Document:

Exhibit 10.21.2 Abengoa R&D Agreement

    R&D
      AGREEMENT

     

    THIS
      R&D AGREEMENT
      (this
“Agreement”),
      dated
      as of October 26, 2006 (the “Agreement
      Date”),
      by
      and among DYADIC INTERNATIONAL (USA), INC., a Florida corporation
      with
      headquarters located at 140 Intracoastal Pointe Drive, Suite 404, Jupiter,
      Florida 33477 (the “Dyadic”),
      and
      ABENGOA BIOENERGY R&D, INC., a Missouri corporation with headquarters
      located at 1400 Elbridge Payne Road, Suite 212, Chesterfield, Missouri
      (“ABRD”).
      Dyadic
      and ABRD are sometimes collectively referred to as the “Parties”
and
      individually as a “Party.”
      Certain capitalized terms used herein have the meanings assigned them in Article
      I hereof. 

     

    RECITALS:

     

    A. ABRD
      has
      developed and continues to develop technologies (i) pertaining to the conversion
      of pre-treated biomass using a proprietary technology owned by ABRD into
      compositions containing fermentable sugars and co-products (each a “Substrate”)
      and
      (ii) in the field of cellulosic ethanol production via enzymatic hydrolysis
      (collectively, “ABRD
      Background Technology”).
      Employing the ABRD Background Technology, ABRD has developed the Substrates
      with
      a commercial goal of improving their consistency independent of the identity
      of
      the biomass.

     

    B. Dyadic
      has developed and continues to develop patented
      and other proprietary technologies pertaining to genes, gene expression, protein
      purification, protein characterization, enzymology, protein engineering,
      molecular evolution, high throughput screening, strain improvement, strain
      optimization and associated refinement, development, processing and
      manufacturing technologies (collectively, the “Dyadic
      Core Technologies”).
      

     

    C. Dyadic
      is
      engaged in various research and development activities based on these Dyadic
      Core Technologies in the field of ethanol production, including but not limited
      to the development of (i) enzyme compositions (“Enzyme
      Mixtures”),
      (ii)
      related Enzyme Mixture treatment processes for the conversion of various
      untreated and/or pre-treated Substrates into fermentable sugars (for each Enzyme
      Mixture, an applicable “Processing
      Technology”),
      and
      (iii) related Enzyme manufacturing processes for the production of those Enzyme
      Mixtures (for each Enzyme Mixture, an applicable “Manufacturing
      Technology”),
      as to
      each, for the production of ethanol (collectively, the “CE
      R&D Activities”).

     

    D. Dyadic
      intends to conduct a series of related and unrelated research and development
      programs of its own, and/or in collaboration with Third Parties (each a
“Collaboration
      Partner”)
      principally, various energy/fuel companies and/or vendors to the energy/fuel
      industry (each an “R&D
      Program”).
      In
      connection with each R&D Program, Dyadic will be performing Foundational
      R&D which may have application to all or most of the R&D Programs, and
      may also perform Applications R&D for the specific Collaboration Partner
      with whom or for whom Dyadic is conducting that R&D Program for or in
      collaboration with. Dyadic intends to conduct each of its R&D Programs in a
      manner in which all Foundational R&D will be applied by Dyadic, as it deems
      necessary or appropriate, to all or any of the R&D Programs, such that for
      purposes of Dyadic’s dealings with its Collaboration Partners and other Third
      Parties, Dyadic shall be deemed to be conducting, in addition to a specific
      R&D Program in collaboration with or for that Collaboration Partner, a
      discrete master R&D program for the performance of Foundational R&D for
      the benefit of itself and, to the extents same is incorporated by Dyadic into
      products or services licensed, sold or distributed by Dyadic, for its licensees
      and customers (the “Master
      R&D Program”).
      

     

    E. ABRD
      desires to (i) support the development of Foundational R&D and improved
      Enzyme Mixtures, their related Processing Technologies and their related
      Manufacturing Technologies, (ii) license and scale-up the use of such Enzyme
      Mixtures and Manufacturing Technologies, and (iii) demonstrate the value of
      such
      Enzyme Mixtures, their related Processing Technologies and their related
      Manufacturing Technologies, when used in pilot-scale and commercial-scale
      biomass hydrolysis processes using ABRD Background Technology.

     

    F. The
      Parties understand that the field of cellulosic ethanol is in its early stages,
      and that a very substantial volume of Foundational R&D will be required to
      be completed before meaningful Applications R&D can reasonably be expected
      to yield commercial-scale Enzyme Mixtures and related Processing Technologies
      and Manufacturing Technologies.

     

    G. Concurrently
      with the execution and delivery of this Agreement, Dyadic’s parent, Dyadic
      International, Inc., a Delaware corporation (“Dyadic-Parent”)
      and
      ABRD are executing and delivering to each other that certain Securities Purchase
      Agreement (the “SPA”),
      pursuant to which ABRD is making a strategic investment in Dyadic-Parent to
      enable Dyadic, in concert with ABRD and other Collaboration Partners, to fund
      Dyadic’s CE R&D Activities. Dyadic expressly acknowledges and agrees that
      pursuant to the provisions of Section 4.6 of the SPA, Dyadic-Parent has jointly
      and severally guaranteed each of Dyadic’s obligations to ABRD created by the
      terms and provisions of this Agreement.

     

    H. ABRD
      now
      desires to engage Dyadic to develop for ABRD one or more Enzyme Mixtures, their
      related Processing Technologies and their related Manufacturing Technologies,
      for Substrates approved by the Steering Committee that ABRD will, within a
      reasonable period of time following the Closing Date, deliver to Dyadic (each
      an
“Applicable
      Substrate”)
      for
      the purposes of having Dyadic develop and demonstrate a cost-effective Enzyme
      Mixture for each Applicable Substrate (as to each Applicable Substrate, its
      applicable “Custom
      Enzyme Mixture”),
      a
      cost-effective Processing Technology for the processing of each such Custom
      Enzyme Mixture (as to each Applicable Substrate, its related “Custom
      Processing Technology”)
      and a
      cost-effective Manufacturing Technology for the production of each such Custom
      Enzyme Mixture (as to each Applicable Substrate, its related “Custom
      Manufacturing Technology”)
      ready
      for scale-up to commercial application in ABRD Background Technology, within
      three (3) years following the Steering Committee’s approval of the applicable
      Statements of Work in respect of those Applicable Substrates (the “ABRD
      R&D Objective”),
      and
      to perform such Foundational R&D as Dyadic determines to be necessary or
      appropriate to facilitate the achievement of the ABRD R&D
      Objective.

     

    I. The
      Parties further wish to provide for Dyadic’s grant of an option to ABRD to
      license the Custom Enzyme Mixture, Custom Processing Technology and the Custom
      Manufacturing Technology for each Applicable Substrate from Dyadic on a
      non-exclusive basis, with the express understanding that Dyadic shall have
      the
      right to sell each Custom Enzyme Mixture, any related Processing Technology
      Dyadic may develop for such Custom Enzyme Mixture and the Custom Manufacturing
      Technology, or to license any or all of same, to any other Dyadic Collaboration
      Partner, or to any other Third Party, subject to the terms of this
      Agreement.

     

    AGREEMENT:

     

     

    NOW,
      THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
      and the foregoing Recitals, which are incorporated herein and by this reference
      made a part hereof, and for other good and valuable consideration the receipt
      and adequacy of which are hereby mutually acknowledged by Dyadic and ABRD,
      they
      hereby agree as follows:

     

    ARTICLE
      I  

     

    DEFINITIONS

     

    “AAA”
has
      the
      meaning set forth in Section 10.1 hereof.

     

    “ABRD
      Background Technology”
has
      the
      meaning set forth in Recital A hereof.

     

    “ABRD
      Facility”
means
      any ethanol manufacturing facility owned or operated by ABRD or any Affiliate
      of
      ABRD.

     

    “ABRD
      R&D Objective”
has
      the
      meaning assigned that term in Recital H hereof.

     

    “ABRD
      R&D Program”
has
      the
      meaning set forth in Section 2.2 hereof.

     

    “Action”
has
      the
      meaning set forth in Section 8.1 hereof.

     

    “Affiliate,”
with
      respect to a Person, means any other Person controlling, controlled by or under
      common control with, such first Person.

     

    “Annual
      R&D Spend Certificate”
has
      the
      meaning set forth in Section 2.1 hereof.

     

    “Applicable
      New Technology”
has
      the
      meaning set forth in Section 4.4 hereof.

     

    “Applicable
      Patent”
has
      the
      meaning set forth in Section 5.2(b) hereof.

     

    “Applicable
      R&D Spend”
has
      the
      meaning set forth in Section 2.1 hereof.

     

    “Applicable
      Royalty Rate”
has
      the
      meaning set forth in Section 5.2(b) hereof.

     

    “Applicable
      Substrate”
has
      the
      meaning assigned that term in Recital H hereof.

     

    “Applications
      R&D”
means
      CE R&D Activities in which technology, whether Dyadic Core Technology,
      Dyadic Improvements, Dyadic New Technology or Jointly Developed Technology,
      are
      used or applied on a specific Substrate or untreated biomass for any customer
      or
      Collaboration Partner of Dyadic. As an example, by way of illustration: (i)
      ABRD
      is a Collaboration Partner; (ii) Dyadic may purify and characterize such number
      of different enzymes as it determines to be worth characterizing, which
      activities shall constitute Foundational R&D; (iii) when Dyadic engages in
      testing these different enzymes on the Applicable Substrate, those CE R&D
      Activities will constitute Applications R&D.

     

    “Best
      Efforts”
means
      the efforts that a prudent Person desirous of achieving a result would use
      in
      similar circumstances to ensure that such result is achieved as expeditiously
      as
      practical; provided,
      however,
      that an
      obligation to use Best Efforts under this Agreement does not require the Company
      to dispose of or make any change to its business, expend any material funds
      or
      incur any other material burden (except to spend the Applicable R&D Spend,
      as contemplated by Section 2.1 hereof).

     

    “CE
      R&D Activities”
has
      the
      meaning assigned that term in Recital C hereof.

     

    “Closing
      Date”
has
      the
      meaning assigned that term in the SPA.

     

    “Collaboration
      Partner”
has
      the
      meaning assigned that term in Recital D hereof.

     

    “Commercial
      Rules”
has
      the
      meaning set forth in Section 10.1 hereof.

     

    “Complex
      Procedures”
has
      the
      meaning set forth in Section 10.1 hereof.

     

    “Confidential
      Information”
has
      the
      meaning set forth in Section 6.1 hereof.

     

    “Custom
      Enzyme Mixture”
has
      the
      meaning assigned that term in Recital H hereof.

     

    “Custom
      Manufacturing Technology”
has
      the
      meaning assigned that term in Recital H hereof.

     

    “Custom
      Processing Technology”
has
      the
      meaning assigned that term in Recital H hereof.

     

    “Demand”
has
      the
      meaning set forth in Section 10.1 hereof.

     

    “Disclosing
      Party”
has
      the
      meaning set forth in Section 6.1 hereof.

     

    “Dispute”
has
      the
      meaning set forth in Section 10.1 hereof.

     

    “Dyadic
      Core Technologies”
has
      the
      meaning assigned that term in Recital B hereof.

     

    “Dyadic-Parent”
has
      the
      meaning assigned that term in Recital G hereof.

     

    “Dyadic
      Improvements”
has
      the
      meaning set forth in Section 4.1 hereof.

     

    “Dyadic
      Technology”
has
      the
      meaning assigned that term in Section 4.1 hereof.

     

    “Enzyme
      Mixtures”
has
      the
      meaning assigned that term in Recital C hereof.

     

    “Foundational
      R&D”
means
      all technology developed by Dyadic in connection with its conduct of its CE
      R&D Activities, whether related to Dyadic Core Technology, Dyadic
      Improvements or New Technologies, excluding technology developed in connection
      with the conduct of Applications R&D. As an example by way of illustration:
      (i) ABRD is a Collaboration Partner; (ii) Dyadic may purify and characterize
      such number of different enzymes as it determines to be worth characterizing,
      which activities shall constitute Foundational R&D; (iii) when Dyadic
      engages in testing these different enzymes on the Applicable Substrate, those
      CE
      R&D Activities will constitute Applications R&D.

     

    “FTE’s”
has
      the
      meaning set forth in Section 2.2 hereof.

     

    “Governmental
      Official”
has
      the
      meaning set forth in Section 12.3 hereof.

     

    “Indemnified
      Party”
has
      the
      meaning set forth in Section 4.5 and Section 8.1 hereof, as
      applicable.

     

    “Indemnifying
      Party”
has
      the
      meaning set forth in Section 4.5 and Section 8.1 hereof, as
      applicable.

     

    “Interchangeable
      Foundational R&D”
has
      the
      meaning set forth in Section 2.6(b) hereof.

     

    “Inspection”
has
      the
      meaning set forth in Section 12.5 hereof.

     

    “Jointly
      Developed Technology”
has
      the
      meaning set forth in Section 4.3 hereof.

     

    “License”
has
      the
      meaning set forth in Section 5.1 hereof.

     

    “Licensed
      ABRD Facility”
has
      the
      meaning set forth in Section 5.1 hereof.

     

    “Licensed
      Enzyme Mixture”
has
      the
      meaning set forth in Section 5.1(c) hereof.

     

    “License
      Fee”
has
      the
      meaning set forth in Section 5.2(a) hereof.

     

    “Licensed
      Manufacturing Technology”
has
      the
      meaning set forth in Section 5.1 hereof.

     

    “Licensed
      Processing Technology”
has
      the
      meaning assigned that term in Section 5.1 hereof.

     

    “Manufacturing
      Technology”
has
      the
      meaning assigned that term in Recital C hereof.

     

    “Master
      R&D Program”
has
      the
      meaning assigned that term in Recital D hereof.

     

    “New
      Technology(ies)”
means
      all Dyadic Technology which is derived from either the Master R&D Program or
      the ABRD R&D Program.

     

    “New
      Applications Technology”
means
      all technology which is developed by Dyadic (whether exclusively by Dyadic
      or
      whether jointly with ABRD) out of Applications R&D performed in connection
      with the ABRD R&D Program.

     

    “Option
      Period”
has
      the
      meaning set forth in Section 5.1(a).

     

    “Other
      R&D Program”
has
      the
      meaning set forth in Section 2.6(a) hereof.

     

    “Person”
means
      a
      natural person, a corporation, a partnership, a trust, a joint venture, any
      governmental authority or any other entity or organization.

     

    “Processing
      Technology”
has
      the
      meaning assigned that term in Recital C hereof.

     

    “Program
      Completion Date”
has
      the
      meaning set forth in Section 9.1.

     

    “Qualified
      Manufacturing Sublicense”
has
      the
      meaning set forth in Section 5.1(c) hereof.

     

    “R&D
      Plan”
has
      the
      meaning set forth in Section 2.2 hereof.

     

    “R&D
      Program”
has
      the
      meaning set forth in Recital D hereof.

     

    “R&D
      Spend Measurement Period”
has
      the
      meaning set forth in Section 2.1 hereof.

     

    “Receiving
      Party”
has
      the
      meaning set forth in Section 6.1 hereof.

     

    “Royalty”
has
      the
      meaning set forth in Section 5.2(b).

     

    “SPA”
has
      the
      meaning assigned that term in Recital G hereof.

     

    “Statement
      of Work”
has
      the
      meaning set forth in Section 2.2 hereof.

     

    “Steering
      Committee”
has
      the
      meaning set forth in Section 3.1 hereof.

     

    “Substrate”
has
      the
      meaning set forth in Recital A hereof.

     

    “Steering
      Committee”
has
      the
      meaning set forth in Section 3.1 hereof.

     

    “Technology
      Transfer Fees”
has
      the
      meaning set forth in Section 5.2(c) hereof.

     

    “Term”
has
      the
      meaning set forth in Section 9.1 hereof.

     

    “Third
      Party”
means
      any Person that is not a Party (or an Affiliate of a Party) to this Agreement,
      including without limitation other Collaboration Partners.

     

    ARTICLE
      II  

     

    ABRD
      R&D PROGRAM

     

    2.1  Commitment
      of Dyadic to Engage in CE R&D Activities.
      Dyadic
      covenants to ABRD that over the three (3) year period commencing with the date
      of the Steering Committee’s approval of the first annual Statement of Work (the
“R&D
      Spend Measurement Period”)
      Dyadic
      will spend not less than $10,000,000 on the conduct of CE R&D Activities
      approved by the Steering Committee (the “Applicable
      R&D Spend”),
      whether related to Dyadic’s performance of its obligations under this Agreement
      (both Foundational R&D and Applications R&D), or its performance of
      Foundational R&D (but not Applications R&D) for its own account or
      Foundational R&D for the benefit of itself and any other Third Parties (but
      not Applications R&D), including but not limited to, by way of illustration,
      and not in limitation: (i) the employment of scientific and non-scientific
      personnel to perform such activities; (ii) the engagement of consultants and
      other independent contractors to perform such activities for Dyadic’s benefit in
      whole or in part; (iii) the in-licensing of relevant technologies; and (iv)
      the
      purchase or lease of necessary equipment, materials and supplies for use in
      connection therewith, provided
      that
      in
      calculating the amount of Dyadic’s Applicable R&D Spend, each full-time
      equivalent scientist employed by Dyadic in the conduct of CE R&D Activities,
      Dyadic shall be deemed to have incurred $**** of Applicable R&D Spend for
      each year during the R&D Spend Measurement Period in which such scientist is
      so employed, pro-rated for any partial year (treating any independent contractor
      as an employee for purposes of the foregoing proviso), further
      provided that
      any
      Applicable R&D Spend made by Dyadic on or after the Agreement Date, up to a
      maximum of $****, shall be treated as if it were expended during the R&D
      Spend Measurement Period. Within one hundred twenty (120) days following the
      close of each calendar year beginning or ending within the R&D Spend
      Measurement Period, Dyadic-Parent Chief Financial Officer shall furnish ABRD
      with a detailed written report (the “Annual
      R&D Spend Certificate”)
      certifying the amount of the Applicable R&D Spend made by Dyadic in the year
      then ended and the cumulative amount of the Applicable R&D Spend made by
      Dyadic since the Closing Date, with a final Annual R&D Spend Certificate to
      be to be furnished by Dyadic to ABRD within one hundred twenty (120) days of
      the
      Program Completion Date; provided that representatives of ABRD, upon reasonable
      advance notice and at ABRD’s expense, shall have the right to have an
      independent accounting firm review the books and records of Dyadic and
      Dyadic-Parent upon the condition that such independent accounting firm execute
      and deliver to Dyadic and Dyadic-Parent a confidentiality agreement in form
      and
      substance reasonably acceptable to Dyadic-Parent’s legal counsel, to verify the
      accuracy of the calculations set forth in the CFO’s Annual R&D Spend
      Certificate, further provided that if such examination shall disclose a more
      than 5% negative variance between the amount of the Applicable R&D Spend for
      the applicable year, Dyadic shall pay all of the expenses of such independent
      accounting firm.

     

    2.2  Scope
      of ABRD R&D Program.
      Dyadic
      shall use its good faith Best Efforts to supply the necessary scientific staff,
      materials, laboratories, offices and other facilities to perform the CE R&D
      Activities described in the R&D Plan attached hereto as Exhibit A (the
“R&D
      Plan”)
      in
      furtherance of the ABRD R&D Objective (the “ABRD
      R&D Program”),
      including without limitation the performance of the CE R&D Activities
      contemplated by statements of work to be approved by the Steering Committee
      for
      CE R&D Activities to be engaged in for each calendar year falling within the
      Term (each a “Statement
      of Work”)
      in
      accordance with the provisions of Article III hereof, which shall identify
      with
      reasonable specificity: (i) the tasks
      and
      stages of
      the
      ABRD R&D Program to be completed, (ii) the cost associated therewith
      denominated in number of full time equivalent scientific personnel
      (“FTE’s”)
      committed per year at the rate of $**** per FTE, and (iii) the applicable
      achievement milestones reasonably expected to be attained with each task, stage
      and phase. The Parties expressly agree that the R&D Plan necessarily
      comprises both Foundational R&D and Applications R&D.

     

    2.3  Funding
      of ABRD R&D Program.
      Dyadic
      shall be solely responsible for all costs associated with funding its
      performance of the ABRD R&D Program.

     

    2.4  Commencement
      of ABRD R&D Program.
      Dyadic
      shall commence performance of its CE R&D Activities in connection with the
      ABRD R&D Program immediately following the execution and delivery of this
      Agreement, and shall ramp-up those CE R&D Activities over the next twelve
      (12) calendar months, as it reasonably determines, in consultation with ABRD
      in
      accordance with the R&D Plan.

     

    2.5   No
      Assurance of Commercial Success. Dyadic
      covenants to ABRD that during the Term of this Agreement Dyadic will use its
      good faith Best Efforts to achieve the ABRD R&D Objective. However,
ABRD
      expressly acknowledges that due to the existing inchoate state of the Dyadic
      Technology in the cellulosic ethanol field and the inherent risks associated
      with the CE R&D Activities, Dyadic can not and does not assure ABRD that the
      ABRD R&D Program will culminate in the successful achievement of the ABRD
      R&D Objective, let alone any Custom Enzyme Mixture and related Custom
      Manufacturing Technology that ABRD will have any commercial interest in
      licensing. Accordingly, ABRD hereby expressly agrees except in the instance
      of a
      material breach by Dyadic of its obligations to ABRD hereunder, Dyadic shall
      have no liability of any kind whatsoever to ABRD by reason of the failure of
      the
      ABRD R&D Program to successfully achieve the ABRD R&D Objective or to
      produce any such Custom Enzyme Mixture and\or Custom Manufacturing Technology.
       

     

    2.6  Dyadic
      Entry into R&D and Other Agreements with Third Parties and Use of
      Foundational R&D Not Performed in the ABRD R&D
      Program. 

     

    (a)  ABRD
      expressly acknowledges that Dyadic is in no way whatsoever prohibited from
      entering into research and development agreements or other forms of
      collaboration or research and development agreements with Collaboration Partners
      and other Third Parties of any kind whatsoever, whether such agreements pertain
      to the Substrates derived from biomass of the kinds used by ABRD or not, or
      otherwise conducting any other R&D Programs (each an “Other
      R&D Program”),
      provided
      that
      in no
      event shall the terms of any such agreement with any other Person (i) impair
      Dyadic’s ability to comply fully with the terms of this Agreement, including the
      Dyadic’s obligation to grant to ABRD the commercial rights described in Article
      V hereof and (ii) require or contemplate Dyadic to breach any obligations of
      confidentiality to ABRD created by the provisions of Article VI
      hereof.

     

    (b)  Further,
      ABRD expressly acknowledges that Dyadic shall be free to use Foundational
      R&D developed from Other R&D Programs to satisfy requirements for the
      performance of such Foundational R&D for the ABRD R&D Program
      (“Interchangeable
      Foundational R&D”),
      and
      to have such Interchangeable Foundation R&D performed in conjunction with
      one or more Other R&D Programs if Dyadic determines, in its commercially
      reasonable discretion, that performance of that Interchangeable Foundational
      R&D in any such Other R&D Program is cost-effective or otherwise
      commercially desirable, and that doing so materially improves the prospects
      for
      achieving the ABRD R&D Objective; provided
      that
      (i) the
      ABRD representatives to the Steering Committee shall first be furnished with
      a
      complete presentation of Dyadic plans in connection therewith which, from a
      commercial reasonableness standard, demonstrates that the use of the
      Interchangeable Foundational R&D from such Other R&D Program would not
      materially diminish Dyadic’s R&D effort being applied to the development of
      Custom Enzyme Mixtures, and related Custom Processing Technologies and Custom
      Manufacturing Technologies, for ABRD and (ii) the use of such Interchangeable
      Foundational R&D from any Other R&D Program will not materially impair
      or limit ABRD in its enjoyment of its option to license the commercial rights
      described in Article V, below. 

     

    (c) ABRD
      expressly acknowledges and agrees that certain Foundational R&D to be
      performed in the ABRD R&D Program may be performed by Dyadic in satisfaction
      of Dyadic obligations to perform the same Foundational R&D for Third
      Parties, whether pursuant to Other R&D Programs or not.

     

    ARTICLE
      III  

     

    STEERING
      COMMITTEE

     

    3.1  Formation
      and Duration.
      Within
      ninety (90) days following the Agreement Date, the Parties shall establish
      an
      advisory board for the purposes set forth in Section 3.2 and with a composition
      specified by Section 3.3 (the “Steering
      Committee”).
      Except to the extent otherwise provided by mutual written agreement of the
      Parties, the Steering Committee shall not disband until the expiration of the
      Term or the earlier termination of this Agreement.

     

    3.2  Functions
      of Steering Committee.
      The
      functions of the Steering Committee shall be: (i) to approve the first annual
      Statement of Work submitted by Dyadic, which shall occur not more than one
      hundred eighty (180) days following the Agreement Date, and thereafter approve
      annual Statements of Work for each subsequent calendar year falling within
      the
      Term not less than thirty (30) days prior to the commencement of each such
      calendar year, which Statements of Work shall reflect decisions of the Steering
      Committee regarding research strategies, levels of effort (resources assigned)
      for each task listed therein, and to prioritize activities; (ii) to determine
      whether CE R&D Activities are Foundational R&D or Applications R&D;
      (iii) to determine which ABRD Substrates should become Applicable Substrates
      and
      make adjustments or modifications to each Statement of Work, as necessary to
      improve the prospects of achieving the ABRD R&D Objective; (iv) to monitor
      Dyadic’s progress in achieving the performance benchmarks fixed in each
      Statement of Work and provide overall guidance to Dyadic’s assigned researchers
      with regard thereto; (v) to monitor and control the ABRD R&D Program budget
      and to consider whether any proposed changes should be made to the R&D Plan
      and its execution; and (vi) to exchange suggestions, ideas and recommendations
      pertaining to the overall achievement of the ABRD R&D Objective. In addition
      to the voting members of the Steering Committee designated pursuant to
      Section 3.3, the Steering Committee may also have non-voting members
      nominated by one Party and approved by the other Party in its absolute
      discretion. 

     

    3.3  Composition.
      Dyadic
      shall designate a total of two (2) employees or officers of Dyadic to
      represent Dyadic, and ABRD shall designate two (2) employees or officers of
      ABRD or its Affiliates to represent ABRD on the Steering Committee. Only
      representatives designated pursuant to this Section 3.3 shall have the
      right to vote on the Steering Committee, provided that if any representative
      of
      a Party is unable to attend a meeting of the Steering Committee, another
      representative of that Party shall be entitled to attend and vote in his or
      her
      stead. The number of voting representatives may be increased upon mutual written
      agreement of the Parties. Each Party shall appoint or nominate its respective
      representatives to the Steering Committee and, from time to time, may substitute
      one or more of its representatives. Additional representatives or consultants
      of
      a Party may from time to time, with
      the
      consent of the other Party (with such consent not to be unreasonably withheld
      or
      delayed) attend meetings of the Steering Committee, subject to such
      representative’s and/or consultant’s agreement to comply with the
      confidentiality obligations equivalent to those set forth in Article VI and
      provided that such additional representatives shall have no vote. The Steering
      Committee may establish such working groups or sub-committees as it may choose
      from time to time to accomplish its purposes.

     

    3.4  Governance.
      The
      Steering Committee shall be chaired by one of the members of the Steering
      Committee, who shall be a representative of Dyadic. Decisions of the Steering
      Committee, shall be made by unanimous vote (with each Party’s voting
      representatives participating in the vote collectively having one (1) vote.

     

    3.5  Meetings.
      The
      Steering Committee shall meet not less than once every four (4) months in
      accordance with a schedule established by mutual written agreement of the
      Parties, with the location for such meetings determined by agreement of the
      Parties. Either Party may call for non-scheduled meetings of the Steering
      Committee for good cause, which shall occur at mutually agreeable times. The
      Steering Committee, upon mutual agreement, may meet by means of teleconference,
      videoconference or other similar communications equipment. No meeting may be
      conducted unless at least two (2) voting representatives of each Party are
      participating. 

     

    3.6  Records.
      The
      chair of the Steering Committee, or his/her designee, shall have responsibility
      for preparing minutes of each meeting. Such minutes shall provide a description,
      in reasonable detail, of the discussions at the meeting and decisions made
      by
      the Steering Committee. Such minutes shall be circulated on a confidential
      basis
      to all members of the Steering Committee within thirty (30) days following
      such
      meeting.

     

    ARTICLE
      IV  

     

    INTELLECTUAL
      PROPERTY

     

    4.1  Dyadic
      Ownership of Intellectual Property.
      Dyadic
      is the sole and exclusive owner of all intellectual property rights (i) in
      Dyadic Core Technologies, (ii) in all improvements thereto made or contributed
      to in whole or in part by Dyadic outside of the ABRD R&D Program (“
Dyadic
      Improvements”)
      and
      (iii) except for (x) certain “Jointly Developed Technology” (as defined in
      Section 4.3, below) and (y) ABRD Background Technology, in all Enzyme Mixtures,
      Processing Technologies, Manufacturing Technologies and any other New
      Applications Technology developed by Dyadic in its conduct of the ABRD R&D
      Program and the Master R&D Program, whether alone or in collaboration with
      any Third Parties (“New
      Technologies,”
and
      together with the Dyadic Core Technologies and the Dyadic Improvements,
      collectively “Dyadic
      Technology”)
      in
      order that Dyadic is able to freely research, develop and commercialize for
      manufacture, distribution, sale and/or license such Dyadic Technology or
      otherwise grant commercial rights to use the Dyadic Technology to Third Parties,
      including without limitation Collaboration Partners. 

     

    4.2   ABRD
      Ownership of its ABRD Background Technology.
      ABRD
      shall provide Dyadic with proprietary samples of various Applicable Substrates
      from time to time, as approved by the Steering Committee, and may disclose
      certain proprietary ABRD information pertaining to the source and composition
      of
      each such Applicable Substrate for the purpose of enabling Dyadic to perform
      the
      R&D Plan. ABRD shall remain the exclusive owner of all ABRD Background
      Technology, provided
      that
      to the
      extent that any ABRD Background Technology is incorporated into any Dyadic
      Technology, including but not limited to any Processing Technology, any
      Manufacturing Technology or any other Enzyme Mixture that Dyadic may develop,
      ABRD shall agree to grant to Dyadic, a license to use such ABRD Background
      Technology in accordance with the provisions of subsection (d) below in any
      manner Dyadic chooses, further
      provided that:

     

    (a)  Dyadic
      shall obtain ABRD’s prior written approval to incorporate each ABRD Background
      Technology into any Dyadic Technology, provided that ABRD shall consent thereto
      unless to grant such consent would cause ABRD to suffer a clear and convincing
      material adverse affect on its business, taken as a whole;

     

    (b)  In
      order
      to be eligible to such approval, Dyadic shall disclose in writing to ABRD each
      Dyadic Technology into which such ABRD Background Technology is incorporated
      and
      the method of such incorporation as promptly as practicable but in no case
      later
      than two (2) weeks after such incorporation, and Dyadic shall not enter into
      any
      agreement which restricts its ability to make any such disclosure;

     

    (c)  in
      no
      event shall Dyadic identify or otherwise disclose to any Third Party as ABRD
      Background Technology any ABRD Background Technology incorporated into any
      Dyadic Technology, nor shall Dyadic disclose any other information in breach
      of
      its obligations of confidentiality as set forth hereunder; and

     

    (d)  any
      license granted by ABRD to Dyadic under this Section 4.2 shall not be effective
      until the Parties have entered into a definitive license agreement granting
      to
      Dyadic a license to use, make, have made and sell products or services
      incorporating such ABRD Background Technology or any derivation thereof, on
      a
      world-wide, irrevocable, paid-up, non-exclusive, royalty-free, but freely
      transferable and freely sub-licensable basis, in consideration for Dyadic’s
      payment to ABRD of a one-time license fee in an amount which shall be
      commercially reasonable in light of the relevant circumstances, provided that
      if
      the Parties, after negotiating in good faith, are unable to agree upon the
      one-time license fee within a reasonable period of time following Dyadic’s
      request for any such license, such license fee shall be determined by binding
      arbitration in accordance with the provisions of Article X hereof, further
      provided in any event that such license fee and other terms shall be not less
      favorable to Dyadic then the most favorable terms offered by ABRD to any other
      licensee of ABRD Background Technology.

     

    4.3  Jointly
      Developed Technology.
      Subject
      to the last sentence of this Section 4.3, if any technology directly or
      indirectly related to the CE R&D Activities, shall, under applicable U.S.
      patent laws, be deemed to be jointly developed by Dyadic and ABRD in connection
      with the completion of any facet of the ABRD R&D Program (“Jointly
      Developed Technology”),
      then:

    

    (a)
      if
      the Jointly Developed Technology relates to either (x) Dyadic’s Core Technology,
      any Dyadic Improvements thereto and any New Technologies other than New
      Applications Technology or (y) any Enzyme Mixture and related Processing
      Technology and \or Manufacturing Technology developed by Dyadic, ABRD shall
      assign exclusive ownership thereof to Dyadic, and ABRD shall enjoy no rights
      therein except to the extent of a License from Dyadic on the terms set forth
      in
      Article V hereof; 

    

    (b) if
      the
      Jointly Developed Technology:

    

    (i) relates
      to the ABRD Background Technology other than New Applications Technology, Dyadic
      shall assign exclusive ownership thereof to ABRD, provided
      that
      ABRD
      shall license such Jointly Developed Technology to Dyadic to use, make, have
      made and sell products or services incorporating such Jointly Owned Technology
      or any derivation thereof, on a world-wide, irrevocable, paid-up, non-exclusive,
      royalty-free, but freely transferable and freely sub-licensable basis, in
      consideration for Dyadic’s payment to ABRD of a one time license fee in an
      amount which shall be commercially reasonable in light of the relevant
      circumstances, provided that if the Parties, after negotiating in good faith,
      are unable to agree upon the one-time license fee within a reasonable period
      of
      time following Dyadic’s request for any such license, such license fee shall be
      determined by binding arbitration in accordance with the provisions of Article
      X
      hereof, further provided in any event that such license fee and other terms
      shall be not less favorable to Dyadic then the most favorable terms offered
      by
      ABRD to any other licensee of ABRD Background Technology; 

    

    (ii) relates
      to New Applications Technology, Dyadic shall assign exclusive ownership thereof
      to ABRD, provided
      that
      ABRD
      shall license such Jointly Developed Technology to Dyadic to use, make, have
      made and sell products or services incorporating such Jointly Owned Technology
      or any derivation thereof, on a world-wide, irrevocable, paid-up, non-exclusive,
      royalty-free, but freely transferable and freely sub-licensable basis, in
      consideration for Dyadic’s payment to ABRD of a ten dollar ($10.00) one-time
      license fee;

    

    and

    

    (c) if
      the
      provisions of subsections (a) and (b) do not apply, then each of Dyadic and
      ABRD
      shall enjoy identical ownership rights in that Jointly Developed Technology
      except
      that
      ABRD
      shall be allowed to use such Jointly Developed Technology for any use which
      does
      not constitute the conduct of a trade or business activity which is competitive
      with the enzyme development and manufacturing business in which Dyadic is
      engaged (or in which Dyadic can reasonably demonstrate it was then planning
      to
      engage) on the date such Jointly Developed Technology was
      developed.

    

    ABRD
      agrees that the term “Jointly Developed Technology” also includes any new
      conceptions, ideas, inventions, innovations, concepts, reductions to practice,
      solutions to problems and other know-how or technology which directly or
      indirectly relates to the CE R&D Activities: (i) in the conduct of any
      Steering Committee review meeting, is revealed by ABRD at any such meeting
      or
      arises therefrom; or (ii) is conceived out of ABRD’s review of any confidential
      information furnished to ABRD by Dyadic in reports or other communications
      furnished or made by Dyadic in connection with its reporting to ABRD on the
      ABRD
      R&D Program. 

     

    4.4  Dyadic
      Disclosure of New Technologies to ABRD.
      To the
      extent that Dyadic or its Affiliates develop any New Technology during the
      Term
      of this Agreement, whether derived out of the Master R&D Program or derived
      out of the ABRD R&D Program, that might reasonably have commercial utility
      to any of the Applicable Substrates (each an “Applicable
      New Technology”),
      Dyadic covenants to ABRD that Dyadic will promptly disclose in writing to ABRD
      each such Applicable New Technology on a timely basis but in no case later
      than
      the next Steering Committee meeting following such development. Such disclosure
      of an Applicable New Technology shall include without limitation, descriptions
      of the nature, the perceived utility of, and the new and/or improved product
      and/or process aspects of that Applicable New Technology; provided
      that
      Dyadic
      shall not be obligated to disclose the identity of any Third Party contributing
      to or expressing a commercial interest in any Applicable New Technology or
      information owned or controlled by a Third Party in respect of which Dyadic
      has
      an obligation of confidentiality. Dyadic covenants that it will not enter into
      any agreement with any Third Party which restricts its ability to grant ABRD
      a
      non-exclusive license for ABRD to practice each Applicable New Technology and
      all Dyadic Technology or to make any such disclosure to ABRD pertaining to
      each
      such Applicable New Technology, to the extent each Applicable New Technology
      is
      owned by Dyadic or its Affiliates; except
      that
      Dyadic
      shall be free to grant the first license granted by Dyadic with respect to
      such
      Applicable New Technology on an exclusive basis to a Third Party for the first
      year of such Dyadic license to any such Third Party.

     

    4.5  Third
      Party Infringement.
      Each
      Party shall indemnify, defend and hold harmless the other Party and its
      Affiliates and their respective officers, directors, and employees (the
“Indemnifying
      Party”
and
      the
“Indemnified
      Parties,”
      respectively) from any losses, damages, liabilities, fines, penalties, and
      expenses (including reasonable attorneys' fees) that arise out of or result
      from
      any Third Party claims of infringement of any patent or copyright, or
      misappropriation of any trademark, trade secret or other intellectual property
      right, private right, or any other proprietary or personal interest
      (“Infringement
      Claim”),
      and
      related by circumstances to the existence of this Agreement and the Dyadic
      Technology, in the case of Dyadic, or the ABRD Background Technology, in the
      case of ABRD, provided by the Indemnifying Party to the Indemnified Party
      hereunder or performance under or in contemplation of this Agreement, except
      to
      the extent such Infringement Claim is due to the infringing acts and/or products
      of the other Party.

     

    (a) The
      Indemnified Parties shall furnish the Indemnified Party with reasonable notice
      of such Infringement Claim and, upon the written request of the Indemnified
      Parties, reasonable assistance and information (at the Indemnifying Party’s
      expense) in the defense or settlement of such Infringement Claim. The
      Indemnifying Party shall have sole control of the defense and settlement
      negotiations. The Indemnifying Party will not make any statement in its defense
      that is against the interest of Indemnified Parties and will not enter into
      any
      settlement without the consent of the Indemnified Parties that requires an
      admission of guilt or wrong-doing on the part of any of the Indemnified Parties
      or a monetary payment by Indemnified Parties that is in addition to the amount
      Indemnifying Party is obligated to pay on Indemnified Parties’ behalf under this
      Section.

     

    (b) The
      Indemnifying Party will have no obligation to indemnify the Indemnified Parties
      under this Section for Infringement Claims that result solely from: (i) the
      Indemnified Parties’ combination, operation or unauthorized use of the
      Indemnifying Party’s intellectual property or products supplied by the
      Indemnified Parties or others on behalf of Indemnified Parties where such
      product alone would not be infringing; (ii) any alteration or modification
      of an
      Indemnifying Party’s products by the Indemnified Parties not approved in writing
      by Indemnifying Party, if the products or intellectual property of the
      Indemnifying Party alone would not be infringing; (iii) the use of any product
      or intellectual property of the Indemnifying Party other than in accordance
      with
      its applicable specifications or documentation for such product or intellectual
      property where same was used in accordance with the applicable specifications
      or
      documentation would not be infringing; or (iv) Indemnifying Party’s compliance
      with Indemnified Parties’ designs, specifications, or instructions, where the
      product or intellectual property would not be infringing if it were not for
      such
      compliance. 

     

    (d) In
      the
      event of an Infringement Claim, or if the Indemnifying Party has reasons to
      believe its product or intellectual property may become the subject of an
      Infringement Claim, the Indemnifying Party will (i) procure
      for the Indemnified Parties the right to continue to use such product or
      intellectual property, as the case may be; and if such procurement is not
      commercially reasonable; (ii) replace or modify such product or intellectual
      property, or portion thereof, so it is no longer infringing; or (iii) if the
      Indemnifying Party, using commercially reasonable efforts, is unable to do
      (i)
      or (ii) above, refund all moneys paid to the Indemnifying Party by Indemnified
      Parties for such infringing product or intellectual property, less a reasonable
      amount for use based upon a five (5) year straight line depreciation
      calculation. 

     

    4.6  Restrictions
      on Dyadic Entry Into Agreements with Third Parties.
      Dyadic
      covenants to ABRD that Dyadic shall not enter into any agreement with any Third
      Party which restricts Dyadic’s ability to license any Custom Enzyme Mixture and
      related Custom Processing Technology and Custom Manufacturing Technology to
      ABRD
      for ABRD to practice.

     

    ARTICLE
      V  

     

    ABRD
      COMMERCIAL RIGHTS

     

    5.1   ABRD
      Commercial Rights.
      In
      respect of each Applicable Substrate, ABRD will have an option for a
      non-exclusive and non-transferable right (except as permitted by the provisions
      of Section 12.8 hereof) to one or multiple licenses (each a “License”),
      to
      the Custom Enzyme Mixture, related Custom Processing Technology and Custom
      Manufacturing Technology, (the “Licensed
      Enzyme Mixture,”
and
      its
      related “Licensed
      Processing Technology”
and
      “Licensed
      Manufacturing Technology,”
      respectively) developed by Dyadic for that Applicable Substrate, and on a per
      ABRD Facility basis for the internal consumption of ABRD and its Affiliates
      only
      (and for no other purpose) and only at the site of that licensed ABRD Facility
      (each a “Licensed
      ABRD Facility”),
      except as permitted by the provisions of Sections 5.1(c) and 5.1(e), below.
      

     

    (a) License
      Option Exercise Periods:
      The
      option period within which ABRD shall have the right to one or more Licenses
      for
      each “completed” Custom Enzyme Mixture and related Custom Processing Technology
      and Custom Manufacturing Technology for an Applicable Substrate shall be the
      ninety (90) day period of time following the completion by ABRD of a
      verification testing period of thirty (30) days after Dyadic has delivered
      to
      ABRD for such verification testing, a completed Applicable Substrate and its
      related Manufacturing Technology (as
      to
      such Custom Enzyme Mixture, related Custom Processing Technology and Custom
      Manufacturing Technology, its applicable “Option
      Period”).
       

     

    (b)
      Dyadic
      Technology Transfer to ABRD Facility:
      Incident to each License, Dyadic personnel will, promptly, but in no event
      more
      than ten (10) Business Days following the date of the execution of the license
      agreement evidencing the License for such Licensed Enzyme Mixture and related
      Licensed Processing Technology and Licensed Manufacturing Technology, provide
      ABRD with a complete technology transfer of the relevant Licensed Processing
      Technology and Licensed Manufacturing Technology and know-how to use the
      Licensed Enzyme Mixture and related Licensed Manufacturing Technology at the
      Licensed ABRD Facility.

     

    (c)
      ABRD
      Licensed Usage:
      Each
      License will permit ABRD to use the Licensed Enzyme Mixture and related Licensed
      Processing Technology and Licensed Manufacturing Technology solely for the
      production of ethanol for the internal consumption of ABRD and its Affiliates,
      and only on-site at the specifically Licensed ABRD Facility. Except for
“Qualified Manufacturing Sublicenses” (as defined below) and “Qualified Entire
      System Sublicenses” described in Section 5.1(e), each License will prohibit ABRD
      from selling, licensing or otherwise transferring either the Licensed
      Manufacturing Technology and/or Processing Technology, in whole or in part,
      or
      any of the Licensed Enzyme Mixture it produces, to any Third Party. ABRD shall
      have the right to grant a manufacturing sub-license of the Licensed Processing
      Technology and\or Manufacturing Technology for the exclusive purpose of enabling
      that manufacturing sub-licensee to manufacture such Licensed Enzyme Mixture
      solely for the internal consumption of ABRD and its Affiliates, and for no
      other
      purpose (a “Qualified
      Manufacturing Sublicense”),
      provided
      that
      no term
      of such sub-license shall be in any way inconsistent with ABRD’s obligations to
      Dyadic under ABRD’s License and ABRD shall, except in the case where the
      sublicensee’s principal place of business and situs of its usage of the Licensed
      Enzyme Mixture is located in North America or the European Union, first obtain
      the prior written consent of Dyadic, which consent shall not be unreasonably
      withheld or delayed, further
      provided that
      no such
      Qualified Manufacturing Sublicense shall be entered into until Dyadic shall
      have
      reviewed same and commercially reasonably satisfied itself that the terms
      thereof fully protect Dyadic against any prohibited use of the Licensed Enzyme
      Mixture and the related Licensed Processing Technology and Licensed
      Manufacturing Technology or
      the
      dissemination of Dyadic Technology outside the sub-licensee’s use and
      control.

     

       (d)
      Most
      Favored Nation Royalty Protection:
      If
      Dyadic offers a license of the Licensed Enzyme Mixture (but not any other Enzyme
      Mixture) to any licensee upon royalty terms more favorable to such licensee
      than
      the terms of the License to ABRD set forth herein, ABRD’s “Royalty” (as that
      term is defined in Section 5.2(b)) for the usage of that Enzyme Mixture shall,
      effective as of the date of such other licensing transaction, be reduced to
      the
      Royalty fixed in that other licensing transaction. 

     

    (e) Qualified
      Entire System Sublicenses:
      Notwithstanding any provision to the contrary, ABRD shall have the right to
      sub-license the Licensed Enzyme Mixture and related Licensed Processing
      Technology and Licensed Manufacturing Technology to a Third Party solely for
      such Third Party’s internal consumption of the Licensed Enzyme Mixture upon the
      following conditions: (i) such sublicense is made incident to ABRD’s license of
      ABRD’s ethanol production system into which Dyadic’s Licensed Processing
      Technology and\or Licensed Manufacturing Technology has been incorporated;
      (ii)
      except for the royalty terms and the right of such Third Party sub-licensee
      to
      use the Licensed Enzyme Mixture and related Licensed Processing Technology
      and
      Licensed Manufacturing Technology for its own internal consumption (and not
      to
      produce Licensed Enzyme Mixture for ABRD or any other Third Parties), no term
      of
      such sub-license shall be in any way inconsistent with ABRD’s obligations to
      Dyadic under its License; (iv) such Qualified Entire System Sublicense shall
      not
      be entered into by ABRD until Dyadic shall have reviewed same and commercially
      reasonably satisfied itself that the terms thereof fully protect Dyadic against
      any prohibited use of the Licensed Enzyme Mixture and the related Licensed
      Processing Technology and Licensed Manufacturing Technology or
      the
      dissemination of Dyadic Technology outside the sub-licensee’s use and control;
      (iii)
      such
      Third Party sub-licensee shall pay the same License Fees and Technology Transfer
      Fees to Dyadic as are fixed by subsections (a) and (c) of Section 5.2; (iv)
      ABRD
      shall, except in the case where the sub-licensee’s principal place of business
      and situs of its usage of the Licensed Enzyme Mixture is located in North
      America or the European Union, first obtain the prior written consent of Dyadic,
      which consent shall not be unreasonably withheld or delayed; and (v) ABRD shall
      pay to Dyadic a Royalty and License Fees on such Third Party Qualified Entire
      System Sublicense at the same License Fee rate and a royalty rate equal to
      the
“Applicable Royalty Rate” fixed in Section 5.2(a) and 5.2(b),
      respectively.

     

    5.2  License,
      Tolling and Technology Transfer Fees for Each License.
      As
      part
      consideration for the commercial rights granted by Dyadic to ABRD, ABRD shall
      pay the following amounts to Dyadic separately for each License:

     

    (a) License
      Fee Per License:
       ABRD
      shall pay to Dyadic a one-time license fee of $**** per **** gallons of ethanol
      capacity for the Licensed Enzyme Mixture and related Licensed Processing
      Technology and Licensed Manufacturing Technology for the Licensed ABRD Facility
      upon Dyadic’s delivery of the that Licensed Manufacturing Technology to that
      Licensed ABRD Facility (the “License
      Fee”),
      provided
      that
      (i) the
      maximum License Fee per License is $**** and (ii) not more than **** License
      Fee
      shall have to be paid in respect of a single ABRD Facility without regard to
      the
      number of Custom Enzyme Mixtures and related Custom Processing Technologies
      and
      Custom Manufacturing Technologies, licensed by ABRD for that particular ABRD
      Facility. 

     

    (b) Royalties
      Per License:
      ABRD
      shall pay to Dyadic a royalty in the amount of **** (US$****) per gallon of
      ethanol produced at that Licensed ABRD Facility using that Licensed Enzyme
      Mixture, related Licensed Processing Technology and\or Licensed Manufacturing
      Technology, on a quarterly basis thereafter, for a term of the greater of (x)
      the life of any patents included in either that Licensed Enzyme Mixture and\or
      its related Licensed Processing Technology and\or its related Licensed
      Manufacturing Technology (each
      an
“Applicable
      Patent”)
      or
      (y)
      **** years from the date of the commencement of commercial production of that
      Licensed Enzyme Mixture on-site at that Licensed ABRD Facility, provided
      that if the last Applicable Patent shall expire prior to the ****, the royalty
      rate shall drop from US$**** per gallon of ethanol to US$**** per gallon of
      ethanol (the “Applicable
      Royalty Rate”),
      provided that commencing on ****, and on the first day of each subsequent
      calendar year, the Applicable Royalty Rate shall be adjusted for inflation
      on an
      annual basis, using the United States Consumers Price Index and the year ****
      as
      the reference year;
      and

     

    (c) Technology
      Transfer Fees Per License:
      ABRD
      shall pay to Dyadic fees (calculated at **** of Dyadic’s the fully-loaded
      salaried cost of the deployed personnel performing the applicable transfer
      services) for time expended by Dyadic personnel (and reimburse all reasonable
      out-of-pocket expenses incurred) in completing Dyadic’s transfer of that
      Licensed Enzyme Mixture, related Licensed Processing Technology and related
      Licensed Manufacturing Technology to that Licensed ABRD Facility, and for any
      additional technical services furnished by Dyadic thereafter at that Licensed
      ABRD Facility (“Technology
      Transfer Fees”).
      

     

    5.3  Other
      License Terms.
      Other
      License provisions, including without limitation, provisions governing (i)
      royalty accounting, (ii) rights controlled by Dyadic which, if enforced against
      ABRD would abrogate or abridge the rights of ABRD under the Licenses granted
      pursuant to this Agreement, (iii) sub-licensor liability for misuse of the
      Licensed Enzyme Mixture and related Licensed Processing Technology and Licensed
      Manufacturing Technology, (iv) confidentiality and related restrictions on
      sub-licensing, (v) ownership of, rights to, and license-back provisions for
      improvements to such Licensed Enzyme Mixture and related Licensed Processing
      Technology and Licensed Manufacturing Technology, (vi) indemnities and (vii)
      other customary license provisions, will all be negotiated by the Parties in
      good faith.
      

    

    ARTICLE
      VI  

     

    CONFIDENTIALITY

    

    6.1  Definition.“Confidential
      Information”
means
      any information disclosed by one Party (the "Disclosing
      Party")
      to the
      other (the "Receiving
      Party"),
      whether oral, written, visual, electromagnetic, electronic or in any other
      form,
      and whether contained in memoranda, summaries, notes, analyses, compilations,
      studies or other documents, and whether same have been prepared by the
      Disclosing Party or the Receiving Party: (i) which, if in written, graphic,
      machine-readable or other tangible form is marked as "Confidential" or
      "Proprietary," or which, if disclosed orally or by demonstration, is identified
      at the time of initial disclosure as confidential and is summarized in writing
      and similarly marked and delivered to the Receiving Party within thirty (30)
      Days of initial disclosure; and (ii) which is (A) technical data or information,
      including proprietary host organisms and their strains, plasmids/vectors, DNA
      sequences, gene expression, fungal high throughput screening, enzymes and their
      applications, research and manufacturing protocols and practices, formulae,
      charts, analyses, reports, patent applications, trade secrets, ideas, methods,
      processes, know-how, computer programs, products, equipment, raw materials,
      designs, data sheets, schematics, configurations, specifications, techniques,
      drawings, and the like, whether or not relating to experimental data, projects,
      products, processes, research practices and the like, (B) past, present and
      future business, financial and commercial data or information, prices and
      pricing methods, marketing and customer information, financial forecasts and
      projections, and other data or information relating to strategies, plans,
      budgets, sales and the like; and (C) any other data or information delivered
      by
      the Disclosing Party to the Receiving Party or which the Receiving Party has
      acquired from the Disclosing Party by way of the former’s inspection or
      observation during visits to the research laboratory, manufacturing plan or
      other type of facility of the latter Party. The Parties expressly acknowledge
      and agree that all information of a proprietary and/or confidential nature
      furnished by the Disclosing Party to the Receiving Party in furtherance of
      the
      Disclosing Party’s obligations under this Agreement shall be deemed Confidential
      Information to which the provisions of this Article VI shall apply.

    

    6.2  Confidential
      Information Exclusions.
      Confidential Information will exclude information that the Receiving Party
      can
      demonstrate is: (i) now or hereafter, through no unauthorized act or failure
      to
      act on Receiving Party's part, in the public domain; (ii) known to the Receiving
      Party from a source other than the Disclosing Party (including former employees
      of the Disclosing Party) without an obligation of confidentiality at the time
      Receiving Party receives the same from the Disclosing Party, as evidenced by
      written records; (iii) furnished to others by the Disclosing Party without
      restriction on disclosure; or (iv) independently developed by the Receiving
      Party without use of the Disclosing Party's Confidential Information. Nothing
      in
      this Agreement shall prevent the Receiving Party from disclosing Confidential
      Information to the extent the Receiving Party is legally compelled to do so
      by
      any governmental investigative or judicial agency pursuant to proceedings over
      which such agency has jurisdiction; provided, however, that prior to any such
      disclosure, the Receiving Party shall (a) assert the confidential nature of
      the
      Confidential Information to the agency; (b) immediately notify the Disclosing
      Party in writing of the agency's order or request to disclose; and (c) cooperate
      fully with the Disclosing Party in protecting against any such disclosure and/or
      obtaining a protective order narrowing the scope of the compelled disclosure
      and
      protecting its confidentiality.

    

    6.3  Confidentiality
      Obligation.
      Except
      as provided in Section 6.4, for a period commencing June 10, 2006 and ending
      on
      the fifth anniversary of the expiration of the Term of the Agreement, the
      Receiving Party shall treat as confidential all of the Disclosing Party's
      Confidential Information and shall not use such Confidential Information for
      any
      purpose whatsoever other than for the purposes set forth herein, except as
      expressly otherwise permitted under this Agreement. Without limiting the
      foregoing, the Receiving Party shall use the same degree of care and means
      that
      it utilizes to protect its own information of a similar nature, but in any
      event
      not less than reasonable care and means, to prevent the unauthorized use or
      the
      disclosure of such Confidential Information to Third Parties. The Confidential
      Information may be disclosed only to employees or contractors of the Receiving
      Party with a "need to know" who are instructed and agree not to disclose the
      Confidential Information and not to use the Confidential Information for any
      purpose, except as set forth herein; provided, however, in the case of Dyadic,
      the term "employees or contractors of a Receiving Party" shall include employees
      of each of those of Dyadic’s independent contractor research organizations with
      whom Dyadic has written agreements pursuant to which such independent contractor
      research organization is bound by an obligation of confidence to Dyadic that
      makes such independent contractor research organization liable for any breach
      by
      its employees of those confidentiality obligations to Dyadic. The Receiving
      Party shall have appropriate written agreements with any such employees or
      independent contractor research organizations sufficient to comply with the
      provisions of this Agreement. A Receiving Party may not alter, decompile,
      disassemble, reverse engineer, or otherwise modify any Confidential Information
      received hereunder and the mingling of the Confidential Information with
      information of the Receiving Party shall not affect the confidential nature
      or
      ownership of the same as stated hereunder.

    

    6.4  Permitted
      Disclosures of Embedded ABRD Confidential Information.
      The
      preceding to the contrary notwithstanding, Dyadic shall be entitled to disclose
      ABRD Confidential Information to Third Parties if the following three (3)
      conditions are satisfied in connection with any such disclosure: (i) such ABRD
      Confidential Information is not identified to any such Third Party as being
      or
      having originated from ABRD Confidential Information; (ii) such disclosure
      of
      ABRD Confidential Information occurs solely by reason of the fact that such
      ABRD
      Confidential Information is embedded or otherwise embodied in Dyadic Technology,
      without regard to whether such Dyadic Technology was derived from Dyadic
      Foundational R&D activities or Applications R&D activities performed by
      Dyadic (whether in the conduct of the ABRD R&D Program or the conduct of the
      Master R&D Program); and (iii) any Third Party to whom such disclosure of
      such ABRD Confidential Information is made is a party to a written
      confidentiality agreement with Dyadic by which such Third Party is bound to
      hold
      such disclosure in confidence. 

    

    6.5  Confidentiality
      of Agreement and Superceding of Prior Confidentiality
      Agreement. 

    Each
      Party agrees that the terms and conditions, but not the existence, of this
      Agreement will be treated as the other Party's Confidential Information and
      that
      no reference to the terms and conditions of this Agreement or to commercial
      metrics and activities pertaining thereto (but no disclosure of any intellectual
      property of ABRD may be made, other than to list same on disclosure schedules)
      may be made in any form of press release or public statement without first
      consulting with the other Party; provided,
      however,
      that
      each Party may disclose the terms and conditions of this Agreement: (i) as
      may
      be required by law; (ii) to legal counsel of the Parties; (iii) in confidence,
      to accountants, banks, and financing sources and their advisors; (iv) in
      confidence, in connection with the enforcement of this Agreement or rights
      under
      this Agreement; or (v) in confidence, in connection with a merger or acquisition
      or proposed merger or acquisition, or the like. The Parties hereby expressly
      agree that the provisions of this Article VI shall supercede the terms of that
      certain Confidentiality Agreement dated June 10, 2006, which shall be of no
      further force and effect, and that this Article VI shall apply to all non-public
      information furnished by Dyadic to ABRD since the June 10, 2006.

    

    6.6  No
      Confidential Information of Other Persons. 

     

    Each
      Party represents and warrants to the other that it has not used and shall not
      use in the course of its performance hereunder, and shall not disclose to the
      other, any confidential information of any other Person, unless it is expressly
      authorized in writing by such Person to do so.

     

    6.7  Required
      Disclosure.
      Each
      Party shall be entitled to make such disclosures as shall be required by law,
      provided that if 

     

    the
      Receiving Party is required to disclose the Disclosing Party's Confidential
      Information pursuant to the order or requirement of a court, administrative
      agency, or other governmental body, the Receiving Party shall provide prompt
      notice thereof to the Disclosing Party and shall use its reasonable efforts
      to
      obtain a protective order or otherwise prevent public disclosure of such
      information.

     

     

    ARTICLE
      VII  

     

    REPRESENTATIONS
      AND WARRANTIES

     

    7.1  Representations
      and Warranties of the Parties.
      The
      Parties represent and warrant that:

     

    (a)  it
      is a
      company duly organized, validly existing and in good standing under the laws
      of,
      in the case of Dyadic, Florida, and in the case of ABRD, Missouri;

     

    (b)  the
      execution of this Agreement on its behalf has been properly authorized by all
      necessary corporate action;

     

    (c)  this
      Agreement is valid and binding on it and enforceable against it in accordance
      with the terms hereof, subject to applicable bankruptcy and similar laws
      affecting creditors’ rights and remedies generally, and subject, as to
      enforceability, to general principles of equity; 

     

    (d)  neither
      the execution nor the performance of this Agreement will constitute a breach
      or
      violation of the terms of its charter or organizational documents or any
      contract, agreement or other commitment to which it is a party or by which
      it or
      any of its properties are bound; and

     

    (e)  there
      are
      no bankruptcy, insolvency, receivership or similar proceedings involving it
      or
      any of its Affiliates either pending or being contemplated, or any other pending
      or threatened actions, suits, arbitrations or other proceedings by or against
      it.

     

    7.2  Disclaimer.
      Except
      for the foregoing warranties (and commercially reasonable warranties of Dyadic
      to ABRD that shall be included in the license agreement evidencing the
      License(s) granted by Dyadic to ABRD in accordance with the provisions of
      Article V hereof), THE FOREGOING WARRANTIES OF EACH PARTY ARE IN LIEU OF ALL
      OTHER WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
      STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
      MERCHANTABILITY AND FITNESS FOR PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY
      DISCLAIMED. 

     

    ARTICLE
      VIII  

     

    INDEMNIFICATION

     

    8.1  In
      General.
      Subject
      to the provisions of Section 9.8 hereof, each Party (the “Indemnifying
      Party”)
      shall
      defend, indemnify and hold harmless the other Party, its Affiliates, and its
      and
      their employees, officers, directors, agents, distributors and licensees (each
      an “Indemnified
      Party”)
      against any loss, damage, expense, or cost, including reasonable attorneys’
fees, arising out of any claim, demand, action, suit, investigation, arbitration
      or other proceeding by a Third Party (an “Action”)
      based
      on (a) the Indemnifying Party’s breach of this Agreement; or (b) negligence,
      willful misconduct or violation of any law or regulation by the Indemnifying
      Party, its Affiliates, or its or their employees, officers, directors, or
      agents.

     

    8.2  Procedure.
      If an
      Indemnified Party becomes aware of any Action it believes is indemnifiable
      under
      Section 8.1, (a) the Indemnified Party shall give the Indemnifying Party
      prompt written notice of such Action; (b) the Indemnifying Party shall
      assume, at its expense, the sole defense of such claim or cause of action
      through counsel selected by it and reasonably acceptable to the Indemnified
      Party, except that in the case of a conflict of interest between the Parties,
      the Indemnifying Party shall, at the Indemnifying Party’s expense, provide
      separate counsel for the Indemnified Party selected by the Indemnified Party;
      (c) the Indemnifying Party shall maintain control of such defense, including
      any
      decision as to settlement, except that any settlement of an Action shall require
      the written consent of both Parties, which consent shall not be withheld or
      delayed unreasonably; (d) the Indemnified Party may, at its option and
      expense, participate in such defense, and in any event, the Parties shall
      cooperate with one another in such defense; and (e) the Indemnifying Party
      shall
      bear the total costs of any court award or settlement in such Action.

     

    ARTICLE
      IX  

     

    TERM
      AND TERMINATION

     

    9.1  Term.
      The term
      of this Agreement (the “Term”),
      unless sooner terminated as below set forth, shall commence as of the Effective
      Date and, end upon the first to occur of: (i) the third anniversary of the
      date
      that the Steering Committee approved the initial Statement of Work; or (ii)
      ABRD’s receipt of Dyadic’s written notice of its full funding of the Applicable
      R&D Spend (the “Program
      Completion Date”).
      

     

    9.2  Termination
      for Default.
      If
      either Party materially breaches this Agreement or the SPA and fails to cure
      the
      breach within thirty (30) days after receiving written notice thereof from
      the
      other Party identifying with reasonable specificity the nature of the alleged
      breach, the other Party may terminate this Agreement upon further written notice
      to the breaching Party at any time that the breach remains uncured.

     

    9.3  Termination
      for Insolvency.
      Either
      Party may terminate this Agreement if the other Party becomes insolvent,
      voluntarily files a petition for relief under bankruptcy or any similar or
      other
      insolvency laws (or has a petition filed against it and the same remains
      undischarged or unstayed for 60 days) or voluntarily or involuntarily enters
      receivership or any similar or other insolvency proceeding. 

     

    9.4  Effect
      of Termination.
      In the
      event of termination of this Agreement either on or prior to the expiration
      of
      its fixed term by ABRD or Dyadic:

     

    (a) if
      this
      Agreement was breached by Dyadic on account of its failure to achieve an
      aggregate cumulative Applicable R&D Spend of not less than $10,000,000.00 on
      or before the close of the R&D Spend Measurement, then Dyadic shall grant to
      ABRD the Licenses fixed in Article V for the Custom Enzyme Mixture, related
      Custom Processing Technology and Custom Manufacturing Technology for each
      Applicable Substrate on a Royalty-free basis (and free of any duty of Royalty
      accounting thereunder), and further, ABRD shall have the right to sublicense
      the
      Enzyme Mixture and related Custom Processing Technology and Custom Manufacturing
      Technology in accordance with the provisions of Sections 5.1(c) and 5.1(e),
      on a
      Royalty-free basis (and free of any duty of Royalty accounting thereunder),
      except that no consent shall be required of Dyadic, provided that the
      obligations of Dyadic to deliver such Licenses to ABRD shall be only as to
      such
      of that technology as has been developed by Dyadic up through the date of the
      breach, further
      provided
      that if
      Dyadic and ABRD are unable to agree upon the material terms of the license
      agreement evidencing the Licenses referred to in Section 5.3 hereof, such that
      the Parties are compelled to resort to arbitration pursuant to the provisions
      of
      Section 10.1, then in that event, without regard to the outcome of such
      arbitration proceedings, Dyadic shall (x) promptly following the execution
      of
      the final form of agreement evidencing such Licenses, reimburse ABRD for all
      reasonable costs (including legal fees) incurred by it in the negotiation,
      arbitration and resolution of the all matters surrounding such arbitration
      and
      the execution and delivery of that form agreement evidencing the Licenses,
      and
      (y) pay all of the costs of the referenced arbitration;

     

    (b) if
      this
      Agreement is materially breached by ABRD which breach is not cured within the
      time period fixed by the provisions of Section 9.2 hereof, then any provision
      to
      the contrary notwithstanding, provided
      that
      ABRD
      shall continue to enjoy the benefit of all Licenses granted to it by Dyadic
      pursuant to the provisions of Article V hereof prior to the date of such breach
      (including all rights to grant sublicenses as therein set forth), all further
      rights of ABRD rights to license Custom Enzyme Mixtures and related Custom
      Processing Technologies and Custom Manufacturing Technologies, shall
      automatically terminate, Dyadic shall have no further obligation to continue
      to
      make any Applicable R&D Spend, and Dyadic shall be entitled to damages in
      the amount determined by arbitration pursuant to the provisions of Article
      X
      (except in the instance where the provisions of Section 10.3 shall apply, in
      which case such damages shall be determined by a court of competent
      jurisdiction); and

     

    (c) if
      this
      Agreement is materially breached by Dyadic for any reason other than that set
      forth in subsection (a), above, which breach is not cured within the time period
      fixed by the provisions of Section 9.2 hereof, provided
      that
      Dyadic
      shall continue to enjoy all of the benefit of all licenses granted to it by
      ABRD
      pursuant to the provisions of Sections 4.2 and 4.3(b) hereof prior to the date
      of such breach (including all of the rights in respect thereof set forth
      therein), all further rights of Dyadic to license ABRD Background Technology
      under Section 4.2 and Jointly Developed Technology under Section 4.3(b) shall
      automatically terminate. In addition to enjoying the commercial rights set
      forth
      in Article V hereof, ABRD shall be entitled to damages in the amount determined
      by arbitration pursuant to the provisions of Article X (except in the instance
      where the provisions of Section 10.3 shall apply, in which case such damages
      shall be determined by a court of competent jurisdiction).

     

    9.5  Dyadic
      Breach of Covenant to Make Applicable Spend.
      Dyadic
      hereby covenants and agrees that if Dyadic breaches its covenant to ABRD to
      achieve an aggregate cumulative Applicable R&D Spend of not less than
      $10,000,000.00 on or before the close of the R&D Spend Measurement, then in
      that event, without regard to the consequences to the Dyadic fixed by the
      provisions of Section 4.6 of the SPA, ABRD shall be entitled to the remedy
      fixed
      in Section 9.4(a) hereof.

     

    9.6  Effect
      of Termination; Other Remedies Available.
      Notwithstanding anything in this Agreement to the contrary, in the event of
      termination of this Agreement as is provided in this Article IX, each Party
      shall have available every remedy allowed under law and equity, including but
      not limited to specific performance, suit for damages, and
      rescission.

     

    9.7  Effectiveness
      of this Agreement.
      The
      effectiveness of this Agreement is conditioned upon the Closing of the purchase
      and sale of the “Purchased Securities” by ABRD from Dyadic pursuant to the terms
      of the SPA Agreement on or before the “Closing Date” fixed by the SPA (as those
      terms are defined therein).

     

    9.8  Limitation
      of Liability.
      EXCEPT
      WITH RESPECT TO DAMAGES TO THIRD PARTIES UNDER INFRINGEMENT INDEMNIFICATION
      OBLIGATIONS SET FORTH IN SECTION 4.5 HEREOF OR WITH RESPECT TO BREACH OF
      CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE VI HEREOF WHICH BREACH IS
      EITHER INTENTIONAL OR ON ACCOUNT OF AN ACT OR ACTS OF GROSS NEGLIGENCE (BUT
      NOT
      SIMPLE NEGLIGENCE)`, NEITHER PARTY SHALL BE LIABLE TO THE OTHER UNDER ANY
      CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER THEORY FOR ANY INDIRECT,
      INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING WITHOUT LIMITATION LOST PROFITS
      IN
      CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT OR ANY PURCHASE ORDER
      IRRESPECTIVE OF WHETHER SUCH PARTY HAD ADVANCE NOTICE OR KNOWLEDGE OF THE
      POSSIBILITY OF SUCH DAMAGES. 

     

    ARTICLE
      X  

     

    DISPUTE
      RESOLUTION

     

    10.1  Arbitration
      of Disputes.
      Other
      than any dispute arising in connection with the obligations of the Parties
      created by the provisions of Article VI hereof (pertaining to Confidential
      Information) or the right of a Party to enjoy the benefits of all intellectual
      property of which Party is the sole and exclusive owner, as to which the
      provisions of Section 10.3 hereof shall apply, any other dispute between the
      Parties not resolved within fifteen (15) days after one Party notifies the
      other
      Party that it wishes to discuss the matter (“Dispute”),
      shall
      be resolved by arbitration in New York City, New York under the Commercial
      Arbitration Rules (“Commercial
      Rules”)
      of the
      American Arbitration Association (“AAA”),
      including the AAA Supplementary Procedures for Large Complex Commercial Disputes
      (“Complex
      Procedures”),
      as
      such rules shall be in effect on the date of delivery of a demand for
      arbitration (“Demand”),
      except to the extent that such rules are inconsistent with the provisions set
      forth herein. Notwithstanding the foregoing, the Parties may agree that the
      Complex Procedures shall not apply in order to promote the efficient arbitration
      of Disputes where the nature of the Dispute, including the amount in
      controversy, does not justify the application of such procedures.

     

    10.2  Arbitration
      Procedures.
      The
      arbitration shall be conducted in the English language before one (1) impartial
      arbitrator selected by mutual agreement of the Parties. If the Parties are
      unable to mutually agree on an impartial arbitrator within ten (10) days, a
      neutral arbitrator shall be appointed by the AAA from the panel of commercial
      arbitrators of any of the AAA Large and Complex Resolution Programs. The
      arbitrator’s award shall be a final and binding determination of the dispute. If
      awarded by the arbitrator, the prevailing Party shall be entitled to recover
      its
      reasonably attorneys’ fees and expenses, including arbitration administration
      fees incurred in connection with such proceeding. 

     

    10.3  Judicial
      Action.
      Notwithstanding the above, either Party may seek from any court having
      jurisdiction hereof any interim, provisional or injunctive relief or specific
      performance that may be necessary to protect that Party’s intellectual property
      rights (including its Confidential Information) and tangible property or to
      maintain the status quo before, during or after the pendency of the arbitration
      proceeding. The institution and maintenance of any judicial action or proceeding
      for any such interim, provisional or injunctive relief shall not constitute
      a
      waiver of the right or obligation of either Party to submit the dispute to
      arbitration, including any claims or disputes arising from the exercise of
      any
      such interim, provisional or injunctive relief.

     

    ARTICLE
      XI  

     

    NOTICES

     

    11.1  Delivery
      of Notices.
      All
      notices sent under this Agreement shall be in writing and (a) hand delivered;
      (b) transmitted by legible facsimile with a copy sent concurrently by certified
      mail, return receipt requested; or (c) delivered by prepaid priority delivery
      service.

     

    11.2  Addresses
      for Notices.
      Notices
      shall be sent to the Parties at the following addresses or such other addresses
      as the Parties subsequently may provide:

    

    If
      to
      Dyadic:    140
      Intracoastal Pointe Drive, Suite 404, 

    Jupiter,
      Florida 33477 

    

    Facsimile
      No.: 561-743-8333

    Telephone
      No.: 561-743-8513

    Attn:
      Chief Executive Officer

    

    With
      a
      copy to: Greenberg
      Traurig, LLP

    77
      West
      Wacker Drive, Suite 2500

    Chicago,
      Illinois 60601

    

    Facsimile:
      312-899-0431

    Telephone:
      312-476-5015

    Attn:
      Robert I. Schwimmer, Esq.

     

    If
      to
      ABRD:    1400
      Elbridge Payne

    Suite
      212

    Chesterfiled,
      MO 63017

    Attention:
      Gerson Santos

     

    Telephone: (636)
      728-0508

    Fax:  (636)
      728-1148

    

    With
      a
      copy to: Squire,
      Sanders & Dempsey L.L.P

    127
      Public Square, Suite 4900

    Cleveland,
      Ohio 44114

    Telephone:
      216-479-8552

    Facsimile:
      216-479-8780

    Attn:
      Laura
      D.
      Nemeth

    

     

    ARTICLE
      XII  

     

    MISCELLANEOUS

     

    12.1  No
      Authority to Bind Parties.
      Neither
      Party shall have the authority and shall not purport to have the authority
      to
      enter into any contracts or make any representations or warranties on behalf
      of
      the other Party or its Affiliates or otherwise to bind or obligate the other
      Party or its Affiliates in any manner whatsoever. 

     

    12.2  Relationship
      Between Parties.
      Dyadic
      and ABRD are separate business entities, and shall not be considered as joint
      ventures, partners, agents, servants, employee, or fiduciaries of each other.
      Neither this Agreement nor the relationship between the Parties shall be
      considered in any way to deem ABRD a franchisee of Dyadic for any purpose
      whatsoever. The Parties specifically agree that any obligation to act in good
      faith and to deal fairly with each other which may be implied in law shall
      be
      deemed satisfied by the Parties’ compliance with the express terms of this
      Agreement.

     

    12.3  Foreign
      Corrupt Practices Act and Anti-Bribery Provisions.
      

     

    (a)  During
      the Term of this Agreement, the Parties will not, and shall cause their
      Affiliates to not, make or provide any payments or gifts or any offers or
      promises of any kind, directly or indirectly, to any official of any government
      or to any official of any agency or instrumentality of any government, or to
      any
      political party or to any candidate for political office (the foregoing
      individually and collectively referred to as “Government
      Official”).
      If on
      the date hereof or at any time during the term of this Agreement any
      Governmental Official or an active member of the armed services of any
      government (a) owns an interest in that certain Party or its Affiliate, (b)
      has
      any legal or beneficial interest in this Agreement or in payments to be received
      by that certain Party or its Affiliate in connection with the services to be
      provided by hereunder, or (c) is a director, officer or employee of that certain
      Party or its Affiliate, that certain Party will notify the other Party and
      will
      take such actions to assure that the affected person does not take any action,
      official or otherwise, and/or use any influence in connection with the other
      Party’s business.

     

    (b)  Each
      Party warrants, on its behalf and on behalf of its Affiliates, that they have
      not and will not pay or offer, directly or indirectly, any commission or finders
      or referral fee to any person or entity in connection with its activities
      relating to this Agreement, unless it has obtained prior written agreement
      thereto from the other Party.

     

    (c)  Each
      Party, including its Affiliates, and all of its and their directors, officers,
      shareholders, employees and agents, have conducted with respect to the
      activities contemplated in this Agreement and shall during the term of this
      Agreement conduct all of their activities in accordance with the U.S. Foreign
      Corrupt Practices Act and the substantive provisions of the OECD Convention
      on
      Combating Bribery of Foreign Public Officials in International Business
      Transactions dated 21 November 1997 as well as any amendments
      thereto.

     

    12.4  Governing
      Law; Jurisdiction.
      This
      Agreement shall be governed by and construed in accordance with the law of
      the
      State of Delaware, without regard to its conflict of laws principles.

     

    12.5  Recordkeeping
      and Inspection.
      During
      the Term and for three (3) years thereafter, or such longer period as may be
      required by law, the Parties shall keep and maintain reasonable records of
      all
      agreements, approvals and other activities relating to this Agreement. Without
      limiting the relevant terms of any License pertaining to the subject matter
      of
      this Section 12.5, Dyadic may, at its expense, during regular business hours
      and
      with reasonable prior notice, examine, review, and inspect all facilities in
      which Dyadic Technology is being practiced by or on behalf of ABRD and review,
      audit and analyze ABRD’s records relating to this Agreement (in combination,
      conduct an “Inspection”).
      ABRD
      may, at its expense, during regular business hours and with reasonable prior
      notice, conduct an Inspection of all facilities in which the ABRD R&D
      Program is being performed by or on behalf of Dyadic and review, audit and
      analyze Dyadic’s records relating to this Agreement. 

     

    12.6  Severability.
      The
      provisions of this Agreement are severable, and the unenforceability of any
      provision of this Agreement shall not affect the enforceability of the remainder
      of this Agreement. The Parties acknowledge that it is their intention that
      if
      any provision of this Agreement is determined by a court to be unenforceable
      as
      drafted, that provision should be construed in a manner designed to effectuate
      the purpose of that provision to the greatest extent possible under applicable
      law.

     

    12.7  Construction
      of Agreement.
      The
      Parties acknowledge that they thoroughly have reviewed this Agreement and
      bargained over its terms. Accordingly, this Agreement shall be construed without
      regard to the Party or Parties responsible for its preparation and shall be
      deemed to have been prepared jointly by the Parties.

     

    12.8  Cumulative
      Rights and Remedies.
      The
      rights and remedies provided in this Agreement and all other rights and remedies
      available to either Party at law or in equity are, to the extent permitted
      by
      law, cumulative and not exclusive of any other right or remedy now or hereafter
      available at law or in equity. Neither asserting a right nor employing a remedy
      shall preclude the concurrent assertion of any other right or employment of
      any
      other remedy, nor shall the failure to assert any right or remedy constitute
      a
      waiver of that right or remedy.

     

    12.9  Assignment.
      Either
      Party may transfer or assign its rights and obligations under this Agreement
      or
      any License to any Affiliate or to any Person who purchases from that Party
      all
      or substantially all of the assets of the business to which this Agreement
      pertains (and in the case of ABRD, the ABRD Affiliate owning or operating the
      ABRD Facility shall have the right to pledge its License to secure funded
      indebtedness). No other assignment of this Agreement, or any rights or
      obligations thereunder may be made by either Party without the consent of the
      Party, which consent shall not be unreasonably withheld or delayed. Subject
      to
      the foregoing, this Agreement shall be binding upon and inure to the benefit
      of
      the Parties and their respective successors, permitted assigns and legal
      representatives. 

     

    12.10  Headings.
      All
      headings in this Agreement are included solely for convenient reference, are
      not
      intended to be full and accurate descriptions of the contents of this Agreement,
      shall not be deemed a part of this Agreement, and shall not affect the meaning
      or interpretation of this Agreement.

     

    12.11  Publicity.
      Subject
      to Dyadic’s SEC reporting responsibilities (in respect of which each Party shall
      furnish the other reasonable advance notice to the extent practicable or not
      in
      violation of applicable securities laws), neither Party shall, without the
      prior
      written approval of the other Party, (i) advertise or otherwise publicize
      the existence or terms of this Agreement or any other aspect of the relationship
      between the Parties, or (ii) use the other Party’s or its Affiliates or any
      or their employees’ names or any trade name, trademark or service mark belonging
      to the other Party in press releases or in any form of advertising.

     

    12.12  Amendments.
      This
      Agreement may be modified or amended only by written agreement of the
      Parties.

     

    12.13  English
      Language.
      The
      Parties shall use the English language in all communications relating to this
      Agreement, and the English language version of this Agreement signed by the
      Parties shall control over any and all translations.

     

    12.14  Entire
      Agreement.
      This
      Agreement, together with the SPA, constitutes the entire agreement between
      the
      Parties concerning the subject matter of this Agreement and supersedes all
      prior
      agreements between the Parties concerning the subject matter
      hereof.

     

    12.15  Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and all of which when taken together
      shall constitute this Agreement.

     

    12.16  Survival.
      Article
      I (relating to definitions), Section 2.1 (to the extent the terms thereof
      provide for obligations to be performed following the expiration of the
      Agreement), Article IV (relating to ownership of intellectual property),
      Article VI (relating to Confidential Information), Section 7.2 (pertaining
      to
      warranty disclaimers), Article VIII (relating to indemnification), Sections
      9.4,
      9.5, 9.6 and 9.8, Article X (relating to dispute resolution), Article XI
      (relating to notices), Article XII (relating to miscellaneous matters) of this
      Agreement shall survive the expiration or termination of this Agreement in
      any
      event. Article V (relating to ABRD commercial rights) shall survive the
      expiration or termination of this Agreement except in the instance where this
      Agreement was terminated on account of ABRD’s default pursuant to the provisions
      of Section 9.2 hereof.

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this R&D Agreement to be
      duly executed by their respective authorized signatories as of the date first
      indicated above.

     

    DYADIC
      INTERNATIONAL (USA), INC.

     

    

     

    By: /s/ 

    Name:
      Mark A. Emalfarb

    Title:
      Chief Executive Officer

    ABENGOA
      BIOENERGY R&D, INC.

    

     

    By: /s/ 

    Name:
      Christopher G. Standlee 

    Title:
      Vice President

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A1 
      Five (5) pages have been omitted from this Exhibit A as a result of the
      confidential portions omitted herefrom and filed separately with the Commission.
      

     

    R&D
      Plan

     

    ABRD
      / DIL

     

    26
      Oct 2006

     

    Capitalized
      terms not expressly defined herein shall have the meanings assigned them in
      the
      R&D Agreement

     

    1.0
      R&D Objective

     

    ****

     

    2.0
      Background

     

    ****

     

    3.0
      Scope of Work

     

    ****
      

     

    3.1
      ****

     

    3.1.1
      ****

     

    ****
      

     

    3.1.2
      ****

     

    ****

     

    3.1.3
      ****

     

    ****

     

    3.2
      ****

     

    3.2.1
      ****

     

    ****
      

     

    3.2.2
      ****

     

    ****

     

    3.2.2.1
      ****
      ****

     

    3.2.2.2
      ****
****

     

    

    	3.2.3  	
            ****
              

          

     

    ****

     

    3.3
      ****

     

    

    	3.3.1  	
            ****

          

     

    ****

     

    3.3.2
      **** 

     

    ****

     

    3.3.2.1
      **** 

     

    ****

     

    3.3.2.2
      ****

     

    ****

     

    3.3.2.3
      ****

     

    ****

     

    

    	3.3.3  	
            ****

          

     

    ****

     

    

    	3.4  	
            ****

          

    

    	3.4.1  	
            ****

          

     

    ****

     

    

    	3.4.2  	
            ****

          

     

    ****

     

    

    	3.4.3  	
            ****

          

     

    ****

     

    

    3.5
      ****

    

    	3.5.1  	
            ****

          

     

    ****

     

    

    	3.5.2  	
            ****

          

     

    ****

     

    

    	3.5.3  	
            ****

          

     

    ****

     

    

    	4.  	
            Resources

          

     

    ****

     

    

    	5.  	
            R&D
              Steering Committee

          

    ****

     

    

    	6.  	
            Milestones

          

     

    ****

     

    7.
      Project Budget:

     

    ****

     

    

    

    179568405v2

    

      

      
         

        1Amendment to the Service/Consulting Agreement Bland Chamberlain and Jose Chapa

    AMENDMENT
      TO THE SERVICE/CONSULTING

    AND

    EMPLOYMENT
      AGREEMENTS

    

    March
      18,
      2007

    

    Board
      of
      Directors

    American
      Surgical Holdings, Inc.

    10039
      Bissonnet #250

    Houston,
      Texas 77036

    

    Dear
      Board of Directors:

    

    In
      reference to those certain Service/Consulting and Employment Agreements between
      ASA, Inc. and Zak Elgamal, Jaime Olmo-Rivas, Bland Chamberlain, and Jose Chapa,
      and their respective individual corporations (“Agreements”), these Agreements
      are hereby modified to confirm the understanding amongst the parties and the
      Company that the $3,000,000 termination payment set forth in the
      Service/Consulting Agreements shall only become due and payable in the
      circumstance where the Company, upon written unanimous resolution of all
      directors, terminated the Service/Consulting Agreements with the Company for
      reasons other than cause. In the event that any of the named parties (other
      than
      the Company) terminate such Agreement for any reason prior to the maturity
      of
      the Agreement or should the Agreements reach maturity of the then current term,
      the termination penalty is neither due nor payable by the Company. For purposes
      of these Agreements, Cause shall be defined as the conviction of the person
      for
      any felony criminal act. All other benefits, compensations, and terms set forth
      in such agreements shall remain in full force and effect.

    

    It
      is
      also hereby agreed that the Employment Agreements between ASA, Inc. and Zak
      Elgamal, Jaime Olmo-Rivas, Bland Chamberlain, and Jose Chapa shall remain in
      force, in accordance with their individual terms and are not in any manner
      related to the Agreements set forth above. The laws of the State of Texas govern
      this amendment and the Service/Consulting and the Employment Agreements
      mentioned herein.

    

    ACCEPTED
      AND AGREED TO BY:

    AMERICAN
      SURGICAL HOLDINGS INC.

    

    By:/s/
      Zak Elgamal 

    

    ASH
      INC.

    

    /s/
      Zak Elgamal         /s/
      Jaime Olmo-Rivas 

    ZAK
      ELGAMAL        JAIME
      OLMO-RIVAS

    

    /s/
      Jose Chapa        /s/
      Bland Chamberlain

    JOSE
      CHAPA     LAND
      CHAMBERLAIN

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