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 in this Article I shall have the meanings ascribed to them elsewhere in this Agreement.

Section 1.1 "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 more than fifty percent (50%) of the outstanding voting securities or equivalent ownership interest of an entity, or the power to direct or cause the direction of the

Section 1.2 "Agreement" means this Settlement Agreement and Mutual Release, including all Exhibits attached hereto, as the same may be amended, supplemented, or modified from time to time in accordance with the terms hereof.

Section 1.3 "Apex Trocar Patent Family" means the fourteen (14) issued United States patents and six (6) pending continuation applications identified in Exhibit C attached hereto, including the Asserted Patents, and any continuations, continuations-in-part, divisionals, reissues, reexamination certificates, and extensions thereof.

Section 1.4 "Asserted Patents" means, collectively, U.S. Patent No. 9,814,237 (the '237 Patent), U.S. Patent No. 10,271,884 (the '884 Patent), and U.S. Patent No. 10,932,105 (the '105 Patent).

Section 1.5 "Accused Products" means the PrecisionEdge™ PE-5000 Series (5 mm trocar assembly), the PrecisionEdge™ PE-12000 Series (12 mm trocar assembly), and the PrecisionEdge™ PE-15000 Series (15 mm trocar assembly), as manufactured, sold, offered for sale, imported, or used by Solstice or its Affiliates.

Section 1.6 "Effective Date" means the date on which the last Party to execute this Agreement delivers its executed signature page, such that this Agreement has been fully executed by all Parties.

Section 1.7 "Escrow Agent" means Tidewater Fiduciary Services, Inc., located at 300 Delaware Avenue, Suite 1400, Wilmington, Delaware 19801, or such successor escrow agent as the Parties may mutually designate in writing.

Section 1.8 "Escrow Agreement" means the escrow agreement entered into by Solstice, Apex, and the Escrow Agent contemporaneously with the execution of this Agreement, which governs the receipt, holding, and disbursement of the Lump-Sum Payment, attached and incorporated herein by reference as a separate instrument.

Section 1.9 "Licensed Field" means

Section 1.10 "Licensed Patents" means the Asserted Patents and any continuations, continuations-in-part, divisionals, reissues, reexamination certificates, and extensions thereof, all as more fully described in the License Agreement attached as Exhibit A.

Section 1.11 "Licensed Products" means the PrecisionEdge™ PE-5000 Series, PE-12000 Series, and PE-15000 Series trocar assemblies in each case to the extent that such products fall within the Licensed Field.

Section 1.12 "License Agreement" means the Patent License Agreement (Non-Exclusive) attached hereto as Exhibit A, executed contemporaneously herewith.

Section 1.13 "Litigation" means the civil 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.

Section 1.14 "Lump-Sum Payment" means the aggregate amount of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) payable by Solstice to Apex in accordance with Article III of this Agreement, consisting of the Tranche 1 Payment and the Tranche 2 Payment.

Section 1.15 "Net Sales" means the gross amounts invoiced by Solstice, Solstice's Affiliates, and authorized sublicensees for the sale, lease, or other disposition of Licensed Products to third parties in arms-length transactions, less the following deductions to the extent actually incurred, allowed, accrued, or specifically allocated to the Licensed Products in accordance with generally accepted accounting principl

Section 1.16 "Running Royalty" means the royalty payable by Solstice to Apex on Net Sales of Licensed Products in accordance with Section 3.3 of this Agreement and the License Agreement.

Section 1.17 "Stipulation of Dismissal" means the Stipulation of Dismissal with Prejudice in the form attached hereto as Exhibit E, to be jointly filed by the Parties in the Litigation in accordance with Section 2.1.

Section 1.18 "Term Sheet" means the Term Sheet executed by the Parties on June 10, 2025, which set out the principal terms of the settlement and which is superseded in its entirety upon execution of this Agreement.

Section 1.19 "Tranche 1 Payment" means the amount of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000), payable in accordance with Section 3.2(a).

Section 1.20 "Tranche 2 Payment" means the amount of Three Million Five Hundred Thousand Dollars ($3,500,000), payable in accordance with Section 3.2(b).

ARTICLE II SETTLEMENT OF THE LITIGATION

Section 2.1 Dismissal with Prejudice. Within business days following the satisfaction of each of the following conditions: (a) full execution of this Agreement by all Parties; (b) execution of the License Agreement attached as Exhibit A by all Parties thereto; and (c) deposit of the Tranche 1 Payment into the escrow account maintained by the Escrow Agent in accordance with the Escrow Agreement, the Parties shall caus

Section 2.2 Vacatur of Trial Date and Pre-Trial Deadlines. Contemporaneously with the filing of the Stipulation of Dismissal, the Parties shall jointly request that the Court vacate the trial date of September 30, 2025 and all remaining pre-trial deadlines, including any deadlines for the filing of motions in limine, trial briefs, proposed findings of fact and conclusions of law, exhibit lists, deposition designation

Section 2.3 No Admission of Liability. This Agreement is entered into solely for the purpose of compromising and settling disputed claims, and nothing contained in this Agreement, nor the fact of its execution, shall be construed as or deemed to be evidence of an admission or concession by any Party of any liability, wrongdoing, or fault whatsoever. Without limiting the generality of the foregoing: (a) Nothing herein

Section 3.1 Lump-Sum Payment. In partial consideration of the settlement of the Litigation, the license grant described in Article IV, the covenant not to sue described in Article V, and the mutual releases described in Article VI, Solstice shall pay to Apex a total lump-sum amount of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) (the "Lump-Sum Payment"), payable in two tranches as set forth in Sect

Section 3.2 Payment Schedule. The Lump-Sum Payment shall be paid in the following installments: (a) Tranche 1 Payment. The sum of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000) (the "Tranche 1 Payment") shall be deposited by Solstice into the escrow account maintained by Tidewater Fiduciary Services, Inc. (the "Escrow Agent") within ten (10) business days following the Effective Date (the "Tranche 1 Dea

Section 3.3 Running Royalty. Commencing on January 1, 2026 and continuing for the remaining life of the Licensed Patents (the last-to-expire of which is the '105 Patent, having an expiration date of January 10, 2038), Solstice shall pay to Apex a running royalty equal to three and three-quarters percent (3.75%) of Net Sales of Licensed Products by Solstice, Solstice's Affiliates, and authorized sublicensees (the "Run

Section 3.4 Annual Royalty Floor. Beginning with calendar year 2026, if the aggregate Running Royalty payable by Solstice in respect of any full calendar year (the "Actual Royalty") is less than Five Hundred Thousand Dollars ($500,000) (the "Annual Minimum Royalty"), Solstice shall pay to Apex the difference between the Actual Royalty and the Annual Minimum Royalty (such difference, the "Shortfall Payment") within fo

Section 4.1 Patent License. Contemporaneously with the execution of this Agreement, the Parties shall execute the Patent License Agreement (Non-Exclusive) attached hereto as Exhibit A (the "License Agreement"). Pursuant to the License Agreement, Apex shall grant to Solstice a non-exclusive, non-transferable (except as provided in Section 10.4 of this Agreement and the corresponding provisions of the License Agreement

Section 4.2 Scope of License. The license granted pursuant to the License Agreement shall be limited in scope as follows: (a) Licensed Products. The license shall extend to the PrecisionEdge™ PE-5000 Series, PE-12000 Series, and PE-15000 Series trocar assemblies (collectively, the "Licensed Products"), in each case to the extent that such products fall within the Licensed Field. (b) Licensed Field. The license shall

Section 4.3 No Other Rights. Except for the license expressly granted in the License Agreement attached as Exhibit A and the covenant not to sue set forth in Article V of this Agreement and in Exhibit B, no license, immunity, covenant, or other right, whether express or implied, is granted by Apex to Solstice (or to any Affiliate, sublicensee, customer, or other third party) under any other intellectual property of A

Section 5.1 Apex Covenant. In further consideration of the settlement of the Litigation and the payments to be made by Solstice hereunder, Apex covenants and agrees, for itself, its Affiliates, successors, and assigns, that it shall not assert, or cause, direct, or authorize any third party to assert, any patent in the Apex Trocar Patent Family (comprising the fourteen (14) issued United States patents and six (6) pe

Section 5.2 Limitations. The covenant not to sue set forth in Section 5.1 and in Exhibit B shall be subject to the following limitations: (a) The covenant shall not extend to any products that are outside the Licensed Field, including, without limitation, robotic surgical systems, open surgical instruments, or any devices not primarily designed for establishing or maintaining minimally invasive laparoscopic surgical

Section 6.1 Release by Solstice. Effective as of the Effective Date, Solstice, for itself and on behalf of its Affiliates, and each of their respective officers, directors, managers, employees, agents, representatives, predecessors, successors, assigns, heirs, executors, administrators, and legal representatives (collectively, the "Solstice Releasing Parties"), hereby irrevocably and unconditionally releases, acquits

Section 6.2 Release by Apex. Effective as of the Effective Date, Apex, for itself and on behalf of its Affiliates, and each of their respective officers, directors, managers, employees, agents, representatives, predecessors, successors, assigns, heirs, executors, administrators, and legal representatives (collectively, the "Apex Releasing Parties"), hereby irrevocably and unconditionally releases, acquits, and foreve

Section 6.3 Waiver of Unknown Claims. Each Party acknowledges that it may discover facts, claims, or circumstances different from, or in addition to, those that it now knows or believes to be true with respect to the matters released in Sections 6.1 and 6.2, and each Party agrees that the releases set forth in this Article VI shall be and remain effective in all respects notwithstanding any such discovery or any chan

Section 6.4 Carve-Out. Notwithstanding anything to the contrary in this Article VI, the releases set forth in Sections 6.1 and 6.2 shall not release, discharge, or otherwise affect any Party's rights, remedies, or obligations arising under or in connection with: (a) this Agreement; (b) the License Agreement (Exhibit A); (c) the Covenant Not to Sue (Exhibit B); (d) the Escrow Agreement; or (e) any other agreement or i

ARTICLE VII MOST-FAVORED LICENSEE

Section 7.1 MFL Obligation. If, at any time during the term of the License Agreement, Apex enters into a patent license agreement (or amends an existing license agreement) with any third party under one or more of the Licensed Patents for the manufacture, use, sale, offer for sale, or importation of products within the Licensed Field at an effective running royalty rate that is lower than three and three-quarters per

Section 7.2 Exclusions from MFL. The most-favored licensee obligation set forth in Section 7.1 shall not apply to, and shall not be triggered by, any of the following: (a) settlement agreements entered into by Apex in connection with the resolution of patent infringement litigation or threatened litigation, where the effective royalty rate reflects, in whole or in part, the litigation risk, costs, and uncertainties a

Section 8.1 Audit Right. During the term of the Running Royalty obligation and for a period of two (2) years following the expiration or termination thereof, Apex shall have the right, at its own expense (subject to Section 8.3), to cause an audit to be conducted of Solstice's books, records, and accounts relating to the calculation and payment of Net Sales and Running Royalties hereunder, for the purpose of verifyin

Section 8.2 Audit Procedures. The following procedures shall govern the conduct of any audit under this Article VIII: (a) Apex shall provide Solstice not less than days' prior written notice of its intent to conduct an audit, which notice shall identify the proposed audit period and the name of the proposed independent auditor. (b) The audit shall be conducted during normal business hours at Solstice's principal U.S.

Section 8.3 Audit Costs. The costs and expenses of any audit conducted under this Article VIII shall be borne by Apex; provided, however, that if any such audit reveals that the Running Royalty paid by Solstice for the audited period was less than of the amount properly due for such period (i.e., an underpayment exceeding of the amounts properly due), Solstice shall bear and promptly reimburse Apex for the reasonable

Section 8.4 Confidentiality of Audit. All information disclosed to, or obtained by, the independent auditor or Apex in connection with any audit conducted under this Article VIII shall be deemed "Confidential Information" for purposes of Article IX and shall be subject to the confidentiality obligations set forth therein. The independent auditor shall, as a condition to its engagement, execute a confidentiality agree

Section 9.1 Confidential Information. The terms and conditions of this Agreement (including the financial terms set forth in Article III), the License Agreement (Exhibit A), the Covenant Not to Sue (Exhibit B), all Exhibits and schedules hereto, the Escrow Agreement, the Side Letter, and all related agreements, instruments, and correspondence exchanged between the Parties in connection with the negotiation, execution

Section 9.2 Permitted Disclosures. Notwithstanding Section 9.1, each Party may disclose Confidential Information to the following persons and in the following circumstances: (a) to such Party's Affiliates, and to the officers, directors, managers, employees, attorneys, accountants, auditors, financial advisors, bankers, and insurers of such Party and its Affiliates, in each case who have a need to know such Confident

Section 9.3 Public Statement. Within five (5) business days following the filing of the Stipulation of Dismissal, the Parties shall jointly issue the Agreed Joint Public Statement in the form attached hereto as Exhibit F. The Agreed Joint Public Statement shall state only that "the matter has been resolved on mutually agreeable terms" and shall not disclose any financial terms, license terms, or other details of this

Section 9.4 Remedies for Breach. The Parties acknowledge and agree that any breach or threatened breach of the confidentiality obligations set forth in this Article IX would cause irreparable harm to the non-breaching Party for which monetary damages alone would be an insufficient remedy. Accordingly, each Party shall be entitled to seek and obtain injunctive relief, specific performance, or other equitable relief fr

ARTICLE X REPRESENTATIONS AND WARRANTIES

Section 10.1 Mutual Representations and Warranties. Each Party hereby represents and warrants to the other Parties as of the Effective Date as follows: (a) Organization and Good Standing. Such Party is a corporation or other legal entity duly organized, validly existing, and in good standing (or the equivalent thereof) under the laws of its jurisdiction of formation, and has all requisite corporate or organizational

Section 10.2 Apex Representations and Warranties. Apex hereby represents and warrants to Solstice as of the Effective Date as follows: (a) Ownership of Patents. Apex is the sole and exclusive owner of the entire right, title, and interest in and to each of the Asserted Patents and each patent and patent application in the Apex Trocar Patent Family, free and clear of all liens, encumbrances, security interests, option

Section 10.3 Solstice Representations and Warranties. Solstice hereby represents and warrants to Apex as of the Effective Date as follows: (a) Corporate Structure. Solstice Biomedical, Inc. is a wholly owned subsidiary of Solstice Biomedical Devices Ltd. (b) Financial Capacity. Solstice has the financial capacity and resources necessary to make the Lump-Sum Payment (including each tranche thereof) and all Running Roy

Section 10.4 Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE X, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGEMENT. EACH PARTY HEREBY DISCLAIMS ALL SUCH REPRESENTATIONS AND WARRANTIES TO THE FULLEST