EXHIBIT 2.3
AGREEMENT
AGREEMENT made as of the 25th day of May, 2004, by and among GENESIS
BIOVENTURES, INC., (a New York corporation ("GBI"), CORGENIX MEDICAL
CORPORATION, a Nevada corporation ("Corgenix"), PRION DEVELOPMENT LABORATORIES
Inc., an Illinois corporation ("PDL") and EFOORA, INC., a Delaware corporation
("Efoora"). (Hereinafter, GBI, Corgenix, PDL and Efoora are referred to
individually as a "Party" and collectively as the "Parties".)
RECITALS
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A. The Parties hereto are engaged in research and development testing,
and in certain cases, manufacturing and marketing activities in
different aspects of the medical diagnostics industry.
B. The Parties desire, for their mutual benefit, to engage in scientific
and technical cooperation in respect of the different areas of medical
diagnostics in which the Parties are engaged, while each reserves for
itself the different focuses which their medical diagnostics efforts
currently have, as stipulated by Schedule "A" to this Agreement.
C. The Parties recognize that for their mutual benefit they may also
engage in certain financial cooperation involving the possibility of
prospective fundings, joint ventures, or merger activities with third
parties.
D. GBI and Corgenix have entered into an Agreement of Merger, which
Merger is expected to be completed on or before August 31, 2004, and
the anticipated resulting entity is hereinafter referred to as the
"Combined Company." The Combined Company does not currently exist, and
the reference to it herein is not intended to imply, and shall not
constitute any assurance that, the Merger will be completed, or, if
completed, that it will be completed on the terms and subject to the
conditions of the Merger Agreement or otherwise.
E. PDL is owned by Efoora (approximately 60%), GBI (33 1/3%), and by
certain individuals (the "PDL Shareholders"), and the Parties desire
to explore and establish a potential mechanism for the Combined
Company, when and if it exists, to have an effective first opportunity
to acquire all of the interests of Efoora and the PDL Shareholders in
PDL pursuant to an exchange of securities, or if such a transaction
cannot be arrived at, for each of Efoora and the Combined Company to
have an opportunity to acquire all of the interests of the other in
PDL for cash.
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NOW, THEREFORE, the parties hereto do hereby agree as follows:
AGREEMENTS
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1. SCIENTIFIC AND TECHNICAL COOPERATION
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1.1 The Parties hereby agree to engage in scientific and technical
cooperation in the different areas of focused medical diagnostics in
which they are separately engaged. The form of scientific and
technical cooperation will be established on an ongoing basis, but
will consist, initially, of each of the Parties appointing one
representative to a joint committee to discuss issues arising with
respect to the research and product development activities of each and
all of the Parties, generally, with particular emphasis initially on
the research and product development, testing, quality assurance,
regulatory approval, delivery methods and product commercialization
activities of PDL.
1.2 Prior to the disclosure of any information regarded as Confidential
Information, as hereinafter defined, the Parties will execute and
deliver appropriate Confidentiality and Non-Disclosure Agreements,
which protect each of the Parties as to the complete confidentiality
of any Confidential Information being exchanged via the joint
committee and any other officers, directors, employees, or advisors of
each of the Parties who may be made privy to such disclosures for
purposes of advancing the scientific and technical cooperation. Each
Party shall obtain, for the benefit of the other Parties, individual
confidentiality and non-disclosure agreements from any such persons
with whom the Confidential Information is being shared, prior to such
sharing of Confidential Information.
1.3 The disclosure of information, including, but not limited to
Confidential Information hereunder, shall not be determined to be, or
to constitute, a license to use the proprietary products or methods of
the disclosing Party by any other Party. The cooperation being
provided by the Parties hereunder to the other Parties hereunder is
being provided without compensation from the recipients. Should any
such cooperation result in the desire by one of the Parties to utilize
a proprietary methodology or procedure of any kind from the disclosing
Party, the recipient and the disclosing Party shall enter into
discussions concerning appropriate compensation for such utilization,
and in the absence of a written agreement concerning compensation, the
recipient may not use any such proprietary methodologies or procedures
belonging to the disclosing Party.
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1.4 The scientific and technical cooperation described in this Section 1
is voluntary and may be terminated at any time by any of the Parties.
Termination by any Party shall be deemed termination by all of the
Parties, and the scientific and technical cooperation provided for in
this Section shall cease, except that the remaining Parties may make
such other arrangements for the continuation of their cooperation as
they may separately agree upon in writing.
1.5 "Confidential Information", as used herein, means information
concerning the business of a Party supplied or made available under
this Agreement, excluding only information that (i) is or becomes part
of the public domain, (ii) is disclosed by the disclosing party to
third parties without restrictions on disclosure, (iii) is received by
the receiving party from a third party without breach of a
nondisclosure obligation to the disclosing party, or (iv) is required
to be disclosed by force of law, including disclosure provisions
impacting upon (a) publicly-owned companies, and (b) privately owned
companies offering securities under certain circumstances.
1.6 Without prejudice to the rights and remedies otherwise available to
any party to this Agreement, each party to this Agreement shall be
entitled to equitable relief by way of injunction or otherwise,
without the necessity of having to post a bond, if the other party or
any of its representatives breach or threaten to breach the provisions
concerning the protection of Confidential Information.
2. FINANCIAL COOPERATION
----------------------
2.1 The Parties hereby agree to engage in financial cooperation in the
different areas of medical diagnostics in which they are engaged. The
form of such financial cooperation will consist of each of the Parties
exercising reasonable efforts to find and introduce or refer to the
other Parties, hereunder third parties ("Funding Sources") interested
in, and capable of, providing funding to such other Parties. Funding,
as used herein, shall mean the provision of capital otherwise than for
products and services including, but not limited to, money provided in
exchange for debt or equity securities of such Party (the "Fundee") or
any acquisition of the assets, business or capital stock of the
Fundee, or any subsidiary or division thereof, and any joint venture
agreement with the Fundee, involving an up front payment of cash or
other forms of capital assistance (each a "Funding Event").
2.2 With respect to the provisions of this Section 2, any entitlement by
GBI or Corgenix, for finding of a Funding Source for a Funding Event
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for Efoora or PDL shall be deemed to be an asset of the Combined
Company or, if for any reason the GBI/Corgenix Merger has not been
completed, shall be an asset, 50% belonging to GBI and 50% belonging
to Corgenix.
2.3 With respect to any Funding Event which results from any introductory
services to the Fundee after the date of this Agreement, the Fundee
agrees to pay to the introducing Party (the "Finder"), upon the
consummation of the Funding Event, an amount equal to ten (10%)
percent of the gross proceeds received by the Fundee, as and when
received; provided that said percentage shall be subject to reduction
as set forth below in this Section 2.3. The Finder shall only be
entitled to a fee under this Section 2 if an initial Funding Event is
consummated within one year of the date of the introduction of the
Funding Source. The parties acknowledge that no fee shall be payable
under this Agreement in connection with a funding of Efoora of
approximately $5-10 million from Sterling Financial Investment Group.
(a) If the introduction by the Finder to the Funding Source is through
another party serving as broker or third party intermediary, which is
itself entitled to compensation from the Fundee as a consequence of
the Funding Event, the fee due hereunder to the Finder shall be
reduced by one-half of the amount, if any, payable by the Fundee to
such other broker or intermediary;
(b) If the Funding Event involves the issuance of any debt securities
by the Fundee, or any other repayment of the proceeds being received
by the Fundee, the fee payable to the Finder shall be equitably
adjusted to not less than one (1%) percent, and not more than five
(5%) percent of the proceeds received by the Fundee, subject to the
terms and conditions of such Funding, and in the event the parties are
unable to fix a mutually acceptable fee, the fee shall be reduced to
three (3%) percent of the proceeds received by the Fundee; and
(c) In any other circumstance in which the transaction is other than a
funding for equity securities or an acquisition for cash of the
Fundee, or any division or subsidiary thereof, the parties shall
equitably adjust the fee due to the Finder and payable by the Fundee.
2.4 For purposes of this Agreement, proceeds received shall be deemed to
include the gross amounts received in cash, and the fair value of any
securities or other tangible property received by the Fundee or the
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shareholders of the Fundee as a direct consequence of the Funding
Event. If the amount received is received otherwise than in U.S.
Dollars, the Fundee shall have the initial responsibility for
determining the U. S. Dollar value of the proceeds received, and the
Finder shall have the right to accept the Fundee's determination in
respect of a cash payment, or to elect to receive payment of ten (10%)
percent (or such reduced percentage in accordance with Section 2.3) of
the proceeds in kind.
2.5 Amounts payable to the Finder upon consummation of a Funding Event
shall be payable at the closing of the Funding Event, and except as
otherwise provided herein, payable solely in cash. Notwithstanding the
foregoing, amounts due to the Finder with respect to proceeds payable
subsequent to the initial closing of the Funding Event shall be
payable as and when the proceeds are received by the Fundee by reason
of the Funding Event.
3. PURCHASE AND SALE OF INTEREST IN PDL
------------------------------------------
3.1 The obligations of the parties hereto pursuant to the provisions of
this Section 3 shall be subject to the completion of the GBI/Corgenix
Merger on or before September 30, 2004. Further, the provisions of
this Section 3 shall not in any way impede or prohibit the sale,
transfer or other disposition by either Efoora or GBI or the Combined
Company of its share interest in PDL at any time prior to December 31,
2004, or at any time thereafter, provided only as to any such
disposition on or after January 1, 2005, the selling Party will
provides to the other Party not less than ten (10) days written notice
of the proposed disposition, and, if the other Party so requests in
writing within the 10 day period prior to the disposition, the selling
Party will use its reasonable efforts to cause the proposed purchaser
to purchase all the share interest in of the other Party in PDL in the
same transaction at the same purchase price and on the same terms as
are applicable to the selling Party in such transaction.
3.2 GBI and Corgenix mutually agree to use all reasonable efforts to
complete the GBI/Corgenix Merger on or before August 31, 2004, and
nothing herein contained shall, in any way, modify the rights and
obligations of such parties as set forth in the Amended and Restated
Merger Agreement dated as of May 20, 2004.
3.3 Subject to the prior completion of the GBI/Corgenix Merger, by October
15, 2004, the Parties (i) will mutually agree upon an acceptable
procedure for contracting with a qualified entity (the "Appraiser) for
a written valuation of the business and assets of PDL as of December
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31, 2004 (the "Valuation") and (ii) will jointly appoint and engage
the Appraiser. Efoora and the Combined Company will share the cost of
the Appraiser on a 50/50 basis. If Efoora and the Combined Company
cannot agree on the identity of one Appraiser, each may, at their
individual expense, appoint a separate Appraiser, and each shall, and
does hereby agree, in such event, to instruct its separate Appraiser
to cooperate with the other Parties appointed Appraiser seeking a
joint Valuation by the two Appraisers. Neither Party shall be deemed
to have defaulted in any way by insisting on two Appraisers; it being
understood that Appraisers sometimes use vastly different approaches
in valuing operating companies, especially those with limited
historical revenues. If for any reason whatsoever the Appraisers
cannot agree upon a Valuation, then the balance of the provisions of
this Section 3 shall be null and void, and of no further force and
effect whatsoever.
3.4 The Appraiser will be requested to complete and deliver the Valuation
of PDL (including a price per share of PDL stock) to Efoora and the
Combined Company, within forty-five (45) days after the engagement of
the Appraiser, or as soon thereafter as reasonably possible. The
failure of the Appraiser to provide a Valuation within seventy-five
(75) days after appointment shall render the balance of the provisions
of this Section 3 null and void, and of no further force and effect.
However, if the Appraiser is unable to provide a Valuation due to the
failure of any Party to reasonably cooperate with the Appraiser, or
Appraisers, as the case may be, then the party which has failed to
cooperate with the Appraiser shall be responsible for one hundred
(100%) percent of the costs of the Appraiser, and shall reimburse the
other Party for any and all expenses which the other Party may have
borne with respect to the appointment of the Appraiser prior thereto.
3.5 Following delivery of the Valuation, the Combined Company shall,
within sixty (60) days thereafter, deliver to Efoora and the PDL
Shareholders a written offer to exchange Common Stock of the Combined
Company for all of the Share interests of PDL not held by the Combined
Company (the "Exchange Offer"). Efoora and the PDL Shareholders shall
have an independent right to accept or reject the Exchange Offer, and
neither Efoora nor the PDL Shareholders will have any obligation
accept the Exchange Offer.
3.6 If the Exchange Offer is not accepted by Efoora for whatever reason,
including no reason at all, the Parties will exercise reasonable
efforts to negotiate a buyout on mutually acceptable terms, or failing
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to arrive at a mutually acceptable buyout, to seek to arrive at
alternatives to the exchange offer which may be mutually acceptable.
Neither the Combined Company nor Efoora shall have any obligation to
consummate a transaction hereunder, but both shall be separately
obligated to advise their respective shareholders as to the outcome of
the discussions.
3.7 If no transaction relating to the share interests of PDL shall have
been consummated by June 30, 2005, no party hereto shall have any
further obligation to any other party hereunder to continue
discussions of such transaction. The Parties agree to use good faith
efforts to consummate a transaction on a timely basis, and no party
shall interfere with the consummation by the other party on a timely
basis.
3.8 GBI and Corgenix understand and agree that PDL may be seeking to raise
additional capital for PDL, including by a private placement of
securities of PDL during the pendency of this Agreement. Nothing
herein contained shall preclude such a placement or other capital
transactions by PDL. No party shall represent to prospective investors
in any such private placement or otherwise that the investors in PDL
will receive securities of the Combined Company, or that the existence
of this Agreement, and arrangement, in any way, whatsoever,
ameliorates the risks of ownership of PDL securities, or that GBI and
Corgenix have, or will have, any obligations to, or with respect to,
such investors. Efoora and PDL agree to include within the terms of
the private placement, appropriate disclosure alerting prospective
investors to these provisions in such manner as PDL and its counsel,
and other advisors, shall determine to be appropriate. There is no
assurance that the Combined Company will exist, or will exist on a
timely basis; that it will make an Exchange Offer which is
satisfactory to Efoora; or that it will accept any Efoora Offer or
make a matching offer. There are numerous provisions and conditions
relating to the procedures provided for herein which make the ultimate
consummation of the transactions relating to the PDL Share interests
highly uncertain.
4. GENERAL PROVISIONS
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4.1 Notices. All notices and other communications required or permitted
------- under this Agreement shall be in writing and will be either
hand delivered in person, sent by telecopier, sent by certified or
registered first class mail, postage pre-paid, or sent by nationally
recognized express courier service. Such notices and other
communications will be effective (i) upon receipt if hand delivered or
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sent by telecopier, (ii) five (5) days after mailing if sent by mail,
and (iii) one (1) day after dispatch if sent via next day service by
express courier, to the addresses set forth on Schedule B hereto, or
such other addresses as any party may select upon notification of the
other parties in accordance with this Section.
4.2 Expenses. Each Party hereto shall pay its own fees and expenses,
-------- including its own legal, accounting, consulting and other
expenses, incurred in connection with this Agreement or any
transaction contemplated hereby, including the scientific and
technical cooperation and the financial cooperation.
4.3 Waiver. No failure to exercise, and no delay in exercising, any right,
------ power or privilege under this Agreement shall operate as a
waiver, nor shall any single or partial exercise of any right, power
or privilege hereunder preclude the exercise of any other right, power
or privilege. No waiver of any breach of any provision shall be deemed
to be a waiver of any preceding or succeeding breach of the same or
any other provision, nor shall any waiver be implied from any course
of dealing between the parties. No extension of time for performance
of any obligations or other acts hereunder or under any other
agreement shall be deemed to be an extension of the time for
performance of any other obligations or any other acts. The rights and
remedies of the parties under this Agreement are in addition to all
other rights and remedies, at law or equity, that they may have
against each other.
4.4 Binding Effect; Assignment. The rights and obligations of this
---------------------------- Agreement shall bind and inure to the
benefit of the parties and their respective successors and assigns.
4.5 Interpretation. The headings contained herein and on the Schedules are
-------------- for reference and convenience purposes only and shall
not affect in any way the meaning or interpretation of this Agreement
or the Schedules. When a reference is made in this Agreement to an
article, section, paragraph, clause, or schedule, such reference shall
be deemed to be to this Agreement unless otherwise indicated. The
words "include," "includes" or "including", as used in this Agreement,
shall be deemed to be followed by the words "without limitation."
4.6 Severability. Any term or provision of this Agreement which is
------------ prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction only, be ineffective only to the extent of such
prohibition or unenforceability, and shall not invalidate the
remaining provisions hereof or affect the validity or enforceability
of such provision in any other jurisdiction.
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4.7 Governing Law; Interpretation. This Agreement shall be construed in
------------------------------- accordance with and governed for all
purposes by the internal laws of the State of New York applicable to
contracts executed and to be wholly performed within such State.
4.8 Arm's Length Negotiations. Each party herein expressly represents and
--------------------------- warrants to all other parties hereto that:
(a) before executing this Agreement, said party has fully informed
itself of the terms, contents, conditions and effects of this
Agreement; (b) said party has relied solely and completely upon its
own judgment in executing this Agreement; (c) said party has had the
opportunity to seek the advice of counsel before executing this
Agreement; (d) said party has acted voluntarily and of its own free
will in executing this Agreement; (e) said party is not acting under
duress, whether economic or physical, in executing this Agreement; and
(f) this Agreement is the result of arm's length negotiations
conducted by and among the parties.
4.9 Counterparts. This Agreement may be executed in any number of
------------ counterparts, each of which shall be an original but all
of which together shall constitute one and the same instrument.
Facsimile signatures shall be deemed suitable evidence of execution.
5. ENTIRE AGREEMENT.
------------------
5.1 This Agreement (including the Schedules hereto), and other documents
being exchanged pursuant hereto, contains the entire understanding of
the parties in respect of its subject matter, and supersedes all prior
agreements and understandings (oral or written) between or among the
parties with respect to such subject matter. Notwithstanding the
foregoing, GBI is a Shareholder of PDL as a consequence of a certain
investment agreement dated as of the 8th day of September, 2000, and
that agreement shall remain in full force and effect, except as
expressly amended hereby.
5.2 Amendment. This Agreement (including the Schedules hereto) may not be
--------- modified, amended, supplemented, canceled or discharged,
except as permitted by the terms hereof or by written instrument
executed by all Parties bound thereby. This Agreement may be amended
by the parties hereto at any time by joint action of the Parties
provided, however, that no such amendment by the Parties shall impose
any obligation upon any of the PDL Shareholders, or remove any right
or privilege in favor of the PDL Shareholders, without the written
consent of such PDL Shareholders.
5.3 Termination:
-----------
(a) The scientific and technical cooperation provided for by Section 1
hereof may be terminated at any time by any of the Parties;
(b) The financial cooperation provided for by Section 2 hereof may be
terminated at any time by any of the Parties, provided, however, that
no such termination shall result in any loss of entitlement to any
Finder as a consequence of the introduction to any other Fundee, prior
to such termination, of a Funding Source which results in a Funding
Event, within one (1) year of the date of introduction; and
(c) If the GBI/Corgenix Merger has not been completed by on or before
September 30, 2004, any party hereto may thereafter terminate the
provisions of Section 3 of this Agreement, and any such termination of
the provisions of Section 3 shall act as a termination of the
scientific and technical cooperation under Section 1, and financial
cooperation under Section 2 as if the same had been cancelled
expressly.
(Execution Page Follows)
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WHEREFORE, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
ACCEPTED AND AGREED:
GENESIS BIOVENTURES, INC.
By: /s/ E. Xxxx XxXxxxxxx
--------------------------
Name: E. Xxxx XxXxxxxxx
Title: President
CORGENIX MEDICAL
CORPORATION
By: /s/ Xx. Xxxx Xxxxx
--------------------------
Name: Xx. Xxxx Xxxxx
Title: Chairman
EFOORA, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
PRION DEVELOPMENT
LABORATORIES, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
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