After due consideration by PSC's board of directors, EBS's bankruptcy strategy was unanimously rejected as unnecessary and not being in the best interests of PSC. During a conference call with EBS on Tuesday July 8, 2008, PSC informed EBS of PSC's rejection of the bankruptcy strategy and indicated that PSC saw three possible paths forward: hold a shareholders meeting and present the original transaction for a vote of PSC's shareholders, continue discussions with EBS about restructuring the transaction to increase the likelihood of obtaining PSC's shareholder approval or discuss an amicable unwinding of the proposed transaction. The prior day EBS was also informed that, as permitted by its the agreement with EBS, PSC was in advanced discussions to secure additional financing that might close as early as July 11, 2008 and that PSC had received a proposal regarding a potential transaction that might be competitive with a transaction between EBS and PSC. EBS filed its lawsuit on July 9th without response to PSC's possible path forward or prior notice to PSC. The lawsuit was filed after PSC had notified EBS of the cure of the alleged loan default.
The reason for, and timing of, EBS's lawsuit and its refusal to honor
its agreement to adequately fund PSC are manifest. EBS is determined to try
to destroy the value of PSC and force PSC into bankruptcy. Part of EBS's
strategy is a concerted campaign to release PSC's confidential information
and spread false allegations through the media. EBS has even contacted the
FDA and the federal government in its attempt to discredit PSC and its
senior management team. This behavior is objectionable on the sole basis
that EBS claims are without substantive merit. However, EBS knows
|SOURCE Protein Sciences Corporation|
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