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11 May 2006
Auckland, New Zealand, 8 May 2006 – Genesis Research and Development Corporation Ltd (NZSX/ASX: GEN) advises that the definitive documentation recording the settlement agreement between Genesis and ArborGen, LLC has been agreed. ArborGen will make payment of US$5.5 million to Genesis following transfer of specified technology and materials to ArborGen over the next 30 days. The terms of the final settlement documentation are consistent with the terms announced in May 2005 and approved by shareholders in June 2005. The settlement terms provide 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 payment due on completion of the settlement of US$5.5 million (approximately NZ$8.5 million) will substantially increase the cash reserves of the Company to approximately 2.5 years cash burn at the current rate. It will provide significantly enhanced ability to continue its research operations until receipt of further licensing revenue. Net tangible assets of Genesis after completion of the settlement will triple to approximately NZ$0.49cps. Stephen Hall, Chief Executive of Genesis, commented “Finalising the documentation of the settlement that was agreed in May 2005 has been a massive undertaking as the schedules exceed 4,500 pages. Now that this distraction is completed and the company’s cash resources are significantly enhanced, Genesis can continue its focus on development of therapeutics for allergic diseases and also consider wider opportunities for development of the business.” 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 focusing on developing RNAi therapeutics. The company has an extensive patent portfolio. AgriGenesis Biosciences Ltd is a wholly owned subsidiary of Genesis that is focused on agbio projects including the development of ethanol for biofuel and also other biomaterials by growing and refining shrubby Salix. 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 Aki von Roy, Chairman- Genesis Research and Development Corporation Limited, +64 9 373 5600 |