Document:

EXECUTION COPY 
	 
	
Exhibit 10.18

INTELLECTUAL PROPERTY TRANSFER AGREEMENT

BY AND BETWEEN

AFBS, INC.

AND

THERICS, LLC

June 30, 2005

	

         

        

    

	
TABLE OF CONTENTS

	 

	ARTICLE I	DEFINITIONS	1
	 	 	 	 
	 	1.1.	AFBS.	1
	 	1.2.	Agreement.	1
	 	1.3.	Assumed IP Contracts.	2
	 	1.4.	Books and Records of IP.	2
	 	1.5.	Business.	2
	 	1.6.	Closing.	2
	 	1.7.	Closing Date.	2
	 	1.8.	Effective Time.	2
	 	1.9.	Intellectual Property.	2
	 	1.10.	IP Assets.	3
	 	1.11.	IP Consents.	3
	 	1.12.	Liens.	3
	 	1.13.	Payment Agreement.	3
	 	1.14.	Post-Closing IP Liabilities.	3
	 	1.15.	Retained IP Liabilities.	4
	 	1.16.	Tax Return.	4
	 	1.17.	Taxes.	4
	 	1.18.	Therics.	4
	 	1.19.	Transfer Agreement.	4
	 	1.20.	Unit Purchase Agreement.	5
			
	 	 	 
	ARTICLE II 	TRANSFER	5
			
	 	 	 	 
	 	2.1.	Purchase and Sale; Assignment; Consideration.	5
	 	2.2.	No Assumption of Retained IP Liabilities; Post-Closing IP Liabilities.	5
	 	2.3.	Authorization to Record.	5
	 	2.4.	Transfer Taxes.	6
			
	 	 	 
	ARTICLE III 	MISCELLANEOUS	6
			
	 	 	 	 
	 	3.1.	Entire Agreement; Amendment.	6
	 	3.2.	Governing Law.	7
	 	3.3.	Notices.	7
	 	3.4.	Counterparts; Headings.	8
	 	3.5.	Binding Effect.	8
	 	3.6.	Severability.	8
	 	3.7.	Specific Performance.	8
	 	 	 	 

	SCHEDULES	 	 
	Schedule 1.3	 	Assumed IP Contracts
	Schedule 1.9	 	Intellectual Property
	Schedule 1.11	 	IP Consents
	 	 
	EXHIBITS	 
	Exhibit 2.1(b)	 	Payment Agreement
		

	

(i)

	Exhibit 2.3(c)	 	Assignment Documents
	Exhibit 2.3(c)(1)	 	Assignment Of Inventions, Applications For Patent, And Letters Patent
	Exhibit 2.3(c)(2)	 	Assignment of Inventions, Applications for Patent and letters Patent
	Exhibit 2.3(c)(3)	 	Assignment and Acceptance of Trademark and Service Mark Rights
	Exhibit 2.3(c)(4)	 	Assignment and Acceptance of Trademarks and Service Marks and Related Community

    Trademark Registrations
	Exhibit 2.3(c)(5)	 	Assignment and Acceptance of Copyrights

	

(ii)

	
  INTELLECTUAL PROPERTY TRANSFER AGREEMENT
  

                  This INTELLECTUAL PROPERTY TRANSFER AGREEMENT, effective as of June 30, 2005, by and between AFBS,
INC., a Virginia corporation, f/k/a Therics, Inc. (“AFBS”), and THERICS, LLC, an Ohio limited liability company (“Therics”), recites and provides as follows:

RECITALS

                WHEREAS, AFBS desires to sell the IP Assets (other than the Assumed IP Contracts) to Therics and assign
the Assumed IP Contracts to Therics, and in exchange therefor, Therics desires to purchase the IP
Assets (other than the Assumed IP Contracts) from AFBS and to assume the Assumed IP Contracts from
AFBS, all on the terms and subject to the conditions set forth herein. 

                NOW, THEREFORE, in consideration of the Recitals and of the mutual covenants, conditions and agreements
set forth herein and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, it hereby is agreed that:

AGREEMENT

ARTICLE I
DEFINITIONS

                When used in this Agreement, the following terms shall have the meanings specified:

	 

		1.1.         	AFBS.

	 
	
                “AFBS” shall have the meaning set forth in the Preamble hereof.

	 

		1.2.         	Agreement.

	 
	
                “Agreement” shall mean this Intellectual Property Transfer Agreement, together with the Schedules
and Exhibits attached hereto.

		1.3.         	Assumed IP Contracts.

	 
	
                “Assumed IP Contracts” shall mean all of the agreements, contracts, licenses, relationships
and commitments, written or oral of AFBS that are specifically listed on Schedule 1.3  attached hereto, including all of the patent, trademark, copyright, trade secret or other rights
arising out of the same.

	 

		1.4.         	Books and Records of IP.

	 
	
                “Books and Records of IP” shall mean the original copies of the books and records of AFBS
that are specifically related to the IP Assets and that are in possession of AFBS.

	 

	

(1)

		1.5.         	Business.

	 
	
                “Business” shall mean the business and operations of AFBS as operated and conducted prior
to and up through the Effective Time.

	 

		1.6.         	Closing.

	 
	
                “Closing” shall mean the conference held immediately following the execution of this Agreement,
on the Closing Date, at the Richmond, Virginia offices of Hunton & Williams LLP.

	 

		1.7.         	Closing Date.

	 
	
                “Closing Date” shall mean June 30, 2005.

	 

		1.8.         	Effective Time.

	 
	
                “Effective Time” shall mean 11:59 p.m. (Eastern Daylight Time) on the Closing Date. 

	 

		1.9.         	Intellectual Property.

	 
	
                “Intellectual Property” shall mean all of the intangible property owned by AFBS solely or
jointly with others, specifically including all patents, patent applications, inventions, trademarks
(whether arising under common law or otherwise), trademark applications, trademark registrations,
copyrights, copyright applications, copyright registrations, trade secrets, know-how, and similar intangible property, together with all goodwill associated therewith and related to the Business, including,
but not limited to, all properties identified on Schedule 1.9  attached hereto.

	
 

	 

		1.10. 	IP Assets.

	 
	
                “IP Assets” shall mean the Assumed IP Contracts, the Books and Records of IP, the Intellectual
Property, together with all goodwill, “going concern value” and similar intangibles associated
with the Intellectual Property (to the extent such goodwill is not included in the foregoing or otherwise
associated with the Business).

	 

		1.11.  	IP Consents.

	 
	
                “IP Consents” shall mean all consents, approvals and waivers related to the Assumed IP Contracts
and the Intellectual Property required to be obtained in order to properly and legally assign or
convey the same to Therics in connection with the transactions contemplated by this Agreement, such
consents, approvals and waivers to be obtained by AFBS and each of which is listed on Schedule 1.11  attached hereto.

	 

		1.12.	Liens.

	 
	
                “Liens” shall mean any encumbrance, mortgage, charge, claim, demand, restriction, pledge,
security interest or imposition of any kind or nature. 

	 

	

(2)

		1.13.	Payment Agreement.

	 
	
                “Payment Agreement” shall have the meaning set forth in Section 2.1(b).

	 

		1.14.	Post-Closing IP Liabilities.

	 
	
                “Post-Closing IP Liabilities” shall mean all liabilities and obligations, whether such liabilities
or obligations relate to payment, performance or otherwise, are matured or unmatured, are known or
unknown, are contingent or non-contingent, are fixed or undetermined or are present, future or otherwise,
that relate to the ownership, operation, use, sale, lease or licensing of the IP Assets by Therics
after the Effective Time, including, but not limited to, all liabilities and obligations arising
out of, or relating to any act, occurrence, performance or other event occurring after the Effective
Time under the Assumed IP Contracts (but excluding any liability or obligation arising out of, or
relating to the performance of or a breach under the Assumed IP Contracts which occurred prior to
the Effective Time).

		1.15.	Retained IP Liabilities.

	 
	
                “Retained IP Liabilities” shall mean all liabilities and obligations of AFBS and the Business,
including, without limitation, (i) those relating to the use of the IP Assets prior to the Effective
Time, whether such liabilities or obligations relate to payment, performance or otherwise, arise
before or after the Effective Time, are matured or unmatured, are known or unknown, are contingent
or non-contingent, are fixed or undetermined or are present, future or otherwise, other than the
Post-Closing IP Liabilities, and (ii) any liability or obligation under any Assumed IP Contract which
arises out of or relates to any act, occurrence, performance or other event thereunder occurring
before the Effective Time or any breach thereof by AFBS. Retained IP Liabilities, as defined above,
shall specifically include any and all disputes, actions, challenges, lawsuits, claims, demands,
arbitrations, and proceedings based on any conduct that constitutes the Business or the practice
by Therics of this conduct, that impact or threaten to impact the Intellectual Property or the Assumed
IP Contracts arising out of (i) ownership claims relating to those patent applications listed on
Schedule 2.10 of the Unit Purchase Agreement for which Therics does not currently have executed assignments
from all listed inventors, and (ii) infringement or validity claims based on the patent identified
in Schedule 2.5 of the Unit Purchase Agreement or any reexamined version thereof.

	 

		1.16.	Tax Return.

	 
	
                “Tax Return” shall mean any report, return, information statement, payee statement or other
information required to be provided to any federal, state, local or foreign legislative, court, arbitral
tribunal, administrative agency or commission or other governmental or regulatory authority.

	 

		1.17.	Taxes.

	 
	
                “Taxes” shall mean any federal, state, local or foreign taxes, charges, levies, imposts,
duties, other assessments or similar charges of any kind whatsoever, including interest, penalties
and additions imposed thereon or with respect thereto.

	 

	

(3)

		1.18.	Therics.

	 
	
                “Therics” shall have the meaning set forth in the Preamble hereof.

	 

		1.19.	Transfer Agreement.

	 
	
                “Transfer Agreement” shall mean the Transfer Agreement by and between AFBS and Therics dated
June 30, 2005.

		1.20.	Unit Purchase Agreement.

	 
	
                “Unit Purchase Agreement” shall mean the Unit Purchase Agreement by and between AFBS, Randall
R. Theken and Therics dated June 30, 2005.

ARTICLE II
TRANSFER

	 

		2.1.         	Purchase and Sale; Assignment; Consideration. 

	 
	
                                 (a)             As of the Effective Time, and upon all of the terms and subject to all of the conditions, representations,
warranties, and indemnifications of this Agreement and the Unit Purchase Agreement, AFBS hereby (i)
sells, conveys, transfers and delivers to Therics, and Therics hereby purchases and accepts from
AFBS, all of the IP Assets (other than the Assumed IP Contracts), free and clear of all Liens, and
(ii) assigns to Therics, and Therics hereby assumes from AFBS, the Assumed IP Contracts.

                                 (b)             In consideration of the sale, transfer, assignment, conveyance and delivery of the IP Assets and the
Assumed IP Contracts by AFBS, as of the Effective Time, Therics will execute and deliver to AFBS
the Payment Agreement in the form attached hereto as Exhibit 2.1(b) (the “Payment Agreement”).

	 

		2.2.         	No Assumption of Retained IP Liabilities; Post-Closing IP Liabilities.

	 
	
                Therics does not and will not assume any Retained IP Liabilities hereunder or any other liability of
AFBS. All of the Retained IP Liabilities and other liabilities of AFBS shall remain the sole responsibility
of and shall be retained, paid, performed, satisfied and discharged solely by AFBS. Notwithstanding
anything herein to the contrary, all of the Post-Closing IP Liabilities shall be the sole responsibility
of Therics.

	 

		2.3.         	Authorization to Record.

	 
	
                                 (a)             Therics shall pay all fees and expenses related to the recordation of the assignment of the Intellectual
Property contemplated herein. AFBS shall use commercially reasonable efforts to cooperate with Therics
in connection with Therics’ effort to record such assignments, including performing all tasks,
executing all documentation reasonably necessary, and having its employees and agents perform all
tasks and execute all documentation reasonably necessary to Therics in achieving accurate and comprehensive
legal recording of the Intellectual Property in Therics’ name. AFBS agrees that this Agreement
shall be deemed a full legal and 

	

(4)

	
formal equivalent of any assignment, consent to file, or like document
that may be required in any country for any purpose regarding the subject matter hereof, as well as constituting proof of the right of Therics or its successors,
assigns, or nominees to apply for patent, copyright, trademark, or design, or other protection for
the Intellectual Property. 

                                 (b)             To facilitate recordation of the assignment of Intellectual Property, AFBS shall deliver to Therics,
at the Closing, a certificate of change of name demonstrating that, effective as of June 30, 2005,
Therics, Inc. changed its corporate name to AFBS, Inc.

                                 (c)             To facilitate recordation of the assignment of Intellectual Property, AFBS shall, at the Closing,
execute the Assignment documents attached hereto as Exhibit 2.3(c).

	 

		2.4.         	Transfer Taxes.

	 
	
                Therics shall pay all transfer, sales, recording and similar Taxes arising in connection with the transactions
contemplated hereunder, whether such Taxes are imposed on AFBS or Therics. The parties shall cooperate
to comply with all Tax Return requirements for such Taxes and shall provide such documentation and
take such other actions as may be necessary to minimize the amount of any such Taxes. 

ARTICLE III
MISCELLANEOUS

	 

		3.1.         	Entire Agreement; Amendment.

	 
	
                This Agreement and the documents referred to herein and to be delivered pursuant hereto (including
the Unit Purchase Agreement and the Transfer Agreement) constitute the entire agreement between the
parties pertaining to the subject matter hereof, and supersede all prior and contemporaneous agreements,
understandings, negotiations and discussions of the parties, whether oral or written, and there are
no warranties, representations or other agreements between the parties in connection with the subject
matter hereof, except as specifically set forth herein or therein. No amendment, supplement, modification,
waiver or termination of this Agreement shall be binding unless executed in writing by the party
to be bound thereby. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement, whether or not similar, nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided. 

		3.2.         	Governing Law.

	 
	
                This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio
as applied to contracts entered into by Ohio residents and performed entirely in Ohio, without giving
effect to its principles or rules regarding conflicts of laws, other than such principles directing
application of the laws of Ohio.

	 

	

(5)

		3.3.         	Notices.

	 
	
                All communications, notices and disclosures required or permitted by this Agreement shall be in writing
and shall be deemed to have been given when delivered personally or by messenger or one business
day after delivery by reliable overnight delivery service, or when mailed by registered or certified
United States mail, postage prepaid, return receipt requested, or when received via telecopy, telex
or other electronic transmission, in all cases addressed to the person for whom it is intended at
its or his address set forth below or to such other address as a party shall have designated by notice
in writing to the other party in the manner provided by this Section 3.3: 

	 	 	 
	If to AFBS:	AFBS, Inc.
	 	c/o Tredegar Corporation
	 	Attention:	General Counsel
	 	1100 Boulders Parkway
	 	Richmond, Virginia 23225
	 	Facsimile:  (804) 330-1010
	 	 
	With a copy (which shall	Hunton & Williams LLP
	not constitute notice) to:	Attention:	C. Porter Vaughan, III, Esq. and
	 	 	R. Mason Bayler, Jr., Esq.

	 	Riverfront Plaza, East Tower
	 	951 East Byrd Street
	 	Richmond, Virginia 23219-4074
	 	Facsimile:  (804) 788-8218

	If to Therics:	Therics, LLC
	 	Attention:             	Randall R. Theken
	 	283 East Waterloo Road
	 	Akron, Ohio 44319
	 	Facsimile: (330) 773-7697
	 	 
	With a copy (which shall	Stark & Knoll Co., L.P.A.
	not constitute notice) to:	Attention: 	Aaron G. Lepp, Esq.
	 	76 South Main Street, Suite 1512
	 	Akron, Ohio 44308-1824
	 	Facsimile: (330) 376-6237

		 	 
		3.4.         	Counterparts; Headings.

	 
	
                This Agreement may be executed in several counterparts, each of which shall be deemed an original,
but such counterparts shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience of reference only
and shall not constitute a part hereof.

	 

		3.5.         	Binding Effect.

	 
	
                This Agreement is binding upon, inures to the benefit of and is enforceable by the parties hereto and
their respective successors and assigns.

	 

	

(6)

		3.6.         	Severability.

	 
	
                If any provision, clause or part of this Agreement, or the application thereof under certain circumstances,
is held invalid, the remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.

	 

		3.7.         	Specific Performance.

	 
	
                Therics and AFBS hereby agree that irreparable damage would occur in the event any of the provisions
of this Agreement were not performed in accordance with the terms hereof and that the parties shall
be entitled to specific performance of the terms hereof, in addition to any other remedy at law or
equity.

	
[Signature Page Follows]

	

(7)

	
                IN WITNESS WHEREOF, each party hereto has caused this Intellectual Property Transfer Agreement to be executed in its
name and, as applicable, by a duly authorized officer as of the day and year first above written.
	 

	 	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

	

(8)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

	 	 	 	 
	 	 	 	Page
	 	 	 	

	   	   	   	   
	 ARTICLE I 	 	 AGREEMENT TO SELL AND PURCHASE UNITS; CLOSING	 2 
	   	   	   	   
	 	 1.1 	 	 Agreement To Sell and Purchase Units.	 2 
	 	 1.2 	 	 Closing, Delivery And Payment.	 2 
	 	 	 	 
	 ARTICLE II 	 	 REPRESENTATIONS AND WARRANTIES OF AFBS 	 2 
	   	   	   	   
	 	 2.1 	 	 Organization of AFBS and Therics.	 2 
	 	 2.2 	 	 Authority; Enforceability.	 2 
	 	 2.3 	 	 No Violation or Conflict.	 3 
	 	 2.4 	 	 Title and Capitalization.	 3 
	 	 2.5 	 	 No Litigation.	 4 
	 	 2.6 	 	 Contracts.	 4 
	 	 2.7 	 	 Condition of Equipment.	 4 
	 	 2.8 	 	 Compliance with Law.	 4 
	 	 2.9 	 	 Taxes.	 5 
	 	 2.10 	 	 Intellectual Property.	 5 
	 	 2.11 	 	 Permits.	 7 
	 	 2.12 	 	 Inventory.	 7 
	 	 2.13 	 	 Product Liability.	 7 
	 	 2.14 	 	 No Untrue Statement.	 7 
	   	   	   	   
	 ARTICLE III 	 	 REPRESENTATIONS AND WARRANTIES OF RRT	 7 
	   	   	   	   
	 	 3.1 	 	 Organization of TS.	 7 
	 	 3.2 	 	 Authority; Enforceability.	 8 
	 	 3.3 	 	 No Violation or Conflict.	 8 
	 	 3.4 	 	 No Litigation.	 8 
	 	 3.5 	 	 Financial Statements.	 8 
	 	 3.6 	 	 Compliance with Law.	 9 
	 	 3.7 	 	 Taxes.	 9 
	 	 3.8 	 	 Affiliated Transactions.	 9 
	 	 3.9 	 	 Intellectual Property.	 10 
	 	 3.10 	 	 No Material Adverse Change.	 11 
	 	 3.11 	 	 Title; Capitalization.	 11 
	 	 3.12 	 	 Agreements; Action.	 12 
	 	 3.13 	 	 Insurance.	 12 
	   	   	   	   
	 ARTICLE IV 	 	 ADDITIONAL AGREEMENTS 	 12 
	   	   	   	   
	 	 4.1 	 	 Expenses.	 12 
	 	 4.2 	 	 Public Disclosure.	 12 
	 	 4.3 	 	 Additional Documents and Further Assurances; Cooperation.	 13 

	

i

	 	 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

	

ii

	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

	

iii

	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 as Exhibit 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 as Exhibit B (the “Operating Agreement”), (ii) AFBS and Therics are executing and delivering the Sublease in the form attached
hereto as Exhibit 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 as Exhibit 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 as Exhibit 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:

	

	ARTICLE I 

              AGREEMENT TO SELL AND PURCHASE UNITS; CLOSING

                        1.1             Agreement To Sell and Purchase Units.

                        Subject to the terms and conditions hereof, at the Closing, AFBS will sell, assign and transfer to RRT, and RRT will purchase from AFBS, the Purchased Units free and clear of all Liens, and, in consideration therefor, RRT shall sell, assign and transfer to AFBS, and AFBS will purchase from RRT, the TS Interest free and clear of all Liens. The parties hereto agree that the fair market value of the Purchased Units and of the TS Interest each is $800,000.

                        1.2             Closing, Delivery And Payment.

                                          (a)             Closing. The closing of the transactions contemplated hereby (the “Closing”) shall take place immediately upon execution of this Agreement on the date hereof at 11:58 p.m. (Eastern Daylight Time) (the “Closing Date”) at the offices of Hunton & Williams LLP located in Richmond, Virginia at 951 East Byrd Street. 

                                          (b)            Delivery. At the Closing, (i) AFBS will deliver to RRT certificate(s) representing the Purchased Units, against delivery of instruments of transfer duly executed and endorsed in blank, (ii) RRT will deliver to AFBS certificate(s) representing the TS Interest, against delivery of instruments of transfer duly executed and endorsed in blank, (iii) RRT and AFBS will execute and deliver the Operating Agreement, (iv) AFBS and Therics will execute and deliver the Sublease, and (v) AFBS will execute and deliver all documents necessary for it to become a member of TS and a party to the T

S Operating Agreement, including, without limitation, a counterpart signature page and/or an instrument of accession.

               ARTICLE II 

              REPRESENTATIONS AND WARRANTIES OF AFBS

                        AFBS represents and warrants to Therics and RRT at the Closing as follows:

                        2.1             Organization of AFBS and Therics.

                                          (a)             AFBS. AFBS is a corporation duly incorporated, validly existing and in good standing under the Laws of the Commonwealth of Virginia.

                                          (b)             Therics. Therics is a limited liability company duly organized, validly existing and in good standing under the Laws of the State of Ohio and a wholly owned subsidiary of AFBS. Prior to the entering into of this Agreement, the Transfer Agreement and the IP Transfer Agreement, Therics had no assets or liabilities and had no business operations or relations of any kind.

                        2.2             Authority; Enforceability. The execution and delivery by AFBS of this Agreement and the Ancillary Agreements to which it is a party and the consummation by AFBS of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action of AFBS. AFBS has full power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party, to perform its obligations 

	

2

	
hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. This Agreement
and the Ancillary Agreements to which AFBS is a party are legal, valid and binding obligations of
AFBS, enforceable against it in accordance with their respective terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or other similar Laws relating to the enforcement of creditors’ rights generally and by general
principles of equity (whether considered at law or in equity).

                2.3             No Violation or Conflict. Except as set forth on Schedule 2.3, the execution, delivery and performance by AFBS of this Agreement and the Ancillary Agreements to
which AFBS is a party do not and will not conflict with or violate any Law, judgment, order or decree
binding on AFBS, the articles of incorporation or bylaws of AFBS or any of the Assumed Contracts
or Assumed IP Contracts, or (b) result in any party to any Assumed Contract or Assumed IP Contract
having a right of cancellation or termination thereof or right to exercise any option thereunder,
or (c) result in the breach of any term or provision of, or constitute a default under, or result
in the acceleration of or entitle any party to accelerate (whether after the giving of notice or
the lapse of time or both) any obligation under, or result in the creation or imposition of any Lien
upon any part of the Contributed Assets or the IP Assets pursuant to any provision of, any order,
Lien, contract or instrument to which AFBS is a party or by which it is bound. Except with respect
to the Consents and the IP Consents, all of which have been obtained by AFBS and other than notices
that may need to be provided under certain of the Permits following the Closing, no notice to or
consent or approval of any other Person, and no notice to, filing or registration with, or authorization,
consent or approval of, any Governmental Entity is necessary or is required to be made or obtained
by AFBS in connection with the consummation of the transactions contemplated in this Agreement or the Ancillary Agreements.

                2.4             Title and Capitalization. 

                                  (a)             Therics owns good and valid title to the Contributed Assets (other than the Assumed Contracts) free
and clear of any and all Liens, and, after acquiring the IP Assets, will own good and valid title
to the IP Assets (other than the Assumed IP Contracts), free and clear of any and all Liens. 

                                  (b)             Immediately prior to the Closing, AFBS will own of record and beneficially 1,000,000 Units of Therics
and the same constitute all of the issued and outstanding membership interest in Therics. AFBS has
good and valid title to the Purchased Units, free and clear of any Liens. The capitalization of Therics
immediately following the Closing shall be as follows: (i) RRT will own 825,000 Units constituting
82.5% of all issued and outstanding membership interest of Therics; and (ii) AFBS will own 175,000
Units constituting 17.5% of all issued and outstanding membership interest of Therics. All of the
issued and outstanding membership interests of Therics are validly issued, fully-paid and nonassessable,
and have not been issued in violation of any federal or state securities Laws. Except as set forth
in the Operating Agreement, no membership interests of Therics have been issued subject to a repurchase
option, put or buy back agreement on the part of AFBS. 

                                  (c)             Except as contemplated herein or as contemplated in the Company appreciation rights plan to be approved
in connection with the Operating Agreement, there are no 

	

3

	
outstanding options, warrants, rights (including unit appreciation, phantom unit, profit participation,
conversion and preemptive rights and rights of first refusal) or agreements for the purchase or acquisition
from AFBS of any membership interests in Therics or any pledge or encumbrance on any such membership
interests. Except as set forth in the Operating Agreement, AFBS is not a party or subject to any
agreement, arrangement, or understanding, and there is no agreement, arrangement or understanding
between or among any Persons, which affects, restricts or relates to voting, giving of written consents,
dividend rights or transferability of membership interests of Therics, including any voting trust
agreement or proxy.

                2.5             No Litigation. Except as set forth on Schedule 2.5, there is no litigation, arbitration proceeding, order, governmental or internal investigation, citation
or action of any kind pending or, to the Knowledge of AFBS, proposed or threatened (a) against AFBS
or Therics, (b) relating to the Contributed Assets, the IP Assets, the Purchased Units, or the
transactions contemplated by this Agreement, or (c) that seeks restraint, prohibition, damages
or other relief in connection with this Agreement or the Ancillary Agreements or the consummation
of the transactions contemplated hereby or thereby and, to the Knowledge of AFBS, no event has occurred
or circumstance exists that may give rise to or serve as a basis for the commencement of any such action. 

                2.6             Contracts. Except as set forth on Schedule 2.6, each Assumed Contract and Assumed IP Contract is in full force and effect and is enforceable in accordance
with its terms (except as enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar Laws relating to the enforcement of creditors’
rights and by generally affecting the rights and principles of equity (whether considered at law
or in equity)). Except as set forth on Schedule 2.6, AFBS has performed each material term, covenant and condition of each of the Assumed Contracts and
Assumed IP Contracts that was to be performed by it at or before the Effective Time and, to the Knowledge
of AFBS, each other party to an Assumed Contract and Assumed IP Contract has not breached any material
term, covenant or condition of each of the Assumed Contracts or Assumed IP Contracts that is to be
performed by it at or before the Effective Time. Except as set forth on Schedule 2.6  or as contemplated by the Transfer Agreement or the IP Transfer Agreement, AFBS has made no
prior assignment of the Assumed Contracts or Assumed IP Contracts or any of its rights or obligations
thereunder. Except as set forth on Schedule 2.6, with respect to each Assumed Contract and Assumed IP Contract, to the Knowledge of AFBS: (i)
there exists no event, occurrence, condition or act which, with the giving of notice, the lapse of
time, or both, or the happening of any other event or condition, would become a default by AFBS;
(ii) AFBS has not received any notice claiming that it has committed any such default or breach or
indicating the desire or intention of any party thereto to amend, modify, rescind or terminate the
same; and (iii) all Assumed Contracts and Assumed IP Contracts are capable of assignment to Therics
without notice to or consent of any other Person, and shall be fully and completely assigned and
transferred to Therics at the Closing.

                2.7             Condition of Equipment. Except as set forth on Schedule 2.7, the Equipment is in good operating condition and repair, subject to ordinary wear and tear and non-use,
and is fit for use in accordance with AFBS’s past practices. 

                2.8             Compliance with Law. No investigation or review by any Governmental Entity with respect to AFBS’s ownership or use
of the Contributed Assets or the IP Assets is pending 

	

4

	
or, to the Knowledge of AFBS, threatened and no Governmental Entity has indicated to AFBS in writing
an intention to conduct such investigation or review. 

                2.9             Taxes. AFBS has filed all required Tax Returns relating to the Business and to its ownership or use of the
Contributed Assets and the IP Assets. All such Tax Returns are correct in all material respects.
Except for property Taxes not due and payable, there are no unpaid Taxes for which AFBS is liable,
the non-payment of which is or could become a Lien upon, or otherwise could materially adversely
affect, any of the Contributed Assets or the IP Assets or the use thereof or could cause Therics
to incur any liability. No taxing authority has asserted any claim against AFBS for the assessment
of any such Tax. There is no current or pending audit of any Tax Return filed by AFBS, including,
without limitation, those filed with respect to the Contributed Assets or the IP Assets. All Taxes
that AFBS has been required by Law to withhold or collect have been duly withheld and collected and
have been timely paid to the proper Governmental Entity or are properly held by AFBS for such payment.

                2.10           Intellectual Property. 

                                   (a)             Except as set forth on Schedule 2.10, after acquiring the IP Assets, Therics will be the sole and exclusive owner of all the Intellectual
Property, or have a valid license to use the Assumed IP Contracts, free and clear of all Liens. There
are no outstanding Liens, third party rights, agreements, or understandings of any kind, either written,
oral, or implied, regarding the Intellectual Property that are inconsistent or in conflict with any
provision of this Agreement. 

                                   (b)             To the Knowledge of AFBS, no third party is engaging in conduct which conflicts with or infringes
in any material way the Intellectual Property. To the Knowledge of AFBS, the use of the Intellectual
Property as of the Effective Time does not conflict with or infringe (and the use of the Intellectual
Property prior to the Effective Time has not and will not conflict with or infringe) any Proprietary
Right of any third party, and, except as set forth on Schedule 2.10, there is no claim, suit, action or proceeding pending or, to the Knowledge of AFBS, threatened against
AFBS or any AFBS-Related Party (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 Intellectual
Property.

                                   (c)             AFBS has not granted or executed, and, to the Knowledge of AFBS, there are not outstanding, any options,
licenses, contracts, agreements or understandings of any kind relating to the Intellectual Property,
nor is either AFBS or Therics or any AFBS-Related Party bound by or a party to any option, license,
contract, agreement or understandings of any kind with respect to any of the Intellectual Property,
except as contemplated by the Assumed IP Contracts or set forth on Schedule 2.10. Neither AFBS nor
Therics nor any AFBS-Related Party is obligated to pay any royalties or other payments to third parties
with respect to the marketing, sale, distribution, manufacture, license or use of any Intellectual
Property, except as set forth on Schedule 2.10.

                                   (d)             Except as set forth on Schedule 2.10, AFBS has received and currently holds valid and effective assignments of all inventors’ rights
to the inventions covered by the Intellectual Property, and no employee, former employee, researcher,
former researcher, 

	

5

	
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 on Schedule 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 in Schedule 2.5 and any patent resulting from the reexamination proceeding set forth in Schedule 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.

	

6

	
                                   (m)            The Intellectual Property set forth in Schedule 1.9 of the IP Transfer Agreement includes all pending trademark applications, issued trademark registrations,
pending copyright applications, issued copyright registrations, pending patent applications, and
issued patents, relating to the Business, that have been applied for by, or issued in the name of,
AFBS or Therics, Inc. anywhere in the World. 

                                   (n)             To the Knowledge of AFBS, the use of the trademarks set forth in the Scheduled IP in connection with
the respective goods and services specified therein will not conflict with or infringe any Proprietary
Rights of any third party.

                                   (o)             AFBS warrants that, effective as of June 30, 2005 Therics, Inc. changed its corporate name to AFBS,
Inc.

                2.11           Permits. The Permits listed on Schedule 1.20 of the Transfer Agreement are a true and accurate listing of
all approvals, authorizations, registrations and licenses issued by a Governmental Entity required
for the Business as of the Closing.

                2.12           Inventory. Except for items of Inventory, the value of which does not exceed $50,000 in the aggregate, the Inventory
does not include any damaged, obsolete, excessive or outdated goods.

                2.13           Product Liability. To the Knowledge of AFBS, AFBS has no liability (and there is no basis for any present or future
action against it giving rise to any liability) arising out of any injury to individuals or property
as a result of the ownership, possession, or use of any product manufactured, sold, leased, or delivered
by AFBS. No product liability or other tort claims have been made or, to the Knowledge of AFBS, threatened
against AFBS relating to the products comprising the products sold by the Business in the past five
(5) years. To the Knowledge of AFBS, there are no defects in the design or manufacture of products
manufactured or sold by AFBS, or any failure by AFBS to warn, test, inspect or instruct of dangers
which could form the basis for a product recall (whether or not at the request of a Governmental
Entity) or a cause of action for product liability (including, without limitation, failure to warn,
test, inspect or instruct) against AFBS.

                2.14           No Untrue Statement. To the Knowledge of AFBS, neither this Agreement (including the Schedules and Exhibits hereto) nor
any Ancillary Agreement contains any untrue statement of a material fact.

ARTICLE III

      REPRESENTATIONS AND WARRANTIES OF RRT

                RRT hereby represents and warrants to AFBS at the Closing as follows:

                3.1             Organization of TS. TS is a limited liability company duly organized, validly existing and in good standing under the
Laws of the State of Ohio and has full limited liability company power and authority to conduct its
business as now conducted and to own, use, license and lease its assets and properties as presently
conducted. TS is duly qualified to do business 

	

7

	
and is in good standing as a foreign limited liability company in all jurisdictions in which the nature
of its activities and of its properties (both owned and leased) makes such qualification necessary,
except for those jurisdictions in which failure to do so would not have a material adverse effect
on TS or its business.

                3.2             Authority; Enforceability. This Agreement and the Ancillary Agreements to which RRT is a party, have been executed and delivered
by RRT. RRT has full power and capacity to execute and deliver this Agreement and the Ancillary Agreements
to which he is a party, to perform his obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. This Agreement and the Ancillary Agreements to which
he is a party, are the legal, valid and binding obligations of RRT, enforceable against him in accordance
with their respective terms, except as the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar Laws relating to the enforcement
of creditors’ rights generally and by general principles of equity (whether considered at law
or in equity).

                3.3             No Violation or Conflict. The execution, delivery and performance by RRT of this Agreement and the Ancillary Agreements to
which he is a party, do not and will not (a) conflict with or violate any Law, judgment, order
or decree binding on RRT or TS, the articles of organization, the TS Operating Agreement or other
organizational documents of TS, or any contract or agreement to which RRT or TS is a party or by
which either is bound, provided, however, that the forgoing representation and warranty contained
in this sentence shall not relate to compliance with the securities laws or “blue sky”
laws of any jurisdiction except the United States of America and the state of Ohio or (b) result
in any party to any contract or agreement to which RRT or TS is a party having a right of cancellation
or termination thereof or right to exercise any purchase, sale or other option or right thereunder.
No notice to or consent or approval of any other Person, and no notice to, filing or registration
with, or authorization, consent or approval of, any Governmental Entity is necessary or is required
to be made or obtained by RRT or TS in connection with the consummation of the transactions contemplated
in this Agreement or the Ancillary Agreements, provided, however, that the forgoing representation
and warranty contained in this sentence shall not relate to compliance with the securities laws or
“blue sky” laws of any jurisdiction except the United States of America and the state of Ohio.

                3.4             No Litigation. Except as set forth on Schedule 3.4, there is no litigation, arbitration proceeding, order, governmental or internal investigation, citation
or action of any kind pending or, to the Knowledge of RRT, proposed or threatened, (a) against
RRT or TS, (b) relating to the TS Interest, or (c) that seeks restraint, prohibition, damages
or other relief in connection with this Agreement or the Ancillary Agreements to which RRT is a party,
or the consummation of the transactions contemplated hereby and thereby and, to the Knowledge of
RRT, no event has occurred or circumstance exists that may give rise to or serve as a basis for the
commencement of any such action. There is no action, suit, proceeding or investigation by TS or RRT
currently pending or which TS or RRT intends to initiate.

                3.5             Financial Statements. The balance sheets of TS as of December 31, 2004, December 31, 2003 and May 31, 2005, including any
notes thereto, which are included in the Financial Statements set forth on Schedule 3.5, are true, complete and correct in all material respects, present fairly the financial condition of
TS as of such dates, and were prepared in 

	

8

	
accordance with GAAP applied on a consistent basis throughout the periods indicated. The statements
of income of TS for the fiscal years ended December 31, 2003 and 2004, and for the five-month period
ended May 31, 2005, which are included in the Financial Statements set forth on Schedule 3.5, are true, complete and correct in all material respects, present fairly TS’s statements of income
for such periods, and were prepared in accordance with GAAP applied on a consistent basis throughout
the periods indicated; provided, however, that the balance sheet and statement of income as of and for the five-month period ended May 31,
2005 are subject to normal year-end adjustments and lack footnotes. 

                3.6             Compliance with Law.  To the Knowledge of RRT, the conduct of TS’s business and use of its assets and performance
of its contracts and agreements does not violate or conflict, and has not violated or conflicted,
with any Law. Except as set forth on Schedule 3.6, no investigation or review by any Governmental Entity with respect to TS or RRT is pending or, to
the Knowledge of RRT, threatened and no Governmental Entity has indicated to RRT or TS an intention
to conduct such investigation or review. To the Knowledge of RRT, TS has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as now being conducted
by it, the lack of which could materially and adversely affect the business, properties or financial
condition of TS.

                3.7             Taxes.  All Taxes levied, assessed, or imposed upon TS and its business, assets or properties, have been
duly and fully-paid or have been adequately provided for on the Financial Statements. All Tax Returns
required to be filed by TS on or prior to the date hereof have been duly and timely filed, and they
are correct in all material respects. Except as set forth on Schedule 3.7, there are no agreements, waivers or other arrangements (oral or written) providing for extensions
of time with respect to the assessment or collection of unpaid Taxes, nor are there any actions,
suits, proceedings, inquiries, investigations or claims of any nature or kind whatsoever now pending
or, to the Knowledge of RRT, threatened, against TS with respect to any such Tax Returns or any such
Taxes, nor are there any matters under discussion with any federal, state, county or local authority
relating to Taxes. There are no unpaid Taxes for which RRT is liable, the nonpayment of which is
or could become a lien upon, or otherwise could adversely affect, the TS Interest or the use thereof
or could cause AFBS to incur any liability. All Taxes that TS has been required by Law to withhold
or collect have been duly withheld and collected and have been timely paid to the proper Governmental
Entity or are properly held by TS for such payment.

                3.8             Affiliated Transactions.  Except as set forth on Schedule 3.8, TS has not, in the ordinary course of business or otherwise, purchased, licensed or leased or otherwise
acquired any property or assets or obtained any services from, or sold, licensed, leased or otherwise
disposed of any property or assets or provided any services to, any employee (except with respect
to remuneration for services rendered as an employee of TS), stockholder, officer or director of
TS, or Affiliate of any of the foregoing. Except as set forth on Schedule 3.8, TS does not owe any contractual obligation or commitment to any of the foregoing (other than compensation
for current services not yet due and payable and reimbursement of expenses arising in the ordinary
course of business) and none of the foregoing owes any amount or has any contractual obligation to
TS.

	

9

	
                3.9             Intellectual Property. 

                                   (a)             With the exception of the patent applications listed on Schedule 3.9, 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 on Schedule 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 on Schedule 3.4  and Schedule 3.9, 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 on Schedule 3.9, 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 on Schedule 3.9. 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 on Schedule 3.9. 

                                   (d)             Except as set forth on Schedule 3.9, 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 on Schedule 3.4  and Schedule 3.9, 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.

	

10

	
                                   (g)             To the Knowledge of RRT, no patents in the TS Intellectual Property are invalid or unenforceable,
and to the Knowledge of RRT, there are no facts from which it can be inferred that any of the patents
in the TS Intellectual Property are invalid or unenforceable. 

                3.10           No Material Adverse Change.  Except as set forth on Schedule 3.10, since December 31, 2004, TS’s business has been operated in the ordinary course and substantially
in the same manner as previously conducted, and there has not been any material adverse change in
the assets, liabilities, financial condition or results of operations of the business of TS from
those reflected in the balance sheet and statements of income of TS as of and for the fiscal year
ended December 31, 2004, and, to the Knowledge of RRT, no fact or condition exists or to the Knowledge
of RRT is contemplated or threatened that will, or might reasonably be expected to, result in any
such material adverse change.

                3.11           Title; Capitalization.

                                  (a)             RRT has good and valid title to the TS Interest, free and clear of all Liens. The membership interests
of TS and the owners thereof immediately prior to the Closing are as set forth on Schedule 3.11. Except as set forth on Schedule 3.11, TS has good and valid title to its properties and assets and good title to its leasehold estates,
in each case subject to no Lien, other than (a) those resulting from taxes which have not yet
become delinquent, and (b) minor liens and encumbrances which do not materially detract from
the value of the property subject thereto or materially impair the operations of TS. The transfer
of the TS Interest hereunder complies with the terms of the TS Operating Agreement, and upon the
closing of the transactions contemplated herein, AFBS shall become a party to the TS Operating Agreement
and a member of TS. All facilities, machinery, equipment, fixtures, vehicles and other properties
owned, leased or used by TS are in good operating condition and repair (normal wear and tear excepted)
and are reasonably fit for use in accordance with TS’s past practices. TS is in compliance with
all material terms of each lease to which it is a party or is otherwise bound. The number of appreciation
units issued and outstanding under the TS Appreciation Rights Plans as of the date hereof does not
exceed 326,182.87342.

                                  (b)             The membership interests of TS, immediately following the Closing, are set forth on Schedule 3.11  (except with respect to the appreciation units issued and outstanding under the TS Appreciation
Rights Plans). All of the issued and outstanding membership interests of TS are validly issued, fully-paid
and nonassessable, and have not been issued in violation of any federal or state securities Laws provided,
however, that the forgoing representation and warranty contained in this sentence shall not relate
to compliance with the securities laws or “blue sky” laws of any jurisdiction except the
United States of America and the state of Ohio. TS does not presently own or control any equity or
debt security or other interest in any Person. TS is not a participant in any joint venture, partnership
or similar arrangement.

                                  (c)             Except as set forth in the TS Operating Agreement, no membership interests of TS have been issued
subject to a repurchase option, put or buy back agreement on the part of TS.

                                  (d)             Except as set forth on Schedule 3.11, and except as set forth in the TS Operating Agreement and in the TS Appreciation Rights Plans, there
are no outstanding options, 

	

11

	warrants, rights (including unit appreciation, phantom unit, profit participation, conversion and preemptive rights and rights of first refusal) or agreements for the purchase or acquisition from TS of any membership interests in TS, or the acquisition from RRT of the TS Interest or any pledge or encumbrance on any such membership interests. 

                                          (e)             Except as set forth in the TS Operating Agreement, neither RRT nor TS is a party or subject to any agreement, arrangement, or understanding, and there is no agreement, arrangement or understanding between or among any Persons, which affects, restricts or relates to voting, giving of written consents, dividend rights or transferability of membership interests of TS, including any voting trust agreement or proxy.

                        3.12           Agreements; Action.

                                          (a)             Except as set forth in the TS Operating Agreement, the TS Appreciation Rights Plans and on Schedule 3.12, there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which TS is a party or, to the Knowledge of RRT, by which it is bound which may involve (i) future obligations (contingent or otherwise) of, or payments to, TS in excess of $1,000,000 (other than obligations of, or payments to, TS arising from purchase or sale agreements entered into in the ordin

ary course of business), or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from TS, or (iii) provisions restricting the development, manufacture or distribution of TS’s products or services, or (iv) indemnification by TS with respect to infringements of Proprietary Rights (other than indemnification obligations arising from purchase, sale or license agreements entered into in the ordinary course of business).

                                          (b)             Except as set forth on Schedule 3.12, since December 31, 2004, TS has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its membership interests, (ii) incurred or guaranteed any indebtedness for money borrowed, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any material portion of its assets or rights, other than the sale of its inventory in

the ordinary course of business.

                        3.13           Insurance.  TS has general commercial, product liability, fire and casualty insurance policies with coverage customary for companies similarly situated to TS.

        ARTICLE IV 

                ADDITIONAL AGREEMENTS

                        4.1             Expenses. Except as otherwise provided herein or in the Ancillary Agreements, all fees and expenses incurred by any party hereto in connection with the negotiation and effectuation of the terms and conditions of this Agreement or the Ancillary Agreements and the transactions contemplated hereby and thereby, including all legal, accounting, financial advisory, consulting, success, brokers and all other fees and expenses of third parties, shall be the obligation of such party.

                        4.2             Public Disclosure. Unless otherwise required by Law (including federal and state securities Laws and the rules and regulations of the New York Stock Exchange), no disclosure 

	

12

	
(whether or not in response to any inquiry) of the existence of any subject matter of, or the terms
and conditions of, this Agreement shall be made by any party hereto unless approved by all other
parties hereto prior to release; provided, however, that such approval shall not be unreasonably withheld or delayed.

                4.3             Additional Documents and Further Assurances; Cooperation.  Each party hereto, at the request of the other party hereto, shall use commercially reasonable efforts
to execute and deliver such other instruments and do and perform such other acts and things as may
be necessary or desirable for effecting completely the transactions contemplated hereby and by the
Ancillary Agreements.

                4.4             Employee Matters.  Except as set forth on Schedule 4.4, AFBS will terminate, as of June 29, 2005, the employment of all of its employees (the “Employees”). AFBS shall satisfy all compensation, severance pay, unemployment, COBRA obligations, accrued
and unused vacation time and any other obligations and liabilities under applicable Law or otherwise
and of any kind or nature with respect to these Employees arising from or in connection with their
employment with AFBS or on account of, or in connection with, the termination of their employment
with AFBS, including, without limitation, any obligation or liability under any stock option plan
of AFBS. 

                4.5             Transfer Taxes.  All transfer, documentary, sales, use, stamp, registration and other such Taxes incurred in connection
with the transfer of the TS Interest or the Purchased Units under this Agreement, shall be paid by
the party legally responsible therefor when due, and such party will, at its own expense, file all
necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales,
use, stamp, registration and other such Taxes and fees, and, if required by applicable Law, each
of the parties hereto will, and will cause its Affiliates to, join in the execution of any such Tax
Returns and other documentation.

                4.6             Income Tax Treatment of Transactions. The parties hereto agree that, for income tax purposes, the transactions contemplated by this Agreement
are intended to constitute, and shall be treated and reported for income tax purposes by the parties
and Therics as constituting, the following: (i) the purchase by RRT (through his purchase of the
Purchased Units) of an 82.5% undivided interest in the Contributed Assets, followed immediately by
(ii) the contribution by RRT and AFBS of their 82.5% and 17.5% undivided interests in the Contributed
Assets to Therics in exchange for membership interests in Therics, and (iii) thereafter, upon transfer
of the IP Assets to Therics, the sale of the IP Assets by AFBS to Therics for the obligation of Therics
to make the payments to be made pursuant to the Payment Agreement, which obligation (and payments)
the parties agree has as a fair market value equal to the amount determined by KPMG LLP, as set forth
in a valuation report to be delivered to AFBS by KPMG LLP, and the amount of any accrued liabilities
assumed by Therics under the IP Transfer Agreement.

                4.7             Put Right.  AFBS may, at any time during the period beginning on the fifth anniversary hereof and ending on the
sixth anniversary hereof, elect to require RRT to provide it with a “Purchase Offer” (as
such term is defined in the TS Operating Agreement) for the TS Interest and thereby initiate a sale
of the TS Interest pursuant to Section 8.5(a) of the TS Operating Agreement. The TS Interest will
therafter be offered for sale to TS and to all members 

	

13

	of TS other than AFBS in accordance with Section 8.6(a) and Section 8.7 of the TS Operating Agreement. The TS Interest shall then be purchased by either TS or the other members of TS in accordance with the terms of Section 8.7 of the TS Operating Agreement, provided however, that in the event that TS declines to purchase the TS Interest under Section 8.7(a) of the TS Operating Agreement then RRT hereby agrees that he will promptly exercise his purchase option under Section 8.7(b) thereof. In accordance with Section 8.9(a) thereof the purchase price for the TS Interest will be as stated in the Purchase Offer. Notice of its exercise of AFBS’s right to have RRT provide it with a Purchase Offer shall be given by AFBS to RRT pursuant to the terms of this Agreement and shall be given at any time during the one-year period described in the first sentence of this Section 4.7. The closing of the transactions cont

emplated in this Section 4.7  may occur following the sixth anniversary hereof so long as the notice of AFBS’s election to require RRT to provide it with a Purchase Offer is provided to RRT after the fifth anniversary and prior to such sixth anniversary. Upon RRT’s receipt of such notice, if at all, then RRT and AFBS shall determine the purchase price of the TS Interest in accordance with the terms of this Section 4.7  and once finally determined it shall be used by RRT in the Purchase Offer and the Purchase Offer shall be issued. The purchase price for the TS Interest shall be equal to the fair market value thereof as of the date notice is provided from AFBS to RRT, as such fair market value is mutually agreed to by AFBS and RRT. If AFBS and RRT cannot agree on the fair market value of the TS Interest, then AFBS and RRT shall select two independent third-party appraisers to determine such fair market value, the cost of such appraisers to be shared equally by RRT

 and AFBS. The selection of the appraisers shall be by agreement of AFBS and RRT and such appraisers shall be designated to serve as the appraisers for purposes of determining the fair market value of such TS Interest. Upon completion of the appraisals, the appraisers shall deliver copies of their appraisals to AFBS and RRT. If the fair market value of the TS Interest, as set forth in each appraisal, is less than 10% apart, then the fair market value of the TS Interest shall be the average of the fair market value set forth in each appraisal. However, if the fair market value of the TS Interest, as set forth in each appraisal, is more than 10% apart, then the parties shall agree on a third appraiser, the cost of such appraiser to be shared equally by RRT and AFBS, who will then appraise the fair market value of the TS Interest and provide copies of the appraisal to both parties. The fair market value of the TS Interest shall then be the average of the fair market value of the TS Interest in the two appraisal

s which are the closest in value. The Purchase Offer shall state that the purchase price for the TS Interest shall be paid, at RRT’s option, either (1) in cash on the date of the closing of the purchase, or (2) by delivery of a promissory note of RRT, payable in equal monthly installments over a four year term, bearing interest at the then prevailing prime interest rate and secured by a first priority security interest in such TS Interest.

        ARTICLE V 

                SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

                        5.1             Survival of Representations and Warranties. All of the representations and warranties contained in this Agreement, the Transfer Agreement or the IP Transfer Agreement shall survive the Closing and continue until the one (1) year anniversary of the Closing Date; provided, however, that the representations and warranties of AFBS in Section 2.10 and the representations and warranties of RRT in Section 3.9 shall survive the Closing and continue until the eighteen (18) month anniversary of the Closing Date, and provided further, that the representations and warranties of AFBS in Sections 2.1

, 2.2, 2.3 and 2.4 and the representations 

	

14

	
and warranties of RRT in Sections 3.1, 3.2, 3.3 and 3.11, 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.

                5.2            Indemnification.

                                 (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 in Sections 5.2(a)(i)  or 5.2(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 

	

15

	
recovered from AFBS Indemnified Parties, $500,000 and (ii) in the case of Losses that may be recovered
from Therics Indemnified Parties, $500,000.

                                 (d)            Notwithstanding anything to the contrary contained in this Agreement, no obligation of Therics or
AFBS, as the case may be (each, an “Indemnifying Party”), with respect to any indemnifiable Loss otherwise payable by such Indemnifying Party under Section 5.2(a)(i)  or 5.2(b)(i), shall be payable until such time as all indemnifiable Losses payable to an AFBS Indemnified Party
or Therics Indemnified Party, as the case may be, by such Indemnifying Party on account of such Loss
shall exceed $25,000, at which time such Indemnified Party shall be entitled to the full amount of
Losses (excluding such $25,000 amount). 

                5.3             Third-Party Claim Indemnification Procedures.

                                  (a)            The obligations and liabilities of an Indemnifying Party under this Article V  with respect to Losses arising from claims of any third party which are subject to the indemnification
provided for in this Article V  (“Third-Party Claims”) shall be governed by and contingent upon the terms and conditions set forth in this Section 5.3. If any Person entitled to indemnification pursuant to Section 5.2(a) or 5.2(b) (an “Indemnified Party”) shall receive notice of any Third-Party Claim, the Indemnified Party shall give the Indemnifying
Party notice of such Third-Party Claim promptly upon the receipt by the Indemnified Party of such
notice; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its
respective obligations under this Article V  except to the extent that the Indemnifying Party is materially prejudiced by such failure. The
notice of claim shall describe in reasonable detail the facts known to the Indemnified Party giving
rise to such indemnification claim, and the amount or good faith estimate of the amount arising therefrom.

                                  (b)            The Indemnifying Party shall be entitled to assume and control the defense of a Third-Party Claim
at its expense and through counsel of its choice (such counsel to be reasonably acceptable to the
Indemnified Party) if it gives notice of its intention to do so to the Indemnified Party within fifteen
(15) days after the receipt of such notice from the Indemnified Party; provided, however, if there exists a conflict of interest that would make it inappropriate for the same counsel to represent
both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled
to retain its own counsel, in each jurisdiction for which counsel is required, at the expense
of the Indemnifying Party. In the event that the Indemnifying Party exercises the right to undertake
any such defense against any such Third-Party Claim as provided above, the Indemnifying Party shall
conduct the defense of the Third-Party Claim actively and diligently and the Indemnified Party shall
cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party
at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information
in the Indemnified Party’s possession or under the Indemnified Party’s control relating
thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified
Party is, directly or indirectly, conducting the defense against any such Third-Party Claim, the
Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available
to the Indemnified Party, at the Indemnifying Party’s expense, all such witnesses, records,
materials and information in the Indemnifying Party’s possession or under the Indemnifying Party’s
control relating thereto as is reasonably required by the Indemnified Party. No such Third-Party Claim may be settled 

	

16

	by any party conducting the defense against such claim without the prior written consent of the other party, which consent shall not be unreasonably delayed or withheld.

                        5.4            Exclusive Remedy. Except with respect to claims based on fraud, the terms and conditions of this Article V shall apply to and shall be the exclusive remedy of any Indemnified Party or any party to this Agreement with respect to Losses arising out of or resulting from inaccuracies in or breaches of representations and warranties contained in this Agreement, the Transfer Agreement or the IP Transfer Agreement.

                        5.5            Allocation of Adjusted Annual License Maintenance Fee. Notwithstanding any provision to the contrary in this Agreement or any of the Ancillary Agreements, AFBS shall be liable for payment of the Adjusted Annual License Maintenance Fee and Therics shall be liable to reimburse AFBS for five-sixths of the Adjusted Annual License Maintenance Fee not later than January 31, 2006.

                        5.6             Delivery of Certain Information. At the written request of AFBS within three months after the Closing Date, Therics shall deliver the hard drive(s) of those servers that contain the Great Plains Software and a usable copy of such hard drives.

        ARTICLE VI 

                  MISCELLANEOUS PROVISIONS 

                        6.1             Notices.  All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by facsimile transmission against facsimile confirmation or mailed by a nationally recognized overnight courier prepaid, to the parties at the following addresses or facsimile numbers:

                        If to RRT or Therics:

	 

	 	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

	

17

	
                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.

	 
	
All such notices, requests and other communications will (a) if delivered personally to the address
as provided in this Section 6.1, be deemed given upon delivery, (b) if delivered by facsimile transmission to the facsimile number
as provided for in this Section 6.1, be deemed given upon facsimile confirmation, and (c) if delivered by overnight courier to the address
as provided in this Section 6.1, be deemed given on the earlier of the first business day following the date sent by such overnight
courier or upon receipt (in each case regardless of whether such notice, request or other communication
is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 6.1). Any party from time to time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the other party hereto.

                6.2             Amendment.  This Agreement may be amended by the parties hereto at any time by execution of an instrument in
writing signed on behalf of each of the parties hereto.

                6.3             Entire Agreement.  This Agreement and the transactions contemplated hereby constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter hereof.

                6.4             Waiver.  Any term or condition of this Agreement may be waived at any time by the party that is entitled to
the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument
duly executed by or on behalf of the party waiving such term or condition. No waiver by any party
of any term or condition of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same or any other term or condition of this Agreement on any future
occasion. All remedies, either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.

	

18

	
                6.5             Third-Party Beneficiaries.  Except as expressly provided herein, the terms and provisions of this Agreement are intended solely
for the benefit of each party hereto and their respective successors or permitted assigns, and it
is not the intention of the parties to confer third-party beneficiary rights, and this Agreement
does not confer any such rights, upon any other Person other than any Person entitled to indemnity
under Article V.

                6.6             No Assignment; Binding Effect.  Neither this Agreement nor any right, interest or obligation hereunder may be assigned by any party
without the prior written consent of the other party and any attempt to do so will be void. Subject
to the preceding sentence, this Agreement is binding upon, inures to the benefit of and is enforceable
by the parties hereto and their respective successors and assigns.

                6.7             Headings.  The headings and table of contents used in this Agreement have been inserted for convenience of reference
only and do not define or limit the provisions hereof.

                6.8             Invalid Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present
or future Law, and if the rights or obligations of any party hereto under this Agreement will not
be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this
Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had
never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there
will be added automatically as a part of this Agreement a legal, valid and enforceable provision
as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

                6.9             Governing Law.

                                  This Agreement, any Ancillary Agreements and any other closing documents shall be governed by and construed
in accordance with the laws of the State of Ohio as applied to contracts entered into by Ohio residents
and performed entirely in Ohio, without giving effect to its principles or rules regarding conflicts
of laws, other than such principles directing application of the laws of Ohio. 

                6.10           WAIVER OF TRIAL BY JURY.  IN ANY ACTION OR PROCEEDING ARISING HEREFROM, THE PARTIES HERETO CONSENT TO TRIAL WITHOUT A JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER OR THEIR
SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, REGARDLESS
OF THE FORM OF ACTION OR PROCEEDING.

                6.11           Construction. The parties hereto agree that this Agreement is the product of negotiation between sophisticated
parties and individuals, all of whom were represented by counsel, and each of whom had an opportunity
to participate in and did participate in, the drafting of each provision hereof. Accordingly, ambiguities
in this Agreement, if any, shall not be construed strictly or in favor of or against any party hereto,
but rather shall be given a fair and reasonable construction without regard to the rule of contra
proferentem.

	

19

	
                6.12           Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original,
but all of which together will constitute one and the same instrument.

                6.13           Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity. Nothing in Article V shall be construed or interpreted to limit this Section 6.13.

ARTICLE VII 

  DEFINITIONS

                7.1             Definitions. As used in this Agreement, the following defined terms shall have the meanings indicated below:

                                  “AFBS” shall have the meaning set forth in the Preamble of this Agreement.

                                  “AFBS Indemnified Parties” shall have the meaning set forth in Section 5.2(a)

                                  “AFBS-Related Party” shall mean any “Affiliate” of AFBS or any predecessor in interest to AFBS (including
but not limited to Therics, Inc.).

                                  “Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled
by or under common control with, that Person. For the purposes of this definition, “control”
(including with correlative meanings, the terms “controlling”, “controlled by”,
and “under common control with”) as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management and policies of that
Person, whether through ownership of voting securities or by contract or otherwise.

                                  “Agreement” means this Unit Purchase Agreement, including (unless the context otherwise requires) the Exhibits,
the Schedules and the certificates and instruments delivered in connection herewith, or incorporated
by reference, as the same may be amended or supplemented from time to time in accordance with the
terms hereof.

                                  “Ancillary Agreements” shall mean, collectively, (a) the Transfer Agreement, (b) the IP Transfer Agreement, (c) the
Operating Agreement, (d) the TS Operating Agreement, (e) the Sublease, and (f) the Payment Agreement.

                                  “Adjusted Annual License Maintenance Fee” means the reduced annual license maintenance fee
of $40,000 due on June 30, 2005 set forth in that certain Patent License Agreement, dated as of June
1, 1994, by and between the Massachusetts Institute of Technology and Therics, Inc., as amended by
the First through Eight Amendments thereto.

                                  “Assumed Contracts” shall have the meaning set forth in the Transfer Agreement.

	

20

	
                                “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 in Section 1.2(a).

                                “Closing Date” shall have the meaning set forth in Section 1.2(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 in Section 4.4.

                                “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 on Schedule 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 on Schedule 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 in Section 5.3(a).

                                “Indemnifying Party” shall have the meaning set forth in Section 5.2(d).

                                “Intellectual Property” shall have the meaning set forth in the IP Transfer Agreement.

	

21

	
                                “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 in Section 5.2(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.

	

22

	
                                “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 in Section 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 in Section 5.2(b)

                                “Third-Party Claims” shall have the meaning set forth in Section 5.3(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 in Section 3.9.

                                “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.

	

23

	
                7.2             Construction.

                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]

	

24

	
                                  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

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