Contract analysis

ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Settlement Agreement.

Section 1.1 — "Action." "Action" means the patent infringement action captioned Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, pending in the United States District Court for the District of Delaware before the Honorable Richard G. Andrews, United States District Judge, together with all associated proceedings, motions, and counterclaims therein.

Section 1.2 — "Affiliate." "Affiliate" means, with respect to any Party, any entity that directly or indirectly controls, is controlled by, or is under common control with such Party. For purposes of this definition, "control" means the direct or indirect ownership of fifty percent (50%) or more of the outstanding voting securities of an entity, or the possession of the power to direct or cause the direction of the m

Section 1.3 — "Change of Control." "Change of Control" means, with respect to Solstice or Solstice US, the occurrence of any of the following events: (a) a merger, consolidation, reorganization, or other business combination transaction in which the equity holders of Solstice or Solstice US (as applicable) immediately prior to such transaction hold, in the aggregate, less than fifty percent (50%) of the total voting

Section 1.4 — "Contract Manufacturer." "Contract Manufacturer" means a third-party manufacturer engaged by Solstice, Solstice US, or any of their respective Affiliates under a bona fide written manufacturing agreement, solely for the purpose of manufacturing Licensed Products on behalf of, and for subsequent sale by, Solstice, Solstice US, or their Affiliates. A Contract Manufacturer shall not include any distributor

Section 1.5 — "Effective Date." "Effective Date" means June 16, 2025, being the date on which this Agreement is executed by all Parties and which is coterminous with the effective date of the Settlement Agreement.

Section 1.6 — "Field of Use." "Field of Use" means the design, development, manufacture, use, import, offer for sale, sale, and distribution of laparoscopic surgical access devices, including without limitation trocar assemblies, trocar cannula systems, obturators, and related surgical access instruments designed for use in minimally invasive laparoscopic surgical procedures.

Section 1.7 — "Licensed Patents." "Licensed Patents" means the following United States patents, together with all continuations, continuations-in-part (solely to the extent that the claims thereof are entitled to a priority date of one or more of the patents identified in clauses (a) through (c) below), divisionals, reissues, re-examinations, and extensions of any of the foregoing: (a) U.S. Patent No. 9,814,237, enti

Section 1.8 — "Licensed Products." "Licensed Products" means the following products manufactured, sold, or distributed by or on behalf of Solstice, Solstice US, or their Affiliates: (a) the PrecisionEdge™ PE-5000 Series (5 mm trocar assembly); (b) the PrecisionEdge™ PE-12000 Series (12 mm trocar assembly); (c) the PrecisionEdge™ PE-15000 Series (15 mm trocar assembly); and (d) any successor products thereto, meaning

Section 1.9 — "Net Sales." "Net Sales" means the gross amounts invoiced by Solstice, Solstice US, their Affiliates, and authorized sublicensees for Licensed Products sold or otherwise transferred to unaffiliated third parties in bona fide, arm's-length transactions, less the following deductions to the extent actually incurred, allowed, or accrued and separately identified on the applicable invoices or in the seller'

Section 1.10 — "Royalty Cap." "Royalty Cap" means one million eight hundred thousand United States dollars ($1,800,000) per calendar year, as further described in Section 3.4.

Section 1.11 — "Royalty Floor." "Royalty Floor" means five hundred thousand United States dollars ($500,000) per calendar year, beginning with calendar year 2026, as further described in Section 3.3.

Section 1.12 — "Royalty Rate." "Royalty Rate" means three and three-quarters percent (3.75%) of Net Sales.

Section 1.13 — "Settlement Agreement." "Settlement Agreement" means that certain Settlement Agreement and Mutual Release dated June 16, 2025, by and among Solstice Biomedical Devices Ltd., Solstice Biomedical, Inc., and Apex Surgical Innovations, Inc., together with all exhibits, schedules, and annexes thereto, as may be amended from time to time in accordance with its terms.

Section 1.14 — "Territory." "Territory" means worldwide. Although the Licensed Patents are United States patents, the license granted hereunder encompasses all activities worldwide to the extent such activities are implicated by or would give rise to liability under the Licensed Patents, including without limitation the importation of Licensed Products into the United States and the manufacture of Licensed Products o

Section 2.1 — License Grant. Subject to the terms and conditions of this Agreement and the Settlement Agreement, and in consideration of the lump-sum payment set forth in Section 3.1 and the running royalty payments set forth in Section 3.2, Apex hereby grants to Solstice and Solstice US (collectively, the "Licensees") a non-exclusive, non-transferable (except as expressly set forth in Section 2.3), royalty-bearing,

Section 2.2 — Sublicense Rights. (a) Solstice and Solstice US may grant sublicenses under the Licensed Patents solely to Contract Manufacturers, and solely for the purpose of manufacturing Licensed Products on behalf of and for subsequent sale by Solstice, Solstice US, or their Affiliates. Solstice and Solstice US shall not grant sublicenses for any other purpose or to any other person or entity without the prior wri

Section 2.3 — Non-Transferability; Change of Control Exception. (a) This Agreement and the license granted hereunder may not be assigned, transferred, or delegated by Solstice or Solstice US, in whole or in part, whether by operation of law or otherwise, without the prior written consent of Apex, which consent may be granted or withheld in Apex's sole and absolute discretion; provided, however, that no such consent s

Section 2.4 — Reservation of Rights. All rights not expressly granted to Solstice and Solstice US under this Agreement are reserved by Apex. Without limiting the generality of the foregoing: (a) nothing in this Agreement shall be construed to grant Solstice or Solstice US any license by implication, estoppel, or otherwise, except as expressly set forth in Section 2.1; (b) the license granted hereunder does not extend

Section 2.5 — No Implied License to Third Parties. The sale of Licensed Products by Solstice, Solstice US, their Affiliates, or authorized sublicensees shall not be deemed to grant to any purchaser, end user, or other third party any sublicense or implied license under the Licensed Patents beyond the normal and customary exhaustion of patent rights that attaches to the authorized sale of a patented article. Nothing i

Section 3.1 — Lump-Sum Consideration. In accordance with Section 4.2 of the Settlement Agreement, Solstice shall pay to Apex a lump-sum settlement payment in the aggregate amount of eight million seven hundred fifty thousand United States dollars ($8,750,000), payable in two tranches as follows: (a) Tranche 1: Five million two hundred fifty thousand United States dollars ($5,250,000), due and payable on or before Jun

Section 3.2 — Running Royalty. Beginning on the Effective Date and continuing throughout the Term of this Agreement, Solstice shall pay to Apex a running royalty equal to three and three-quarters percent (3.75%) of Net Sales of Licensed Products (the "Running Royalty"). The Running Royalty obligation shall commence as of the calendar quarter in which the Effective Date falls (i.e., the third calendar quarter of 2025,

Section 3.3 — Royalty Floor. (a) Beginning January 1, 2026, and for each full calendar year thereafter during the Term of this Agreement, the aggregate annual Running Royalty payable by Solstice to Apex shall not be less than the Royalty Floor of five hundred thousand United States dollars ($500,000). (b) If the Running Royalties calculated pursuant to Section 3.2 for any calendar year (beginning with calendar year 2

Section 3.4 — Royalty Cap. (a) Notwithstanding anything to the contrary in Section 3.2, the aggregate Running Royalty payable by Solstice to Apex in any single calendar year shall not exceed the Royalty Cap of one million eight hundred thousand United States dollars ($1,800,000). (b) If cumulative Running Royalties for a calendar year reach the Royalty Cap, no further Running Royalty shall be due or payable by Solsti

Section 3.5 — Payment Terms. (a) Running Royalties shall be calculated and paid on a quarterly basis, within forty-five (45) days after the end of each calendar quarter during the Term. The royalty payment schedule shall be as follows: (b) All payments under this Agreement shall be made in United States dollars. Running Royalty payments shall be made by wire transfer of immediately available funds to a bank account d

Section 3.6 — Late Payments. Any Running Royalty payment, Royalty Floor true-up payment, or other payment due under this Agreement that is not received by Apex within the applicable payment period specified herein shall bear interest from the date on which such payment was due until the date on which such payment is received by Apex, at a rate equal to the lesser of (a) one and one-half percent (1.5%) per month (eigh

Section 3.7 — Taxes and Withholding. (a) All Running Royalty payments and other amounts payable by Solstice to Apex under this Agreement are exclusive of any applicable withholding taxes, value-added taxes, goods and services taxes, sales taxes, use taxes, or similar governmental charges or levies. Solstice shall be responsible for the payment of all such taxes imposed on or with respect to payments made by Solstice

ARTICLE IV ROYALTY REPORTS AND RECORDS

Section 4.1 — Royalty Reports. Concurrently with each quarterly Running Royalty payment, Solstice shall furnish to Apex a written royalty report in the form attached as Exhibit D to the Settlement Agreement (the "Royalty Report"), which form is incorporated herein by reference. Each Royalty Report shall set forth, with respect to the applicable calendar quarter, the following information in reasonable detail: (a) the

Section 4.2 — Record-Keeping. Solstice and Solstice US shall maintain complete and accurate books and records relating to the manufacture, sale, distribution, and other disposition of Licensed Products, in sufficient detail to enable the verification of Net Sales and the calculation of all royalty payments due under this Agreement. Such books and records shall be maintained in accordance with generally accepted accou

Section 4.3 — Audit Rights. (a) Apex shall have the right, exercisable no more than once per calendar year, upon at least thirty (30) days' prior written notice to Solstice, to engage an independent certified public accounting firm reasonably acceptable to Solstice (such acceptance not to be unreasonably withheld, conditioned, or delayed) to examine and audit Solstice's and Solstice US's books and records solely for

ARTICLE V INTELLECTUAL PROPERTY OWNERSHIP AND MAINTENANCE

Section 5.1 — Ownership. Nothing in this Agreement shall be construed to transfer, convey, or assign any ownership interest in any Licensed Patent from Apex to Solstice, Solstice US, or any other person or entity. Apex retains all right, title, and interest in and to the Licensed Patents, including all rights to enforce, license, and dispose of the Licensed Patents, subject only to the license granted to Solstice and

Section 5.2 — Patent Maintenance. (a) Apex shall be responsible, at its own cost and expense, for the maintenance and prosecution of the Licensed Patents during the Term of this Agreement, including the timely payment of all maintenance fees, annuities, and other official fees required to maintain the Licensed Patents in force. (b) Apex shall not, without providing at least thirty (30) days' prior written notice to S

Section 5.3 — Prosecution of Pending Applications. With respect to the six (6) pending continuation applications identified in Exhibit C to the Settlement Agreement, Apex shall use commercially reasonable efforts to prosecute such applications through issuance as United States patents, including by responding to office actions and conducting examiner interviews as Apex deems appropriate in the exercise of its reasona

ARTICLE VI ENFORCEMENT AND DEFENSE OF LICENSED PATENTS

Section 6.1 — Infringement by Third Parties. (a) As between the Parties, Apex shall retain the sole and exclusive right, but not the obligation, to enforce the Licensed Patents against third-party infringers, including the right to initiate and prosecute any legal, administrative, or other proceeding against any such infringer, in any jurisdiction and before any court, tribunal, or governmental body, at Apex's own co

Section 6.2 — Cooperation. In any enforcement action brought by Apex relating to a Licensed Patent, Solstice and Solstice US shall cooperate with Apex at Apex's reasonable request and at Apex's cost and expense, including by: (a) providing relevant non-privileged documents and information relating to Licensed Products and the Licensed Patents; (b) making knowledgeable personnel of Solstice and Solstice US available f

Section 6.3 — Third-Party Challenges. (a) If any Licensed Patent is challenged by a third party, including in any inter partes review, post-grant review, or ex parte reexamination proceeding before the United States Patent and Trademark Office, or in any litigation or other proceeding before any court or tribunal, Apex shall have sole control over the defense of such Licensed Patent in such proceeding, at Apex's own

ARTICLE VII REPRESENTATIONS AND WARRANTIES

Section 7.1 — Apex Representations and Warranties. Apex hereby represents and warrants to Solstice and Solstice US as of the Effective Date as follows: (a) Ownership. Apex is the sole and exclusive owner by assignment of the entire right, title, and interest in and to each of the Licensed Patents, free and clear of any liens, encumbrances, security interests, or adverse claims, except for the license granted to Solst

Section 7.2 — Solstice Representations and Warranties. Each of Solstice and Solstice US hereby represents and warrants to Apex as of the Effective Date as follows: (a) Authority. Such Party has the full right, power, and authority to enter into this Agreement and to perform its obligations hereunder. The execution, delivery, and performance of this Agreement by such Party have been duly authorized by all necessary co

Section 7.3 — Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE VII, APEX MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, WITH RESPECT TO THE LICENSED PATENTS, THE LICENSE GRANTED HEREUNDER, OR THE LICENSED PRODUCTS, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT OF THIR

Section 8.1 — Indemnification by Solstice. Solstice and Solstice US, jointly and severally, shall indemnify, defend, and hold harmless Apex and its officers, directors, employees, agents, successors, and assigns (collectively, the "Apex Indemnitees") from and against any and all third-party claims, actions, suits, proceedings, demands, losses, damages, liabilities, costs, and expenses (including reasonable attorneys'

Section 8.2 — Indemnification by Apex. Apex shall indemnify, defend, and hold harmless Solstice, Solstice US, and their respective officers, directors, employees, agents, successors, and assigns (collectively, the "Solstice Indemnitees") from and against any and all Losses arising out of or related to any breach by Apex of its representations and warranties set forth in Section 7.1 of this Agreement.

Section 8.3 — Indemnification Procedures. (a) Notice. A Party seeking indemnification under this Article VIII (the "Indemnified Party") shall provide the other Party (the "Indemnifying Party") with prompt written notice of any claim, action, suit, or proceeding for which indemnification is sought (a "Claim"), including a description in reasonable detail of the facts and circumstances giving rise to such Claim and the

ARTICLE IX LIMITATION OF LIABILITY

Section 9.1 — Consequential Damages Exclusion. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR ANY OTHER THEORY OF LIABILITY, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILIT

Section 9.2 — Cap on Liability. EXCEPT FOR (A) SOLSTICE'S PAYMENT OBLIGATIONS UNDER ARTICLE III AND SOLSTICE'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 8.1, AND (B) APEX'S INDEMNIFICATION OBLIGATIONS UNDER SECTION 8.2, NEITHER PARTY'S AGGREGATE LIABILITY UNDER THIS AGREEMENT, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE, SHALL EXCEED THE TOTAL AMOUNT OF LUMP-SUM AND RUNNING ROYALTY PAYMENTS ACTUALLY RECEIVED BY A

Section 10.1 — Confidential Information. The terms and conditions of this Agreement, including without limitation the Royalty Rate, the Royalty Floor, the Royalty Cap, the lump-sum payment amounts, Net Sales figures, Royalty Reports, audit findings, and all other financial and commercial terms hereof (collectively, "Confidential Information"), shall be treated as confidential by each Party and shall not be disclosed

Section 10.2 — Exceptions. The confidentiality obligations set forth in Section 10.1 shall not apply to information that: (a) is or becomes generally available to the public through no fault of, or breach of this Agreement by, the receiving Party; (b) was known to the receiving Party prior to disclosure by the disclosing Party, as demonstrated by the receiving Party's written records; (c) is independently developed b

Section 10.3 — Permitted Disclosures. Notwithstanding Section 10.1, either Party may disclose the terms and conditions of this Agreement, including Confidential Information, to the following persons and entities, provided that each such person or entity is bound by professional ethical obligations or written contractual confidentiality obligations at least as protective as those set forth in this Article X: (a) such

ARTICLE XI TERM AND TERMINATION

Section 11.1 — Term. This Agreement shall be effective as of the Effective Date and shall continue in full force and effect until the expiration of the last to expire of the Licensed Patents (i.e., January 10, 2038, being the expiration date of U.S. Patent No. 10,932,105, "Integrated Insufflation Valve and Seal for Laparoscopic Trocar"), unless earlier terminated in accordance with this Article XI (the "Term"). Upon

Section 11.2 — Termination for Material Breach. (a) Either Party may terminate this Agreement upon written notice to the other Party if the other Party commits a material breach of any provision of this Agreement and fails to cure such breach within sixty (60) days after receipt of written notice from the non-breaching Party specifying the nature of the breach in reasonable detail and demanding its cure. (b) Notwiths

Section 11.3 — Termination for Insolvency. Either Party may terminate this Agreement immediately upon written notice to the other Party if the other Party: (a) files a voluntary petition in bankruptcy or is the subject of an involuntary petition in bankruptcy that is not dismissed within ninety (90) days of filing; (b) makes a general assignment for the benefit of creditors; (c) has a receiver, administrator, examine