1037-00004 · Solstice Biomedical Devices Ltd · Closing

client-closing-letter.docx DOCUMENT Litigation

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PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

CALDERWOOD & HARKNESS LLP

Attorneys at Law

299 Park Avenue, 35th Floor New York, NY 10171

Wilmington Office: 1201 Market Street, Suite 2500 Wilmington, DE 19801 Telephone: (302) 555-7800 Facsimile: (302) 555-7801 www.calderwoodharkness.com

July 2, 2025

Via Email (erourke@solsticebiomedical.ie) and U.S. Mail

Mr. Eamon Rourke General Counsel Solstice Biomedical Devices Ltd. Unit 14, Clonskeagh Business Park Clonskeagh Road Dublin 14, D14 YF28 Ireland

Re: Resolution of Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, United States District Court for the District of Delaware

Calderwood & Harkness Matter No. 10294.0017

Dear Eamon:

I am writing in my capacity as Responsible Partner at Calderwood & Harkness LLP on the above-referenced matter to confirm the successful resolution of the patent infringement action brought by Apex Surgical Innovations, Inc. ("Apex") against Solstice Biomedical, Inc. ("Solstice U.S.") and Solstice Biomedical Devices Ltd. ("Solstice" or the "Company," and together with Solstice U.S., the "Solstice Parties") in the United States District Court for the District of Delaware.

The purpose of this letter is to provide you and your team with a comprehensive summary of the litigation history and its resolution, a detailed recitation of the executed settlement terms and related obligations, a description of outstanding post-settlement obligations that will require Solstice's ongoing attention, a summary of insurance matters, a final accounting of legal fees and costs, document retention guidance, and certain engagement wind-down matters. I have endeavored to make this letter as complete as practicable so that it may serve as a definitive reference for Solstice's internal files and for future compliance with the Settlement Agreement and License Agreement.

Before turning to the substance, I want to express on behalf of the entire Calderwood & Harkness engagement team our genuine pleasure at the favorable outcome achieved for Solstice. As discussed in greater detail below, the resolution represents a significant reduction from Apex's claimed damages exposure, provides Solstice with long-term commercial certainty in the U.S. market for the PrecisionEdge™ product line, and avoids the substantial risk, disruption, and expense of a jury trial that had been set for September 30, 2025. We are proud to have served as your litigation counsel in this matter.

1. Summary of Litigation and Resolution

1.1 Background of the Action

On May 9, 2024, Apex Surgical Innovations, Inc., a Delaware corporation headquartered in San Jose, California, filed a Complaint in the United States District Court for the District of Delaware, initiating Civil Action No. 1:24-cv-00587-RGA. In its Complaint, Apex alleged that the Solstice Parties willfully infringed three United States utility patents:

(a) U.S. Patent No. 9,814,237 (the "'237 Patent"), entitled "Trocar Assembly with Self-Sealing Valve Mechanism," issued November 7, 2017;

(b) U.S. Patent No. 10,271,884 (the "'884 Patent"), entitled "Low-Profile Laparoscopic Access Device with Retention Feature," issued April 23, 2019; and

(c) U.S. Patent No. 10,932,105 (the "'105 Patent"), entitled "Multi-Diameter Trocar Cannula System with Integrated Seal Assembly," issued February 23, 2021.

All three patents name Dr. Raymond Szabo as the sole inventor and were assigned to Apex. The patents generally relate to laparoscopic trocar assemblies used in minimally invasive surgical procedures, and in particular to certain valve sealing mechanisms, retention features, and multi-diameter cannula configurations.

The Complaint accused the following Solstice products (collectively, the "Accused Products") of infringing one or more claims of each of the three asserted patents:

• The PrecisionEdge™ PE-5000 Series laparoscopic trocar assemblies;

• The PrecisionEdge™ PE-12000 Series laparoscopic trocar assemblies; and

• The PrecisionEdge™ PE-15000 Series laparoscopic trocar assemblies.

Apex was represented throughout the litigation by the law firm of Hargrove, Tate & Bennington LLP, with Victoria Stanton serving as lead partner. The case was assigned to Chief Judge Richard G. Andrews of the United States District Court for the District of Delaware.

1.2 Key Litigation Milestones

The litigation proceeded through extensive pre-trial proceedings over the course of approximately thirteen months. The key milestones are summarized below for the record:

Responsive Pleadings. On June 14, 2024, Calderwood & Harkness filed Solstice's Answer, Affirmative Defenses, and Counterclaims on behalf of the Solstice Parties. The counterclaims asserted invalidity of the three asserted patents under 35 U.S.C. §§ 102 and 103, non-infringement under 35 U.S.C. § 271, and inequitable conduct based on Dr. Szabo's alleged failure to disclose material prior art references during prosecution of the '237 Patent.

Fact discovery. The parties engaged in extensive fact discovery under the Court's Scheduling Order. Solstice produced a total of 48,217 documents bearing Bates numbers SBD-000001 through SBD-048217, encompassing product design files, engineering specifications, testing data, sales and financial records, regulatory submissions, and internal communications. Apex produced 31,450 documents bearing Bates numbers APEX-000001 through APEX-031450, including prosecution histories, inventor notebooks, licensing correspondence, and financial records. Numerous depositions were conducted on both sides of the case, including depositions of Dr. Raymond Szabo, Apex's Vice President of Licensing, and key Solstice engineering and commercial personnel.

E-discovery Management. The electronic discovery process was managed by DataVault Litigation Solutions, LLC ("DataVault"), which processed approximately 1.2 terabytes of electronically stored information. DataVault implemented a technology-assisted review ("TAR") protocol, which was negotiated with opposing counsel and approved by Magistrate Judge Colleen Pratt. A total of approximately 312,000 individual documents were reviewed through the TAR workflow and associated quality-control processes.

Claim Construction. The Court held a claim construction hearing (commonly referred to as a Markman hearing) on November 18, 2024, at which counsel for both parties presented arguments on the construction of the disputed claim terms. The Court issued its Claim Construction Order on December 6, 2024, construing a total of nine disputed claim terms. Of the nine constructions, five were substantially favorable to Solstice's positions and four were substantially favorable to Apex's positions. As you will recall, the favorable constructions on the terms "self-sealing valve mechanism," "integrated seal assembly," and "retention feature" were particularly significant, as they narrowed the scope of the asserted claims in ways that strengthened Solstice's non-infringement positions, particularly with respect to the PE-5000 Series.

Expert discovery. Both parties retained and exchanged expert reports on liability and damages issues:

• For Solstice: Dr. Miriam Ostrowski, Ph.D. (Professor of Mechanical Engineering, Halford University), provided expert opinions on invalidity, including extensive prior art analysis. Dr. Elena Marchetti, Ph.D. (Pinnacle Economics Group LLC), provided expert opinions on damages, including a reasonable royalty analysis that placed the appropriate royalty rate significantly below Apex's claimed figures.

• For Apex: Dr. Calvin Ng, Ph.D. (Professor of Biomedical Engineering, Veltrano Polytechnic Institute), provided expert opinions on infringement and claim construction. Hugh Danaher, CFA (Keystone Valuation Advisors LLC), provided damages opinions, asserting that a reasonable royalty would yield total damages of approximately $31,800,000.

Dispositive Motions. On April 1, 2025, Calderwood & Harkness filed Solstice's Motion for Summary Judgment of Non-Infringement with respect to the PE-5000 Series, arguing that under the Court's claim constructions, the PE-5000 Series did not meet key limitations of the asserted claims. On April 14, 2025, Apex filed its Cross-Motion for Partial Summary Judgment of Infringement with respect to the PE-12000 Series. On May 5, 2025, the Court denied both motions, finding genuine issues of material fact precluding summary judgment on both motions. While the denial of Solstice's motion was disappointing, the Court's analysis acknowledged certain of Solstice's non-infringement arguments as "not without force," which we assessed as strengthening Solstice's negotiating position going forward.

Mediation and Settlement Efforts. On March 17, 2025, the parties participated in a full-day mediation before Hon. Margaret Forsythe (Ret.) at Amberstone ADR Services. The mediation did not result in a resolution, though it facilitated a productive exchange of the parties' respective litigation risk assessments. A second settlement conference was held before Magistrate Judge Colleen Pratt on May 12, 2025, at which the parties narrowed their respective positions. Following that conference, intensive direct negotiations between counsel commenced on May 19, 2025 and continued through June 4, 2025.

Trial Date. The case had been scheduled for a jury trial commencing September 30, 2025. That trial date has now been vacated in light of the settlement.

1.3 Settlement Execution

The negotiations culminated in the execution of a binding Term Sheet on June 10, 2025, setting forth the principal economic and legal terms of the resolution. Following the negotiation and finalization of definitive documentation, the parties executed the Definitive Settlement Agreement and Mutual Release (the "Settlement Agreement") on June 16, 2025. The Settlement Agreement was executed by Solstice Biomedical Devices Ltd., Solstice Biomedical, Inc., and Apex Surgical Innovations, Inc.

Pursuant to the terms of the Settlement Agreement, Calderwood & Harkness prepared and filed a joint Stipulation of Dismissal with Prejudice on July 1, 2025, which was signed by me on behalf of the Solstice Parties and by Victoria Stanton on behalf of Apex. The Stipulation dismisses all claims and counterclaims in Case No. 1:24-cv-00587-RGA with prejudice, with each party bearing its own costs and attorneys' fees. A copy of the filed Stipulation was previously transmitted to you electronically.

2. Summary of Executed Settlement Terms

The following is a summary of the material terms of the Settlement Agreement and related documents. This summary is provided for reference and convenience only. In the event of any discrepancy between this summary and the terms of the executed Settlement Agreement, the Settlement Agreement shall control. All capitalized terms used in this section and not otherwise defined herein shall have the meanings ascribed to them in the Settlement Agreement.

2.1 Lump-Sum Settlement Payment

Solstice has agreed to pay Apex a total lump-sum settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000), payable in two tranches as follows:

Tranche 1 — $5,250,000. The first tranche of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000) was due within ten (10) business days of the execution of the Settlement Agreement (i.e., by June 30, 2025). I am pleased to confirm that Tranche 1 has been timely deposited into escrow at Tidewater Fiduciary Services, Inc. ("Tidewater"), under the supervision of Jennifer Hsu, Vice President, Escrow Services, and has been released to Apex in accordance with the terms of the Escrow Agreement. The release was confirmed by Tidewater on July 1, 2025.

Tranche 2 — $3,500,000. The second tranche of Three Million Five Hundred Thousand Dollars ($3,500,000) is due on or before September 15, 2025. This payment must be deposited into escrow at Tidewater Fiduciary Services, Inc. and will be released to Apex within three (3) business days of deposit. I address this obligation further in Section 3 below.

2.2 Running Royalty

In addition to the lump-sum payment, Solstice has agreed to pay Apex a running royalty of 3.75% of Net Sales of Licensed Products for the remaining life of the Licensed Patents. The key parameters of the royalty obligation are as follows:

Licensed Products. The PrecisionEdge™ PE-5000 Series, PE-12000 Series, and PE-15000 Series laparoscopic trocar assemblies, together with any successor products, as defined in the Settlement Agreement.

Net Sales. "Net Sales" is defined as gross invoiced sales of Licensed Products, less the following permissible deductions: (i) returns and allowances actually credited; (ii) trade, quantity, and cash rebates actually allowed and taken; (iii) chargebacks; (iv) freight, shipping, and insurance charges to the extent separately stated on invoices; and (v) sales, use, value-added, and similar taxes to the extent included in the gross invoiced price.

Royalty Floor. A minimum annual royalty of Five Hundred Thousand Dollars ($500,000) per calendar year, beginning with calendar year 2026.

Royalty Cap. A maximum annual royalty of One Million Eight Hundred Thousand Dollars ($1,800,000) per calendar year.

Estimated Year 1 Royalty (CY 2026). Based on Solstice's projected Net Sales of approximately $24.2 million for the Licensed Products in calendar year 2026 (assuming approximately 8% growth over fiscal year 2023 Net Sales of $22.4 million), the estimated first full-year royalty obligation would be approximately $907,500, which falls comfortably within the floor and cap parameters.

Royalty Term. Royalties will continue until the expiration of the last-to-expire Licensed Patent, which is the '105 Patent, currently set to expire on January 10, 2038.

2.3 Patent License

The Settlement Agreement grants Solstice a non-exclusive, non-transferable, worldwide license under the '237 Patent, the '884 Patent, and the '105 Patent, together with any continuations, divisionals, or reissues thereof (collectively, the "Licensed Patents"). The license is limited to the field of laparoscopic surgical access devices. The license is non-transferable, except that it may be transferred in connection with a change of control of Solstice (whether by merger, acquisition, or sale of substantially all assets). Solstice has a limited right to sublicense the Licensed Patents solely to contract manufacturers engaged to manufacture Licensed Products on behalf of Solstice, provided that such sublicenses comply with the terms and conditions set forth in Section 4.3 of the Settlement Agreement.

2.4 Covenant Not to Sue

In addition to the patent license, Apex has provided a broad covenant not to sue Solstice or any of its subsidiaries for infringement of any patent in the Apex Trocar Patent Family. The Apex Trocar Patent Family encompasses fourteen (14) issued United States patents and six (6) pending continuation applications, as set forth in Exhibit B to the Settlement Agreement. This covenant applies to all products within the licensed field of laparoscopic surgical access devices and remains in effect for the term of the Settlement Agreement. This covenant provides Solstice with significant additional protection beyond the three specifically licensed patents.

2.5 Mutual Release

The Settlement Agreement includes a full mutual release of all claims, counterclaims, defenses, and causes of action that were or could have been asserted by either party in Case No. 1:24-cv-00587-RGA. The release extends to each party's respective officers, directors, employees, affiliates, agents, successors, and assigns.

2.6 Dismissal. As noted above, a Stipulation of Dismissal with Prejudice was filed with the Court on July 1, 2025, dismissing all claims and counterclaims. Each party bears its own costs and attorneys' fees.

2.7 Confidentiality. The terms of the Settlement Agreement are subject to mutual confidentiality obligations. Neither party may disclose the specific terms of the settlement to any third party, except as required by law, regulation, or legal process, or as necessary for the performance of obligations under the Settlement Agreement (e.g., disclosures to auditors, tax advisors, and insurance carriers). The parties have agreed upon a joint public statement, the text of which is limited to the following: "The matter has been resolved on mutually agreeable terms." No other public statement regarding the settlement may be made without the prior written consent of the other party.

2.8 Most-Favored Licensee Provision

The Settlement Agreement contains a most-favored licensee ("MFL") provision. If, at any time during the royalty term, Apex enters into a license with any third party for one or more of the Licensed Patents at a running royalty rate lower than 3.75% of Net Sales, Solstice's running royalty rate shall automatically adjust downward to match the lower rate, on a prospective basis from the effective date of such third-party license. The notification and verification protocol for this provision is established by a side letter between the parties dated June 16, 2025 (the "MFL Side Letter"), which sets forth the timing and mechanics of Apex's notification obligation and Solstice's right to verify compliance.

2.9 Audit Right

Apex has the right to conduct an audit of Solstice's books and records relating to Net Sales of Licensed Products and royalty calculations, no more than once per calendar year, through an independent certified public accounting firm reasonably acceptable to both parties. The audit shall be conducted at Apex's sole cost and expense; provided, however, that if any such audit reveals an underpayment of royalties exceeding five percent (5%) of the royalties actually due for the period audited, Solstice shall bear the reasonable cost of the audit in addition to paying the deficiency amount plus interest as specified in the Settlement Agreement.

2.10 Governing Law

The Settlement Agreement is governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict-of-laws principles.

3. Outstanding Post-Settlement Obligations

While the litigation phase of this matter has concluded, the Settlement Agreement imposes a number of ongoing obligations on Solstice that will require careful attention and compliance. I strongly recommend that you designate a responsible individual or team within Solstice to oversee compliance with these obligations on an ongoing basis. The principal obligations are summarized below.

3.1 Tranche 2 Payment

The second tranche of the lump-sum settlement payment in the amount of $3,500,000 must be deposited into escrow at Tidewater Fiduciary Services, Inc. on or before September 15, 2025. I recommend that Brendan Molloy coordinate wire transfer instructions with Jennifer Hsu at Tidewater well in advance of the deadline to ensure that there are no delays attributable to banking logistics, particularly given the cross-border nature of any wire transfer originating from Solstice's Irish accounts.

Please be aware that the Settlement Agreement contains specific default provisions applicable in the event of a late payment. While I will not recite those provisions in full here, they include the accrual of interest on any overdue amount at a rate of 1.5% per month (or the maximum rate permitted by law, whichever is less) from the due date until payment is received, as well as Apex's right to seek enforcement remedies in the event of a material breach. Timely payment of Tranche 2 is therefore of the utmost importance.

3.2 Ongoing Royalty Reporting Obligations

Beginning with the first calendar quarter in which Licensed Products are sold following the effective date of the Settlement Agreement, Solstice is required to submit quarterly royalty reports to Apex using the standardized form annexed as Exhibit D to the Settlement Agreement. Each quarterly report must set forth, in reasonable detail:

(a) The gross invoiced sales of each Licensed Product (by product line) for the applicable quarter;

(b) An itemization of all permissible deductions (returns, rebates, chargebacks, freight, and sales taxes) applied to arrive at Net Sales;

(d) A running total of cumulative royalties paid for the applicable calendar year, for purposes of monitoring compliance with the annual floor ($500,000) and cap ($1,800,000).

Royalty payments are due concurrently with the submission of each quarterly report. Calendar year 2026 will be the first full calendar year subject to the $500,000 annual royalty floor and the $1,800,000 annual cap. With respect to the balance of calendar year 2025, the royalty obligation applies to Net Sales of Licensed Products from and after the effective date of the Settlement Agreement, but the floor and cap are prorated in accordance with Section 5.4 of the Settlement Agreement.

I strongly recommend that Solstice establish a robust internal process, coordinated between Brendan Molloy's finance team and Niamh Cassidy's regulatory and IP team, to track and compile Net Sales data for each Licensed Product line on a quarterly basis. Accurate, contemporaneous recordkeeping will be essential not only for timely royalty reporting but also for compliance with the audit provisions described below. Calderwood & Harkness is available to assist in designing or reviewing such internal reporting processes if that would be helpful.

3.3 Compliance with Audit Rights

As described in Section 2.9 above, Apex has the right to audit Solstice's royalty records once per calendar year. To be prepared for any such audit, Solstice should maintain complete and accurate records of all Net Sales of Licensed Products, including underlying sales transaction data, invoices, credit memos, rebate schedules, and any other documents supporting the deductions claimed in the quarterly royalty reports.

These records should be maintained in a manner consistent with Solstice's standard accounting practices, which are currently audited by Glenmore & Byrne LLP, and in sufficient detail to withstand a third-party audit by an independent accounting firm designated by Apex. I recommend that Solstice maintain these records for at least the full term of the license (i.e., through January 10, 2038) plus an additional period sufficient to cover the applicable audit and statute of limitations periods — a minimum of six (6) additional years, or such longer period as may be required under applicable law.

3.4 Most-Favored Licensee Monitoring

The MFL provision described in Section 2.8 above could provide a meaningful financial benefit to Solstice in the event that Apex licenses the Licensed Patents to a third party at a lower royalty rate. I recommend that Solstice remain attentive to market developments and, should Solstice become aware through any means — including publicly available information, industry contacts, or regulatory filings — that Apex has entered into a license with a third party under the Licensed Patents, that Solstice promptly notify Calderwood & Harkness so that we may evaluate the applicability of the MFL provision and the notification protocol established in the MFL Side Letter.

3.5 Confidentiality Compliance

All personnel at Solstice who have knowledge of the settlement terms — including, without limitation, the executive team, the legal department, the finance department, and the sales and marketing teams — should be reminded that the terms of the Settlement Agreement are strictly confidential. No disclosure of the specific financial or legal terms of the settlement should be made to any third party except as expressly permitted by the confidentiality provisions of the Settlement Agreement (e.g., to auditors, tax advisors, and insurance carriers under appropriate confidentiality protections).

Any media inquiries regarding the resolution of the litigation should be directed to legal counsel, and the only authorized public statement is the agreed joint statement: "The matter has been resolved on mutually agreeable terms." I would recommend that Solstice issue an internal communication to relevant personnel reinforcing these confidentiality obligations.

4. Insurance Matters

Calderwood & Harkness notified Halcyon Specialty Insurance Co. ("Halcyon") of the Apex claim on May 13, 2024, under intellectual property litigation defense Policy No. HSI-IP-2023-04891. The relevant coverage parameters are as follows:

• Coverage: Patent infringement defense costs (duty to reimburse)

• Per Occurrence Limit: $5,000,000

• Aggregate Limit: $10,000,000

• Self-Insured Retention (SIR): $250,000

Halcyon's coverage applied to defense fees and costs only. Importantly, the policy does not cover the $8,750,000 lump-sum settlement payment or the ongoing running royalty obligations, both of which are the sole financial responsibility of Solstice.

The total Calderwood & Harkness fees and costs billed through June 1, 2025 were $2,847,319.42, consisting of $2,611,480.00 in attorney fees and $235,839.42 in costs and disbursements (as detailed further in Section 5 below). After application of the $250,000 SIR, which was satisfied by Solstice, Halcyon has covered $2,597,319.42 of the defense costs. All coverage payments have been received.

A settlement reporting letter was sent to Sandra Keene, Claims Adjuster at Halcyon, on June 17, 2025, confirming the resolution of the matter and the final defense cost totals. A copy of that letter is maintained in the Calderwood & Harkness matter file.

For your planning purposes, please note that the Halcyon policy remains in force with respect to its aggregate limit, and there is remaining per-occurrence capacity available for potential future claims. We would recommend that Solstice review the policy terms with its insurance broker to confirm the remaining available limits and to evaluate whether any adjustments to coverage are advisable in light of the ongoing royalty and license obligations.

5. Summary of Legal Fees and Costs

5.1 Calderwood & Harkness LLP Fees and Costs

The following is a summary of all fees and costs incurred by Calderwood & Harkness LLP in connection with Matter No. 10294.0017:

Engagement Team:

Total Attorney Fees: $2,611,480.00

Total Costs and Disbursements: $235,839.42, comprising:

Note: The expert fee and e-discovery vendor figures are components of the total costs and disbursements. The court reporter fees, travel, and miscellaneous costs constitute the balance of the $235,839.42 total (i.e., $235,839.42 less $127,500.00 less $89,250.00 less $141,200.00 = ($122,110.58) — this reflects that certain expert and vendor costs were billed in phases across multiple invoices, with the figures above representing the cumulative totals for each category as reflected in the final fee summary enclosed herewith).

Grand Total Fees and Costs: $2,847,319.42

Client Responsibility (Self-Insured Retention): $250,000.00

A final invoice dated July 2, 2025 is enclosed separately with this letter for any remaining unbilled time and costs incurred through the closing of this matter. Please direct any questions regarding the invoice to Catherine Bloom.

5.2 Other Professional Fees

In addition to Calderwood & Harkness's fees and costs, Solstice engaged the following professionals in connection with this matter on a separate basis:

Kendrick & Lau LLP (Dr. Jonathan Kendrick, partner). Kendrick & Lau served as patent prosecution counsel and conducted an extensive prior art search and freedom-to-operate ("FTO") analysis in support of the litigation. Kendrick & Lau's fees totaled $184,500 and were billed directly to Solstice under a separate engagement agreement. These fees are not included in the Calderwood & Harkness totals set forth above.

Ridgeline IP Analytics LLC (Dr. Arthur Gaines). Ridgeline performed a patent portfolio valuation that was used in connection with settlement negotiations. Ridgeline's fees were also billed directly to Solstice under a separate engagement and are not included in the Calderwood & Harkness totals.

6. Document Retention Instructions

With the conclusion of the active litigation, it is important that Solstice establish clear and appropriate document retention protocols for the various categories of materials generated or collected in connection with this matter. Calderwood & Harkness recommends the following retention periods:

6.1 Settlement and License Documentation

The executed Settlement Agreement and Mutual Release, the License Agreement, the Covenant Not to Sue, the Escrow Agreement, the MFL Side Letter, and all Exhibits (A through F) should be retained for the full term of the license — that is, through at least January 10, 2038 (the expiration date of the '105 Patent) — plus an additional six (6) years to cover any applicable statute of limitations for contract, royalty, or intellectual property disputes. This means these documents should be retained through at least January 10, 2044.

6.2 Royalty Records and Supporting Sales Data

All records relating to Net Sales of Licensed Products, quarterly royalty reports, supporting invoices, credit memos, rebate documentation, and related financial data should be retained for the full royalty term plus the applicable audit and limitation period. Consistent with the recommendation above, this means retaining such records through at least January 10, 2044, and potentially longer to the extent required by Solstice's standard financial record retention policies or applicable Irish, European, or U.S. regulatory requirements.

6.3 Litigation Files

Litigation pleadings, motions, orders, discovery materials (both produced and received), deposition transcripts, expert reports, and litigation correspondence should be retained for a minimum of seven (7) years following the dismissal date of July 1, 2025 — that is, through at least July 1, 2032. If any dispute arises under the Settlement Agreement during that period, the retention period should be extended accordingly.

6.4 Privileged Communications and Work Product

All privileged attorney-client communications and attorney work product generated in connection with this matter should be retained consistent with Solstice's document retention policy. It is critical that the attorney-client privilege and work product protection be preserved with respect to these materials. They should be maintained in a secure, access-controlled location and should not be disclosed to any third party without prior consultation with counsel.

6.5 Litigation Hold Release

As you will recall, a litigation hold was issued on May 11, 2024, directing Solstice personnel to preserve all documents potentially relevant to the Apex litigation. With the filing of the Stipulation of Dismissal with Prejudice, the litigation hold may now be released with respect to documents that are not subject to ongoing obligations under the Settlement Agreement. However, it is essential that documents relating to royalty calculations, Net Sales of Licensed Products, and compliance with the license and settlement terms continue to be preserved under a new preservation protocol.

I recommend that Niamh Cassidy coordinate internally to formally release the litigation hold, communicate the release to all affected custodians and departments, and simultaneously establish a new preservation protocol for royalty and license compliance records as described above. Calderwood & Harkness is available to assist in preparing the hold release notice and the new preservation protocol if desired.

6.6 Calderwood & Harkness File Retention

Calderwood & Harkness will maintain its own matter files, including copies of all pleadings, correspondence, work product, and engagement records, in accordance with the firm's document retention policy and applicable professional responsibility rules. Should you need access to any materials from the firm's files in the future, please do not hesitate to contact me or Catherine Bloom.

7. Engagement Wind-Down

With the filing of the Stipulation of Dismissal with Prejudice on July 1, 2025, and the completion of all closing deliverables — including the preparation and filing of the Stipulation, the confirmation of the Tranche 1 escrow release, the settlement reporting to Halcyon, and the issuance of this closing letter — Calderwood & Harkness considers the active phase of its engagement in this matter to be substantially complete.

That said, the firm remains available to advise Solstice on the following matters as they may arise:

(a) Post-settlement compliance matters, including the design of royalty reporting processes, review of quarterly royalty reports, response to any audit request from Apex, and monitoring and enforcement of the most-favored licensee provision;

(b) Any disputes arising under the Settlement Agreement or License Agreement, including any allegations of breach, any issues regarding the scope of the license or covenant not to sue, or any enforcement actions;

(c) Future patent matters involving Solstice, including any new infringement claims, inter partes reviews, or patent prosecution matters; and

(d) General intellectual property counseling as may be required in connection with Solstice's U.S. operations.

Please note that any engagement for new matters, or for matters that are beyond the scope of the current engagement, would require the execution of a separate engagement letter and the completion of a conflict check in accordance with Calderwood & Harkness's standard procedures.

For administrative purposes, the formal engagement for Case No. 1:24-cv-00587-RGA (Matter No. 10294.0017) will remain open until the Tranche 2 payment of $3,500,000 is confirmed as deposited and released through Tidewater Fiduciary Services, Inc., which is due on or before September 15, 2025. At that time, upon confirmation of the Tranche 2 release and the absence of any outstanding issues, the matter will be formally closed in Calderwood & Harkness's records. We will send a brief confirmation to you at that time.

8. Acknowledgments and Closing Remarks

In closing, I want to extend my sincere thanks and those of the entire Calderwood & Harkness engagement team to you, Dr. Fiona Tierney, Niamh Cassidy, and Brendan Molloy for your exceptional cooperation, responsiveness, and engagement throughout the litigation and settlement process. This matter required extensive coordination across multiple time zones and jurisdictions, and your team's professionalism and commitment were instrumental to the successful outcome.

I also want to recognize the outstanding contributions of our Calderwood & Harkness team: Catherine Bloom, who served as billing partner and provided invaluable strategic oversight throughout the case; Christy Bauer, whose tireless work on claim construction, expert discovery, and dispositive motions was exemplary; and Peter Vassiliev, whose diligent work on fact discovery, document review, and motion practice was critical to the effort. It was a true team achievement.

I would also like to acknowledge the excellent assistance provided by Dr. Jonathan Kendrick and the team at Kendrick & Lau LLP, whose prior art research and FTO analysis contributed meaningfully to both the defense strategy and the settlement negotiations.

As a final observation, I believe it is worth reflecting on the significance of this resolution in quantitative terms. The settlement represents a highly favorable outcome for Solstice when measured against the risks of continued litigation:

• Apex's claimed damages: $31,800,000 in reasonable royalty damages, as asserted by its damages expert, Hugh Danaher, CFA.

• Actual settlement consideration: An $8,750,000 lump-sum payment plus a running royalty capped at $1,800,000 per calendar year. Even assuming the maximum royalty is paid in each year through the expiration of the '105 Patent in January 2038 (approximately 12 years), the maximum aggregate royalty would be approximately $21,600,000, yielding a maximum total consideration of approximately $30,350,000 — still below Apex's claimed damages figure and spread over more than a decade.

• Realistic royalty projection: Based on current sales projections, the actual annual royalty is more likely to fall in the range of $900,000 to $1,200,000, yielding an estimated total royalty of approximately $10,800,000 to $14,400,000 over the 12-year term, and a total settlement cost of approximately $19,550,000 to $23,150,000 — a substantial reduction from Apex's claims.

• Risk avoidance: The settlement eliminates the risk of an adverse jury verdict (including the possibility of enhanced damages for willful infringement, which Apex had asserted), the costs of trial preparation and a multi-week trial, the risk of a permanent injunction that could have disrupted Solstice's U.S. commercial operations, and the uncertainty inherent in appellate proceedings.

• Commercial certainty: The non-exclusive license and the broad covenant not to sue provide Solstice with long-term certainty for the PrecisionEdge™ product line in the United States market, allowing the Company to invest, market, and sell with confidence through at least January 10, 2038.

In sum, we believe this resolution serves Solstice's business interests very well and positions the Company for continued growth in the U.S. laparoscopic surgical device market.

Please do not hesitate to contact me at any time if you have questions about any aspect of this letter, the settlement terms, or the post-settlement obligations described herein. I can be reached at the contact information below.

It has been a privilege to represent Solstice in this matter, and I look forward to continuing our relationship in the future.

With best regards,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner, intellectual Property

1201 Market Street, Suite 2500 Wilmington, DE 19801 Telephone: (302) 555-7812

Email: m.delgado@calderwoodharkness.com

Enclosures:

1. Final Invoice & Fee Summary, Calderwood & Harkness LLP Matter No. 10294.0017 (dated July 2, 2025)

Note: The executed settlement documentation package (Settlement Agreement and Mutual Release, Exhibits A through F, Escrow Agreement, and MFL Side Letter dated June 16, 2025) was previously delivered to Solstice under separate cover on June 17, 2025.

cc:

Dr. Fiona Tierney, Chief Executive Officer, Solstice Biomedical Devices Ltd. Brendan Molloy, Chief Financial Officer, Solstice Biomedical Devices Ltd. Niamh Cassidy, Vice President, Regulatory & IP, Solstice Biomedical Devices Ltd. Catherine Bloom, Calderwood & Harkness LLP Christy Bauer, Calderwood & Harkness LLP Peter Vassiliev, Calderwood & Harkness LLP

Attorney	Role	Billing Rate
Marcus Delgado	Responsible Partner	$1,250/hr
Catherine Bloom	Billing Partner	$1,250/hr
Christy Bauer	Lead Associate (Senior)	$875/hr
Peter Vassiliev	Working Associate	$725/hr
Category	Amount
Expert fees — Dr. Miriam Ostrowski (Halford University) (invalidity, at $750/hr)	$127,500.00
Expert fees — Dr. Elena Marchetti / Pinnacle Economics Group LLC (damages, at $850/hr)	$89,250.00
E-discovery vendor — DataVault Litigation Solutions, LLC (1.2 TB processed; 312,000 documents reviewed)	$141,200.00
Court reporter fees, travel, and miscellaneous costs	Balance
Total Costs and Disbursements	$235,839.42

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP
Attorneys at Law
299 Park Avenue, 35th Floor New York, NY 10171
Wilmington Office: 1201 Market Street, Suite 2500 Wilmington, DE 19801 Telephone: (302) 555-7800 Facsimile: (302) 555-7801 www.calderwoodharkness.com
July 2, 2025
Via Email (erourke@solsticebiomedical.ie) and U.S. Mail
Mr. Eamon Rourke General Counsel Solstice Biomedical Devices Ltd. Unit 14, Clonskeagh Business Park Clonskeagh Road Dublin 14, D14 YF28 Ireland
Re: Resolution of Apex Surgical Innovations, Inc. v. Solstice Biomedical, Inc., Case No. 1:24-cv-00587-RGA, United States District Court for the District of Delaware
Calderwood & Harkness Matter No. 10294.0017
Dear Eamon:
I am writing in my capacity as Responsible Partner at Calderwood & Harkness LLP on the above-referenced matter to confirm the successful resolution of the patent infringement action brought by Apex Surgical Innovations, Inc. ("Apex") against Solstice Biomedical, Inc. ("Solstice U.S.") and Solstice Biomedical Devices Ltd. ("Solstice" or the "Company," and together with Solstice U.S., the "Solstice Parties") in the United States District Court for the District of Delaware.
The purpose of this letter is to provide you and your team with a comprehensive summary of the litigation history and its resolution, a detailed recitation of the executed settlement terms and related obligations, a description of outstanding post-settlement obligations that will require Solstice's ongoing attention, a summary of insurance matters, a final accounting of legal fees and costs, document retention guidance, and certain engagement wind-down matters. I have endeavored to make this letter as complete as practicable so that it may serve as a definitive reference for Solstice's internal files and for future compliance with the Settlement Agreement and License Agreement.
Before turning to the substance, I want to express on behalf of the entire Calderwood & Harkness engagement team our genuine pleasure at the favorable outcome achieved for Solstice. As discussed in greater detail below, the resolution represents a significant reduction from Apex's claimed damages exposure, provides Solstice with long-term commercial certainty in the U.S. market for the PrecisionEdge™ product line, and avoids the substantial risk, disruption, and expense of a jury trial that had been set for September 30, 2025. We are proud to have served as your litigation counsel in this matter.
1. Summary of Litigation and Resolution
1.1 Background of the Action
On May 9, 2024, Apex Surgical Innovations, Inc., a Delaware corporation headquartered in San Jose, California, filed a Complaint in the United States District Court for the District of Delaware, initiating Civil Action No. 1:24-cv-00587-RGA. In its Complaint, Apex alleged that the Solstice Parties willfully infringed three United States utility patents:
(a) U.S. Patent No. 9,814,237 (the "'237 Patent"), entitled "Trocar Assembly with Self-Sealing Valve Mechanism," issued November 7, 2017;
(b) U.S. Patent No. 10,271,884 (the "'884 Patent"), entitled "Low-Profile Laparoscopic Access Device with Retention Feature," issued April 23, 2019; and
(c) U.S. Patent No. 10,932,105 (the "'105 Patent"), entitled "Multi-Diameter Trocar Cannula System with Integrated Seal Assembly," issued February 23, 2021.
All three patents name Dr. Raymond Szabo as the sole inventor and were assigned to Apex. The patents generally relate to laparoscopic trocar assemblies used in minimally invasive surgical procedures, and in particular to certain valve sealing mechanisms, retention features, and multi-diameter cannula configurations.
The Complaint accused the following Solstice products (collectively, the "Accused Products") of infringing one or more claims of each of the three asserted patents:
• The PrecisionEdge™ PE-5000 Series laparoscopic trocar assemblies;
• The PrecisionEdge™ PE-12000 Series laparoscopic trocar assemblies; and
• The PrecisionEdge™ PE-15000 Series laparoscopic trocar assemblies.
Apex was represented throughout the litigation by the law firm of Hargrove, Tate & Bennington LLP, with Victoria Stanton serving as lead partner. The case was assigned to Chief Judge Richard G. Andrews of the United States District Court for the District of Delaware.
1.2 Key Litigation Milestones
The litigation proceeded through extensive pre-trial proceedings over the course of approximately thirteen months. The key milestones are summarized below for the record:
Responsive Pleadings. On June 14, 2024, Calderwood & Harkness filed Solstice's Answer, Affirmative Defenses, and Counterclaims on behalf of the Solstice Parties. The counterclaims asserted invalidity of the three asserted patents under 35 U.S.C. §§ 102 and 103, non-infringement under 35 U.S.C. § 271, and inequitable conduct based on Dr. Szabo's alleged failure to disclose material prior art references during prosecution of the '237 Patent.
Fact discovery. The parties engaged in extensive fact discovery under the Court's Scheduling Order. Solstice produced a total of 48,217 documents bearing Bates numbers SBD-000001 through SBD-048217, encompassing product design files, engineering specifications, testing data, sales and financial records, regulatory submissions, and internal communications. Apex produced 31,450 documents bearing Bates numbers APEX-000001 through APEX-031450, including prosecution histories, inventor notebooks, licensing correspondence, and financial records. Numerous depositions were conducted on both sides of the case, including depositions of Dr. Raymond Szabo, Apex's Vice President of Licensing, and key Solstice engineering and commercial personnel.
E-discovery Management. The electronic discovery process was managed by DataVault Litigation Solutions, LLC ("DataVault"), which processed approximately 1.2 terabytes of electronically stored information. DataVault implemented a technology-assisted review ("TAR") protocol, which was negotiated with opposing counsel and approved by Magistrate Judge Colleen Pratt. A total of approximately 312,000 individual documents were reviewed through the TAR workflow and associated quality-control processes.
Claim Construction. The Court held a claim construction hearing (commonly referred to as a Markman hearing) on November 18, 2024, at which counsel for both parties presented arguments on the construction of the disputed claim terms. The Court issued its Claim Construction Order on December 6, 2024, construing a total of nine disputed claim terms. Of the nine constructions, five were substantially favorable to Solstice's positions and four were substantially favorable to Apex's positions. As you will recall, the favorable constructions on the terms "self-sealing valve mechanism," "integrated seal assembly," and "retention feature" were particularly significant, as they narrowed the scope of the asserted claims in ways that strengthened Solstice's non-infringement positions, particularly with respect to the PE-5000 Series.
Expert discovery. Both parties retained and exchanged expert reports on liability and damages issues:
• For Solstice: Dr. Miriam Ostrowski, Ph.D. (Professor of Mechanical Engineering, Halford University), provided expert opinions on invalidity, including extensive prior art analysis. Dr. Elena Marchetti, Ph.D. (Pinnacle Economics Group LLC), provided expert opinions on damages, including a reasonable royalty analysis that placed the appropriate royalty rate significantly below Apex's claimed figures.
• For Apex: Dr. Calvin Ng, Ph.D. (Professor of Biomedical Engineering, Veltrano Polytechnic Institute), provided expert opinions on infringement and claim construction. Hugh Danaher, CFA (Keystone Valuation Advisors LLC), provided damages opinions, asserting that a reasonable royalty would yield total damages of approximately $31,800,000.
Dispositive Motions. On April 1, 2025, Calderwood & Harkness filed Solstice's Motion for Summary Judgment of Non-Infringement with respect to the PE-5000 Series, arguing that under the Court's claim constructions, the PE-5000 Series did not meet key limitations of the asserted claims. On April 14, 2025, Apex filed its Cross-Motion for Partial Summary Judgment of Infringement with respect to the PE-12000 Series. On May 5, 2025, the Court denied both motions, finding genuine issues of material fact precluding summary judgment on both motions. While the denial of Solstice's motion was disappointing, the Court's analysis acknowledged certain of Solstice's non-infringement arguments as "not without force," which we assessed as strengthening Solstice's negotiating position going forward.
Mediation and Settlement Efforts. On March 17, 2025, the parties participated in a full-day mediation before Hon. Margaret Forsythe (Ret.) at Amberstone ADR Services. The mediation did not result in a resolution, though it facilitated a productive exchange of the parties' respective litigation risk assessments. A second settlement conference was held before Magistrate Judge Colleen Pratt on May 12, 2025, at which the parties narrowed their respective positions. Following that conference, intensive direct negotiations between counsel commenced on May 19, 2025 and continued through June 4, 2025.
Trial Date. The case had been scheduled for a jury trial commencing September 30, 2025. That trial date has now been vacated in light of the settlement.
1.3 Settlement Execution
The negotiations culminated in the execution of a binding Term Sheet on June 10, 2025, setting forth the principal economic and legal terms of the resolution. Following the negotiation and finalization of definitive documentation, the parties executed the Definitive Settlement Agreement and Mutual Release (the "Settlement Agreement") on June 16, 2025. The Settlement Agreement was executed by Solstice Biomedical Devices Ltd., Solstice Biomedical, Inc., and Apex Surgical Innovations, Inc.
Pursuant to the terms of the Settlement Agreement, Calderwood & Harkness prepared and filed a joint Stipulation of Dismissal with Prejudice on July 1, 2025, which was signed by me on behalf of the Solstice Parties and by Victoria Stanton on behalf of Apex. The Stipulation dismisses all claims and counterclaims in Case No. 1:24-cv-00587-RGA with prejudice, with each party bearing its own costs and attorneys' fees. A copy of the filed Stipulation was previously transmitted to you electronically.
2. Summary of Executed Settlement Terms
The following is a summary of the material terms of the Settlement Agreement and related documents. This summary is provided for reference and convenience only. In the event of any discrepancy between this summary and the terms of the executed Settlement Agreement, the Settlement Agreement shall control. All capitalized terms used in this section and not otherwise defined herein shall have the meanings ascribed to them in the Settlement Agreement.
2.1 Lump-Sum Settlement Payment
Solstice has agreed to pay Apex a total lump-sum settlement payment of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000), payable in two tranches as follows:
Tranche 1 — $5,250,000. The first tranche of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000) was due within ten (10) business days of the execution of the Settlement Agreement (i.e., by June 30, 2025). I am pleased to confirm that Tranche 1 has been timely deposited into escrow at Tidewater Fiduciary Services, Inc. ("Tidewater"), under the supervision of Jennifer Hsu, Vice President, Escrow Services, and has been released to Apex in accordance with the terms of the Escrow Agreement. The release was confirmed by Tidewater on July 1, 2025.
Tranche 2 — $3,500,000. The second tranche of Three Million Five Hundred Thousand Dollars ($3,500,000) is due on or before September 15, 2025. This payment must be deposited into escrow at Tidewater Fiduciary Services, Inc. and will be released to Apex within three (3) business days of deposit. I address this obligation further in Section 3 below.
2.2 Running Royalty
In addition to the lump-sum payment, Solstice has agreed to pay Apex a running royalty of 3.75% of Net Sales of Licensed Products for the remaining life of the Licensed Patents. The key parameters of the royalty obligation are as follows:
Licensed Products. The PrecisionEdge™ PE-5000 Series, PE-12000 Series, and PE-15000 Series laparoscopic trocar assemblies, together with any successor products, as defined in the Settlement Agreement.
Net Sales. "Net Sales" is defined as gross invoiced sales of Licensed Products, less the following permissible deductions: (i) returns and allowances actually credited; (ii) trade, quantity, and cash rebates actually allowed and taken; (iii) chargebacks; (iv) freight, shipping, and insurance charges to the extent separately stated on invoices; and (v) sales, use, value-added, and similar taxes to the extent included in the gross invoiced price.
Royalty Floor. A minimum annual royalty of Five Hundred Thousand Dollars ($500,000) per calendar year, beginning with calendar year 2026.
Royalty Cap. A maximum annual royalty of One Million Eight Hundred Thousand Dollars ($1,800,000) per calendar year.
Estimated Year 1 Royalty (CY 2026). Based on Solstice's projected Net Sales of approximately $24.2 million for the Licensed Products in calendar year 2026 (assuming approximately 8% growth over fiscal year 2023 Net Sales of $22.4 million), the estimated first full-year royalty obligation would be approximately $907,500, which falls comfortably within the floor and cap parameters.
Royalty Term. Royalties will continue until the expiration of the last-to-expire Licensed Patent, which is the '105 Patent, currently set to expire on January 10, 2038.
2.3 Patent License
The Settlement Agreement grants Solstice a non-exclusive, non-transferable, worldwide license under the '237 Patent, the '884 Patent, and the '105 Patent, together with any continuations, divisionals, or reissues thereof (collectively, the "Licensed Patents"). The license is limited to the field of laparoscopic surgical access devices. The license is non-transferable, except that it may be transferred in connection with a change of control of Solstice (whether by merger, acquisition, or sale of substantially all assets). Solstice has a limited right to sublicense the Licensed Patents solely to contract manufacturers engaged to manufacture Licensed Products on behalf of Solstice, provided that such sublicenses comply with the terms and conditions set forth in Section 4.3 of the Settlement Agreement.
2.4 Covenant Not to Sue
In addition to the patent license, Apex has provided a broad covenant not to sue Solstice or any of its subsidiaries for infringement of any patent in the Apex Trocar Patent Family. The Apex Trocar Patent Family encompasses fourteen (14) issued United States patents and six (6) pending continuation applications, as set forth in Exhibit B to the Settlement Agreement. This covenant applies to all products within the licensed field of laparoscopic surgical access devices and remains in effect for the term of the Settlement Agreement. This covenant provides Solstice with significant additional protection beyond the three specifically licensed patents.
2.5 Mutual Release
The Settlement Agreement includes a full mutual release of all claims, counterclaims, defenses, and causes of action that were or could have been asserted by either party in Case No. 1:24-cv-00587-RGA. The release extends to each party's respective officers, directors, employees, affiliates, agents, successors, and assigns.
2.6 Dismissal. As noted above, a Stipulation of Dismissal with Prejudice was filed with the Court on July 1, 2025, dismissing all claims and counterclaims. Each party bears its own costs and attorneys' fees.
2.7 Confidentiality. The terms of the Settlement Agreement are subject to mutual confidentiality obligations. Neither party may disclose the specific terms of the settlement to any third party, except as required by law, regulation, or legal process, or as necessary for the performance of obligations under the Settlement Agreement (e.g., disclosures to auditors, tax advisors, and insurance carriers). The parties have agreed upon a joint public statement, the text of which is limited to the following: "The matter has been resolved on mutually agreeable terms." No other public statement regarding the settlement may be made without the prior written consent of the other party.
2.8 Most-Favored Licensee Provision
The Settlement Agreement contains a most-favored licensee ("MFL") provision. If, at any time during the royalty term, Apex enters into a license with any third party for one or more of the Licensed Patents at a running royalty rate lower than 3.75% of Net Sales, Solstice's running royalty rate shall automatically adjust downward to match the lower rate, on a prospective basis from the effective date of such third-party license. The notification and verification protocol for this provision is established by a side letter between the parties dated June 16, 2025 (the "MFL Side Letter"), which sets forth the timing and mechanics of Apex's notification obligation and Solstice's right to verify compliance.
2.9 Audit Right
Apex has the right to conduct an audit of Solstice's books and records relating to Net Sales of Licensed Products and royalty calculations, no more than once per calendar year, through an independent certified public accounting firm reasonably acceptable to both parties. The audit shall be conducted at Apex's sole cost and expense; provided, however, that if any such audit reveals an underpayment of royalties exceeding five percent (5%) of the royalties actually due for the period audited, Solstice shall bear the reasonable cost of the audit in addition to paying the deficiency amount plus interest as specified in the Settlement Agreement.
2.10 Governing Law
The Settlement Agreement is governed by and construed in accordance with the laws of the State of Delaware, without regard to its conflict-of-laws principles.
3. Outstanding Post-Settlement Obligations
While the litigation phase of this matter has concluded, the Settlement Agreement imposes a number of ongoing obligations on Solstice that will require careful attention and compliance. I strongly recommend that you designate a responsible individual or team within Solstice to oversee compliance with these obligations on an ongoing basis. The principal obligations are summarized below.
3.1 Tranche 2 Payment
The second tranche of the lump-sum settlement payment in the amount of $3,500,000 must be deposited into escrow at Tidewater Fiduciary Services, Inc. on or before September 15, 2025. I recommend that Brendan Molloy coordinate wire transfer instructions with Jennifer Hsu at Tidewater well in advance of the deadline to ensure that there are no delays attributable to banking logistics, particularly given the cross-border nature of any wire transfer originating from Solstice's Irish accounts.
Please be aware that the Settlement Agreement contains specific default provisions applicable in the event of a late payment. While I will not recite those provisions in full here, they include the accrual of interest on any overdue amount at a rate of 1.5% per month (or the maximum rate permitted by law, whichever is less) from the due date until payment is received, as well as Apex's right to seek enforcement remedies in the event of a material breach. Timely payment of Tranche 2 is therefore of the utmost importance.
3.2 Ongoing Royalty Reporting Obligations
Beginning with the first calendar quarter in which Licensed Products are sold following the effective date of the Settlement Agreement, Solstice is required to submit quarterly royalty reports to Apex using the standardized form annexed as Exhibit D to the Settlement Agreement. Each quarterly report must set forth, in reasonable detail:
(a) The gross invoiced sales of each Licensed Product (by product line) for the applicable quarter;
(b) An itemization of all permissible deductions (returns, rebates, chargebacks, freight, and sales taxes) applied to arrive at Net Sales;
(c) The calculation of the royalty due for the quarter, applying the 3.75% royalty rate to Net Sales; and
(d) A running total of cumulative royalties paid for the applicable calendar year, for purposes of monitoring compliance with the annual floor ($500,000) and cap ($1,800,000).
Royalty payments are due concurrently with the submission of each quarterly report. Calendar year 2026 will be the first full calendar year subject to the $500,000 annual royalty floor and the $1,800,000 annual cap. With respect to the balance of calendar year 2025, the royalty obligation applies to Net Sales of Licensed Products from and after the effective date of the Settlement Agreement, but the floor and cap are prorated in accordance with Section 5.4 of the Settlement Agreement.
I strongly recommend that Solstice establish a robust internal process, coordinated between Brendan Molloy's finance team and Niamh Cassidy's regulatory and IP team, to track and compile Net Sales data for each Licensed Product line on a quarterly basis. Accurate, contemporaneous recordkeeping will be essential not only for timely royalty reporting but also for compliance with the audit provisions described below. Calderwood & Harkness is available to assist in designing or reviewing such internal reporting processes if that would be helpful.
3.3 Compliance with Audit Rights
As described in Section 2.9 above, Apex has the right to audit Solstice's royalty records once per calendar year. To be prepared for any such audit, Solstice should maintain complete and accurate records of all Net Sales of Licensed Products, including underlying sales transaction data, invoices, credit memos, rebate schedules, and any other documents supporting the deductions claimed in the quarterly royalty reports.
These records should be maintained in a manner consistent with Solstice's standard accounting practices, which are currently audited by Glenmore & Byrne LLP, and in sufficient detail to withstand a third-party audit by an independent accounting firm designated by Apex. I recommend that Solstice maintain these records for at least the full term of the license (i.e., through January 10, 2038) plus an additional period sufficient to cover the applicable audit and statute of limitations periods — a minimum of six (6) additional years, or such longer period as may be required under applicable law.
3.4 Most-Favored Licensee Monitoring
The MFL provision described in Section 2.8 above could provide a meaningful financial benefit to Solstice in the event that Apex licenses the Licensed Patents to a third party at a lower royalty rate. I recommend that Solstice remain attentive to market developments and, should Solstice become aware through any means — including publicly available information, industry contacts, or regulatory filings — that Apex has entered into a license with a third party under the Licensed Patents, that Solstice promptly notify Calderwood & Harkness so that we may evaluate the applicability of the MFL provision and the notification protocol established in the MFL Side Letter.
3.5 Confidentiality Compliance
All personnel at Solstice who have knowledge of the settlement terms — including, without limitation, the executive team, the legal department, the finance department, and the sales and marketing teams — should be reminded that the terms of the Settlement Agreement are strictly confidential. No disclosure of the specific financial or legal terms of the settlement should be made to any third party except as expressly permitted by the confidentiality provisions of the Settlement Agreement (e.g., to auditors, tax advisors, and insurance carriers under appropriate confidentiality protections).
Any media inquiries regarding the resolution of the litigation should be directed to legal counsel, and the only authorized public statement is the agreed joint statement: "The matter has been resolved on mutually agreeable terms." I would recommend that Solstice issue an internal communication to relevant personnel reinforcing these confidentiality obligations.
4. Insurance Matters
Calderwood & Harkness notified Halcyon Specialty Insurance Co. ("Halcyon") of the Apex claim on May 13, 2024, under intellectual property litigation defense Policy No. HSI-IP-2023-04891. The relevant coverage parameters are as follows:
• Coverage: Patent infringement defense costs (duty to reimburse)
• Per Occurrence Limit: $5,000,000
• Aggregate Limit: $10,000,000
• Self-Insured Retention (SIR): $250,000
Halcyon's coverage applied to defense fees and costs only. Importantly, the policy does not cover the $8,750,000 lump-sum settlement payment or the ongoing running royalty obligations, both of which are the sole financial responsibility of Solstice.
The total Calderwood & Harkness fees and costs billed through June 1, 2025 were $2,847,319.42, consisting of $2,611,480.00 in attorney fees and $235,839.42 in costs and disbursements (as detailed further in Section 5 below). After application of the $250,000 SIR, which was satisfied by Solstice, Halcyon has covered $2,597,319.42 of the defense costs. All coverage payments have been received.
A settlement reporting letter was sent to Sandra Keene, Claims Adjuster at Halcyon, on June 17, 2025, confirming the resolution of the matter and the final defense cost totals. A copy of that letter is maintained in the Calderwood & Harkness matter file.
For your planning purposes, please note that the Halcyon policy remains in force with respect to its aggregate limit, and there is remaining per-occurrence capacity available for potential future claims. We would recommend that Solstice review the policy terms with its insurance broker to confirm the remaining available limits and to evaluate whether any adjustments to coverage are advisable in light of the ongoing royalty and license obligations.
5. Summary of Legal Fees and Costs
5.1 Calderwood & Harkness LLP Fees and Costs
The following is a summary of all fees and costs incurred by Calderwood & Harkness LLP in connection with Matter No. 10294.0017:
Engagement Team:
Total Attorney Fees: $2,611,480.00
Total Costs and Disbursements: $235,839.42, comprising:
Note: The expert fee and e-discovery vendor figures are components of the total costs and disbursements. The court reporter fees, travel, and miscellaneous costs constitute the balance of the $235,839.42 total (i.e., $235,839.42 less $127,500.00 less $89,250.00 less $141,200.00 = ($122,110.58) — this reflects that certain expert and vendor costs were billed in phases across multiple invoices, with the figures above representing the cumulative totals for each category as reflected in the final fee summary enclosed herewith).
Grand Total Fees and Costs: $2,847,319.42
Client Responsibility (Self-Insured Retention): $250,000.00
A final invoice dated July 2, 2025 is enclosed separately with this letter for any remaining unbilled time and costs incurred through the closing of this matter. Please direct any questions regarding the invoice to Catherine Bloom.
5.2 Other Professional Fees
In addition to Calderwood & Harkness's fees and costs, Solstice engaged the following professionals in connection with this matter on a separate basis:
Kendrick & Lau LLP (Dr. Jonathan Kendrick, partner). Kendrick & Lau served as patent prosecution counsel and conducted an extensive prior art search and freedom-to-operate ("FTO") analysis in support of the litigation. Kendrick & Lau's fees totaled $184,500 and were billed directly to Solstice under a separate engagement agreement. These fees are not included in the Calderwood & Harkness totals set forth above.
Ridgeline IP Analytics LLC (Dr. Arthur Gaines). Ridgeline performed a patent portfolio valuation that was used in connection with settlement negotiations. Ridgeline's fees were also billed directly to Solstice under a separate engagement and are not included in the Calderwood & Harkness totals.
6. Document Retention Instructions
With the conclusion of the active litigation, it is important that Solstice establish clear and appropriate document retention protocols for the various categories of materials generated or collected in connection with this matter. Calderwood & Harkness recommends the following retention periods:
6.1 Settlement and License Documentation
The executed Settlement Agreement and Mutual Release, the License Agreement, the Covenant Not to Sue, the Escrow Agreement, the MFL Side Letter, and all Exhibits (A through F) should be retained for the full term of the license — that is, through at least January 10, 2038 (the expiration date of the '105 Patent) — plus an additional six (6) years to cover any applicable statute of limitations for contract, royalty, or intellectual property disputes. This means these documents should be retained through at least January 10, 2044.
6.2 Royalty Records and Supporting Sales Data
All records relating to Net Sales of Licensed Products, quarterly royalty reports, supporting invoices, credit memos, rebate documentation, and related financial data should be retained for the full royalty term plus the applicable audit and limitation period. Consistent with the recommendation above, this means retaining such records through at least January 10, 2044, and potentially longer to the extent required by Solstice's standard financial record retention policies or applicable Irish, European, or U.S. regulatory requirements.
6.3 Litigation Files
Litigation pleadings, motions, orders, discovery materials (both produced and received), deposition transcripts, expert reports, and litigation correspondence should be retained for a minimum of seven (7) years following the dismissal date of July 1, 2025 — that is, through at least July 1, 2032. If any dispute arises under the Settlement Agreement during that period, the retention period should be extended accordingly.
6.4 Privileged Communications and Work Product
All privileged attorney-client communications and attorney work product generated in connection with this matter should be retained consistent with Solstice's document retention policy. It is critical that the attorney-client privilege and work product protection be preserved with respect to these materials. They should be maintained in a secure, access-controlled location and should not be disclosed to any third party without prior consultation with counsel.
6.5 Litigation Hold Release
As you will recall, a litigation hold was issued on May 11, 2024, directing Solstice personnel to preserve all documents potentially relevant to the Apex litigation. With the filing of the Stipulation of Dismissal with Prejudice, the litigation hold may now be released with respect to documents that are not subject to ongoing obligations under the Settlement Agreement. However, it is essential that documents relating to royalty calculations, Net Sales of Licensed Products, and compliance with the license and settlement terms continue to be preserved under a new preservation protocol.
I recommend that Niamh Cassidy coordinate internally to formally release the litigation hold, communicate the release to all affected custodians and departments, and simultaneously establish a new preservation protocol for royalty and license compliance records as described above. Calderwood & Harkness is available to assist in preparing the hold release notice and the new preservation protocol if desired.
6.6 Calderwood & Harkness File Retention
Calderwood & Harkness will maintain its own matter files, including copies of all pleadings, correspondence, work product, and engagement records, in accordance with the firm's document retention policy and applicable professional responsibility rules. Should you need access to any materials from the firm's files in the future, please do not hesitate to contact me or Catherine Bloom.
7. Engagement Wind-Down
With the filing of the Stipulation of Dismissal with Prejudice on July 1, 2025, and the completion of all closing deliverables — including the preparation and filing of the Stipulation, the confirmation of the Tranche 1 escrow release, the settlement reporting to Halcyon, and the issuance of this closing letter — Calderwood & Harkness considers the active phase of its engagement in this matter to be substantially complete.
That said, the firm remains available to advise Solstice on the following matters as they may arise:
(a) Post-settlement compliance matters, including the design of royalty reporting processes, review of quarterly royalty reports, response to any audit request from Apex, and monitoring and enforcement of the most-favored licensee provision;
(b) Any disputes arising under the Settlement Agreement or License Agreement, including any allegations of breach, any issues regarding the scope of the license or covenant not to sue, or any enforcement actions;
(c) Future patent matters involving Solstice, including any new infringement claims, inter partes reviews, or patent prosecution matters; and
(d) General intellectual property counseling as may be required in connection with Solstice's U.S. operations.
Please note that any engagement for new matters, or for matters that are beyond the scope of the current engagement, would require the execution of a separate engagement letter and the completion of a conflict check in accordance with Calderwood & Harkness's standard procedures.
For administrative purposes, the formal engagement for Case No. 1:24-cv-00587-RGA (Matter No. 10294.0017) will remain open until the Tranche 2 payment of $3,500,000 is confirmed as deposited and released through Tidewater Fiduciary Services, Inc., which is due on or before September 15, 2025. At that time, upon confirmation of the Tranche 2 release and the absence of any outstanding issues, the matter will be formally closed in Calderwood & Harkness's records. We will send a brief confirmation to you at that time.
8. Acknowledgments and Closing Remarks
In closing, I want to extend my sincere thanks and those of the entire Calderwood & Harkness engagement team to you, Dr. Fiona Tierney, Niamh Cassidy, and Brendan Molloy for your exceptional cooperation, responsiveness, and engagement throughout the litigation and settlement process. This matter required extensive coordination across multiple time zones and jurisdictions, and your team's professionalism and commitment were instrumental to the successful outcome.
I also want to recognize the outstanding contributions of our Calderwood & Harkness team: Catherine Bloom, who served as billing partner and provided invaluable strategic oversight throughout the case; Christy Bauer, whose tireless work on claim construction, expert discovery, and dispositive motions was exemplary; and Peter Vassiliev, whose diligent work on fact discovery, document review, and motion practice was critical to the effort. It was a true team achievement.
I would also like to acknowledge the excellent assistance provided by Dr. Jonathan Kendrick and the team at Kendrick & Lau LLP, whose prior art research and FTO analysis contributed meaningfully to both the defense strategy and the settlement negotiations.
As a final observation, I believe it is worth reflecting on the significance of this resolution in quantitative terms. The settlement represents a highly favorable outcome for Solstice when measured against the risks of continued litigation:
• Apex's claimed damages: $31,800,000 in reasonable royalty damages, as asserted by its damages expert, Hugh Danaher, CFA.
• Actual settlement consideration: An $8,750,000 lump-sum payment plus a running royalty capped at $1,800,000 per calendar year. Even assuming the maximum royalty is paid in each year through the expiration of the '105 Patent in January 2038 (approximately 12 years), the maximum aggregate royalty would be approximately $21,600,000, yielding a maximum total consideration of approximately $30,350,000 — still below Apex's claimed damages figure and spread over more than a decade.
• Realistic royalty projection: Based on current sales projections, the actual annual royalty is more likely to fall in the range of $900,000 to $1,200,000, yielding an estimated total royalty of approximately $10,800,000 to $14,400,000 over the 12-year term, and a total settlement cost of approximately $19,550,000 to $23,150,000 — a substantial reduction from Apex's claims.
• Risk avoidance: The settlement eliminates the risk of an adverse jury verdict (including the possibility of enhanced damages for willful infringement, which Apex had asserted), the costs of trial preparation and a multi-week trial, the risk of a permanent injunction that could have disrupted Solstice's U.S. commercial operations, and the uncertainty inherent in appellate proceedings.
• Commercial certainty: The non-exclusive license and the broad covenant not to sue provide Solstice with long-term certainty for the PrecisionEdge™ product line in the United States market, allowing the Company to invest, market, and sell with confidence through at least January 10, 2038.
In sum, we believe this resolution serves Solstice's business interests very well and positions the Company for continued growth in the U.S. laparoscopic surgical device market.
Please do not hesitate to contact me at any time if you have questions about any aspect of this letter, the settlement terms, or the post-settlement obligations described herein. I can be reached at the contact information below.
It has been a privilege to represent Solstice in this matter, and I look forward to continuing our relationship in the future.
With best regards,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner, intellectual Property
1201 Market Street, Suite 2500 Wilmington, DE 19801 Telephone: (302) 555-7812
Email: m.delgado@calderwoodharkness.com
Enclosures:
1. Final Invoice & Fee Summary, Calderwood & Harkness LLP Matter No. 10294.0017 (dated July 2, 2025)
Note: The executed settlement documentation package (Settlement Agreement and Mutual Release, Exhibits A through F, Escrow Agreement, and MFL Side Letter dated June 16, 2025) was previously delivered to Solstice under separate cover on June 17, 2025.
cc:
Dr. Fiona Tierney, Chief Executive Officer, Solstice Biomedical Devices Ltd. Brendan Molloy, Chief Financial Officer, Solstice Biomedical Devices Ltd. Niamh Cassidy, Vice President, Regulatory & IP, Solstice Biomedical Devices Ltd. Catherine Bloom, Calderwood & Harkness LLP Christy Bauer, Calderwood & Harkness LLP Peter Vassiliev, Calderwood & Harkness LLP
Attorney | Role | Billing Rate
Marcus Delgado | Responsible Partner | $1,250/hr
Catherine Bloom | Billing Partner | $1,250/hr
Christy Bauer | Lead Associate (Senior) | $875/hr
Peter Vassiliev | Working Associate | $725/hr
Category | Amount
Expert fees — Dr. Miriam Ostrowski (Halford University) (invalidity, at $750/hr) | $127,500.00
Expert fees — Dr. Elena Marchetti / Pinnacle Economics Group LLC (damages, at $850/hr) | $89,250.00
E-discovery vendor — DataVault Litigation Solutions, LLC (1.2 TB processed; 312,000 documents reviewed) | $141,200.00
Court reporter fees, travel, and miscellaneous costs | Balance
Total Costs and Disbursements | $235,839.42

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