SATISFACTION AND PURCHASE AGREEMENT
THIS
SATISFACTION AND PURCHASE AGREEMENT (this “Agreement”)
is
made as of the 28th day of April, 2006 and effective as of January 1, 2006
(the
“Effective
Date”)
by and
between Dyadic
International, Inc.,
a
Delaware, USA corporation (“Dyadic
Parent”),
its
wholly-owned subsidiary, Geneva Investment Holdings Limited, a British Virgin
Islands corporation (“Geneva”)
and
its majority owned subsidiary, Puridet (Asia) Limited, a Hong Kong corporation
(the “A-Subsidiary”
and
together with Dyadic Parent and Geneva, the “Dyadic
Parties”),
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“▇▇▇▇▇▇▇”)
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”).
The
Dyadic Parties, Smeaton and ▇▇▇▇▇ are sometimes hereinafter collectively
referred to as the “Parties”
and
individually as a “Party.”
Certain capitalized terms not expressly defined elsewhere herein are defined
in
the glossary appearing in Article V hereof.
RECITALS:
A. Geneva,
the Subsidiary and Smeaton are parties to that certain Agreement dated October
21, 1998 with ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (“▇▇▇▇▇”)
pertaining to Geneva’s purchase of a majority of the A-Subsidiary’s issued and
outstanding shares of capital stock from Smeaton and ▇▇▇▇▇ (the “First
Stock Purchase Agreement”).
B. As
of the
date of this Agreement, the 200 issued and outstanding shares of the
A-Subsidiary are owned 82.5% by Geneva, 12.5% by Smeaton and 5.0% by ▇▇▇▇▇
(the
share of the A-Subsidiary owned by Smeaton and ▇▇▇▇▇ beings sometimes
hereinafter collectively referred to as the “Subsidiary
Minority Shares”).
C. Under
the
terms of the First Stock Purchase Agreement, Smeaton is owed $405,000 as the
unpaid balance of the purchase price due him from Geneva for the shares of
the
A-Subsidiary stock Geneva purchased from him upon the occurrence of certain
events which have not yet obtained (the “Unpaid
Purchase Price Obligation”),
and
the Parties wish to satisfy in full the Unpaid Purchase Price Obligation to
Smeaton by providing for the payment to him of the sum of $405,000 (the
“Settlement
Amount”).
▇. ▇▇▇▇▇▇▇
and ▇▇▇▇▇ have each made loans to the A-Subsidiary, the current unpaid principal
and interest owed by the A-Subsidiary hereunder being, as of the Effective
Date,
$122,846 of principal and $ 49,901 of interest in the case of Smeaton (the
“Smeaton
Loan Balance”)
and
$49,139 of principal and $19,968 of interest in the case of ▇▇▇▇▇ (the
“▇▇▇▇▇
Loan Balance”
and
together with the Smeaton Loan Balance, collectively, the “Loan
Balances”).
E. Geneva
wishes to purchase from Smeaton and ▇▇▇▇▇, all of the A-Subsidiary Minority
Shares in consideration for $109,390 in the case of Smeaton (the “Smeaton
Minority Share Purchase Price Amount”)
and
$43,756, in the case of ▇▇▇▇▇ (the “▇▇▇▇▇
Minority Share Purchase Price Amount”
and
together with the Smeaton Redemption Amount, the “Minority
Share Purchase Price Amounts”).
F. The
Dyadic Parties wish to pay the aggregates sum of the Settlement Amount, the
Loan
Balances and the Minority Share Purchase Price Amounts (such aggregate sum
being
sometimes hereinafter collectively referred to as the “Total
Payment Amount”)
partially in the form of cash and partially in the form of shares of Common
Stock of Dyadic Parent (the “Parent
Shares”),
all
upon and subject to the terms and conditions of this Agreement.
▇. ▇▇▇▇▇▇▇
wishes to settle the Unpaid Purchase Price Obligation with the Dyadic Parties,
each of Smeaton and ▇▇▇▇▇ wish to receive payment in full of their respective
Loan Balances and each of
Smeaton
and ▇▇▇▇▇ wish to sell all of their A-Subsidiary Minority Shares to Geneva,
for
an aggregate consideration in the amount of the Total Payment Amount, by
accepting payment thereof partially in immediately available funds and partially
in Parent Shares, all upon and subject to the terms and conditions of this
Agreement, provided
that:
(i) the
payments of the Settlement Amount and the Minority Share Purchase Price Amounts,
whether in the form of cash or in the form of Parent Shares, shall be for the
account of Geneva only (and Geneva and Dyadic Parent have agreed that the that
to the extent that Dyadic Parent pays the Settlement Amount and the Minority
Share Purchase Price Amounts, an inter-company loan from Dyadic Parent to Geneva
shall be deemed to be created on such terms as Geneva and Dyadic Parent may
agree upon; and (ii) payment of the Loan Balances shall be made by Dyadic Parent
and shall be deemed to give rise to a loan bearing the lowest rate of interest
permitted by applicable US and Hong Kong laws by Dyadic Parent to the
A-Subsidiary, payable upon demand.
H. References
to $ means United States dollars.
AGREEMENT:
NOW
THEREFORE, in consideration of the foregoing Recitals (which are incorporated
into this Agreement and made a part hereof), the covenants and agreements of
the
Parties herein below set forth and other good and valuable consideration, the
receipt and sufficiency of which the Parties hereby each mutually acknowledge,
the Parties, for themselves and their respective successors and assigns, agree
as follows:
ARTICLE
I
SETTLEMENT
OF UNPAID PURCHASE PRICE, PAYMENT OF LOAN BALANCES AND PURCHASE OF SUBSIDIARY
MINORITY SHARES
1.1 Settlement
of Unpaid Purchase Price and Termination of First Stock Purchase
Agreement
For
and
in full satisfaction of all of the obligations of the Dyadic Parties to Smeaton
arising under and created by the First Stock Purchase Agreement, including
by
way of illustration, and not in limitation, the Unpaid Purchase Price
Obligation, within five (5) days following the execution and delivery of this
Agreement by the Parties, Geneva shall pay or cause to be paid to Smeaton the
Settlement Amount ($405,000), which Settlement Amount is a part of and included
in the Total Payment Amount, to be paid as provided in Section 1.4 hereof.
Following Smeaton’s receipt of the Total Purchase Price, each of the Dyadic
Parties, on the one hand, and Smeaton, on the other hand, expressly acknowledges
and agree that as of the Effective Date, all of the rights and all of the
obligations of the Dyadic Parties and Smeaton owing to the other created by
or
arising under the First Stock Purchase Agreement are satisfied in
full.
1.2 Payment
of Loan Balances
For
and
in full satisfaction of the entirety of the Smeaton Loan Balance owed Smeaton
as
of the Effective Date ($172,747), and for and in full satisfaction of the
entirety of the ▇▇▇▇▇ Loan Balance owed ▇▇▇▇▇ as of the Effective Date
($69,107), within five (5) days following the execution and delivery of this
Agreement by the Parties, Dyadic Parent shall lend the A-Subsidiary an amount
sufficient to enable the Subsidiary to pay, and immediately thereupon, the
A-Subsidiary shall remit, to Smeaton the Smeaton Loan Balance, and to ▇▇▇▇▇,
the
▇▇▇▇▇ Loan Balance, which sums are a part of and included in the Total Payment
Amount, to be paid as provided in Section 1.4 hereof.
1.3 Purchase
and Sale of Subsidiary Minority Shares
Each
of
Smeaton and ▇▇▇▇▇, as legal and beneficial owners, hereby sell to Geneva, and
Geneva hereby purchases from Smeaton and ▇▇▇▇▇, all of the Subsidiary Minority
Shares owned by them, free and clear of all encumbrances or third party rights
or claims of any nature whatsoever, in consideration for, in the case of
Smeaton, the Smeaton
Minority
Redemption Amount ($109,390), and in the case of ▇▇▇▇▇, the ▇▇▇▇▇ Minority
Redemption Amount ($43,756), which Aggregate Subsidiary Minority Share Purchase
Price are a part of and included in the Total Payment Amount, to be paid as
provided in Section 1.4 hereof. Concurrently with the execution and delivery
of
this Agreement, each of Smeaton and ▇▇▇▇▇ shall deliver to Geneva at the offices
of its legal counsel, ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq., Deacons, 5th
Floor
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ DX-009010 Central 1:
(i)
instruments of transfer of the Subsidiary Minority Shares to Geneva; (ii) share
certificates evidencing all of the Subsidiary Minority Shares; and (iii) sold
notes in respect of the sale of the Subsidiary Minority Shares. The Dyadic
Parties shall pay the entire ad valorem stamp duty on the purchase and sale
of
all of the Subsidiary Minority Shares. The Dyadic Parties expressly agree that
the Chief Financial Officer of Dyadic-Parent, ▇▇. ▇▇▇▇▇ ▇▇▇▇, shall sign the
instruments of transfer and bought notes on behalf of Geneva, as
required.
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1.4 Dyadic
Parties Payment of Total Payment Amount
The
Total
Payment Amount shall be paid by Dyadic Parent and\or Geneva as follows: (a)
by
the wire transfers of Dyadic Parent and\or Geneva immediately available funds
to
each of Smeaton and ▇▇▇▇▇ in the aggregate amount of $375,000 (the “Total
Cash Amount”),
$325,000 to Smeaton and $50,000 to ▇▇▇▇▇, within one (1) business day following
the execution and delivery of this Agreement by the Parties; and (b) by Dyadic
Parent’s delivery of an irrevocable letter of direction to its stock transfer
agent to issue 212,501 Parent Shares (the “Total
Share Amount”),
181,069 Parent Shares to Smeaton, and 31,432 Parent Shares to ▇▇▇▇▇.
1.5 Mutual
General Releases of Smeaton and Dyadic Parties
(a) Smeaton,
for himself and his estate, personal representatives, assigns and
successors-in-interest (each a “Smeaton
Releasor”),
hereby releases and discharges each of the Dyadic Parties and their respective
shareholders, directors, officers, employees, agents, successors and assigns
(each a “Dyadic
Released Party”)
of and
from any and all claims or liabilities of any kind whatsoever, whether or not
by
contract and whether or not in law or in equity, which any Smeaton Releasor
ever
had, may now have or could ever have, or may have, known or unknown, accrued
or
unaccrued, fixed or contingent, in existence on the Effective Date, against
any
Dyadic Released Party, for or upon any matter, cause or thing relating to or
connected in any manner with anything in existence on the Effective Date,
except:
(i) any
obligations and liabilities of the A-Subsidiary to Smeaton arising by reason
of
his employment by the A-Subsidiary or under the that certain real estate lease
dated November 3, 2005 by and between Smeaton and the A-Subsidiary (The
“Smeaton
Lease”);
(ii)
all obligations and liabilities of Dyadic Parent to Smeaton in respect of Parent
Shares acquired by him pursuant to all other subscription agreements between
Dyadic Parent and Smeaton pertaining to his prior purchase of Parent Shares;
and
(iii) any obligations and liabilities of the Dyadic Parties to Smeaton created
by the provisions of this Agreement.
(b) Each
of
the Dyadic Parties, for themselves and their respective shareholders, directors,
officers, employees, agents, successors and assigns (each a “Dyadic
Releasor”),
hereby releases and discharges each of Smeaton and his estate, personal
representatives, assigns and successors-in-interest (each a “Smeaton
Released Party),
of and
from any and all, claims or liabilities of any kind whatsoever, whether or
not
by contract and whether or not in law or in equity, which any Dyadic Releasor
ever had, may now have or could ever have, or may have, known or unknown,
accrued or unaccrued, fixed or contingent, in existence on the Effective Date,
against any Smeaton Released Party, for or upon any matter, cause or thing
relating to or connected in any manner with anything in existence on the
Effective Date, except:
(i) any
obligations and liabilities of Smeaton to the A-Subsidiary by reason of his
employment by the A-Subsidiary or the terms of the Smeaton Lease; (ii) all
obligations and liabilities of Smeaton to Dyadic Parent in respect of Parent
Shares acquired by him pursuant to all other subscription
(c) agreements
between Dyadic Parent and Smeaton pertaining to his prior purchase of Parent
Shares; and (iii) any obligations and liabilities of Smeaton to the Dyadic
Parties created by the provisions of this Agreement.
1.6 Mutual
General Releases of ▇▇▇▇▇ and Dyadic Parties
(a) ▇▇▇▇▇,
for himself and his estate, personal representatives, assigns and
successors-in-interest (each a “▇▇▇▇▇
Releasor”),
hereby releases and discharges each Dyadic Released Party of and from any and
all, claims or liabilities of any kind whatsoever, whether or not by contract
and whether or not in law or in equity, which any ▇▇▇▇▇ Releasor ever had,
may
now have or could ever have, or may have, known or unknown, accrued or
unaccrued, fixed or contingent, in existence on the Effective Date, against
any
Dyadic Released Party, for or upon any matter, cause or thing relating to or
connected in any manner with anything in existence on the Effective Date,
except:
(i) any
obligations and liabilities of the A-Subsidiary to ▇▇▇▇▇ arising by reason
of
his employment by the A-Subsidiary; and (ii) any obligations and liabilities
of
the Dyadic Parties to ▇▇▇▇▇ created by the provisions of this
Agreement.
(b) Each
Dyadic Releasor hereby releases and discharges each of ▇▇▇▇▇ and his estate,
personal representatives, assigns and successors-in-interest (each a
“▇▇▇▇▇
Released Party),
of and
from any and all, claims or liabilities of any kind whatsoever, whether or
not
by contract and whether or not in law or in equity, which any Dyadic Releasor
ever had, may now have or could ever have, or may have, known or unknown,
accrued or unaccrued, fixed or contingent, in existence on the Effective Date,
against any ▇▇▇▇▇ Released Party, for or upon any matter, cause or thing
relating to or connected in any manner with anything in existence on the
Effective Date, except:
(i) any
obligations and liabilities of ▇▇▇▇▇ to the A-Subsidiary by reason of his
employment by the A-Subsidiary; and (ii) any obligations and liabilities of
▇▇▇▇▇ to the Dyadic Parties created by the provisions of this
Agreement.
3
ARTICLE
II
ISSUANCE
OF PARENT SHARES TO SMEATON AND ▇▇▇▇▇
2.1 Purchase
and Sale of Parent Shares
Pursuant
to the provisions of Section 1.4 hereof, but subject to the provisions of this
Article II and the restrictions imposed by applicable US securities laws, as
set
forth in Section 3.3 hereof: (a) Smeaton hereby purchases from Dyadic Parent,
and Dyadic Parent hereby sells to Smeaton 181,069 Parent Shares; and (b) ▇▇▇▇▇
hereby purchases from Dyadic Parent, and Dyadic Parent hereby sells to ▇▇▇▇▇
31,432 Parent Shares.
2.2 Smeaton
and ▇▇▇▇▇ Securities Representations and Warranties
In
connection with Smeaton’s and ▇▇▇▇▇’▇ purchase of the Parent Shares, they each
hereby severally, and not jointly and severally, make
the
following representations and warranties to the Dyadic Parties:
(a) each
has
such knowledge and experience in financial and business matters in general
and
with respect to businesses of a nature similar to Dyadic Parent so as to be
capable of evaluating the merits and risks of, and making an informed business
decision with respect to, the acquisition of the Parent Shares;
(b) each
is
acquiring the Parent Shares solely for its own account and not with a view
to or
for resale in connection with any distribution or public offering thereof,
within the meaning of any applicable securities laws and regulations, unless
such distribution or offering is registered under the Securities Act of 1933,
as
amended (the “Securities Act”), or an exemption from such registration is
available;
(c) each
(i) has received all the information it has deemed necessary to make an
informed investment decision with respect to an acquisition of the Parent
Shares; (ii) understands that Dyadic Parent is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and has had the opportunity to review all publicly available filings made
by Dyadic Parent with the Securities and Exchange Commission (the “SEC”)
pursuant to either the Securities Act or the Exchange Act; (iii) has had
the unrestricted opportunity to make such investigation as it has desired
pertaining to Dyadic Parent and the acquisition of the Parent Shares and to
verify the information that is, and has been, available to Smeaton and ▇▇▇▇▇;
and (iv) has had the opportunity to ask questions of Dyadic Parent
concerning Dyadic Parent;
(d) each
is
an
“accredited investor” within the meaning of the Securities Act, is able to bear
the economic risk of its investment in the Parent Shares for an indefinite
period of time;
(e) each
has
received no public solicitation or advertisement with respect to the Parent
Shares; and
(f) each
understands that the Parent Shares are "restricted securities" as that term
is
defined in Rule 144 promulgated by the SEC under the Securities Act, the resale
of these Parent Shares is restricted by federal and state securities laws and,
accordingly, the Parent Shares must be held indefinitely unless their resale
is
subsequently registered under the Securities Act, effectuated pursuant to Rule
144, or Dyadic Parent receives an opinion of counsel acceptable to Dyadic Parent
or another exemption from such registration is available for their
resale.
2.3 Restrictions
on Transfer of Parent Shares
Each
of
Smeaton and ▇▇▇▇▇ acknowledges and consents that certificates now or hereafter
issued for the Parent Shares shall bear a legend with respect to the transfer
restrictions under the Securities Act. Each of Smeaton and ▇▇▇▇▇ further agrees
that if the Parent Shares or any portion thereof are subsequently transferred,
he will execute, deliver and file all such papers, documents and instruments
as
may be required by the SEC and any applicable state securities commission to
qualify the transfer for an exemption from registration under the Securities
Act, or any applicable state securities laws, respectively, to the extent that
such papers, documents and instruments may be necessary for such transfer.
Each
of Smeaton and ▇▇▇▇▇ also agrees to furnish Dyadic Parent with a copy of all
such papers, documents and instruments, and, in addition, will furnish Dyadic
Parent with any other information that
4
Dyadic
Parent may reasonably require to ensure that no subsequent transfer or
disposition of the Parent Shares by Smeaton or ▇▇▇▇▇, as the case may be, is
in
violation of the Securities Act or any applicable US state or Hong Kong
securities laws. Each of Smeaton and ▇▇▇▇▇ further acknowledges that it is
aware
that stop-transfer instructions may be given to the transfer agent of the Parent
Shares to prevent any illegal transfer of the Parent Shares. For purposes
hereof, the term resale includes any transfer for value including the mortgage,
pledge or hypothecation of such Parent Shares.
2.4 Piggyback
Registration Rights of Smeaton and ▇▇▇▇▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇ are
hereby granted Dyadic Parent’s standard form piggyback registration rights,
which are set forth in Exhibit A attached hereto and by this reference made
a
part hereof.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE PARTIES
3.1 Dyadic
Parties
Each
Dyadic Party, as regards itself, represents and warrants to Smeaton and ▇▇▇▇▇
that:
(a) it is a duly organized corporation validly existing under the laws of
the state or country of its incorporation and has the requisite power and
authority to enter into and carry out the terms of this Agreement;
(b) all
corporate actions required to be taken by it to consummate this Agreement have
been taken and no further approval of any board, court, or other body is
necessary in order to permit it to consummate this Agreement; and
(c) neither
the execution and delivery of this Agreement, nor the performance or the
compliance with this Agreement, has resulted (or will result) in any violation
of, or be in conflict with, or invalidate, cancel, or make inoperative, or
interfere with, or constitute a default under, any charter, bylaw, agreement,
permit, judgment, decree or order, to which it is a party and there is no
default and no event or omission has occurred which, but for the passing of
time
or the giving of notice, or both, would constitute a default on the part of
any
Party under this Agreement.
Dyadic
Parent represents and warrants to Smeaton and ▇▇▇▇▇ that the Parent Shares
issued to each of Smeaton and ▇▇▇▇▇ have been duly authorized for issuance
and
sale, have been validly issued and are fully-paid and
non-assessable.
3.2 Smeaton
and ▇▇▇▇▇
Each
of
Smeaton and ▇▇▇▇▇, severally, and not jointly and severally, hereby represents
and warrants to each of the Dyadic Parties that:
(a) he
has
the full power, authority and legal capacity to enter into this Agreement,
and
to perform his obligations hereunder;
(b) neither
his execution and delivery of this Agreement, nor his performance of or
compliance with the terms and provisions of this Agreement, has resulted (or
will result) in any violation of, or be in conflict with, or invalidate, cancel,
or make inoperative, or interfere with, or constitute a default under any
agreement to which he is a party;
(c) upon
his
execution, delivery and performance of this Agreement, this Agreement shall
be
the valid and binding obligation of his, enforceable in accordance with its
terms;
(d) he
is the
record owner of, and has good and marketable title to, the Subsidiary Minority
Shares he is selling to Geneva, free and clear of all encumbrances or third
party rights or claims of any nature whatsoever;
(e) since
December 31, 2005, there has occurred no fact, event or circumstance which
has
had or would reasonably be expected to have a Material Adverse Effect on the
business or operations of the A-Subsidiary and its Subsidiary;
(f) the
balance sheet of the A-Subsidiary and its Subsidiary as of December 31, 2005
reflect all of the liabilities as of that date, and neither the A-Subsidiary
nor
its Subsidiary have any undisclosed liabilities of any kind
whatsoever;
5
(g) the
A-Subsidiary and its Subsidiary have paid all Taxes properly owed when due
and
timely filed all Tax Returns required to be filed;
(h) neither
A-Subsidiary nor its Subsidiary has made any illegal payments of any kind to
any
other Person for purposes of doing business with such Person, and to the
knowledge of
either
of Smeaton or ▇▇▇▇▇, employees of neither the A-Subsidiary nor its Subsidiary
have received any illegal payment from any Person for purposes of doing business
with the A-Subsidiary or its Subsidiary;
(i) each
of
the A-Subsidiary and its Subsidiary holds and is in compliance with all material
permits, licenses, bonds, approvals, certificates, registrations, accreditations
and other authorizations of all foreign, federal, state and local governmental
agencies required for their conduct of their businesses and the ownership of
their properties (including as the same relate to Environmental and Safety
Requirements);
(j) neither
Smeaton nor ▇▇▇▇▇ is aware that any executive or key employee of the
A-Subsidiary or its Subsidiary or any group of employees of the A-Subsidiary
or
its Subsidiary have any plans to terminate employment with the A-Subsidiary
or
its Subsidiary, as the case may be, and each of the A-Subsidiary and its
Subsidiary have complied with all applicable laws, rules, and regulations
relating to the employment of labor; and
(k) except
for the Smeaton Lease and the loans made by Smeaton and ▇▇▇▇▇ to the
A-Subsidiary, there have been no contracts or transactions between the
A-Subsidiary or its Subsidiary with Smeaton, Tsang or any of their
Affiliates.
ARTICLE
IV
INDEMNIFICATION
4.1 Indemnification
by Smeaton and ▇▇▇▇▇.
▇▇▇▇▇▇▇
and ▇▇▇▇▇, severally, and not jointly and severally, for themselves and their
respective personal representatives, successors and assigns hereby agrees to
protect, indemnify and hold each of the Dyadic Parties harmless of and from
all
loss, damage and expense, including reasonable attorneys’ and accountants fees
and costs of investigation (collectively, “Damages”)
arising out of the breach by either or Smeaton or ▇▇▇▇▇ of any of their
respective representations, warranties and covenants set forth in this
Agreement, provided that: (a) any claim for Damages made by any Dyadic Party
in
respect thereof must be made within two (2) years following the Effective Date;
and (b) the maximum liability of each of Smeaton and ▇▇▇▇▇ to the Dyadic Parties
pursuant to the provisions of this Section 4.1 shall not exceed: (i) in the
case
of Smeaton, the Smeaton Minority Share Purchase Price Amount; and (ii) in the
case of ▇▇▇▇▇, the ▇▇▇▇▇ Minority Share Purchase Price Amount.
4.2 Indemnification
by Geneva and Dyadic Parent.
Geneva
and Dyadic Parent, jointly and severally, hereby agree to protect, indemnify
and
hold each of Smeaton and ▇▇▇▇▇ harmless of and from all loss, damage and
expense, including reasonable attorneys’ and accountants fees and costs of
investigation (collectively, “Damages”)
arising out of the breach by any Dyadic Party of its representations, warranties
and covenants set forth in this Agreement, provided that : (a) any claim for
Damages made by any Dyadic Party in respect thereof must be made within two
(2)
years following the Effective Date; and (b) the maximum liability of Geneva
and
Dyadic Parent pursuant to the provisions of this Section 4.2 is $425,002.
ARTICLE
V
DEFINITIONS
Capitalized
terms not otherwise defined in this Agreement shall have the following
meanings:
(a) “Affiliate”
means a
Person or entity, which directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with
the
Party specified.
(b) “Material
Adverse Effect”
means,
with respect to any of the Dyadic Parties, as applicable, a material and
adverse
effect or development upon the business, assets, liabilities, financial
condition, operating results, customer or supplier relations, employee
relations, business prospects, cash flow or net worth of such Person and
its
Subsidiaries taken as a whole.
6
(c) “Person”
means
an individual, a partnership, a joint venture, a corporation, a trust, an
estate, an unincorporated organization or a government or any department or
agency thereof.
(d) “Strategic
Issuance”
means
any issuance of Parent Shares (i) in connection with issuance of Parent Shares
which are already the subject of an effective registration statement on file
with the Securities and Exchange Commission on the date of this Agreement;
(ii)
a “corporate partnering” transaction or “strategic alliance,” as determined by
the Board of Directors of Dyadic Parent, in good faith; (iii) in connection
with
any financing transaction in respect of which Dyadic Parent or any Affiliate
is
a borrower, or (iv) to a vendor, lender or customer of Dyadic Parent or any
Affiliate, or a research, manufacturing or other commercial collaborator of
Dyadic Parent or any Affiliate, in a transaction approved by the Board of
Directors of Dyadic Parent in good faith.
(e) “Subsidiary”
means,
with respect to any Person, any corporation, partnership, limited liability
company, association or other business entity of which (i) if a corporation,
a
majority of the total voting power of shares of stock entitled (irrespective
of
whether, at the time, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by that Person
or
one or more of the other Subsidiaries of that Person or a combination thereof,
or (ii) if a partnership, limited liability company, association or other
business entity, either (A) a majority of the partnership or other similar
ownership interest thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more Subsidiaries of that Person or a
combination thereof, or (B) such Person is a general partner, managing member
or
managing director of such partnership, limited liability company, association
or
other entity.
(f) “Securities
Act”
means
the Securities Act of 1933, and regulations promulgated thereunder, as amended,
or any similar federal law then in force.
(g) “Tax”
or
“Taxes”
means
any federal, state, local or foreign income, gross receipts, franchise,
estimated, alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee, withholding or other tax of any kind
whatsoever, including any interest, penalties or additions to tax or additional
amounts in respect of the foregoing, and “Tax
Return”
means
any report or filing required to be made to any governmental authority in
respect of any obligation to pay Taxes or report with respect to the computation
thereof.
GENERAL
5.2 Announcements
Subject
to any applicable statutory or regulatory rules, or otherwise as may be
required, none of the Parties hereto shall make any public announcement in
relation to the transactions the terms of which are set out in this Agreement or
the transactions or arrangements hereby contemplated or herein referred to
or
any matter ancillary hereto or thereto without the prior consent of the other
parties (which consent shall not be unreasonably withheld or
delayed).
5.3 Costs
Each
Party shall pay its own costs in relation to the negotiations leading up
to the
transactions which are the subject of this Agreement and the preparation,
execution and carrying into effect of this Agreement. Notwithstanding anything
herein provided, Smeaton and ▇▇▇▇▇ shall pay all ad valorem stamp duty on
the
sale of the Subsidiary Minority Shares, and the Dyadic Parties shall pay
all ad
valorem stamp duty on the purchase of the Parent Shares, as
applicable.
5.4 Further
Assurances
Each
of
the Parties undertakes to the other Parties that he or it will do all such
acts
and things and execute all such deeds and documents as may be necessary or
desirable to carry into effect or to give legal effect to the provisions
of this
Agreement and the transactions hereby contemplated.
7
5.5 Assignment
Neither
Smeaton nor ▇▇▇▇▇ shall assign or transfer, or purport to assign or transfer,
any of their rights or obligations arising under this Agreement without the
prior written consent of Dyadic Parent, in its absolute discretion,
but
any
of the Dyadic Parties may assign or transfer all or any part of its rights
and
obligations arising under this Agreement to any Affiliate, except for the
obligation of Dyadic Parent to issue the Parent Shares and observe its
obligations to Smeaton and ▇▇▇▇▇ set forth in Article III hereof.
5.6 Notices.
(a) Any
notices (which term shall include any other communication) required to be given
under this Agreement or in connection with the matters contemplated by it shall,
except where otherwise specifically provided, be in writing in the English
language.
(b) Any
such
notice shall be addressed as provided in Section 6.5(c) and may be:
(i) personally
delivered, in which case it shall be deemed to have been given upon delivery
at
the relevant address; or
(ii) sent
by
pre-paid post, in which case it shall be deemed to have been given 7 days after
the date of posting; or
(iii) sent
by
facsimile, in which case it shall be deemed to have been given when dispatched,
subject to confirmation of uninterrupted transmission by a transmission
report.
(c) The
addresses and other details of the parties referred to in clause
13.1(b):
|
Name:
Address:
Fax
No.:
|
▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Blocks
C-D, 2nd
Floor, ▇. ▇▇▇ Industrial Building, ▇▇-▇▇
▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
(▇▇▇)
▇▇▇▇-▇▇▇▇
|
|
Name:
Address:
Fax
No.:
|
▇▇▇▇▇▇▇
▇▇▇▇▇
Blocks
C-D, 2nd
Floor, ▇. ▇▇▇ Industrial Building, ▇▇-▇▇
▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
(▇▇▇)
▇▇▇▇-▇▇▇▇
|
|
Name:
Address:
Fax
No.:
|
Geneva
Investment Holdings Limited
c/o
Deacons
5/F.,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
(▇▇▇)
▇▇▇▇-▇▇▇▇
|
|
Name:
Address:
Fax
No.:
|
Dyadic
International, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Executive Officer
(▇▇▇)
▇▇▇-▇▇▇▇
|
|
Name:
Address:
Fax
No.:
|
A-Subsidiary
Blocks
C-D, 2nd
Floor, ▇. ▇▇▇ Industrial Building, 77-81
Chai
▇▇▇ ▇▇▇ Street, New Territories, Hong Kong
(▇▇▇)
▇▇▇▇-▇▇▇▇
|
or
to
such other address as shall, from time to time, be supplied in writing by any
party to the other. Notices shall be deemed given on the date actually received
by the addressee.
5.7 Time
of the Essence
Time
shall be of the essence of this Agreement.
8
5.8 Governing
Law
This
Agreement shall be governed by, and construed in accordance with, the laws of
the Hong Kong Special Administrative Region.
6.8 Dispute
Resolution and Arbitration
Except
with respect to the enforcement of the covenants of Smeaton and ▇▇▇▇▇ set forth
in Article IX hereof, as to which any Dyadic Party shall have the alternative
right to elect to resort to any court of proper jurisdiction for the enforcement
thereof and for relief in the form of any proper remedy that may be available
thereunder, any dispute, controversy or claim arising out of or relating to
this
Agreement, or the breach termination or invalidity thereof, shall be settled
by
arbitration in accordance with the UNCITRAL Arbitration Rules as at present
in
force and as may be amended by the rest of this clause upon application by
any
party hereto to the Hong Kong International Arbitration Centre (“HKIAC”).
The
arbitration shall be conducted in the English language and the place of
arbitration shall be in Hong Kong at the Hong Kong International Arbitration
Centre. Any such arbitration shall be administered by HKIAC in accordance with
HKIAC Procedures for Arbitration Rules as are therein contained. The decision
of
the arbitrators (by rule of majority) shall be final and binding on the parties
(including any decision on their fees).
6.9 Miscellaneous
Provisions
Whenever
possible, each provision of this Agreement will be interpreted in such manner
as
to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity, illegality
or
unenforceability will not affect any other provision or any other jurisdiction,
but this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained
herein. This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns.
This
Agreement may be executed in counterparts, each of which shall be deemed an
original and all of which, when taken together, shall constitute one and the
same instrument.
This
Agreement constitutes the whole agreement between the parties relating to the
transactions hereby contemplated (no Party having relied on any representation
or warranty made by any other Party which is not a term of this Agreement)
and
no future variation and/or waiver shall be effective unless made in writing
and
signed by each of the Parties. This Agreement shall supersede all and any
previous agreements or arrangements between the Parties hereto or any of them
relating to the A-Subsidiary or any other matter referred to in this Agreement
and all or any such previous agreements or arrangements (if any ) shall cease
and determine with effect from the date hereof, except for the Service Agreement
between the A-Subsidiary and Smeaton dated October 21, 1998.
No
change, modification or amendment of any provision of this Agreement shall
be
valid unless made in writing and signed by the Parties hereto; provided,
however, that changes, modifications, or amendments to those provisions of
this
Agreement that apply only to a single Party need only be signed by that
Party.
The
waiver by a Party of a breach of any provision of this Agreement by another
Party shall not operate or be construed as a waiver of any subsequent breach
by
that other Party.
The
headings of this Agreement are inserted for convenience of reference only,
and
are not to be considered in the construction of the provisions hereof.
9
IN
WITNESS WHEREOF,
the
Parties hereto have executed this Agreement as of the date and year first above
written.
|
DYADIC
INTERNATIONAL, INC.
|
GENEVA
INVESTMENT HOLDINGS LIMITED
|
PURIDET
(ASIA) LIMITED
|
|
By:_____________________________
|
By:__________________________
|
By:_____________________________
|
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
|
|
Title:
Chief Executive Officer
|
Title:
President
|
Title:
Chief Executive Officer
|
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
▇▇▇▇▇▇▇
▇▇▇▇▇
|
|
|
_________________________
|
_______________________
|
|
10
EXHIBIT
A
SMEATON
AND ▇▇▇▇▇ PIGGYBACK REGISTRATION RIGHTS
1. Notice
of Registration of Dyadic Parent Securities
Dyadic
Parent hereby covenants and agrees that in the event it shall take action to
register any of its securities under the Securities Act at any time during
the
two (2) year period following the Effective Date other than in the case of
a
registration being undertaken for the purpose of registering “Excluded
Securities” (as hereinafter defined), Dyadic Parent shall give each of Smeaton
and ▇▇▇▇▇ and any other Person that, as of that date, had been granted piggyback
registration rights by Dyadic Parent comparable to the piggyback registration
rights granted to Smeaton and ▇▇▇▇▇ in this Exhibit
A
(for
purposes hereof, Smeaton and ▇▇▇▇▇ and all other such holders being hereinafter
referred to as “Rightsholders”)
written notice of Dyadic Parent’s intention to take that action (the
“Registration
Notice”).
2. Smeaton/▇▇▇▇▇
Piggyback Rights
Smeaton
and ▇▇▇▇▇ (together with all other Rightsholders) shall have the right,
exercisable by written notice to Dyadic Parent within forty-five (45) days
following receipt of the Registration Notice from Dyadic Parent, to request
the
inclusion of all or such portion of the Parent Shares issued to them pursuant
to
this Agreement (and any additional Parent Shares which may be issued to them
in
respect thereof by way of stock split, stock dividend or otherwise) as either
or
both of Smeaton and ▇▇▇▇▇ may elect in such registration, at the expense of
the
Dyadic Parent (other than the commission costs of selling all such Parent
Shares).
3. Registration
Process
.Dyadic
Parent shall, subject to the provisions of this Exhibit
A,
thereupon use its commercially reasonable efforts to (i) effect the registration
of Smeaton’s and\or ▇▇▇▇▇’▇ Parent Shares to the end that such registration
under the Securities Act shall become and remain effective, (ii) cause any
underwriting agreement relating to Dyadic Parent's securities to provide that
Smeaton and\or ▇▇▇▇▇ shall have the right to sell his or their Parent Shares
to
the underwriters and that the underwriters shall purchase the Parent Shares
at
the price paid by the underwriters for the securities sold by Dyadic Parent,
and
(iii) keep each of Smeaton and ▇▇▇▇▇ advised in writing as to the initiation
of
each registration and as to the completion thereof, (iv) furnish such number
of
the registration statement and the prospectus included therein, including
preliminary prospectuses and other documents incident thereto as Smeaton and
▇▇▇▇▇ from time to time may reasonably request, and (v) cause all Parent Shares
covered by such registrations to be listed on each securities exchange on which
similar securities issued Dyadic Parent are listed, provided that:
(a) each
of
Smeaton and ▇▇▇▇▇ shall have timely executed and delivered the usual and
customary agreement between Dyadic Parent, Smeaton, and\or ▇▇▇▇▇ (as the case
may be) and the underwriters relating to the registration;
(b) in
no
event shall Dyadic Parent be required to keep up to date or to supplement any
prospectus more than nine (9) months after the effective date of the
registration statement of which such prospectus is a part; and
(c) if
the
registration contemplated by the Registration Notice consists of an underwritten
offer and sale by Dyadic Parent for its own account of Dyadic Parent securities
to be registered under the Securities Act, and the managing underwriters advise
Dyadic Parent in writing that in their opinion the offering contemplated by
the
Registration Notice cannot be successfully completed if Dyadic Parent were
to
also register all of the “Registrable Shares” (as defined below) requested to be
included in such registration by the Rightsholders, then Dyadic Parent will
include in that registration: (i) first, any securities Dyadic Parent proposes
to sell as contemplated by the Registration Notice, and (ii) second, that
portion of the aggregate number of Parent Shares held by Smeaton and ▇▇▇▇▇
pursuant to Section 2 hereof and all other Rightsholders (collectively, the
“Registrable
Shares”),
which
in the opinion of such managing underwriters can successfully be sold, such
number of Registrable Shares to be taken pro rata from the then Rightsholders
on
the basis of the total number of Registrable Shares then held by each of them,
with further like pro rata allocations among the Rightsholders of Registrable
Shares in the event that any Rightsholder has requested registration of less
than all of the Registrable Shares then held by such Rightsholder.
4. Excluded
Securities
As
used
herein, the term “Excluded
Securities”
shall
mean securities of Dyadic Parent issued: (i) pursuant to a stock option or
other
compensatory equity compensation plan being maintained by Dyadic Parent for
employees, directors or other consultants to Dyadic Parent and its Affiliates;
(ii) for the purpose of effecting an acquisition by Dyadic Parent of (or the
procurement by Dyadic Parent of the right to acquire) another Person, by merger,
purchase of all or substantially all of the assets of such other Person or
by
other reorganization whereby Dyadic Parent ends up owning or will have the
right
to acquire, directly or indirectly, more than 50% of the voting power of such
other Person; or (iii) pursuant to any Strategic Issuance.
11