EXHIBIT 2.2
EXECUTION VERSION
SPLIT-OFF AGREEMENT
THE SPLIT-OFF AGREEMENT (this "Agreement") is made and entered into
this 28th day of September, 2004, by and between CCP Worldwide, Inc., a Delaware
corporation ("Seller"), David R. Allison ("Purchaser"), Custom Craft Packaging,
Inc., a North Carolina corporation ("Custom Craft"), and Dyadic International,
Inc., a Florida corporation ("Dyadic").
R E C I T A L S:
A. Seller is the owner of all of the issued and outstanding
capital stock of Custom Craft. Custom Craft is the sole operating subsidiary of
Seller. Seller has no other businesses or operations.
B. Contemporaneous with the execution of this Agreement,
Seller, Dyadic and a newly-formed, wholly-owned Florida subsidiary of Seller,
CCP Acquisition Corp. ("Mergeco"), have entered into an Agreement of Merger and
Plan of Reorganization (the "Merger Agreement") pursuant to which Mergeco will
merge with and into Dyadic, with Dyadic being the survivor (the "Merger"), and
the stockholders of Dyadic will receive shares of common stock in Seller in
exchange for their shares of common stock in Dyadic.
C. The execution of this Agreement is required by Dyadic as a
condition to its execution of the Merger Agreement. The consummation of the
purchase and sale transaction contemplated by this Agreement is also a condition
to the completion of the Merger pursuant to the Merger Agreement. Seller has
represented to Dyadic in the Merger Agreement that the purchase and sale
transaction contemplated by this Agreement will be consummated in connection
with the Merger, and Dyadic is relying on such representation in entering into
the Merger Agreement.
D. Purchaser desires to purchase the Shares (as defined in
Section 1.1) from Seller, and to assume, as between Seller and Purchaser, all
responsibilities for any debts, obligations and liabilities of Custom Craft, on
the terms and subject to the conditions specified in this Agreement.
E. Seller desires to sell and transfer the Shares to the
Purchaser, on the terms and subject to the conditions specified in this
Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and agreements contained herein and for other good and valuable consideration,
the receipt and sufficiency are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
I. PURCHASE AND SALE OF STOCK.
1.1 Purchased Shares. Subject to the terms and conditions
provided below, Seller shall sell and transfer to Purchaser and Purchaser shall
purchase from Seller, on the Closing Date (as defined in Section 1.3), all the
issued and outstanding shares of capital stock of Custom Craft (the "Shares").
1.2 Purchase Price. The purchase price for the Shares shall be
the transfer and delivery by Purchaser to Seller of all of the shares of common
stock of Seller that Purchaser owns, which Purchaser represents consists of
3,000,000 shares (the "Purchase Price Shares"), deliverable as provided in
Section 2.2.
1.3 Closing. The closing of the transactions contemplated in
this Agreement (the "Closing") shall take place simultaneously with the closing
of the Merger. The date on which the Closing occurs shall be referred to herein
as the Closing Date (the "Closing Date").
II. CLOSING.
2.1 Transfer of Shares. At the Closing, Seller shall deliver
to Purchaser the certificates representing all the Shares, duly endorsed to
Purchaser, which said delivery shall vest Purchaser with good and marketable
title to all issued and outstanding shares of capital stock of Custom Craft,
free and clear of all liens and encumbrances.
2.2 Payment of Purchase Price. At the Closing, Purchaser shall
deliver to Seller the certificates representing the Purchase Price Shares duly
endorsed to Seller, which said delivery shall vest Seller with good and
marketable title to the Purchase Price Shares, free and clear of all liens and
encumbrances.
2.3 Transfer of Records. At the Closing or as soon as
practical thereafter, Seller shall arrange for transfer to Custom Craft all
existing corporate books and records in Seller's possession relating to Custom
Craft and its business, including but not limited to all agreements, litigation
files, real estate files, personnel files and filings with governmental
agencies; provided, however, when any such documents relate to both Seller and
Custom Craft, only copies of such documents need be furnished. At the Closing or
as soon as practical thereafter, Purchaser and Custom Craft shall transfer to
Seller all existing corporate books and records in the possession of Purchaser
or Custom Craft relating to Seller, including but not limited to all corporate
minute books, stock ledgers, certificates and corporate seals of Seller and all
agreements, litigation files, real property files, personnel files and filings
with governmental agencies; provided, however, when any such documents relate to
both Seller and Custom Craft or its business, only copies of such documents need
be furnished.
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III. PURCHASER'S AND CUSTOM CRAFT'S REPRESENTATIONS AND WARRANTIES.
Purchaser and Custom Craft, jointly and severally, represent and warrant to
Seller and Dyadic that:
3.1 Organization and Good Standing. Custom Craft is a
corporation that has been duly incorporated and is validly existing and in good
standing under the laws of the State of North Carolina.
3.2 Capacity and Enforceability. Purchaser has the capacity to
execute and deliver this Agreement and the documents to be executed and
delivered by Purchaser at the Closing pursuant to the purchase and sale
transaction contemplated hereby. This Agreement and all such documents
constitute valid and binding agreements of Purchaser, enforceable in accordance
with their terms. The execution and delivery by Custom Craft of this Agreement
and the documents to be executed and delivered at the Closing pursuant to the
transaction contemplated hereby, and performance in accordance the terms
thereof, have been duly authorized by Custom Craft. This Agreement and all such
documents constitute the valid and binding agreements of Custom Craft,
enforceable in accordance with their terms.
3.3 Compliance. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby by
Purchaser or Custom Craft will result in the breach of any term or provision of,
or constitute a default under, or violate any agreement, indenture, instrument,
order, law or regulation to which Purchaser or Custom Craft is a party or by
which Purchaser or Custom Craft is bound.
3.4 Purchase for Investment. Purchaser is financially able to
bear the economic risks of acquiring an interest in Custom Craft and the other
transactions contemplated hereby and has no need for liquidity in this
investment. Purchaser has such knowledge and experience in financial and
business matters in general and with respect to businesses of a nature similar
to the business of Custom Craft so as to be capable of evaluating the merits and
risks of, and making an informed business decision with regard to, the
acquisition of the Shares. Purchaser is acquiring the Shares solely for his 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. Purchaser has (i) received all the information
he has deemed necessary to make an informed investment decision with respect to
an acquisition of the Shares; (ii) has had an opportunity to make such
investigation as he has desired pertaining to Custom Craft and the acquisition
of an interest therein and to verify the information which is, and has been,
made available to him; and (iii) has had the opportunity to ask questions of
Seller concerning Custom Craft. Purchaser acknowledges that Purchaser is the
senior member of management of Seller and Custom Craft and, as such, has actual
knowledge of the business, operations and financial affairs of Custom Craft.
Purchaser has received no public solicitation or advertisement with respect to
the offer or sale of the Shares. Purchaser realizes that the Shares are
"restricted securities" as that term is defined in SEC Rule 144, the resale of
the Shares is restricted by federal and state securities laws and, accordingly,
the Shares must be held indefinitely unless their resale is subsequently
registered under the Securities Act or an exemption from such registration is
available for their resale. Purchaser understands that any resale of the Shares
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by him must be registered under the Securities Act (and any applicable state
securities law) or be effected in circumstances that, in the opinion of counsel
for Custom Craft at the time, create an exemption or otherwise do not require
registration under the Securities Act (or applicable state securities laws).
Purchaser acknowledges and consents that certificates now or hereafter issued
for the Shares will bear a legend substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS (THE "STATE ACTS"), HAVE
BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND QUALIFICATION UNDER THE STATE ACTS OR EXEMPTIONS FROM SUCH
REGISTRATION OR QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE
SECURITIES ACT, THE EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT
AND RULE 144 THEREUNDER). THE COMPANY SHALL BE FURNISHED WITH AN OPINION OF
COUNSEL OPINING AS TO THE AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND
QUALIFICATION AND/OR SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY
THAT ANY SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES LAWS AS A PRECONDITION TO
ANY SUCH TRANSFER.
Purchaser understands that the Shares are being sold to him pursuant
to the exemption from registration contained in Section 4(2) of the Securities
Act and that the Seller is relying upon the representations made herein as one
of the bases for claiming the Section 4(2) exemption. In the event the Shares or
any portion thereof are subsequently transferred, Purchaser agrees to execute,
deliver and file all such papers, documents and instruments as may be required
by the Securities Exchange Commission ("SEC") and any 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 or
appropriate for such transfer. Purchaser agrees to furnish Custom Craft and
Seller with a copy of all such papers, documents and instruments, and, in
addition, will furnish Custom Craft and Seller with any other information that
Custom Craft or Seller may reasonably require to ensure that no subsequent
transfer or disposition of the Shares is in violation of the Securities Act or
any applicable state securities laws. For purposes hereof, the term resale
includes any transfer for value including the mortgage, pledge, or hypothecation
of such Shares.
3.5 WARN Act. Custom Craft does not have a sufficient number
of employees to make it subject to the Worker Adjustment and Retraining
Notification Act ("WARN Act").
3.6 Liabilities. Following the Closing, Seller will have no
liability for any debts, liabilities or obligations of Custom Craft or its
business or activities, and there are no outstanding guaranties, performance or
payment bonds, letters of credit or other contingent contractual obligations
that have been undertaken by Seller directly or indirectly in relation to Custom
Craft or its business and that may survive the Closing. Seller has no employees.
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3.7 Title to Purchase Price Shares. Purchaser is the sole
record and beneficial owner of the Purchase Price Shares. At Closing, Purchaser
will have good and marketable title to the Purchase Price Shares, which Purchase
Price Shares are, and at the Closing will be, free and clear of all options,
warrants, pledges, claims, liens, and encumbrances and any restrictions or
limitations prohibiting or restricting transfer to Seller, except for
restrictions on transfer as contemplated by applicable securities laws.
3.8 Representations in Merger Agreement. Custom Craft
represents and warrants that all of the representations and warranties by
Seller, insofar as they relate to Custom Craft, contained in the Merger
Agreement are true and correct.
IV. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Purchaser that:
4.1 Organization and Good Standing. Seller is a corporation
that has been duly incorporated and is validly existing and in good standing
under the laws of the State of Delaware.
4.2 Authority and Enforceability. The execution and delivery
of this Agreement and the documents to be executed and delivered at the Closing
pursuant to the transactions contemplated hereby, and performance in accordance
with the terms thereof, have been duly authorized by Seller and all such
documents constitute the valid and binding agreements of Seller enforceable in
accordance with their terms.
4.3 Title to Shares. Seller is the sole record and beneficial
owner of the Shares. At Closing, Seller will have good and marketable title to
the Shares, which Shares are, and at the Closing will be, free and clear of all
options, warrants, pledges, claims, liens and encumbrances, and any restrictions
or limitations prohibiting or restricting transfer to Purchaser, except for
restrictions on transfer as contemplated by Section 3.4 above. The Shares
constitute all of the issued and outstanding shares of capital stock of Custom
Craft.
V. OBLIGATIONS OF PURCHASER PENDING CLOSING. Purchaser and Custom Craft,
jointly and severally, covenant and agree that between the date hereof and the
Closing:
5.1 Business as Usual. Custom Craft shall operate in
accordance with past practices and shall use best efforts to preserve its
goodwill and the goodwill of its employees, customers and others having business
dealings with Custom Craft. Without limiting the generality of the foregoing,
from the date of this Agreement until the Closing Date, Custom Craft shall (a)
make all normal and customary repairs to its equipment, assets and facilities,
(b) keep in force all insurance, (c) preserve in full force and effect all
material franchises, licenses, contracts and real property interests and comply
in all material respects with all laws and regulations, (d) collect all accounts
receivable and pay all trade creditors in the ordinary course of business at
intervals historically experienced, and (e) preserve and maintain Custom Craft's
assets in their current operating condition and repair, ordinary wear and tear
excepted. Custom Craft shall not (i) amend, terminate or surrender any material
franchise, license, contract or real property interest, or (ii) sell or dispose
of any of its assets except in the ordinary course of business. Neither Custom
Craft nor Purchaser shall take or omit to take any action that results in Seller
incurring any liability or obligation prior to or in connection with the
Closing.
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5.2 Not Impair Performance. Purchaser and Custom Craft shall
not take any intentional action that would cause the conditions upon the
obligations of the parties hereto to effect the transactions contemplated hereby
not to be fulfilled, including, without limitation, taking or causing to be
taken any action that would cause the representations and warranties made by any
party herein not to be true, correct and accurate as of the Closing, or in any
way impairing the ability of Seller to satisfy its obligations as provided in
Article VI.
5.3 Assist Performance. Purchaser and Custom Craft shall
exercise their reasonable best efforts to cause to be fulfilled those conditions
precedent to Seller's obligations to consummate the transactions contemplated
hereby, as well as any conditions to the consummation of the Merger contained in
the Merger Agreement, which are dependent upon actions of Purchaser or Custom
Craft and to make and/or obtain any necessary filings and consents in order to
consummate the sale transaction contemplated by this Agreement. Purchaser shall
cause Custom Craft to comply with its obligations under this Agreement.
5.4 Access. Prior to the Closing, Purchaser shall use his
reasonable best efforts to cause Custom Craft to, and Custom Craft shall, permit
the authorized representatives of Dyadic to have reasonable access to the
properties, records and documents related to Custom Craft and its business and
furnish to Dyadic such financial records and other documents with respect to
Custom Craft's operations and business as Dyadic shall reasonably request.
VI. OBLIGATIONS OF SELLER PENDING CLOSING. Seller covenants and agrees
that between the date hereof and the Closing:
6.1 Business as Usual. Seller shall not take any intentional
action that prevents Custom Craft from satisfying its covenants set forth in
Section 5.1 above.
6.2 Not Impair Performance. Seller shall not take any
intentional action that would cause the conditions upon the obligations of the
parties hereto to effect the transactions contemplated hereby not to be
fulfilled, including, without limitation, taking or causing to be taken any
action which would cause the representations and warranties made by any party
herein not to be materially true, correct and accurate as of the Closing, or in
any way impairing the ability of Purchaser to satisfy his obligations as
provided in Article V.
6.3 Assist Performance. Seller shall exercise its reasonable
best efforts to cause to be fulfilled those conditions precedent to Purchaser's
obligations to consummate the transactions contemplated hereby which are
dependent upon the actions of Seller and to work with Purchaser to make and/or
obtain any necessary filings and consents.
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VII. SELLER'S CONDITIONS PRECEDENT TO CLOSING. The obligations of Seller
to close the transactions contemplated by this Agreement are subject to the
satisfaction at or prior to the Closing of each of the following conditions
precedent (any or all of which may be waived by Seller and Dyadic in writing):
7.1 Representations and Warranties, Performance. All
representations and warranties of Purchaser and Custom Craft contained in this
Agreement shall have been true and correct, in all material respects, when made
and shall be true and correct, in all material respects, at and as of the
Closing, with the same effect as though such representations and warranties were
made at and as of the Closing. Purchaser and Custom Craft shall have performed
and complied with all covenants and agreements and satisfied all conditions, in
all material respects, required by this Agreement to be performed or complied
with or satisfied by Purchaser and Custom Craft at or prior to the Closing.
7.2 Bring-Down Certificate of Purchaser. Purchaser and Custom
Craft shall deliver to Seller at Closing a certificate signed by Purchaser and
an authorized officer of Custom Craft dated the Closing Date: (i) certifying
that Purchaser and Custom Craft have performed and complied with all covenants
and agreements and satisfied all conditions, in all material respects, required
by this Agreement to be performed or complied with or satisfied by Purchaser or
Custom Craft at or prior to the Closing; and (ii) certifying that all
representations and warranties made by Purchaser and Custom Craft in this
Agreement are true and correct, in all material respects, as of the Closing Date
with the same effect as though such representations and warranties were made at
and as of the Closing Date.
7.3 Additional Documents. Purchaser and Custom Craft shall
deliver or cause to be delivered such additional documents as may be necessary
in connection with the consummation of the transactions contemplated by this
Agreement and the performance of their obligations hereunder.
7.4 Releases by Purchaser and Custom Craft.
(a) Purchaser. At the Closing, Purchaser shall execute and
deliver to Seller and Dyadic a general release which in substance and
effect releases Seller and Dyadic from any and all liabilities and
obligations that Seller and Dyadic may owe to Purchaser in any
capacity and from any and all claims that Purchaser may have against
Seller, Dyadic, or their respective officers, directors,
stockholders, employees and agents (other than those arising pursuant
to this Agreement or any document delivered in connection with this
Agreement).
(b) Custom Craft. At the Closing, Custom Craft shall
execute and deliver to Seller and Dyadic a general release which in
substance and effect releases Seller and Dyadic from any and all
liabilities and obligations that Seller and Dyadic may owe to Custom
Craft in any capacity and from any and all claims that Custom Craft
may have against Seller, Dyadic, or their respective officers,
directors, stockholders, employees and agents (other than those
arising pursuant to this Agreement or any document delivered in
connection with this Agreement).
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7.5 Resignation of Purchaser. At the Closing, Purchaser shall
deliver to Seller his resignation as an officer and director of Seller, said
resignation to be effective immediately upon the consummation of the
transactions contemplated by this Agreement.
7.6 Consummation of Merger. The consummation of the Merger
shall have occurred simultaneously with the Closing.
VIII. PURCHASER'S CONDITIONS PRECEDENT TO CLOSING. The obligations of
Purchaser to close the transactions contemplated by this Agreement are subject
to the satisfaction at or prior to the Closing of each of the following
conditions precedent (any and all of which may be waived by Purchaser and Dyadic
in writing):
8.1 Representations and Warranties, Performance. All
representations and warranties of Seller contained in this Agreement shall have
been true and correct, in all material respects, when made and shall be true and
correct, in all material respects, at and as of the Closing with the same effect
as though such representations and warranties were made at and as of the
Closing. Seller shall have performed and complied with all covenants and
agreements and satisfied all conditions, in all material respects, required by
this Agreement to be performed or complied with or satisfied by them at or prior
to the Closing.
8.2 Delivery of Books and Records. At the Closing, Seller
shall deliver to Purchaser all corporate books and records of Custom Craft,
including any minutes, stock certificate stubs, stock transfer ledgers, and
seals.
8.3 Certificates of Seller. Seller shall deliver or cause to
be delivered to Purchaser at Closing:
(a) Good Standing. Certificate of good standing in
Delaware for Seller, dated within 20 days of the Closing Date.
(b) Bring-Down. A certificate signed by an authorized
officer of Seller, dated as of the Closing Date: (i) certifying that
Seller has performed and complied with all covenants and agreements
and satisfied all conditions, in all material respects, required by
this Agreement to be performed or complied with or satisfied by
Seller at or prior to the Closing; and (ii) certifying that all
representations and warranties made by Seller in this Agreement are
true and correct, in all material respects, as of the Closing Date
with the same effect as though such representations and warranties
were made at and as of the Closing Date.
8.4 Release by Seller. At the Closing, Seller shall execute
and deliver to Purchaser a general release which in substance and effect
releases Custom Craft from any and all liabilities and obligations that Custom
Craft may owe to Seller and from any and all claims that Seller may have against
Custom Craft, its officers, directors, stockholders, employees and agents (other
than those arising pursuant to this Agreement or any document delivered in
connection with this Agreement).
8.5 Consummation of Merger. The consummation of the Merger
shall have occurred simultaneously with the Closing.
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IX. OTHER AGREEMENTS.
9.1 Expenses. Each party hereto shall bear its expenses
separately incurred in connection with this Agreement and with the performance
of its obligations hereunder.
9.2 Confidentiality. The parties hereto shall not make any
public announcements concerning this transaction other than in accordance with
mutual agreement reached prior to any such announcement(s) and other than as may
be required by applicable law. If for any reason the transactions contemplated
hereby are not consummated, then Purchaser shall return any information received
by Purchaser from Seller, and Purchaser shall cause all confidential information
obtained by Purchaser concerning Custom Craft and its business to be treated as
such.
9.3 Brokers' Fees. No party to this Agreement has employed the
services of a broker and each agrees to indemnify the other against all claims
of any third parties for fees and commissions of any brokers claiming a fee or
commission related to the transactions contemplated hereby.
9.4 Access to Information Post-Closing; Cooperation.
(a) Following the Closing, Purchaser and Custom Craft
shall afford to Seller and its authorized accountants, counsel, and
other designated representatives reasonable access (and including
using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business
hours to allow records, books, contracts, instruments, computer data
and other data and information (collectively, "Information") within
the possession or control of Purchaser or Custom Craft insofar as
such access is reasonably required by Seller. Information may be
requested under this Section 9.4(a) for, without limitation, audit,
accounting, claims, litigation and tax purposes, as well as for
purposes of fulfilling disclosure and reporting obligations and
performing this Agreement and the transactions contemplated hereby.
No files, books or records of Custom Craft existing at the Closing
Date shall be destroyed by Purchaser or Custom Craft after Closing
but prior to the expiration of any period during which such files,
books or records are required to be maintained and preserved by
applicable law without giving the Seller at least 30 days prior
written notice, during which time Seller shall have the right to
examine and to remove any such files, books and records prior to
their destruction.
(b) Following the Closing, Seller shall afford to Custom
Craft and its authorized accountants, counsel and other designated
representatives reasonable access (including using reasonable efforts
to give access to persons or firms possessing information)
duplicating rights during normal business hours to Information within
Seller's possession or control relating to the business of Custom
Craft. Information may be requested under this Section 9.4(b) for,
without limitation, audit, accounting, claims, litigation and tax
purposes as well as for purposes of fulfilling disclosure and
reporting obligations and for performing this Agreement and the
transactions contemplated hereby. No files, books or records of
Custom Craft existing at the Closing Date shall be destroyed by
Seller after Closing but prior to the expiration of any period during
which such files, books or records are required to be maintained and
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preserved by applicable law without giving the Purchaser at least 30
days prior written notice, during which time Purchaser shall have the
right to examine and to remove any such files, books and records
prior to their destruction.
(c) At all times following the Closing, Seller, Purchaser
and Custom Craft shall use reasonable efforts to make available to
the other party on written request, the current and former officers,
directors, employees and agents of Seller or Custom Craft for any of
the purposes set forth in Section 9.4(a) or (b) above or as witnesses
to the extent that such persons may be reasonably be required in
connection with any legal, administrative or other proceedings in
which Seller or Custom Craft may from time to be involved.
(d) The party to whom any Information or witnesses are
provided under this Section 9.4 shall reimburse the provider thereof
for all out-of-pocket expenses actually and reasonably incurred in
providing such Information or witnesses.
(e) Seller, Purchaser, Custom Craft and their respective
employees and agents shall each hold in strict confidence all
Information concerning the other party in their possession or
furnished by the other or the other's representative pursuant to this
Agreement with the same degree of care as such party utilizes as to
such party's own confidential information (except to the extent that
such Information is (i) in the public domain through no fault of such
party or (ii) later lawfully acquired from any other source by such
party), and each party shall not release or disclose such Information
to any other person, except such party's auditors, attorneys,
financial advisors, bankers, other consultants and advisors or
persons with whom such party has a valid obligation to disclose such
Information, unless compelled to disclose such Information by
judicial or administrative process or, as advised by its counsel, by
other requirements of law.
(f) Seller, Purchaser and Custom Craft shall each use
their best efforts to forward promptly to the other party all
notices, claims, correspondence and other materials which are
received and determined to pertain to the other party.
9.5 Guarantees, Surety Bonds and Letter of Credit Obligations.
In the event that Seller is obligated for any debts, obligations or liabilities
of Custom Craft by virtue of any outstanding guarantee, performance or surety
bond or letter of credit provided or arranged by Seller on or prior to the
Closing Date, Purchaser and Custom Craft shall use best efforts to cause to be
issued replacements of such bonds, letters of credit and guarantees and to
obtain any amendments, novations, releases and approvals necessary to release
and discharge fully Seller from any liability thereunder following the Closing.
Purchaser and Custom Craft, jointly and severally, shall be responsible for, and
shall indemnify, hold harmless and defend Seller from and against, any costs or
losses incurred by Seller arising from such bonds, letters of credits and
guarantees and any liabilities arising therefrom and shall reimburse Seller for
any payments that Seller may be required to pay pursuant to enforcement of its
obligations relating to such bonds, letters of credit and guarantees.
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9.6 Filings and Consents. Purchaser and Custom Craft, at their
risk, shall determine what, if any, filings and consents must be made and/or
obtained prior to Closing to consummate the purchase and sale of the Shares.
Purchaser and Custom Craft, jointly and severally, shall indemnify the Seller
Indemnified Parties against any Losses incurred by any Seller Indemnified
Parties by virtue of the failure to make and/or obtain any such filings or
consents. Recognizing that the failure to make and/or obtain any filings or
consents may cause Seller to incur Losses or otherwise adversely affect Seller,
Purchaser and Custom Craft confirm that the provisions of this Section 9.6 will
not limit Seller's right to treat such failure as the failure of a condition
precedent to Seller's obligation to close pursuant to Article VII above.
9.7 Insurance. Purchaser acknowledges that on the Closing
Date, effective as of the Closing, all insurance coverage and bonds provided by
Seller for Custom Craft, and all certificates of insurance evidencing that
Custom Craft maintains any required insurance by virtue of insurance provided by
Seller, will terminate with respect to any insured damages resulting from
matters occurring subsequent to Closing.
9.8 Agreements Regarding Taxes.
(a) Tax Sharing Agreements. Any tax sharing agreement
between Seller and Custom Craft is terminated as of the Closing Date
and will have no further effect for any taxable year (whether the
current year, a future year, or a past year).
(b) Returns for Periods Through the Closing Date. Seller
will include the income and loss of Custom Craft (including any
deferred income triggered into income by Reg. ss.1.1502-13 and any
excess loss accounts taken into income under Reg. ss.1.1502-19) on
Seller's consolidated federal income tax returns for all periods
through the Closing Date and pay any federal income taxes
attributable to such income. Seller and Custom Craft agree to
allocate income, gain, loss, deductions and credits between the
period up to Closing (the "Pre-Closing Period") and the period after
Closing (the "Post-Closing Period") based on a closing of the books
of Custom Craft and both Seller and Custom Craft agree not to make an
election under Reg. ss.1.1502-76(b)(2)(ii) to ratably allocate the
year's items of income, gain, loss, deduction and credit. Seller,
Custom Craft and Purchaser agree to report all transactions not in
the ordinary course of business occurring on the Closing Date after
Purchaser's purchase of the Shares on Custom Craft's tax returns to
the extent permitted by Reg. ss.1.1502-76(b)(1)(ii)(B). Purchaser
agrees to indemnify Seller for any additional tax owed by Seller
(including tax owned by Seller due to this indemnification payment)
resulting from any transaction engaged in by Custom Craft not in the
ordinary course of business occurring on the Closing Date after
Purchaser's purchase of the Shares. Custom Craft will furnish tax
information to Seller for inclusion in Seller's consolidated federal
income tax return for the period which includes the Closing Date in
accordance with Custom Craft's past custom and practice.
(c) Audits. Seller will allow Custom Craft and its counsel
to participate at Custom Craft's expense in any audits of Seller's
consolidated federal income tax returns to the extent that such audit
raises issues that relate to and increase the tax liability of Custom
Craft. Seller shall have the absolute right, in its sole discretion,
to engage professionals and direct the representation of Seller in
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connection with any such audit and the resolution thereof, without
receiving the consent of Purchaser or Custom Craft or any other party
acting on behalf of Purchaser or Custom Craft, provided that Seller
will not settle any such audit in a manner which would materially
adversely affect Custom Craft after the Closing Date unless such
settlement would be reasonable in the case of a person that owned
Custom Craft both before and after the Closing Date. In the event
that after Closing any tax authority informs the Purchaser or Custom
Craft of any notice of proposed audit, claim, assessment, or other
dispute concerning an amount of taxes which pertain to the Seller, or
to Custom Craft during the period prior to Closing, Purchaser or
Custom Craft must promptly notify the Seller of the same within 15
calendar days of the date of the notice from the tax authority. In
the event Purchaser or Custom Craft does not notify the Seller within
such 15 day period, Purchaser and Custom Craft, jointly and
severally, will indemnify the Seller for any incremental interest,
penalty or other assessments resulting from the delay in giving
notice. To the extent of any conflict or inconsistency, the
provisions of this Section 9.8 shall control over the provisions of
Section 11.2 below.
(d) Cooperation on Tax Matters. Purchaser, Seller and
Custom Craft shall cooperate fully, as and to the extent reasonably
requested by the other party, in connection with the filing of tax
returns pursuant to this Section and any audit, litigation or other
proceeding with respect to taxes. Such cooperation shall include the
retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such
audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Custom Craft shall
(i) retain all books and records with respect to tax matters
pertinent to Custom Craft relating to any taxable period beginning
before the Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Seller, any extensions
thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority,
and (ii) give Seller reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the
Seller so requests, Purchaser agrees to cause Custom Craft to allow
Seller to take possession of such books and records.
9.9 ERISA Agreement. Effective as of the Closing Date, Custom
Craft shall terminate its participation in, and withdraw from, all employee
benefit plans sponsored by Seller, and Seller and Purchaser shall cooperate
fully in such termination and withdrawal. Without limitation, Custom Craft shall
be solely responsible for (i) all liabilities under those employee benefit plans
notwithstanding any status as an employee benefit plan sponsored by Seller, and
(ii) all liabilities for the payment of vacation pay, severance benefits, and
similar obligations, including, without limitation, amounts which are accrued
but unpaid as of the Closing Date with respect thereto. Purchaser and Custom
Craft acknowledge that Custom Craft is solely responsible for providing
continuation health coverage, as required under the Consolidated Omnibus
Reconciliation Act of 1985, as amended ("COBRA"), to each person, if any,
participating in an employee benefit plan subject to COBRA with respect to such
employee benefit plan as of the Closing Date, including, without limitation, any
person whose employment with Custom Craft is terminated after the Closing Date.
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X. TERMINATION.
10.1 This Agreement may be terminated at, or at any time prior
to, the Closing:
(a) by mutual written consent of Seller, Purchaser and
Dyadic;
(b) by Seller or Purchaser if the Closing has not occurred
by November 5, 2004; or
(c) the Seller or Purchaser if the Merger Agreement is
abandoned or terminated without the Merger occurring.
If this Agreement is terminated as provided herein, it shall become wholly void
and of no further force and effect and there shall be no further liability or
obligation on the part of any party except to pay such expenses as are required
of such party.
XI. INDEMNIFICATION.
11.1 Indemnification by Purchaser. Purchaser and Custom Craft,
jointly and severally, covenant and agree to indemnify, defend, protect and hold
harmless Seller, and its officers, directors, employees, stockholders, agents,
representatives and affiliates (collectively, together with Seller, the "Seller
Indemnified Parties") at all times from and after the date of this Agreement
from and against all losses, liabilities, damages, claims, actions, suits,
proceedings, demands, assessments, adjustments, costs and expenses (including
specifically, but without limitation, reasonable attorneys' fees and expenses of
investigation), whether or not involving a third party claim and regardless of
any negligence of any Seller Indemnified Party (collectively, "Losses"),
incurred by any Seller Indemnified Party as a result of or arising from (i) any
breach of the representations and warranties of Purchaser and Custom Craft set
forth herein or in certificates delivered in connection herewith, (ii) any
breach or nonfulfillment of any covenant or agreement (including any other
agreement of Purchaser and Custom Craft to indemnify Seller set forth in this
Agreement) on the part of Purchaser or Custom Craft under this Agreement, (iii)
any debt, liability or obligation of Custom Craft, (iv) the conduct and
operations of the business of Custom Craft whether before or after Closing, (v)
claims asserted against Custom Craft whether before or after Closing, or (vi)
any federal or state income tax payable by Seller and attributable to the
transaction contemplated by this Agreement.
11.2 Third-Party Claims.
(a) Defense. If any claim or liability (a "Third-Party
Claim") should be asserted against any of the Seller Indemnified
Parties (the "Indemnitee") by a third party after the Closing for
which Purchaser and Custom Craft have an indemnification obligation
under the terms of Section 11.1, then the Indemnitee shall notify
Purchaser and Custom Craft (the "Indemnitor") within 20 days after
the Third-Party Claim is asserted by a third party (said notification
being referred to as a "Claim Notice") and give the Indemnitor a
reasonable opportunity to take part in any examination of the books
and records of the Indemnitee relating to such Third-Party Claim and
to assume the defense of such Third-Party Claim and in connection
therewith and to conduct any proceedings or negotiations relating
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thereto and necessary or appropriate to defend the Indemnitee and/or
settle the Claim. The expenses (including reasonable attorneys' fees)
of all negotiations, proceedings, contests, lawsuits or settlements
with respect to any Third-Party Claim shall be borne by the
Indemnitor. If the Indemnitor agrees to assume the defense of any
Third-Party Claim in writing within 20 days after the Claim Notice of
such Third-Party Claim has been delivered, through counsel reasonably
satisfactory to Indemnitee, then the Indemnitor shall be entitled to
control the conduct of such defense, and any decision to settle such
Third-Party Claim, and shall be responsible for any expenses of the
Indemnitee in connection with the defense of such Third-Party Claim
so long as the Indemnitor continues such defense until the final
resolution of such Third-Party Claim. The Indemnitor shall be
responsible for paying all settlements made or judgments entered with
respect to any Third-Party Claim the defense of which has been
assumed by the Indemnitor. Except as provided on subsection (b)
below, both the Indemnitor and the Indemnitee must approve any
settlement of a Third Party Claim. A failure by the Indemnitee to
timely give the Claim Notice shall not excuse Indemnitor from any
indemnification liability except only to the extent that the
Indemnitor is materially and adversely prejudiced by such failure.
(b) Failure To Defend. If the Indemnitor shall not agree
to assume the defense of any Third-Party Claim in writing within 20
days after the Claim Notice of such Third-Party Claim has been
delivered, or shall fail to continue such defense until the final
resolution of such Third-Party Claim, then the Indemnitee may defend
against such Third-Party Claim in such manner as it may deem
appropriate and the Indemnitee may settle such Third-Party Claim on
such terms as it may deem appropriate. The Indemnitor shall promptly
reimburse the Indemnitee for the amount of all settlement payments
and expenses, legal and otherwise, incurred by the Indemnitee in
connection with the defense or settlement of such Third-Party Claim.
If no settlement of such Third-Party Claim is made, then the
Indemnitor shall satisfy any judgment rendered with respect to such
Third-Party Claim before the Indemnitee is required to do so, and pay
all expenses, legal or otherwise, incurred by the Indemnitee in the
defense against such Third-Party Claim.
11.3 Non-Third-Party Claims. Upon discovery of any claim for
which Purchaser and Custom Craft have an indemnification obligation under the
terms of Section 11.1 which does not involve a claim by a third party against
the Indemnitee, the Indemnitee shall give prompt notice to Purchaser and Custom
Craft of such claim and, in any case, shall give Purchaser and Custom Craft such
notice within 30 days of such discovery. A failure by Indemnitee to timely give
the foregoing notice to Purchaser and Custom Craft shall not excuse Purchaser or
Custom Craft from any indemnification liability except to the extent that
Purchaser or Custom Craft is materially and adversely prejudiced by such
failure.
11.4 Temporal Limitation. Except as otherwise provided in this
Section 11.4, all representations and warranties made by Purchaser, Custom Craft
and Seller in connection with this Agreement shall survive the Closing. Anything
in this Agreement to the contrary notwithstanding, the liability of all
Indemnitors under this Article XI shall terminate on the fourth (4th)
anniversary of the Closing Date, except with respect to (a) liability for any
item as to which, prior to the fourth (4th) anniversary of the Closing Date, any
Indemnitee shall have asserted a Claim in writing, which Claim shall identify
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its basis with reasonable specificity, in which case the liability for such
Claim shall continue until it shall have been finally settled, decided or
adjudicated, (b) liability of any party for Losses for which such party has an
indemnification obligation, incurred as a result of such party's breach of any
covenant or agreement to be performed by such party after the Closing, (c)
liability of Purchaser and Custom Craft for Losses incurred by a Seller
Indemnified Party due to breaches of their representations and warranties in
Article III of this Agreement, and (d) liability of Purchaser and Custom Craft
for Losses arising out of Third-Party Claims for which Purchaser and Custom
Craft have an indemnification obligation, which liability shall survive until
the statute of limitation applicable to any third party's right to assert a
Third-Party Claim bars assertion of such claim.
XII. MISCELLANEOUS.
12.1 Notices. All notices and communications required or
permitted hereunder shall be in writing and deemed given when received by means
of the United States mail, addressed to the party to be notified, postage
prepaid and registered or certified with return receipt requested, or personal
delivery, or overnight courier, as follows:
(a) If to Seller, addressed to:
(Prior to Closing)
CCP Worldwide, Inc.
6040-A Six Forks Road, Suite 179
Raleigh, North Carolina 27609
(After Closing)
Dyadic International, Inc.
(formerly known as CCP Worldwide, Inc.)
140 Intracoastal Pointe Dr., Suite 404
Jupiter, Florida 33477-5094
Attention: Mr. Mark Emalfarb, CEO
With a copy to:
(Prior to Closing)
Gottbetter & Partners
488 Madison Avenue, 12th Floor
New York, New York 10022
Attention: Adam S. Gottbetter, Esq.
(After Closing)
Jenkens & Gilchrist, a Professional Corporation
225 West Washington, Suite 2600
Chicago, Illinois 60606
Attention: Robert I. Schwimmer, Esq.
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(b) If to Purchaser or Custom Craft, addressed to:
Mr. David R. Allison
Custom Craft Packaging, Inc.
6040-A Six Forks Road, Suite 179
Raleigh, North Carolina 27609
With a copy to (which shall not constitute notice
hereunder):
Gottbetter & Partners
488 Madison Avenue, 12th Floor
New York, New York 10022
Attention: Adam S. Gottbetter, Esq.
(c) If to Dyadic, addressed to:
Dyadic International, Inc.
140 Intracoastal Pointe Dr., Suite 404
Jupiter, Florida 33477-5094
Attention: Mr. Mark Emalfarb, CEO
With a copy to (which shall not constitute notice
hereunder):
Jenkens & Gilchrist, a Professional Corporation
225 West Washington, Suite 2600
Chicago, Illinois 60606
Attention: Robert I. Schwimmer, Esq.
or to such other address as any party hereto shall specify pursuant to this
Section 12.1 from time to time.
12.2 Exercise of Rights and Remedies. Except as otherwise
provided herein, no delay of or omission in the exercise of any right, power or
remedy accruing to any party as a result of any breach or default by any other
party under this Agreement shall impair any such right, power or remedy, nor
shall it be construed as a waiver of or acquiescence in any such breach or
default, or of any similar breach or default occurring later; nor shall any
waiver of any single breach or default be deemed a waiver of any other breach or
default occurring before or after that waiver.
12.3 Time. Time is of the essence with respect to this
Agreement.
12.4 Reformation and Severability. In case any provision of
this Agreement shall be invalid, illegal or unenforceable, it shall, to the
extent possible, be modified in such manner as to be valid, legal and
enforceable but so as to most nearly retain the intent of the parties, and if
such modification is not possible, such provision shall be severed from this
Agreement, and in either case the validity, legality and enforceability of the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
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12.5 Further Acts. Seller, Purchaser and Custom Craft shall
execute any and all documents and perform such other acts which may be
reasonably necessary to effectuate the purposes of this Agreement. 12.6 Entire
Agreement; Amendments. This Agreement contains the entire understanding of the
parties relating to the subject matter contained herein. This Agreement cannot
be amended or changed except through a written instrument signed by all of the
parties hereto, including Dyadic. No provisions of this Agreement or any rights
hereunder may be waived by any party without the prior written consent of
Dyadic.
12.7 Assignment. No party may assign his or its rights or
obligations hereunder, in whole or in part, without the prior written consent of
the other parties.
12.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts or choice of laws thereof.
12.9 Counterparts. This Agreement may be executed in one or
more counterparts, with the same effect as if all parties had signed the same
document. Each such counterpart shall be an original, but all such counterparts
taken together shall constitute a single agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature page was an original thereof.
12.10 Section Headings and Gender. The Section headings used
herein are inserted for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement. All personal pronouns used in
this Agreement shall include the other genders, whether used in the masculine,
feminine or neuter, and the singular shall include the plural, and vice versa,
whenever and as often as may be appropriate.
12.11 Specific Performance; Remedies. Each of Seller, Purchaser
and Custom Craft acknowledges and agrees that Dyadic would be damaged
irreparably if any provision of this Agreement is not performed in accordance
with its specific terms or is otherwise breached. Accordingly, each of Seller,
Purchaser and Custom Craft agrees that Dyadic will be entitled to seek an
injunction or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically this Agreement and its terms and
provisions in any action instituted in any court of the United States or any
state thereof having jurisdiction over the parties and the matter, subject to
Section 12.12, in addition to any other remedy to which they may be entitled, at
law or in equity. Except as expressly provided herein, the rights, obligations
and remedies created by this Agreement are cumulative and in addition to any
other rights, obligations or remedies otherwise available at law or in equity,
and nothing herein will be considered an election of remedies. Seller, Purchaser
and Custom Craft acknowledge that they are familiar with the terms of the Merger
Agreement, that a breach of this Agreement by any of them may result in the
inability of one or more of the parties to the Merger Agreement to consummate
the Merger or the Private Placement Offering (as defined in the Merger
Agreement) or the election by one or more of the parties to the Merger Agreement
not to consummate the Merger or the Private Placement Offering, and that any
damages of Dyadic arising from such failure to consummate the Merger or Private
Placement Offering are foreseeable damages resulting from the breach of this
Agreement.
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12.12 Submission to Jurisdiction; Process Agent; No Jury Trial.
(a) Each party to the Agreement hereby submits to the
jurisdiction of any state or federal court sitting in the Palm Beach
County, Florida, in any action arising out of or relating to this
Agreement and agrees that all claims in respect of the action may be
heard and determined in any such court. Each party to the Agreement
also agrees not to bring any action arising out of or relating to
this Agreement in any other court. Each party to the Agreement agrees
that a final judgment in any action so brought will be conclusive and
may be enforced by action on the judgment or in any other manner
provided at law or in equity. Each party to the Agreement waives any
defense of inconvenient forum to the maintenance of any action so
brought and waives any bond, surety, or other security that might be
required of any other Party with respect thereto.
(b) EACH PARTY TO THE AGREEMENT HEREBY AGREES TO WAIVE HIS
OR HER RIGHTS TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING TO THE SUBJECT
MATTER OF THIS AGREEMENT OR ANY DEALINGS AMONG THEM RELATING TO THE
TRANSACTIONS CONTEMPLATED HEREBY. The scope of this waiver is
intended to be all encompassing of any and all actions that may be
filed in any court and that relate to the subject matter of the
transactions, including, contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Each party to
the Agreement hereby acknowledges that this waiver is a material
inducement to enter into a business relationship and that they will
continue to rely on the waiver in their related future dealings. Each
party to the Agreement further represents and warrants that it has
reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation
with legal counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of
commencement of any action, this Agreement may be filed as a written
consent to trial by a court.
12.13 Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. If an ambiguity or question
of intent or interpretation arises, this Agreement will be construed as if
drafted jointly by the parties hereto and no presumption or burden of proof will
arise favoring or disfavoring any party because of the authorship of any
provision of this Agreement. Any reference to any federal, state, local, or
foreign law will be deemed also to refer to law as amended and all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
words "include," "includes," and "including" will be deemed to be followed by
"without limitation." The words "this Agreement," "herein," "hereof," "hereby,"
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"hereunder," and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The parties
hereto intend that each representation, warranty, and covenant contained herein
will have independent significance. If any party hereto has breached any
representation, warranty, or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which
that party has not breached will not detract from or mitigate the fact that such
party is in breach of the first representation, warranty, or covenant.
[SIGNATURES FOLLOW ON THE NEXT PAGE]
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IN WITNESS WHEREOF, this Agreement has been duly executed by or on
behalf of each of the parties as of the date first above written.
CCP WORLDWIDE, INC.
By: /s/ David R. Allison
--------------------------------
Name: David R. Allison
------------------------------
Title: President & CEO
-----------------------------
/s/ David R. Allison
-----------------------------------
DAVID R. ALLISON, INDIVIDUALLY
DYADIC INTERNATIONAL, INC.
By: /s/ Mark A. Emalfarb
--------------------------------
Name: Mark A. Emalfarb
------------------------------
Title: President
-----------------------------
CUSTOM CRAFT PACKAGING, INC.
By: /s/ David R. Allison
--------------------------------
Name: David R. Allison
------------------------------
Title: President & CEO
-----------------------------
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