EXECUTION COPY |
Exhibit 10.19 UNIT PURCHASE AGREEMENT BY AND AMONG AFBS, INC., THERICS, LLC AND RANDALL R. THEKEN DATED AS OF JUNE 30, 2005 |
TABLE OF CONTENTS |
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4.4 | Employee Matters. | 13 | ||
4.5 | Transfer Taxes. | 13 | ||
4.6 | Income Tax Treatment of Transactions. | 13 | ||
4.7 | Put Right. | 13 | ||
ARTICLE V | SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION | 14 | ||
5.1 | Survival of Representations and Warranties. | 14 | ||
5.2 | Indemnification. | 15 | ||
5.3 | Third-Party Claim Indemnification Procedures. | 16 | ||
5.4 | Exclusive Remedy. | 17 | ||
5.5 | Allocation of Adjusted Annual License Maintenance Fee. | 17 | ||
5.6 | Delivery of Certain Information. | 17 | ||
ARTICLE VI | MISCELLANEOUS PROVISIONS | 17 | ||
6.1 | Notices. | 17 | ||
6.2 | Amendment. | 18 | ||
6.3 | Entire Agreement. | 18 | ||
6.4 | Waiver. | 18 | ||
6.5 | Third-Party Beneficiaries. | 19 | ||
6.6 | No Assignment; Binding Effect. | 19 | ||
6.7 | Headings. | 19 | ||
6.8 | Invalid Provisions. | 19 | ||
6.9 | Governing Law. | 19 | ||
6.10 | WAIVER OF TRIAL BY JURY. | 19 | ||
6.11 | Construction. | 19 | ||
6.12 | Counterparts. | 20 | ||
6.13 | Specific Performance. | 20 | ||
ARTICLE VII | DEFINITIONS | 20 | ||
7.1 | �� | Definitions. | 20 | |
7.2 | Construction. | 24 | ||
EXHIBITS | |
Exhibit A | Transfer Agreement |
Exhibit B | Operating Agreement |
Exhibit C | Sublease Agreement |
Exhibit D | IP Transfer Agreement |
Exhibit E | Payment Agreement |
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SCHEDULES | |
Schedule 2.3 | No Violation or Conflict |
Schedule 2.5 | No Litigation |
Schedule 2.6 | Contracts |
Schedule 2.7 | Condition of Equipment |
Schedule 2.10 | Intellectual Property |
Schedule 3.4 | No Litigation |
Schedule 3.5 | Financial Statements |
Schedule 3.6 | Compliance with Law |
Schedule 3.7 | Taxes |
Schedule 3.8 | Affiliated Transactions |
Schedule 3.9 | TS Intellectual Property |
Schedule 3.10 | No Material Adverse Change |
Schedule 3.11 | Title; Capitalization |
Schedule 4.4 | Employee Matters |
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UNIT PURCHASE AGREEMENT |
This UNIT PURCHASE AGREEMENT, effective as of June 30, 2005, is made by and among AFBS, INC., a Virginia corporation (f/k/a “Therics, Inc.”) (“AFBS”), THERICS, LLC, an Ohio limited liability company, (“Therics”) and RANDALL R. THEKEN, a resident of the State of Ohio (“RRT”). RECITALS WHEREAS, pursuant to the terms of the Transfer Agreement dated June 30, 2005, by and between AFBS and Therics, and attached hereto asExhibit A (the “Transfer Agreement”), AFBS has contributed, conveyed, transferred, assigned and delivered to Therics, and Therics has accepted and assumed from AFBS, the Contributed Assets in exchange for 1,000,000 common units of Therics, representing 100% of the membership interest of Therics. WHEREAS, RRT wishes to purchase and acquire from AFBS, and AFBS wishes to transfer and sell to RRT, 825,000 of its outstanding common units (the “Purchased Units”), representing 82.5% of the membership interest of Therics, in exchange for 36,411.305 class A units (the “TS Interest”) of Theken Spine, LLC, an Ohio limited liability company (“TS”), representing 3.5% of the outstanding membership interest of TS. WHEREAS, simultaneously with the execution of this Agreement, (i) RRT and AFBS are executing and delivering the Operating Agreement of Therics in the form attached hereto asExhibit B (the “Operating Agreement”), (ii) AFBS and Therics are executing and delivering the Sublease in the form attached hereto asExhibit C (the “Sublease”), and (iii) AFBS will execute and deliver all documents necessary for it to become a member of TS and a party to the TS Operating Agreement, including, without limitation, a counterpart signature page and/or an instrument of accession. WHEREAS, pursuant to terms of the Intellectual Property Transfer Agreement to be entered into by and between AFBS and Therics immediately following the Closing in the form attached hereto asExhibit D (the “IP Transfer Agreement”), AFBS will sell, convey, transfer, assign and deliver to Therics, and Therics will purchase, accept and assume from AFBS, the IP Assets in exchange for the rights and benefits provided under the Payment Agreement to be entered into by and between AFBS and Therics immediately following the Closing in the form attached hereto asExhibit E (the “Payment Agreement”). WHEREAS, Therics and TS will enter into a mutually agreeable Distribution Agreement (the “Distribution Agreement”) following the Closing. AGREEMENT NOW, THEREFORE, in consideration of the Recitals, covenants, representations and warranties set forth herein, intending to be legally bound hereby, the parties agree as follows: |
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investigator, former investigator, or any other person may claim rights to any of inventions covered by the Intellectual Property. (e) AFBS has the full and proper legal right, capacity, ability, and authority to grant the rights in the Intellectual Property granted in the IP Transfer Agreement, and except with respect to rights in the Assumed IP Contracts, does not hold or own any other rights to technology, trade secrets, know-how, inventions, trademarks, trademark applications, trademark registrations, copyrights, copyright applications, copyright registrations, patent applications, or patents (1) necessary or useful to the full enjoyment and exploitation of the Intellectual Property or (2) otherwise used in connection with the Business. (f) No patent or patent application within the Intellectual Property is the subject of any pending interference, opposition, cancellation, protest, reexamination, or other challenge or adversarial proceeding. (g) Except as set forth onSchedule 2.10, no court orders, judgments, or decrees exist that impair or restrict the use, scope, validity, or enforceability of the Intellectual Property and no action, suit, inquiry, proceeding, or investigation is currently pending or threatened before any court, administrative agency, or other governmental body in which such use, scope, validity, or enforceability is being challenged, either directly or indirectly. (h) To the Knowledge of AFBS, no patents in the Intellectual Property are invalid or unenforceable, and to the Knowledge of AFBS, there are no facts from which it can be inferred that any of the patents in the Intellectual Property are invalid or unenforceable. (i) The patent set forth inSchedule 2.5 and any patent resulting from the reexamination proceeding set forth inSchedule 2.5 will not materially adversely impact the scope, validity, or enforceability of any patent rights in the Intellectual Property or the Assumed IP Contracts that are commercially used in the Business. (j) The patents or applications mentioned, listed, or referenced in Schedule 2.10 and any assignment or ownership disputes related thereto that arise either before or after the Effective Time will not materially adversely impact the scope, validity, or enforceability of the Intellectual Property or the Assumed IP Contracts and will not cause Therics to be in breach of any contract, assignment, agreement, or understanding of any kind. (k) To the Knowledge of AFBS, no trademark registrations in the Intellectual Property are invalid or unenforceable, and to the Knowledge of AFBS, there are no facts from which it can be inferred that any of the trademark registrations in the Intellectual Property are invalid or unenforceable. (l) To the Knowledge of AFBS, no pending trademark applications in the Intellectual Property were filed under circumstances that would render any resulting registration invalid or unenforceable, and to the Knowledge of AFBS, there are no facts from which it can be inferred that any registration resulting from any pending trademark application is likely to be invalid or unenforceable. |
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(a) With the exception of the patent applications listed onSchedule3.9, for which an assignment from one or more inventors is still outstanding, TS is the sole and exclusive owner of, or has a valid license to use all of its patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes (the “TS Intellectual Property”), free and clear of all Liens. The TS Intellectual Property is identified onSchedule 3.9. (b) To the Knowledge of RRT, no third party is engaging in conduct which conflicts with or infringes in any material way any of such TS intellectual property. To the Knowledge of RRT, the use of the TS intellectual property as currently used does not conflict with or infringe (and the use of the TS Intellectual Property prior to the Closing has not and the use of the TS Intellectual Property will not conflict with or infringe) in any material way any Proprietary Right of any third party, and, except as set forth onSchedule3.4 andSchedule3.9, there is no claim, suit, action or proceeding pending or, to the Knowledge of RRT, threatened against TS (i) alleging any such conflict or infringement with any third party’s Proprietary Rights, or (ii) challenging the ownership, use, validity or enforceability of the TS Intellectual Property. (c) With the exception of the license agreements listed onSchedule3.9, TS has not granted, and, to the Knowledge of RRT, there are not outstanding, any options, licenses or agreements of any kind relating to any of the TS Intellectual Property, nor is TS bound by or a party to any option, license or agreement of any kind with respect to any of the TS Intellectual Property, except as set forth onSchedule3.9. TS is not obligated to pay any royalties or other payments to third parties with respect to the marketing, sale, distribution, manufacture, license or use of the TS Intellectual Property or any other property or rights, except as set forth onSchedule3.9. (d) Except as set forth onSchedule3.9, TS has received and currently holds valid and effective assignments of all inventors’ rights to the inventions covered by the TS Intellectual Property, and no employee, former employee, researcher, former researcher, investigator, former investigator, or any other person may claim rights to any of inventions covered by the TS Intellectual Property. (e) No patent or patent application within the TS Intellectual Property is the subject of any pending interference, opposition, cancellation, protest, reexamination, or other challenge or adversarial proceeding. (f) Except as set forth onSchedule3.4 andSchedule3.9, no court orders, judgments, or decrees exist that impair or restrict the use, scope, validity, or enforceability of the TS Intellectual Property, and no action, suit, inquiry, proceeding, or investigation is currently pending or threatened before any court, administrative agency, or other governmental body in which such use, scope, validity, or enforceability is being challenged, either directly or indirectly. |
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and warranties of RRT inSections 3.1,3.2,3.3 and3.11, shall survive for the applicable statute of limitations period (such period, the “Survival Period”). Except in the event an “Indemnified Party” (as defined below) makes a written claim for indemnification against an “Indemnifying Party” (as defined below) prior to the expiration of the Survival Period, no action or proceeding may be instituted to enforce, or seek damages or other remedies with respect to the breach of, any representation or warranty after such expiration. (a) After the Closing, AFBS and its officers, directors, agents, successors and assigns, as applicable (“AFBS Indemnified Parties”) shall be indemnified and held harmless by Therics for any and all liabilities, losses, damages of any kind, claims, costs, expenses, fines, fees, deficiencies, interest, awards, judgments, amounts paid in settlement and penalties (including, without limitation, attorneys’, consultants’ and experts’ fees and expenses and other costs of defending, investigating or settling claims) actually suffered or incurred by them (including, without limitation, in connection with any action brought or otherwise initiated by any of them) (hereinafter, “Loss(es),” which Loss(es) shall be reduced by the full amount of any insurance collected by the Indemnified Party (or any Affiliate thereof) with respect to such claim or the underlying facts under any applicable policy or policies it being understood that all Indemnified Parties will use good faith efforts to file all insurance claims relating to such Losses), arising out of or resulting from: (i) any inaccuracy in or breach of any representation or warranty of RRT or Therics contained in this Agreement, the Transfer Agreement or the IP Transfer Agreement; (ii) the Post-Closing Liabilities and the Post-Closing IP Liabilities; or (iii) any breach of any covenant or agreement made by RRT or Therics in this Agreement, the Transfer Agreement or the IP Transfer Agreement. (b) After the Closing, Therics and its officers, directors, agents, successors and assigns, as applicable (“Therics Indemnified Parties”), shall be indemnified and held harmless by AFBS for any and all Losses arising out of or resulting from: (i) any inaccuracy in or breach of any representation or warranty of AFBS contained in this Agreement, the Transfer Agreement or the IP Transfer Agreement; (ii) the Retained Liabilities and the Retained IP Liabilities; or (iii) any breach of any covenant or agreement made by AFBS in this Agreement, the Transfer Agreement or the IP Transfer Agreement. (c) Notwithstanding anything to the contrary contained in this Agreement, the maximum aggregate amount of indemnifiable Losses arising out of or resulting from the causes enumerated inSections5.2(a)(i) or5.2(b)(i) that may be recovered from AFBS Indemnified Parties or Therics, as the case may be, shall not exceed (i) in the case of Losses that may be |
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Randall R. Theken | |
283 East Waterloo Road | |
Akron, Ohio 44319 | |
Facsimile: (330) 773-7697 |
with a copy (which shall not constitute notice) to: |
Stark & Knoll Co., L.P.A. | |
Attention: Aaron G. Lepp, Esq. | |
76 South Main Street, Suite 1512 | |
Akron, Ohio 44308-1824 | |
Facsimile: (330) 376-6237 |
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If to AFBS: |
AFBS, Inc. | |
c/o Tredegar Corporation | |
Attention: Chief Financial Officer | |
1100 Boulders Parkway | |
Richmond, Virginia 23225 | |
Facsimile: (804) 330-1010 |
with a copy (which shall not constitute notice) to: |
Hunton & Williams LLP | |
Riverfront Plaza, East Tower | |
951 East Byrd Street | |
Richmond, Virginia 23219 | |
Facsimile No.: (804) 343-4600 | |
Attn: C. Porter Vaughan, III, Esq.and | |
R. Mason Bayler, Jr., Esq. |
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“Assumed IP Contracts” shall have the meaning set forth in the IP Transfer Agreement. “Assumed IP Liabilities” shall have the meaning set forth in the IP Transfer Agreement. “Business” shall mean the business and operations of AFBS as operated and conducted prior to and up through the Effective Time. “Closing” shall have the meaning set forth inSection 1.2(a). “Closing Date” shall have the meaning set forth inSection1.2(a). “Consents” shall have the meaning set forth in the Transfer Agreement. “Contributed Assets” shall have the meaning set forth in the Transfer Agreement. “Distribution Agreement” shall have the meaning set forth in the Recitals of this Agreement. “Effective Time” shall mean 11:58 p.m. (Eastern Daylight Time) on the Closing Date. “Equipment” shall have the meaning set forth in the Transfer Agreement. “Employees” shall have the meaning set forth inSection4.4. “Financial Statements” shall mean the unaudited balance sheets and statements of income of TS as of and for the fiscal years ended December 31, 2003 and 2004 and as of and for the five months ended May 31, 2005, including the notes thereto (for 2003 and 2004), which are set forth onSchedule 3.5. “GAAP” means generally accepted accounting principles in the United States, as in effect from time to time. “Great Plains Software” shall mean any of the software identified in Items 86 through 92 onSchedule 1.14 of the Transfer Agreement. “Governmental Entity” shall have the meaning set forth in the Transfer Agreement. “Indemnified Party” shall have the meaning set forth inSection5.3(a). “Indemnifying Party” shall have the meaning set forth inSection5.2(d). “Intellectual Property” shall have the meaning set forth in the IP Transfer Agreement. |
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“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder. “Inventory” shall have the meaning set forth in the Transfer Agreement. “IP Assets” shall have the meaning set forth in the IP Transfer Agreement. “IP Consents” shall have the meaning set forth in the IP Transfer Agreement. “IP Transfer Agreement” shall have the meaning set forth in the Recitals of this Agreement. “Knowledge of RRT” shall mean the actual knowledge of Randall R. Theken. “Knowledge of AFBS” shall mean the actual knowledge of Thomas S. Stribling, Peter A. Materna, or Anne M. Nolan. “Law” or “Laws” shall have the meaning set forth in the Transfer Agreement. “Liens” shall have the meaning set forth in the Transfer Agreement. “Loss(es)” shall have the meaning set forth inSection5.2(a) “Operating Agreement” shall have the meaning set forth in the Recitals of this Agreement. “Payment Agreement” shall have the meaning set forth in the Recitals of this Agreement. “Permits” shall have the meaning set forth in the Transfer Agreement. “Person” means any natural person, corporation, general partnership, limited partnership, limited liability company or partnership, proprietorship, other business organization, trust, union, association or Governmental Entity. “Post-Closing Liabilities” shall have the meaning set forth in the Transfer Agreement. “Post-Closing IP Liabilities” shall have the meaning set forth in the IP Transfer Agreement. “Proprietary Rights” means the legal rights, property rights, and other interests evidenced by or embodied in (1) any idea, design, concept, technique, invention, discovery, or improvement, regardless of patentability, but including patents, patent applications, trade secrets, and know-how; (2) any work of authorship, regardless of copyrightability, but including copyrights and any moral rights recognized by law; (3) any brand name, logo, trade dress, designation of source, trademark, service mark, or trade name; and (4) any other similar rights, in each case on a worldwide basis. |
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“Purchased Units” shall have the meaning set forth in the Recitals of this Agreement. “Retained IP Liabilities” shall have the meaning set forth in the IP Transfer Agreement. “Retained Liabilities” shall have the meaning set forth in the Transfer Agreement. “RRT” shall have the meaning set forth in the Preamble of this Agreement. “Scheduled IP” shall have the meaning provided in the IP Transfer Agreement. “Sublease” shall have the meaning set forth in the Recitals of this Agreement. “Survival Period” shall have the meaning set forth inSection 5.1 “Tax” or “Taxes” shall have the meaning provided in the Transfer Agreement. “Tax Returns” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof. “Therics” shall have the meaning set forth in the Preamble of this Agreement. “Therics Indemnified Party” shall have the meaning set forth inSection5.2(b) “Third-Party Claims” shall have the meaning set forth inSection5.3(a) “Transfer Agreement” shall have the meaning set forth in the Recitals of this Agreement. “TS” shall have meaning set forth in the Recitals of this Agreement. “TS Appreciation Rights Plans” means the following: (i) the TS Appreciation Rights Plan dated December 31, 2003; (ii) the TS Appreciation Rights Plan for Employees and Distributors dated January 1, 2005; and (iii) the TS Appreciation Rights Plan for Consultants dated January 1, 2005, as amended March 11, 2005. “TS Intellectual Property” shall have meaning set forth inSection3.9. “TS Interest” shall have the meaning set forth in the Recitals of this Agreement. “TS Operating Agreement” shall mean the Amended and Restated Operating Agreement of TS, dated as of December 20, 2004, as the same is modified and amended by the following: (i) a certain Addendum to Certain Agreements for Theken Spine, LLC effective December 20, 2004; (ii) a certain Addendum #2 to Certain Agreements for Theken Spine, LLC effective December 20, 2004; (iii) a certain Amendment to Addendum #2 to Certain Agreements for Theken Spine, LLC effective December 20, 2004; and (iv) a certain Amendment to the Theken Spine, LLC Amended and Restated Operating Agreement dated April 1, 2005. |
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Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender and the neuter, (ii) words using the singular or plural number also include the plural or singular number, respectively, (iii) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire Agreement as a whole and not to any particular Article, Section or other subdivision, (iv) the terms “Article” or “Section” or other subdivision refer to the specified Article, Section or other subdivision of the body of this Agreement, (v) the words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation,” and (vi) when a reference is made in this Agreement to Schedules or Exhibits, such reference shall be to a Schedule or an Exhibit to this Agreement unless otherwise indicated. All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP. [SIGNATURE PAGES FOLLOW] |
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IN WITNESS WHEREOF, AFBS, Therics and RRT, have caused this Agreement to be signed as of the date first written above. |
AFBS, INC. | ||
By: | /s/ W. Hildebrandt Surgner, Jr. | |
W. Hildebrandt Surgner, Jr. Vice President | ||
THERICS, LLC | ||
By: Theken Orthopaedic Inc. | ||
Its: Manager | ||
By: | /s/ Randall R. Theken | |
Randall R. Theken President | ||
/s/ Randall R. Theken | ||
RANDALL R. THEKEN |