shares............................................... 5,845
Additional paid-in capital.................................................... 9,338,484
Accumulated deficit........................................................... (3,447,022)
-----------
Net stockholders' equity................................................... 5,897,307
-----------
$ 7,387,603
===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE> 56

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1994 AND 1995

<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Revenue............................................................. $7,367,257 8,608,447
Cost of goods sold.................................................. 3,132,991 2,996,103
---------- ----------
Gross profit...................................................... 4,234,266 5,612,344
---------- ----------
Operating expenses:
Research and development.......................................... 721,902 1,073,733
Sales and marketing............................................... 1,140,662 1,289,939
General and administrative........................................ 1,929,187 1,633,649
Compensation recognized under performance escrow share arrangement
(note 6)....................................................... 577,452 --
---------- ----------
Total operating expenses.................................. 4,369,203 3,997,321
---------- ----------
Operating income (loss)................................... (134,937) 1,615,023
---------- ----------
Other income (expense):
Interest expense.................................................. (28,768) (26,301)
Interest income................................................... 28,953 32,837
Other............................................................. (26,689) (10,180)
---------- ----------
Total other expense....................................... (26,504) (3,644)
---------- ----------
Income (loss) before income taxes......................... (161,441) 1,611,379
Provision for income taxes (note 9)................................. 48,195 451,000
---------- ----------
Net income (loss)......................................... $ (209,636) 1,160,379
========== ==========
Income (loss) per share:
Net income (loss) per share............................... $ (.04) .20
========== ==========
Weighted average number of common shares outstanding................ 5,724,106 5,945,900
========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE> 57

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994 AND 1995

<TABLE>
<CAPTION>
COMMON STOCK
------------------ ADDITIONAL NET
NUMBER OF PAID-IN ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
---------- ------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 as
previously reported.................... 5,037,580 $5,038 8,497,031 (4,397,209) 4,104,860
Pooling of interests with Keystone
Laboratories, Inc...................... 500,000 500 154,500 42,346 197,346
--------- ------ --------- ----------- ---------
Balance as restated...................... 5,537,580 5,538 8,651,531 (4,354,863) 4,302,206
Exercise of stock options................ 550 -- 484 -- 484
Conversion of allotted escrow shares
(note 6)............................... 266,898 267 28,768 -- 29,035
Compensation recognized under performance
escrow share arrangement (note 6)...... -- -- 577,452 -- 577,452
Distribution to stockholders............. -- -- -- (42,902) (42,902)
Issuance of common stock................. 8,000 8 16,242 -- 16,250
Net loss................................. -- -- -- (209,636) (209,636)
--------- ------ --------- ----------- ---------
Balance at December 31, 1994............. 5,813,028 5,813 9,274,477 (4,607,401) 4,672,889
Exercise of stock options................ 32,278 32 64,007 -- 64,039
Net income............................... -- -- -- 1,160,379 1,160,379
--------- ------ --------- ----------- ---------
Balance at December 31, 1995............. 5,845,306 $5,845 9,338,484 (3,447,022) 5,897,307
========= ====== ========= =========== =========
</TABLE>

See accompanying notes to consolidated financial statements.

F-5
<PAGE> 58

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1994 AND 1995

<TABLE>
<CAPTION>
1994 1995
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)................................................... $ (209,636) 1,160,379
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization.................................... 214,376 258,045
Loss on sale of property and equipment........................... 17,389 --
Compensation recognized under performance escrow share
arrangement..................................................... 577,452 --
Other............................................................ 16,250 --
Changes in assets and liabilities:
Accounts receivable.............................................. (40,022) (360,930)
Inventories...................................................... (436,752) (592,581)
Prepaid expenses and other assets................................ (75,778) (7,961)
Deferred income taxes............................................ 4,385 36,781
Accounts payable................................................. 47,488 168,927
Accrued expenses and other liabilities........................... (98,616) (151,636)
Income taxes payable............................................. -- 342,176
---------- ----------
Net cash provided by operating activities................... 16,536 853,200
---------- ----------
Cash flows from investing activities -- purchase of property and
equipment........................................................... (692,139) (211,809)
---------- ----------
Cash flows from financing activities:
Proceeds from conversion of allotted escrow shares.................. 29,035 --
Distributions to stockholders....................................... (42,902) --
Proceeds from the exercise of options............................... 484 64,039
Borrowings from bank................................................ 351,174 28,000
Repayments to bank.................................................. (83,819) (188,212)
Payments on capital lease obligations............................... (115,046) (35,886)
---------- ----------
Net cash provided by (used in) financing activities......... 138,926 (132,059)
---------- ----------
Net increase (decrease) in cash and cash equivalents........ (536,677) 509,332
Cash and cash equivalents at beginning of year........................ 1,420,437 883,760
---------- ----------
Cash and cash equivalents at end of year.............................. $ 883,760 1,393,092
========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest......................................................... $ 28,768 26,301
Income taxes..................................................... 34,096 87,063
========== ==========
</TABLE>

See accompanying notes to consolidated financial statements.

F-6
<PAGE> 59

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of BioSource
International, Inc. and its wholly owned subsidiary. All significant
intercompany accounts and transactions have been eliminated.

The Company is engaged in the licensing, development, manufacture,
marketing and distribution of immunological reagents, test kits and
oglionucleotides used in biomedical research. The types of products supplied by
the Company include a range of bioactive proteins, enzymes, substrates,
antibodies, human and murine cytokines, growth factors and a variety of assay
systems for the detection of biological molecules. These products focus on areas
of research such as immunology, AIDS and cancer. The Company focuses its sales
efforts on academic, industrial and governmental laboratories.

Cash and Cash Equivalents

Cash and cash equivalents includes all cash balances and highly liquid
investments in debt instruments with an original maturity of three months or
less.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market
(net realizable value) for raw materials and work in process and the
average-cost method for finished goods.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives which range from three
to seven years. Leasehold improvements are amortized using the straight-line
method over the estimated useful life or the lease term, whichever is shorter.

License Agreements

License agreements are recorded at cost and are amortized using the
straight-line method over the shorter of the estimated useful lives of the
license or the license term (generally five to ten years). These costs are
included with other assets in the accompanying consolidated balance sheet.
Accumulated amortization at December 31, 1995 was approximately $47,000.

Revenue Recognition

Revenue and related cost of goods sold are recognized upon shipment of
products.

Research and Development Costs

Research and development costs are charged to expense as incurred.

Income Taxes

F-7
<PAGE> 60

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred taxes of a change in tax
rates is recognized in income in the period that includes the enactment date.

Long Lived Assets

In March 1995, Statement of Financial Accounting Standards No. 121.
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of," was issued. This statement provides guidelines for recognition
of impairment losses related to long-term assets and is effective for fiscal
years beginning after December 15, 1995. Company management does not believe
that the adoption of this new standard will have a material effect on the
Company's consolidated financial statements.

Accounting for Stock Options

In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("Statement No. 123"), was issued.
This statement encourages, but does not require a fair value based method of
accounting for employee stock options and will be effective for fiscal years
beginning after December 15, 1995. While the Company is still evaluating
Statement No. 123, it currently expects to elect to continue to measure
compensation costs under APB Opinion No. 25, "Accounting for Stock Issued to
Employees" and to comply with the pro forma disclosure requirements of Statement
No. 123. If the Company makes this election, Statement No. 123 will have no
impact on the Company's consolidated financial statements.

Use of Estimates

Company management has made a number of estimates and assumptions relating
to the reporting of assets and liabilities in conformity with generally accepted
accounting principles. Actual results could differ from these estimates.

Net Income (Loss) per Share

Net income (loss) per share has been computed using the weighted average
number of common shares outstanding each year. The Company's common share
equivalents associated with dilutive stock options and warrants are immaterial,
and accordingly, primary and fully diluted net income (loss) per share are
approximately the same.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current
year's presentation.

(2) BUSINESS COMBINATION

On November 21, 1995, the Company issued 500,000 shares of its common stock
in exchange for all of the outstanding common stock of Keystone Laboratories,
Inc. (Keystone). The business combination has been accounted for as a pooling of
interest combination and, accordingly, the Company's consolidated financial
statements for periods prior to the combination have been restated to include
the accounts and results of operations of Keystone.

F-8
<PAGE> 61

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The results of operations previously reported by the separate enterprises
and the combined amounts presented in the accompanying consolidated financial
statements are summarized below:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, 1995
1994 -------------
------------ (UNAUDITED)
<S> <C> <C>
Revenue
BioSource................................................ $6,240,147 5,650,102
Keystone................................................. 1,127,110 693,936
---------- ----------
Combined.............................................. $7,367,257 6,344,038
========== ==========
Net income (loss):
BioSource................................................ $ (347,304) 730,246
Keystone................................................. 137,668 63,271
---------- ----------
Combined.............................................. $ (209,636) 793,517
========== ==========
</TABLE>

Total expenses of approximately $116,000 related to the business
combination have been included in 1995 operations.

(3) INVENTORIES

Inventories at December 31, 1995 are summarized as follows:

<TABLE>
<S> <C>
Raw materials............................................ $ 18,285
Work in process.......................................... 1,791,431
Finished goods........................................... 1,491,492
----------
$3,301,208
==========
</TABLE>

(4) PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1995 are summarized as follows:

<TABLE>
<S> <C>
Computer equipment....................................... $ 235,603
Office furniture and equipment........................... 236,077
Machinery and equipment.................................. 904,695
Leasehold improvements................................... 291,629
----------
1,668,004
Less accumulated depreciation and amortization........... 745,396
----------
$ 922,608
==========
</TABLE>

(5) NOTES PAYABLE

The Company had a credit agreement with a bank providing for borrowings of
up to $500,000 under a revolving line of credit limited to 70% of eligible
accounts receivable, as defined, through December 31, 1995. Interest on the
revolving line of credit is payable monthly at prime (8.5% at December 31, 1995)
plus 1%. Included under the credit agreement is a $150,000 installment note
payable with interest at prime plus 1.375% through June 30, 1998. Borrowings
under the credit agreement are secured by all Company assets. The credit

F-9
<PAGE> 62

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

agreement contains restrictive covenants and conditions which require the
Company to meet certain financial tests as defined. As of December 31, 1995, the
Company was in compliance with these covenants.

On January 31, 1996, the credit agreement was extended through December 31,
1996. The extension agreement provides for borrowings up to $1,000,000 limited
to 75% of eligible accounts receivable. Interest is payable monthly at prime
plus .75%.

The Company leases approximately $104,000 of certain equipment under a
capital lease. The capital lease obligation is payable in monthly installments
through June 1996, including interest at approximately 11.8%. Accumulated
depreciation related to this equipment was approximately $78,000 at December 31,
1995.

Maturities under the line of credit agreement and the capital lease
obligation at December 31, 1995 are:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
<S> <C>
1996................................................. $ 65,857
1997................................................. 42,857
1998................................................. 21,429
--------
$130,143
========
</TABLE>

(6) COMMON STOCK

In 1993, BioSource International, Inc. was formed through the consolidation
of BioSource Industries, Inc. (BioSource) and TAGO, Inc. (TAGO) (the
Consolidation). At the effective date of the Consolidation, each two shares of
BioSource common stock then outstanding were converted into one share of Company
common stock and each two performance escrow shares were converted into one
Company performance escrow share. Performance escrow shares are released from
escrow on the basis of one share for every Canadian $.82 of cumulative cash
flow, as defined in the escrow agreement, generated by the Company. Also, each
two allotted escrow shares were converted into the right to receive one Company
allotted escrow share, and each outstanding share of TAGO common stock was
converted into one share of Company common stock. Each allotted share entitles
the holder to acquire one performance escrow share upon payments of Canadian
$.14 per share and once converted are subject to the same terms and conditions
as the performance escrow shares. All references to the number of shares and per
share amounts in the financial statements have been restated to reflect the
conversions.

At December 31, 1994, the Company had 1,101,494 issued and outstanding
shares held in escrow and 3,449 allotted escrow shares outstanding, all of which
had been earned under the terms of the escrow agreement. Of the performance and
allotted escrow shares, 469,180 were issued to directors, officers and others
who could have affected the financial results of the Company (Performance
Shares), and 635,763 were issued to other stockholders. Cumulative cash flow
through December 31, 1994, as defined under the escrow agreement, was sufficient
to release all the escrow and allotted shares. Accordingly, the Company
recognized $577,452 of compensation expense in 1994 related to the Performance
Shares. The 1,101,494 shares held in escrow were released in 1995 and the 3,449
allotted escrow shares were canceled.

(7) STOCK OPTION AND PURCHASE PLANS

During 1995, the Company had three separate stock option plans in effect.

Under the BioSource International, Inc. 1993 Stock Incentive Plan (the 1993
Plan), options may be granted to full-time employees, part-time employees,
directors and consultants of the Company to purchase a maximum of 750,000 shares
of common stock. Options granted under the 1993 Plan are exercisable at the rate

F-10
<PAGE> 63

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of 25% beginning one year from date of grant and an additional 1/48 vest at the
beginning of each month thereafter.

The BioSource California 1992 Stock Incentive Plan (the 1992 Plan) covered
BioSource California employees prior to the Consolidation. Options granted under
the 1992 Plan are exercisable at the rate of 50% per year beginning one year
from date of grant. All options outstanding under this plan are fully
exercisable as of December 31, 1995. Upon the completion of the Consolidation,
the 1992 Plan was replaced by the Company's 1993 Stock Incentive Plan. No
further grants will be made under the 1992 Plan.

The TAGO 1987 Stock Option Plan (the 1987 Plan) covered TAGO employees
prior to the Consolidation and converted to Company stock options upon
completion of the Consolidation. All options remaining under this plan were
exercised or canceled during 1995.

The following summarizes the stock option transactions under the 1993 Plan,
1992 Plan and 1987 Plan for the year ended December 31, 1995:

<TABLE>
<CAPTION>
SHARES OPTION PRICE
-------- ---------------
<S> <C> <C>
Options outstanding at January 1, 1995.................. 746,525 $.85227 -- 2.188
Options granted......................................... 384,000 1.281 -- 3.75
Options exercised....................................... (32,278) .85227 -- 2.188
Options canceled........................................ (269,142) .85227 -- 2.188
--------- -------------
Options outstanding at December 31, 1995................ 829,105 1.281 -- 3.75
========= =============
Options exercisable at December 31, 1995................ 259,876 1.281 -- 3.75
========= =============
</TABLE>

At December 31, 1995, 794,105 options were outstanding under the 1993 Plan.
Exercisability of 105,000 of these options is subject to stockholder approval of
an amendment to the 1993 Plan to increase the maximum number of shares
available.

In addition to the option plans discussed previously, the Company has
several agreements with certain officers. As of December 31, 1995, 255,000
options with exercise prices ranging from $1.50 per share to $2.6875 per share
had been granted. The outstanding agreements expire from May 2003 through June
2005.

The following summarizes transactions outside the option plans for the year
ended December 31, 1995:

<TABLE>
<CAPTION>
SHARES OPTION PRICE
------- --------------
<S> <C> <C>
Options outstanding at January 1, 1995.................... 100,000 $2.00 -- 2.6875
Options granted........................................... 155,000 1.50 -- 1.6875
Options exercised......................................... -- --
Options canceled.......................................... -- --
------- -----------
Options outstanding at December 31, 1995.................. 255,000 1.50 -- 2.6875
======= ===========
Options exercisable at December 31, 1995.................. 255,000 1.50 -- 2.6875
======= ===========
</TABLE>

Effective April 7, 1995, the Company adopted an Employee Stock Purchase
Plan to provide substantially all full-time employees, excluding officers, an
opportunity to purchase shares of its common stock through payroll deductions.
In addition, the Company provides a matching contribution equal to 50% of the
participant's contribution. All contributions are invested in the Company's
common stock, which are purchased on the open market at prevailing market
prices. Participants have a fully vested interest in the shares purchased with
payroll deductions and become fully vested in shares purchased with Company
matching contributions after two years. The Company's matching expense was
approximately $4,000 for the year ended December 31, 1995.

F-11
<PAGE> 64

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(8) COMMON STOCK WARRANTS

On January 17, 1994, the Company granted warrants to purchase 24,000 shares
of the Company stock to The Equity Group, Inc., with an exercise price of $2.25
per share and an expiration date of January 17, 1999. On July 12, 1994, 18,000
of the warrants were canceled.

On May 19, 1993, the Company granted warrants to purchase 60,000 shares of
the Company stock to Immunoplex, Inc. with an exercise price of $1.85 per share
and an expiration date of May 19, 1998.

No warrants were granted or exercised during the year ended December 31,
1995.

Proceeds from the sale of common stock issued under outstanding warrant
arrangements will be credited to common stock at the time the warrants are
exercised. The Company recorded no charge to operations with respect to these
warrants since the warrants were issued at amounts approximating or exceeding
fair market value.

(9) INCOME TAXES

Effective January 1, 1993, the Company adopted Statement 109, the impact of
which was not material to the Company's financial condition or results of
operations.

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
1994 1995
------- --------
<S> <C> <C>
Current
Federal....................................................... $26,476 $332,000
State and local............................................... 17,334 82,000
Deferred:
Federal....................................................... 4,700 27,000
State and local............................................... (315) 10,000
-------- --------
$48,195 $451,000
======== ========
</TABLE>

The primary components of temporary differences which give rise to deferred
taxes at December 31, 1995 are:

<TABLE>
<S> <C>
Deferred tax asset:
Accruals................................................................ $ 40,000
Reserves................................................................ 51,000
Net operating loss carryforwards........................................ 563,000
Research and development credit carryforward............................ 44,000
--------
Total........................................................... 698,000
Valuation allowance..................................................... 607,000
--------
Net deferred tax assets......................................... $ 91,000
========
Deferred tax liability -- depreciation.................................... $ 65,000
========
</TABLE>

The net change in the total valuation allowance for the years ended
December 31, 1994 and 1995 was a decrease of approximately $120,000 and
$115,000, respectively. Management has determined that the Company will be able
to realize the tax benefit of the net deferred tax assets based on the future
reversal of the taxable temporary differences.

F-12
<PAGE> 65

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Actual income tax expense differs from that obtained by applying the
Federal income tax rate of 34% to income (loss) before income taxes as follows:

<TABLE>
<CAPTION>
1994 1995
--------- ---------
<S> <C> <C>
Computed "expected" tax expense (benefit).................... $ (54,890) $ 548,000
Nondeductible items.......................................... 208,725 74,000
State taxes (net of Federal benefit)......................... 11,263 61,000
Utilization of net operating losses.......................... (112,000) (82,000)
Tax credits.................................................. (4,000) (143,000)
Other........................................................ (903) (7,000)
---------- ----------
Total.............................................. $ 48,195 $ 451,000
========== ==========
</TABLE>

As of December 31, 1995, the Company has a net operating loss (NOL)
carryforward of approximately $1,700,000 for Federal income tax purposes. The
Federal NOL has a carryover period of 15 years and is available to offset future
taxable income, if any, through 2005, subject to an annual statutory limitation.

The Company also has Federal research and development credit carryforwards
of approximately $44,000 which, unless utilized, will expire in various amounts
through 2001.

(10) 401(K) BENEFIT PLAN

The Company has a 401(k) profit sharing plan (the Plan) which covers
substantially all employees of the Company. Plan participants may make voluntary
contributions up to 20% of their earnings up to the statutory limitation. The
Company's contribution to the Plan is discretionary and no contributions were
made in fiscal years 1994 or 1995.

(11) NOTES RECEIVABLE

The Company has notes receivable due from employees of $50,537 at December
31, 1995 which are included with other current assets in the accompanying
consolidated balance sheet. The notes bear interest at an average rate of
approximately 8%.

(12) EXPORTS

The Company's export sales were approximately $1,560,000 or 25% and
$2,300,00 or 27% of total revenue for 1994 and 1995, respectively.

(13) COMMITMENTS AND CONTINGENCIES

The Company leases its facilities and certain equipment under various
noncancelable operating leases. During 1994, the Company entered into a
long-term operating lease through September 30, 2001 and consolidated its
operations into one facility. The Company incurred a lease settlement cost of
approximately $81,000 for vacating certain leased facilities prior to lease
expiration. Rental expense, including the lease settlement cost, during 1994 and
1995 was $373,000 and $200,000, respectively.

F-13
<PAGE> 66

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At December 31, 1995, the future minimum payments under these leases are as
follows:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31:
<S> <C>
1996.................................................... $151,743
1997.................................................... 166,898
1998.................................................... 178,845
1999.................................................... 173,607
2000.................................................... 182,291
--------
$853,384
========
</TABLE>

The Company is involved in various threatened legal actions arising in the
ordinary course of business. The potential outcome of these actions and possible
loss, if any, cannot be estimated. However, Company management believes that the
loss, if any, resulting from such legal actions, would not be material to the
financial statements of the Company.

F-14
<PAGE> 67

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(UNAUDITED)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents...................................................... $1,301,488
Accounts receivable, less allowance for doubtful accounts of $29,000........... 1,464,221
Inventories.................................................................... 3,384,222
Prepaid expenses and other current assets...................................... 176,993
Deferred income taxes.......................................................... 91,000
----------
Total current assets........................................................ 6,417,924
----------
Property and equipment, net.................................................... 2,439,013
Other assets................................................................... 366,455
----------
$9,223,392
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of notes payable............................................ $ 665,489
Accounts payable............................................................... 831,545
Accrued expenses............................................................... 190,304
Income taxes payable........................................................... 237,369
----------
Total current liabilities................................................... 1,924,707
----------
Notes payable, less current maturities........................................... 785,289
Deferred income taxes............................................................ 65,000
Stockholders' equity:
Preferred stock, $.001 par value. Authorized 1,000,000 shares; none issued..... --
Common stock, $0.001 par value. Authorized 20,000,000 shares; issued and
outstanding 5,862,565 shares................................................ 5,863
Additional paid-in capital..................................................... 9,369,806
Accumulated deficit............................................................ (2,927,273)
----------
Net stockholders' equity.................................................... 6,448,396
----------
$9,223,392
=========
</TABLE>

See accompanying notes to consolidated financial statements

F-15
<PAGE> 68

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE QUARTERS ENDED MARCH 31

(UNAUDITED)

<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Revenue............................................................. $1,924,502 $2,518,557
Cost of goods sold.................................................. 857,705 849,031
---------- ----------
Gross profit...................................................... 1,066,797 1,669,526
---------- ----------
Operating expenses:
Research and development.......................................... 287,764 244,019
Sales and marketing............................................... 309,756 323,442
General and administrative........................................ 351,571 373,540
---------- ----------
Total operating expenses....................................... 949,091 941,001
---------- ----------
Operating income............................................... 117,706 728,525
---------- ----------
Other income, net................................................... 19,470 61,416
---------- ----------
Income before income taxes........................................ 137,176 789,941
Provision for income taxes.......................................... 21,982 270,193
---------- ----------
Net income..................................................... $ 115,194 $ 519,748
---------- ----------
Income per share:
Net income per share.............................................. $ 0.02 $ 0.09
========== ==========
Weighted average number of common shares outstanding................ 5,816,817 5,957,285
========== ==========
</TABLE>

See accompanying notes to consolidated financial statements

F-16
<PAGE> 69

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE QUARTERS ENDED MARCH 31

(UNAUDITED)

<TABLE>
<CAPTION>
1995 1996
-------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income........................................................ $115,194 $ 519,748
-------- ----------
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.................................. 39,159 55,385
Changes in assets and liabilities:
Accounts receivable............................................ (79,347) (74,361)
Inventories.................................................... (3,274) (83,014)
Prepaid expenses and other current assets...................... (90,586) (34,672)
Other assets................................................... (11,638) (218,940)
Accounts payable............................................... 88,195 104,914
Accrued expenses............................................... (24,119) (140,849)
-------- ----------
Net cash provided by operating activities................. 33,584 128,211
-------- ----------
Cash flows from investing activities:
Purchase of property and equipment................................ (84,325) (1,571,790)
-------- ----------
Cash flows from financing activities:
Proceeds from the exercise of options............................. 10,171 31,340
Borrowings from bank.............................................. 28,000 1,341,000
Repayments to bank................................................ (15,068) (10,715)
Payments of capital lease obligations............................. (8,579) (9,650)
-------- ----------
Net cash provided by financing activities................. 14,524 1,351,975
-------- ----------
Net decrease in cash and cash equivalents................. (36,217) (91,604)
Cash and cash eqivalents at beginning of period..................... 883,760 1,393,092
-------- ----------
Cash and cash equivalents at end of period.......................... $847,543 $ 1,301,488
======== ==========
</TABLE>

See accompanying notes to consolidated financial statements

F-17
<PAGE> 70

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The unaudited financial statements as of March 31, 1996 and for the three
month periods ended March 31, 1995 and 1996 included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
rules and regulations. However, the Company believes that the disclosures are
adequate to prevent the information presented from being misleading. These
financial statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's Form 10-KSB, which contains
financial information for the year ended December 31, 1995.

The information provided in this report reflects all adjustments that are,
in the opinion of management, necessary to present fairly the results of
operations for these periods. The results of these periods are not necessarily
indicative of the results to be expected for the full year.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The Company is engaged in the licensing, development, manufacture,
marketing and distribution of immunological reagents, test kits and
oligonucleotides used in biomedical research. The types of products supplied by
the Company include a range of bioactive proteins, enzymes, substrates,
antibodies, human and murine cytokines, growth factors and a variety of assay
systems for the detection of biological molecules. These products focus on areas
of research such as immunology, AIDS and cancer. The Company focuses its sales
efforts on academic, industrial and governmental laboratories.

Cash and Cash Equivalents

Cash and cash equivalents includes all cash balances and highly liquid
investments with an original maturity of three months or less.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market
(net realizable value) for raw materials and work in process and the
average-cost method for finished goods.

Property and Equipment

License Agreements

F-18
<PAGE> 71

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes

The Company accounts for income taxes under Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Statement 109
requires the use of the asset and liability method of accounting for income
taxes. Under the asset and liability method of Statement 109, deferred income
taxes are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred taxes of a change in tax
rates is recognized in income in the period that includes the enacted date.

Long Lived Assets

In March 1995, Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," was issued. This statement provides guidelines for recognition
of impairment losses related to long-term assets. Effective January 1, 1996, the
Company adopted Statement No. 121. The adoption of this new standard did not
have a material effect on the Company's consolidated financial statements.

Accounting for Stock Options

In October 1995, Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("Statement No. 123"), was issued.
This statement encourages, but does not require a fair value based method of
accounting for employee stock options. The Company will continue to measure
compensation costs pursuant to APB Opinion No. 25, "Accounting for Stock Issued
to Employees" and comply with the pro forma disclosure requirements of Statement
No. 123. Effective January 1, 1996, the Company adopted Statement No. 123 which
had no impact on the Company's consolidated financial statements.

Net Income per Share

Net income per share has been computed using the weighted average number of
common shares outstanding each quarter. The Company's common share equivalents
associated with dilutive stock options and warrants are immaterial, and
accordingly, primary and fully diluted net income per share are approximately
the same.

2. INVENTORIES

Inventories are summarized as follows:

<TABLE>
<CAPTION>
MARCH 31,
1996
----------
<S> <C>
Raw materials............................................................ $ 27,581
Work in process.......................................................... 1,778,899
Finished goods........................................................... 1,577,742
----------
$3,384,222
==========
</TABLE>

F-19
<PAGE> 72

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

<TABLE>
<CAPTION>
MARCH 31,
1996
----------
<S> <C>
Land..................................................................... $ 270,000
Building and improvements................................................ 1,510,769
Leasehold improvements................................................... 7,423
Computer equipment....................................................... 265,262
Office furniture and fixtures............................................ 190,694
Machinery and equipment.................................................. 995,646
----------
3,239,794
Less accumulated depreciation and amortization........................... 800,781
----------
$2,439,013
==========
</TABLE>

4. NOTES PAYABLE

On March 31, 1996 the Company had a credit agreement with a bank providing
for borrowings of up to $1,000,000 under a revolving line of credit limited to
75% of eligible accounts receivable, as defined per the borrowing agreement.
Interest on the revolving line of credit is payable monthly at prime plus .75%.
Included under the credit agreement is a $150,000 installment note payable with
interest at prime plus 1.375% through June 30, 1998. Borrowings under the credit
agreement are secured by all Company assets.

On March 29, 1996, the Company purchased its existing executive offices and
manufacturing facilities, consisting of approximately 27,000 square feet located
on 63,162 square feet of land in Camarillo, California. These offices and
manufacturing facilities, leased by the Company prior to the purchase date, are
subject to a first trust deed mortgage (the "First Mortgage") which was made by
the lender pursuant to the Small Business Administration's Loan Guarantee
Program. At March 31, 1996, the First Mortgage had an outstanding balance of
$745,000 with unpaid principal due on April 1, 2006. The principal amount of the
loan is being amortized over twenty years. Pursuant to the First Mortgage, the
Company is obligated to make monthly payments of $6,895, which include interest
at 9.4% per annum. The property is also subject to a second trust deed loan (the
"Second Mortgage") with the California Statewide Development Corp. with an
outstanding principal balance of $616,000 as of the date of sale of the
debenture which is scheduled for funding by June 1, 1996. The second mortgage is
subject to a fixed rate of approximately 7.75% per annum, payable and amortized
over twenty years, due approximately June 1, 2016, with estimated monthly
payments of principle and interest of $5,057. As of March 31, 1996 there is a
bridge loan in the amount of $596,000 payable to the holder of the First
Mortgage which is subject to a fixed rate of 9.75%. The bridge loan will be
funded upon the sale of the debenture underlying the Second Mortgage by the
California Statewide Certified Development Corporation. Payments by the Company
under the First Mortgage and the Second Mortgage are unconditionally guaranteed
by James H. Chamberlain, Chief Executive Officer and President of the Company.

F-20
<PAGE> 73

BIOSOURCE INTERNATIONAL, INC.
AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

At March 31, 1996 the estimated minimum payments on these notes are as
follows:

<TABLE>
<S> <C>
1996........................................................... $ 637,987
1997........................................................... 57,106
1998........................................................... 37,076
1999........................................................... 17,183
2000........................................................... 18,870
Thereafter 669,206
-------
$1,437,428
=======
</TABLE>

5. LEASE COMMITMENTS

The Company leases manufacturing premises for its wholly owned subsidiary
under an operating lease expiring on April 30, 1998 and renewable for a
three-year period upon expiration of the initial term.

The subsidiary also leases approximately $104,000 of certain equipment
under a capital lease. The capital lease obligation is payable in monthly
installments through June 1996, including interest at approximately 11.8%.

At March 31, 1996 the estimated future minimum payments under these leases
are as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
1996............................................................ $13,350 $ 9,587
1997............................................................ -- 13,479
1998............................................................ -- 4,592
------- -------
$13,350 $27,658
======= =======
</TABLE>

6. INCOME TAXES

Income taxes for the interim periods were computed using the effective tax
rate estimated to be applicable for the full fiscal year, which is subject to
ongoing review by management.

F-21
<PAGE> 74

INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS AND STOCKHOLDERS

BIOSOURCE INTERNATIONAL, INC.

We have audited the accompanying consolidated balance sheet of the in vitro
business segment of Medgenix Diagnostics, S.A. and subsidiaries as of October
31, 1995, and the related consolidated statements of operations, changes in
equity and cash flows for the years ended October 31, 1994 and 1995. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the in vitro
business segment of Medgenix Diagnostics, S.A. and subsidiaries as of October
31, 1995 and the results of their operations and their cash flows for each of
the years ended October 31, 1994 and 1995 in conformity with generally accepted
accounting principles in the United States.

KPMG Reviseurs d'Entreprises

Brussels

May 10, 1996

F-22
<PAGE> 75

MEDGENIX DIAGNOSTICS, S.A.
(IN VITRO BUSINESS)

CONSOLIDATED BALANCE SHEET

OCTOBER 31, 1995
(IN THOUSANDS)

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................................ $ 2,006
Accounts receivable, less allowance for doubtful accounts of $333................ 4,407
Inventories...................................................................... 3,115
Prepaid expenses and other current assets........................................ 1,050
-------
Total current assets..................................................... 10,578
Property and equipment, net........................................................ 1,196
Other assets....................................................................... 64
-------
$11,838
=======
LIABILITIES AND NET ASSETS
Current liabilities:
Notes payable to bank............................................................ $ 192
Accounts payable................................................................. 2,249
Accrued expenses................................................................. 1,923
Income taxes payable............................................................. 391
-------
Total current liabilities................................................ 4,755
Commitments and contingencies
Net Assets:
Financing in vitro business by Medgenix Diagnostics, S.A. ....................... 16,050
Consolidation difference......................................................... (3,525)
Loss brought forward since November 1, 1993...................................... (2,666)
Current year loss................................................................ (2,473)
Translation differences.......................................................... (303)
-------
Net Assets............................................................... 7,083
-------
$11,838
=======
</TABLE>

See accompanying notes to consolidated financial statements.

F-23
<PAGE> 76

MEDGENIX DIAGNOSTICS, S.A.
(IN VITRO BUSINESS)

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED OCTOBER 31, 1994 AND 1995
(IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Revenue.................................................................. $11,575 $11,313
Cost of goods sold....................................................... 4,710 4,405
------- -------
Gross profit........................................................... 6,865 6,908
Operating expenses:
Research and development............................................... 1,973 1,655
Selling and marketing.................................................. 4,104 3,532
General and administrative............................................. 3,353 4,045
------- -------
Total operating expenses............................................ 9,430 9,232
------- -------
Operating loss...................................................... (2,565) (2,324)
Other income (expense):
Interest expense....................................................... (163) (189)
Interest income........................................................ 142 140
------- -------
Total other expense................................................. (21) (49)
------- -------
Loss before income taxes................................................. (2,586) (2,373)
Provision for income taxes............................................. 80 100
------- -------
Net loss................................................................. $(2,666) $(2,473)
======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-24
<PAGE> 77

MEDGENIX DIAGNOSTICS, S.A.

(IN VITRO BUSINESS)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

YEARS ENDED OCTOBER 31, 1995 AND 1994

(IN THOUSANDS)

<TABLE>
<CAPTION>
ACCUMULATED CONSOLIDATION TRANSLATION
DEFICIT DIFFERENCE DIFFERENCE
----------- ------------- -----------
<S> <C> <C> <C>
Balance at November 1, 1993............................ $ -- $(3,525) $ (58)
Net loss............................................... (2,666) --
Translation difference................................. (212)
------ ------ ---
Balance at October 31, 1994............................ (2,666) (3,525) (270)
Net loss............................................... (2,473)
Translation difference................................. (33)
------ ------ ---
Balance at October 31, 1995............................ $(5,139) $(3,525) $(303)
====== ====== ===
</TABLE>

See accompanying notes to consolidated financial statements.

F-25
<PAGE> 78

MEDGENIX DIAGNOSTICS, S.A.
(IN VITRO BUSINESS)

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED OCTOBER 31, 1994 AND 1995
(IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1995
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss............................................................... $(2,666) $(2,473)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization....................................... 485 509
Changes in translation differences and consolidation differences.... (383) 9
Changes in assets and liabilities:
Accounts receivable................................................. 1,279 (505)
Inventories......................................................... 613 236
Prepaid expenses and other assets................................... 409 (134)
Accounts payable.................................................... (2,188) (164)
Accrued expenses.................................................... 436 (884)
Income taxes payable................................................ (13) 164
------- -------
Net cash used in operating activities.................................. (2,028) (3,242)
------- -------
Cash flows from investing activities -- purchase of property and
equipment.............................................................. 26 (317)
------- -------
Cash flows from financing activities:
Repayments to banks.................................................... (1,070) (115)
Financing in vitro..................................................... 3,166 3,212
------- -------
Net cash provided by financing activities.............................. 2,096 3,097
------- -------
Net increase (decrease) in cash and cash equivalents..................... 94 (462)
------- -------
Cash and cash equivalents at beginning of year........................... 2,374 2,468
------- -------
Cash and cash equivalents at end of year................................. $ 2,468 $ 2,006
======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-26
<PAGE> 79

MEDGENIX DIAGNOSTICS, S.A.
(IN VITRO BUSINESS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 1995

(1) DESCRIPTION OF BUSINESS

Medgenix Diagnostics, S.A. is a company incorporated under Belgian law with
subsidiaries in the United Kingdom, France, Italy, Spain, Switzerland and The
Netherlands. Medgenix Diagnostics, S.A. is a wholly owned subsidiary of Nordion
Europe, S.A. Its principal activities comprise two business segments: the in
vivo and in vitro products.

The financial statements reflect only the in vitro business segment. This
segment is involved in the development, manufacture, marketing and distribution
of immunological reagents and test kits used in biomedical research.

(2) BASIS OF PRESENTATION

The financial statements have been prepared in accordance with generally
accepted accounting principles in the United States.

The financial statements have been prepared in the context of the
acquisition by BioSource International, Inc. of the in vitro business of
Medgenix Diagnostics, S.A.

The consolidated financial statements include all significant components of
the in vitro business. They have been prepared as if the in vitro business had
operated as a separate entity during all periods presented.

The financing of the in vitro segment is presented under the heading
"Financing in vitro". No interest charge on this account has been recorded.

The consolidated financial statements do not include the assets of the in
vivo business and of Nordion Europe S.A. However, an allocation of the cost of
shared facilities as well as allocated expenses relating to corporate
accounting, financial, administrative, marketing and selling services provided
by Medgenix Diagnostics, S.A. and Nordion Europe, S.A. to the in vitro business
are included in the consolidated statements of operations. Expenses are
allocated on the basis of actual usage or using other allocation methods which
approximate actual usage. Management believes that the allocation methods are
reasonable.

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include all the operations and
accounts of the in vitro business of Medgenix Diagnostics, S.A. All significant
intercompany accounts and transactions have been eliminated.

The difference between the acquisition cost of the investment in the
subsidiary and the net equity as at the date of first consolidation is shown
under the heading "Consolidation Differences".

Foreign Currency Translation

In consolidating the operations, currency effects are recorded and included
in the consolidated financial statements under the heading "Translation
Difference".

The translation difference results from the translation into United States
currency of all balance sheet assets and liabilities at the year end rate and
the statement of operations at an average rate for the year.

Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly liquid
investments in debt instruments with an original maturity of three months or
less.

F-27
<PAGE> 80

MEDGENIX DIAGNOSTICS, S.A.
(IN VITRO BUSINESS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market
(net realizable value) for raw materials and work in process, and at
average-cost for finished goods.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets which
range from three to ten years. Leasehold improvements are amortized using the
straight-line method over their estimated useful lives or the lease term,
whichever is shorter.

Revenue Recognition

Revenue and related cost of goods sold are recognized upon shipment of
products.

Research and Development Costs

Research and development costs and any related subsidies obtained are
charged or credited to the Statement of Operations as incurred.

Income Taxes

The in vitro business operations are included in the respective local tax
returns of Medgenix Diagnostics, S.A. and each of its subsidiaries. The
consolidated financial statements include the provision for income taxes for the
operating entities that have a net taxable income.

The Company uses the asset and liability method for accounting for income
taxes. Under the asset and liability method, deferred income taxes are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.

The primary temporary difference which would give rise to a deferred tax
asset is net operating losses available for offset against future taxable
income. As the management of the Company is of the opinion that it is not in a
position to confirm that it is more likely than not that the Company will be
able to realize the future tax benefit resulting from these losses, a valuation
allowance has been recorded for the amount of the related deferred tax asset.
Temporary differences which give rise to deferred tax liabilities are
immaterial.

The difference between the expected tax benefit and the tax expense
recorded in 1994 and 1995 relates primarily to the provision for income taxes
for the operating entities that have a net taxable income which cannot be
compensated by the tax losses of the other entities.

In addition, as the tax losses can only be used by Medgenix Diagnostics,
S.A., no allocation between in vivo and in vitro has been made.

F-28
<PAGE> 81

MEDGENIX DIAGNOSTICS, S.A.
(IN VITRO BUSINESS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

(4) INVENTORIES

Inventories at October 31, 1995 are summarized as follows (in thousands):

<TABLE>
<S> <C>
Raw materials....................................................... $ 771
Work in process..................................................... 782
Finished goods...................................................... 1,562
------
$3,115
======
</TABLE>

(5) PROPERTY AND EQUIPMENT

Property and equipment at October 31, 1995 are summarized as follows (in
thousands):

<TABLE>
<S> <C>
Buildings........................................................... $ 26
Leasehold improvements.............................................. 498
Machinery and equipment............................................. 2,978
Furniture and equipment............................................. 405
Corporate equipment................................................. 1,253
------
5,160
Less accumulated depreciation....................................... 3,964
------
$1,196
======
</TABLE>

(6) COMMITMENTS AND CONTINGENCIES

Since 1987, Medgenix Diagnostics, S.A. has received subsidies from the
Region Wallone to finance certain of its R&D activities. If a R&D project
culminates in a commercial product, the Company will have to reimburse the
subsidies received by way of royalties on the related sales. These royalties are
recorded and charged to the income statement during the year in which they
occur.

The revenues and costs incurred are summarized as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenues...................................................... $357 $ 43
Costs......................................................... 307 258
</TABLE>

The cumulative subsidies received to date but not yet reimbursed at October
31, 1995 is summarized as follows (in thousands):

<TABLE>
<S> <C>
Subsidies:
Received....................................................... $8,511
Included in accounts receivable................................ 444
------
8,955
Royalties:
Paid........................................................... (973)
Accrued........................................................ (82)
------
Subsidies received but not yet reimbursed........................... $7,900
======
</TABLE>

At October 31, 1995, the Company had not recorded a liability for these
subsidies as it has the option of submitting all related R&D data to Region
Wallone in exchange for the subsidies received.

F-29
<PAGE> 82

MEDGENIX DIAGNOSTICS, S.A.

(IN VITRO BUSINESS)

CONSOLIDATED BALANCE SHEET

JANUARY 31, 1996

(IN THOUSANDS)

(UNAUDITED)

ASSETS

<TABLE>
<S> <C>
Current Assets:
Cash and cash equivalents...................................................... $ 2,181
Accounts receivable, less allowance for doubtful accounts of $324.............. $ 4,194
Inventories.................................................................... 2,958
Prepaid expenses and other current assets...................................... 1,424
-------
Total current assets................................................... 10,757
Property and equipment, net...................................................... 1,120
Other assets..................................................................... 60
-------
$11,937
=======
</TABLE>

LIABILITIES AND NET ASSETS

<TABLE>
<S> <C>
Current liabilities:
Note payable to bank........................................................... $ 184
Accounts payable............................................................... 2,386
Accrued expenses............................................................... 1,754
-------
Total current liabilities.............................................. 4,324
Commitments and contingencies:
Net Assets:
Financing in vitro business by Medgenix Diagnostics, S.A....................... 16,426
Accumulated deficit............................................................ (5,290)
Consolidation difference....................................................... (3,405)
Translation differences........................................................ (118)
-------
Net Assets............................................................. 7,613
$11,937
=======
</TABLE>

See accompanying notes to consolidated financial statements.

F-30
<PAGE> 83

MEDGENIX DIAGNOSTICS, S.A.

(IN VITRO BUSINESS)

CONSOLIDATED STATEMENTS OF OPERATIONS

QUARTERS ENDED JANUARY 31

(IN THOUSANDS)

(UNAUDITED)

<TABLE>
<CAPTION>
1995 1996
------ ------
<S> <C> <C>
Revenue............................................................ $2,708 $2,926
Cost of sales...................................................... 1,013 1,160
------ ------
Gross Profit..................................................... 1,695 1,766
------ ------
Operating expenses:
Research and development......................................... 364 388
Selling and marketing............................................ 852 775
General and administrative....................................... 936 783
------ ------
Total operating expenses................................. 2,152 1,946
------ ------
Operating loss........................................... (457) (180)
Other income (expense):
Interest expense................................................. (39) (14)
Interest income.................................................. 14 50
------ ------
Loss before income taxes........................................... (482) (144)
Provision for income taxes......................................... (1) (7)
------ ------
Net loss................................................. $ (483) $ (151)
====== ======
</TABLE>

See accompanying notes to consolidated financial statements.

F-31
<PAGE> 84

MEDGENIX DIAGNOSTICS, S.A.

(IN VITRO BUSINESS)

CONSOLIDATED STATEMENTS OF CASH FLOWS

QUARTERS ENDED JANUARY 31

(IN THOUSANDS)

(UNAUDITED)

<TABLE>
<CAPTION>
1995 1996
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net loss................................................................. $ (483) $ (151)
Adjustments to reconcile net loss to net cash used in operating
activities...........................................................
Depreciation and amortization......................................... 113 166
Changes in translation differences & consolidation differences........ 75 --
Changes in assets and liabilities
Accounts receivable................................................... 467 63
Inventories........................................................... 168 51
Prepaid expenses and other assets..................................... (124) (410)
Accounts payable...................................................... 213 213
Accrued expenses...................................................... (773) (103)
Income taxes payable.................................................. (210) (378)
------ ------
Net cash used in operating activities................................. (554) (549)
Cash flows from investing activities -- purchase of property and
equipment................................................................ (18) (128)
Cash flows from financing activities:
Repayments to bank....................................................... (63) (1)
Financing in-vitro....................................................... 342 921
------ ------
Net cash provided by financing activities........................ 279 920
------ ------
Net increase (decrease) in cash and cash equivalents............. (293) 243
Cash and cash equivalents at beginning of year............................. 2,283 1,938
------ ------
Cash and cash equivalents at end of year................................... $1,990 $2,181
====== ======
</TABLE>

See accompanying notes to consolidated financial statements.

F-32
<PAGE> 85

MEDGENIX DIAGNOSTICS, S.A.

(IN VITRO BUSINESS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The unaudited financial statements as of January 31, 1996 and for the three
month periods ended January 31, 1995 and 1996 included herein have been prepared
by the in vitro business. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. However, the in vitro
business believes that the disclosures are adequate to prevent the information
presented from being misleading. These financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
in vitro business' annual report for the year ended October 31, 1995.

(1) DESCRIPTION OF BUSINESS

Medgenix Diagnostics, S.A. is a company incorporated under Belgian law with
subsidiaries in the United Kingdom, France, Italy, Spain, Switzerland and The
Netherlands. Medgenix Diagnostics, S.A. is a wholly owned subsidiary of Nordion
Europe, S.A. Its principle activities comprise two business segments: the in
vivo and in vitro products.

(2) BASIS OF PRESENTATION

The financial statements have been prepaid in accordance with generally
accepted accounting principles in the United States.

The financial statements have been prepared in the context of the
acquisition by BioSource International, Inc. of the in vitro business Medgenix
Diagnostics, S.A.

The consolidated financial statements include all significant components of
the in vitro business. They have been prepared as if the in vitro business
operated as a separate entity during all periods presented.

The financing of the in vitro segment is presented under the heading
"Financing in vitro." No interest charge on this account has been recorded.

The consolidated financial statements do not include the assets of the in
vitro business and of Nordion Europe, S.A. However, an allocation of the cost of
shared facilities as well as allocated expenses relating to corporate
accounting, financial, administrative, marketing and selling services provided
by Medgenix Diagnostics, S.A. and Nordion Europe, S.A. to the in vitro business
are included in the consolidated statements of operations. Expenses are
allocated on the basis of actual usage or using other allocation methods which
approximate actual usage. Management believes that the allocation methods are
reasonable.

(3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The difference between the acquisition cost of the investment in the
subsidiary and the net equity as at the date of first consolidation is shown
under the heading "Consolidation Differences."

F-33
<PAGE> 86

MEDGENIX DIAGNOSTICS, S.A.

(IN VITRO BUSINESS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Foreign Currency Translation

In consolidating the operations, currency effects are recorded and included
in the consolidated financial statements under the heading "Translation
Difference."

Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly liquid
investments in debt instruments with an original maturity of three months or
less.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market
(net realizable value) for raw materials and work in process, and at
average-cost for finished goods.

Property and Equipment

Property and equipment are stated at cost. Depreciation is provided using
the straight-line method over the estimated useful lives of the assets which
range from three to ten years. Leasehold improvements are amortized using the
straight-line method over the estimated useful lives or the lease term,
whichever is shorter.

Revenue Recognition

Revenue and related cost of goods sold are recognized upon shipment of
products.

Research and Development Costs

Research and development costs and any related subsidies obtained are
charged or credited to the Statement of Operations as incurred.

Income Taxes

respective tax bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.

F-34
<PAGE> 87

MEDGENIX DIAGNOSTICS, S.A.

(IN VITRO BUSINESS)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition, as the tax losses can only be used by Medgenix Diagnostics,
S.A. no allocation between in vivo and in vitro has been made.

F-35
<PAGE> 88

BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARY

INTRODUCTION TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION

The following Unaudited Pro Forma Condensed Consolidated Financial
Statements give effect to the following transactions as if they had occurred as
of March 31, 1996 for purposes of the pro forma condensed consolidated balance
sheet data and as of the beginning of the period for purposes of the pro forma
condensed consolidated statements of operations: (1) the acquisition of certain
assets and assumption of certain liabilities of Medgenix Diagnostics, S.A.
(Medgenix) which relate to the in vitro business of Medgenix in exchange for
cash of $6,565,000 and (2) the issuance of 2,048,000 shares of the Company's
Common Stock through a secondary offering at an assumed initial public offering
price of $10.13 per share (including the sale of 31,000 shares of Common Stock
to be issued by the Company upon exercise of warrants by two of the Selling
Stockholders for which the Company will receive net proceeds of $59,750). The
principal use of proceeds from this offering is to fund the Medgenix in-vitro
business acquisition. Both of these transactions are expected to be consummated
in May 1996.

The Unaudited Pro Forma Condensed Consolidated Financial Statements do not
purport to present the financial position or results of operations of BioSource
had the transactions assumed therein occurred on the dates specified, nor are
they necessarily indicative of the results of operations that may be achieved in
the future.

The following Unaudited Pro Forma Condensed Consolidated Financial
Statements for the year ended December 31, 1995 and for the quarter ended March
31, 1996 do not reflect certain cost savings that management believes may be
realized as a result of the acquisition. These savings are expected to be
realized primarily through the elimination of duplicative corporate overhead
expenses, reduced work force and sales and marketing expenses. No assurances can
be made as to the amount of cost savings, if any, that actually will be
realized.

The Unaudited Pro Forma Condensed Consolidated Financial Statements are
based on certain assumptions and adjustments described in the Notes to Unaudited
Pro Forma Condensed Consolidated Financial Statements included herein and should
be read in conjunction with Management's Discussion and Analysis of Financial
Condition and Results of Operations and the Consolidated Financial Statements of
the Company and the related Notes thereto and the Combined Financial Statements
of Medgenix and the related Notes thereto included herein.

BioSource reports its financial information on the basis of a December 31
fiscal year. Medgenix reports its financial information on the basis of an
October 31 fiscal year.

F-36
<PAGE> 89

BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

MARCH 31, 1996

<TABLE>
<CAPTION>
HISTORICAL
------------------------------------ PRO FORMA
BIOSOURCE MEDGENIX PRO FORMA CONSOLIDATED
MARCH 31, 1996 JANUARY 31, 1996 ADJUSTMENTS MARCH 31, 1996
--------------- ---------------- ----------- --------------
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents..... $ 1,301,488 $ 2,181,000 $21,195,763(a) $ 15,932,251
(6,565,000)(b)
(2,181,000)(c)
Accounts receivable, less
allowance for doubtful
accounts................... 1,464,221 4,194,000 5,658,221
Inventories................... 3,384,222 2,958,000 6,342,222
Prepaid expenses and other
current assets............. 176,993 1,424,000 1,600,993
Deferred income taxes......... 91,000 -- 91,000
----------- ----------- ---------- ----------
Total current
assets.............. 6,417,924 10,757,000 12,449,763 29,624,687
Unallocated excess net book
value over purchase price..... -- -- 1,133,000(d) 1,133,000
Property and equipment.......... 2,439,013 1,120,000 3,559,013
Other assets.................... 366,455 60,000 426,455
----------- ----------- ---------- ----------
$ 9,223,392 $ 11,937,000 $13,582,763 $ 34,743,155
=========== =========== ========== ==========
Current liabilities:
Current maturities of notes
payable.................... $ 665,489 $ 184,000 $ 849,489
Accounts payable.............. 831,545 2,386,000 3,217,545
Accrued expenses.............. 190,304 1,754,000 1,944,304
Income taxes payable.......... 237,369 -- 237,369
----------- ----------- ----------
Total current
liabilities......... 1,924,707 4,324,000 6,248,707
Notes payable, less current
maturities.................... 785,289 -- 785,289
Deferred income taxes........... 65,000 -- 65,000
Commitments and contingencies:
Stockholders' equity:
Preferred stock............... -- -- --
Common stock.................. 5,863 -- 2,048(a) 7,911
Additional paid-in capital.... 9,369,806 -- 21,193,715(a) 30,563,521
Financing in vitro business by
Medgenix Diagnostics,
S.A. ...................... -- 16,426,000 --
Consolidation difference...... -- (3,405,000) --
(2,181,000)(c)
(4,275,000)(d)
(6,565,000)(b)
Accumulated deficit........... (2,927,273) (5,290,000) 5,290,000(d) (2,927,273)
Translation difference........ -- (118,000) 118,000(d) --
----------- ----------- ---------- ----------
Net stockholders'
equity.............. 6,448,396 7,613,000 13,582,763 27,644,159
----------- ----------- ---------- ----------
$ 9,223,392 $ 11,937,000 $13,582,763 $ 34,743,155
=========== =========== ========== ==========
</TABLE>

F-37
<PAGE> 90

BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 1995

<TABLE>
<CAPTION>
HISTORICAL
------------------------------------
BIOSOURCE MEDGENIX PRO FORMA
----------------- ---------------- -----------------
YEAR ENDED YEAR ENDED PRO FORMA YEAR ENDED
DECEMBER 31, 1995 OCTOBER 31, 1995 ADJUSTMENTS DECEMBER 31, 1995
----------------- ---------------- ------------ -----------------
<S> <C> <C> <C> <C>
Revenue.............................. $ 8,608,447 $ 11,313,000 $19,921,447
Cost of goods sold................... 2,996,103 4,405,000 7,401,103
----------------- ---------------- -----------------
Gross profit............... 5,612,344 6,908,000 12,520,344
----------------- ---------------- -----------------
Operating expenses:
Research and development........... 1,073,733 1,655,000 2,728,733
Sales and marketing................ 1,289,939 3,532,000 4,821,939
General and administrative......... 1,633,649 4,045,000 76,000(e) 5,754,649
----------------- ---------------- ------------ -----------------
Total operating expenses... 3,997,321 9,232,000 76,000 13,305,321
----------------- ---------------- ------------ -----------------
Operating income (loss).... 1,615,023 (2,324,000) (76,000) (784,977)
Other expenses, net.................. (3,644) (49,000) (52,644)
----------------- ---------------- ------------ -----------------
Income (loss) before income
taxes.................... 1,611,379 (2,373,000) (76,000) (837,621)
Provision for income taxes........... 451,000 100,000 551,000
----------------- ---------------- ------------ -----------------
Net income (loss).......... $ 1,160,379 $ (2,473,000) (76,000) $(1,388,621)
============= ============ ========= =============
Income (loss) per share:
Net income (loss) per
share.................... $ 0.20 $ (0.17)
============= =============
Weighted average number of common
shares outstanding................. 5,945,900 7,993,900
============= =============
</TABLE>

F-38
<PAGE> 91

BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARY

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

QUARTER ENDED MARCH 31, 1996

<TABLE>
<CAPTION>
HISTORICAL
---------------------------------
BIOSOURCE MEDGENIX PRO FORMA
-------------- ---------------- --------------
QUARTER ENDED QUARTER ENDED PRO FORMA QUARTER ENDED
MARCH 31, 1996 JANUARY 31, 1996 ADJUSTMENTS MARCH 31, 1996
-------------- ---------------- ------------ --------------
<S> <C> <C> <C> <C>
Revenue.................................. $2,518,557 $2,926,000 $5,444,557
Cost of goods sold....................... 849,031 1,160,000 2,009,031
-------------- ---------------- --------------
Gross profit................... 1,669,526 1,766,000 3,435,526
-------------- ---------------- --------------
Operating expenses:
Research and development............... 244,019 388,000 632,019
Sales and marketing.................... 323,442 775,000 1,098,442
General and administrative............. 373,540 783,000 19,000(e) 1,175,540
-------------- ---------------- ------------ --------------
Total operating expenses....... 941,001 1,946,000 19,000 2,906,001
-------------- ---------------- ------------ --------------
Operating income (loss)........ 728,525 (180,000) (19,000) 529,525
Other income, net........................ 61,416 36,000 97,416
-------------- ---------------- ------------ --------------
Income (loss) before income
taxes........................ 789,941 (144,000) (19,000) 626,941
Provision for income taxes............... 270,193 7,000 277,193
-------------- ---------------- ------------ --------------
Net income (loss).............. $ 519,748 $ (151,000) $(19,000) $ 349,748
=========== ============ ========= ===========
Income per share:
Net income per share........... $ 0.09 $ 0.04
=========== ===========
Weighted average number of common shares
outstanding............................ 5,957,285 8,005,285
=========== ===========
</TABLE>

F-39
<PAGE> 92

BIOSOURCE INTERNATIONAL, INC. AND SUBSIDIARY

NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

The Unaudited Pro Forma Condensed Consolidated Statement of Operations for
the year ended December 31, 1995 and for the quarter ended March 31, 1996 do not
give effect to certain cost savings that may be realized as a result of the
acquisition. The anticipated savings are based on estimates and assumptions that
are inherently uncertain; though considered reasonable by the Company, they are
subject to significant business, economic and competitive uncertainties and
contingencies, all of which are difficult to predict and many of which are
beyond the control of management. There can be no assurances that such savings,
if any, will be achieved.

The adjustments to arrive at the Unaudited Pro Forma Condensed Consolidated
Financial Statements are as follows:

(a) To record the estimated net proceeds received from issuance of
2,048,000 shares of BioSource common stock at an assumed offering price
of $10.13 per share (including the sale of 31,000 shares of Common Stock
to be issued by the Company upon exercise of warrants by two of the
Selling Stockholders for which the Company will receive net proceeds of
$59,750) less estimated offering costs.

(b) To record the estimated cash used to purchase the in vitro business of
Medgenix Diagnostics, S.A.

(d) To record the adjustment to eliminate net stockholders' equity of
Medgenix.

(e) To record the amortization expense related to the unallocated excess
net book value over purchase price assuming a useful life of 15 years.

F-40
<PAGE> 93

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

NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS. IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SHARES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 6
The Company........................... 10
Use of Proceeds....................... 10
Price Range of Common Stock........... 11
Dividend Policy....................... 11
Capitalization........................ 12
Selected Consolidated Financial
Data................................ 13
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 15
Business.............................. 22
Management............................ 35
Principal and Selling Stockholders.... 43
Description of Capital Stock.......... 45
Shares Eligible For Future Sale....... 46
Underwriting.......................... 47
Legal Matters......................... 48
Experts............................... 48
Change in Independent Public
Accountant.......................... 48
Additional Information................ 48
Glossary of Scientific Terms.......... 50
Index to Financial Statements......... F-1
</TABLE>

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

2,150,000 SHARES

LOGO

COMMON STOCK

BIOSOURCE
INTERNATIONAL, INC.
--------------------

PROSPECTUS
--------------------
CRUTTENDEN ROTH
I N C O R P O R A T E D

COMMONWEALTH ASSOCIATES
, 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 94

PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Article Eight of the Registrant's Certificate of Incorporation and Article
Five of its Bylaws provide for the indemnification by the Company of each
director, officer and employee of the Company to the fullest extent permitted by
the Delaware General Corporation Law, as the same exists or may hereafter be
amended. Section 145 of the Delaware General Corporation Law provides in
relevant part that a corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful.

II-1
<PAGE> 95

Section 8 of the Underwriting Agreement filed as Exhibit 1.1 hereto sets
forth certain provisions with respect to the indemnification of certain
controlling persons, directors and officers against certain losses and
liabilities, including certain liabilities under the Securities Act.

Reference is made to the following documents filed as exhibits to this
Registration Statement regarding relevant indemnification provisions described
above and elsewhere herein:

<TABLE>
<CAPTION>
EXHIBIT
DOCUMENT NUMBER
---------------------------------------------------------------------------- ------
<S> <C>
Form of Underwriting Agreement.............................................. 1.1
Registrant's Certificate of Incorporation................................... 3.1
Registrant's Bylaws......................................................... 3.2
Registrant's Form of Indemnification Agreement.............................. 10.12
</TABLE>

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table itemizes the expenses incurred by the Registrant in
connection with the issuance and distribution of the securities being
registered, other than underwriting discounts. All the amounts shown are
estimates except the Securities and Exchange Commission registration fee, the
NASD filing fee and the Nasdaq National Market filing fee.

<TABLE>
<S> <C>
Registration fee -- Securities and Exchange Commission.................... $ 5,308
NASD filing fee........................................................... 2,039
Representatives' non-accountable expense allowance........................ 326,693
Nasdaq fee for listing additional shares.................................. 17,500
Accounting fees and expenses.............................................. 125,000
Legal fees and expenses (other than blue sky)............................. 200,000
Directors' and officers' insurance........................................ 75,000
Blue sky fees and expenses, including legal fees.......................... 15,000
Printing fees............................................................. 100,000
Transfer agent and registrar fees......................................... 5,000
Miscellaneous............................................................. 28,460
--------
Total........................................................... $900,000
========
</TABLE>

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.

On November 21, 1995, the Company acquired Keystone Laboratories, Inc.
("Keystone"), located in Menlo Park, California, by issuing 500,000 shares of
its Common Stock in exchange for all issued and outstanding common stock of
Keystone held by the stockholders of Keystone. At the date of closing, the
500,000 shares had an aggregate fair market value of $1,812,500, based on the
closing sale price of BioSource's Common Stock on such date, as reported by the
Nasdaq Small Cap Market. The transaction was effected pursuant to a merger
whereby a wholly-owned subsidiary of the Company was merged with and into
Keystone and the stockholders of Keystone received restricted shares of Common
Stock of the Company in the merger. The shares of the Company's Common Stock
were issued pursuant to an exemption from registration under Section 4(2) of the
Securities Act.

II-2
<PAGE> 96

ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement.
2.1 Asset Purchase Agreement dated April 30, 1996, by and among Registrant, Nordion
International Inc. and Medgenix Diagnostics, S.A.
3.1 Certificate of Incorporation of Registrant.(1)
3.2 Bylaws of Registrant.(1)
4.1 Specimen Stock Certificate of Registrant.(1)
4.2 Form of Representatives' Warrant Agreement.*
5.1 Opinion and Consent of Troop Meisinger Steuber & Pasich, LLP.*
10.1 Registrant's 1992 Stock Incentive Plan.(1)
10.2 Registrant's 1993 Stock Incentive Plan.(4)
10.3 Licensing Agreement dated May 1, 1990, by and between TAGO, Inc., as licensee, and
St. Jude Children's Research Hospital, as Licenser.(1)
10.4 License Agreement dated February 14, 1991, by and between Registrant and Schering
Corporation.(1)
10.5 Warrant Agreement dated May 19, 1993, by and between Registrant and Immunoplex,
Inc.(2)
10.6 Warrant Agreement dated January 1, 1994, by and between Registrant and The Equity
Group, Inc.(2)
10.7 Warrant Agreement dated February 1, 1996, by and between Registrant and Nordion
International Inc.
10.8 Business Loan Agreement dated October 12, 1993, by and between Registrant, as
borrower, and Silicon Valley Bank as lender, together with Commercial Security
Agreement dated October 12, 1993 and promissory note dated October 12, 1993.(3)
10.9 License Agreement dated October 1, 1993, by and between Registrant, as licensee, and
Schering Corporation, as licensor.(2)
10.10 Employment Agreement between Registrant and James H. Chamberlain dated January 2,
1996.*
10.11 License Agreement dated February 7, 1994, by and between Registrant, a licensee and
Fundacio Clinic.(4)
10.12 Form of Indemnification Agreement for Directors and Executive Officers.*
10.13 List of Indemnitees relating to Form of Indemnification Agreement previously filed
as Exhibit 10.12.
10.14 Purchase Agreement dated December 20, 1995 between Registrant and Pacific Ranch
Company.*
10.15 Promissory Note dated March 25, 1996 in the principal amount of $745,000 payable to
Heller Financial, Inc., Small Business Lending Division.*
10.16 Promissory Note dated March 25, 1996 in the principal amount of $596,000 payable to
Heller Financial, Inc., Small Business Lending Division; Loan Agreement dated March
11, 1996 between California Statewide Certified Development Corporation and
Registrant.*
10.17 Loan Modification Agreement dated as of June 22, 1994, by and between Registrant and
Silicon Valley Bank.(4)
10.18 Loan Modification Agreements dated as of May 31, 1995, September 30, 1995 and
December 31, 1995, by and between Registrant and Silicon Valley Bank.
16.1 Changes in Registrant's Certifying Accountant.(5)
22.1 Subsidiary.(1)
</TABLE>

II-3
<PAGE> 97

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S>
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of KPMG Reviseurs d'Entreprises
24.1 Power of Attorney.*
24.2 Power of Attorney for Robert D. Weist.
</TABLE>

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

* Previously filed.

(1) Incorporated by reference from the Company's Registration Statement on Form
S-4 as filed with the Commission on October 22, 1992, as amended.

(2) Incorporated by reference from the Company's Form 10KSB for the year ended
December 31, 1992.

(3) Incorporated by reference from the Company's Form 10KSB for the year ended
December 31, 1993.

(4) Incorporated by reference from the Company's Form 10KSB for the year ended
December 31, 1994.

(5) Incorporated by reference to Form 8-K filed with the Securities and Exchange
Commission on August 15, 1994.

ITEM 28. UNDERTAKINGS.

The undersigned Registrant hereby undertakes:

(a) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by a controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.

(b) The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed
to be part of this registration statement as of the time it was declared
effective.

(2) For purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.

(3) The undersigned will file, during any period in which the
undersigned offers or sells securities, a post-effective amendment to
this registration statement to: (i) include any prospectus required by
Section 10(a)(3) of the Securities Act; (ii) reflect in the prospectus
any facts or events which, individually or together, represent a
fundamental change in the information in the registration statement; and
(iii) include any additional or changed material information in the plan
of distribution.

II-4
<PAGE> 98

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Amendment No. 1
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Camarillo, State of California, on May
13, 1996.

BIOSOURCE INTERNATIONAL, INC.

By: /s/ JAMES H. CHAMBERLAIN

------------------------------------
James H. Chamberlain
Chairman of the Board, President,
and Chief Executive Officer

In accordance with the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities and on the dates stated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- -------------------------------- ---------------
<C> <S> <C>
/s/ JAMES H. CHAMBERLAIN Chairman of the Board, President May 13, 1996
- --------------------------------------------- and Chief Executive Officer,
James H. Chamberlain (Principal Executive Officer)
* Chief Financial Officer May 13, 1996
- --------------------------------------------- (Principal Accounting Officer)
Anna M. Anderson (Principal Financial Officer)
* Director May 13, 1996
- ---------------------------------------------
Leonard M. Hendrickson
* Director May 13, 1996
- ---------------------------------------------
David J. Moffa
* Director May 13, 1996
- ---------------------------------------------
John R. Overturf, Jr.
* Director May 13, 1996
- ---------------------------------------------
Robert D. Weist
*By: /s/ JAMES H. CHAMBERLAIN
- ---------------------------------------------
James H. Chamberlain
Attorney-in-Fact
</TABLE>

II-5
<PAGE> 99

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------------
<S> <C> <C>
1.1 Form of Underwriting Agreement.......................................
2.1 Asset Purchase Agreement dated April 30, 1996, by and among
Registrant, Nordion International Inc. and Medgenix Diagnostics,
S.A..................................................................
3.1 Certificate of Incorporation of Registrant(1)........................
3.2 Bylaws of Registrant(1)..............................................
4.1 Specimen Stock Certificate of Registrant(1)..........................
4.2 Form of Representatives' Warrant Agreement*..........................
5.1 Opinion and Consent of Troop Meisinger Steuber & Pasich, LLP*........
10.1 Registrant's 1992 Stock Incentive Plan(1)............................
10.2 Registrant's 1993 Stock Incentive Plan(4)............................
10.3 Licensing Agreement dated May 1, 1990, by and between TAGO, Inc., as
licensee, and St. Jude Children's Research Hospital, as
Licenser(1)..........................................................
10.4 License Agreement dated February 14, 1991, by and between Registrant
and Schering Corporation(1)..........................................
10.5 Warrant Agreement dated May 19, 1993, by and between Registrant and
Immunoplex, Inc.(2)..................................................
10.6 Warrant Agreement dated January 1, 1994, by and between Registrant
and The Equity Group, Inc.(2)........................................
10.7 Warrant Agreement dated February 1, 1996, by and between Registrant
and Nordion International Inc........................................
10.8 Business Loan Agreement dated October 12, 1993, by and between
Registrant, as borrower, and Silicon Valley Bank as lender, together
with Commercial Security Agreement dated October 12, 1993 and
promissory note dated October 12, 1993(3)............................
10.9 License Agreement dated October 1, 1993, by and between Registrant,
as licensee, and Schering Corporation, as licensor(2)................
10.10 Employment Agreement between Registrant and James H. Chamberlain
dated January 2, 1996*...............................................
10.11 License Agreement dated February 7, 1994, by and between Registrant,
a licensee and Fundacio Clinic(4)....................................
10.12 Form of Indemnification Agreement for Directors and Executive
Officers*............................................................
10.13 List of Indemnitees relating to Form of Indemnification Agreement
previously filed as Exhibit 10.12....................................
10.14 Purchase Agreement dated December 20, 1995 between Registrant and
Pacific Ranch Company*...............................................
10.15 Promissory Note dated March 25, 1996 in the principal amount of
$745,000 payable to Heller Financial, Inc., Small Business Lending
Division*............................................................
</TABLE>

<PAGE> 100

<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
-------------
<S> <C> <C>
10.16 Promissory Note dated March 25, 1996 in the principal amount of
$596,000 payable to Heller Financial, Inc., Small Business Lending
Division; Loan Agreement dated March 11, 1996 between California
Statewide Certified Development Corporation and Registrant*..........
10.17 Loan Modification Agreement dated as of June 22, 1994, by and between
Registrant and Silicon Valley Bank(4)................................
10.18 Loan Modification Agreements dated as of May 31, 1995, September 30,
1995 and December 31, 1995, by and between Registrant and Silicon
Valley Bank..........................................................
16.1 Changes in Registrant's Certifying Accountant(5).....................
22.1 Subsidiary(1)........................................................
23.1 Consent of KPMG Peat Marwick LLP.....................................
23.2 Consent of KPMG Reviseurs d'Entreprises..............................
24.1 Power of Attorney*...................................................
24.2 Power of Attorney for Robert D. Weist................................
</TABLE>

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

* Previously filed.

(1) Incorporated by reference from the Company's Registration Statement on Form
S-4 as filed with the Commission on October 22, 1992, as amended.

(2) Incorporated by reference from the Company's Form 10KSB for the year ended
December 31, 1992.

(3) Incorporated by reference from the Company's Form 10KSB for the year ended
December 31, 1993.

(4) Incorporated by reference from the Company's Form 10KSB for the year ended
December 31, 1994.

(5) Incorporated by reference to Form 8-K filed with the Securities and Exchange
Commission on August 15, 1994.

<PAGE> 1
EXHIBIT 1.1

2,150,000 SHARES(1)

BIOSOURCE INTERNATIONAL, INC.

COMMON STOCK

UNDERWRITING AGREEMENT

____________, 1996

CRUTTENDEN ROTH INCORPORATED
COMMONWEALTH ASSOCIATES
As Representatives of the several Underwriters
c/o Cruttenden Roth Incorporated
18301 Von Karman, Suite 100
Irvine, California 92715

Gentlemen:

BIOSOURCE INTERNATIONAL, INC. a Delaware corporation (the "Company"),
and certain stockholders of the Company named in Schedule B hereto (hereafter
called the "Selling Stockholders") address you as the Representatives of each of
the persons, firms and corporations listed in Schedule A hereto (herein
collectively called the "Underwriters") and hereby confirm their respective
agreements with the several Underwriters as follows:

1. Description of Shares. The Company proposes to issue and sell
2,017,000 shares of its authorized and unissued Common Stock, $0.001 par value
per share, to the several Underwriters. The Selling Stockholders, acting
severally and not jointly, propose to sell an aggregate of 133,000 shares of the
Company's authorized and outstanding Common Stock, $0.001 par value per share,
to the several Underwriters. The 2,017,000 shares of Common Stock, $0.001 par
value per share, of the Company to be sold by the Company are hereinafter called
the "Company Shares" and the 133,000 shares of Common Stock, $0.001 par value
per share, to be sold by the Selling Stockholders are hereinafter called the
"Selling Stockholder Shares." The Company Shares and the Selling Stockholder
Shares are hereinafter collectively referred to as the "Firm Shares." The
Company also proposes to grant to the Underwriters an option to purchase up to
322,500 additional shares of the Company's Common Stock, $0.001 par value per
share (the "Option Shares"), as provided in Section 7 hereof. In addition, the
Company proposes to sell to you, individually and not in your capacity as
Representatives, four-year warrants (the "Representatives' Warrants") to
purchase up to 100,000 shares of Common Stock, $0.001 par value per share, of
the Company (the "Representatives' Warrant Stock"), which sale will be
consummated in accordance with the terms and conditions of the Representatives'
Warrant Agreement (the "Representatives' Warrant Agreement"), the form of which
is filed as an exhibit to the Registration Statement described below. As used in
this Agreement, the term "Shares" shall include the Firm Shares and the Option
Shares. All shares of Common Stock, $0.001 par value per share, of the Company
to be outstanding after giving effect to the sales contemplated hereby,
including the Shares, are hereinafter referred to as "Common Stock."

2. Representations, Warranties and Agreements of the Company and the
Selling Stockholders.

I. The Company represents and warrants to and agrees with each
Underwriter that:

_________________________

(1) Plus an option to purchase up to 322,500 additional shares from the Company
to cover over-allotments.
<PAGE> 2
(a) A registration statement on Form SB-2 (File No. 33-_____) with
respect to the Shares, including a prospectus subject to completion, has been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"), and the applicable rules and regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Act and has been filed with the Commission; such
amendments to such registration statement and such amended prospectuses subject
to completion as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file such
additional amendments to such registration statement and such amended
prospectuses subject to completion as may hereafter be required. Copies of such
registration statement and amendments and of each related prospectus subject to
completion (the "Preliminary Prospectuses") have been delivered to you. The
Company and the transactions contemplated by this Agreement meet the
requirements for using Form SB-2 under the Act.

If the registration statement relating to the Shares has been
declared effective under the Act by the Commission, the Company will prepare and
promptly file with the Commission the information omitted from the registration
statement pursuant to Rule 430A(a) of the Rules and Regulations pursuant to
subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations or as part
of a post-effective amendment to the registration statement (including a final
form of prospectus). If the registration statement relating to the Shares has
not been declared effective under the Act by the Commission, the Company will
prepare and promptly file an amendment to the registration statement, including
a final form of prospectus. The term "Registration Statement" as used in this
Agreement shall mean such registration statement, including financial
statements, schedules and exhibits, in the form in which it became or becomes,
as the case may be, effective (including, if the Company omitted information
from the registration statement pursuant to Rule 430A(a) of the Rules and
Regulations, the information deemed to be a part of the registration statement
at the time it became effective pursuant to Rule 430A(b) of the Rules and
Regulations) and, in the event of any amendment thereto after the effective date
of such registration statement, shall also mean (from and after the
effectiveness of such amendment) such registration statement as so amended. The
term "Prospectus" as used in this Agreement shall mean the prospectus relating
to the Shares as included in such Registration Statement at the time it becomes
effective (including, if the Company omitted information from the Registration
Statement pursuant to Rule 430A(a) of the Rules and Regulations, the information
deemed to be a part of the Registration Statement at the time it became
effective pursuant to Rule 430A(b) of the Rules and Regulations), except that if
any revised prospectus shall be provided to the Underwriters by the Company for
use in connection with the offering of the Shares that differs from the
prospectus on file with the Commission at the time the Registration Statement
became or becomes, as the case may be, effective (whether or not such revised
prospectus is required to be filed with the Commission pursuant to Rule
424(b)(3) of the Rules and Regulations), the term "Prospectus" shall refer to
such revised prospectus from and after the time it is first provided to the
Underwriters for such use.

(b) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or instituted proceedings for that
purpose, and each such Preliminary Prospectus has conformed in all material
respects to the requirements of the Act and the Rules and Regulations and, as of
its date, has not included any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; and at the time
the Registration Statement became or becomes, as the case may be, effective and
at all times subsequent thereto up to and on the Closing Date (hereinafter
defined) and on any later date on which Option Shares are to be purchased, (i)
the Registration Statement and the Prospectus, and any amendments or supplements
thereto, contained and will contain all material information required to be
included therein by the Act and the Rules and Regulations and will in all
material respects conform to the requirements of the Act and the Rules and
Regulations, (ii) the Registration Statement, and any amendments or supplements
thereto, did not and will not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (iii) the Prospectus, and any
amendments or supplements thereto, did not and will not include any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that none of the representations and
warranties contained in this subparagraph (b) shall apply to

2
<PAGE> 3
information contained in or omitted from the Registration Statement or
Prospectus, or any amendment or supplement thereto, in reliance upon, and in
conformity with, written information relating to any Underwriter furnished to
the Company by such Underwriter specifically for use in the preparation thereof.

(c) Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation with full power and authority
(corporate and other) to own, lease and operate its properties and conduct its
business as described in the Prospectus; the Company owns all of the outstanding
capital stock of its subsidiaries free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest; each of the Company and its
subsidiaries is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would not have a
material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise; no proceeding has been instituted in any such
jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification; each of the Company and its
subsidiaries is in possession of and operating in compliance with all
authorizations, licenses, certificates, consents, orders and permits from state,
federal and other regulatory authorities which are material to the conduct of
its business, all of which are valid and in full force and effect; neither the
Company nor any of its subsidiaries is in violation of its respective charter or
bylaws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any material bond,
debenture, note or other evidence of indebtedness, or in any material lease,
contract, indenture, mortgage, deed of trust, loan agreement, joint venture or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of its subsidiaries or their respective properties
may be bound; and neither the Company nor any of its subsidiaries is in material
violation of any law, order, rule, regulation, writ, injunction, judgment or
decree of any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or over
their respective properties of which it has knowledge. The Company does not own
or control, directly or indirectly, any corporation, association or other entity
other than those subsidiaries listed in Exhibit 21.1 to the Registration
Statement.

(d) The Company has full legal right, power and authority to enter
into this Agreement and the Representatives' Warrant Agreement and to perform
the transactions contemplated hereby and thereby. Each of this Agreement and the
Representatives' Warrant Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement on the part of the
Company, enforceable in accordance with its terms, except as rights to
indemnification under this Agreement or the Representatives' Warrant Agreement
may be limited by applicable law and except as the enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; the performance of this Agreement and the Representatives'
Warrant Agreement and the consummation of the transactions herein or therein
contemplated will not result in a material breach or violation of any of the
terms and provisions of, or constitute a default under, (i) any bond, debenture,
note or other evidence of indebtedness, or under any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of its subsidiaries or their respective properties may be bound,
(ii) the charter or bylaws of the Company or any of its subsidiaries, or (iii)
any law, order, rule, regulation, writ, injunction, judgment or decree of any
court, government or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any of its subsidiaries or over their
respective properties. No consent, approval, authorization or order of or
qualification with any court, government or governmental agency or body,
domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective properties is required for the execution
and delivery of this Agreement or the Representatives' Warrant Agreement and the
consummation by the Company or any of its subsidiaries of the transactions
herein and therein contemplated, except such as may be required under the Act or
under state or other securities or Blue Sky laws, all of which requirements have
been satisfied in all material respects.

3
<PAGE> 4
(e) There is no pending or, to the best of the Company's knowledge,
threatened action, suit, claim or proceeding against the Company, any of its
subsidiaries or any of their respective officers or any of their respective
properties, assets or rights before any court, government or governmental agency
or body, domestic or foreign, having jurisdiction over the Company or any of its
subsidiaries or over their respective officers or properties or otherwise which
(i) would result in any material adverse change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise or would materially and
adversely affect their properties, assets or rights, (ii) would prevent
consummation of the transactions contemplated hereby or (iii) is required to be
disclosed in the Registration Statement or Prospectus and is not so disclosed;
and there are no agreements, contracts, leases or documents of the Company or
any of its subsidiaries of a character required to be described or referred to
in the Registration Statement or Prospectus or to be filed as an exhibit to the
Registration Statement by the Act or the Rules and Regulations or by the
Exchange Act or the rules and regulations of the Commission thereunder which
have not been accurately described in all material respects in the Registration
Statement or Prospectus or filed as exhibits to the Registration Statement.

(f) All outstanding shares of capital stock of the Company
(including the Selling Stockholder Shares) have been duly authorized and validly
issued and are fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or purchase
securities, and the authorized and outstanding capital stock of the Company is
as set forth in the Prospectus under the caption "Capitalization" and conforms
in all material respects to the statements relating thereto contained in the
Registration Statement and the Prospectus (and such statements correctly state
the substance of the instruments defining the capitalization of the Company);
the Company Shares and the Option Shares have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued and
delivered by the Company against payment therefor in accordance with the terms
of this Agreement, will be duly and validly issued and fully paid and
nonassessable, and will be sold free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest; and no preemptive right,
co-sale right, registration right, right of first refusal or other similar right
of stockholders exists with respect to any of the Company Shares or Option
Shares or the issuance and sale thereof other than those that have been
expressly waived prior to the date hereof and those that will automatically
expire upon the consummation of the transactions contemplated on the Closing
Date. No further approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance and sale or
transfer of the Shares except as may be required under the Act or under state or
other securities or Blue Sky laws. All issued and outstanding shares of capital
stock of each subsidiary of the Company have been duly authorized and validly
issued and are fully paid and nonassessable, and were not issued in violation of
or subject to any preemptive right, or other rights to subscribe for or purchase
shares and are owned by the Company free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest. Except as disclosed in or
contemplated by the Prospectus and the financial statements of the Company, and
the related notes thereto, included in the Prospectus, neither the Company nor
any subsidiary has outstanding any options to purchase, or any preemptive rights
or other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted and
exercised thereunder, set forth in the Prospectus accurately and fairly presents
the information required to be shown with respect to such plans, arrangements,
options and rights.

(g) KPMG Peat Marwick L.L.P. which has examined (i) the consolidated
financial statements of the Company, together with the related notes, as of
December 31, 1995 and for each of the years in the two (2) years ended December
31, 1995 and (ii) such portion of the financial statements of Medgenix
Diagnostics S.A. ("Medgenix") relating to Medgenix' in vitro business
(hereinafter referred to as "Medgenix' Financial Statements"), together with the
related notes, as of October 31, 1995 and for each of the years in the two (2)
years ended October 31,1995, in each case filed with the Commission as a part of
the Registration Statement and are included in the Prospectus, are independent
accountants within the meaning of the Act and the Rules and Regulations; the
audited consolidated financial statements of the Company and Medgenix, together
with the related respective notes, and the unaudited financial statements and
the pro forma financial statements, forming part of

4
<PAGE> 5
the Registration Statement and Prospectus, fairly present the financial position
and the results of operations of the Company and its subsidiaries and Medgenix,
respectively, at the respective dates and for the respective periods to which
they apply and the pro forma consolidated financial position and results of
operations of the Company and Medgenix at the respective dates and for the
respective periods to which they apply; and all audited consolidated financial
statements of the Company and Medgenix, together with the related respective
notes, and the unaudited consolidated financial information and pro forma
financial statements, filed with the Commission as part of the Registration
Statement, have been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved except as may be
otherwise stated therein. The selected and summary financial, pro forma and
statistical data included in the Registration Statement present fairly the
information shown therein and have been compiled on a basis consistent with the
audited financial statements presented therein. No financial statements, pro
forma financial statement or schedules are required to be included in the
Registration Statement other than those which have been so included.

(h) Subsequent to the respective dates as of which information is
given in the Registration Statement and Prospectus, there has not been (i) any
material adverse change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise, (ii) any transaction that is material to the
Company and its subsidiaries considered as one enterprise, except transactions
entered into in the ordinary course of business, (iii) any obligation, direct or
contingent, that is material to the Company and its subsidiaries considered as
one enterprise, incurred by the Company or its subsidiaries, except obligations
incurred in the ordinary course of business, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any of its subsidiaries that
is material to the Company and its subsidiaries considered as one enterprise,
(v) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company or any of its subsidiaries, or (vi) any loss or
damage (whether or not insured) to the property of the Company or any of its
subsidiaries which has been sustained or will have been sustained which has a
material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise.

(i) Except as set forth in the Registration Statement and
Prospectus, (i) each of the Company and its subsidiaries has good and marketable
title to all properties and assets described in the Registration Statement and
Prospectus as owned by it, free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest, other than such as would not
have a material adverse effect on the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise, (ii) the agreements to which the
Company or any of its subsidiaries is a party described in the Registration
Statement are valid agreements, enforceable by the Company and its subsidiaries
(as applicable), except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles and, to the best of the Company's knowledge, the other contracting
party or parties thereto are not in material breach or material default under
any of such agreements, and (iii) each of the Company and its subsidiaries has
valid and enforceable leases for all properties described in the Registration
Statement and Prospectus as leased by it, except as the enforcement thereof may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting creditors' rights generally or by
general equitable principles. Except as set forth in the Registration Statement
and Prospectus, the Company owns or leases all such properties as are necessary
to its operations as described in the Registration Statement and Prospectus.

(j) The Company and its subsidiaries have timely filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown thereon as due, and there is no tax deficiency that has been or, to
the best of the Company's knowledge, might be asserted against the Company or
any of its subsidiaries that might have a material adverse effect on the
condition (financial or otherwise), earnings, operations, business or business
prospects of the Company and its subsidiaries considered as one enterprise; and
all tax liabilities are adequately provided for on the books of the Company and
its subsidiaries.

(k) The Company and its subsidiaries maintain insurance with
insurers of recognized financial responsibility of the types and in the amounts
generally deemed adequate for their respective businesses

5
<PAGE> 6
and consistent with insurance coverage maintained by similar companies in
similar businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company or its subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect; neither the
Company nor any such subsidiary has been refused any insurance coverage sought
or applied for; and neither the Company nor any such subsidiary has any reason
to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not
materially and adversely affect the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise.

(l) To the best of Company's knowledge, no labor disturbance by the
employees of the Company or any of its subsidiaries exists or is imminent; and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers, that might be expected to result in
a material adverse change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company and its subsidiaries
considered as one enterprise. No collective bargaining agreement exists with any
of the Company's employees and, to the best of the Company's knowledge, no such
agreement is imminent.

(m) Each of the Company and its subsidiaries owns or possesses
adequate rights to use all patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which are
necessary to conduct its businesses as described in the Registration Statement
and Prospectus, the expiration of any patents, patent rights, trade secrets,
trademarks, service marks, trade names or copyrights would not have a material
adverse effect on the condition (financial or otherwise), earnings, operations,
business or business prospects of the Company and its subsidiaries considered as
one enterprise; and the Company has not received any notice of, and has no
knowledge of, any infringement of or conflict with asserted rights of the
Company by others with respect to any patent, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names or copyrights; which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise.

(n) The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is listed on The Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from The Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of Securities
Dealers, Inc. ("NASD") is contemplating terminating such registration or
listing.

(o) The Company has in the past conducted, now conducts, and intends
in the future to conduct, its affairs in such a manner as to ensure that it is
not, and will not become, an "investment company" or a company "controlled" by
an "investment company" within the meaning of the the Investment Company Act of
1940, as amended, and the such rules and regulations thereunder.

(p) The Company has not distributed and will not distribute prior to
the later of (i) the Closing Date, or any date on which Option Shares are to be
purchased, as the case may be, and (ii) completion of the distribution of the
Shares, any offering material in connection with the offering and sale of the
Shares other than any Preliminary Prospectuses, the Prospectus, the Registration
Statement and other materials, if any, permitted by the Act.

(q) Neither the Company nor any of its subsidiaries has at any time
during the last five (5) years (i) made any unlawful contribution to any
candidate for foreign office or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.

6
<PAGE> 7
(r) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Shares.

(s) Each officer and director of the Company, each Selling
Stockholder and each beneficial owner of five (5) percent or more shares of
Common Stock (other than Kenedy Capital Management) has agreed in writing that
such person will not, for a period of 180 days from the date that the
Registration Statement is declared effective by the Commission (the "Lock-up
Period"), offer to sell, contract to sell, or otherwise sell, dispose of, loan,
pledge or grant any rights with respect to (collectively, a "Disposition") any
shares of Common Stock, any options or warrants to purchase any shares of Common
Stock or any securities convertible into or exchangeable for shares of Common
Stock (collectively, "Securities") now owned or hereafter acquired directly by
such person or with respect to which such person has or hereafter acquires the
power of disposition, otherwise than (i) as a bona fide gift or gifts, provided
the donee or donees thereof agree in writing to be bound by this restriction,
(ii) as a distribution to limited partners or stockholders of such person,
provided that the distributees thereof agree in writing to be bound by the terms
of this restriction, or (iii) with the prior written consent of Cruttenden Roth
Incorporated. The Company has caused its transfer agent to provide to counsel
for the Underwriters a list of all securityholders of the Company and the number
and type of securities held by each securityholder, certified by such transfer
agent to be complete and accurate as of March 29, 1996. The Company has provided
to counsel for the Underwriters true, accurate and complete copies of all of the
agreements pursuant to which its officers, directors and stockholders have
agreed to such or similar restrictions (the "Lock-up Agreements") presently in
effect or effected hereby. The Company hereby represents and warrants that it
will not release any of its officers, directors or other stockholders from any
Lock-up Agreements currently existing or hereafter effected without the prior
written consent of Cruttenden Roth Incorporated.

(t) Except as set forth in the Registration Statement and
Prospectus, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of health or the environment ("Environmental Laws")
which are applicable to its business, (ii) the Company has received no notice
from any governmental authority or third party of an asserted claim under
Environmental Laws, which claim is required to be disclosed in the Registration
Statement and the Prospectus, (iii) the Company will not be required to make
future material capital expenditures to comply with Environmental Laws and (iv)
no property which is owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the Comprehensive Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et
seq.), or otherwise designated as a contaminated site under applicable state or
local law.

(u) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(v) There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of the members of the families of any of them,
except as disclosed in the Registration Statement and the Prospectus.

(w) The Representative's Warrants have been duly and validly
authorized by the Company and upon delivery to you in accordance with the
Representatives' Warrant Agreement will be duly issued and legal, valid and
binding obligations of the Company.

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<PAGE> 8
(x) The Representative's Warrant Stock has been duly authorized and
reserved for issuance upon the exercise of the Representative's Warrants and
when issued upon payment of the exercise price therefor will be validly issued,
fully paid and nonassessable shares of Common Stock of the Company.

II. Each Selling Stockholder, severally for itself only and not
jointly, represents and warrants to and agrees with each Underwriter and the
Company that:

(a) Such Selling Stockholder now has and on the Closing Date will
have valid marketable title to the Shares to be sold by such Selling
Stockholder, free and clear of any pledge, lien, security interest, encumbrance,
claim or equitable interest other than pursuant to this Agreement; and upon
delivery of such Shares hereunder and payment of the purchase price as herein
contemplated, each of the Underwriters will obtain valid marketable title to the
Shares purchased by it from such Selling Stockholder, free and clear of any
pledge, lien, security interest, encumbrance, claim or equitable interest
pertaining to such Selling Stockholder or such Selling Stockholder's property,
including any liability for estate or inheritance taxes, or any liability to or
claims of any creditor, devisee, legatee or beneficiary of such Selling
Stockholder.

(b) Such Selling Stockholder has duly executed and delivered, in the
form heretofore furnished to the Representatives, an irrevocable Power of
Attorney (the "Power of Attorney") appointing James H. Chamberlain and Anna
Anderson, and each of them, as attorneys-in-fact (collectively, the "Attorneys"
and individually, an "Attorney") and a Custody Agreement (the "Custody
Agreement") with U.S. Stock Transfer Corporation as custodian (the "Custodian");
each of the Power of Attorney and the Custody Agreement constitutes a valid and
binding agreement on the part of such Selling Stockholder, enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally or by general
equitable principles; and each of such Selling Stockholder's Attorneys, acting
alone, is authorized to execute and deliver this Agreement and the certificate
referred to in Section 6(g) hereof on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the several Underwriters to such
Selling Stockholder as provided in Section 3 hereof, to authorize the delivery
of the Selling Stockholder Shares under this Agreement and to duly endorse (in
blank or otherwise) the certificate or certificates representing such Shares or
a stock power or powers with respect thereto, to accept payment therefor, and
otherwise to act on behalf of such Selling Stockholder in connection with this
Agreement.

(c) All consents, approvals, authorizations and orders required for
the execution and delivery by such Selling Stockholder of the Power of Attorney
and the Custody Agreement, the execution and delivery by or on behalf of such
Selling Stockholder of this Agreement and the sale and delivery of the Selling
Stockholder Shares under this Agreement (other than, at the time of the
execution hereof (if the Registration Statement has not yet been declared
effective by the Commission), the issuance of the order of the Commission
declaring the Registration Statement effective and such consents, approvals,
authorizations or orders as may be necessary under state or other securities or
Blue Sky laws) have been obtained and are in full force and effect; and such
Selling Stockholder has full legal right, power and authority to enter into and
perform its obligations under this Agreement and such Power of Attorney and
Custody Agreement, and to sell, assign, transfer and deliver the Shares to be
sold by such Selling Stockholder under this Agreement.

(d) Such Selling Stockholder will not, during the Lock-up Period,
effect the Disposition of any Securities now owned or hereafter acquired
directly by such Selling Stockholder or with respect to which such Selling
Stockholder has or hereafter acquires the power of disposition, otherwise than
(i) as a bona fide gift or gifts, provided the donee or donees thereof agree in
writing to be bound by this restriction, (ii) as a distribution to limited
partners or stockholders of such Selling Stockholder, provided that the
distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of Cruttenden Roth
Incorporated. The foregoing restriction is expressly agreed to preclude the
holder of the Securities from engaging in any hedging or other transaction which
is designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-up Period, even if such Securities would be disposed
of by someone other than the Selling Stockholder. Such prohibited hedging or
other transactions would include, without limitation, any short sale (whether or
not against the box) or any purchase, sale or grant of any right (including,
without limitation, any put

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<PAGE> 9
or call option) with respect to any Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from Securities. Such Selling
Stockholder also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent against the transfer of the securities held by
such Selling Stockholder except in compliance with this restriction.

(e) Certificates in negotiable form for all Shares to be sold by
such Selling Stockholder under this Agreement, together with a stock power or
powers duly endorsed in blank by such Selling Stockholder, have been placed in
custody with the Custodian for the purpose of effecting delivery hereunder.

(f) This Agreement has been duly authorized by such Selling
Stockholder (if such Selling Stockholder is not a natural person) and has been
duly executed and delivered by or on behalf of such Selling Stockholder and is a
valid and binding agreement of such Selling Stockholder, enforceable in
accordance with its terms, except as rights to indemnification hereunder may be
limited by applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles; and the performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or violation of any
of the terms and provisions of or constitute a default under any bond,
debenture, note or other evidence of indebtedness, or under any lease, contract,
indenture, mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder, or any Selling Stockholder Shares hereunder, may be
bound or, to the best of such Selling Stockholders' knowledge, result in any
violation of any law, order, rule, regulation, writ, injunction, judgment or
decree of any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over such Selling Stockholder or over the
properties of such Selling Stockholder, or, if such Selling Stockholder is other
than a natural person, result in any violation of any provisions of the charter,
bylaws or other organizational documents of such Selling Stockholder.

(g) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.

(h) Such Selling Stockholder has not distributed and will not
distribute any prospectus or other offering material in connection with the
offering and sale of the Shares.

(i) All information furnished by or on behalf of such Selling
Stockholder relating to such Selling Stockholder and the Selling Stockholder
Shares that is contained in the representations and warranties of such Selling
Stockholder in such Selling Stockholder's Power of Attorney or set forth in the
Registration Statement and the Prospectus is, and at the time the Registration
Statement became or becomes, as the case may be, effective and at all times
subsequent thereto up to and on the Closing Date, was or will be, true, correct
and complete, and does not, and at the time the Registration Statement became or
becomes, as the case may be, effective and at all times subsequent thereto up to
and on the Closing Date (hereinafter defined) will not, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make such information not misleading.

(j) Such Selling Stockholder will review the Prospectus and will
comply with all agreements and satisfy all conditions on its part to be complied
with or satisfied pursuant to this Agreement on or prior to the Closing Date and
will advise one of its Attorneys and Cruttenden Roth Incorporated prior to the
Closing Date if any statement to be made on behalf of such Selling Stockholder
in the certificate contemplated by Section 6(g) would be inaccurate if made as
of the Closing Date.

(k) Such Selling Stockholder does not have, or has waived prior to
the date hereof, any preemptive right, co-sale right or right of first refusal
or other similar right to purchase any of the Shares that are to be sold by the
Company or any of the other Selling Stockholders to the Underwriters pursuant to
this Agreement; such Selling Stockholder does not have, or has waived prior to
the date hereof, any registration right or other

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<PAGE> 10
similar right to participate in the offering made by the Prospectus, other than
such rights of participation as have been satisfied by the participation of such
Selling Stockholder in the transactions to which this Agreement relates in
accordance with the terms of this Agreement; and such Selling Stockholder does
not own any warrants, options or similar rights to acquire, and does not have
any right or arrangement to acquire, any capital stock, rights, warrants,
options or other securities from the Company, other than those described in the
Registration Statement and the Prospectus.

(l) Such Selling Stockholder is not aware (without having conducted
any investigation or inquiry) that any of the representations and warranties of
the Company set forth in Section 2.I. above is untrue or inaccurate in any
material respect.

3. Purchase, Sale and Delivery of Shares. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company and the Selling Stockholders
agree, severally and not jointly, to sell to the Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company and
the Selling Stockholders, respectively, at a purchase price of $_____ per share,
the respective number of Company Shares and Selling Stockholder Shares set forth
opposite the names of the Company and the Selling Stockholders in Schedule B
hereto. The obligation of each Underwriter to the Company and to each Selling
Stockholder shall be to purchase from the Company or such Selling Stockholder
that number of Company Shares or Selling Stockholder Shares, as the case may be,
which (as nearly as practicable, as determined by you) is in the same proportion
to the number of Company Shares or Selling Stockholder Shares, as the case may
be, set forth opposite the name of the Company or such Selling Stockholder in
Schedule B hereto as the number of Firm Shares which is set forth opposite the
name of such Underwriter in Schedule A hereto (subject to adjustment as provided
in Section 10) is to the total number of Firm Shares to be purchased by all the
Underwriters under this Agreement. In the event that any Selling Stockholder
shall have failed, refused or been unable to perform any agreement on his, her
or its part to be performed hereunder, the Company and not such Selling
Stockholder shall sell to the Underwriters, and each Underwriter agrees,
severally and not jointly, to purchase from the Company and not from such
Selling Stockholder, at the same price per share as set forth in this Section 3,
the number of Selling Stockholder Shares which were otherwise to be sold by such
Selling Stockholder but for such Selling Stockholder's failure, refusal or
inability to perform any agreement on his, her or its part to be performed
hereunder. The additional shares of Common Stock so sold by the Company as a
result of the provisions of the preceding sentence shall added to, and included
within, "Company Shares," and shall be subtracted and excluded from "Selling
Stockholder Shares" as may be applicable in the context of this Agreement.

The certificates in negotiable form for the Selling Stockholder Shares
have been placed in custody (for delivery under this Agreement) under the
Custody Agreement. Each Selling Stockholder agrees that the certificates for the
Selling Stockholder Shares of such Selling Stockholder so held in custody are
subject to the interests of the Underwriters hereunder, that the arrangements
made by such Selling Stockholder for such custody, including the Power of
Attorney is to that extent irrevocable and that the obligations of such Selling
Stockholder hereunder shall not be terminated by the act of such Selling
Stockholder or by operation of law, whether by the death or incapacity of such
Selling Stockholder or the occurrence of any other event, except as specifically
provided herein or in the Custody Agreement. If any Selling Stockholder should
die or be incapacitated, or if any other such event should occur, before the
delivery of the certificates for the Selling Stockholder Shares hereunder, the
Selling Stockholder Shares to be sold by such Selling Stockholder shall, except
as specifically provided herein or in the Custody Agreement, be delivered by the
Custodian in accordance with the terms and conditions of this Agreement as if
such death, incapacity or other event had not occurred, regardless of whether
the Custodian shall have received notice of such death or other event.

Delivery of definitive certificates for the Firm Shares to be purchased
by the Underwriters pursuant to this Section 3 shall be made against payment of
the purchase price therefor by the several Underwriters by certified or official
bank check or checks drawn in next-day funds, payable to the order of the
Company with regard to the Shares being purchased from the Company, and to the
order of each such Selling Stockholder (or the Custodian for the respective
accounts of the Selling Stockholders) with regard to the Shares being purchased
from such Selling Stockholders (and the Company and such Selling Stockholders
agree not to deposit and to cause the

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<PAGE> 11
Custodian not to deposit any such check in the bank on which it is drawn until
the day following the date of its delivery to the Company or the Custodian, as
the case may be), at the offices of Troop Meisenger Steuber & Pasich, LLP, 10940
Wilshire Boulevard, Los Angeles, CA 90024-3902, or such other place as may be
agreed upon among the Representatives and the Company and the Selling
Stockholders), at 7:00 A.M., California time, on the third (3rd) full business
day following the first day that Shares are traded or at such other time and
date not later than seven (7) full business days following the first day that
Shares are traded as the Representatives and the Company and the Selling
Stockholders may determine (or at such time and date to which payment and
delivery shall have been postponed pursuant to Section 10 hereof), such time and
date of payment and delivery being herein called the "Closing Date." The
certificates for the Firm Shares to be so delivered will be made available to
you at such office or such other location as you may reasonably request for
checking at least one (1) full business days prior to the Closing Date and will
be in such names and denominations as you may request, such request to be made
at least two (2) full business days prior to the Closing Date. If the
Representatives so elect, delivery of the Firm Shares may be made by credit
through full fast transfer to the accounts at The Depository Trust Company
designated by the Representatives.

It is understood that you, individually, and not as the
Representatives of the several Underwriters, may (but shall not be obligated to)
make payment of the purchase price on behalf of any Underwriter or Underwriters
whose check or checks shall not have been received by you prior to the Closing
Date for the Firm Shares to be purchased by such Underwriter or Underwriters.
Any such payment by you shall not relieve any such Underwriter or Underwriters
of any of its or their obligations hereunder.

After the Registration Statement becomes effective, the several
Underwriters intend to make an initial public offering (as such term is
described in Section 11 hereof) of the Firm Shares at an initial public offering
price of $_____ per share. After the initial public offering, the several
Underwriters may, in their discretion, vary the public offering price.

The information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Underwriters), under the last
two paragraphs on page 2, concerning stabilization and over-allotment and
passive market marking by the Underwriters, and under the _____ and _____
paragraphs under the caption "Underwriting" in any Preliminary Prospectus and in
the final form of Prospectus filed pursuant to Rule 424(b) constitutes the only
information furnished by the Underwriters to the Company for inclusion in any
Preliminary Prospectus, the Prospectus or the Registration Statement, and you,
on behalf of the respective Underwriters, represent and warrant to the Company
and the Selling Stockholders that the statements made therein do not include any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

4. Further Agreements of the Company. The Company agrees with the
several Underwriters that:

(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof, if not effective at the time and date that
this Agreement is executed and delivered by the parties hereto, to become
effective as promptly as possible; it will notify you, promptly after it shall
receive notice thereof, of the time when the Registration Statement or any
subsequent amendment to the Registration Statement has become effective or any
supplement to the Prospectus has been filed; if the Company omitted information
from the Registration Statement at the time it was originally declared effective
in reliance upon Rule 430A(a) of the Rules and Regulations, the Company will
provide evidence satisfactory to you that the Prospectus contains such
information and has been filed, within the time period prescribed, with the
Commission pursuant to subparagraph (1) or (4) of Rule 424(b) of the Rules and
Regulations or as part of a post-effective amendment to such Registration
Statement as originally declared effective which is declared effective by the
Commission; if for any reason the filing of the final form of Prospectus is
required under Rule 424(b)(3) of the Rules and Regulations, it will provide
evidence satisfactory to you that the Prospectus contains such information and
has been filed with the Commission within the time period prescribed; it will
notify you promptly of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; promptly upon your request, it will prepare and file with the
Commission any amendments or supplements to the

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<PAGE> 12
Registration Statement or Prospectus which, in the opinion of counsel for the
several Underwriters ("Underwriters' Counsel"), is required under the Act in
connection with the distribution of the Shares by the Underwriters; it will
promptly prepare and file with the Commission, and promptly notify you of the
filing of, any amendments or supplements to the Registration Statement or
Prospectus which may be necessary to correct any statements or omissions, if, at
any time when a prospectus relating to the Shares is required to be delivered
under the Act, any event shall have occurred as a result of which the Prospectus
or any other prospectus relating to the Shares as then in effect would include
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; in case any Underwriter is required
to deliver a prospectus nine (9) months or more after the effective date of the
Registration Statement in connection with the sale of the Shares, it will
prepare promptly upon request, but at the expense of such Underwriter, such
amendment or amendments to the Registration Statement and such prospectus or
prospectuses as may be necessary to permit compliance with the requirements of
Section 10(a)(3) of the Act; and it will file no amendment or supplement to the
Registration Statement or Prospectus which shall not previously have been
submitted to you a reasonable time prior to the proposed filing thereof or to
which you shall reasonably object in writing, subject, however, to compliance
with the Act and the Rules and Regulations and the rules and regulations of the
Commission thereunder and the provisions of this Agreement.

(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge, of the issuance of any stop order by the Commission
suspending the effectiveness of the Registration Statement or of the initiation
or threat of any proceeding for that purpose; and it will promptly use its best
efforts to prevent the issuance of any stop order or to obtain its withdrawal at
the earliest possible moment if such stop order should be issued.

(c) The Company will use its best efforts to qualify the Shares for
offering and sale under the securities laws of such jurisdictions as you may
designate and to continue such qualifications in effect for so long as may be
required for purposes of the distribution of the Shares, except that the Company
shall not be required in connection therewith or as a condition thereof to
qualify as a foreign corporation or to execute a general consent to service of
process in any jurisdiction in which it is not otherwise required to be so
qualified or to so execute a general consent to service of process. In each
jurisdiction in which the Shares shall have been qualified as above provided,
the Company will make and file such statements and reports in each year as are
or may be reasonably required by the laws of such jurisdiction.

(d) The Company will furnish to you, as soon as available, copies of
the Registration Statement (three of which will be signed and which will include
all exhibits), each Preliminary Prospectus, the Prospectus and any amendments or
supplements to such documents, including any prospectus prepared to permit
compliance with Section 10(a)(3) of the Act (three of which will include all
exhibits) all in such quantities as you may from time to time reasonably
request.

(e) The Company will make generally available to its securityholders
as soon as practicable, but in any event not later than the forty-fifth (45th)
day following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement (which will be in reasonable detail but need not be audited) complying
with the provisions of Section 11(a) of the Act and covering a twelve (12) month
period beginning after the effective date of the Registration Statement.

(f) During a period of five (5) years after the date hereof, the
Company will furnish to its stockholders as soon as practicable after the end of
each respective period, annual reports (including financial statements audited
by independent certified public accountants) and unaudited quarterly reports of
operations for each of the first three quarters of the fiscal year, and will
furnish to you and the other several Underwriters hereunder, upon request (i)
concurrently with furnishing such reports to its stockholders, statements of
operations of the Company for each of the first three (3) quarters in the form
furnished to the Company's stockholders, (ii) concurrently with furnishing to
its stockholders, a balance sheet of the Company as of the end of such fiscal
year, together with statements of operations, of stockholders' equity, and of
cash flows of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of independent certified public accountants,

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<PAGE> 13
(iii) as soon as they are available, copies of all reports (financial or other)
mailed to stockholders, (iv) as soon as they are available, copies of all
reports and financial statements furnished to or filed with the Commission, any
securities exchange or the National Association of Securities Dealers, Inc.
("NASD"), (v) every material press release and every material news item or
article in respect of the Company or its affairs which was generally released to
stockholders or to any news wire service, and (vi) any additional information of
a public nature concerning the Company or its subsidiaries, or its business
which you may reasonably request. During such five (5) year period, if the
Company shall have active subsidiaries, the foregoing financial statements shall
be on a consolidated basis to the extent that the accounts of the Company and
its subsidiaries are consolidated, and shall be accompanied by similar financial
statements for any significant subsidiary which is not so consolidated.

(g) The Company will apply the net proceeds from the sale of the Shares
being sold by it in the manner set forth under the caption "Use of Proceeds" in
the Prospectus.

(h) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar (which may be the
same entity as the transfer agent) for its Common Stock.

(i) If the transactions contemplated hereby are not consummated by
reason of any failure, refusal or inability on the part of the Company or any
Selling Stockholder to perform any agreement on its their respective parts to be
performed hereunder or to fulfill any condition of the Underwriters' obligations
hereunder, or if the Company shall terminate this Agreement pursuant to Section
11(a) hereof, or if the Underwriters shall terminate this Agreement pursuant to
Section 11(b)(i), the Company will pay the several Underwriters for all
out-of-pocket expenses (including fees and disbursements of Underwriters'
Counsel) incurred by the Underwriters in investigating or preparing to market or
marketing the Shares.

(j) If at any time during the ninety (90) day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
opinion the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or event
necessitates a supplement to or amendment of the Prospectus), the Company will
consult with you concerning the necessity for, and if the Company determines to
disseminate a press release or other public statement, the substance of a press
release or other public statement responding to or commenting on such rumor,
publication or event.

(k) During the Lock-up Period, the Company will not, without the prior
written consent of Cruttenden Roth Incorporated effect the Disposition of,
directly or indirectly, any Securities other than the sale of the Firm Company
Shares and the Option Shares hereunder and the Company's issuance of options or
Common Stock under the Company's presently authorized stock option plans (the
"Option Plans").

(l) During a period of ninety (90) days from the effective date of the
Registration Statement, the Company will not file a registration statement
registering shares under the Option Plans or other employee benefit plan, other
than a registration statement on Form S-3 relating to the resale by certain
stockholders (the "S-3 Sellers") of up to 397,000 shares of Common Stock issued
to the S-3 Sellers in connection with the Company's acquisition of Keystone
Laboratories, Inc., provided that each of the S-3 Sellers has delivered to you
an agreement that such person will not, during the Lock-up Period, effect the
Disposition of any Securities now owned or hereafter acquired directly by such
person or with respect to which such person has or hereafter acquires the power
of disposition, otherwise than (i) as a bona fide gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this restriction, (ii)
as a distribution to limited partners or stockholders of such person, provided
that the distributees thereof agree in writing to be bound by the terms of this
restriction, or (iii) with the prior written consent of Cruttenden Roth
Incorporated.

5. Expenses.

(a) The Company agrees with each Underwriter that:

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(i) The Company will pay and bear all costs and expenses of the
Company and the Selling Stockholders in connection with the preparation,
printing and filing of the Registration Statement (including financial
statements, schedules and exhibits), Preliminary Prospectuses and the Prospectus
and any amendments or supplements thereto; the duplication of this Agreement,
the Agreement Among Underwriters, the Selected Dealer Agreement, the Preliminary
Blue Sky Survey and any supplemental Blue Sky Survey, the Underwriters'
Questionnaire and Power of Attorney, and any instruments related to any of the
foregoing; the issuance and delivery of the Shares hereunder to the several
Underwriters, including transfer taxes, if any, the cost of all certificates
representing the Shares and transfer agents' and registrars' fees; the fees and
disbursements of counsel for the Company; all fees and other charges of the
Company's independent certified public accountants; the cost of furnishing to
the several Underwriters copies of the Registration Statement (including
appropriate exhibits), Preliminary Prospectus and the Prospectus, and any
amendments or supplements to any of the foregoing; NASD filing fees and the cost
of qualifying the Shares under the laws of such jurisdictions as you may
designate (including filing fees and disbursements and up to a maximum of
$15,000 for fees of Underwriters' Counsel in connection with Blue Sky
qualifications); and all other expenses directly incurred by the Company and the
Selling Stockholders in connection with the performance of their obligations
hereunder. Any additional expenses incurred as a result of the sale of the
Shares by the Selling Stockholders will be borne by the Company. The provisions
of this Section 5(a)(i) are intended to relieve the Underwriters from the
payment of the expenses and costs which the Selling Stockholders and the
Company, as the case may be, have agreed to pay, but shall not affect any
agreement which the Selling Stockholders and the Company may make, or may have
made, for the sharing of any of such expenses and costs. Such agreements shall
not impair the obligations of the Company and the Selling Stockholders hereunder
to the several Underwriters.

(ii) In addition to its other obligations under Section 5(a)(i)
hereof, the Company shall, as applicable: (A) on the Closing Date, pay to
Cruttenden Roth Incorporated, individually and not in its capacity as
Representative, a non-accountable expense allowance equal to one and one-half
percent (1 1/2%) of the initial public offering price of the Shares sold
pursuant to this Agreement (including Selling Stockholder Shares and Option
Shares), or, (B) if this Agreement is terminated for any reason other than the
reasons set forth set in Section 4(i), pay the several Underwriters for all
reasonable out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with the investigation,
preparing to market and marketing the Shares or in contemplation of performing
their obligations hereunder (including the legal fees and expenses of their
counsel) up to a maximum of $30,000. You acknowledge that the sum of $30,000 has
already been paid by the Company to Cruttenden Roth Incorporated to be applied
against such non-accountable expense allowance or the Underwriters reasonable
out-of-pocket expenses in the event of the termination of this agreement. In the
event of the termination of this agreement, Cruttenden Roth Incorporated agrees
to refund any of such $30,000 that is in excess of the amount necessary to pay
for the Underwriters' actual out-of-pocket expenses in connection with the
investigation, preparing to market and marketing the Shares or in contemplation
of performing their obligations hereunder (including the legal fees and expenses
of their counsel), The Company shall not in any event be liable to any of the
Underwriters for loss of anticipated profits from the transactions covered by
this Agreement.

(iii) In addition to its other obligations under Section 8(a)
hereof, the Company agrees that, as an interim measure during the pendency of
any claim, action, investigation, inquiry or other proceeding described in
Section 8(a) hereof, it will reimburse the Underwriters on a monthly basis for
all reasonable legal or other expenses incurred in connection with investigating
or defending any such claim, action, investigation, inquiry or other proceeding,
notwithstanding the absence of a judicial determination as to the propriety and
enforceability of the Company's obligation to reimburse the Underwriters for
such expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any such
interim reimbursement payment is so held to have been improper, the Underwriters
shall promptly return such payment to the Company together with interest,
compounded daily, determined on the basis of the prime rate (or other commercial
lending rate for borrowers of the highest credit standing) listed from time to
time in The Wall Street Journal which represents the base rate on corporate
loans posted by a substantial majority of the nation's thirty (30) largest banks
(the "Prime Rate"). Any such interim reimbursement payments which are not made
to the Underwriters within thirty (30) days of a request for reimbursement shall
bear interest at the Prime Rate from the date of such request.

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<PAGE> 15
(iv) In addition to their other obligations under Section 8(b)
hereof, each Selling Stockholder agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
described in Section 8(b) hereof relating to such Selling Stockholder, it will
reimburse the Underwriters on a monthly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of such
Selling Stockholder's obligation to reimburse the Underwriters for such expenses
and the possibility that such payments might later be held to have been improper
by a court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Underwriters shall
promptly return such payment to the Selling Stockholders, together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Underwriters within
thirty (30) days of a request for reimbursement shall bear interest at the Prime
Rate from the date of such request.

(b) In addition to their other obligations under Section 8(c)
hereof, the Underwriters severally and not jointly agree that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding described in Section 8(c) hereof, they will reimburse the
Company and each Selling Stockholder on a monthly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the Underwriters' obligation to reimburse the Company and each such Selling
Stockholder for such expenses and the possibility that such payments might later
be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Company and each such Selling Stockholder shall promptly return
such payment to the Underwriters together with interest, compounded daily,
determined on the basis of the Prime Rate. Any such interim reimbursement
payments which are not made to the Company and each such Selling Stockholder
within thirty (30) days of a request for reimbursement shall bear interest at
the Prime Rate from the date of such request.

(c) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in Sections 5(a)(iii),
5(a)(iv) and 5(b) hereof, including the amounts of any requested reimbursement
payments, the method of determining such amounts and the basis on which such
amounts shall be apportioned among the reimbursing parties, shall be settled by
arbitration conducted pursuant to the Code of Arbitration Procedure of the NASD
in Los Angeles County, California (or as close geographically to Los Angeles
County, California as is reasonably practical). Any such arbitration must be
commenced by service of a written demand for arbitration or a written notice of
intention to arbitrate, therein electing the arbitration tribunal. In the event
the party demanding arbitration does not make such designation of an arbitration
tribunal in such demand or notice, then the party responding to said demand or
notice is authorized to do so. Any such arbitration will be limited to the
operation of the interim reimbursement provisions contained in Sections
5(a)(iii), 5(a)(iv) and 5(b) hereof and will not resolve the ultimate propriety
or enforceability of the obligation to indemnify for expenses which is created
by the provisions of Sections 8(a), 8(b) and 8(c) hereof or the obligation to
contribute to expenses which is created by the provisions of Section 8(e)
hereof.

6. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters to purchase and pay for the Shares as provided herein shall
be subject to the accuracy, as of the date hereof and the Closing Date and any
later date on which Option Shares are to be purchased, as the case may be, of
the representations and warranties of the Company and the Selling Stockholders
herein, to the performance by the Company and the Selling Stockholders of their
respective obligations hereunder and to the following additional conditions:

(a) The Registration Statement shall have become effective not later
than 2:00 P.M., California time, on the date following the date of this
Agreement, or such later date as shall be consented to in writing by you; and no
stop order suspending the effectiveness thereof shall have been issued and no
proceedings for that purpose shall have been initiated or, to the knowledge of
the Company, any Selling Stockholder or any Underwriter, threatened by the
Commission, and any request of the Commission for additional information (to be

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<PAGE> 16
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to the satisfaction of Underwriters' Counsel.

(b) All corporate proceedings and other legal matters in connection
with this Agreement, the form of Registration Statement and the Prospectus, and
the registration, authorization, issue, sale and delivery of the Shares, shall
have been reasonably satisfactory to Underwriters' Counsel, and such counsel
shall have been furnished with such papers and information as they may
reasonably have requested to enable them to pass upon the matters referred to in
this Section.

(c) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date there shall not have been any change in the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one enterprise from that set
forth in the Registration Statement or Prospectus, which, in your reasonable
judgment, is material and adverse and that makes it, in your reasonable
judgment, impracticable or inadvisable to proceed with the public offering of
the Shares as contemplated by the Prospectus.

(d) You shall have received on the Closing Date and on any later
date on which Option Shares are purchased, as the case may be, the following
opinion of Troop Meisenger Steuber & Pasich, LLP, counsel for the Company and
the Selling Stockholders, dated the Closing Date or such later date on which
Option Shares are purchased, addressed to the Underwriters (and stating that it
may be relied upon by Freshman, Marantz, Orlanski, Cooper & Klein, a law
corporation, Underwriters' Counsel, in rendering its opinion pursuant to Section
6(e) of this Agreement) and with reproduced copies or signed counterparts
thereof for each of the Underwriters, to the effect that:

(i) The Company and each significant subsidiary within the
meaning of Item 3-01 of Regulation S-X under the Rules and Regulations
(a "Significant Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation;

(ii) The Company and each Significant Subsidiary has the
corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus;

(iii) The Company and each Significant Subsidiary is duly
qualified to do business as a foreign corporation and is in good
standing in each jurisdiction, if any, in which the ownership or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified or be in
good standing would not have a material adverse effect on the condition
(financial or otherwise), earnings, operations or business of the
Company and its subsidiaries considered as one enterprise. To such
counsel's knowledge, the Company does not own or control, directly or
indirectly, any corporation, association or other entity other than
Keystone Laboratories, Inc. and Medgenix (upon completion of the
acquisition thereof).

(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption
"Capitalization" as of the dates stated therein, the issued and
outstanding shares of capital stock of the Company (including the
Selling Stockholder Shares) have been duly and validly issued and are
fully paid and nonassessable, and, to such counsel's knowledge, will
not have been issued in violation of or subject to any preemptive
right, co-sale right, registration right, right of first refusal or
other similar right;

(v) All issued and outstanding shares of capital stock of each
Significant Subsidiary of the Company have been duly authorized and
validly issued and are fully paid and nonassessable, and, to such
counsel's knowledge, have not been issued in violation of or subject to
any preemptive right, co-sale right, registration right, right of first
refusal or other similar right and, to such counsel's

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<PAGE> 17
knowledge, are owned by the Company free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest;

(vi) The Firm Shares and the Option Shares, as the case may be,
to be issued by the Company pursuant to the terms of this Agreement
each have been duly authorized and, upon issuance and delivery against
payment therefor in accordance with the terms hereof, will be duly and
validly issued and fully paid and nonassessable, and, to such counsel's
knowledge, will not have been issued in violation of or subject to any
preemptive right, co-sale right, registration right, right of first
refusal or other similar right of stockholders;

(vii) The Company has the corporate power and authority to enter
into this Agreement and to issue, sell and deliver to the Underwriters
the Shares to be issued and sold by it hereunder;

(viii) The Company has the corporate power and authority to
enter into the Representatives' Warrant Agreement and to issue, sell
and deliver to the Representatives the Representatives' Warrants to be
issued and sold by it thereunder;

(ix) This Agreement and the Representatives' Warrant Agreement
each has been duly authorized by all necessary corporate action on the
part of the Company and has been duly executed and delivered by the
Company and, assuming due authorization, execution and delivery by you,
is a valid and binding agreement of the Company, enforceable in
accordance with its terms, except insofar as indemnification provisions
may be limited by applicable law and except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally or by
general equitable principles;

(x) The Registration Statement has become effective under the
Act and, to such counsel's knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened under the Act;

(xi) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements
(including supporting schedules, if any) and financial data derived
therefrom as to which such counsel need express no opinion), as of the
effective date of the Registration Statement, complied as to form in
all material respects with the requirements of the Act and the
applicable Rules and Regulations;

(xii) The information in the Prospectus under the caption
"Description of Capital Stock," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by such counsel
and is a fair summary of such matters and conclusions; and the forms of
certificates evidencing the Common Stock and filed as exhibits to the
Registration Statement comply with Delaware law;

(xiii) The description in the Registration Statement and the
Prospectus of the charter and bylaws of the Company and of statutes are
accurate and fairly present the information required to be presented by
the Act and the applicable Rules and Regulations;

(xiv) To such counsel's knowledge, there are no agreements,
contracts, leases or documents to which the Company is a party of a
character required to be described or referred to in the Registration
Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which are not described or referred to therein
or filed as required;

(xv) The performance of this Agreement and the Representatives'
Warrant Agreement and the consummation of the transactions herein and
therein contemplated (other than performance

17
<PAGE> 18

of the Company's indemnification obligations
hereunder or under the Representatives' Warrant Agreement,
concerning which no opinion need be expressed) will not (a)
result in any violation of the Company's charter or bylaws or
(b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute
a default under, any bond, debenture, note or other evidence of
indebtedness, or under any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other
agreement or instrument known to such counsel to which the
Company is a party or by which its properties are bound, or any
applicable statute, rule or regulation known to such counsel
or, to such counsel's knowledge, any order, writ or decree of
any court, government or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries, or
over any of their properties or operations;

(xvi) No consent, approval, authorization or
order of or qualification with any court, government or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries, or over any of their
properties or operations is necessary in connection with the
consummation by the Company of the transactions herein
contemplated, except such as have been obtained under the Act
or such as may be required under state or other securities or
Blue Sky laws in connection with the purchase and the
distribution of the Shares by the Underwriters;

(xvii) To such counsel's knowledge, there are
no legal or governmental proceedings pending or threatened
against the Company or any of its subsidiaries of a character
required to be disclosed in the Registration Statement or the
Prospectus by the Act or the Rules and Regulations or by the
Exchange Act or the applicable rules and regulations of the
Commission thereunder, other than those described therein;

(xviii) To such counsel's knowledge, neither
the Company nor any of its subsidiaries is presently (a) in
material violation of its respective charter or bylaws, or (b)
in material breach of any applicable statute, rule or
regulation known to such counsel or, to such counsel's
knowledge, any order, writ or decree of any court or
governmental agency or body having jurisdiction over the
Company or any of its subsidiaries, or over any of their
properties or operations;

(xix) The Representative's Warrants have been
duly and validly authorized by the Company and upon delivery to
you in accordance with the Representatives' Warrant Agreement
will be duly issued and legal, valid and binding obligations of
the Company;

(xx) The Representatives' Warrant Stock to be
issued by the Company pursuant to the terms of the
Representatives' Warrants have been duly authorized and, upon
issuance and delivery against payment therefor in accordance
with the terms of the Representatives' Warrant Agreement, will
be duly and validly issued and fully paid and nonassessable,
and, to such counsel's knowledge, will not have been issued in
violation of or subject to any preemptive right, co-sale right,
registration right, right of first refusal or other similar
right of stockholders;

(xxi) To such counsel's knowledge, except as
set forth in the Registration Statement and Prospectus, no
holders of Common Stock or other securities of the Company have
registration rights with respect to securities of the Company
and, except as set forth in the Registration Statement and
Prospectus, all holders of securities of the Company having
rights known to such counsel to registration of such shares of
Common Stock or other securities , because of the filing of the
Registration Statement by the Company have, with respect to the
offering contemplated there by, waived such rights or such
rights have expired by reason of lapse of time following
notification of the Company's intent to file the Registration
Statement or have included securities in the Registration
Statement pursuant to the exercise of and in full satisfaction
of such rights;

(xxii) The offer and sale of all securities of
the Company made within the last three years as set forth in
Item 26 of the Registration Statement were exempt from the
registration

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<PAGE> 19
requirements of the Securities Act, pursuant to
the provisions set forth in such Item, and from the
registration or qualification requirements of all relevant
state securities laws.

(xxiii) Each Selling Stockholder which is not
a natural person has full right, power and authority to enter
into and to perform its obligations under the Power of Attorney
and Custody Agreement to be executed and delivered by it in
connection with the transactions contemplated herein; the Power
of Attorney and Custody Agreement of each Selling Stockholder
that is not a natural person has been duly authorized by such
Selling Stockholder; the Power of Attorney and Custody
Agreement of each Selling Stockholder has been duly executed
and delivered by or on behalf of such Selling Stockholder; and
the Power of Attorney and Custody Agreement of each Selling
Stockholder constitutes the valid and binding agreement of such
Selling Stockholder, enforceable in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by
general equitable principles;

(xxiv) Each of the Selling Stockholders has
full right, power and authority to enter into and to perform
its obligations under this Agreement and to sell, transfer,
assign and deliver the Shares to be sold by such Selling
Stockholder hereunder;

(xxv) This Agreement has been duly authorized
by each Selling Stockholder that is not a natural person and
has been duly executed and delivered by or on behalf of each
Selling Stockholder; and

(xxvi) Upon the delivery of and payment for
the Shares as contemplated in this Agreement, each of the
Underwriters will receive valid marketable title to the Shares
purchased by it from such Selling Stockholder, free and clear
of any pledge, lien, security interest, encumbrance, claim or
equitable interest. In rendering such opinion, such counsel may
assume that the Underwriters are without notice of any defect
in the title of the Shares being purchased from the Selling
Stockholders.

In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Representatives, Underwriters' Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and Prospectus and related matters were
discussed, and although they have not verified the accuracy or completeness of
the statements contained in the Registration Statement or the Prospectus,
nothing has come to the attention of such counsel which leads them to believe
that, at the time the Registration Statement became effective and at all times
subsequent thereto up to and on the Closing Date and on any later date on which
Option Shares are to be purchased, the Registration Statement and any amendment
or supplement, when such documents became effective or were filed with the
Commission (other than the financial statements including supporting schedules
and other financial and statistical information derived therefrom, as to which
such counsel need express no comment) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or at the Closing
Date or any later date on which the Option Shares are to be purchased, as the
case may be, the Prospectus and any amendment or supplement thereto contained
any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel shall also state that
the conditions for the use of Form SB-2 set forth in the General Instructions
thereto have been satisfied.

Counsel rendering the foregoing opinion may rely as to
questions of law not involving the laws of the United States or the State of
Delaware upon opinions of local counsel, and as to questions of fact upon
representations or certificates of officers of the Company, the Selling
Stockholders or officers of the Selling Stockholders (when the Selling
Stockholder is not a natural person), and of government officials, in which case
their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or

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<PAGE> 20
inaccuracy in any such opinion, representation or certificate. Copies of any
opinion, representation or certificate so relied upon shall be delivered to you,
as Representatives of the Underwriters, and to Underwriters' Counsel.

(e) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, as the case may be, an opinion of
Freshman, Marantz, Orlanski, Cooper & Klein, a law corporation, in form and
substance satisfactory to you, with respect to the sufficiency of all such
corporate proceedings and other legal matters relating to this Agreement and the
transactions contemplated hereby as you may reasonably require, and the Company
shall have furnished to such counsel such documents as they may have requested
for the purpose of enabling them to pass upon such matters.

(f) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, as the case may be, a letter from
KPMG Peat Marwick L.L.P., addressed to the Company and the Underwriters, dated
the Closing Date or such later date on which Option Shares are to be purchased,
as the case may be, confirming that they are independent certified public
accountants with respect to the Company within the meaning of the Act and the
applicable published Rules and Regulations and based upon the procedures
described in such letter delivered to you concurrently with the execution of
this Agreement (herein called the "Original Letter"), but carried out to a date
not more than five (5) business days prior to the Closing Date or such later
date on which Option Shares are to be purchased, as the case may be, (i)
confirming, to the extent true, that the statements and conclusions set forth in
the Original Letter are accurate as of the Closing Date or such later date on
which Option Shares are to be purchased, as the case may be, and (ii) setting
forth any revisions and additions to the statements and conclusions set forth in
the Original Letter which are necessary to reflect any changes in the facts
described in the Original Letter since the date of such letter, or to reflect
the availability of more recent financial statements, data or information. The
letter shall not disclose any change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the Company and its
subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your sole judgment, is material
and adverse and that makes it, in your sole judgment, impracticable or
inadvisable to proceed with the public offering of the Shares as contemplated by
the Prospectus. The Original Letter from KPMG Peat Marwick L.L.P. shall be
addressed to or for the use of the Underwriters in form and substance
satisfactory to the Underwriters and shall (i) represent, to the extent true,
that they are independent certified public accountants with respect to the
Company and Medgenix within the meaning of the Act and the applicable published
Rules and Regulations, (ii) set forth their opinion with respect to their
examination of the consolidated balance sheet of the Company as of December 31,
1995 and related consolidated statements of operations, stockholders' equity,
and cash flows for the each of the years in the two year period ended December
31, 1995, (iii) state that KPMG Peat Marwick L.L.P. has performed the procedure
set out in Statement on Auditing Standards No. 71 ("SAS 71") for a review of
interim financial information and providing the report(s) of KPMG Peat Marwick
L.L.P. as described in SAS 71 on the financial statements of the Company for
each of the quarters ended March 31, 1996 and March 31, 1995, (iv) set forth
their opinion with respect to their examination of the consolidated balance
sheet of the Medgenix as of October 31, 1995 and related consolidated statements
of operations, stockholders' equity, and cash flows for the each of the years in
the two year period ended October 31, 1995, (v) state that KPMG Peat Marwick
L.L.P. has performed the procedure set out in SAS 71 for a review of interim
financial information and providing the report(s) of KPMG Peat Marwick L.L.P. as
described in SAS 71 on the financial statements of Medgenix for each of the
quarters ended January 31, 1996 and January 31, 1995, (vi) provide appropriate
assurances on (A) the pro forma financial information of the Company and
Medgenix, (B) the application of pro forma adjustments to the corresponding
historical amounts, (C) the compilation of the pro forma financial information,
and (D) the pro forma financial information complying as to form in all material
respects with the applicable accounting requirement of Rule 11-02 of Regulation
S-X of the Rules and Regulations and (vii) address other matters agreed upon by
KPMG Peat Marwick L.L.P. and you. In addition, you shall have received from KPMG
Peat Marwick L.L.P. a letter addressed to the Company and made available to you
for the use of the Underwriters stating that their review of the Company's
system of internal accounting controls, to the extent they deemed necessary in
establishing the scope of their examination of the Company's consolidated
financial statements as of December 31, 1995 did not disclose any weaknesses in
internal controls that they considered to be material weaknesses.

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<PAGE> 21
(g) You shall have received on the Closing Date and on any later date
on which Option Shares are to be purchased, as the case may be, a certificate of
the Company, dated the Closing Date or such later date on which Option Shares
are to be purchased, as the case may be, signed by the President and Chief
Financial Officer of the Company, to the effect that, and you shall be satisfied
that:

(i) The representations and warranties of the
Company in this Agreement are true and correct, as if made on
and as of the Closing Date or any later date on which Option
Shares are to be purchased, as the case may be, and the Company
has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior
to the Closing Date or any later date on which Option Shares
are to be purchased, as the case may be;

(ii) No stop order suspending the
effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or are
pending or threatened under the Act;

(iii) When the Registration Statement became
effective and at all times subsequent thereto up to the
delivery of such certificate, the Registration Statement and
the Prospectus, and any amendments or supplements thereto,
contained all material information required to be included
therein by the Act and the Rules and Regulations or the
Exchange Act and the applicable rules and regulations of the
Commission thereunder, as the case may be, and in all material
respects conformed to the requirements of the Act and the Rules
and Regulations or the Exchange Act and the applicable rules
and regulations of the Commission thereunder, as the case may
be, the Registration Statement, and any amendment or supplement
thereto, did not and does not include any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, the Prospectus, and any amendment or supplement
thereto, did not and does not include any untrue statement of a
material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading, and, since the
effective date of the Registration Statement, there has
occurred no event required to be set forth in an amended or
supplemented Prospectus which has not been so set forth; and

(iv) Subsequent to the respective dates as of
which information is given in the Registration Statement and
Prospectus, and except as may be contemplated thereby, there
has not been (a) any material adverse change in the condition
(financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries
considered as one enterprise, (b) any transaction that is
material to the Company and its subsidiaries considered as one
enterprise, except transactions entered into in the ordinary
course of business, (c) any obligation, direct or contingent,
that is material to the Company and its subsidiaries considered
as one enterprise, incurred by the Company or its subsidiaries,
except obligations incurred in the ordinary course of business,
(d) any change in the capital stock or outstanding indebtedness
of the Company or any of its subsidiaries that is material to
the Company and its subsidiaries considered as one enterprise,
(e) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company or any of its
subsidiaries, or (f) any loss or damage (whether or not
insured) to the property of the Company or any of its
subsidiaries which has been sustained or will have been
sustained which has a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or
business prospects of the Company and its subsidiaries
considered as one enterprise.

(h) You shall be satisfied that, and you shall have received a
certificate, dated the Closing Date from the Attorneys for each Selling
Stockholder to the effect that, as of the Closing Date, they have not been
informed that:

(i) The representations and warranties made by
such Selling Stockholder herein are not true or correct in any
material respect on the Closing Date; or

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<PAGE> 22
(ii) Such Selling Stockholder has not complied
with any obligation or satisfied any condition which is
required to be performed or satisfied on the part of such
Selling Stockholder at or prior to the Closing Date.

(i) The Company shall have obtained and delivered to you an agreement
from each officer and director of the Company, each Selling Stockholder and each
beneficial owner of five (5) percent or more shares of Common Stock in writing
prior to the date hereof that such person will not, during the Lock-up Period,
effect the Disposition of any Securities now owned or hereafter acquired
directly by such person or with respect to which such person has or hereafter
acquires the power of disposition, otherwise than (i) as a bona fide gift or
gifts, provided the donee or donees thereof agree in writing to be bound by this
restriction, (ii) as a distribution to limited partners or stockholders of such
person, provided that the distributees thereof agree in writing to be bound by
the terms of this restriction, or (iii) with the prior written consent of
Cruttenden Roth Incorporated. The foregoing restriction is expressly agreed to
preclude the holder of the Securities from engaging in any hedging or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of Securities during the Lock-up Period, even if such Securities
would be disposed of by someone other than the such holder. Such prohibited
hedging or other transactions would including, without limitation, any short
sale (whether or not against the box) or any purchase, sale or grant of any
right (including, without limitation, any put or call option) with respect to
any Securities or with respect to any security (other than a broad-based market
basket or index) that includes, relates to or derives any significant part of
its value from Securities. Furthermore, such person will have also agreed and
consented to the entry of stop transfer instructions with the Company's transfer
agent against the transfer of the Securities held by such person except in
compliance with this restriction.

(j) The Company and the Selling Stockholders shall have furnished to
you such further certificates and documents as you shall reasonably request
(including certificates of officers of the Company, the Selling Stockholders or
officers of the Selling Stockholers (when the Selling Stockholer is not a
natural person)) as to the accuracy of the representations and warranties of the
Company and the Selling Stockholders herein, as to the performance by the
Company and the Selling Stockholders of its their respective obligations
hereunder and as to the other conditions concurrent and precedent to the
obligations of the Underwriters hereunder.

(k) The Representative's Warrant Agreement shall have been entered into
by the Company and you, and the Representative's Warrants shall have been issued
and sold to you pursuant thereto.

(l) You shall have received on the Closing Date the following opinion
of Cleary, Gottlieb, Steen & Hamilton, counsel to Medgenix, dated the Closing
Date, to the effect that:

(i) Medgenix is a corporation duly organized and validly
existing under the laws of Belgium and has the corporate power and authority to
enter into the Agreement and to perform its obligations thereunder and to own,
lease and operate its properties and to conduct its business as presently
conducted.

(ii) The execution and delivery of the the Asset Purchase
Agreement by and among the [Company, ______________ (the "Purchaser"), Medgenix
and Nordion] dated May __, 1996 (the "Asset Purchase Agreement") have been duly
authorized by all necessary corporate action of Medgenix and the Asset Purchase
Agreement Agreement is a legal, valid, binding and enforceable agreement of
Medgenix.

(iii) The execution, delivery and performance of the Asset
Purchase Agreement by Medgenix do not contravene or violate the Articles of
Association of Medgenix.

(iv) Other than with respect to competition matters, as to
which such counsel need express no opinion, no consent, approval or
authorization of, or registration or filing with any Belgian or EC governmental
or regulatory authority is required on the part of Medgenix in connection with
the execution, delivery and performance of the Asset Purchase Agreement or the
consummation by Medgenix of the transactions contemplated thereby other than as
are obtained or effected or will be obtained or effected prior to Closing in
accordance with the Asset Purchase Agreement.

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<PAGE> 23
(v) Such counsel was not under instruction by Medgenix to give
substantive attention, in the form of legal consultation or representation, to
any material overtly threatened or pending litigation involving Medgenix, except
for (i) an ICC arbitration between Medgenix and Imagenix Ltd. relating to
certain receivables pertaining to the in vivo business of Medgenix, which is
currently pending before Mr. Morand, as sole arbitrator in Geneva, Switzerland
and (ii) a litigation with Medgenix Group S.A. (in liquidation) which is now
definitively settled.

(m) The closing of the acquisition of Medgenix by the Company on the
terms and conditions described in the Registration Statement shall be completed
on to the Closing Date concurrently with the closing of the transaction
contemplated hereby.

All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company and the Selling Stockholders will furnish
you with such number of conformed copies of such opinions, certificates, letters
and documents as you shall reasonably request.

7. Option Shares.

(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants to the several Underwriters, for the purpose of covering
over-allotments in connection with the distribution and sale of the Firm Shares
only, a nontransferable option to purchase up to an aggregate of 322,500 Option
Shares at the purchase price per share for the Firm Shares set forth in Section
3 hereof. Such option may be exercised by the Representatives on behalf of the
several Underwriters on one (1) or more occasions in whole or in part during the
period of forty-five (45) days after the date on which the Firm Shares are
initially offered to the public, by giving written notice to the Company. The
number of Option Shares to be purchased by each Underwriter upon the exercise of
such option shall be the same proportion of the total number of Option Shares to
be purchased by the several Underwriters pursuant to the exercise of such option
as the number of Firm Shares purchased by such Underwriter (set forth in
Schedule A hereto) bears to the total number of Firm Shares purchased by the
several Underwriters (set forth in Schedule A hereto), adjusted by the
Representatives in such manner as to avoid fractional shares.

Delivery of definitive certificates for the Option Shares to be
purchased by the several Underwriters pursuant to the exercise of the option
granted by this Section 7 shall be made against payment of the purchase price
therefor by the several Underwriters by certified or official bank check or
checks drawn in next-day funds, payable to the order of the Company (and the
Company agrees not to deposit any such check in the bank on which it is drawn
until the day following the date of its delivery to the Company). Such delivery
and payment shall take place at the offices of Troop Meisenger Steuber & Pasich,
LLP, 10940 Wilshire Boulevard, Los Angeles, CA 90024-3902, or at such other
place as may be agreed upon among the Representatives and the Company (i) on the
Closing Date, if written notice of the exercise of such option is received by
the Company at least three (3) full business days prior to the Closing Date, or
(ii) on a date which shall not be later than the fifth (5th) full business day
following the date the Company receives written notice of the exercise of such
option, if such notice is received by the Company less than three (3) full
business days prior to the Closing Date.

The certificates for the Option Shares to be so delivered will be made
available to you at such office or such other location as you may reasonably
request for checking at least two (2) full business days prior to the date of
payment and delivery and will be in such names and denominations as you may
request, such request to be made at least three (3) full business days prior to
such date of payment and delivery. If the Representatives so elect, delivery of
the Option Shares may be made by credit through full fast transfer to the
accounts at The Depository Trust Company designated by the Representatives.

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<PAGE> 24
delivery for the Option Shares to be purchased by such Underwriter or
Underwriters. Any such payment by you shall not relieve any such Underwriter or
Underwriters of any of its or their obligations hereunder.

(b) Upon exercise of any option provided for in Section 7(a)
hereof, the obligations of the several Underwriters to purchase such Option
Shares will be subject (as of the date hereof and as of the date of payment and
delivery for such Option Shares) to the accuracy of and compliance with the
representations, warranties and agreements of the Company and the Selling
Stockholders herein, to the accuracy of the statements of the Company, the
Selling Stockholders and officers of the Company made pursuant to the provisions
hereof, to the performance by the Company and the Selling Stockholders of its
their respective obligations hereunder, and to the condition that all
proceedings taken at or prior to the payment date in connection with the sale
and transfer of such Option Shares shall be satisfactory in form and substance
to you and to Underwriters' Counsel, and you shall have been furnished with all
such documents, certificates and opinions as you may request in order to
evidence the accuracy and completeness of any of the representations, warranties
or statements, the performance of any of the covenants or agreements of the
Company and the Selling Stockholders or the compliance with any of the
conditions herein contained.

8. Indemnification and Contribution.

(a) The Company agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject (including, without
limitation, in its capacity as an Underwriter or as a "qualified independent
underwriter" within the meaning of Schedule E of the Bylaws of the NASD), under
the Act, the Exchange Act or otherwise, specifically including, but not limited
to, losses, claims, damages or liabilities, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon (i) any breach of any representation, warranty, agreement or covenant of
the Company herein contained, (ii) any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any untrue statement or alleged
untrue statement of any material fact contained in any Preliminary Prospectus or
the Prospectus or any amendment or supplement thereto, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each
Underwriter for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement,
such Preliminary Prospectus or the Prospectus, or any such amendment or
supplement thereto, in reliance upon, and in conformity with, written
information relating to any Underwriter furnished to the Company by such
Underwriter, directly or through you, specifically for use in the preparation
thereof and, provided further, that the indemnity agreement provided in this
Section 8(a) with respect to any Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any losses, claims,
damages, liabilities or actions based upon any untrue statement or alleged
untrue statement of material fact or omission or alleged omission to state
therein a material fact purchased Shares, if a copy of the Prospectus in which
such untrue statement or alleged untrue statement or omission or alleged
omission was corrected had not been sent or given to such person within the time
required by the Act and the Rules and Regulations, unless such failure is the
result of noncompliance by the Company with Section 4(d) hereof.

The indemnity agreement in this Section 8(a) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which the Company may otherwise have.

(b) Each Selling Stockholder, severally and not jointly,
agrees to indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such

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<PAGE> 25
Underwriter may become subject (including, without limitation, in its capacity
as an Underwriter or as a "qualified independent underwriter" within the meaning
of Schedule E or the Bylaws of the NASD) under the Act, the Exchange Act or
otherwise, specifically including, but not limited to, losses, claims, damages
or liabilities, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon (i) any breach of any
representation, warranty, agreement or covenant of such Selling Stockholder
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any amendment or
supplement thereto, or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any untrue statement or alleged untrue
statement of any material fact contained in any Preliminary Prospectus or the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in the case of subparagraphs (ii) and (iii) of this Section 8(b) to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or such Underwriter
by such Selling Stockholder, directly or through such Selling Stockholder's
representatives, specifically for use in the preparation thereof, and agrees to
reimburse each Underwriter for any legal or other expenses reasonably incurred
by it in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
provided in this Section 8(b) with respect to any Preliminary Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
losses, claims, damages, liabilities or actions based upon any untrue statement
or alleged untrue statement of a material fact or omission or alleged omission
to state therein a material fact purchased Shares, if a copy of the Prospectus
in which such untrue statement or alleged untrue statement or omission or
alleged omission was corrected had not been sent or given to such person within
the time required by the Act and the Rules and Regulations, unless such failure
is the result of noncompliance by the Company with Section 4(d) hereof.

The indemnity agreement in this Section 8(b) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
person, if any, who controls any Underwriter within the meaning of the Act or
the Exchange Act. This indemnity agreement shall be in addition to any
liabilities which such Selling Stockholder may otherwise have.

(c) Each Underwriter, severally and not jointly, agrees to
indemnify and hold harmless the Company and each Selling Stockholder against any
losses, claims, damages or liabilities, joint or several, to which the Company
or such Selling Stockholder may become subject under the Act, the Exchange Act
or otherwise, specifically including, but not limited to, losses, claims,
damages or liabilities, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon (i) any breach of
any representation, warranty, agreement or covenant of such Underwriter herein
contained, (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment or supplement
thereto, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (iii) any untrue statement or alleged untrue statement of any
material fact contained in any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, or the omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, in the case of
subparagraphs (ii) and (iii) of this Section 8(c) to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by such Underwriter, directly or through
you, specifically for use in the preparation thereof, and agrees to reimburse
the Company and each such Selling Stockholder for any legal or other expenses
reasonably incurred by the Company and each such Selling Stockholder in
connection with investigating or defending any such loss, claim, damage,
liability or action.

The indemnity agreement in this Section 8(c) shall extend upon
the same terms and conditions to, and shall inure to the benefit of, each
officer of the Company who signed the Registration Statement and each director
of the Company, each Selling Stockholder and each person, if any, who controls
the Company or any

25
<PAGE> 26
Selling Stockholder within the meaning of the Act or the Exchange Act. This
indemnity agreement shall be in addition to any liabilities which each
Underwriter may otherwise have.

(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against any indemnifying
party under this Section 8, notify the indemnifying party in writing of the
commencement thereof but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
hereunder unless such indemnifying party was unaware of the action to which such
notice would have related and was actually prejudiced by the failure of the
indemnified party to provide it with such notice, but the omission so to notify
such indemnifying party or parties shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnification agreement.
In case any such action is brought against any indemnified party, and it
notified the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it shall
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnified party or parties shall have
the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying party
to such indemnified party of the indemnifying party's election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with appropriate local counsel) approved by the
indemnifying party representing all the indemnified parties under Section 8(a),
8(b) or 8(c) hereof who are parties to such action), (ii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party. In no event shall any indemnifying party be liable in
respect of any amounts paid in settlement of any action unless the indemnifying
party shall have approved the terms of such settlement; provided that such
consent shall not be unreasonably withheld. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnification could have been sought hereunder by
such indemnified party, unless such settlement includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such proceeding.

(e) In order to provide for just and equitable contribution in
any action in which a claim for indemnification is made pursuant to this Section
8 but it is judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 8 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that, except as set forth
in Section 8(f) hereof, the Underwriters severally and not jointly are
responsible pro rata for the portion represented by the percentage that the
underwriting discount bears to the initial public offering price, and the
Company and the Selling Stockholders are responsible for the remaining portion,
provided, however, that (i) no Underwriter shall be required to contribute any
amount in excess of the underwriting discount applicable to the Shares purchased
by such Underwriter in excess of the amount of damages which such Underwriter
has otherwise required to pay and (ii) no person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. The contribution agreement in this Section 8(e) shall extend
upon the same terms and conditions to, and shall inure

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<PAGE> 27
to the benefit of, each person, if any, who controls the Underwriters or the
Company or any Selling Stockholder within the meaning of the Act or the Exchange
Act and each officer of the Company who signed the Registration Statement and
each director of the Company and each officer of the Selling Stockholders who
signed the Registration Statement.

(f) The liability of each Selling Stockholder under the
representations, warranties and agreements contained herein and under the
indemnity agreements contained in the provisions of this Section 8 shall be
limited to an amount equal to the initial public offering price of the Selling
Stockholder Shares sold by such Selling Stockholder to the Underwriters minus
the amount of the underwriting discount paid thereon to the Underwriters by such
Selling Stockholder. The Company and such Selling Stockholders may agree, as
among themselves and without limiting the rights of the Underwriters under this
Agreement, as to the respective amounts of such liability for which they each
shall be responsible.

(g) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 8, and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 8 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act. The parties are advised that federal or state public policy, as interpreted
by the courts in certain jurisdictions, may be contrary to certain of the
provisions of this Section 8, and the parties hereto hereby expressly waive and
relinquish any right or ability to assert such public policy as a defense to a
claim under this Section 8 and further agree not to attempt to assert any such
defense.

9. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company, the Selling Stockholders and the Underwriters herein or in certificates
delivered pursuant hereto, and the indemnity and contribution agreements
contained in Section 8 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter
or any controlling person within the meaning of the Act or the Exchange Act, or
by or on behalf of the Company or any Selling Stockholder, or any of its their
officers, directors or controlling persons within the meaning of the Act or the
Exchange Act, and shall survive the delivery of the Shares to the several
Underwriters hereunder or termination of this Agreement.

10. Substitution of Underwriters. If any Underwriter or
Underwriters shall fail to take up and pay for the number of Firm Shares agreed
by such Underwriter or Underwriters to be purchased hereunder upon tender of
such Firm Shares in accordance with the terms hereof, and if the aggregate
number of Firm Shares which such defaulting Underwriter or Underwriters so
agreed but failed to purchase does not exceed 10% of the Firm Shares, the
remaining Underwriters shall be obligated, severally in proportion to their
respective commitments hereunder, to take up and pay for the Firm Shares of such
defaulting Underwriter or Underwriters.

If any Underwriter or Underwriters so defaults and the
aggregate number of Firm Shares which such defaulting Underwriter or
Underwriters agreed but failed to take up and pay for exceeds 10% of the Firm
Shares, the remaining Underwriters shall have the right, but shall not be
obligated, to take up and pay for (in such proportions as may be agreed upon
among them) the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase. If such remaining Underwriters do not, at the
Closing Date, take up and pay for the Firm Shares which the defaulting
Underwriter or Underwriters so agreed but failed to purchase, the Closing Date
shall be postponed for twenty-four (24) hours to allow the several Underwriters
the privilege of substituting within twenty-four (24) hours (including
non-business hours) another underwriter or underwriters (which may include any
nondefaulting Underwriter) satisfactory to the Company. If no such underwriter
or underwriters shall have been substituted as aforesaid by such postponed
Closing Date, the Closing Date may, at the option of the Company, be postponed
for a further twenty-four (24) hours, if necessary, to allow the Company the
privilege of finding another underwriter or underwriters, satisfactory to you,
to purchase the Firm Shares which the defaulting Underwriter or Underwriters so
agreed but failed to purchase. If it shall be arranged for the remaining

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<PAGE> 28
Underwriters or substituted underwriter or underwriters to take up the Firm
Shares of the defaulting Underwriter or Underwriters as provided in this Section
10, (i) the Company shall have the right to postpone the time of delivery for a
period of not more than seven (7) full business days, in order to effect
whatever changes may thereby be made necessary in the Registration Statement or
the Prospectus, or in any other documents or arrangements, and the Company
agrees promptly to file any amendments to the Registration Statement or
supplements to the Prospectus which may thereby be made necessary, and (ii) the
respective number of Firm Shares to be purchased by the remaining Underwriters
and substituted underwriter or underwriters shall be taken as the basis of their
underwriting obligation. If the remaining Underwriters shall not take up and pay
for all such Firm Shares so agreed to be purchased by the defaulting Underwriter
or Underwriters or substitute another underwriter or underwriters as aforesaid
and the Company shall not find or shall not elect to seek another underwriter or
underwriters for such Firm Shares as aforesaid, then this Agreement shall
terminate.

In the event of any termination of this Agreement pursuant to
the preceding paragraph of this Section 10, neither the Company nor any Selling
Stockholder shall be liable to any Underwriter (except as provided in Sections 5
and 8 hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this Agreement, to
purchase the number of Firm Shares agreed by such Underwriter to be purchased
hereunder, which Underwriter shall remain liable to the Company, the Selling
Stockholders and the other Underwriters for damages, if any, resulting from such
default) be liable to the Company or any Selling Stockholder (except to the
extent provided in Sections 5 and 8 hereof).

The term "Underwriter" in this Agreement shall include any
person substituted for an Underwriter under this Section 10.

11. Effective Date of this Agreement and Termination.

(a) This Agreement shall become effective at the earlier of
(i) 6:30 A.M., California time, on the second full business day following the
effective date of the Registration Statement, or (ii) the time of the initial
public offering of any of the Shares by the Underwriters after the Registration
Statement becomes effective. The time of the initial public offering shall mean
the time of the release by you, for publication, of the first newspaper
advertisement relating to the Shares, or the time at which the Shares are first
generally offered by the Underwriters to the public by letter, telephone,
telegram or telecopy, whichever shall first occur. By giving notice as set forth
in Section 12 before the time this Agreement becomes effective, you, as
Representatives of the several Underwriters, or the Company, may prevent this
Agreement from becoming effective without liability of any party to any other
party, except as provided in Sections 4(i), 5 and 8 hereof.

(b) You, as Representatives of the several Underwriters, shall
have the right to terminate this Agreement by giving notice as hereinafter
specified at any time at or prior to the Closing Date or on or prior to any
later date on which Option Shares are to be purchased, as the case may be, (i)
if the Company shall have failed, refused or been unable to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled is not fulfilled,
including, without limitation, any change in the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company
and its subsidiaries considered as one enterprise from that set forth in the
Registration Statement or Prospectus, which, in your reasonable judgment, is
material and adverse, or (ii) if additional material governmental restrictions,
not in force and effect on the date hereof, shall have been imposed upon trading
in securities generally or minimum or maximum prices shall have been generally
established on the New York Stock Exchange or on the American Stock Exchange or
in the over the counter market by the NASD, or trading in securities generally
shall have been suspended on either such exchange or in the over the counter
market by the NASD, or if a banking moratorium shall have been declared by
federal, New York or California authorities, or (iii) if the Company shall have
sustained a loss by strike, fire, flood, earthquake, accident or other calamity
of such character as to interfere materially with the conduct of the business
and operations of the Company regardless of whether or not such loss shall have
been insured, or (iv) if there shall have been a material adverse change in the
general political or economic conditions or financial markets as in your
reasonable judgment makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have been an
outbreak or

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<PAGE> 29
escalation of hostilities or of any other insurrection or armed conflict or the
declaration by the United States of a national emergency which, in your
reasonable judgment, makes it impracticable or inadvisable to proceed with the
public offering of the Shares as contemplated by the Prospectus. Any termination
pursuant to any of subparagraphs (ii) through (v) above shall be without
liability of any party to any other party except as provided in Sections 4(i), 5
and 8 hereof. In the event of termination pursuant to subparagraph (i) above,
the Company shall also remain obligated to pay costs and expenses pursuant to
Sections 4(i), 5 and 8 hereof.

If you elect to prevent this Agreement from becoming effective
or to terminate this Agreement as provided in this Section 11, you shall
promptly notify the Company by telephone, telecopy or telegram, in each case
confirmed by letter. If the Company shall elect to prevent this Agreement from
becoming effective, the Company shall promptly notify you by telephone, telecopy
or telegram, in each case, confirmed by letter.

12. Notices. All notices or communications hereunder, except as
herein otherwise specifically provided, shall be in writing and if sent to you
shall be mailed, delivered, telegraphed (and confirmed by letter) or telecopied
(and confirmed by letter) to you c/o Cruttenden Roth Incorporated, 18301 Von
Karman, Suite 100, Irvine, California 92715, telecopier number (714) 852-9603,
Attention: Mr. Byron Roth; if sent to the Company, such notice shall be mailed,
delivered, telegraphed (and confirmed by letter) or telecopied (and confirmed by
letter) to 820 Flynn Road, Suite A, Camarillo, California 93012, telecopier
number (805) 987-0296, Attention: James H. Chamberlain, Chairman of the Board
and President; if sent to one or more of the Selling Stockholders, such notice
shall be sent mailed, delivered, telegraphed (and confirmed by letter) or
telecopied (and confirmed by letter) to James H. Chamberlain or Anna Anderson,
BioSource International, Inc.,820 Flynn Road, Suite A, Camarillo, California
93012, telecopier number (805) 987-0296.

13. Parties. This Agreement shall inure to the benefit of and
be binding upon the several Underwriters and the Company and the Selling
Stockholders and their respective executors, administrators, successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall
be construed to give any person or corporation, other than the parties hereto
and their respective executors, administrators, successors and assigns, and the
controlling persons within the meaning of the Act or the Exchange Act, officers
and directors referred to in Section 8 hereof, any legal or equitable right,
remedy or claim in respect of this Agreement or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of the parties hereto and their
respective executors, administrators, successors and assigns and said
controlling persons and said officers and directors, and for the benefit of no
other person or corporation. No purchaser of any of the Shares from any
Underwriter shall be construed a successor or assign by reason merely of such
purchase.

In all dealings with the Company and the Selling Stockholders
under this Agreement, you shall act on behalf of each of the several
Underwriters, and the Company and the Selling Stockholders shall be entitled to
act and rely upon any statement, request, notice or agreement made or given by
you jointly or by Cruttenden Roth Incorporated on behalf of you.

14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California.

15. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.

29
<PAGE> 30
If the foregoing correctly sets forth the understanding among
the Company, the Selling Stockholders and the several Underwriters, please so
indicate in the space provided below for that purpose, whereupon this letter
shall constitute a binding agreement among the Company, the Selling Stockholders
and the several Underwriters.

Very truly yours,

BIOSOURCE INTERNATIONAL, INC.

By
-------------------------------------
James H. Chamberlain
Chairman of the Board and
Chief Executive Officer

SELLING STOCKHOLDERS

By
-------------------------------------
Attorney-in-Fact for the
Selling Stockholders
named in Schedule B hereto

Accepted as of the date first above written:

CRUTTENDEN ROTH INCORPORATED
COMMONWEALTH ASSOCIATES

On their behalf and on behalf of each of the
several Underwriters named in Schedule A hereto.

By: CRUTTENDEN ROTH INCORPORATED

By:
--------------------------------------
Authorized Signatory

30
<PAGE> 31
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Firm Shares
To Be
Underwriters Purchased
------------ ---------
<S> <C>
Cruttenden Roth Incorporated . . . . . . . . . . . . . . . .
Commonwealth Associates . . . . . . . . . . . . . . . . . . .
---------
Total . . . . . . . . . . . . . . . . . . . . . . . 2,150,000
=========
</TABLE>

31
<PAGE> 32
SCHEDULE B
<TABLE>
<CAPTION>
Number of
Company
Shares To
Company Be Sold
------- ---------

<S> <C>
BioSource International, Inc. 2,017,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,017,000
=========
</TABLE>

<TABLE>
<CAPTION>
Number of
Selling
Stockholder
Shares
Name of Selling Stockholder To Be Sold
--------------------------- ----------

<S> <C>
----------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 133,000
==========
</TABLE>

<PAGE> 1
EXHIBIT 2.1

ASSET PURCHASE AGREEMENT

DATED: APRIL 30, 1996

BY AND AMONG

BIOSOURCE INTERNATIONAL, INC.
A DELAWARE CORPORATION

AND

MEDGENIX DIAGNOSTICS, S.A.,
A BELGIAN CORPORATION

AND

NORDION INTERNATIONAL INC.,
A CANADIAN CORPORATION
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
-----------

SECTION 2. SALE AND TRANSFER OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----------------
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
---------------
2.3 Delivery of Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------
2.4 Consents to Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------
2.5 Right of Endorsement; Payment . . . . . . . . . . . . . . . . . . . . . . . . . . 6
-----------------------------

SECTION 3. CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
--------------
3.2 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
----------------------------
3.3 Prorations/Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
----------------------
3.4 Form of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
----------------

SECTION 4. ASSUMPTION OF LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-------------------
4.2 Liabilities Not Assumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-----------------------
4.3 Right of Enforcement and Settlement . . . . . . . . . . . . . . . . . . . . . . . 9
-----------------------------------

SECTION 5. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.1 The Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
----------------
5.2 Actions and Deliveries by Seller at the Closing . . . . . . . . . . . . . . . . . 9
-----------------------------------------------
5.3 Actions and Deliveries by Purchaser at the Closing . . . . . . . . . . . . . . . . 9
--------------------------------------------------

SECTION 6. REPRESENTATIONS AND WARRANTIES OF MEDGENIX AND
NORDION . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . 10
--------------------------------
6.2 Authority and Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------
6.3 Title to the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------------------
6.4 Rights of First Refusal on Assets . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------------
6.5 Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------
6.6 Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-------------------
6.7 Contracts, Agreements, Arrangements, Etc. . . . . . . . . . . . . . . . . . . . . 12
-----------------------------------------
6.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------
6.9 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------------------
6.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
----------
6.11 Compliance with the Law and Other Instruments . . . . . . . . . . . . . . . . . . 15
---------------------------------------------
6.12 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . 15
------------------------------------
</TABLE>

i
<PAGE> 3
<TABLE>
<S> <C>
6.13 Operation of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
-------------------------
6.14 Territorial Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------------------
6.15 Suppliers; Raw Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
------------------------
6.16 Absence of Certain Business Practices . . . . . . . . . . . . . . . . . . . . . . 16
-------------------------------------
6.17 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
---------------------
(a) Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
-----
(b) Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
--------
(c) No Infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
---------------
(d) Licensing Arrangements . . . . . . . . . . . . . . . . . . . . . . . 17
----------------------
(e) No Intellectual Property Litigation . . . . . . . . . . . . . . . . . 17
-----------------------------------
(f) Due Registration, Etc . . . . . . . . . . . . . . . . . . . . . . . . 18
---------------------
(g) Use of Name and Mark . . . . . . . . . . . . . . . . . . . . . . . . 18
--------------------
6.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------------------
6.19 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
---------
6.20 Employee Benefit Plans, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------------------------
6.21 Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------
6.22 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
---------
6.23 Purchase and Sale Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-----------------------------
6.24 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
-------------------
6.25 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-----------
6.26 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
---------
6.27 Powers of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
------------------
6.28 Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
----------------
6.29 No Unrelated Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
------------------------
6.30 No Change of Control Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 20
-------------------------------
6.31 No Finder's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
---------------
6.32 Export Control Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------------
6.33 Accuracy of Other Information; Disclosure . . . . . . . . . . . . . . . . . . . . 21
-----------------------------------------

SECTION 7. REPRESENTATIONS AND WARRANTIES OF BIOSOURCE . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.1 Organization, Standing and Corporate Power . . . . . . . . . . . . . . . . . . . . 21
------------------------------------------
7.2 Authorization of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------------
7.3 Execution, Delivery and Performance . . . . . . . . . . . . . . . . . . . . . . . 22
-----------------------------------
7.4 Effect of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
-------------------
7.5 No Consents Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
--------------------
7.6 No Finder's Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
---------------
7.7 No Financing Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
----------------------
7.8 Accuracy of Other Information; Disclosure . . . . . . . . . . . . . . . . . . . . 22
-----------------------------------------

SECTION 8. CONDUCT AND TRANSACTIONS PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
--------------
8.2 Operation of the Business Pending Closing . . . . . . . . . . . . . . . . . . . . 23
-----------------------------------------
8.3 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
--------
8.4 Advice of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-----------------
8.5 Non-Disclosure or Use of Information . . . . . . . . . . . . . . . . . . . . . . . 25
------------------------------------
</TABLE>

ii
<PAGE> 4
<TABLE>
<S> <C>
8.6 Governmental and Third Party Consents and Approvals . . . . . . . . . . . . . . . 25
---------------------------------------------------
8.7 8-K Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
------------------------

SECTION 9. CONDITIONS OF PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Conditions to Obligations of Purchaser . . . . . . . . . . . . . . . . . . . . . . 26
--------------------------------------
(a) Representations and Warranties of Medgenix and Nordion To Be True . . 26
-----------------------------------------------------------------
(b) No Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
--------------
(c) No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-----------------
(d) Statutory Requirements . . . . . . . . . . . . . . . . . . . . . . . 27
----------------------
(e) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------
(f) Opinion of Counsel for Medgenix and Nordion . . . . . . . . . . . . 27
-------------------------------------------
(g) Releases of Security Interests . . . . . . . . . . . . . . . . . . . 27
------------------------------
(h) Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
--------
(i) Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-------------
(j) Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
-------------
(k) Completion of Financing . . . . . . . . . . . . . . . . . . . . . . . 28
-----------------------
(l) Assignment of Facility . . . . . . . . . . . . . . . . . . . . . . . 28
----------------------
(m) Subleases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
---------
(n) Spinouts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
--------
(o) Receipt of Certain Agreements . . . . . . . . . . . . . . . . . . . . 28
-----------------------------
(p) Receipt of Report . . . . . . . . . . . . . . . . . . . . . . . . . . 28
-----------------
9.2 Conditions to Obligations of Medgenix . . . . . . . . . . . . . . . . . . . . . . 28
-------------------------------------
(a) Representations and Warranties of Purchaser To Be True . . . . . . . 29
------------------------------------------------------
(b) Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------
(c) Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
-------------
(d) Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
-------------
(e) Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
-------------
(f) Whole-Blood Stimulation Assay . . . . . . . . . . . . . . . . . . . . 29
-----------------------------
(g) No Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
--------------
(h) Statutory Requirements . . . . . . . . . . . . . . . . . . . . . . . 30
----------------------
(i) Receipt of Certain Agreements . . . . . . . . . . . . . . . . . . . . 30
-----------------------------
(j) Subleases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
---------
(k) Assignment of Facility . . . . . . . . . . . . . . . . . . . . . . . 30
----------------------

SECTION 10. FURTHER AGREEMENTS OF THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.1 Further Agreements of Medgenix . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------------------------
10.2 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
---------------
10.3 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
---------------------------
10.4 Operation of Business as Separate Division . . . . . . . . . . . . . . . . . . . . 32
------------------------------------------
10.5 Agreement to Increase Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 32
------------------------------------
10.6 Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
---------
</TABLE>

iii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 11. NATURE AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNITY; OFFSET RIGHTS . . . . . . . . . . . . . . . 32
11.1 Nature and Survival of Representations and Warranties . . . . . . . . . . . . . . 32
-----------------------------------------------------
11.2 Indemnification by Medgenix and Nordion . . . . . . . . . . . . . . . . . . . . . 32
---------------------------------------
11.3 Indemnification by Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
----------------------------
11.4 Notice of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
---------------
11.5 Direct Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
-------------
11.6 Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
------------------
11.7 Settlement of Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . 34
--------------------------------
11.8 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-----------
11.9 Exclusivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-----------
11.10 Basket on Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------------------
11.11 Cap on Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
---------------
11.12 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
-------

SECTION 12. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
12.1 Payment of Taxes, Filing of Returns . . . . . . . . . . . . . . . . . . . . . . . 35
-----------------------------------
12.2 Sales Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
-----------

SECTION 13. NONCOMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
13.1 Covenant Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
-----------------------
13.2 Investment Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
---------------------

SECTION 14. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
14.1 Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
--------------------------
14.2 Waiver of Immunity and Inconvenient Forum . . . . . . . . . . . . . . . . . . . . 37
-----------------------------------------
14.3 Arbitration Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
----------------------
14.4 Final Arbitration Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
---------------------------
14.5 Claims for Unpaid Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
-------------------------

SECTION 15. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
15.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-----------

SECTION 16. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
16.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
-------
16.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
----------------
16.3 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
----------------------
16.4 Waiver and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
--------------------
16.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-------------
16.6 Captions; Certain Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-----------------------
16.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
------------
16.8 Costs and Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
-------------------------
16.9 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
--------
16.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
------------
16.11 Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
-----------------
</TABLE>

iv
<PAGE> 6
SCHEDULES

<TABLE>
<S> <C> <C>
2.1 - Medgenix Subsidiaries

2.2 - Excluded Assets

6.3 - Title to Purchased Assets

6.3(A) - Inadequacies of Purchased Assets for Operation
of Business

6.3(B) - Property Leased or Used by Medgenix

6.7 - Contracts

6.8 - Medgenix Approvals, Authorizations, Consents

6.9 - Financial Statements of Medgenix

6.10 - Litigation

6.11 - Permits

6.12 - Absence of Changes; Payroll Listing

6.13 - Conduct of Business

6.15 - Suppliers Names & Addresses

6.17(a) - Intellectual Property

6.17(c) - Possible Infringements of Intellectual Property

6.17(d) - Licensing Arrangements

6.17(e) - Intellectual Property Litigation

6.17(f) - List of Intellectual Property Assets and Filing
Offices

6.17(g) - Restrictions on Use of Name and Mark
</TABLE>

v
<PAGE> 7
<TABLE>
<S> <C> <C>
6.19 - Employees

6.20 - Employee Benefit Plans

6.21 - Customer List

6.22 - Inventory

6.24 - Accounts Receivable

6.26 - Insurance Policies

6.27 - Powers of Attorney

6.28 - Prepaid Expenses

7.5 - BioSource Approvals, Authorizations, Consents
</TABLE>

vi
<PAGE> 8
EXHIBITS

<TABLE>
<S> <C> <C>
3.1 - Form of Royalty Agreement

5.2 - Form of Bill of Sale

9.1A - Form of Opinion of Counsel for Medgenix

9.1B - Form of Opinion of Counsel for Nordion

9.1C - Form of Opinion of Patent Counsel for Medgenix

9.2 - Form of Opinion of Counsel for BioSource

9.2f - Form of License Agreement
</TABLE>

vii
<PAGE> 9

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into on the 30th day of April, 1996, by and among BioSource International, Inc.
a Delaware corporation ("BioSource") and Nordion International Inc., a Canadian
corporation ("Nordion"), and Medgenix Diagnostics, S.A. ("Medgenix"), a
corporation organized under the laws of Belgium and an indirect, wholly-owned
subsidiary of Nordion. Medgenix is sometimes referred to herein as "Seller."

RECITALS

A. Seller desires to sell to BioSource, and BioSource
desires to acquire from Seller the Business (as defined below), upon the terms
and subject to the conditions set forth in this Agreement.

B. BioSource intends to acquire the Business (as defined
below) through a corporation to be formed by BioSource under the laws of
Belgium prior to the Closing (as defined below) which will be a wholly-owned
subsidiary of BioSource ("Sub"). BioSource intends to assign the Purchased
Assets to Sub. BioSource is sometimes referred to herein as "Purchaser."

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, and the mutual
covenants set forth herein, the parties agree as follows:

SECTION 1. DEFINITIONS

1.1 Definitions. As used in this Agreement, the following terms
shall have the following meanings:

"Affiliate" of (i) Medgenix means Nordion Europe S.A., Nordion
or any subsidiary, direct or indirect, of Medgenix or Nordion; (ii) Nordion
means Nordion Europe S.A., Medgenix or any subsidiary, direct or indirect, of
Nordion; and (iii) BioSource means any subsidiary, direct or indirect, of
BioSource.

"Agreement" means this Agreement and includes each Exhibit and
Schedule delivered pursuant to the terms of this Agreement.

"Assumed Liabilities" has the meaning set forth in Section
4.1.

"Balance Sheet Date" means the date of the Medgenix Balance
Sheet, January 31, 1996.
<PAGE> 10
"Business" means the in vitro diagnostics business of Medgenix
and the Medgenix Subsidiaries (including the goodwill related thereto) acquired
or to be acquired by Purchaser pursuant to this Agreement, consisting of the
Purchased Assets and the Assumed Liabilities.

"Claim" has the meaning set forth in Section 11.4.

"Closing" has the meaning set forth in Section 5.1.

"Closing Date" has the meaning set forth in Section 5.1.

"Competing Activity" has the meaning set forth in Section
13.1.

"Direct Claim" has the meaning set forth in Section 11.4.

"EEC" means the European Economic Community and all of its
current and future full member nations.

"Effective Time" means 11:59 p.m. on the day immediately
preceding the Closing Date.

"Employees" has the meaning set forth in Section 6.19.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"Excluded Assets" means those properties and assets listed on
Schedule 2.2.

"Governmental Approval" means any consent of any Governmental
Authority.

"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any multilateral authority or any
government authority, agency, department, board, commission or instrumentality
of Belgium, Canada, the EEC, the United States, any State of the United States
or any political subdivision thereof, and any tribunal or arbitrator(s) of
competent jurisdiction, and any self-regulatory organization.

"Hazardous Substances" means any natural or artificial
substance, preparation or article which if generated, transported, stored,
treated, used or disposed of (alone or combined with any other substance,
preparation or article) is harmful to water, air or land or any living
organism.

"Indemnified Party" has the meaning set forth in Section 11.4.

"Indemnifying Party" has the meaning set forth in Section 11.4

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<PAGE> 11
"Intellectual Property" means any and all Belgium, Canadian,
United States and other foreign: (a) patents (including design patents,
industrial designs and utility models) and patent applications (including
docketed patent disclosures awaiting filing, reissues, divisions,
continuations-in-part and extensions), patent disclosures awaiting filing
determination, inventions and improvements thereto; (b) trademarks, service
marks, trade names, trade dress, logos, business and product names, slogans,
and registrations and applications for registration thereof; (c) copyrights
(including software) and registrations thereof; (d) inventions, processes,
designs, formulae, trade secrets, know-how, industrial models, confidential and
technical information, manufacturing, engineering and technical drawings,
product specifications and confidential business information; (e) intellectual
property rights similar to any of the foregoing; and (f) copies and tangible
embodiments thereof (in whatever form or medium, including electronic media).

"Intellectual Property Assets" has the meaning set forth in
Section 6.17(a).

"Inventory" means all raw material, work in process and
finished goods inventory of the Business (whether held by Medgenix or any of
the Medgenix Subsidiaries), located at the premises or at other facilities of
Seller or the Medgenix Subsidiaries, which is usable by the Business in the
ordinary course of its business, and including all such inventory set forth on
Schedule 6.22, less only those items listed therein sold by Medgenix in the
ordinary course of its business.

"Leases" means any real or personal property leases,
subleases, licenses and occupancy agreements pursuant to which Medgenix or any
of the Medgenix Subsidiaries is the lessee, sublessee, licensee or occupant
other than real property leases, subleases, licenses and occupancy agreements
included in Excluded Assets.

"Liens" shall include any encumbrance, lien, charge,
hypothecation, pledge, mortgage, title retention agreement, security interest
of any nature, adverse claim, exception, reservation, easement, right of
occupation, any matter capable of registration against title, option,
right-of-preemption, privilege or any agreement, indenture, contract, lease,
deed of trust, license, option, instrument or other commitment to create any of
the foregoing.

"Losses" means any and all costs, demands, claims,
liabilities, fines, penalties, assessments, damages and expenses (including the
burden and expense of defending against all of the foregoing even if the
assertions therein are groundless, false or fraudulent), or amounts paid in
settlement thereof, and court costs (including court-awarded interest) and
reasonable attorneys' fees and disbursements of counsel (including legal or
other expenses reasonably incurred in connection with investigating or
defending the same); provided, that the term "Losses" shall not include costs,
demands, claims, liabilities, fines, penalties, assessments, damages and
expenses which are indirect or consequential in nature.

"Material Adverse Effect" means any event, occurrence, fact,
condition, change or effect that is materially adverse to the business,
operations, prospects, results of operations, condition (financial or
otherwise), properties (including intangible properties), assets (including

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<PAGE> 12
intangible assets) or liabilities of the Business, not otherwise disclosed,
permitted or reflected in this Agreement.

"Material Contracts" has the meaning set forth in Section 6.7.

"Medgenix Balance Sheet" has the meaning set forth in
Section 6.9.

"Medgenix Financial Statements" has the meaning set forth in
Section 6.9.

"Medgenix Subsidiaries" has the meaning set forth in Section
2.1.

"Notices" has the meaning set forth in Section 16.1.

"Permit" means any license, permit, order, approval or
Governmental Approval from any Governmental Authority.

"Permitted Liens" means

(i) liens for taxes, assessments and governmental
charges due and being contested in good faith and diligently by
appropriate proceedings (and for the payment of which adequate
provision has been made);

(ii) servitudes, easements, restrictions, rights-of-way
and other similar rights in real property or any interest therein,
including without limitation, those existing at the Closing Date in
favor of Nordion Europe or Institute National des Radioelements;
provided the same are not of such nature as to materially adversely
affect the use of the property subject thereto;

(iii) liens for taxes either not due and payable or due
but for which notice of assessment has not been given;

(iv) undetermined or inchoate liens, charges and
privileges incidental to current construction or current operations
and statutory liens, charges, adverse claims, security interests or
encumbrances of any nature whatsoever claimed or held by any
governmental authority that have not at the time been filed or
registered against the title to the asset or served upon the Seller
pursuant to law or that relate to obligations not due or delinquent;

(v) liens or rights reserved in any lease for rent or
for compliance with the terms of such lease;

(vi) security given in the ordinary course of the
Business to any public utility, municipality or government or to any
statutory or public authority in connection with the operations of the
Business, other than security for borrowed money;

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<PAGE> 13
(vii) statutory liens in favor of a seller of personal
property, mechanic's liens or other statutory liens in favor of a
provider of a service; provided, that obligations to a secured party
are not overdue or delinquent; and

(viii) the Liens described on Schedule 6.3.

"Person" means any individual, corporation, trust, estate,
partnership, joint venture, company, association, governmental bureau or other
entity of whatsoever kind or nature.

"Plans" has the meaning set forth in Section 6.20.

"Purchase Price" has the meaning set forth in Section 3.1.

"Purchased Assets" has the meaning set forth in Section 2.1.

"Records" has the meaning set forth in Section 10.3.

"Third Party Claim" has the meaning set forth in Section 11.4.

"Walloon Region Contracts" means the Walloon Region Subsidies
Agreement No. 2819; Walloon Region Subsidies Agreement No. 2820; Walloon Region
Subsidies Agreement No. 115; Walloon Region Subsidies Agreement No. 240;
Walloon Region Subsidies Agreement No. 850; Walloon Region Subsidies Agreement
No. 1101; and Tripartite Agreement of December 28, 1993 between the Walloon
Region, Medgenix Group and Medgenix.

Unless otherwise indicated, all dollar amounts in this
Agreement are expressed in U.S. dollars. Any reference in this Agreement to
generally accepted accounting principles refers to generally accepted
accounting principles that have been established in Belgium by law or
regulation, including those approved from time-to-time by the Belgian Institute
of Corporate Auditors or any successor body thereto.

SECTION 2. SALE AND TRANSFER OF ASSETS

2.1 Purchased Assets. On the terms and subject to the conditions
set forth in this Agreement, on the "Closing Date" (as that term is defined in
Section 5.1 of this Agreement) Seller agrees to sell, convey, assign, transfer
and deliver to Purchaser or, at its written direction, Sub, free and clear of
any and all Liens of any type, kind or nature (other than Permitted Liens and
those which Purchaser expressly agrees to assume pursuant to Section 4.1 of
this Agreement), all of the properties, assets, powers and rights, wherever
located, held by Seller or used or usable by Seller primarily in connection
with the operation and conduct of the Business (including, without limitation,
all of the capital stock of those subsidiaries of Medgenix which are listed on
Schedule 2.1 to this Agreement (the "Medgenix Subsidiaries")), other than the
Excluded Assets referred to in Section 2.2 below (the "Purchased Assets"), as
of and as the

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<PAGE> 14
same shall exist at the Effective Time, and Purchaser agrees to purchase and
acquire the Purchased Assets from Seller, for the Purchase Price provided in
Section 3.1 of this Agreement.

2.2 Excluded Assets. Notwithstanding anything to the contrary
contained in Section 2.1 hereof, the Purchased Assets shall not include, and
Seller shall retain for its own use and benefit those other properties and
assets of Seller listed on Schedule 2.2 to this Agreement (the "Excluded
Assets").

2.3 Delivery of Possession. At the Closing, Seller shall, at
Seller's expense, deliver to Purchaser physical possession of the Purchased
Assets, at Medgenix' facilities in Fleurus, Belgium.

2.4 Consents to Assignment. This Agreement shall not constitute
an agreement to assign any interest in any instrument, contract, lease, permit
or other agreement or arrangement or any claim, right or benefit arising
thereunder or resulting therefrom, if an attempted assignment thereof without
the consent required or necessary of a third party would constitute a breach or
violation thereof or affect adversely the rights of Purchaser or Seller
thereunder. Seller and Purchaser shall exercise best commercially reasonable
efforts and cooperate to realize an effective transfer to Purchaser, or at its
written direction, to Sub, of all agreements of Seller and/or its Affiliates
pertaining to the Business, by way of written consent and/or a formal novation
within the meaning of Art. 1271 of the Belgian Civil Code, including
substitution of Purchaser for Seller and express release of Seller as an
obligor in respect of all liabilities originating from and including the
Closing Date. If the counterparty to one or more contracts concerned does not
agree to a formal novation, Purchaser shall be given by Seller to the fullest
extent legally possible the benefit of such agreements and assume, pursuant to
delegation, Seller's liabilities existing at or accruing from and after the
Closing Date under such agreements and, as the case may be, indemnify Seller
and hold Seller harmless in respect thereof, provided, that Purchaser shall
continue to use all commercially reasonable efforts to obtain novation
agreements and to remove Nordion and Medgenix from all obligations under the
relevant agreements. Provided, further, that nothing contained in this Section
2.4 shall affect the liability, if any, of Seller pursuant to this Agreement
for failing to have disclosed the need for such consent or approval; and
provided, further, that nothing contained in this Section 2.4 shall obligate
Purchaser to waive the satisfaction of the conditions precedent set forth in
Section 9.1 of this Agreement.

2.5 Right of Endorsement; Payment. After the Closing Date,
Purchaser shall have the absolute and unconditional right and authority
(subject to promptly providing to Seller a full accounting) to endorse, without
recourse, the name of Seller on any check or any other evidence of indebtedness
received by Purchaser on account of any Purchased Asset, and Seller shall
deliver to Purchaser at the Closing a letter of instruction executed by Seller
sufficient to permit Purchaser to deposit such checks or other evidences of
indebtedness in bank accounts in the name of Purchaser. In addition, if after
the Closing Date, Seller receives any other payment on account of the Purchased
Assets, Seller will promptly remit such payment to Purchaser. To the

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<PAGE> 15
extent Purchaser receives a check or other evidence of indebtedness unrelated
to the Purchased Assets, Purchaser will promptly return such payment to
Medgenix.

SECTION 3. CONSIDERATION

3.1 Purchase Price. The Purchased Assets shall be purchased by
Purchaser from Seller for a purchase price (the "Purchase Price") comprised of
the following: (i) $6,565,000 in cash, which shall be delivered by Purchaser to
Nordion at the Closing; and (ii) a royalty of three percent (3%) for a period
of five years from and after the Closing Date on the "net sales" of certain of
Seller's products, pursuant to a Royalty Agreement substantially in the form of
Exhibit "3.1" hereto. The Purchase Price shall be exclusive of any value added
tax. The parties agree that the purchase and sale of the Business constitutes
a transfer of a branch of activity to a company duly registered as a VAT
"assujetti" in Belgium and the purchase and sale is accordingly exempted from
the application of value added tax in accordance with the terms of Article 11
of the Belgian Value Added Tax Code. In connection with the foregoing, the
Purchaser agrees to register the Sub as a VAT "assujetti" prior to the Closing
Date.

3.2 Allocation of Purchase Price. BioSource and Medgenix shall
agree on the allocation of the Purchase Price among the Purchased Assets prior
to the Closing.

3.3 Prorations/Adjustments. Rent, utility charges, common area
charges and other costs and expenses, including personal property taxes payable
with respect to Leases included in the Purchased Assets shall be prorated as of
the Closing Date, and payable, to the extent possible, by a dollar-for-dollar
adjustment to the Purchase Price on the Closing Date, and if not paid on the
Closing Date, then paid within 30 days of the Closing Date.

3.4 Form of Payments. All amounts to be paid by any party
pursuant to this Agreement at the Closing shall be paid by banker's check or by
irrevocable wire transfer to a bank account established by the payee, such
payment to be in Los Angeles Clearinghouse or equivalent "next day" funds.

SECTION 4. ASSUMPTION OF LIABILITIES

4.1 Assumed Liabilities. Subject to the provisions of this
Agreement, Purchaser agrees that upon transfer of the Purchased Assets on the
Closing Date, it shall assume, pay, satisfy, discharge, perform and fulfill, to
the extent not paid, satisfied, performed, discharged or fulfilled by Seller
and/or the Medgenix Subsidiaries on or before the Closing Date only the
following obligations of Seller and the Medgenix Subsidiaries (collectively,
the "Assumed Liabilities"), and none other:

(a) the contracts, agreements, arrangements, etc.
described in Schedules 6.3(B) (except that the Leases of buildings 1 and 14
referred to on Schedule 6.3(B) shall not constitute Assumed Liabilities and
except that those Leases referred to in Section 6.3(c) which are not set forth
on Schedule 6.3(B) because Medgenix pays less than $50,000 per year thereunder
shall also constitute Assumed Liabilities) and 6.7 (except that the
distribution agreement with Corpus,

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<PAGE> 16
the non-exclusive license agreement with HAT and the exclusive distribution
agreement with Kyowa Hakko, all of which are the subject of litigation and
referred to on Schedule 6.10, shall not constitute Assumed Liabilities and
except that those contracts, agreements, arrangements, etc. referred to in
Section 6.7(a)(ii), (iv), (v), (ix) and (xii) which are not set forth on
Schedule 6.7 because they require payments, discounts or expenditures in
amounts less than the amounts set forth in such sections shall also constitute
Assumed Liabilities), including the Walloon Region Contracts;

(b) the Permits, agreements or arrangements described in
Schedules 6.11 and 6.17(d);

(c) the agreements entered into by Seller and/or the
Medgenix Subsidiaries in the ordinary course of the Business for the provision
of services or goods to the Seller and/or the Medgenix Subsidiaries including,
without limitation, agreements with suppliers listed in Schedule 6.15;

(d) the agreements entered into by Seller and/or the
Medgenix Subsidiaries in the ordinary course of the Business for the sale of
Inventory by Seller and/or the Medgenix Subsidiaries; and

(e) all liabilities for employee compensation, benefits,
vacation pay, sick leave, severance payments, social security, and payroll
taxes, whether under individual or collective labor agreements, in accordance
with the Belgian national collective bargaining agreement No. 32 bis of June 7,
1985 or under the Plans (as defined in Section 6.20), existing at or accruing
from and after the Effective Time which relate to employees of Seller employed
by Purchaser after the Effective Time and involved in the Business; provided,
that the double vacation gratuity liability accrued on the Medgenix Balance
Sheet which is payable in May or June 1996 shall have been paid by Medgenix on
or prior to the Closing.

It is not the intention of either Purchaser or Seller that the
assumption by Purchaser of the Assumed Liabilities shall in any way enlarge the
rights of third Persons under any agreements or arrangements with Purchaser or
Seller. Nothing contained herein shall in any way prevent Purchaser from
contesting in good faith any of the Assumed Liabilities with any third Person
obligee; provided no contestation shall relieve Purchaser of its obligations
hereunder to Seller with respect thereto.

4.2 Liabilities Not Assumed. Purchaser shall not and does not
assume any liabilities, obligations or commitments of Seller of any kind, known
or unknown, contingent or otherwise, of whatsoever kind or nature, not
specifically included within the Assumed Liabilities, and the same shall remain
the sole responsibility of Seller.

4.3 Right of Enforcement and Settlement. From and after the
Closing Date, Purchaser shall have complete control over the payment,
settlement or other disposition of the Assumed Liabilities and the right to
commence, conduct and control all negotiations and proceedings with respect
thereto. Seller shall notify Purchaser promptly of any claim made with

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<PAGE> 17
respect to any such Assumed Liability and shall not, except with Purchaser's
prior written consent, which may arbitrarily be withheld by Purchaser,
voluntarily make any payment of, settle or offer to settle, or consent to any
compromise or admit liability with respect to, any such Assumed Liability.
Seller shall cooperate, at Purchaser's expense, with Purchaser in any
reasonable manner requested by Purchaser in connection with any negotiations or
proceedings involving any Assumed Liabilities.

SECTION 5. CLOSING

5.1 The Closing Date. The Closing of the purchase and sale of the
Business (the "Closing") shall take place concurrent with the closing of a
public offering of Purchaser's common stock, at the offices of Troop Meisinger
Steuber & Pasich, LLP, 10940 Wilshire Boulevard, Los Angeles, California 90024.
The date of the Closing is herein referred to as the "Closing Date."

5.2 Actions and Deliveries by Seller at the Closing. At the
Closing, Seller shall deliver to Purchaser the following instruments in form
and substance reasonably satisfactory to Purchaser:

(a) such bills of sale, endorsements, assignments,
subleases, and other good and sufficient instruments of conveyance, transfer
and assignment, including without limitation, a Bill of Sale in the form of
Exhibit "5.2" to this Agreement, as shall be necessary or appropriate to vest
in Purchaser, good title in and to the Purchased Assets, free and clear of any
and all Liens (other than Permitted Liens and Assumed Liabilities);

(b) any terminations of Liens or other security interests
necessary for the consummation of the transactions contemplated by this
Agreement or as may be required to permit Seller to deliver the Purchased
Assets free and clear of any and all Liens (other than Permitted Liens and
Assumed Liabilities); and

(c) the documents, instruments and evidences of the
satisfaction of all of the conditions precedent set forth in Section 9.1 of
this Agreement.

5.3 Actions and Deliveries by Purchaser at the Closing. At the
Closing, Purchaser shall deliver:

(a) to Nordion or as it may otherwise direct in writing,
the cash portion of the Purchase Price, and the Royalty Agreement; and

(b) to Seller, the following instruments in form and
substance reasonably satisfactory to or for the account of Seller:

(i) any acceptances of assignments required in
connection with the transfer and delivery of the Purchased Assets and the
assumption of the Assumed Liabilities; and

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<PAGE> 18
(ii) the documents, instruments and evidences of
the satisfaction of the conditions precedent provided for in Section 9.2 of
this Agreement.

SECTION 6. REPRESENTATIONS AND WARRANTIES OF MEDGENIX AND
NORDION

As a material inducement to Purchaser to enter into this Agreement and
to perform its obligations hereunder and thereunder Medgenix and Nordion
jointly and severally represent and warrant to and agree with Purchaser as
follows:

6.1 Organization, Standing and Power. Medgenix is a corporation
duly organized, validly existing and in good standing under the laws of
Belgium, and has full power and authority (corporate and other) to own its
properties and assets and carry on its business as presently conducted.

6.2 Authority and Capacity. Each of Medgenix and Nordion has full
power and authority (corporate and other) to enter into, execute and deliver
this Agreement and to perform its respective obligations hereunder. This
Agreement, and the consummation of the transactions contemplated hereby, have
been duly authorized by the Board of Directors of Medgenix and the Board of
Directors of Nordion, and no other corporate proceedings on the part of either
are necessary to authorize this Agreement and the transactions contemplated
hereby. This Agreement has been duly executed and delivered by each of
Medgenix and Nordion, and constitutes the valid and binding obligations of
each, enforceable against each in accordance with its terms.

6.3 Title to the Assets.

(a) Except as set forth in Schedule 6.3, Medgenix and/or
the Medgenix Subsidiaries has/have good and marketable title to all of the
Purchased Assets other than properties or assets held under valid Leases which
are in full force and effect and not in default, including, but not limited to,
all of the properties and assets reflected on the Medgenix Balance Sheet,
wherever located, free and clear of all Liens other than Permitted Liens.

(b) Except as set forth in Schedule 6.3(A), the Purchased
Assets to be transferred to Purchaser hereunder are adequate for the operation
of the Business as presently conducted, constitute all of the material
properties and assets, tangible and intangible, applicable to or used in
connection with the operation of the Business as it is being conducted on the
date hereof, and are in good operating condition, ordinary wear and tear
excepted.

(c) Schedule 6.3(B) sets forth a complete and accurate
list of (i) all real property leased or used by Medgenix and/or the Medgenix
Subsidiaries exclusively in connection with the operation and conduct of the
Business and (ii) all Leases for the rental or use of personal property leased
or used by Medgenix and/or the Medgenix Subsidiaries exclusively in connection
with the operation and conduct of the Business pursuant to which Medgenix pays
amounts in excess of $50,000 per year. The Leases with respect to such
properties are valid,

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enforceable and effective in accordance with their terms; all rentals,
royalties and other monetary obligations thereunder payable have been fully
paid; there is not under any such Lease any existing or claimed default by
Medgenix and/or the Medgenix Subsidiaries or, to the best knowledge of Medgenix
and Nordion, of any other party thereto; there is not under any such Lease any
event or condition which with or without notice or the passage of time, or
both, would constitute a default by Medgenix and/or the Medgenix Subsidiaries
or, to the best knowledge of Medgenix and Nordion, of any other party thereto;
and Medgenix and/or the Medgenix Subsidiaries enjoy(s) peaceable and
undisturbed possession under all such Leases. All of the Leases under which
Medgenix and/or the Medgenix Subsidiaries is/are lessee contain provisions
which generally require the consent of the lessor in the event of the
assignment or sublet thereof to the Purchaser hereunder and Medgenix will use
its best efforts to obtain the required consents in order that such Leases will
continue in full force and effect after the Effective Time in accordance with
their terms. None of the Leases are encumbered by any Liens, other than
Permitted Liens.

6.4 Rights of First Refusal on Assets. Neither Medgenix nor the
Medgenix Subsidiaries nor the Purchased Assets are subject to any right of
first refusal of any third party relating to the sale of any of the Purchased
Assets or the Business.

6.5 Intentionally Omitted.

6.6 Effect of Agreement. The sale by Medgenix of the Purchased
Assets to Purchaser at the Closing, the performance by each of its respective
obligations pursuant to the terms of this Agreement, and the consummation of
the transactions contemplated hereby, do not and will not, with or without the
giving of notice or passage of time, or both:

(a) violate any existing provision of law, statute, rule,
regulation or executive order, whether of Belgium, the EEC, the United States
or any other government or multilateral body, relating to the Business to which
Medgenix is subject or by which the Purchased Assets are bound or affected;

(b) violate any current judgment, order, writ or decree
of any court or administrative body (whether the jurisdiction of such body
originates in Belgium, the EEC, the United States or in any other government or
multilateral body) applicable to the Business or by which the Purchased Assets
are bound or affected;

(c) accelerate or constitute an event entitling the
holder of any indebtedness related to the Business and assumed hereunder by
Purchaser to currently accelerate the maturity of any such indebtedness or
increase the rate of interest presently in effect with respect to such
indebtedness; or

(d) result in the breach of, constitute a default under,
constitute an event which with notice or passage of time, or both, would become
a default under, or result in the creation of any mortgage, Lien, security
interest, charge or encumbrance upon any of the Purchased Assets under any
agreement, commitment, contract (written or oral) or other instrument

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(including, without limitation, Medgenix' Articles of Association to which
Medgenix or any Medgenix Subsidiary is a party, or by which the Purchased
Assets are bound or affected.

6.7 Contracts, Agreements, Arrangements, Etc.

(a) Except as set forth on Schedule 6.7, neither Medgenix
nor any Medgenix Subsidiary is a party to, nor is Medgenix, any Medgenix
Subsidiary or any of the Purchased Assets bound by, any:

(i) license agreement, assignment or contract
(whether as licensor or licensee, assignor or assignee) relating to trademarks,
trade names, patents or copyrights (or applications therefor), know-how or
technical assistance, or other proprietary rights (other than trademark
agreements which are entered into in the ordinary course of Medgenix' business)
which relates to the Business;

(ii) agreement or other arrangement for the sale
of goods or services by the Business to any government or Governmental
Authority whether in Belgium, the EEC, the United States, or any sovereign
nation or multilateral body (other than pursuant to open purchase orders issued
by such entities) at an aggregate price per agreement or arrangement in excess
of $25,000;

(iii) agreement with any labor union or otherwise
relating to employees of Medgenix or any Medgenix Subsidiary;

(iv) agreement with any vendor, distributor,
dealer, sales agent or representative relating to the Business other than
contracts or orders for the purchase or sale of goods at an aggregate price per
contract or order of more than $25,000;

(v) agreement with any distributor or customer of
the Business with respect to discounts (other than those reflected on Medgenix'
current price lists or in distribution or sale agreements duly disclosed under
this Agreement) or allowances or extended payment terms, where each such
discount, allowance or extended payment term has a value in excess of $10,000;

(vi) joint venture or partnership agreement with
any other Person which relates to the Business;

(vii) agreement guaranteeing, indemnifying or
otherwise becoming liable for the obligations or liabilities of another in
connection with the Business;

(viii) agreement appointing any Person as a
distributor or subdistributor with respect to the Business;

(ix) agreement for the making of any capital
expenditure relating to the Business in excess of $25,000;

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(x) agreement giving any customer of the Business
the right to require a reduction in prices or the repayment of any amount
previously paid other than discounts in the ordinary course or agreements
disclosed under this Agreement;

(xi) other agreement, not included in or expressly
excluded from the terms of the foregoing clauses (i) through (x), which would
have a Material Adverse Effect on the Purchased Assets or the Business; or

(xii) other agreement, not included in or expressly
excluded from the terms of the foregoing clauses (i) through (xi), which would
require the payment by BioSource of an amount in excess of $25,000.

(b) Correct and complete copies of all agreements,
indentures, mortgages, plans, policies, arrangements and other instruments and
written amendments thereto (or, where they are oral, written summaries of the
material terms thereof), required to be shown on Schedule 6.7 or which, except
for their inclusion on other Schedules to this Agreement, would have been shown
on Schedule 6.7 (collectively referred to herein as the "Material Contracts")
have been separately delivered to Purchaser prior to the date hereof.

(c) Each of the Material Contracts is valid, in full
force and effect and is enforceable by Medgenix and/or the Medgenix
Subsidiaries and its/their assignees and, to the best knowledge of Medgenix and
Nordion, against Medgenix and/or the Medgenix Subsidiaries in accordance with
its terms.

(d) There has not occurred any default by Medgenix and/or
the Medgenix Subsidiaries or any event which, with notice or the passage of
time and/or the election of any person other than Medgenix and/or the Medgenix
Subsidiaries, will become a default, nor to the knowledge of Medgenix and
Nordion has there occurred any default by others or any event which, with
notice or the passage of time and/or the election of Medgenix and/or the
Medgenix Subsidiaries, will become a default under any of the Material
Contracts, nor, to the best knowledge of Medgenix and Nordion, has there
occurred any default by any other party to any of the Material Contracts,
except defaults, if any, which (i) have not resulted and will not result in any
material loss to or liability of the Business, or (ii) have been indicated on
Schedule 6.7 or on Schedule 6.24.

(e) Except as set forth on Schedule 6.8 referred to
below, each of the Material Contracts is assignable by Medgenix and/or the
Medgenix Subsidiaries to Purchaser without the consent of the other parties
thereto.

6.8 Consents. Schedule 6.8 sets forth a complete and accurate
list of all approvals, authorizations, consents, orders or other actions of, or
filings with, any Person that are required to be obtained or made by Seller and
Nordion in connection with the execution of, and the consummation of the
transactions contemplated under, this Agreement, including, without limitation,
the effective transfer and conveyance to the Purchaser of the Purchased Assets.

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6.9 Financial Statements.

(a) Attached as Schedule 6.9 to this Agreement are the
balance sheets and supporting schedules of Medgenix as of October 31, 1994 and
October 31, 1995, and the related statement of operations and statement of cash
flows for the periods then ended, audited by the independent public accounting
firm of Ernst & Young Reviseurs d'Entreprises; and the unaudited balance sheet
of Medgenix as of January 31, 1996. All of the financial statements, including
the notes thereto, referred to in the preceding sentence are sometimes
collectively referred to herein as the "Medgenix Financial Statements".

(b) All of the Medgenix Financial Statements:

(i) are in accordance with the books and records
of Medgenix;

(ii) present fairly the financial condition of
Medgenix as of the date of such Statements and the results of its operations
for the periods therein specified; and

(iii) were prepared in accordance with generally
accepted accounting principles in effect in Belgium and the valuation rules
adopted by the Board of Directors of Medgenix applied on a basis consistent
with prior accounting periods.

(c) As of the dates of the Medgenix Financial Statements,
neither Medgenix nor any of the Medgenix Subsidiaries had any liabilities or
obligations, either accrued, absolute, contingent or otherwise, which have not
been reflected, and which are required to be reflected in accordance with
generally accepted accounting principles in effect in Belgium and the valuation
rules adopted by the Board of Directors of Medgenix, in the Medgenix Financial
Statements, other than liabilities or obligations which are disclosed in
Schedule 6.9, non-monetary obligations under governmental statutes and
regulations, and other liabilities and obligations which are not material in
the aggregate to the condition (financial or otherwise), business or properties
of Medgenix.

6.10 Litigation. Except as set forth in Schedule 6.10 to this
Agreement, there is no claim, legal action, suit, arbitration, investigation or
hearing, notice of claims or other legal, administrative or governmental
proceedings, whether of Belgium, the EEC, Canada, the United States or any
other government or multilateral body, relating to the Business or the
Purchased Assets pending or, to the best knowledge of Medgenix and Nordion,
threatened against Medgenix or any of the Purchased Assets (or in which
Medgenix or any Medgenix Subsidiary is plaintiff or otherwise a party thereto),
and, to the best knowledge of Medgenix and Nordion, there are no facts existing
which are likely to result in any such claim, action, suit, arbitration,
investigation, hearing, notice of claim or other legal, administrative or
governmental proceeding, whether of Belgium, the EEC, Canada, the United States
or any other government or multilateral body. Neither Medgenix nor any
Medgenix Subsidiary has waived any statute of limitations or other affirmative
defense with respect to any of the Assumed Liabilities. There is no continuing
order, injunction or decree of any court, arbitrator or governmental or
administrative authority, whether of Belgium, the EEC, Canada, the United
States or any other government or multilateral

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<PAGE> 23
body, relating to the Business to which Medgenix or any Medgenix Subsidiary is
a party or to which it or any of the Purchased Assets is subject.

6.11 Compliance with the Law and Other Instruments. The operation
of the Business has been and is being conducted in accordance with all
applicable laws, ordinances, rules and regulations, judgments and decrees of
all Belgium, EEC and local and corresponding foreign authorities applicable to
the Business. No investigations by any governmental authorities asserting or
alleging any violation of or noncompliance with any such laws, ordinances,
rules and regulations, judgments and decrees are pending or, to the best
knowledge of Medgenix and Nordion, threatened. Schedule 6.11 sets forth a true
and complete list of all Permits necessary to the conduct of the Business as
currently conducted. Medgenix and/or a Medgenix Subsidiary has obtained all of
such Permits, each of which is in full force and effect. No violation of any
Permit has occurred which is continuing and no proceeding is pending or, to the
knowledge of Medgenix and Nordion, threatened to revoke or limit any such
Permit.

6.12 Absence of Certain Changes or Events. Since the Balance Sheet
Date, there has not been any change in, or event affecting, the condition
(financial or otherwise), business, properties, assets, liabilities, operations
or prospects of the Business other than changes in the ordinary course of its
business, none of which has (either when taken by itself or when taken in
conjunction with any other or all such other changes) been materially adverse
to the Business. Except as set forth in Schedule 6.12, since the Balance Sheet
Date, the Business has not:

(a) suffered any adverse change in, and no events have
occurred which, individually or in the aggregate, have had, or may have, any
material adverse effect on, the results of operations, condition (financial or
otherwise), business or prospects of the Business;

(b) incurred damage to or destruction of any of the
Purchased Assets of the Business by casualty, whether or not covered by
insurance, which, individually or in the aggregate, exceeded $25,000 in value;

(c) made or granted any wage or salary increase to any
employee or paid any bonus, for which Purchaser shall be obligated, to any
employee (other than as required by law or contract existing at the date of
this Agreement) since the date of the payroll listing set forth on Schedule
6.12 hereto; entered into any employment agreement with any officer or employee
which is not terminable in accordance with applicable law; or entered into or
instituted any new Plans (as defined herein);

(d) made any loans which have not been repaid to its
employees other than travel advances made in the ordinary course of business
and consistent with past practice and any individual salary advance not in
excess of $5,000 made to nonmanagement employees in the ordinary course of
business and consistent with past practice;

(e) mortgaged, pledged or subjected to Lien or any other
encumbrance any of the Purchased Assets other than the Assumed Liabilities and
Permitted Liens;

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<PAGE> 24
(f) amended or terminated any of its contracts,
agreements, leases or arrangements which otherwise would have been set forth on
Schedule 6.7 to this Agreement if such termination would have a Material
Adverse Effect;

(g) waived or released any other rights with a value over
$25,000;

(h) entered into any transaction that has not been
disclosed in a Schedule to this Agreement and which is not in the ordinary
course of business; or

(i) agreed to do any of the actions described in the
preceding subsections (a) through (h).

6.13 Operation of the Business. Except as set forth in Schedule
6.13, (a) Medgenix currently conducts the Business only through Medgenix and
the Medgenix Subsidiaries and not through any other divisions or any other
Affiliate of Nordion or Medgenix and (b) no part of the Business is operated by
Medgenix through any entity other than Medgenix and the Medgenix Subsidiaries.

6.14 Territorial Restrictions. To the best knowledge of Medgenix
and Nordion, Medgenix is not restricted by any agreement or understanding,
whether written or oral, with any other Person from carrying on the Business
anywhere in the world. To the best knowledge of Nordion and Medgenix,
Purchaser, solely as a result of its purchase of the Purchased Assets from the
Seller pursuant hereto and the assumption of the Assumed Liabilities, will not
thereby become restricted in carrying on the Business anywhere in the world.

6.15 Suppliers; Raw Materials. Schedule 6.15 sets forth (a) the
names and addresses of all suppliers (including without limitation Nordion and
any Affiliates thereof) from which Medgenix ordered raw materials, supplies,
merchandise and other goods and services with an aggregate purchase price for
each such supplier of $100,000 or more during the twelve-month period ended
December 31, 1995 and (b) the amount for which each such supplier invoiced
Medgenix in such period.

6.16 Absence of Certain Business Practices. To the best knowledge
of Nordion and Medgenix, neither Medgenix nor any officer, employee or agent of
Medgenix, nor any other person acting on their behalf, has, directly or
indirectly, since January 1, 1995 given or agreed to give any gift or similar
benefit to any customer, supplier, governmental employee or other person who is
or may be in a position to help or hinder the Business (or assist Medgenix in
connection with any actual or proposed transaction relating to the Business)
(i) which subjected Medgenix to any damage or penalty in any civil, criminal or
governmental litigation or proceeding, (ii) which if not given in the past,
might have had a Material Adverse Effect, (iii) which if not continued in the
future, might have had a Material Adverse Effect or subject Medgenix to suit or
penalty in any private or governmental proceeding, or (iv) for the purpose of
establishing or maintaining any concealed fund or concealed bank account.

6.17 Intellectual Property.

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<PAGE> 25
(a) Title. Schedule 6.17(a) contains a complete and
correct list of all Intellectual Property that is owned by Medgenix and
primarily related to, currently used in, held for current use in connection
with, or currently necessary for the conduct of, or otherwise material to the
Business (the "Intellectual Property Assets") other than Intellectual Property
that is both not registered or subject to application or registration and not
material to the Business as currently conducted. The Intellectual Property
Assets comprise all of the Intellectual Property necessary for Purchaser to
conduct and operate the Business as it is now being conducted by Medgenix.

(b) Transfer. Immediately after the Closing, Purchaser
will own all of the Intellectual Property Assets free from any Liens (other
than Permitted Liens) subject to any notices or transfer filings or
registrations which Medgenix will effect or support pursuant to Section 10.1.

(c) No Infringement. Except as set forth on Schedule
6.17(c), the conduct of the Business does not infringe or otherwise conflict
with any rights of any Person in respect of any Intellectual Property. To the
best knowledge of Medgenix and Nordion, none of the Intellectual Property
Assets is being infringed or otherwise used or available for use by any other
Person.

(d) Licensing Arrangements. Schedule 6.17(d) sets forth
all agreements or arrangements (i) pursuant to which Medgenix has licensed
Intellectual Property Assets to, or the use of Intellectual Property Assets has
been otherwise permitted (through settlement or similar agreements) by, any
other Person and (ii) pursuant to which Medgenix has had Intellectual Property
licensed to it or has otherwise been permitted to use Intellectual Property
(through settlement or similar agreements). All of the agreements or
arrangements set forth on Schedule 6.17(d) (x) are in full force and effect in
accordance with their terms and no default exists thereunder by Medgenix, or to
the best knowledge of Medgenix and Nordion, by any other party thereto, (y) are
free and clear of all Liens, other than Permitted Liens and Assumed Liabilities
and (z) do not contain any change in control or other terms or conditions that
will become applicable or inapplicable as a result of the transactions
contemplated by the Agreement. Medgenix has delivered to Purchaser true and
complete copies of all licenses and arrangements (including amendments) set
forth on Schedule 6.17(d).

(e) No Intellectual Property Litigation. Except as set
forth on Schedule 6.17(e), no claim or demand of any Person has been made nor
is there any proceeding that is pending or to the best knowledge of Medgenix
and Nordion, threatened, which (i) challenges the rights of Medgenix in respect
of any Intellectual Property Assets, (ii) asserts that Medgenix is infringing
or otherwise in conflict with, or is, except as set forth in Schedule 6.17(d),
required to pay any royalty, license fee, charge or other amount with regard to
any Intellectual Property, or (iii) claims that any default exists under any
agreement or arrangement listed on Schedule 6.17(d). None of the Intellectual
Property Assets is subject to any outstanding order, ruling, decree, judgment
or stipulation by or with any court, arbitrator, or administrative agency, or
has been the subject of any litigation within the last five years, whether or
not resolved in favor of Medgenix.

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<PAGE> 26
(f) Due Registration, Etc. Schedule 6.17(f) sets forth
the Intellectual Property Assets and the filing offices, domestic or foreign,
where such Intellectual Property Assets have been registered, issued or filed.
Medgenix has taken such other actions that Medgenix considers reasonably
necessary to ensure full protection under any applicable laws or regulations,
and such registrations, filings, issuances and other actions remain in full
force and effect, in each case to the extent material to the Business.

(g) Use of Name and Mark. Except as set forth in
Schedule 6.17(g), there are, and immediately after the Closing will be, no
contractual restriction or limitations pursuant to any orders, decisions,
injunctions, judgments, awards or decrees of any Governmental Authority on
Purchaser's right to use the name and mark "Medgenix" in the conduct of the
Business as presently carried on by Medgenix.

6.18 Environmental Matters. Medgenix and the Medgenix
Subsidiaries have each obtained all necessary permits for the storage,
production and use of all Hazardous Substances which have been and are in their
possession or under their control. Such storage, production and use has not
resulted in the release or discharge into the environment (which for the
avoidance of doubt includes the soil and sub-soil) of any Hazardous Substances
in a manner which would give rise to liability for Purchaser (or any of the
Medgenix Subsidiaries acquired hereunder) under environmental laws currently in
effect.

6.19 Employees. Schedule 6.19 is a true and complete list of all
current employees (the "Employees") of Medgenix and the Medgenix Subsidiaries
who primarily perform services in connection with the operation or conduct of
the Business, together with their current rates of compensation, all written
employment contracts and collective bargaining agreements and all other
agreements or arrangements providing for compensation to Employees, to which
Medgenix is a party or by which Medgenix is bound. At the Closing, Schedule
6.19 will also contain, for each employee, all accrued but unpaid vacation and
sick pay earned by such employee. Medgenix has delivered to Purchaser accurate
and complete copies of all such contracts, agreements and arrangements and all
handbooks, manuals and other writings describing Medgenix' employment policies
applicable to the Employees. There are no commissions due and owing to any
Employee which are currently due and payable and which have not been paid in
full. Subject to the Belgian National Collective Bargaining Agreement No. 32
bis of June 7, 1985 and except as set forth on Schedules 6.19 and 6.20,
Medgenix is not a party to, or subject to any present obligation (statutory or
otherwise), liability or commitment with respect to, any written employment,
compensation, consulting, severance pay or similar agreement relating to any
Employee, and Medgenix is not now, nor will be liable in the future for any
material termination payment or benefit payable to any Employee as a
consequence of the transaction contemplated by this Agreement.

6.20 Employee Benefit Plans, Etc. Schedule 6.20 contains a true
and complete list of each employee benefit plan, fringe benefit plan, vacation
plan, sick leave plan, retiree health plan, bonus plan, deferred compensation
plan and any other compensation agreements or plan or funding arrangement
(collectively, the "Plans") sponsored, maintained or contributed to by Medgenix
or by any member of a group or organization of which Medgenix is a member under

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<PAGE> 27
which any Employee may be entitled to benefits. Medgenix has delivered to
Purchaser accurate and complete copies of all documents embodying or relating
to the Plans, including a list of the Employees eligible for coverage and the
benefits available under each such Plan. Except as disclosed on Schedule 6.20,
all Plans have in the past been, and are now, in all respects maintained,
funded and administered in compliance with all applicable law.

6.21 Customers. Schedule 6.21 contains a correct and complete list
of each of the customers of the Business who have purchased from Medgenix or
any Medgenix Subsidiary products and/or services in excess of 10% of Medgenix's
revenues during the twelve months ended February 29, 1996, and indicates the
dollar value of the products and/or services purchased by each such customer.

6.22 Inventory. Set forth on Schedule 6.22 is a correct and
complete list as of February 29, 1996, of all items which constitute
"Inventory" on such date, indicating for each item of Inventory where it is
located. All of the Inventory is of a quality and quantity saleable at regular
prices or usable by Purchaser in the ordinary course of business of Purchaser,
net of reserves reflected on the balance sheet of Medgenix as of February 29,
1996.

6.23 Purchase and Sale Obligations. Since the Balance Sheet Date,
all purchase and sales orders and all other commitments for purchases and sales
made by or on behalf of Medgenix relating to the Business have been made in the
usual and ordinary course of business in accordance with Medgenix' normal
practices.

6.24 Accounts Receivable. Attached hereto as Schedule 6.24 is a
true and complete schedule of the accounts receivable of Medgenix as of
February 29, 1996 (the "Accounts Receivable"), setting forth a description of
the Accounts Receivable including the names and, at the Closing, the addresses
of the account debtors, the balance amount and aging as of the date indicated
therein. The Accounts Receivable and all books, records and documents relating
to the Accounts Receivable were genuine and accurate as of February 29, 1996.
As of February 29, 1996, each of the Accounts Receivable represented an
undisputed, bona fide sale and delivery of goods or services rendered or to be
rendered, subject to any reserve or allowance taken or made in respect thereof
in accordance with Medgenix' normal practices. As of February 29, 1996,
Medgenix was the lawful owner of the Accounts Receivable.

6.25 Tax Returns. Medgenix has paid in full all ad valorem
property taxes and other assessments levied on its assets and properties which
have heretofore become due and payable. Medgenix has withheld all proper and
accurate amounts from its employees and made provisions, deposited or paid over
such withheld amounts in full and complete compliance with the tax laws of
Belgium and other applicable foreign, EEC or local laws, and has filed proper
and accurate foreign, EEC and local returns and reports and has paid all
related taxes or assessments (including penalties and interest) for all years
and periods (and portions thereof) for which any such returns and reports were
due with respect to corporate income, franchise, sales and use, personal
property, local business license, employee income, withholding, old age
pension, unemployment, and all other taxes.

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<PAGE> 28
6.26 Insurance. Set forth on Schedule 6.26 is a correct and
complete list of (a) all currently effective insurance policies and fidelity
and surety bonds covering the Purchased Assets, and (b) for the three-year
period ending on the date hereof, (i) all accidents, casualties or damage
occurring on or to the Purchased Assets or relating to the Business or its
products, and (ii) claims for damages, contribution or indemnification and
settlements (including pending settlement negotiations) relating thereto.
Except as set forth on Schedule 6.26, as of the date hereof there are no
disputes with underwriters of any such policies or bonds, and all premiums due
and payable have been paid. To the best knowledge of Medgenix and Nordion,
there are no pending or threatened terminations or premium increases with
respect to any of such policies or bonds and, to the best knowledge of Medgenix
and Nordion, there is no condition or circumstance applicable to the Business,
other than the sale of the Purchased Assets and assumption of the Assumed
Liabilities pursuant to this Agreement, which is likely to result in such
termination or increase. The Business and the Purchased Assets are in
compliance with all conditions contained in such policies or bonds, except for
non-compliance which, individually or in the aggregate, would not have a
material adverse effect on the Business or the Purchased Assets.

6.27 Powers of Attorney. Except for powers of attorney given in
the ordinary course of business to officers and directors of Medgenix and
except as set forth on Schedule 6.27, no person has been granted and currently
holds any power of attorney to act on behalf of Medgenix in connection with any
of the Purchased Assets or the Business.

6.28 Prepaid Expenses. Set forth in Schedule 6.28 is a true,
complete and accurate list of all prepaid expenses, trade deposits, security
deposits and other similar assets of the Business, which in each case is in
excess of $25,000, and existing as of February 29, 1996.

6.29 No Unrelated Liabilities. As of the Closing Date, Purchaser
will not by reason of the transactions contemplated by this Agreement assume,
acquire, succeed to or be subject in any way to, any liability arising out of
or in connection with the Business other than the Assumed Liabilities or
otherwise as results from this Agreement.

6.30 No Change of Control Provisions. Neither Medgenix nor any
Medgenix Subsidiary is a party or subject to any agreement or contract which
would require under the terms of such agreement or contract the making by
Purchaser or the Business of any payment, other than payments contemplated by
this Agreement, to any employee of the Business or to any other Person as a
result of the consummation of the transactions contemplated herein.

6.31 No Finder's Fee. Neither Nordion nor Medgenix has retained
any finder, broker, agent or other party or incurred any liability or is
otherwise obligated for any brokerage fees, commissions, finder's fees or
investment banking fees in connection with this Agreement or the transactions
contemplated hereby.

6.32 Export Control Regulations. None of the Intellectual Property
or technology used by Medgenix in the conduct of the Business and included in
the Purchased Assets is subject to the export control regulations or ordinances
of Belgium or the EEC.

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<PAGE> 29
6.33 Accuracy of Other Information; Disclosure. None of the
information contained in any certificate delivered or to be delivered by
Medgenix to Purchaser at the Closing, or contained in this Agreement, contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made or will be made, not materially
misleading. Medgenix has disclosed to Purchaser all information known to it
which it reasonably believes to be material to a decision by Purchaser to
acquire the Purchased Assets and Assumed Liabilities hereunder. The
information in and attachments to each of the Schedules attached to this
Agreement are hereby incorporated into and made part of each other Schedule,
and the listing of an agreement, document or other instrument in the Schedules
constitutes disclosure of its terms (if a copy of such has been provided to
BioSource).

SECTION 7. REPRESENTATIONS AND WARRANTIES OF BIOSOURCE

As a material inducement to Nordion and Medgenix to enter into this
Agreement and to perform its obligations hereunder and thereunder, BioSource
represents and warrants to and agrees with Nordion and Medgenix as follows:

7.1 Organization, Standing and Corporate Power. BioSource is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, with adequate corporate power and authority to
own its properties and carry on its business as presently conducted. BioSource
has the corporate power to enter into, execute and deliver this Agreement and
to consummate the transactions contemplated hereby in accordance with its
terms.

7.2 Authorization of Agreement. The execution and delivery of
this Agreement and the performance by BioSource of its obligations and
agreements under this Agreement will prior to the Closing have been duly and
validly authorized and approved by BioSource's Board of Directors. BioSource
has taken, and shall take prior to the Closing Date, all other actions required
on its part by law and its Certificate of Incorporation and Bylaws in order to
consummate the transactions contemplated hereby.

7.3 Execution, Delivery and Performance. This Agreement
constitutes the valid and binding obligations of BioSource, enforceable in
accordance with its terms.

7.4 Effect of Agreement. The execution and delivery of this
Agreement do not, and compliance by BioSource with the provisions hereof will
not, (i) conflict with or result in a breach or default under any of the terms,
conditions, or provisions of any note, bond, mortgage, indenture, license,
agreement or other instrument or obligation (including, without limitation,
BioSource's Certificate of Incorporation or Bylaws) to which BioSource is a
party or by which it may be bound; or (ii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to BioSource, which conflict,
breach, default or violation could have a material adverse effect on BioSource,
or BioSource's ability to fulfill its obligations pursuant to this Agreement.

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7.5 No Consents Required. Except as set forth on Schedule 7.5,
there are no approvals, authorizations, consents, orders or other actions of,
or filings with, any Governmental Authority required to be filed by BioSource
in connection with the consummation of the transactions contemplated under this
Agreement.

7.6 No Finder's Fee. BioSource has not retained any finder,
broker, agent or other party or incurred any liability or is otherwise
obligated for any brokerage fees, commissions, finder's fees or investment
banking fees in connection with this Agreement or the transactions contemplated
hereby.

7.7 No Financing Liability. The financing transaction
contemplated by BioSource pursuant to that certain Registration Statement on
Form SB-2, Registration No. 333-3336, filed with the United States Securities
and Exchange Commission on April 10, 1996, requires as a condition to its
consummation that the Closing occur simultaneously with the consummation of
such financing. Whether or not such financing is consummated, BioSource
represents that neither Nordion, Medgenix nor any of their Affiliates or
respective officers or directors shall have any liability for any of
BioSource's actions in connection with such financing, including without
limitation, for any misstatement of a material fact or omission of any material
fact from such Registration Statement, nor any liability for the
nonconsummation of such financing, and the indemnification provided by
Purchaser in Section 11.3 of this Agreement expressly applies to any breach of
this representation.

7.8 Accuracy of Other Information; Disclosure. None of the
information contained in any certificate delivered or to be delivered by
BioSource to Nordion or Medgenix at the Closing, or contained in this
Agreement, contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made or will be made, not materially
misleading. BioSource has disclosed to Nordion or Medgenix all information
known to it which it reasonably believes to be material to a decision by
Nordion or Medgenix to sell the Business hereunder.

SECTION 8. CONDUCT AND TRANSACTIONS PRIOR TO CLOSING

8.1 Investigations. Between the date of this Agreement and the
Closing Date, Medgenix shall give to Purchaser and its representatives full
access to all of Medgenix' premises, books, records, employees, bankers,
independent public accountants and other agents possessing any information
relating in any manner to the Business, and shall furnish Purchaser with such
financial and operating data and other information with respect to the business
and properties of the Business as Purchaser shall from time to time request;
provided, however, that any such investigation shall not affect any of the
representations and warranties hereunder; and provided, further, that any such
investigation shall be conducted in such manner as not to interfere
unreasonably with the operation of the Business. If this Agreement is
terminated without the transactions contemplated hereby having been effected,
Purchaser and Medgenix shall each return to the other all documents, working
papers and other materials obtained from the other party pursuant to this
Agreement, and the confidentiality provisions of Section 10.2 of this Agreement
shall continue to apply.

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8.2 Operation of the Business Pending Closing. Between the date
hereof and the Closing Date, unless Purchaser consents in writing to the
contrary, other than as provided for herein, Medgenix shall, with respect to
the Business only:

(a) conduct the Business in the ordinary course in
accordance with prior practice;

(b) make, amend and terminate contracts and operate only
in the ordinary course of business;

(d) not suffer, create or incur any mortgage, security
interest, Lien, Lease, encumbrance or restriction on any of the Purchased
Assets (other than Permitted Liens);

(e) duly comply with all laws, ordinances, rules and
regulations applicable to Medgenix and to the conduct of the Business;

(f) not make or agree to make any capital expenditures in
excess of $25,000 in the aggregate;

(g) not sell, lease, dispose of, convey or transfer or
agree to sell, lease, dispose of, convey or transfer any Purchased Assets,
except sales from Inventory in the ordinary course of business;

(h) not incur any fixed or contingent obligation or enter
into any agreement, commitment or other transaction or arrangement relating to
the Business which (i) may not be terminated by Medgenix on 30 days' notice or
less without cost or liability, and (ii) which is not in the ordinary course of
the Business, and (iii) which is not transferrable or assignable to Purchaser;

(i) use its best efforts to preserve its business
organization, retain its employees and preserve good relationships with
suppliers, customers and other persons having significant business
relationships with the Business;

(j) use its best efforts to keep available for possible
retention by Purchaser the services of the Employees;

(k) not enter into any agreement, arrangement or
undertaking with respect to any Employee relating to the payment of any bonus,
profit-sharing or special compensation or any increase in the compensation
payable to an Employee (other than as required by law or contract) if any such
payment will be incurred by Purchaser;

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(l) maintain in full force and effect all existing
insurance policies and keep the Purchased Assets insured in accordance with
present practice;

(m) maintain the Purchased Assets in a good condition and
state of repair, except for reasonable wear and tear;

(n) not sell, assign, license or transfer or agree to
sell, assign, license or transfer (with or without consideration) any of the
Intellectual Property Assets or any interest therein;

(o) use its best efforts not commit any act or omit to do
any act which would be or result in a breach of any of its obligations, duties,
agreements or representations under any agreement, contract or commitment to
which it is a party or to which it enters into subsequent to the date of this
Agreement which would have a Material Adverse Effect;

(p) bear the risk of loss or damage to the Purchased
Assets on and prior to the Closing Date, and maintain all properties necessary
for the conduct of the Business, whether owned or leased, in substantially the
same condition as they now are, reasonable wear and tear excepted; and, in the
event that any Purchased Asset is damaged on or prior to the Closing Date by
any casualty, Medgenix shall give Purchaser immediate written notice of such
damage, and, if such damage or destruction has a material adverse impact on the
Business, shall afford Purchaser, in its sole and absolute discretion, the
right to cancel, terminate or delay the Closing under this Agreement without
further liability to Medgenix or Nordion.

(q) maintain the books, records and accounts of Medgenix
in the usual, regular and ordinary manner, on a basis consistent with prior
periods;

(r) not enter into any agreement of any kind or nature
with any Affiliate of Medgenix with respect to the Purchased Assets or the
Business other than transactions required to give effect to this Agreement;

(s) not enter into any transaction or perform any act
which would make any of the representations, warranties or agreements contained
in this Agreement false or misleading in any material respect if made again
immediately after such transaction or act; and

(t) not, directly or indirectly, sell, transfer or
otherwise dispose of, solicit any offer for the purchase or acquisition of, or
engage in any negotiations, discussions or agreements with any Person other
than Purchaser the purpose or result of which would be the sale, transfer or
disposition of the Business or any Purchased Assets, excepting only sales from
Inventory and other dispositions in the ordinary course of business.

8.3 Meetings. At Purchaser's request, Medgenix shall cooperate
with Purchaser in arranging and/or participating in any meetings with
customers, suppliers, and others who have or have had a business relationship
with Medgenix relating in any manner to the operation of

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<PAGE> 33
the Business, unless in the reasonable judgment of Medgenix the holding of such
a meeting or meetings would be likely to have a Material Adverse Effect upon
the ongoing business of the Business, were the transactions contemplated by
this Agreement not, in fact, to occur.

8.4 Advice of Changes. If Medgenix becomes aware of any fact or
facts which, if known at the date of this Agreement, would have been required
to be set forth or disclosed in or pursuant to this Agreement or which,
individually or in the aggregate, materially adversely affects the Business,
Medgenix shall promptly advise Purchaser in writing thereof.

8.5 Non-Disclosure or Use of Information. Medgenix agrees that,
unless this Agreement is terminated, subject to Section 10.2, from and after
the date hereof, Medgenix shall not use or disclose to any third party, other
than in the ordinary course of business, any information proprietary to
Medgenix and held by Medgenix or used by Medgenix in the Business, including,
without limitation, Medgenix's customer lists, except for the benefit of
Purchaser and with the prior written consent of Purchaser.

8.6 Governmental and Third Party Consents and Approvals. Prior to
the Closing, Medgenix shall, at Purchaser's cost and expense and with
Purchaser's reasonable assistance, take all such actions as are reasonable and
necessary to:

(a) prepare and file applications with any governmental
agency or multilateral body or other appropriate agency and any other necessary
third party for consent to the transactions contemplated by this Agreement or
as may be required to deliver the Purchased Assets in accordance with the terms
and subject to the conditions of this Agreement;

(b) prosecute such applications with diligence;

(c) diligently oppose any objections to, appeals from or
petitions to reconsider such governmental or third party approvals or consents;
and

(d) take all such further action as reasonably may be
necessary to obtain and maintain such consents.

8.7 8-K Financial Statements. Medgenix shall permit Purchaser
access to its books and records sufficient to allow Purchaser to prepare
audited financial statements and pro forma financial statements of the Business
sufficient to permit Purchaser to fully, completely and timely

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<PAGE> 34
comply with Purchaser's obligations to file financial statements relating to
the Business under and pursuant to the General Instructions to Form 8-K under
the Exchange Act, Form SB-2 under the Securities Act of 1933, as amended and
Rule 3-05 of Regulation S-X of the General Rules and Regulations under the
Exchange Act ("Regulation S-X"); provided that neither Medgenix, Nordion, or
any of their respective officers, directors or Affiliates shall have any
liability to Purchaser or any other Person in respect of or arising out of any
financial statements so prepared and filed, and Purchaser agrees to indemnify
Medgenix, Nordion and their respective officers, directors and Affiliates in
respect thereof in accordance with the provisions of Section 11 herein.

SECTION 9. CONDITIONS OF PURCHASE AND SALE

9.1 Conditions to Obligations of Purchaser. Unless waived, in
whole or in part, in writing by Purchaser, the obligations of Purchaser to
effect consummation of the transactions contemplated by this Agreement shall be
subject to the fulfillment prior to or at the Closing Date of each of the
following conditions:

(a) Representations and Warranties of Medgenix and
Nordion To Be True. The representations and warranties of Medgenix and Nordion
(contained in this Agreement, any Exhibit or Schedule hereto, or any
certificate, instrument or other writing delivered to Purchaser or its
representatives by Medgenix, or any of its representatives) shall be true and
correct in all material respects on the Closing Date with the same force and
effect as though made on and as of the Closing Date (i.e., with respect to a
representation that a state of facts exists on or as of the date hereof, it is
a condition that such state of facts exists in all material respects on or as
of the Closing Date, and with respect to a representation that a state of facts
has or has not changed between a date prior to the date hereof and the date
hereof, it is a condition that such state of facts has or has not changed
between such prior date and the Closing Date), except as affected by
transactions contemplated hereby and thereby and except that any such
representation or warranty made as of a specified date (other than the date of
this Agreement) shall only need to have been true on and as of such date.
Medgenix shall have performed all obligations and complied with all covenants
required by this Agreement to be performed or complied with by Medgenix on or
prior to the Closing Date.

(b) No Proceedings. No action, suit or proceeding before
any court or any governmental body or authority pertaining to the transactions
contemplated by this Agreement or to their consummation shall have been
instituted or threatened on or prior to the Closing Date.

(c) No Adverse Change. Since the date of this Agreement
there shall not have been any change in the business, properties, prospects,
results of operations or condition (financial or otherwise) of the Business
which, individually or in the aggregate, is materially adverse.

(d) Statutory Requirements. All consents and approvals
of all Belgium, Canadian, United States, local and foreign governmental
agencies and authorities, and any other person or entity, required to be
obtained to permit consummation by Medgenix of the

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<PAGE> 35
transactions contemplated by this Agreement or as may be required to deliver
the Purchased Assets free and clear of any liens and encumbrances (not
otherwise permitted hereunder) shall have been obtained, and true and correct
copies of such consents and approvals shall have been delivered to Purchaser or
its counsel except for consents and approvals which are not material to the
Business and which will be obtained without undue delay.

(e) Certificates. Medgenix shall have delivered to
Purchaser a certificate, dated the Closing Date, certifying that the conditions
specified in Sections 9.1(a), 9.1(c) and 9.1(d), of this Agreement have been
satisfied.

(f) Opinion of Counsel for Medgenix and Nordion.
Purchaser and counsel to the Underwriters shall have received from Cleary,
Gottlieb, Steen & Hamilton, counsel for Medgenix, an opinion, dated the Closing
Date, in form and substance substantially identical to Exhibit "9.1A" attached
hereto. Purchaser shall have received from David Nichols, counsel for Nordion,
an opinion, dated the Closing Date, in form and substance substantially
identical to Exhibit "9.1B" attached hereto. Purchaser and counsel to the
Underwriters shall have received from patent counsel for Medgenix, an opinion,
dated the Closing Date, in form and substance substantially identical to
Exhibit "9.1C" attached hereto.

(g) Releases of Security Interests. Medgenix shall have
delivered to Purchaser any required releases and/or termination statements,
releasing all security interests in favor of any third party in or to any of
the Purchased Assets except those which are in connection with the Assumed
Liabilities and Permitted Liens.

(h) Consents. Medgenix shall have delivered all material
consents of third parties necessary to the transfer of the Purchased Assets.

(i) Authorization. Medgenix and Nordion shall each have
delivered to Purchaser certified copies of resolutions adopted by its
respective board of directors authorizing the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated herein.

(j) Other Matters. All corporate and other proceedings
and actions taken in connection with this Agreement and all certificates,
opinions, agreements, instruments and documents mentioned in this Agreement or
incident to any such transactions shall be reasonably satisfactory in form and
substance to Purchaser and its counsel.

(k) Completion of Financing. Purchaser shall have
successfully consummated a public offering of its common stock realizing
aggregate net proceeds of not less than $10,000,000 or shall have arranged
substantially equivalent alternative financing on such terms as are
satisfactory to Purchaser in its reasonable judgment.

(l) Assignment of Facility. Subject to the provisions of
Section 2.4, Medgenix shall have assigned to Sub the Lease on Medgenix's
principal facility in Fleurus, Belgium, the form and substance of such
assignment to be satisfactory in all respects to Purchaser and its

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counsel; provided, however, that an assignment on the same terms and conditions
as the current lease of such facility will be acceptable to Purchaser and its
counsel.

(m) Subleases. Purchaser shall have entered into
subleases with Medgenix or one or more subsidiaries of Medgenix to sublease
that portion of each Medgenix Subsidiary's leased facilities which is necessary
to carry on the in vivo diagnostics business of Medgenix, such subleases to be
in form and content reasonably satisfactory to Purchaser and Medgenix.

(n) Spinouts. Each Medgenix Subsidiary shall have
transferred, sold or otherwise divested itself of any Excluded Assets,
including without limitation, the Techneges instrument business at the French
Subsidiary, and all related liabilities under applicable law.

(o) Receipt of Certain Agreements. Purchaser shall have
received at its cost and expense from Seller an original executed counterpart
of the Royalty Agreement.

(p) Receipt of Report. Purchaser shall have
received at its cost and expense a report from a firm of outside environmental
advisors, reasonably acceptable to Purchaser, with respect to the permits,
licenses and authorizations necessary to operate the Business.

If any of the conditions contained in this Section 9.1 shall
not be performed or fulfilled at or prior to the Closing to the satisfaction of
Purchaser, acting reasonably, Purchaser may, by notice to Medgenix and Nordion,
terminate this Agreement and the obligations of Medgenix and Nordion and
Purchaser under this Agreement, other than the obligations contained in
Sections 10.2, 11.5 and 14; provided that Purchaser may also bring an action
pursuant to Section 11 against Medgenix and Nordion for damages, other than
incidental or consequential damages, suffered by Purchaser where the
non-performance or non-fulfillment of the relevant condition is as a result of
a breach of covenant, representation or warranty by either Medgenix or Nordion.
For purposes of this section, the conditions contained in Section 9.1(f), (g),
(h), (i), (l), (m) and (n) shall be deemed to be covenants; provided, however,
that if the conditions contained in Sections 9.1(h) and (l) are not satisfied
because a third party refuses to provide its consent, Purchaser may not bring
an action pursuant to Section 11 against Medgenix and Nordion for damages. Any
such condition may be waived in whole or in part by Purchaser without prejudice
to any claims it may have for breach of covenant, representation or warranty.

9.2 Conditions to Obligations of Medgenix. Unless waived, in
whole or in part, in writing by Medgenix, the obligations of Medgenix to effect
the consummation of the transactions contemplated by this Agreement shall be
subject to the fulfillment prior to or at the Closing Date of each of the
following conditions:

(a) Representations and Warranties of Purchaser To Be
True. The representations and warranties of Purchaser (contained in this
Agreement, any Exhibit or Schedule hereto, or any certificate, instrument or
other writing delivered to Medgenix or its representatives by Purchaser, or any
of its representatives) shall be true and correct on the

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Closing Date with the same force and effect as though made on and as of the
Closing Date (i.e., with respect to a representation that a state of facts
exists on or as of the date hereof, it is a condition that such state of facts
exists on or as of the Closing Date, and with respect to a representation that
a state of facts has or has not changed between a date prior to the date hereof
and the date hereof, it is a condition that such state of facts has or has not
changed between such prior date and the Closing Date), except as affected by
transactions contemplated hereby and thereby and except that any such
representation or warranty made as of a specified date (other than the date of
this Agreement) shall only need to have been true on and as of such date.
Purchaser shall have performed all obligations and complied with all covenants
required by this Agreement to be performed or complied with by Purchaser on or
prior to the Closing Date.

(b) Certificates. Purchaser shall have delivered to
Medgenix a certificate of Purchaser dated the Closing Date certifying that the
conditions specified in Sections 9.2(a) and 9.2(h) of this Agreement shall have
been fulfilled.

(c) Other Matters. All corporate and other proceedings
and actions taken in connection with this Agreement and all certificates,
opinions, agreements, instruments and documents mentioned in this Agreement or
incident to any such transactions shall be reasonably satisfactory in form and
substance to Medgenix and its counsel.

(d) Authorization. Purchaser shall have delivered to
Medgenix certified copies of resolutions adopted by its board of directors
authorizing the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.

(e) Legal Opinion. Medgenix shall have received from
Troop Meisinger Steuber & Pasich, LLP, counsel for Purchaser, an opinion, dated
the Closing Date, in the form of Exhibit "9.2" attached hereto.

(f) Whole-Blood Stimulation Assay. Purchaser shall have
licensed to Nordion and its Affiliates (including MDS Health Group) the
whole-blood stimulation assay technique developed by Medgenix without royalty
or other payments and on such other terms and conditions as are satisfactory to
Nordion, in the form of Exhibit "9.2f" attached hereto.

(g) No Proceedings. No action, suit or proceeding before
any court or any governmental body or authority pertaining to the transactions
contemplated by this Agreement or to their consummation shall have been
instituted or threatened on or prior to the Closing Date.

(h) Statutory Requirements. All consents and approvals
of all Belgium, Canadian, United States, local and foreign governmental
agencies and authorities, and any other Person or entity, required to be
obtained to permit consummation by BioSource of the transactions contemplated
by this Agreement or as may be required to buy the Purchased Assets shall have
been obtained, and true and correct copies of such consents and approvals shall
have been delivered to Seller or its counsel except for consents and approvals
which are not material to the Business and which will be obtained without undue
delay.

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(i) Receipt of Certain Agreements. Seller shall have
received from Purchaser an original executed counterpart of the Royalty
Agreement.

(j) Subleases. Purchaser shall have entered into
subleases with Medgenix or one or more subsidiaries of Medgenix to sublease
that portion of each Medgenix Subsidiary's leased facilities which is necessary
to carry on the in vivo diagnostics business of Medgenix, such subleases to be
in form and content reasonably satisfactory to Purchaser and Medgenix.

(k) Assignment of Facility. Subject to the provisions of
Section 2.4, Sub shall have accepted an assignment from Medgenix of the Lease
on Medgenix's principal facility in Fleurus, Belgium, the form and substance of
such assignment to be satisfactory in all respects to Medgenix and its counsel;
provided, however, that an assignment on the same terms and conditions as the
current lease of such facility will be acceptable to Medgenix and its counsel.

If any of the conditions contained in this Section 9.2 shall
not be performed or fulfilled at or prior to the Closing to the satisfaction of
Medgenix acting reasonably, Medgenix may, by notice to Purchaser, terminate
this Agreement and the obligations of Medgenix and Purchaser under this
Agreement, other than the obligations contained in Sections 10.2, 11.5 and 14;
provided that Medgenix and Nordion may also bring an action pursuant to Section
11 against Purchaser for damages, other than indirect or consequential damages,
suffered by it where the non-performance or non-fulfillment of the relevant
condition is as a result of a breach of covenant, representation or warranty by
Purchaser. For purposes of this section, the conditions contained in Sections
9.2(d), (e), (f), (j) and (k) shall be deemed to be covenants. Any such
condition may be waived in whole or in part by Medgenix without prejudice to
any claims it may have for breach of covenant, representation or warranty.

SECTION 10. FURTHER AGREEMENTS OF THE PARTIES

10.1 Further Agreements of Medgenix. Medgenix shall upon the
request of Purchaser from time to time execute and deliver to Purchaser such
further bills of sale, endorsements and other good and sufficient instruments
of title, conveyance, transfer and assignment as may be necessary or desirable
in order to vest in Purchaser, free and clear of all liens and encumbrances
(other than Permitted Liens), all right, title and interest in and to any and
all of the Purchased Assets.

10.2 Confidentiality. Purchaser and Medgenix hereby acknowledge to
and agree with the other that any and all information which has been disclosed
by one to the other, its employees, consultants, agents and, if applicable,
stockholders during the discussions and negotiations leading to the execution
of this Agreement, and all information to be disclosed by one to the other, its
employees, consultants and agents and, if applicable, stockholders, during the
period commencing on the date of execution of this Agreement through the
Closing or termination of this Agreement, shall constitute confidential
information and trade secrets of the disclosing party, and as such are secret,
confidential and unique and constitute the exclusive trade secrets and property
of such party. Such information has been made known and available

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to the other party and its respective employees, consultants and agents
strictly in connection with the negotiation and execution of this Agreement and
the consummation of the transactions provided for herein. Each party hereby
acknowledges and agrees that any use or disclosure of any such confidential
information or trade secrets, other than pursuant to this Agreement, would be
wrongful and would cause irreparable injury to the other. Accordingly, each
party hereby expressly agrees, for itself and on behalf of its stockholders and
directors, if any, and its principal officers, managers, employees, agents,
consultants and representatives, that it and they will not at any time prior to
the Closing or at any time thereafter, use or disclose, other than in
accordance with the terms and provisions of this Agreement, any of such
confidential information or trade secrets; provided, that either Purchaser or
Medgenix may use or disclose such confidential information or secrets of the
other without restriction if such information or secrets (i) were or are
available to such party on a non-confidential basis from a source other than
the other party; or (ii) were or become generally available to the public
(other than as a result of an impermissible disclosure by such party or its
Affiliates); and provided, further, that if either party is requested or
required (by oral question, interrogatories, requests for information or
documents, subpoena or similar process) to disclose any of such information or
secrets of the other, such disclosure, be made without liability hereunder
(although notice of such request or requirement shall be given to the other
party so that, if practicable, the other party may seek a protective order
against such disclosure). Notwithstanding the foregoing, no provision of this
Section 10.2 shall in any manner whatsoever prevent or inhibit Purchaser from
using or disclosing any such confidential information relating to the Business
or the Purchased Assets including, without limitation, customer lists and Trade
Rights in any manner Purchaser shall deem fit from and after the Closing. Each
party acknowledges that, in the event of a violation by the other of the terms
and provisions of this Section 10.2, the remedies at law would not be adequate;
and accordingly, in such event such party may proceed to protect and enforce
its rights under this Section 10.2 by a suit in equity for specific performance
hereof, or for an injunction against the violation hereof.

10.3 Access to Books and Records. Purchaser, Medgenix and Nordion
shall grant to each other access to the books, records, papers and documents
relating to the Business (i) in the case of Purchaser, included in the
Purchased Assets, and (ii) in the cases of Medgenix and Nordion, not included
in the Purchased Assets which relate to the operation of the Business (the
"Records"). Such access shall be given upon the reasonable request of the
requesting party during normal business hours and upon five business days prior
notice. Each party shall maintain the Records in its possession for a period
of four years from and after the Closing Date, and each shall first offer to
the other such of the Records as it may hereafter desire to dispose of or
destroy at least 30 days prior to initiating any disposition or destruction
whether prior to or following the aforementioned four-year period.

10.4 Operation of Business as Separate Division. For a period of
at least five years after the Closing Date, Purchaser agrees to operate the
Business through the Sub.

10.5 Agreement to Increase Purchase Price. The parties agree that
a material condition to the determinatin of the Purchase Price hereunder is the
determination of the parties that the costs to be incurred by Medgenix in
connection with the termination of the employment of

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George Raj and Etienne Poncelet shall not exceed $255,000; consequently,
BioSource agrees to reimburse Nordion for the full amount, if any, by which the
actual costs associated with the termination of the employment of such persons
exceeds $255,000, and Nordion agrees to reimburse BioSource for the full
amount, if any, by which the actual costs associated with the termination of
the employment of such persons are less than $255,000.

10.6 Computers. Promptly following the Closing, BioSource will
arrange for, and Nordion and Medgenix shall cooperate with BioSource in
connection with, the physical move of the F-45 computer which is included in
the Purchased Assets to the facilities to be acquired by BioSource hereunder,
and for the simultaneous move of the F-35 computer which is not included in the
Purchased Assets to Medgenix' facilities, together with the appropriate
transfer of each parties' associated software applications.

SECTION 11. NATURE AND SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNITY; OFFSET RIGHTS

11.1 Nature and Survival of Representations and Warranties. To the
extent that they have not been fully performed at or prior to the Closing, the
covenants, representations and warranties contained in this Agreement and in
the certificates delivered pursuant to Sections 9.1(e) and 9.2(b) of this
Agreement shall survive the Closing of the transactions contemplated hereby
notwithstanding any investigation made by or on behalf of the party entitled to
the benefit thereof; provided, however, that the representations and warranties
of Medgenix and Nordion set out in Section 6 and the representations and
warranties of BioSource set out in Section 7, and in any certificate delivered
by either party pursuant to this Agreement shall terminate on the third
anniversary of the Closing Date.

11.2 Indemnification by Medgenix and Nordion. Medgenix and
Nordion hereby agree to indemnify and save harmless Purchaser from all Losses
suffered or incurred by Purchaser as a result of or arising directly or
indirectly out of or in connection with:

(a) any breach by Medgenix or Nordion of or any
inaccuracy of any representation or warranty of Medgenix or Nordion contained
in this Agreement or in any certificate delivered pursuant thereto;

(b) any breach or non-performance by Medgenix or Nordion
of any covenant to be performed by either of them that is contained in this
Agreement or in any agreement or certificate delivered pursuant thereto; and

11.3 Indemnification by Purchaser. Purchaser agrees to indemnify
and save harmless Medgenix and Nordion from all Losses suffered or incurred by
Medgenix and Nordion as a result of or arising directly or indirectly out of or
in connection with:

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(a) any breach by Purchaser of or any inaccuracy of any
representation or warranty contained in this Agreement or in any certificate
delivered pursuant thereto;

(b) any breach or non-performance by Purchaser of any
covenant to be performed by it that is contained in this Agreement or in any
agreement or certificate delivered pursuant hereto; and

(c) the operations of the Business after the Closing
including, without limitation, any failure by Purchaser to pay, satisfy,
discharge, perform or fulfill any of the Assumed Liabilities.

11.4 Notice of Claim. In the event that a party (the "Indemnified
Party") shall become aware of any claim, proceeding or other matter (a "Claim")
in respect of which the other party (the "Indemnifying Party") agreed to
indemnify the Indemnified Party pursuant to this Agreement, the Indemnified
Party shall promptly give written notice thereof to the Indemnifying Party.
Such notice shall specify whether the Claim arises as a result of a claim by a
person against the Indemnified Party (a "Third Party Claim") or whether the
Claim does not so arise (a "Direct Claim"), and shall also specify with
reasonable particularity (to the extent that the information is available):

(a) the factual basis for the Claim; and

(b) the amount of the Claim, if known.

If, through the fault of the Indemnified Party, the
Indemnifying Party does not receive notice of any Claim in time to effectively
contest the determination of any liability susceptible of being contested, the
Indemnifying Party shall be entitled to set off against the amount claimed by
the Indemnified Party the amount of any Losses incurred by the Indemnifying
Party resulting from the Indemnified Party's failure to give such notice on a
timely basis.

11.5 Direct Claims. With respect to any Direct Claim, following
receipt of notice from the Indemnified Party of the Claim, the Indemnifying
Party shall have 45 days to make such investigation of the Claim as is
considered necessary or desirable. For the purpose of such investigation, the
Indemnified Party shall make available to the Indemnifying Party sufficient
information to substantiate the Claim, together with all such other
non-privileged information as the Indemnifying Party may reasonably request.
If both parties agree at or prior to the expiration of such 45-day period (or
any mutually agreed upon extension thereof) to the validity and amount of such
Claim, the Indemnifying Party shall immediately pay to the Indemnified Party
the full agreed upon amount of the Claim. If the parties have not so agreed to
the validity and/or amount of the Claim, then the parties shall proceed in the
manner set forth in the following sentence. If the Closing shall have occurred
under this Agreement, the matter shall be resolved pursuant to the arbitration
provisions contained in Section 14; and if the Closing shall not have occurred
under this Agreement, the Indemnified Party may bring an action against the
Indemnifying Party in any court located in Los Angeles, California.

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11.6 Third Party Claims. With respect to any Third Party Claim,
the Indemnifying Party shall have the right, at its expense, to participate in
or assume control of the negotiation, settlement or defense of the Claim. If
the Indemnifying Party elects to assume such control, the Indemnified Party
shall have the right to participate in the negotiation, settlement or defense
of such Third Party Claim and to retain counsel to act on its behalf, provided
that the fees and disbursements of such counsel shall be paid by the
Indemnified Party unless the Indemnifying Party consents to the retention of
such counsel or unless the named parties to any action or proceeding include
both the Indemnifying Party and the Indemnified Party and a representation of
both the Indemnifying Party and the Indemnified Party by the same counsel would
be inappropriate due to the actual or potential differing interests between
them (such as the availability of different defenses). If the Indemnifying
Party, having elected to assume such control, thereafter fails to defend the
Third Party Claim within a reasonable time, the Indemnified Party shall be
entitled to assume such control and the Indemnifying Party shall be bound by
the results obtained by the Indemnified Party with respect to such Third Party
Claim. If any Third Party Claim is of a nature such that the Indemnified Party
is required by applicable law to make a payment to any person (a "Third Party")
with respect to the Third Party Claim before the completion of settlement
negotiations or related legal proceedings, the Indemnified Party may make such
payment and the Indemnifying Party shall, forthwith after demand by the
Indemnified Party, reimburse the Indemnified Party for such payment. If the
amount of any liability of the Indemnified Party under the Third Party Claim in
respect of which such a payment was made, as finally determined, is less than
the amount that was paid by the Indemnifying Party to the Indemnified Party,
the Indemnified Party shall, forthwith after receipt of the difference from the
Third Party, pay the amount of such difference to the Indemnifying Party.

11.7 Settlement of Third Party Claims. If the Indemnifying Party
fails to assume control of the defense of any Third Party Claim, the
Indemnified Party shall have the exclusive right to contest, settle or pay the
amount claimed. Whether or not the Indemnifying Party assumes control of the
negotiation, settlement or defense of any Third Party Claim, the Indemnifying
Party shall not settle any Third Party Claim without the written consent of the
Indemnified Party, which consent shall not be unreasonably withheld or delayed;
provided, however, that the liability of the Indemnifying Party shall be
limited to the proposed settlement amount if any such consent is not obtained
for any reason; further, provided, that consent or lack of consent by the
Indemnified Party shall be without prejudice to such Indemnifying Party's
rights under this Agreement, including without limitation, its rights to
challenge that there is an obligation to indemnify.

11.8 Cooperation. The Indemnified Party and the Indemnifying Party
shall cooperate fully with each other with respect to Third Party Claims, and
shall keep each other fully advised with respect thereto (including supplying
copies of all relevant documentation promptly as it becomes available).

11.9 Exclusivity. The provisions of this Section 11 shall apply
to any Claim for breach of any covenant, representation, warranty or other
provision of this Agreement or any agreement, certificate or other document
delivered pursuant to this Agreement (other than a

34
<PAGE> 43
claim for specific performance or injunctive relief) with the intent that all
such Claims shall be subject to the limitations and other provisions contained
in this Section 11.

11.10 Basket on Indemnity. No indemnity shall be payable to
Purchaser with respect to any Losses under Section 11.2 unless the aggregate
amount due thereunder with respect to all Losses shall exceed Three Hundred
Thousand Dollars ($300,000) (the "Basket Amount"), whereupon all amounts then
or thereafter due with respect to such Losses in excess of the Basket Amount
shall be payable.

No indemnity shall be payable to Nordion or Medgenix with
respect to any Losses under Section 11.3 unless the aggregate amount due
thereunder with respect to all Losses shall exceed the Basket Amount, whereupon
all amounts then or thereafter due with respect to such Losses in excess of the
Basket Amount shall be payable.

11.11 Cap on Payments. The maximum amount (the "Cap") payable by or
on behalf of any Indemnifying Party to any Indemnified Party with respect to
any claim hereunder, including without limitation, the representations,
warranties and/or covenants contained in this Agreement, whether at law or in
equity, shall be limited to $6,000,000.

11.12 Set-off. If as a result of the indemnification provisions
contained in this Section 11, there arises any liability to BioSource,
BioSource shall be entitled to set off the amount of such liability against any
payments of royalties due to Nordion from BioSource under the Royalty
Agreement.

SECTION 12. TAXES

12.1 Payment of Taxes, Filing of Returns. Medgenix shall remain
liable for the filing of all tax returns and reports and for the payment of all
Belgian or other foreign, and local taxes (other than payroll taxes to the
extent expressly included as part of the Assumed Liabilities) of Medgenix
relating to the operation of the Business for any period ending on or prior to
the Closing Date, and for the payment of all taxes attributable to or relating
to the consummation of the transactions contemplated herein and shall indemnify
and hold Purchaser harmless from and against all liability in connection
therewith.

12.2 Sales Taxes. Subject to Section 3.1 hereof, Medgenix shall
bear all responsibility for sales, use, value added or other similar taxes, if
any, arising out of the consummation of the transactions herein provided for
and shall be liable for the filing of all necessary tax returns and reports
with respect to such taxes.

SECTION 13. NONCOMPETITION

13.1 Covenant Not to Compete. Nordion hereby agrees that neither
Nordion, nor any of its Affiliates shall for a period of five years from and
after the Closing Date, directly or indirectly, and whether as a principal or
agent or otherwise, or alone or in association with any individual or any other
entity, carry on, be engaged or take part in, consult or advise, or own,

35
<PAGE> 44
share in the earnings of, or invest in the stock, bonds or other securities of,
any other entity which is engaged anywhere in the world in an in vitro
diagnostics business which is substantially similar to or which is otherwise in
competition with the products now sold or hereafter sold by the Business (a
"Competing Activity"); provided, however, that business relating to Nordion's
cyberfluor technology shall not be a Competing Activity. Nordion further
agrees that for one year after the Closing, neither Nordion nor any of its
Affiliates will (a) induce or attempt to induce any employee of the Business to
leave the employ of Purchaser or in any way interfere adversely with the
relationship between any such employee and Purchaser, (b) induce or attempt to
induce any employee of the Business to work for, render services or provide
advice to or supply confidential business information or trade secrets of
Purchaser to any third person, firm or corporation or (c) induce or attempt to
induce any customer, supplier, licensee, licensor or other business relation of
the Business to cease doing business with Purchaser or in any way interfere
with the relationship between any such customer, supplier, licensee, licensor
or other business relation and Purchaser.

13.2 Investment Activities. Notwithstanding the foregoing, neither
Nordion nor Medgenix shall be deemed to be in violation of the agreement set
forth in Section 13.1 solely by reason of investing in stock, bonds or other
securities of any business engaged in a Competing Activity (but without
otherwise participating in such business), if (a) such stock, bonds or other
securities are listed on any national or foreign securities exchange or have
been registered under Section 12(g) of the Exchange Act, and (b) such
investment by Nordion or Medgenix does not exceed, in the case of any class of
the capital stock of any one issuer, 5% of the issued and outstanding shares,
or, in the case of bonds or other securities, 5% of the aggregate principal
amount thereof issued and outstanding.

SECTION 14. ARBITRATION; CONSENT TO JURISDICTION

14.1 Submission to Jurisdiction. BioSource, Medgenix and Nordion
each hereby agree that any and all disputes, legal actions, suits, or
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby may be brought in any state or federal court located in NEW
YORK COUNTY, STATE OF NEW YORK. By their signature to this Agreement,
BioSource, Medgenix and Nordion each irrevocably submit to the jurisdiction of
the courts located in NEW YORK COUNTY, STATE OF NEW YORK, in any dispute, legal
action, suit, or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

14.2 Waiver of Immunity and Inconvenient Forum. BioSource,
Medgenix and Nordion each hereby irrevocably waives all immunity from
jurisdiction, attachment and execution, whether on the basis of sovereignty or
otherwise, to which it might otherwise be entitled in any legal action or
proceeding brought in any state or federal court located in NEW YORK COUNTY,
STATE OF NEW YORK, and further irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to any
dispute, legal action, suit, or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby being brought in any federal
or state court located in NEW YORK COUNTY, STATE OF NEW YORK, and hereby
further irrevocably waives any claim that any such dispute, legal action, suit,
or proceeding brought in any such court has been brought in an inconvenient
forum.

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<PAGE> 45
14.3 Arbitration Procedures.

(a) Except as otherwise expressly provided in Section
14.5 below, all disputes arising in connection with this Agreement or any
contract of sale hereunder shall be finally settled by arbitration in New York,
NY, in accordance with the International Arbitration Rules of the American
Arbitration Association (the "Rules of Arbitration"). Judgment on the award
rendered by the arbitration panel (the "Arbitration Panel") may be entered in
any court of competent jurisdiction.

(b) Any party which desires to initiate arbitration
proceedings may do so by delivering written notice to the other party (the
"Arbitration Notice") specifying (x) the nature of the dispute or controversy
to be arbitrated; (y) the name and address of the arbitrator appointed by the
party initiating such arbitration; and (z) such other matters as may be
required by the Rules of Arbitration. The party who receives an Arbitration
Notice shall appoint an arbitrator and notify the initiating party of such
arbitrator's name and address within 30 days after delivery of the Arbitration
Notice; otherwise, a second arbitrator shall be appointed by the American
Arbitration Association at the request of the party who delivered the
Arbitration Notice. The two arbitrators so appointed shall appoint a third
arbitrator who shall be chairman of the Arbitration Panel and the "neutral
arbitrator" for purposes of the Rules of Arbitration.

14.4 Final Arbitration Decisions. All decisions of the Arbitration
Panel shall be final, conclusive and binding on all parties and shall not be
subject to judicial review. The parties expressly waive the provisions of
California Code of Civil Procedure Section 1285 insofar as it permits a party
to an arbitration in which an award has been made to petition a court of
competent jurisdiction to vacate an arbitration award.

14.5 Claims for Unpaid Balance. Notwithstanding anything to the
contrary contained in this Section 14, any claim by either party for a
"provisional remedy" as defined in Section 1281.8 of the Rules of Arbitration,
may be brought in any court of competent jurisdiction, and any judgment, order
or decree relating thereto shall have precedence over any arbitral award or
proceeding.

SECTION 15. TERMINATION

15.1 Termination. This Agreement may be terminated at any time
prior to the Closing:

(a) by the mutual agreement of Medgenix and Purchaser;
provided, however, that such termination is set forth in a writing executed by
both parties;

(b) by Purchaser, in a writing, should Purchaser elect to
exercise the rights granted pursuant to Section 8.2(p) hereof;

(c) by either Purchaser or Medgenix, in a writing, if the
Closing does not occur on or prior to June 30, 1996, other than by reason of a
breach of a covenant to be performed hereunder of the party electing to
terminate this Agreement; or

37
<PAGE> 46
(d) by either Purchaser or Medgenix, in a writing, if any
of the conditions set forth in Section 9 are not met.

In the event of such termination, no party shall have any
obligation or liability to any other in respect to this Agreement, except for
any breach of this Agreement occurring prior to such termination, or except as
may be provided in Section 10.2 of this Agreement.

SECTION 16. MISCELLANEOUS

16.1 Notices. All notices, requests, demands and other
communications (collectively, "Notices") given or made pursuant to this
Agreement shall be in writing and shall be delivered in person, transmitted by
telecopy or similar means of recorded electronic communication or sent by
registered or certified mail, return receipt requested, postage and fees
prepaid, to the following addresses:

(i) if to Purchaser, to:

BioSource International, Inc.
820 Flynn Road, Suite A
Camarillo, California 93012
FAX No. (805) 987-0296
Attn: James H. Chamberlain
President

(ii) if to Medgenix, to

Medgenix Diagnostics, S.A
Zoning industriel, B-6220
Fleurus, Belgium
FAX No. 011-32-71-829221
Attn: President

(iii) if to Nordion, to

Nordion International Inc.
447 March Road
Kanata, Ontario
Canada K2K IX8
FAX No. (613) 592-6937
Attn: David Evans
Vice President - Technology and Business Development

38
<PAGE> 47
Any Notice shall be deemed duly given when received by the addressee thereof,
provided that any Notice sent by registered or certified mail shall be deemed
to have been duly given two days from the date of deposit in the United States
mails, unless sooner received. Any of the parties to this Agreement may from
time to time change its address for receiving notices by giving written notice
thereof in the manner set forth above.

16.2 Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether written or oral. There are no conditions, covenants,
agreements, representations, warranties or other provisions, express or
implied, collateral, statutory or otherwise, relating to the subject matter
hereof, except as herein provided.

16.3 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. Neither party may assign any of its rights, or delegate any of
its duties or obligations, under this Agreement without the prior written
consent of the other party, and any such purported assignment or delegation
shall be void ab initio; provided, however, that Purchaser may assign the
Purchased Assets to Sub, however, no such assignment shall relieve Purchaser of
its covenants and obligations.

16.4 Waiver and Amendment. No provision of this Agreement may be
waived unless in writing signed by all the parties to this Agreement, and
waiver of any one provision of this Agreement shall not be deemed to be a
waiver of any other provision. This Agreement may be amended only by a written
agreement executed by the parties to this Agreement.

16.5 Governing Law. This Agreement shall be governed by and
construed both as to validity and performance and enforced in accordance with
the laws of the State of California and the United States of America, without
regard to the application of any state, federal or foreign conflicts of laws
rules.

16.6 Captions; Certain Terms. The various captions and heading
contained in this Agreement are for reference only and shall not be considered
or referred to in resolving questions of interpretation of this Agreement. As
used in this Agreement, the term "including" means "including but not limited
to" unless otherwise specified; the word "or" means "and/or."

16.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

16.8 Costs and Attorneys' Fees. If any action, suit or other
proceeding is instituted to remedy, prevent or obtain relief from a default in
the performance by any party of its obligations under this Agreement, the
prevailing party shall recover all of such party's costs and attorneys' fees
incurred in each and every such action, suit or other proceeding, including any
and all appeals or petitions therefrom. As used in this Section 16.8,
attorneys' fees shall be

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<PAGE> 48
deemed to mean the full and actual costs of any legal services actually
performed in connection with the matters involved calculated on the basis of
the usual fee charged by the attorney performing such services and shall not be
limited to "reasonable attorneys' fees" as defined in any statute or rule of
court.

16.9 Expenses. Except as otherwise provided in this Agreement each
of the parties shall pay its own expenses incurred in connection with the
preparation of this Agreement and the consummation of the transactions
contemplated hereby and all documents reasonably necessary to effectuate the
terms and intent of this Agreement.

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<PAGE> 49
16.10 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provision shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.

16.11 Rights Cumulative. No right granted to the parties under this
Agreement on default or breach is intended to be in full or complete
satisfaction of any damages arising out of such default or breach, and each and
every right under this Agreement, or under any other document or instrument
delivered hereunder, or allowed by law or equity, shall be cumulative and may
be exercised from time to time.

IN WITNESS WHEREOF, each of the parties hereto has executed or
caused this Agreement to be executed on its behalf all as of the day and year
first above written.

"MEDGENIX"

MEDGENIX DIAGNOSTICS, S.A.

By: /s/ David Nicholds
-------------------------------------
Its: General Counsel
-------------------------------------

"PURCHASER"

BIOSOURCE INTERNATIONAL, INC.

By: /s/ James H. Chamberlain
-------------------------------------
Its: President
-------------------------------------

"NORDION"

NORDION INTERNATIONAL INC.

By: /s/ David Nicholds
-------------------------------------
Its: General Counsel
-------------------------------------

<PAGE> 1

EXHIBIT 10.7

THE SECURITIES EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, HAVE BEEN TAKEN FOR INVESTMENT AND MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

WARRANT AGREEMENT

THIS WARRANT AGREEMENT (this "AGREEMENT") is entered into as of the
1st day of February 1996 by and between BioSource International, Inc., a
Delaware corporation (the "COMPANY"), having offices at 820 Flynn Road,
Camarillo, California 93012 and Nordion International, Inc., a Canadian
corporation (together with any other person or entity to whom it may transfer
the rights and interests granted in this Agreement and the Warrant (as defined
below) issued hereunder, or a portion thereof, the "HOLDER"), having offices
at 447 March Road, Kanata, Ontario, Canada K2K 1X8.

R E C I T A L

The Company agrees to issue a warrant permitting the purchase of an
aggregate of 100,000 shares of Common Stock (subject to adjustment pursuant to
Section 4 below) in connection with and as an inducement for the Holder's
execution of and performance of that certain Letter of Intent between Holder
and the Company dated February 1, 1996.

A G R E E M E N T

In consideration of the foregoing and the mutual covenants and
conditions contained herein, the parties hereto agree as follows:

1. GRANT OF WARRANT. For good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company hereby
grants to Holder the right and option (the "WARRANT"), upon the terms and
subject to the conditions set forth in this Agreement, to purchase 100,000
shares of the Common Stock, par value $0.001 per share of the Company (the
"WARRANT SHARES"), at an exercise price equal to (i) the lesser of $7.50 per
Warrant Share and (ii) one hundred fifteen percent (115%) of the closing sale
price of the Common Stock on the Nasdaq National Market (the "EXERCISE PRICE")
on the date of closing of the acquisition by the Company of certain assets and
the assumption of certain liabilities of the in vitro diagnostic business of
Medgenix Diagnostics, S.A. The number of Warrant Shares and the Exercise Price
shall be subject to adjustment as set forth in Section 4 hereof.
<PAGE> 2
2. TERM OF WARRANT. The Warrant shall terminate and expire at
5:00 p.m. (Los Angeles Time) on February 1, 2001, and no Warrant Shares shall
be purchasable by Holder after that date.

3. EXERCISE OF WARRANT. There is no obligation to exercise all
or any portion of the Warrant. The Warrant is immediately exercisable. The
Warrant may be exercised only by delivery to the Company of:

(i) Written notice of exercise in form and substance
identical to Exhibit "A" attached to this Agreement; and

(ii) Payment of the Exercise Price of the Warrant Shares
being exercised (the "PURCHASED SHARES"), in cash, by wire transfer of funds or
by certified or cashier's check or by any combination of the foregoing methods
of payment.

4. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
The Exercise Price and number of Warrant Shares shall be subject to adjustment
from time to time as follows:

4.1 In the event the Company should at any time or from
time to time after the date of this Agreement (the "ISSUANCE DATE") fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling the
holder thereof to receive, directly or indirectly, additional shares of Common
Stock (hereinafter referred to as "COMMON STOCK EQUIVALENTS") without payment
of any consideration by such holder for the additional shares of Common Stock
or the Common Stock Equivalents (including the additional shares of Common
Stock issuable upon conversion or exercise thereof), then, as of such record
date (or the date of such dividend distribution, split or subdivision if no
record date is fixed), the Exercise Price shall be appropriately decreased and
the number of Warrant Shares shall be increased in proportion to such increase
in the aggregate number of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents.

4.2 If the number of shares of Common Stock outstanding
at any time after the Issuance Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the Exercise Price shall be appropriately increased and the number
of Warrant Shares shall be decreased in proportion to such decrease in the
aggregate number of shares of Common Stock outstanding and those issuable with
respect to such Common Stock Equivalents.

2
<PAGE> 3
4.3 In case of any capital reorganization, any
reclassification of the Common Stock (other than a change in par value or
recapitalization described in Section 4.1 or 4.2 of this Agreement), or the
consolidation of the Company with, or a sale of substantially all of the assets
of the Company to (which sale is followed by a liquidation or dissolution of
the Company), or merger of the Company with, another person, the Holder shall
thereafter be entitled upon exercise of the Warrant to purchase the kind and
number of shares of stock or other securities or property of the surviving
corporation receivable upon such event by a holder of the number of shares of
the Common Stock which the Warrant entitles the Holder to purchase from the
Company immediately prior to such event; and in any such case, appropriate
adjustment shall be made in the application of the provisions set forth in this
Agreement with respect to the Holder's rights and interests thereafter, to the
end that the provisions set forth in this Agreement (including the specified
changes and other adjustments to the Exercise Price) shall thereafter be
applicable in relation to any shares or other property thereafter purchasable
upon exercise of the Warrant.

4.4 If it is expected that there will occur any event
described in Section 4.3, above, the Company shall give the Holder notice
thereof, which notice shall be given as soon as practicable prior to the
planned happening of such event but not more than 30 days prior thereto and not
less than 10 days prior thereto.

4.5 The provisions of this Section 4 are intended to be
exclusive, and the Holder shall have no other rights upon the occurrence of any
of the events described in this Section 4.

4.6 The grant of the Warrant shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure, or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF HOLDER. Holder
makes the following representations, warranties and covenants:

5.1 Holder is acquiring the Warrants for its own account
with the present intention of holding such securities for investment purposes
only and not with a view to, or for sale in connection with, any distribution
of such securities (other than a distribution in compliance with all applicable
United States federal and state securities laws); provided, that nothing
contained herein will prevent Holder and its permitted assigns from
transferring such securities in compliance with the provisions of Section 7 of
this Agreement.

5.2 Holder is an experienced and sophisticated investor
and has such knowledge and experience in financial and business matters that it
is capable of evaluating the relative merits and the risks of an investment in
the Warrants and in the Warrant Shares and of protecting its own interests in
connection with this transaction.

3
<PAGE> 4
5.3 Holder is willing to bear and is capable of bearing
the economic risk of an investment in the Warrants and the Warrant Shares. In
making this representation, consideration has been given to the fact that there
is no public market for the Warrants. Holder understands that the restrictions
on transfer placed upon Holder pursuant to the provisions of Section 8 of this
Agreement may result in Holder being required to hold the Warrants and/or the
Warrant Shares for an indefinite period of time.

5.4 The Company has made available, prior to the date of
this Agreement, to Holder the opportunity to ask questions of the Company and
its officers, and to receive from the Company and its officers information
concerning the terms and conditions of the Warrants and this Agreement and to
obtain any additional information with respect to the Company, its business,
operations and prospects, as reasonably requested by Holder.

6. RESERVATION OF COMMON STOCK. The Company covenants that
it will at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of issuance upon
exercise of the Warrants, such number of shares of Common Stock as shall then
be issuable upon the exercise of all of the Warrants.

7. RESTRICTIONS ON TRANSFER OR EXERCISE OF THE WARRANTS.

7.1 This Agreement and all certificates representing the
Warrant Shares will bear the following legend:

"THE SECURITIES EVIDENCED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, HAVE
BEEN TAKEN FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN
THE COMPANY AND THE ORIGINAL HOLDER HEREOF, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY."

If in the reasonable opinion of counsel for the Company, or
the opinion of counsel for the Holder, which opinion is reasonably satisfactory
to counsel for the Company, all future dispositions of any of the Warrants or
Warrant Shares by the contemplated transferee would be exempt from the
registration and prospectus delivery requirements of the Securities Act and the
qualification requirements of the California Corporate Securities Law and any
other applicable state securities laws, then the restrictions on transfer of
such securities contained in this Section 7 shall not apply to any subsequent
transfer thereof and the legend set forth above may be removed from the
certificates representing such securities.

4
<PAGE> 5
7.2 Holder may not transfer, sell, pledge, assign or
hypothecate the Warrants or the Warrant Shares to any person or entity and no
person other than Holder may exercise any Warrants unless the transfer of such
Warrants or Warrant Shares to such Holder was permitted by this Section 7.
Prior to any exercise of the Warrants or any transfer or attempted transfer of
any of the Warrants or Warrant Shares, Holder shall give the Company written
notice of its intention so to do, describing briefly the manner of any such
proposed exercise, sale or transfer. The Company agrees to permit such
exercise or transfer, provided that such exercise or transfer is not prohibited
by this Section 7 and that the Company is reasonably satisfied that such
exercise or transfer complies with all applicable federal and state securities
laws and regulations, and provided, further, in the case of a sale or transfer,
Holder delivers to the Company a Notice of Assignment in the form attached to
this Agreement as Exhibit "B."

7.3 If in the reasonable opinion of counsel for the
Company, notwithstanding the opinion of counsel to Holder to the contrary, if
any, the proposed transfer of such Warrant Shares or Warrants may not be
effected without registration thereof under the Securities Act, the Company
shall, as promptly as practicable, so notify Holder and Holder shall not
consummate the proposed transfer.

8. MISCELLANEOUS.

8.1 In no event shall Holder have any right or authority
to execute any contract, document or obligation for or on behalf of the
Company; it being recognized that the relationship between Holder, on the one
hand, and the Company, on the other hand, is that of independent contractor and
in no event shall this document be construed to create a joint venture or
partnership.

8.2 All notices or demands shall be in writing and shall be
delivered personally, electronically, telegraphically, or by express or
certified mail or registered mail or by private overnight express mail service.
Delivery shall be deemed conclusively made (i) at the time of delivery if
personally delivered, (ii) immediately in the event notice is delivered by
transmittal over electronic or telephonic transmitting devices, such as telex
or telecopy, provided, the party to whom the notice is delivered has a
compatible device and electronically or by other written document confirms
receipt thereof, or the party otherwise confirms actual receipt thereof, (iii)
at the time that the telegraphic agency confirms to the sender delivery thereof
to the addressee if served telegraphically, (iv) twenty-four (24) hours after
delivery to the carrier if served by any private, overnight express mail
service, (v) twenty-four (24) hours after deposit thereof in the United States
mail, properly addressed and postage prepaid, return receipt requested, if
served by express mail, or (vi) five (5) days after deposit thereof in the
United States mail, properly addressed and postage prepaid, return receipt
requested, if served by certified mail.

5
<PAGE> 6
Any notice or demand to the Company shall be given to:

BioSource International, Inc.
820 Flynn Road
Camarillo, CA 93012
FAX No.: (805) 987-0296

and with copy to:

Scott W. Alderton, Esq.
Troop Meisinger Steuber & Pasich, LLP
10940 Wilshire Boulevard
Los Angeles, CA 90024
FAX No.: (310) 443-8569

Any notice or demand to Holder shall be given to:

Nordion International, Inc.
447 March Road
Kanata, Ontario
Canada K2K 1X8
FAX No.: (613) 592-6937

Any party may, by virtue of written notice in compliance with this paragraph,
alter or change the address or the identity of the person to whom any notice,
or copy thereof, is to be delivered.

8.3 Any controversy arising out of or relating to this
Agreement, or the making, performance or interpretation thereof, including the
interpretation and scope of this arbitration provision, claims arising
thereunder or relating thereto, and any claims involving statements, agreements
or representations made during the negotiation of this Agreement, or in those
situations in which arbitration is specifically called for in this Agreement,
shall be settled by final and binding arbitration in accordance with the
Commercial Arbitration rules of the American Arbitration Association, before
three arbitrators of whom at least one shall be a certified public accountant
and one shall be an attorney, each with at least ten years of practice in their
respective fields.

8.4 Each party shall execute and deliver all such
further instruments, documents and papers, and shall perform any and all acts
necessary, to give full force and effect to all of the terms and provisions of
this Agreement.

8.5 This Agreement shall inure to the benefit of and be
binding upon the parties hereto, and their successors in interest. This
Agreement shall not be assignable to any

6
<PAGE> 7
other party and neither the Company nor Holder shall have any right to assign
any of its rights or benefits, or delegate any of its entries hereunder.

8.6 This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and fully to be performed therein. In all matters of
interpretation, whenever necessary to give effect to any provision of this
Agreement, each gender shall include the others, the singular shall include the
plural, and the plural shall include the singular. The titles of the
paragraphs of this Agreement are for convenience only and shall not in any way
affect the interpretation of any provision or condition of this Agreement. All
remedies, rights, undertakings, obligations and agreements contained in this
Agreement shall be cumulative and none of them shall be in limitation of any
other remedy, right, undertaking, obligation or agreement of any party. Each
party and its counsel have reviewed and revised this Agreement. As a result,
the normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of this Agreement or any amendments or exhibits thereto.

8.7 In the event of any litigation or arbitration
between the parties hereto respecting or arising out of this Agreement, the
prevailing party shall be entitled to recover reasonable legal fees, whether or
not such litigation or arbitration proceeds to final judgment or determination.

8.8 Any litigation or arbitration between the parties
shall occur exclusively in the County of Los Angeles, State of California.

8.9 This Agreement may be executed in counterparts
which, taken together, shall constitute the whole of the agreement as between
the parties.

8.10 Each party to this Agreement hereby represents and
warrants that all necessary corporate action has been taken, including the due
adoption of a resolution by its board of directors sufficient to enable such
corporation to enter into this Agreement, to be bound thereby and to perform
fully as required hereunder.

8.11 Each person executing this Agreement on behalf of an
entity represents and warrants that he or she has been duly authorized to enter
into this Agreement on behalf of such entity, and that such entity is thereby
fully bound.

8.12 The terms and conditions of this Agreement shall be
subject to all applicable laws and regulations of any governing jurisdictions.
If any clause or provision of this Agreement is illegal, invalid or
unenforceable under present or future laws effective during the term of this
Agreement, then and, in that event, the remainder of this Agreement shall not
be affected thereby, and in lieu of each clause or provision of this Agreement
that is illegal, invalid or unenforceable, there shall be added a clause or
provision as similar in terms and in amount to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal,

7
<PAGE> 8
valid and enforceable, as long as it does not otherwise frustrate the principal
purposes of this Agreement.

IN WITNESS WHEREOF, the parties have entered into and executed
this Agreement as of the date first above written.

BIOSOURCE INTERNATIONAL, INC.

By: /s/ James H. Chamberlain
----------------------------------------------
James H. Chamberlain
President

NORDION INTERNATIONAL, INC.

By: /s/ David Evans
----------------------------------------------
Its: Vice President-Technology and
Business Development
-----------------------------------------

8
<PAGE> 9
EXHIBIT "A"

NOTICE OF EXERCISE

(To be signed only upon exercise of the Warrant)

TO: BIOSOURCE INTERNATIONAL, INC.

The undersigned, hereby irrevocably elects to exercise the purchase
rights represented by the Warrant granted to the undersigned as of February 1,
1996 and to purchase thereunder ___* shares of Common Stock of BIOSOURCE
INTERNATIONAL, INC. (the "COMPANY") and herewith encloses payment of
$____________ in full payment of the purchase price of such shares being
purchased.

Dated: ,
---------- ----

------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)

------------------------------
(Please Print Name)

------------------------------
(Address)

* Insert here the number of shares being exercised, without making any
adjustment for additional Common Stock of the Company, other securities or
property which, pursuant to the adjustment provisions of the Warrant, may be
deliverable upon exercise.
<PAGE> 10
EXHIBIT "B"

NOTICE OF ASSIGNMENT

(To be signed only upon a proposed transfer of the Warrant)

TO: BIOSOURCE INTERNATIONAL, INC.

The undersigned desires to transfer the purchase rights represented by
the Warrant granted to the undersigned as of February 1, 1996 by BIOSOURCE
INTERNATIONAL, INC. (the "COMPANY"). A description of the proposed transfer is
attached to this Notice.

The undersigned represents and warrants to the Company that the
proposed transfer is not prohibited by Section 7 of the Warrant Agreement, and
that the proposed transfer is not in violation of any applicable federal or
state securities laws or regulations.

Dated: ,
--------- ----

------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Warrant)

------------------------------
(Please Print Name)

------------------------------
(Address)

The proposed transfer is hereby approved by the Company pursuant to
the terms of Section 7.2 of the Warrant Agreement.

Dated: ,
--------- ----

BIOSOURCE INTERNATIONAL, INC.

By:
------------------------------
Its:
--------------------------

<PAGE> 1

EXHIBIT 10.13

LIST OF INDEMNITEES

The attached Form of Indemnification Agreement has been entered into by and
between BioSource International, Inc. and the following persons, each an
"Indemnitee":

1. James H. Chamberlain
2. Anna M. Anderson
3. Gus E. Davis
4. Leonard M. Hendrickson
5. David J. Moffa
6. John R. Overturf, Jr.
7. Robert D. Weist

<PAGE> 1

EXHIBIT 10.18

LOAN MODIFICATION AGREEMENT

This Loan Modification Agreement is entered into as of May 31, 1995,
by and between Biosource International, Inc. (the "Borrower") whose address is
950 Flynn Road, Suite A, Camarillo, CA 93012, and Silicon Valley Bank (the
"Lender") whose address is 3000 Lakeside Drive, Santa Clara, CA 95054.

Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness."

2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the
Indebtedness is secured by a Commercial Security Agreement, dated October 12,
1993.

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing payment of the Indebtedness shall be referred
to as the "Security Documents." Hereinafter, the Security Documents, together
with all other documents evidencing or securing the Indebtedness shall be
referred to as the "Existing Loan Documents."

3. DESCRIPTION OF CHANGE IN TERMS.

A. Modification(s) to Note.

1. The Payment schedule is hereby amended as follows:

Payable in one payment of all outstanding principal
plus all accrued unpaid interest on September 30,
1995. In addition, Borrower will pay regular monthly
payments of all accrued unpaid interest due as of
each payment date, beginning June 30, 1995, and all
subsequent interest payments will be due on the same
day of each month thereafter.

4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.

5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor
signing below) agrees that, as of this date, it has no defenses against the
obligations to pay any amounts under the Indebtedness.
<PAGE> 2
6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in the Existing Loan Documents. Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Lender's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Lender to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute
a satisfaction of the Indebtedness. It is the intention of Lender and Borrower
to retain as liable parties all makers and endorsers of Existing Loan
Documents, unless the party is expressly released by Lender in writing. No
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement. The terms of this Paragraph apply not only to this Loan
Modification Agreement, but also to all subsequent loan modification
agreements.

This Loan Modification Agreement is executed as of the date first
written above.

BORROWER: LENDER:

BIOSOURCE INTERNATIONAL, INC. SILICON VALLEY BANK

By:/s/ James H. Chamberlain By:/s/ Raja Singh
------------------------------- -------------------------

Name: James H. Chamberlain Name: Raja Singh

Title: President & CEO Title: Assistant Vice President

<PAGE> 3

LOAN MODIFICATION AGREEMENT

This Loan Modification Agreement is entered into as of September 30,
1995, by and between Biosource International, Inc. ("Borrower") whose address
is 950 Flynn Road, Suite A, Camarillo, CA 93012, and Silicon Valley Bank
("Lender") whose address is 3003 Tasman Drive, Santa Clara, CA 95054.

1. DESCRIPTION OF EXISTING INDEBTEDNESS. Among other indebtedness which
may be owing by Borrower to Lender, Borrower is indebted to Lender pursuant to,
among other documents, a Promissory Note, dated October 12, 1993, in the
original principal amount of Five Hundred Thousand and 00/100 Dollars
($500,000.00) (the "Line of Credit") and a Promissory Note, dated June 22,
1994, in the original principal amount of One Hundred Fifty Thousand and 00/100
Dollars ($150,000.00) (the "Term Note"). Hereinafter, the Line of Credit
together with the Term Note shall be collectively referred to as the "Notes".
The Line of Credit has been modified pursuant to Loan Modification Agreements
dated June 22, 1994 and May 31, 1995. The Notes, together with other promissory
notes from Borrower to Lender, are governed by the terms of a Business Loan
Agreement, dated October 12, 1993, as such agreement may be amended from time
to time, between Borrower and Lender (the "Loan Agreement").

Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness".

2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the
Indebtedness is secured by a Commercial Security Agreement, dated October 12,
1993.

Hereinafter, the above-described security documents and guaranties, together
with all other documents securing repayment of the Indebtedness shall be
referred to as the "Security Documents". Hereinafter, the Security Documents,
together with all other documents evidencing or securing the Indebtedness shall
be referred to as the "Existing Loan Documents".

3. DESCRIPTION OF CHANGE IN TERMS.

A. Modification(s) to Note.

1. Payable in one payment of all outstanding principal
plus all accrued unpaid interest on December 31,
1995. In addition, Borrower will pay two (2) regular
monthly payments of all accrued unpaid interest due
on October 31, 1995 and November 30, 1995.

4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.

5. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor
signing below) agrees that it has no defenses against the obligations to pay
any amounts under the Indebtedness.
<PAGE> 4
6. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in the Existing Loan Documents. Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Lender's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Lender to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute
a satisfaction of the Indebtedness. It is the intention of Lender and Borrower
to retain as liable parties all makers and endorsers of Existing Loan
Documents, unless the party is expressly released by Lender in writing. No
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement. The terms of this paragraph apply not only to this Loan
Modification Agreement, but also to all subsequent loan modification
agreements.

This Loan Modification Agreement is executed as of the date first written
above.

BORROWER: LENDER:

BIOSOURCE INTERNATIONAL, INC. SILICON VALLEY BANK

By:/s/ James H. Chamberlain By:/s/ Robert Anderson
------------------------------- --------------------------

Name: James H. Chamberlain Name: Robert Anderson

Title: CEO Title: CBO

2
<PAGE> 5

LOAN MODIFICATION AGREEMENT

This Loan Modification Agreement is entered into as of December 31,
1995, by and between Biosource International, Inc. ("Borrower") whose address
is 950 Flynn Road, Suite A, Camarillo, CA 93012, and Silicon Valley Bank
("Lender") whose address is 3003 Tasman Drive, Santa Clara, CA 95054.

1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which
may be owing by Borrower to Lender, Borrower is indebted to Lender pursuant to,
among other documents, a Promissory Note, dated October 12, 1993, in the
original principal amount of Five Hundred Thousand and 00/100 Dollars
($500,000.00) (the "Line of Credit") and a Promissory Note, dated June 22,
1994, in the original principal amount of One Hundred Fifty Thousand and 00/100
Dollars ($150,000.00) (the "Term Note"). Hereinafter, the Line of Credit
together with the Term Note shall be collectively referred to as the "Notes".
The Line of Credit has been modified pursuant to Loan Modification Agreements
dated June 22, 1994, May 31, 1995, and September 30, 1995. The Notes, together
with other promissory notes from Borrower to Lender, are governed by the terms
of a Business Loan Agreement, dated October 12, 1993, as such agreement may be
amended from time to time, between Borrower and Lender (the "Loan Agreement").

Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to
as the "Indebtedness".

2. DESCRIPTION OF COLLATERAL AND GUARANTIES. Repayment of the
Indebtedness is secured by a Commercial Security Agreement, dated October 12,
1993.

3. DESCRIPTION OF CHANGE IN TERMS.

A. Modification(s) to Line of Credit.

1. Payable in one payment of all outstanding principal
plus all accrued unpaid interest on December 30,
1996. In addition, Borrower will pay regular monthly
payments of all accrued unpaid interest due as of
each payment date beginning February 29, 1996, and
all subsequent interest payments are due on the last
day of each month thereafter.

2. The interest rate to be applied to the unpaid
principal balance of the Note is hereby decreased,
effective as of the date hereof, to three quarters of
one (0.75) percent point over the Lender's current
Index.

3. The principal amount of the Note is hereby increased
to One Million and 00/100 Dollars ($1,000,000.00).
Notwithstanding the principal amount of this Note,
the amount available for advance shall be limited to
Three Hundred Thousand and
<PAGE> 6
00/100 Dollars ($300,000.00) (the "Cap Amount"). Any advances in
excess of the Cap Amount are conditioned upon Lender's completion of
an accounts receivable audit, satisfactory to Lender, within thirty
(30) days of funding. Following the completion of a satisfactory
audit, the Cap Amount shall be removed.

B. Modification(s) to Loan Agreement.

1. The paragraph entitled "Borrowing Base Formula" is
hereby amended in its entirety, to read as follows:

Funds shall be advanced under the Line of Credit
according to a borrowing base formula, as determined
by Lender on a monthly basis, defined as follows: the
lesser of (a) $1,000,000.00 (subject to the Cap
Amount) minus the face amount of outstanding Letters
of Credit (including drawn but unreimbursed Letters
of Credit) or (b) the sum of (i) seventy- five
percent (75%) of eligible domestic accounts
receivable plus (ii) twenty-five percent (25%) of
eligible foreign accounts receivable minus the face
amount of outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit) (subject to
the Cap Amount). Eligible accounts receivable shall
include, but not be limited to, those accounts
outstanding less than 90 days from the date of
invoice, excluding government, contra, and
intercompany accounts; and exclude accounts wherein
50% or more of the account is outstanding more than
90 days from the date of invoice. Any account which
alone exceeds 25% of total accounts will be
ineligible to the extent said account exceeds 25% of
total accounts. Also exclude any credit balances
which are aged past 90 days. Also ineligible are any
accounts which Lender in its sole judgment excludes
for valid credit reasons.

2. The paragraph entitled "Accounts Receivable and
Accounts Payable" is hereby amended in its entirety,
to read as follows:

Provide to Lender, not later than twenty (20) days
after the end of each month with a Borrowing Base
Certificate and aged lists of accounts receivable and
accounts payable. Annual accounts receivable audit
to be performed by Lender's agent. Borrower's
deposit account will be debited for the audit expense
and a notification will be mailed to Borrower. In
addition, an accounts receivable audit shall be
performed within thirty (30) days of any borrowings
under Borrower's Line of Credit.

3. The paragraph entitled "Financial Statements" is
hereby amended in its entirety, to read as follows:

Furnish Lender with, as soon as available, but in no
event later than five (5) days after filing with the
Securities Exchange Commission (SEC), Borrower's
forms 10K and 10Q together with a Compliance
Certificate. All financial reports required to be
provided under this Agreement shall be prepared in
accordance

2
<PAGE> 7
with generally accepted accounting principles,
applied on a consistent basis, and certified by
Borrower as being true and correct.

4. The paragraph entitled "Compliance Certificate" is
hereby amended in its entirety, to read as follows:

Borrower shall provide to Lender, as soon as
possible, but in no event later than five (5) days
after filing Forms 10Q and 10K with the SEC, a
Compliance Certificate executed by Borrower's chief
financial officer, or other officer or person
acceptable to Lender, certifying that the
representations and warranties set forth in this
Agreement are true and correct as of the date of the
certificate and further certifying that, as of the
date of certification, no Event of Default exists
under this Agreement.

5. The paragraph entitled "Financial Covenants" is
hereby amended in its entirety, to read as follows:

Borrower shall maintain, on a quarterly basis,
beginning with the quarter ending March 31, 1996, a
minimum quick ratio of 1.50 to 1.00 a minimum
tangible net worth of $5,000,000.00; a maximum debt
to tangible net worth ratio of 1.00 to 1.00; a
minimum debt service coverage ratio of 1.75 to 1.00;
and profitability.

For purposes of calculation, debt service coverage
shall mean:

Quarterly net income plus depreciation plus
amortization plus interest expense divided by current
maturity of long term debt plus interest expense and
shall apply only to the Term Loan facility.

6. The following paragraph is hereby incorporated into
the Loan Agreement:

Letter of Credit Sublimit. Subject to the terms and
conditions of this Loan Agreement, as may be amended
from time to time, Lender agrees to issue or cause to
be issued under the Line of Credit facility standby
and commercial letters of credit for the account of
Borrower in an aggregate face amount not to exceed
(i) the lesser of Two Hundred Fifty Thousand and
00/100 Dollars ($250,000.00) or the Borrowing Base
Formula minus (ii) the face amount of outstanding
Letters of Credit (including drawn but unreimbursed
Letters of Credit) shall not in any case exceed Two
Hundred Fifty Thousand and 00/100 Dollars
($250,000.00). Each such letter of credit shall have
an expiry date of no later than ninety (90) days
after the maturity date; provided that Borrower's
letter of credit reimbursement obligation shall be
secured by cash on terms acceptable to Lender at any
time after the maturity date of the facility if the
term of this Agreement is not extended by Lender.
All such letters of credit shall be, in form and
substance, acceptable to Lender in its sole
discretion and shall be subject to the terms and
conditions of Lender's form of application and letter
of credit agreement.

3
<PAGE> 8
4. CONSISTENT CHANGES. The Existing Loan Documents are hereby amended
wherever necessary to reflect the changes described above.

5. PAYMENT OF LOAN FEE. Borrower shall pay to Lender a loan fee in the
amount of Six Thousand Two Hundred Fifty and 00/100 Dollars ($6,250.00) plus
all out-of-pocket expenses. The loan fee shall be payable as follows: Three
Thousand Seven Hundred Fifty and 00/100 Dollars ($3,750.00) to be paid upon
execution of this Loan Modification Agreement (the "Closing Fee"), and Two
Thousand Five Hundred and 00/100 Dollars ($2,500.00) to be paid on June 30,
1996.

6. NO DEFENSES OF BORROWER. Borrower (and each guarantor and pledgor
signing below) agrees that it has no defenses against the obligations to pay
any amounts under the Indebtedness.

7. CONTINUING VALIDITY. Borrower (and each guarantor and pledgor signing
below) understands and agrees that in modifying the existing Indebtedness,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in the Existing Loan Documents. Except as expressly modified
pursuant to this Loan Modification Agreement, the terms of the Existing Loan
Documents remain unchanged and in full force and effect. Lender's agreement to
modifications to the existing Indebtedness pursuant to this Loan Modification
Agreement in no way shall obligate Lender to make any future modifications to
the Indebtedness. Nothing in this Loan Modification Agreement shall constitute
a satisfaction of the Indebtedness. It is the intention of Lender and Borrower
to retain as liable parties all makers and endorsers of Existing Loan
Documents, unless the party is expressly released by Lender in writing. No
maker, endorser, or guarantor will be released by virtue of this Loan
Modification Agreement. The terms of this paragraph apply not only to this
Loan Modification Agreement, but also to all subsequent loan modification
agreements.

8. CONDITIONS. The effectiveness of this Loan Modification Agreement is
conditioned upon Borrower's payment of the Closing Fee.

This Loan Modification Agreement is executed as of the date first
written above.

BORROWER: LENDER:

BIOSOURCE INTERNATIONAL, INC. SILICON VALLEY BANK

By: /s/ James H. Chamberlain By: /s/ Robert Anderson
------------------------ -------------------
Name: James H. Chamberlain Name: Robert Anderson
----------------------- ------------------
Title: CEO Title: CBO

<PAGE> 1

EXHIBIT 23.1

The Board of Directors and Stockholders
BioSource International, Inc.:

We consent to the use of our report dated February 9, 1996 included herein
relating to the consolidated balance sheet of BioSource International, Inc. and
subsidiary as of December 31, 1995 and the related consolidated statements of
operations, stockholders' equity and cash flows for each of the years in the
two-year period ended December 31, 1995, and to the reference to our firm in the
"Selected Consolidated Financial Data" section, and to the reference to our firm
under the heading "Experts" in the prospectus.

KPMG PEAT MARWICK LLP

Los Angeles, California
May 13, 1996

<PAGE> 1

EXHIBIT 23.2

The Board of Directors and Stockholders
BioSource International, Inc.:

We consent to the use of our report dated May 10, 1996 included herein
relating to the consolidated balance sheet of the in vitro business segment of
Medgenix Diagnostics SA and subsidiaries as of October 31, 1995, and the related
consolidated statements of operations, statements of changes in equity and cash
flows for the years ended October 31, 1994 and 1995, and to the reference to our
firm under the heading "Experts" in the prospectus.

KPMG Reviseurs d'Entreprises

Brussels

May 13, 1996

<PAGE> 1

EXHIBIT 24.2

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the person whose signature
appears below constitutes and appoints James H. Chamberlain and Anna Anderson
and each of them, as his true and lawful attorneys-in-fact and agents, each
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the Registration Statement
(Registration No. 333-3336) and any and all registration statements filed
pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
foregoing, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or either of them, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.

May 9, 1996 /s/Robert D. Weist
---------------------------
Robert D. Weist
Director