EXHIBIT 10.5
SECOND EXTENSION AGREEMENT
DATED AS OF FEBRUARY 22, 2005
BETWEEN DMI BIOSCIENCES, INC. AND
COGENCO INTERNATIONAL, INC.
This Extension Agreement dated as of February 22, 2005 is made by and
between DMI BioSciences, Inc., a Colorado corporation ("DMI") and Cogenco
International, Inc. ("Cogenco"), (collectively referred to as the "Parties").
WHEREAS, DMI and Cogenco entered into a Term Sheet executed on August 23,
2004 (the "Term Sheet"), requiring, among other things, a standstill period
through November 23, 2004 and the execution of the Co-Development Agreement
referred to below;
WHEREAS, DMI and Cogenco entered into an Amended Letter of Intent (the
"Amended Letter of Intent") dated and executed on November 5, 2004 (superceding
a previous Letter of Intent dated August 23, 2004) regarding (i) a proposed
Co-Development Agreement relating to the treatment of asthma in humans ("CODA")
and (ii) a proposed subsequent merger and equity investment between the Parties;
and
WHEREAS, DMI and Cogenco entered into a Co-Development Agreement regarding
the treatment of asthma in humans ("CODA") effective on November 21, 2004
requiring, among other things, a non-refundable $500,000 fee and a
non-refundable $2,500,000 access payment, aggregating $3,000,000, due no later
than November 21, 2004;
WHEREAS, DMI and Cogenco entered into an Extension Agreement ("Extension
Agreement") effective on January 21, 2005 to extend the time required by Cogenco
to make the non-refundable payments aggregating $3,000,000 to DMI under the CODA
from January 21, 2005 to February 22, 2005, pursuant to Section 8 of the CODA;
WHEREAS, the Parties mutually desire to extend further the time required by
Cogenco to make the non-refundable payments aggregating $3,000,000 to DMI under
the CODA from February 22, 2005 to July 1, 2005, pursuant to Section 8 of the
CODA;
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, which the Parties hereto acknowledge and to be good and
sufficient consideration, the Parties hereby agree as follows:
1. Extension. DMI and Cogenco hereby agree to extend the time Cogenco is
allowed under the CODA and Amended LOI to make certain non-refundable fee and
access payments aggregating $3,000,000 to DMI from February 22, 2005 to July 1,
2005 (the "Second Extension Date"). The CODA and Amended LOI shall remain in
place until the Second Extension Date.
2. DMI and Cogenco hereby agree to extend the time for the parties to enter
into a merger and equity investment between the Parties as described in
Paragraph 1(b) of the Amended Letter of Intent from March 31, 2005 until
December 31, 2005.
3. DMI and Cogenco hereby further agree that the date of June 1, 2005
specified in Paragraph 1(d) which provides for the automatic conversion of the
Access Fee payment into One Million (1,000,000) shares of DMI common stock shall
be extended until December 31, 2005.
4. Extension Fee. As consideration for the extension granted under this
Second Extension Agreement, Cogenco agrees to increase the non-refundable
$500,000 fee to an aggregate amount of $650,000 which shall be due no later than
July 1, 2005. Therefore, the total non-refundable fee shall be $650,000 and the
non-refundable $2,500,000 access payment in the aggregate amount of $3,150,000
shall be due no later than July 1, 2005;
4.1 For each $500,000 of the $3,150,000 aggregate payment due under the
CODA that is paid by Cogenco to DMI on or before April 30, 2005, the Extension
Fee will be reduced by $15,000 up to a maximum aggregate reduction of $75,000.
5. Waiver of Defaults. DMI hereby waives any and all Events of
Noncompliance and Events of Default of whatever nature by Cogenco pursuant to
CODA and Amended LOI until the Extension Date.
6. Notice. Any notices, papers, demands or communications which are
required to be given in accordance with this Extension Agreement shall be in
writing and shall be delivered to the relevant Parties pursuant to and at the
addresses set forth in Section 24.1 of the CODA.
7. Miscellaneous. This Extension Agreement may only be amended by the
written agreement of DMI and Cogenco. Unless specified herein, this Extension
Agreement may not be assigned by either party except with the express written
consent of both parties. This agreement shall be binding on DMI and Cogenco and
their successors and assigns. This agreement has been made and executed in the
State of Colorado and shall be construed in accordance with the laws of the
State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
DMI BIOSCIENCES, INC. COGENCO INTERNATIONAL, INC.
By:____________________________ By:____________________________
Xxxxx X. Xxxxxx, President and CEO Xxxxx X. Xxxxxxx, President
