Contract analysis

I. Introduction and Purpose The purpose of this Memorandum is to provide Solstice Biomedical Devices Ltd. ("Solstice" or "SBD") with a comprehensive, phased budget estimate for the defense of the patent infringement action filed by Apex Surgical Innovations, Inc. ("Apex") on May 9, 2024, in the United States District Court for the District of Delaware, Case No. 1:24-cv-00587-RGA (the "Action"). The Action has been as

II. Matter Overview A. The Action On May 9, 2024, Apex Surgical Innovations, Inc. filed a Complaint for Patent Infringement in the United States District Court for the District of Delaware, initiating the above-captioned Action. The Complaint alleges that Solstice's PrecisionEdge™ line of laparoscopic trocar assemblies infringes three Apex utility patents. The asserted patents, their key characteristics, and the spec

1. PrecisionEdge™ PE-5000 Series (5 mm trocar assembly) — accused of infringing the '237 Patent and the '884 Patent. The PE-5000 Series is Solstice's smallest-diameter trocar product and is widely used for instrument insertion in standard laparoscopic procedures.

2. PrecisionEdge™ PE-12000 Series (12 mm trocar assembly) — accused of infringing all three asserted patents (the '237 Patent, the '884 Patent, and the '105 Patent). The PE-12000 Series is Solstice's highest-volume product in the PrecisionEdge™ line and is used for a broad range of laparoscopic and robotic-assisted surgical applications.

3. PrecisionEdge™ PE-15000 Series (15 mm trocar assembly) — accused of infringing the '884 Patent and the '105 Patent. The PE-15000 Series is Solstice's large-bore trocar product, principally used for specimen retrieval and larger instrument insertion. Based on information provided by Solstice's finance team, the combined U.S. sales of the accused PrecisionEdge™ products for calendar years 2021 through 2023 were appr

III. Billing Rates The current Calderwood & Harkness LLP billing rates applicable to this engagement for the 2024–2025 period are as follows: These rates are consistent with the terms set forth in the engagement letter dated May 10, 2024, and are in line with the rates typically charged by major intellectual property litigation practices for matters of this complexity and magnitude in the District of Delaware. We not

IV. Insurance Coverage Context Solstice maintains an intellectual property litigation insurance policy with Halcyon Specialty Insurance Co. ("Halcyon") that provides coverage for patent infringement defense costs. The key parameters of the applicable coverage are as follows: • Policy Number: HSI-IP-2023-04891 • Insurer: Halcyon Specialty Insurance Co. • Coverage: Patent infringement defense costs, including attorney

V. Phased Litigation Budget The following sections describe, phase by phase, the substantive scope of legal work anticipated, the key deliverables and activities within each phase, and the estimated fees and costs. Where phases overlap in timing, we have noted the overlap and the allocation of shared attorney resources. Phase 1: Case Assessment, Pleadings, and Initial Case Management (May 2024 – July 2024) Scope of W

VI. Budget Summary Table The following table summarizes the estimated fees and costs for each phase of the litigation, as well as the overall totals for Calderwood & Harkness and for all counsel and consultants combined. Calderwood & Harkness LLP — Phased Budget Summary Additional Costs Outside Calderwood & Harkness Budget Grand Total — All Counsel and Consultants The midpoint of the Grand Total estimate is approxima

VII. Insurance Recovery Analysis The following analysis summarizes the expected allocation of defense costs between Solstice and Halcyon Specialty Insurance Co. under the applicable insurance policy. Policy Parameters: • Policy No.: HSI-IP-2023-04891 • Self-Insured Retention (SIR): $250,000 • Per-Occurrence Limit: $5,000,000 • Aggregate Limit: $10,000,000 Estimated Allocation of Costs (Based on Midpoint Budget of App

VIII. Key Assumptions and Caveats This budget estimate is based on a number of assumptions regarding the course of the litigation, court scheduling, and opposing party conduct. We set forth below the principal assumptions and caveats that should be considered in evaluating the budget:

1. Full Trial Assumption. The budget assumes that the case proceeds through a full jury trial on the September–October 2025 schedule. If the case resolves earlier — whether through settlement, voluntary dismissal, or dispositive motion — fees for later phases will be significantly reduced. By way of illustration, a settlement at the close of expert discovery (end of Phase 4) would reduce total Calderwood & Harkness f

2. No Appellate Proceedings. The budget does not include any fees or costs for appellate proceedings. If an appeal is taken by either party following trial, a separate budget estimate will be prepared. Patent appeals to the U.S. Court of Appeals for the Federal Circuit can involve significant additional expense, typically in the range of $250,000 to $500,000 or more.

3. Single Consolidated Trial. The budget assumes a single, consolidated trial on all three asserted patents and all three accused product lines. If the Court bifurcates the proceedings (e.g., separating liability from damages) or orders separate trials on individual patents or products, the total costs may increase due to the duplication of trial preparation and presentation efforts.

4. No Extraordinary Motion Practice. The budget does not account for potential sanctions motions, discovery abuse motions, emergency injunctive relief proceedings, or other extraordinary motion practice beyond the typical motions described in the phased scope of work. If such proceedings become necessary, they will be addressed in a supplemental budget estimate.

5. E-discovery Volume. E-discovery costs are highly variable and depend on the actual volume of custodian data collected, the number of custodians identified, the extent and specificity of Apex's discovery requests, and the degree to which TAR protocols can reduce the manual review burden. The current estimate assumes approximately 1.0 to 1.5 terabytes of data processed through TAR. Significant increases in data volu

6. Expert Fee Variability. Expert fees are estimated based on anticipated hours and may vary depending on the actual scope of expert work required, the complexity of the analysis, the volume of materials to be reviewed, and the extent of deposition and trial preparation. The estimates for Dr. Ostrowski and Dr. Marchetti represent our current best assessment based on comparable engagements.

7. Separate Kendrick & Lau Billing. Kendrick & Lau LLP fees are separate from the Calderwood & Harkness budget and will be invoiced directly to Solstice. Calderwood & Harkness has no involvement in Kendrick & Lau's billing arrangements and does not control or guarantee their fee estimates.

8. No Settlement or Royalty Costs. The budget does not include any potential settlement payment, royalty obligation, or licensing fee. These amounts, if applicable, will be discussed separately in the context of any settlement negotiations.

9. Monthly Billing and Reporting. Phased billing will be submitted on a monthly basis with detailed time entries and cost backup, consistent with Halcyon's periodic reporting requirements and with Solstice's internal financial management processes.

10. Currency. All amounts in this memorandum are expressed in U.S. dollars. Given that Solstice Biomedical Devices Ltd. is an Irish-domiciled entity, Brendan Molloy's finance team should coordinate internally regarding EUR/USD conversion rates and any hedging arrangements that may be appropriate for the anticipated stream of legal fee payments over the next 18 months.

IX. Damages Exposure Context To provide context for the defense investment reflected in this budget, we set forth below a preliminary assessment of Solstice's potential damages exposure in this Action: Revenue Base. The combined U.S. sales of the accused PrecisionEdge™ products for calendar years 2021 through 2023 totaled approximately $52.3 million. Sales in calendar year 2024 are on pace to match or exceed fiscal y

X. Billing and Reporting Procedures To ensure transparency, accountability, and compliance with both Solstice's internal requirements and Halcyon's coverage reporting obligations, the following billing and reporting procedures will be in effect throughout this engagement:

1. Monthly Invoices. Monthly invoices will be prepared by Catherine Bloom (Billing Partner) and submitted to Eamon Rourke (General Counsel) and Brendan Molloy (CFO) of Solstice. Invoices will be submitted within 30 days of the end of each billing month.

2. Detailed Time and Expense Reporting. Each invoice will include detailed time entries organized by timekeeper, with narrative descriptions of the work performed sufficient to satisfy both Solstice's internal review requirements and Halcyon's coverage audit standards. Itemized disbursements will be separately listed with supporting documentation as applicable.

3. LEDES Format Submission. Copies of invoices will be prepared in LEDES (Legal Electronic Data Exchange Standard) format, if required by Halcyon, for submission to Halcyon Specialty Insurance Co. for reimbursement of covered defense costs above the $250,000 SIR.

4. Quarterly Budget-to-Actual Reports. Quarterly reports comparing actual fees and costs incurred to the phased budget estimates will be provided to Solstice and Halcyon. These reports will identify any variances from the budget, explain the reasons for the variances, and provide updated projections for subsequent phases.

5. Material Budget Overrun Notification. Any material budget overrun — defined as an actual or projected variance exceeding 10% of any individual phase estimate — will be flagged in advance to Solstice with a written explanation and a revised estimate. We are committed to providing advance notice of any significant cost deviations so that Solstice can make informed decisions about case strategy and resource allocatio

6. Halcyon Coordination. Calderwood & Harkness will coordinate directly with Halcyon's Claims Adjuster, Sandra Keene, as needed to ensure that invoices and reports satisfy the insurer's documentation requirements and to facilitate timely reimbursement of covered costs.

XI. Recommendation and Next Steps Based on the foregoing analysis, we recommend that Solstice authorize the phased litigation budget as presented in this memorandum, with the understanding that the budget will be reviewed and updated on a regular basis as the case progresses and material developments occur. The budget represents a sound and proportionate investment in the defense of a high-stakes patent infringement

1. Finalize and File Answer, Affirmative Defenses, and Counterclaims. Target filing date: June 14, 2024. We are well underway in the preparation of the responsive pleading and will circulate a draft to Eamon Rourke and Niamh Cassidy for review in advance of filing.

2. Complete Preliminary Claim Charts for Non-Infringement Analysis. Detailed element-by-element claim charts mapping the asserted claims against the PE-5000, PE-12000, and PE-15000 Series will be prepared and circulated for internal review. These charts will be refined as claim construction positions develop.

3. Coordinate with Kendrick & Lau LLP on Prosecution History Review and Prior Art Search. Dr. Jonathan Kendrick will begin his review of the prosecution histories of the three asserted patents and initiate the prior art search. We will schedule an initial coordination call with Dr. Kendrick for the week of May 20, 2024.

4. Confirm Halcyon Coverage Acknowledgment and Scope of Covered Costs. Solstice should follow up with Sandra Keene at Halcyon to obtain written acknowledgment of coverage and to confirm the scope of covered defens