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24 May 2005
Auckland, New Zealand, 24 May 2005 – Genesis Research and Development Corporation Ltd (NZSX/ASX: GEN) today announced that it has agreed a settlement of the legal dispute with ArborGen, LLC. Genesis will receive US$5.5 million from ArborGen in return for exiting its forestry related activities (including its ownership interest in ArborGen) on completion of the settlement conditions. The settlement is subject to formal legal documentation being agreed, and to approval by Genesis shareholders at the annual meeting to be held on 17 June. The settlement provides that: 1. Genesis will transfer to ArborGen all rights and ownership it has in certain specified agbio technology and patents, including all its forestry related technology. 2. Genesis will not operate in the forestry field, and will have no ownership interest or rights in ArborGen. 3. Genesis will maintain its rights to receive a royalty on certain patented technology to the extent that such technology is included in commercial products developed and sold by ArborGen. 4. ArborGen will pay Genesis US$5.5 million on completion of the transfer of certain patents, technology, information, documentation and materials to ArborGen. 5. ArborGen will pay Genesis a further US$1.5 million if certain ownership restructuring events occur in ArborGen prior to March 2007. 6. Both parties will withdraw all legal action against each other. The Board of Genesis has reviewed the options of continuing the current legal action against ArborGen or accepting the terms of the negotiated settlement and believes that an early settlement of the dispute is preferable to extended court proceedings and that it is strongly in the best interests of the Company to settle the dispute on the terms noted above. The Board notes that ongoing Court action would have a significant impact on management time and would hinder the development of other more productive initiatives for the future benefit of the Company. The Board also notes that the payment due on completion of the settlement of US$5.5 million (approximately NZ$7.7 million) will substantially increase the cash reserves of the Company to more than 3 years cash burn at the current rate. It will provide significantly enhanced ability to continue its research operations until receipt of further licensing revenue. About Genesis Founded in 1994, Genesis is a New Zealand-based biotechnology company. It has built a broad therapeutic development platform targeting immune disorders and cancer and is developing RNAi therapeutics for immune disorders. The company has an extensive patent portfolio. Collaborations are maintained with Amgen Inc. (Nasdaq:AMGN), Corixa Corporation (Nasdaq:CRXA), SR Pharma plc (AIM:SPA), Jurox Pty Ltd, and AgResearch. AgriGenesis Biosciences Ltd is a wholly owned subsidiary of Genesis that is focused on using key plant cell signalling genes – novel hormones and transcription factors – to control commercial traits including flowering control, cold tolerance, growth rates and cell-wall lignin and cellulose content in commercial species other than forestry. It has developed comprehensive plant EST databases. It has commercial collaborations with Wrightson (NZSX: WRI), HortResearch and Landcare Research. For more information, please visit www.genesis.co.nz and www.agrigenesis.co.nz Media contacts: Stephen Hall, Chief Executive - Genesis Research and Development Corporation Limited, +64 9 373 5600 Jim McLean, Chairman- Genesis Research and Development Corporation Limited, +64 27 222 3886 |